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Nero v. Law Office of Sam Streeter

September 10, 2009


The opinion of the court was delivered by: Kiyo A. Matsumoto, United States District Judge


Plaintiff, Liz Nero ("plaintiff" or "Nero") commenced an individual and putative class action*fn1 under the Fair Debt Collection Practices Act ("FDCPA" or "the Act") 15 U.S.C. §§ 1692, et seq., in connection with efforts by the Law Office of Sam Streeter, P.L.L.C. ("defendant" or "Streeter Law") to collect payment on an alleged debt plaintiff owed. Defendant failed to answer or otherwise defend this action. Accordingly, default was entered against defendant. (See Oct. 30, 2008 Order.) At this time, plaintiff seeks statutory damages, attorneys' fees, and costs.


The following allegations are taken from the complaint and are unchallenged. On February 28, 2008, Streeter Law sent a letter to plaintiff in an attempt to collect an alleged personal debt (the "Letter"). (Compl. ¶ 6). The Letter provided plaintiff with Streeter Law's contact information, including its post office address in Texas, its toll free telephone number, its local (Texas) telephone number, and its website. (Compl. Ex. 1). It also advised plaintiff that:

Unless you, the consumer, notify this office within thirty days after receipt of this notice that you dispute the validity of the debt or any portion thereof, the debt will be assumed to be valid by this office. If you, the consumer, notify us within the thirty (30) days after receipt of this notice, that the debt or any portion thereof is disputed, this office will obtain verification of the debt or a copy of a judgment against you and a copy of such verification or judgment will be mailed to you by this office. Upon your written request within thirty days after receipt of this notice this office will provide you with the name and address of the original creditor, if different from the current creditor....


(Compl. Ex. 1)(emphasis in original). Plaintiff does not allege that she made any effort to dispute the debt or that she had any such intent. There are no allegations that Streeter Law engaged in any additional collection efforts.

Shortly after receiving the Letter, plaintiff filed the instant action, asserting two claims under the FDCPA. (See Compl., Doc. Entry No. 1.) Plaintiff's first claim is based on the content of the Letter. She asserts that Streeter Law failed to inform her that she must request verification of the debt in writing and that this omission constitutes a violation of 15 U.S.C. §§ 1692g(a)(4), 1692(g)(b), and 1692e(10). (Id. at ¶ 2.) Plaintiff's second claim focuses on defendant's debt collection practices. Plaintiff asserts that defendant was not licensed to collect debts in New York City, as is required of debt collectors under New York Admin. Code tit. 20 ch. 2 § 20-490, and therefore, defendant, by mailing a collection letter, misrepresented its legal status to plaintiff in violation of 15 U.S.C. §§ 1692e(5) and 1692e(10). (Id. at ¶ 3.)

Plaintiff served a summons and the complaint on defendant on April 23, 2008. (See Doc. Entry Nos. 1, 2.) Plaintiff filed a motion for default judgment on October 1, 2008. (Doc. Entry No. 3.) Default was entered against defendant on October 30, 2008, pursuant to Rule 55(a) of the Federal Rules of Civil Procedure. Plaintiff does not allege any actual loss; rather, plaintiff seeks statutory damages, attorneys' fees and costs. (See Compl.; Compl. Ex. 1; Doc. Entry No. 6, Kidd Nov. 7, 2008 Letter.)

For the reasons set forth below, this court enters judgment in favor of plaintiff and against defendant in the amount of $2,755.00, reflecting $500.00 in statutory damages, $415.00 in costs, and $1,840.00 in reasonable attorneys' fees.


A. Determination of Damages on a Motion for Default

The Second Circuit has approved the holding of a damages inquest by affidavit without an in-person court hearing following a default, "as long as [the court has] ensured that there was a basis for the damages specified in the default judgment." Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997) (quoting Fustok v. ContiCommodity Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989)). Moreover, when "the court determines that defendant is in default, the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true." Chen v. Jenna Lane, Inc., 30 F. Supp. 2d 622, 623 (S.D.N.Y. 1998); see also Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981). A default judgment that is entered on the well-pleaded allegations in a complaint establishes a defendant's liability, see Bambu Sales, Inc. v. Ozark Trading Inc., 58 F.3d 849, 854 (2d Cir. 1995), and the sole remaining issue before the court is whether the plaintiff has provided adequate support for the relief sought. See Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). When, as here, default has been noted, a party's recovery is limited to the amount prayed for in its demand for judgment. Fed. R. Civ. P. 54(c); Scala v. Moore McCormack Lines, Inc., 985 F.2d 680, 683 (2d Cir. 1993).

In the instant action, defendant conceded the following facts due to its default: (1) defendant is a "debt collector" as that term is used in the FDCPA (Compl. ¶ 3); (2) the Letter failed to specifically inform plaintiff that she was required to notify defendant in writing of any dispute regarding the validity of the debt to obtain verification of the debt (Compl. ¶ 7); (3) defendant attempted to collect a debt in New York City without the requisite debt collection license (Compl.

¶11). In light of these uncontested facts, the court must now determine whether Streeter Law violated the aforementioned sections of the FDCPA so as to merit granting the relief sought -- statutory damages, attorneys' fees, and costs.

B. FDCPA Claims

1. Validation Notice Claim

The FDCPA was enacted to "protect consumers from unscrupulous debt collection practices . . . without imposing unnecessary restrictions on ethical debt collectors." Tromba v. M.R.S. Assocs., Inc., 323 F. Supp. 2d 424, 426 (E.D.N.Y. 2004) (citing S. Rep. No. 382, 95th Cong., 1st Sess. 1-2 reprinted in 1997 U.S. Code Cong. & Admin. News 1695, 1696). The FDCPA "establishes certain rights for consumers whose debts are placed in the hands of professional debt collectors for collection, and requires that such debt collectors advise the consumers whose debts they seek to collect of specified rights." DeSantis v. Comp. Credit, Inc., 269 F.3d 159, 161 (2d Cir. 2001). Debt collectors are required to inform consumers of these rights in writing through what is commonly referred to as a "validation ...

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