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DOWLING v. KUCKER KRAUS & BRUH

June 6, 2005.

ROBERT DOWLING and JESSICA DOWLING, Plaintiffs,
v.
KUCKER KRAUS & BRUH, LLP; KUCKER & BRUH, LLP; and ALAN D. KUCKER, Defendants.



The opinion of the court was delivered by: RICHARD CASEY, District Judge

MEMORANDUM & ORDER

Robert and Jessica Dowling ("Plaintiffs") brought this action under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692-1692o, alleging that the law firm of Kucker Kraus & Bruh, LLP; the firm's successor-in-interest, Kucker & Bruh, LLP; and attorney Alan D. Kucker ("Defendants") are liable under the FDCPA because they prepared and sent a rent-demand letter to Plaintiffs, on behalf of Plaintiffs' landlord, that failed to include the warnings and notices required by the FDCPA. The Court granted partial summary judgment to Plaintiffs on the issue of liability. Plaintiffs now move for summary judgment for and awarding damages, costs, and attorney's fees under 15 U.S.C. § 1692k(a). For the following reasons, Plaintiffs' motion is GRANTED, as modified in this memorandum. Plaintiffs are awarded $1,100.00 in statutory damages and $20,669.50 in costs and attorney's fees, for a total of $21,769.50.

I. BACKGROUND

  The following facts are undisputed except where noted. During the period in question, Defendants regularly collected past-due rent from tenants through proceedings in the Civil Court of the City of New York, Housing Part ("Housing Court") under Article 7 of the New York State Real Property Actions and Proceedings Law. Defendants, whose legal practice concentrates in the areas of real estate and rent regulation, maintained a "paralegal nonpayment unit" to process calls and information from their landlord-clients with respect to past-due rent owed by tenants. After receiving information regarding past-due rent, the unit would open a file, assign the matter a file number, prepare a rent-demand notice bearing the particular file number, obtain the signature of the landlord-client on the letter, and send the rent-demand letter to the tenant or tenants using a process server. In 1999, Defendants prepared and sent more than 300 such rent-demand letters.

  Defendants concede that they adopted the practice of having their clients sign the rent-demand letters that they prepared in order to avoid the requirements of the FDCPA after (1) the Second Circuit decided Romea v. Heiberger & Associates, 163 F.3d 111 (2d Cir. 1998), which affirmed the district court's determination that attorneys who regularly send rent-demand notices to tenants must comply with the requirements of the FDCPA, and (2) Defendants were sued in January 1998 for sending a rent-demand letter that lacked the notices required by the FDCPA. Rather than change the rent-demand notices that they prepared so as to comply with the requirements of the FDCPA, Defendants attempted to avoid FDPCA compliance by ceasing to actually sign the rent-demand notices that they continued to draft, prepare, print, and have served.*fn1 In 1999, Plaintiffs failed to make certain payments to their landlord, the Missionary Sisters of the Sacred Heart ("Missionary Sisters"). Defendants prepared a rent-demand letter, a prerequisite to the commencement of a summary nonpayment proceeding, on behalf of the Missionary Sisters. Defendants sent the document to Sister Agnes Santomassimo, the Treasurer of the Missionary Sisters, who signed the letter and returned it to Defendants, who then gave the letter to a process server for service on Plaintiffs. The letter, which was dated June 30, 1999 and received by Plaintiffs on July 7, 1999, was addressed to both Plaintiffs and sent to their home address. The letter demanded the payment of $3,804.90 in allegedly past-due rent within three days, but did not disclose that Defendants were attempting to collect a debt and that any information obtained would be used for that purpose, did not provide Plaintiffs with a 30-day validation notice (i.e., a 30-day period to dispute the bill), or otherwise give Plaintiffs notice of their rights under the FDCPA. Although the letter was not on Defendants' letterhead and did not contain Defendants' names or contact information, Defendants' file number ("Case Code: 6418-097") was printed on the bottom face of the letter.

  After Defendants' paralegal nonpayment unit sent out the rent-demand letters, an employee would follow-up on the rent demand and obtain consent from the landlord-client to proceed against a tenant in the event that no payment was received. If no payment was received, Defendant would, upon the landlord-client's consent, commence a nonpayment summary proceeding in Housing Court against the tenant. In 1999, Defendants commenced approximately 300 summary proceedings against tenants for nonpayment of rent.

  Plaintiffs were served with a Notice of Petition in 1999. In the summary nonpayment proceeding against Plaintiffs, the Housing Court rejected Plaintiffs' argument that an FDCPA violation could serve as a defense in such a proceeding. See Missionary Sisters of the Sacred Heart, Inc. v. Dowling, 703 N.Y.S.2d 362, 367-68 (N.Y. Civ. Ct. 1999).

  Plaintiffs then brought this action. Defendants moved for summary judgment on the ground that the FDCPA was inapplicable and that Plaintiffs' claims were barred by res judicata and collateral estoppel, and Plaintiffs cross-moved for partial summary judgment on the issue of liability under the FDCPA. On March 28, 2002, the Court denied Defendants' motion for summary judgment and granted Plaintiffs' cross-motion for partial summary judgment, holding that Defendants were subject to and had violated the FDCPA in their attempt to collect a debt from Plaintiffs.*fn2 Plaintiff now moves for summary judgment on the issues of damages and attorney's fees.

  Plaintiffs argue that the Court should assess maximum statutory damages against Defendants under 15 U.S.C. § 1692k(a)(2)(A) and that, under 15 U.S.C. § 1692k(a)(3), they are entitled to recover the costs and reasonable attorney's fees generated by their successful prosecution of this action. Defendants argue that the Court should award no or minimal statutory damages and deny or significantly reduce the costs and attorney's fees sought by Plaintiffs.

  II. DISCUSSION

  A. Summary Judgment Standard

  Federal Rule of Civil Procedure 56(c) provides that summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." The party seeking summary judgment bears the burden of showing that no genuine factual dispute exists. Celotex v. Catrett, 477 U.S. 317, 323 (1986). Issues of fact are genuine when "a reasonable jury could return a verdict for the nonmoving party," and such contested facts are material to the outcome of the particular litigation if the substantive law at issue so renders them. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In determining whether a genuine issue as to any material fact exists, the Court must assess the record in the light most favorable to the nonmoving party, resolving ambiguities and drawing factual inferences in its favor. See Nationwide Life Ins. Co. v. Bankers Leasing Ass'n, Inc., 182 F.3d 157, 160 (2d Cir. 1999). Summary judgment is improper if "there is any evidence in the record from any source from which a reasonable inference could be drawn in favor of the nonmoving party," but permissible when it is apparent that no rational trier of fact could find in favor of the nonmoving party. Chambers v. TRM Copy Ctrs. Corp., 43 F.3d 29, 37 (2d Cir. 1994); Gallo v. Prudential Residential Servs., 22 F.3d 1219, 1223-24 (2d Cir. 1994).

  B. The Federal Debt Collection Practices Act The FDCPA establishes a general prohibition against the use of "false, deceptive, or misleading representation or means in the connection with the collection of any debt." 15 U.S.C. § 1692(e); Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir. 1993). The purpose of the FDCPA is to "eliminate abusive practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent state action to protect consumers against debt collection abuses." 15 U.S.C. § 1692(e); Kropelnicki v. Siegel, 290 F.3d 118, 127 (2d Cir. 2002). Any debt collector who fails to comply with any provision of the FDCPA ...


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