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Katz v. Asset Acceptance

November 29, 2006

NATHAN KATZ, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
ASSET ACCEPTANCE, LLC, GOLDMAN & WARSHAW, P.C., AND JEFFREY M. PARRELLA, DEFENDANTS.



The opinion of the court was delivered by: Trager, J.

MEMORANDUM AND ORDER

Plaintiff Nathan Katz brings this action on behalf of himself and all others similarly situated against Asset Acceptance, LLC ("Asset Acceptance"), Goldman & Warshaw, P.C. ("Goldman & Warshaw") and Jeffrey M. Parrella, Esq. (collectively "defendants") under the Fair Debt Collection Practices Act ("FDCPA" or "Act"), 15 U.S.C. § 1692. Katz claims that Goldman & Warshaw, a law firm specializing in consumer debt collection, intentionally filed a collection suit against him in an improper venue in violation of 15 U.S.C. § 1692i(a). Goldman & Warshaw claim that this was the result of a bona fide error and now move for summary judgment under Fed. R. Civ. P. 56 and for costs pursuant to Fed. R. Civ. P. 68.

Background

In or about November 2003, Asset Acceptance retained Goldman & Warshaw to provide legal services in connection with the collection of credit card debt owed by Katz. Affidavit of Jeffrey M. Parrella ("Parrella Aff.") ¶ 3. Although Katz resides in Kings County, a Goldman & Warshaw paralegal erroneously entered the numerical code "198" in the venue field of Katz's file signifying New York County rather than "202" signifying Kings County. Parrella Aff. ¶ 10; Affidavit of Suzanne Jones ("Jones Aff.") ¶ 10. From December 2003 to December 2004, Goldman & Warshaw mailed five letters and made six telephone calls to Katz in an attempt to collect his debt. Parrella Aff. ¶ 4. In March 2005, Goldman & Warshaw filed a collection suit (the "underlying suit") against Katz on behalf of Asset Acceptance in the Civil Court of the City of New York, County of New York. Id. ¶ 5. Defendants concede that New York County is an improper venue for the underlying suit and that the suit should have been filed in Kings County. Id. ¶ 10.

On June 9, 2005, Katz filed an action under the FDCPA claiming that defendants used "false representations and deceptive means to attempt to collect a debt in violation of 15 U.S.C. § 1692e(10)" and that defendants brought "an action in an improper judicial district in violation of 15 U.S.C. § 1692i."

Plaintiff's Complaint ("Pl.'s Compl.") ¶ 12. Katz filed suit against defendant Asset Acceptance under the theory that it is vicariously liable for the actions of its agent, Goldman & Warshaw. Plaintiff's Mem. in Opp'n to Def.'s Mot. for Summ. J. ("Pl.'s Opp'n.") at 8. Additionally, Katz filed this action on behalf of a purported class consisting of all consumers subject to an improperly filed complaint by Goldman & Warshaw.*fn1 Pl.'s Compl. ¶ 13. Katz seeks injunctive and declaratory relief as well as statutory damages and costs. Id. at 5.

In its defense, Goldman & Warshaw claims the error was unintentional and that it occurred notwithstanding the detailed policies and procedures it adopted to avoid venue errors. Goldman & Warshaw's and Jeffrey M. Parrella's Reply in Supp. of Mot. for Summ. J. and Mot. for Costs ("Def.'s Reply") at 2-3; Parrella Aff. ¶ 10 (stating "I had no intention of having the Underlying Suit filed in a county other than where Katz, the defendant-debtor, resided."). Goldman & Warshaw (1) publishes and circulates policies and procedures to paralegals and attorneys stating that suits are to be filed in the venue of residence, Certification of Luciana Lalande ("Lalande Cert.")

Exs. E, F; Affidavit of Ann Marie Kielty ("Kielty Aff.") ¶¶ 3, 7; Jones Aff. ¶¶ 3, 7; Parrella Aff. ¶ 8; (2) provides FDCPA compliance training, which includes specific instructions on the proper filing of collection suits in light of the FDCPA's venue requirements, Kietly Aff. ¶¶ 3-4, 10, Jones Aff. ¶¶ 3-4, Parrella ¶¶ 6-7; and (3) requires attorneys and paralegals to review flow charts explaining proper venue procedures, Lalande Cert. Ex. G, Kielty Aff. ¶ 7, Jones Aff. ¶ 7, Parrella ¶ 8. Subsequent to Katz's suit, Goldman & Warshaw reviewed approximately 1700 cases and found that no other cases were filed in an improper venue. Parrella Aff. ¶ 11.

Goldman & Warshaw submitted a settlement offer pursuant to Rule 68 of the Fed. R. Civ. P. consisting of $1,000.00 plus reasonable attorney fees and costs. Lalande Cert. Ex. C. Katz did not accept this offer. Def. Goldman & Warshaw and Parrella Mem. in Supp. of Mot. for Summ. J. and Mot. for Costs ("Def.'s Mem.") at 1. Furthermore, defendants assert that Katz has neither responded to discovery requests nor sought any meaningful discovery from Goldman & Warshaw. Id. at 3.

Defendants claim they are not liable under the FDCPA's bona fide error defense, 15 U.S.C. § 1692k(c), and move for summary judgment under Fed. R. Civ. P. 56 and costs in accordance with Fed. R. Civ. P. 68.*fn2

Discussion

(1) The FDCPA

"Congress' general intent in enacting the FDCPA was to protect consumers from a host of unfair, harassing, and deceptive debt collection practices without imposing unnecessary restrictions on ethical debt collectors." Riveria v. MAB Collections, Inc., 682 F. Supp. 174, 176 (W.D.N.Y. 1988). The Act requires that any debt collector who sues a consumer shall do so only in the judicial district "(A) in which such consumer signed the contract sued upon; or (B) in which such consumer resides at the commencement of the action." 15 U.S.C. § 1692i(a)(2). However, the Act also provides that

[a] debt collector may not be held liable in any action brought under this subchapter if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the ...


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