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Linda Hasbrouck v. Arrow Financial Services LLC

May 19, 2011

LINDA HASBROUCK, PLAINTIFF,
v.
ARROW FINANCIAL SERVICES LLC, DEFENDANT.



The opinion of the court was delivered by: Mae A. D'Agostino, U.S. District Judge:

MEMORANDUM-DECISION AND ORDER

INTRODUCTION

Plaintiff Linda Hasbrouck ("Hasbrouck" or "plaintiff") commenced the within action seeking damages as a result of defendant's alleged violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq . Specifically, plaintiff alleges that defendant violated §§ 1692e; 1692e(10); and 1692f of the FDCPA. Presently before the Court is defendant's motion for summary judgment and an award of attorney's fees and costs (Dkt. No. 22) and plaintiff's cross motion for summary judgment (Dkt. No. 27).

FACTS AND BACKGROUND *fn1

Plaintiff is a citizen of the State of New York and resides within the Northern District of New York. Defendant Arrow Financial Services, LLC ("Arrow" or "defendant") is a Delaware limited liability company authorized to do business in the State of New York.

Prior to July 2008, Arrow, a debt collection agency, purchased a credit card account under the name of Linda Hasbrouck from HSBC Bank Nevada ("HSBC" or "Household"). At the time of the purchase, Arrow obtained electronic account information regarding Hasbrouck's account from Household. This information, which defendant refers to as the "Boarding File" included: plaintiff's name; address; social security number; telephone numbers; the account number on plaintiff's Best Buy account; the date the account was opened; the date of the charge off; the balance at the time of the charge off; and the date and amount of the last payment. Arrow concedes that, at the time it purchased the account, Household did not provide the following: the original application for credit as signed by plaintiff; the cardholder agreement; proof that the cardholder agreement was provided to plaintiff; copies of monthly statements; or proof that payment of the balance due had been demanded.

On July 14, 2008, Arrow commenced a lawsuit against Hasbrouck in Schenectady City Court. *fn2 In the complaint, Arrow alleged, "[u]pon information and belief [Hasbrouck] in person or through an agent made credit card purchases or took money advances under a credit card or line of credit account or promissory note/loan - which a copy was furnished to [Hasbrouck]. [Arrow] purchased this account for value and [Hasbrouck] was notified of same". Arrow also alleged, "[t]here remains an agreed balance on said account of $3,224.43 due and owing on [Arrow's] cause of action, no part of which has been paid although duly demanded".

On October 31, 2008, Arrow moved for a default judgment against Hasbrouck. In support of that motion, Arrow submitted an Affidavit entitled "Affidavit of Facts Constituting The Claim The Default and The Amount Due" setting forth the facts supporting its claim and the amount owed. On July 1, 2008, Geamen Izdou, an authorized agent/officer employed by Arrow, executed the affidavit. Izdou stated, "[o]n information and belief, the defendant through an agent made credit card purchases or took property advances under a credit card or line of credit account or promissory note/loan which a copy was furnished to defendant". The affiant further stated that Hasbrouck was delinquent on the credit card account that Arrow purchased from HSBC, the original creditor. The affiant based his conclusions on, "a review of plaintiff's (Arrow's) books and records as well as account information provided to plaintiff (Arrow) by Household [HSBC]". *fn3

Arrow obtained a default judgment against Hasbrouck in the amount of $3,224.43 together with statutory interest and costs. In November 2008, Hasbrouck learned of the default judgment. On December 1, 2008, Hasbrouck retained counsel to represent her in the Schenectady City Court action. On December 8, 2008, the parties agreed to vacate the default judgment. On May 18, 2009, the parties stipulated to discontinue the City Court action without prejudice.

On June 30, 2009, plaintiff filed the within action alleging that defendant violated the FDCPA by, "submitting an affidavit in a state court collection action which falsely represent [sic] that the affiant has personal knowledge of the material facts constituting the allegations and possessed documents which support the action's claims". Plaintiff further alleged, "Arrow, on the date of the affidavit and otherwise, never had anything from Household and had no books and records regarding any account in my name".

On July 15, 2009, Paul C. Ziebert, Arrow's Vice-President and Senior Corporate Counsel, requested additional account documentation from Household. Household responded by providing Arrow with the following: copies of the Best Buy credit card application executed by Hasbrouck dated January 13, 2006; the cardholder agreement; and copies of monthly account statements covering the period January 2006 through May 2007. *fn4 Ziebert claims that these documents were provided to Hasbrouck's counsel on August 3, 2009, prior to Arrow responding to the complaint. *fn5

On September 30, 2009, Arrow filed an Answer to the complaint.

On November 20, 2009, defendant filed a motion for judgment on the pleadings. On March 26, 2010, District Judge Gary L. Sharpe issued an order denying defendant's motion noting that, "Hasbrouck's complaint gives rise to at least a plausible inference of falsity, and alleges a potentially viable claim under the FDCPA."

DISCUSSION

I. DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

A. Standard on Motion for Summary Judgment

Summary judgment is appropriate where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c). Substantive law determines which facts are material; that is, which facts might affect the outcome of the suit under the governing law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 258 (1986). A party moving for summary judgment bears the initial burden of demonstrating that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); see Celotex Corp. v. Catrett , 477 U.S. 317, 323 (1986). If the Court, viewing the evidence in the light most favorable to the non-movant, determines that the movant has satisfied this burden, the burden then shifts to the ...


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