Kucker & Bruh, a debt collecting law firm relied on a client’s records and mistakenly went after an 82-year-old tenant in an eviction proceeding. The Southern District of New York held the firm liable for Fair Debt Collection Practices Act damages even though the filing of the eviction action was a “benign” error and it backed off immediately after learning of the error, as reported by the NYLJ.
Judge Lorna Schofield held that the Fair Debt Collection Practices Act (FDCPA) is a strict liability statute, and while damages can be averted for a bona fide error, the standard is high.
She said attorney Alan Kucker and his Manhattan firm of Kucker & Bruh did nothing to confirm the accuracy of information received from a new client with no established track record of reliability.
The case centers on Rafael Lee, who lives in a rent-controlled apartment. Since at least 1995, Lee has had a Senior Citizen Rent Increase Exemption, a benefit under which he pays a portion of the rent and the landlord gets a real estate tax credit equal to the balance. Consequently, while the legally collectible rent for the apartment is $790, Lee is responsible for only $401.
In early 2012, Kucker & Bruh began representing Mall Properties Inc. (MPI), the managing agent for Lee’s building. MPI reported to the law firm that Lee was delinquent on his rent. Based on that, Kucker & Bruh issued a “three day notice” advising Lee that eviction proceedings would be initiated unless he paid $1,125. Shortly thereafter, the firm began a summary eviction proceeding in New York City Housing Court.
Lee then retained attorney James Fishman, a consumer and tenant advocate with what is now Fishman & Mallon in Manhattan. Fishman advised Kucker that his client had a senior citizen exemption. Kucker immediately checked with MPI and confirmed that Lee had the exemption and was not in arrears. The eviction proceeding was discontinued, but Lee began the FDCPA claim, which provides for statutory, strict liability damages.
“While the court makes no finding of what procedures would have been sufficient, the absence of any procedures to avoid discoverable errors clearly is insufficient,” Schofield wrote in Lee v. Kucker & Bruh, 12 Civ. 04662. “No reasonable jury could conclude that Defendants’ procedures were reasonably designed to avoid the type of error that occurred in this case.”
The matter settled last week for $22,000 in FDCPA damages to Lee and $108,000 in legal fees, according to Fishman.
Fishman said the ruling marks the first time a federal court has held a landlord’s law firm liable in such an action. He said “high volume law firms that file dozens of cases at a time without making sure what they allege is accurate” are potentially on the hook for FDCPA damages under Schofield’s decision.
“This will hopefully raise the level of practice in Housing Court and lawyers will now be held liable” for FDCPA violations, Fishman said. “I think this is a game changer in Housing Court. The level of practice there is pretty sloppy and hopefully this will cause a higher level of inquiry before cases are filed.”