Call Now for a Consultation: 212-897-5840

New York Law Journal: Debt Collecting Firm Is Found Liable for ‘Benign’ Error

New York Law Journal Logo

By 

A debt collecting law firm that “blindly” relied on a client’s records and mistakenly went after an 82-year-old tenant is liable for Fair Debt Collection Practices Act damages even though the slip-up was “benign” and it backed off immediately after learning of the error, a Southern District judge has held.

Judge Lorna Schofield stressed that the Fair Debt Collection Practices Act (FDCPA) is a strict liability statute, and while damages can be averted for a bona fide error, the standard is high.

She said attorney Alan Kucker and his Manhattan firm of Kucker & Bruh did nothing to confirm the accuracy of information received from a new client with no established track record of reliability.

The case centers on Rafael Lee, who lives in a rent-controlled apartment.

Since at least 1995, Lee has had a Senior Citizen Rent Increase Exemption, a benefit under which he pays a portion of the rent and the landlord gets a real estate tax credit equal to the balance. Consequently, while the legally collectible rent for the apartment is $790, Lee is responsible for only $401.

In early 2012, Kucker & Bruh began representing Mall Properties Inc. (MPI), the managing agent for Lee’s building.

MPI reported to the law firm that Lee was delinquent on his rent. Based on that, Kucker & Bruh issued a “three day notice” advising Lee that eviction proceedings would be initiated unless he paid $1,125. Shortly thereafter, the firm began a summary eviction proceeding in New York City Housing Court.

Lee then retained attorney James Fishman, a consumer and tenant advocate with what is now Fishman & Mallon in Manhattan. Fishman advised Kucker that his client had a senior citizen exemption.

Kucker immediately checked with MPI and confirmed that Lee had the exemption and was not in arrears. The eviction proceeding was discontinued, but Lee began the FDCPA claim, which provides for statutory, strict liability damages.

Kucker initially alleged that Fishman had entrapped them into violating the FDCPA by withholding information about Lee’s exemption until after the rent demand was issued. But U.S. Magistrate Judge James Francis IV (See Profile) noted that Fishman was not retained until after the eviction was initiated and “could not have enticed [Kucker] into acts they had already committed.”
Read full article: http://www.newyorklawjournal.com/PubArticleNY.jsp?id=1202615379015&Debt_Collecting_Firm_Is_Found_Liable_for_Benign_Error#ixzz2fSX21Jrb