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Carmona v. Gene Kazlow, P.C.

United States District Court, E.D. New York

August 2, 2017

MARILUZ CARMONA, Plaintiff,
v.
GENE KAZLOW, P.C. d/b/a KAZLOW & KAZLOW and XAVERIAN HIGH SCHOOL, Defendants.

          MEMORANDUM & ORDER

          MARGO K. BRODIE, United States District Judge

         Plaintiff Mariluz Carmona commenced the above-captioned action against Defendants Gene Kazlow, P.C. doing business as Kazlow & Kazlow (“Kazlow”) and Xaverian High School (“Xaverian”), alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (the “FDCPA”) and asserting a claim for conversion in connection with Defendants' efforts to collect a debt in violation of an order staying collection. (Am. Compl., Docket Entry No. 17.) Defendants move for summary judgment pursuant to Rule 56(a) of the Federal Rules of Civil Procedure. (Defs. Mot. for Summ. J. (“Defs. Mot.”), Docket Entry No. 16; Defs. Statement of Undisputed Facts Pursuant to Local R. 56.1 (“Defs. 56.1”), Docket Entry No. 16-40; Defs. Mem. of Law in Supp. of Defs. Mot. (“Defs. Mem.”), Docket Entry No. 16-42.) For the reasons set forth below, the Court grants Defendants' motion for summary judgment.

         I. Background

         The following facts are undisputed except as noted. On or about January 11, 2005, Kazlow, a commercial litigation and debt collection firm, was retained by Xaverian High School to collect $4634 in unpaid tuition from Plaintiff. (Defs. 56.1 ¶ 5; Pl. Response to Defs. 56.1 (“Pl. 56.1”) ¶ 5, Docket Entry No. 26.) Kazlow commenced an action against Plaintiff to collect the debt in New York City Civil Court on April 27, 2005. (Defs. 56.1 ¶ 8.) On July 18, 2005, the civil court entered a default judgment against Plaintiff and in favor of Xaverian in the amount of $6687.18 (the “Default Judgment”). (Id. ¶ 9.) On or about February 4, 2015, Kazlow issued an income execution (the “Income Execution”) to garnish Plaintiff's wages and sent it to City Marshal Martin A. Bienstock (the “City Marshal”) for service and enforcement. (Id. ¶ 11.) The City Marshal's office received the first payment from the New York City Office of Payroll Administration (the “OPA”)[1] on April 14, 2015 and the second on May 13, 2015, in the amounts of $145.26 and $290.52, respectively. (Id. ¶ 14.)

         a. May 15 Order to Show Cause

         On or about May 15, 2015, Plaintiff filed a motion to vacate the Default Judgment and the civil court judge issued an order to show cause (the “May 15 OSC”) and a temporary stay of enforcement of the Default Judgment. (Id. ¶ 15.) The civil court directed Plaintiff to serve the City Marshal's office with a copy of the May 15 OSC, which Plaintiff did on May 18, 2015. (Pl. 56.1 ¶ 16.) The City Marshal's office sent a letter to Kazlow that same day informing them of the May 15 OSC. (Defs. 56.1 ¶ 16.) The City Marshal's office prepared a form letter, which it sent to the OPA by fax and mail on or about May 19, 2015, stating that the office had been served with an order to show cause and a stay of enforcement and that OPA was “not to make further deductions nor release any monies previously withheld from [Plaintiff], pending the decision of the Court. This office will notify you of said decision.” (Id. ¶ 17.)

         After it faxed the letter of May 18, 2015 to the OPA, the City Marshal's office did not receive any payment from OPA and did not send any of Plaintiff's garnished wages to Kazlow until after the civil court judge decided Plaintiff's motion to vacate. (Id. ¶ 18; Pl. 56.1 ¶ 18.) On or about September 4, 2015, the civil court judge denied Plaintiff's motion to vacate the Default Judgment, and a week later, on September 11, Kazlow faxed a letter to the City Marshal's office notifying them that Plaintiff's motion had been denied and the garnishment could proceed. (Defs. 56.1 ¶ 22; Pl. 56.1 ¶ 22.) On September 14, 2015, the City Marshal's office informed OPA that it was required to reinstate the Income Execution and resume sending deductions from Plaintiff's pay to the City Marshal's office. (Def. 56.1 ¶ 23.)

         b. September 16 Order to Show Cause

         On or about September 16, 2015, Plaintiff filed another motion requesting permission to reargue the order denying her motion to vacate the Default Judgment. (Id. ¶ 24.) The civil court judge issued another order to show cause (the “September 16 OSC”) and a second temporary stay of the Default Judgment. (Id.) Kazlow received a copy of the September 16 OSC but assumed that Plaintiff had sent a copy of it to the City Marshal because she had done so with the earlier order to show cause.[2] (Id. ¶¶ 26, 27.)

         OPA garnished Plaintiff's wages on September 30 and on October 15, 2015. (Defs. 56.1 ¶ 36; Pl. 56.1 ¶ 36.) On October 14, 2015, the City Marshal's office received a payment from OPA for $149.65 in connection with Plaintiff's Income Execution. (Id. ¶ 29.) After deducting their fee, on October 15, 2015, the City Marshal's office issued a payment in the amount of $142.17 to Kazlow. (Id. ¶ 30.) Kazlow received the check on October 19, 2015, and Defendants assert that Kazlow then called the City Marshal's office and informed them that no further payments should be forwarded because of the September 16 OSC.[3] (Id. ¶¶ 31-32.) Kazlow did not remit any portion of the payment to Xaverian. (Id. ¶ 66.)

         On October 20, 2015, Kazlow faxed a letter to the City Marshal's office with copies of the September 16 OSC and Plaintiff's pay statements. (Defs. 56.1 ¶ 40.) Kazlow's letter stated that “according to the [c]ourt, any monies collected after [September 17, 2015] are to be returned to [Plaintiff]. We received a total of $142.17 from your office, which we are returning back to [Plaintiff]. Please return any funds over and above that amount that were collected.” (Id.) The City Marshal's office requested that Kazlow return the $142.17 to the City Marshal's office to be combined with the deducted fee and subsequently returned to Plaintiff.[4] (Id. ¶ 42.) Plaintiff asserts that, based on the City Marshal's notes from a telephone call between Kazlow and the City Marshal on October 21, 2015, Kazlow “instructed the [City] Marshal to hold any additional money that had been collected - contradicting [Kazlow's] October 20, 2015 letter and in direct contravention of the September 16, 2015 stay.” (Pl. 56.1 ¶ 48.)

         On or about October 20, 2015, the City Marshal's office faxed a form letter to the OPA stating that the office had been served with an order to show cause and a stay of enforcement and that the OPA was “not to make further deductions nor release any monies previously withheld from [Plaintiff], pending the decision of the Court. This office will notify you of said decision.” (Id. ¶ 33.)

         c. Garnishments and refunds of Plaintiff's salary

         On November 3, 2015, Plaintiff's attorney called Kazlow to inform them that the amounts withheld from Plaintiff's paychecks had not been refunded and that her salary had again been garnished on October 30, 2015. (Defs. 56.1 ¶ 44; Pl. 56.1 ¶ 44.) On November 4, 2015, Plaintiff's attorney followed up with an email to Kazlow, attaching copies of Plaintiff's pay statements from September 30, October 15 and October 30, 2015, that reflected a total amount of $630.93 withheld during the pendency of the stay. (Def. 56.1 ¶ 49.) Plaintiff's attorney informed Kazlow that they were violating the stay and demanded that Plaintiff's wages no longer be garnished until a decision was issued on her motion in civil court. (Id.)

         In discussing the issue with the City Marshal's office, Kazlow was told that the City Marshal's office had faxed a letter to the OPA on or about October 20, 2015, informing them of the stay; that the City Marshal's office had only received one payment in the amount of $149.65 since the September 16 OSC was issued; and that any other garnishments of Plaintiff's pay might be attributable to another income execution for a different judgment. (Id. ¶ 51.)

         Kazlow then emailed Plaintiff's counsel, attaching a copy of the City Marshal's letter to the OPA from October 20, 2015 and stating:

I spoke with [the City Marshal]'s office today and I was advised that on October 20, 2015 they notified [the OPA] of the stay on your client's OSC (see attached letter). They got confirmation receipt from [the OPA]. However, they will send another letter to [the OPA]. They also said that the only amount they received in October, was 149.65 . . . . They did not receive any additional monies in October. They mentioned that the garnishments could be from another creditor. Please check with your client to see if there is another judgment against her. I am doing my best to resolve the issue.

(Id. ¶ 53.) Kazlow never received a response from Plaintiff's counsel, “which led her to assume that the problem concerning the garnishment of [Plaintiff's] pay had been resolved without the need for further action.” (Id. ¶ 54.)

         Defendants assert that the City Marshal's office issued check 508958 to Plaintiff in the amount of $149.65 on November 6, 2015 and mailed it to Plaintiff, but the check was never cashed. (Id. ¶ 57.) Plaintiff states that she never received check 508958, nor have Defendants provided a copy of the check or evidence that it was issued or mailed. (Pl. 56.1 ¶ 57.) Defendants have submitted admissible contemporary business records indicating that the City Marshal drew and mailed check 508958. (See Decl. of Martin A. Bienstock ¶¶ 19, 22, 25-26, Docket Entry No. 16-5; see Marshal Bienstock Case Notes at 7, 9, 13-14, Docket Entry No. 16-13 (reflecting that refund was sent on November 6, 2015, remained unclaimed as of July 28, 2016, and was reversed and stopped on September 13, 2016).)

         On November 17, 2015, Plaintiff's motion for reargument was denied in New York City Civil Court. (Id. ¶ 55.) Kazlow asked the City Marshal's office to resume collection of the Income Execution on or about February 17, 2016. (Defs. 56.1 ¶ 61.) On February 18, 2016, the City Marshal's office faxed a form letter to the OPA directing the OPA to reinstate the Income Execution. (Id. ¶ 62.) On or about April 11, 2016, the City Marshal's office received a check from the OPA in the amount of $299.30, which was the first payment the City Marshal's office received from the OPA after October 14, 2015. (Id. ¶ 63.) Kazlow received that payment on April 22, 2016, and it was the first payment Kazlow had received since the check on October 19, 2015 in the amount of $142.17. (Id. ¶ 64.)

         Plaintiff commenced this action on August 24, 2016. (Id. ¶ 67; Compl., Docket Entry No. 1.) On or about September 9, 2016, the City Marshal's office called the OPA and learned that the OPA was holding $149.65 that it had withheld from Plaintiff's pay on May 15, 2015, and $331.63 that it had withheld from Plaintiff's pay on October 15, 2015. (Defs. 56.1 ¶ 71.) The parties dispute whether Kazlow was aware that the City Marshal's letter directed the OPA to hold the funds that were improperly withheld during the temporary stay. (See Pl. 56.1 ¶ 71.) Plaintiff received a refund of $149.65 on or about November 16, 2015 and refunds totaling $636.15 on or about September 30, 2016.[5] (Id. ¶ 81.)

         II. ...


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