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February 26, 1997


The opinion of the court was delivered by: SPATT

 SPATT, District Judge:

 This case presents the Court with an opportunity to answer a practical question: can a real estate agent representing a landlord obtain the credit report of a prospective tenant without his approval?

 Because the transaction underlying the case involves so many parties, the Court identifies them at the outset:

1. The plaintiffs: Robert J. Scott and Jonathan C. Scott, are two brothers seeking to rent a house in Old Bethpage, New York (the "plaintiffs" or the Scotts");
2. Real Estate Finance Group: a mortgage brokering entity that ran the credit check or the plaintiffs at the request of Simonoff ("REFG");
3. ERA Gatewood Realty, Inc.: The brokerage agency representing the landlord ("ERA Gatewood");
4. Ira Simonoff: The ERA Gatewood agent involved in this transaction ("Simonoff");
5. AA Premier Realty, Ltd. d/b/a Remax Premier Realtors, the real estate agency acting on behalf of the plaintiffs in their search for a house ("Remax"); and
6. Rose Petrokiewicz, the agent employed by Remax participating in this transaction ("Petrokiewicz").

 This action arises from the Scotts' against REFG, ERA Gatewood and Simonoff (collectively the "defendants"), based on their alleged violation the plaintiff's rights under the federal and New York Fair Credit Reporting Acts. See 15 U.S.C. §§ 1681 et seq. ("FCRA"); N.Y. Gen. Bus. L. §§ 380 et seq. ("NYFCRA"). According to the plaintiffs, the defendants unlawfully performed a credit check in connection with their potential lease of a house without giving them proper notice and without their consent.

 The defendants all deny any liability in this matter. Nevertheless, to the extent that they are found liable, they have filed cross claims against each other and two third party complaints against Petrokiewicz and Remax for contribution and or indemnification. Presently before the Court are the plaintiffs' motion for partial summary judgment as to liability and the defendants' cross motions for summary judgment pursuant to Fed. R. Civ. P. 56. The defendants ERA Gatewood and Simonoff also move for sanctions pursuant to Fed. R. Civ. P. 11 arguing that the plaintiffs' claims against then are frivolous.

 I. Background

 The plaintiffs are residents of Nassau County. REFG is a New York corporation owned by Peter Visconti ("Visconti") and engaged in the business of mortgage brokering, with its principal place of business in Jericho, New York. As part of its operations, REFG obtains credit reports regarding individuals participating in real estate transactions. Toward this end, REFG has entered into a contract with Factual Data Group, a credit reporting agency, to provide these credit reports. This agreement states that all information supplied is furnished in compliance with the federal Fair Credit Reporting Act and that any "information is for the exclusive use of [REFG] and is to be held in strict confidence." Declaration of Bernard L. Burton, May 17, 1996 ("Burton Dec."), Exh. G. Ira Simonoff is a real estate agent for ERA Gatewood Realty, Inc., a New York corporation with its principal place of business in Syosset, New York.

 In April 1995, the plaintiffs contacted third party defendant Rose Petrokiewicz, a real estate broker and employee of Remax, located in Bethpage, New York, in order to find a house to rent. In their supporting "declarations" however, the plaintiffs deny that Petrokiewicz was their agent. See Declarations of Robert J. Scott and Jonathan C. Scott, February 27, 1996 P 4. In any event, Petrokiewicz found one potential house located in Old Bethpage, New York using a computer listing service. The landlords live in Japan. Simonoff at ERA Gatewood was designated as the selling agent. According to the computer listing, a copy of which is provided by the defendants, "references and [a] credit check [were] a must" for any applicant. Affirmation of Joseph A. Deliso, June 14, 1996 ("Deliso Aff.") P 6, Exh. F.

 On April 8, 1995, Petrokiewicz contacted Simonoff who agreed to show the Scotts the house that night. After viewing the house, the plaintiffs made an offer of either $ 1,600 or $ 1,850 per month and discussed related issues including a security deposit, restrictions on pets and smoking. Deliso Aff., Exh. B., Deposition of Ronald Scott, March 13, 1996 at 47-48. According to the plaintiffs, at this time Simonoff advised them that the owners "might want to obtain a credit report before renting the house. . . ." Burton Dec., Exh. F., Declaration of Rose Petrokiewicz P 6. In response, the Scotts advised Simonoff "that he was not authorized to obtain their credit reports and he agreed that he would not obtain such information." Id.

 The Scotts further claim that the next day, April 9, 1995, Simonoff contacted Visconti at REFG and had him run a "credit check" on them. The plaintiffs emphasize, and REFG admits, that they had "no relationship whatsoever" with Visconti or REFG, never provided any written authorization for the credit check and were never given notice that the check would be performed. Sometime thereafter, the Scotts learned about the credit reports and contacted Simonoff who sent them copies upon their request. Deliso Aff., Exh. B. at 65-66.

 The plaintiffs commenced this action by filing their complaint on March 24, 1995 alleging two causes of action for: (1) obtaining consumer reports under "false pretenses" in violation of federal and state law; and (2) failing to provide adequate notice of efforts to obtain consumer reports under state law. REFG filed its answer on July 24, 1995 denying all material allegations contained in the complaint and cross claiming for indemnification against Simonoff and ERA Gatewood. Simonoff and ERA Gatewood filed their answer on August 15, 1995 and alleged a similar cross claim for contribution and or indemnification against REFG.

 On January 4, 1996, defendants Simonoff and ERA Gatewood filed a third party complaint against Petrokiewicz and Remax. According to the third party plaintiffs, Petrokiewicz, in her capacity as an agent, had a duty to convey the contents of the computer listing, including the credit check requirement to any perspective purchasers. Further, ERA Gatewood and Simonoff allege that they "were entitled to rely upon the fact that any information provided to the third-party defendants as plaintiffs' agents would be communicated to the plaintiffs." ERA Gatewood-Simonoff Third Party Compl. P 20. As a result, ERA Gatewood and Simonoff claim that when they obtained the credit reports, they were acting with the consent of the plaintiffs' agents, the third party defendants. Accordingly, to the extent that ERA Gatewood and Simonoff are found liable for violating the federal and state Fair Credit Reporting Acts, they are entitled to contribution and or indemnification from the third party defendants.

 Similarly, on January 10, 1996, defendant REFG filed its own third party complaint against Petrokiewicz and Remax. According to REFG, when defendant Ira Simonoff requested the credit check on the plaintiffs, Simonoff stated "that he was authorized by the Third-Party Defendants Remax by its real estate sales agent Rose Petrokiewicz to obtain credit reports of the Plaintiffs as a prerequisite to determine their eligibility to rent said rental property." REFG Third Party Compl. P 11. Based on this apparent authority, REFG maintains that if it is found liable to the plaintiffs for damages, it should be entitled to contribution and or indemnification from the third party defendants.

 On or about January 26, 1996, the third party defendants filed answers to both third party complaints and submitted cross claims against Simonoff, ERA Gatewood and REFG seeking indemnification. On February 21, 1996, ERA Gatewood and Simonoff filed their answer to these third party cross claims denying all material allegations contained therein.

 II. Discussion

 A. Summary judgment standard

 A court may grant summary judgment only if the evidence, viewed in the light most favorable to the party opposing the motion, presents no genuine issue of material fact, Samuels v. Mockry, 77 F.3d 34, 35 (2d Cir. 1996), and the movant is entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). The Court must however, resolve all ambiguities and draw all reasonable inferences in the light most favorable to the party opposing the motion. See Quaratino v. Tiffany & Co., 71 F.3d 58, 64 (2d Cir. 1995); Twin Laboratories, Inc. v. Weider Health & Fitness, 900 F.2d 566, 568 (2d Cir. 1990); Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir. 1986), cert. denied, 480 U.S. 932, 94 L. Ed. 2d 762, 107 S. Ct. 1570 (1987).

 According to the Second Circuit "summary judgment is a tool to winnow out from the trial calendar those cases whose facts predestine them to result in a directed verdict." United National Ins. Co. v. The Tunnel, Inc., 988 F.2d 351, 355 (2d Cir. 1993). Once a party moves for summary judgment, in order to avoid the granting of the motion, the non-movant must come forward with specific facts showing that a genuine issue for trial exists. West-Fair Elec. Contractors v. Aetna Cas. & Surety Co., 78 F.3d 61, 63 (2d Cir. 1996); see also Western World Ins. Co. v. Stack Oil, Inc., 922 F.2d 118, 121 (2d Cir. 1990) (quoting Fed. R. Civ. P. 56(e)). A genuine issue of material fact exists if "a reasonable jury could return a verdict for the nonmoving party." Liberty Lobby,, 477 U.S. at 248; see Vann v. New York City, 72 F.3d 1040 (2d Cir. 1995).

 However, mere conclusory allegations, speculation or conjecture will not avail a party resisting summary judgment. Kulak v. City of New York, 88 F.3d 63, 70 (2d Cir. 1996). If there is evidence in the record as to any material fact from which an inference could be drawn in favor of the non-movant, summary judgment is unavailable. Holt v. KMI-Continental, Inc., 95 F.3d 123, 128 (2d Cir. 1996); Rattner v. Netburn, 930 F.2d 204, 209 (2d Cir. 1991). Finally, the Court is charged with the function of "issue finding", not "issue resolution." Gallo v. Prudential Residential Servs., Ltd, Partnership, 22 F.3d 1219, 1224 (2d Cir. 1994).

 It is within this framework that the Court addresses the grounds for the present motion ...

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