Carmona v. Kazlow et al
Filing
33
MEMORANDUM AND ORDER granting 16 Motion for Summary Judgment. For the reasons set forth in the attached Memorandum and Order, the Court grants Defendants' motion for summary judgment. Ordered by Judge Margo K. Brodie on 8/2/2017. (Haji, Sara)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
--------------------------------------------------------------MARILUZ CARMONA,
Plaintiff,
v.
MEMORANDUM & ORDER
16-CV-4723 (MKB)
GENE KAZLOW, P.C. d/b/a KAZLOW &
KAZLOW and XAVERIAN HIGH SCHOOL,
Defendants.
--------------------------------------------------------------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.)
1
Because Plaintiff is employed by the New York City Department of Education, (Defs.
56.1 ¶ 10), her wages were garnished through OPA.
2
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
2
Plaintiff notes that the September 16 OSC, by its explicit terms, only directed her to
serve Kazlow, and that is what she did. (Pl. 56.1 ¶ 26.)
3
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.)
3
Plaintiff states that she has no basis to admit or deny this fact because Defendants have
refused to answer Plaintiff’s discovery requests and neither the employees of Kazlow’s office
nor the City Marshal have been deposed. (Pl. 56.1 ¶ 32.)
4
Plaintiff states that she has no basis to dispute Defendants’ representations that Kazlow
faxed the letter to the City Marshal’s office requesting that Plaintiff be reimbursed, because
Defendants have not answered Plaintiff’s discovery requests and the documentary evidence does
not address this issue. (Pl. 56.1 ¶¶ 40–42.)
4
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
5
[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. 1613 (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,
6
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. Discussion
a.
Standard of review
Summary judgment is proper only when, construing the evidence in the light most
favorable to the non-movant, “there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); Davis v. Shah, 821 F.3d 231,
243 (2d Cir. 2016); see also Cortes v. MTA NYC Transit, 802 F.3d 226, 230 (2d Cir. 2015). The
role of the court “is not to resolve disputed questions of fact but only to determine whether, as to
any material issue, a genuine factual dispute exists.” Rogoz v. City of Hartford, 796 F.3d 236,
245 (2d Cir. 2015) (first quoting Kaytor v. Elec. Boat Corp., 609 F.3d 537, 545 (2d Cir. 2010);
and then citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249–50 (1986)). A genuine issue
of fact exists when there is sufficient “evidence on which the jury could reasonably find for the
plaintiff.” Anderson, 477 U.S. at 252. The “mere existence of a scintilla of evidence” is not
5
It is not clear from the record precisely which of Plaintiff’s garnished paychecks were
refunded on these dates.
7
sufficient to defeat summary judgment. Id. The court’s function is to decide “whether, after
resolving all ambiguities and drawing all inferences in favor of the non-moving party, a rational
juror could find in favor of that party.” Pinto v. Allstate Ins. Co., 221 F.3d 394, 398 (2d Cir.
2000).
b.
FDCPA claims against Kazlow
Plaintiff alleges that Kazlow violated sections 1692e and 1692f of the FDCPA. (Am.
Compl. ¶ 45.) Plaintiff argues that Kazlow violated the FDCPA by “failing to take any steps to
correct what it knew by November 5, 2015 was an instruction by the [City] [M]arshal to [the
OPA] that would result in [the OPA] retaining and refusing to release funds garnished after the
September 15[, 2015] collection stay.” (Pl. Mem. in Opp’n to Defs. Mot. (“Pl. Opp’n Mem.”)
15, Docket Entry No. 27.)
Plaintiff argues that Kazlow violated section 1692e(10) of the FDCPA by “ratifying the
[City] [M]arshal’s instruction to the employer ‘not to . . . release any monies previously held’”
when Kazlow knew that some of the previously garnished funds “could not legally be garnished
because of the stay.” (Id. at 18.) Plaintiff argues that Kazlow violated section 1692f for
substantially the same reasons: (1) by “failing to promptly inform the [City] [M]arshal of the
stay,” (2) by “silence or inaction,” allowing the City Marshal to continue to have OPA garnish
Plaintiff’s wages in violation of the stay, and (3) by refusing to refund the garnishments to
Plaintiff for eleven months. (Id. at 20–21.)
Defendants argue that no reasonable juror would find that Kazlow violated sections
1692e or 1692f because Kazlow never misled or deceived Plaintiff in collecting the debt and
because the City Marshal acted properly — he informed the OPA of the stay when he learned of
it, and Kazlow ensured that he learned of it promptly after they realized the OPA had continued
8
to withhold Plaintiff’s funds during the pendency of the stay. (Defs. Mem. 15.)
Because Plaintiff asserts that the same conduct underlies both the section 1692e and
section 1692f claims, (see Pl. Opp’n Mem. 16), the Court considers whether, based on the
undisputed facts of the conduct at issue, a reasonable jury could find that Kazlow violated either
provision of the FDCPA.
i.
Statutory framework
“Congress enacted the FDCPA ‘to eliminate abusive debt collection practices by debt
collectors, to insure that those debt collectors who refrain from using abusive debt collection
practices are not competitively disadvantaged, and to promote consistent State action to protect
consumers against debt collection abuses.’” Vincent v. The Money Store, 736 F.3d 88, 96
(2d Cir. 2013) (quoting 15 U.S.C. § 1692e); see also Carlin v. Davidson Fink LLP, 852 F.3d
207, 214 (2d Cir. 2017) (“We have . . . recognized that the ‘FDCPA was passed to protect
consumers from deceptive or harassing actions taken by debt collectors.’” (emphasis omitted)
(quoting Kropelnicki v. Siegel, 290 F.3d 118, 127 (2d Cir. 2002))); Benzemann v. Citibank, N.A.,
806 F.3d 98, 100 (2d Cir. 2015) (“The purpose of the FDCPA is to ‘eliminate abusive debt
collection practices by debt collectors, to insure that those debt collectors who refrain from using
abusive debt collection practices are not competitively disadvantaged, and to promote consistent
State action to protect consumers against debt collection abuses.’” (quoting Kropelnicki, 290
F.3d at 127)). “To accomplish these goals, the FDCPA creates a private right of action for
debtors who have been harmed by abusive debt collection practices.” Benzemann, 806 F.3d at
100 (citing 15 U.S.C. § 1692k).
To establish a violation under the FDCPA, “(1) the plaintiff must be a ‘consumer’ who
allegedly owes the debt or a person who has been the object of efforts to collect a consumer debt,
9
(2) the defendant collecting the debt [must be] considered a ‘debt collector,’ and (3) the
defendant [must ha[ve] engaged in an[] act or omission in violation of FDCPA requirements.”
Polanco v. NCO Portfolio Mgmt., Inc. (Polanco II), 132 F. Supp. 3d 567, 578 (S.D.N.Y. 2015)
(quoting Plummer v. Atl. Credit & Fin., Inc., 66 F. Supp. 3d 484, 488 (S.D.N.Y. 2014)); see also
Benzemann, 806 F.3d at 100 (“[T]he FDCPA creates a private right of action for debtors who
have been harmed by abusive debt collection practices.”). 6
The FDCPA prohibits debt collectors from, among other things, making false or
misleading representations. 15 U.S.C. § 1692e. Section 1692e specifies certain categories of
conduct that are prohibited, including making false representations about the amount or legal
status of any debt, threatening to take any action that cannot legally be taken or that the debt
collector does not intend to take, and using “any false representation or deceptive means to
collect or attempt to collect any debt or to obtain information concerning a consumer.” Id.; see
Clomon v. Jackson, 988 F.2d 1314, 1319 (2d Cir. 1993) (“The sixteen subsections of § 1692e set
forth a non-exhaustive list of practices that fall within [the ban on false, deceptive, or misleading
representations or means in connection with the collection of any debt].”).
Section 1692f prohibits the use of “unfair or unconscionable means” to collect a debt.
15 U.S.C. § 1692f; Rogers v. Capital One Servs., LLC, 447 F. App’x 246, 249 (2d Cir. 2011)
(describing section 1692f as a “catchall provision prohibiting the use of any unfair or
unconscionable means to collect or attempt to collect any debt” (citation and internal quotation
marks omitted)); Bank v. Cooper, Paroff, Cooper & Cook, 356 F. App’x 509, 511 (2d Cir. 2009)
(holding that both the collection and the attempted collection of a debt in violation of section
6
The parties do not appear to dispute that Plaintiff is a “consumer” who owed a “debt”
as defined by the FDCPA, and that Kazlow is a “debt collector” as defined under the FDCPA.
10
1692f violate the FDCPA); Sutton v. Fin. Recovery Servs., Inc., 121 F. Supp. 3d 309, 314
(E.D.N.Y. 2015) (noting that in its prefatory clause, section 1692f prohibits the use of “unfair or
unconscionable means to collect or attempt to collect any debt. . . . The list of [section] 1692f
violations found in the subsections are nonexhaustive . . . .” (citation and internal quotation
marks omitted)). “Courts analyzing claims under 1692f have acknowledged that the phrase
‘unfair or unconscionable’ is as vague as they come.” Rojas v. Forster & Garbus LLP,
No. 13-CV-02825, 2014 WL 3810124, at *5 (E.D.N.Y. July 31, 2014) (alteration, citations and
internal quotation marks omitted).
ii.
Failing to promptly inform the City Marshal of the September 16
OSC
Plaintiff argues that Kazlow violated the FDCPA when it failed to promptly inform the
City Marshal of the September 16 OSC. 7 (Pl. Opp’n Mem. 12.) Defendants argue that Kazlow
was not obligated to notify the City Marshal of the September 16 OSC and did not otherwise
deceive, mislead or misrepresent anything to Plaintiff. (Defs. Reply in Further Supp. of Defs.
Mot. (“Defs. Reply”) 2, Docket Entry No. 31.)
Kazlow did not violate the FDCPA by failing to inform the City Marshal of the
September 16 OSC because it was under no obligation to serve the City Marshal with the
September 16 OSC and Plaintiff has not identified how Kazlow’s conduct was otherwise false or
deceptive, see 15 U.S.C. § 1692e, or unfair or unconscionable, see id. § 1692f.
As Defendant correctly notes, under New York law, the duty to notify a marshal or a
sheriff of an order is placed on the party who obtains the order, rather than the opposing party or
its attorney, who “cannot be faulted for not having borne the [complaining party’s] burden.” See
7
Plaintiff does not argue that the City Marshal was Kazlow’s agent for purposes of this
collection but, as discussed in Part II(b)(iii), infra, argues that Kazlow ratified the City Marshal’s
conduct.
11
Chelsea Marina, Inc. v. Scoralick, 463 N.Y.S.2d 489, 493 (App. Div. 1983) (holding that a
landlord’s attorney had no obligation to recall execution or serve the sheriff with notice of a
stay); Hosp. Serv. Plan of N.J. v. Warehouse Prod. & Sales Emps., 429 N.Y.S.2d 31, 33 (App.
Div. 1980) (holding that judgment creditors were not obligated to recall an execution, “it being
incumbent upon [the judgment debtors] to protect their own interests by serving the [s]heriff”
even where the order did not provide for service to the sheriff); see also Martin v. Consol.
Edison Co. v. N.Y., Inc., 576 N.Y.S.2d 290, 290 (App. Div. 1991) (holding that the plaintiff who
issued the execution was “under no obligation to recall [it]” where the defendant had obtained
the stay in its favor (citing Hosp. Service Plan of N.J., 429 N.Y.S. at 33)); Felder v. Bentley, 872
N.Y.S.2d 690, 2008 WL 4118090, at *2 (Dist. Ct. 2008) (holding that “it was the sole obligation
of the [r]espondent to serve the sheriff with a copy of the stay in order to avoid being evicted
from her residency” (citing Hosp. Service Plan of N.J., 429 N.Y.S. at 33)). Although this
authority arises in the context of landlord-tenant law, the Court nevertheless finds it probative, as
Defendants should not be liable under the FDCPA for conduct that complies with their legal
obligations during litigation.
Moreover, Defendants reasonably relied on Plaintiff’s earlier service upon the City
Marshal of the May 15 OSC and, immediately upon realizing that Plaintiff had not served the
City Marshal with the September 16 OSC, attempted to remedy the improper garnishment.
The May 15 OSC indicated that Plaintiff should serve both Kazlow and the City Marshal.
(See May 15 OSC, Docket Entry No. 16-15.) Plaintiff did so. (Pl. 56.1 ¶ 16.) The September 16
OSC, by contrast, indicated that Plaintiff should serve Kazlow, (see Sept. 16 OSC, Docket Entry
No. 16-21), and Plaintiff complied, (Pl. 56.1 ¶ 26). Kazlow states that because Plaintiff served
the City Marshal with the May 15 OSC, it assumed she would similarly serve the City Marshal
12
with the September 16 OSC. (Def. 56.1 ¶¶ 26, 27.) Plaintiff states that she did not serve the City
Marshal with the September 16 OSC because the OSC did not instruct her to, but “[d]espite that,
Kazlow never disclosed the September 16 OSC until after the [City] [M]arshal informed Kazlow
on or about October 19 of a recent garnishment.” (Pl. Opp’n Mem. 12.) The Court has not
located, nor has Plaintiff provided, any authority to suggest that Kazlow had an obligation to
“disclose” the September 16 OSC to the City Marshal or that its mistaken noncompliance with
such an obligation would constitute a deceptive, unconscionable or unfair practice under the
FDCPA. Nevertheless, the very day that Kazlow received its first payment garnished in
violation of the stay, it called the City Marshal’s office and informed them that no further
payments should be collected or forwarded. (Defs. 56.1 ¶¶ 30–32.) Plaintiff neither disputes this
nor explains in what way it was deceptive, misleading, unconscionable or unfair.
The Court therefore dismisses Plaintiff’s FDCPA claims under both sections 1692e and
1692f to the extent that they are based on Kazlow’s failure to timely inform the City Marshal of
the September 16 OSC.
iii. Ratifying the City Marshal’s October 20, 2015 letter to the OPA
Plaintiff argues that Kazlow violated sections 1692e and 1692f “by ratifying the [City]
[M]arshal’s instruction to [the OPA]” because Kazlow knew that some of the previously
garnished wages could not legally be garnished after the September 16 OSC. (Pl. Opp’n Mem.
18.) According to Plaintiff, the City Marshal violated the September 16 OSC when, on October
20, 2015, he notified the OPA of the stay and told the OPA not to release Plaintiff’s previously
garnished wages. (Id. at 13.) Defendants argue that Kazlow did not ratify the City Marshal’s
conduct and that, even if it had, the City Marshal did not violate the FDCPA when he sent a form
letter to the OPA informing it of the stay and including instructions not to release previously
13
garnished wages. (Defs. Reply 3–4.) Because, as explained below, the Court finds that Kazlow
did not ratify the City Marshal’s conduct, it declines to consider whether the City Marshal
violated the FDCPA when he instructed the OPA “not to make further deductions nor release any
monies previously withheld from [Plaintiff], pending the decision of the Court.” 8 (See Defs.
56.1 ¶ 33.)
“Ratification is the act of knowingly giving sanction or affirmance to an act which would
otherwise be unauthorized and not binding.” In re Adelphia Recovery Tr., 634 F.3d 678, 691 (2d
Cir. 2011). “Ratification may be express or implied, or may result from silence or inaction.” Id.
at 692 (alteration and citations omitted); see also RLI Ins. Co. v. Athan Contracting Corp., 667 F.
Supp. 2d 229, 235 (E.D.N.Y. 2009) (“Under New York law, a principal can be held liable for the
unauthorized acts of an agent that the principal later ratifies. . . . Ratification is the express or
implied adoption, i.e. recognition and approval, of the unauthorized acts of another.”). In all
cases, ratification requires both “knowledge of a defect in the act to be confirmed” and “the right
to reject or ratify it.” Royal Park Invs. SA/NV v. Deutsche Bank Nat’l Trust Co., No. 14-CV4394, 2016 WL 4613390, at *16 (S.D.N.Y. Aug. 31, 2016) (citing In re Estate of Edgar Wolf
Levy, 893 N.Y.S.2d 142, 144 (App. Div. 2010)). Ratification “must be performed with full
knowledge of the material facts relating to the transaction, and the assent must be clearly
established and may not be inferred from doubtful or equivocal acts or language.” Id. (quoting
Chem. Bank v. Affiliated FM Ins. Co., 169 F.3d 121, 128 (2d Cir. 1999), vacated on other
grounds sub nom. Chase Manhattan Bank v. Affiliated FM Ins. Co., 343 F.3d 120 (2d Cir.
2003)); see also Municipality of Bremanger v. Citigroup Glob. Mkts., Inc., No. 09-CV-7058,
8
The Court notes that the language at issue is equally amenable to an interpretation that
the OPA not release money to the City Marshal, rather than a direction that the OPA not release
money to Plaintiff.
14
2013 WL 1294615, at *21 (S.D.N.Y. Mar. 28, 2013) (holding that the defendant had not ratified
the transaction where it accepted the benefits flowing from a sale but the plaintiffs failed to
proffer evidence that the defendant was fully aware of the material facts of the transaction);
Standard Funding Corp. v. Lewitt, 89 N.Y.2d 546, 552 (1997) (holding that an insurance
company had not impliedly ratified an agent’s contract where it “received no premiums or any
other benefit in connection with the fraudulent financing agreements”).
In a seminal case on ratification, the New York Court of Appeals explained that an
“implied ratification” occurs where the beneficiary’s subsequent conduct “supports the
reasonable conclusion that he, by his assent thereto or acquiescence therein, has accepted and
adopted” the fiduciary’s actions. Pollitz v. Wabash R.R. Co., 207 N.Y. 113, 129 (1912)
(alterations omitted); see In re Levy, 893 N.Y.S.2d at 144 (quoting Pollitz, 209 N.Y. at 129);
Hempstead Realty, LLC v. Sturrup, 55 Misc.3d 1219(A), 2017 WL 2215747, at *6 (N.Y. Sup.
Ct. 2017) (quoting Pollitz, 207 N.Y. at 129). Although “an act, such as an acceptance of
benefits, may constitute a ratification, and acquiescence may give rise to an implied ratification,”
“[m]ere negligence is not ratification.” Adelphia, 634 F.3d at 693. “However, the intent can be
implied from knowledge of the principal coupled with a failure to timely repudiate, where the
party seeking a finding of ratification has in some way relied upon the principal’s silence or
where the effect of the contract depends upon future events.” Cammeby’s Mgmt., Co., LLC v.
Affiliated FM Ins. Co., 152 F. Supp. 3d 159, 165 (S.D.N.Y. 2016) (quoting Chem. Bank, 169
F.3d at 128); see also Holm v. C.M.P. Sheet Metal, Inc., 455 N.Y.S.2d 429, 432 (App. Div.
1982) (comparing cases in which a landlord received rent pursuant to a lease made by an agent
and explaining that where the landlord had knowledge of the terms of the lease, he ratified the
agent’s acts and where the landlord did not have knowledge of the terms of the lease, he had not
15
ratified the agent’s acts).
Here, Plaintiff has not presented any evidence to support her contention that Kazlow
ratified the City Marshal’s October 20, 2015 letter to the OPA when Kazlow failed to
countermand the City Marshal’s instructions. Plaintiff argues that Kazlow “indisputably knew
no later than November 5, 2015 that the [City Marshal] had instructed [the OPA] to violate the
stay by instructing [the OPA] ‘not to . . . release any funds previously withheld’” because
Kazlow forwarded Plaintiff’s attorney an email chain on November 5 that attached the October
20 letter. (Pl. Opp’n Mem. 15.) Despite this, Kazlow “took no steps to instruct [the OPA] to
release any wages garnished” since the September 16 OSC, reflecting an “inaction” that ratified
the City Marshal’s directive. (Id.)
Plaintiff’s arguments are unpersuasive for several reasons. First, Plaintiff has not
demonstrated that Kazlow had “knowledge” that the OPA had funds to release to Plaintiff that
were improperly garnished during the pendency of the stay. Plaintiff does not dispute that before
Kazlow emailed Plaintiff’s attorney on November 5, 2015, attaching the October 20 letter,
Kazlow had verified that the City Marshal had not received any improperly garnished wages
from Plaintiff and had been told that, to the extent that Plaintiff was reporting amounts that were
withheld during the pendency of the stay, those withholdings may be attributable to another
income execution. (See Defs. 56.1 ¶¶ 46–47, 50–51; Pl. 56.1 ¶¶ 46–47, 50–51.) Nor does
Plaintiff dispute that Kazlow communicated this information to Plaintiff on November 5, 2015
and never received a response to the inquiry about whether the withholdings could have arisen
from other judgments. (See Defs. 56.1 ¶ 54; Pl. 56.1 ¶ 54.) Thus, no rational juror could
conclude that Kazlow had “full knowledge of the material facts,” see Chem. Bank, 169 F.3d at
128 — namely, that the OPA had not released to Plaintiff the funds it had improperly withheld
16
while the September 16 OSC was in effect.
In addition, in order for ratification to be implied, “the party seeking ratification [must
have] in some way relied upon the principal’s silence.” Cammeby’s Mgmt., 152 F. Supp. 3d at
165 (quoting Chem. Bank, 169 F.3d at 128). Plaintiff has not presented any facts to support a
conclusion that she relied on Kazlow’s “silence,” or, in this case, failure to correct any
inaccuracies in the City Marshal’s October 20 letter.
Finally, Kazlow “received no . . . benefit in connection with” the City Marshal’s direction
to the OPA that it retain Plaintiff’s previously garnished funds, see Lewitt, 89 N.Y.2d at 552; in
fact, on October 27, 2015, Kazlow mailed the City Marshal a check in the amount of $142.17 in
order to refund the wages garnished during the September 16 OSC, (see Defs. 56.1 ¶ 43).
Plaintiff does not dispute that Kazlow received no other payments from the City Marshal in
connection with the Income Execution during the pendency of the September 16 OSC. (Defs.
56.1 ¶ 65; Pl. 56.1 ¶ 65.) Thus, “the rule that ratification may be implied where the principal
retains the benefit of an unauthorized transaction with knowledge of the material facts has no
application here.” See Lewitt, 89 N.Y.2d at 552. The Court concludes that no reasonable juror
could find that Kazlow ratified the City Marshal’s language on October 20, 2015, which
allegedly caused the OPA to not release Plaintiff’s garnished wages. Plaintiff’s FDCPA claims
are therefore dismissed to the extent that they are based on Kazlow’s ratification of the City
Marshal’s October 20, 2015 letter.
iv. Refusing to refund the garnishments to Plaintiff
Plaintiff relies on Polanco v. NCO Portfolio Management, Inc. (Polanco I), 930 F. Supp.
2d 547, 552 (S.D.N.Y. 2013), to argue that Kazlow violated section 1692f by “mak[ing] an endrun around the September 16 OSC by having [the OPA] retain funds [Kazlow knew] were
17
garnished in violation of the stay.” (Pl. Opp’n Mem. 19.) Defendants argue that the City
Marshal mailed Plaintiff check 508958 on November 6, 2015, reimbursing the money that the
City Marshal had in its possession from Plaintiff’s improperly garnished wages, and that even if
Plaintiff disputes that check 508958 was mailed, Kazlow had no further information that
Plaintiff’s garnished wages had not been returned to her because Plaintiff’s attorney never
responded to the last correspondence from Kazlow. (Defs. Reply 9.)
In Polanco I, the defendant attempted to collect the plaintiff’s credit card debt “via a twopart scheme: falsifying an affidavit of service to obtain a default judgment against her and
ignoring subsequent [c]ourt [o]rders to return the improperly collected debt for over a ten-month
period.” Polanco I, 930 F. Supp. 2d at 551. The court held that the defendant’s conduct “of
fraudulently using the court’s power to secure a default judgment and subsequent garnishment
and then refusing to obey promptly that same [c]ourt’s [o]rders” fell within the FDCPA’s “broad
purpose to protect consumers from such alleged abusive and unfair tactics,” even while the
defendant’s conduct did not strictly fall within the FDCPA’s proscribed behaviors. Id. at 552. In
its decision on summary judgment, the court found that there was “no question” that the
defendant “had copies of the two [o]rders first vacating the default judgment and then
unequivocally requiring return of [the p]laintiff’s funds ‘forthwith.’” Polanco II, 132 F. Supp. at
584 (granting partial summary judgment for the plaintiff).
Here, unlike in Polanco I, Plaintiff does not allege that Defendants obtained a fraudulent
judgment, and there is no evidence to support Plaintiff’s allegation that Kazlow violated or
intended to violate an explicit court order. Indeed, the September 16 OSC instructed Defendants
to stay the Income Execution, and, as Defendants observe, the City Marshal was not required to
implement the stay until after he was served. (See Defs. Reply 9); see Felder, 872 N.Y.S.2d at
18
690 (“In the case at bar, neither party informed the sheriff of the stay of eviction, therefore, the
sheriff is not at fault for executing the eviction when he possessed a valid warrant to do so and he
was not served with the stay.” (citing Chelsea Marina, 463 N.Y.S.2d at 493)). Immediately after
the City Marshal was informed of the stay, the City Marshal informed the OPA to stop
garnishing Plaintiff’s wages, in compliance with the September 16 OSC. (See Defs. 56.1 ¶ 33;
Pl. 56.1 ¶ 33.)
Unlike in Polanco, the court did not direct Defendants to return Plaintiff’s garnished
funds “forthwith,” see Polanco II, 132 F. Supp. at 584, and neither Kazlow nor the City Marshal
had reason to believe that Plaintiff’s funds were being withheld improperly as a result of their
judgment, as opposed to some other judgment. (See Defs 56.1 ¶¶ 54–54.) Furthermore, there is
undisputed evidence that Kazlow immediately attempted to implement a refund of the wages that
it understood had been garnished improperly during the pendency of the stay. (See Defs. 56.1 ¶¶
40–42.) Thus, even if, as Plaintiff asserts, the City Marshal did not mail her check 508958 in
November of 2015, 9 Kazlow promptly notified the City Marshal’s office of the September 16
OSC, provided Plaintiff’s pay statements reflecting the improper garnishments and instructed the
City Marshal that “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.” (Defs. 56.1
¶ 40.) Plaintiff has not provided any evidence that the City Marshal or Kazlow had reason to
9
Although Defendants have submitted admissible contemporary business records
indicating that the City Marshal drew and sent check 508958, Plaintiff asserts that she never
received the check. (See Pl. 56.1 ¶ 57; 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. 1613 (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).)
19
know of any further improper garnishments after that date, and, without such evidence, no
rational juror could conclude that Kazlow refused to refund Plaintiff’s funds.
Because there is no genuine issue of disputed fact and no rational juror could find, based
on the facts of this case, that Kazlow violated sections 1692e or 1692f of the FDCPA, the Court
grants Defendants’ motion for summary judgment on Plaintiff’s FDCPA claims.
c.
Conversion
Plaintiff alleges that both Defendants “intentionally and without authority . . . exercised
control over [Plaintiff’s] wages and money” and interfered with her right to possession of that
money. (Am. Compl. ¶ 51.)
A district court may decline to exercise supplemental jurisdiction over a claim if “the
district court has dismissed all claims over which it has original jurisdiction.” 28 U.S.C.
§ 1367(c)(3); Alliance of Auto. Mfrs., Inc. v. Currey, 610 F. App’x 10, 14 (2d Cir. 2015) (holding
that it was “not improper for the court to decline to exercise its supplemental jurisdiction” after it
properly dismissed the plaintiff’s constitutional claims); Purgess v. Sharrock, 33 F.3d 134, 138
(2d Cir. 1994) (“[I]f the federal claims are dismissed before trial, even though not insubstantial
in a jurisdictional sense, the state claims should be dismissed as well.” (alteration in original)
(quoting Castellano v. Bd. of Trs., 937 F.3d 752, 758 (2d Cir. 1991))).
Having dismissed Plaintiff’s FDCPA claims, the Court declines to exercise supplemental
jurisdiction over Plaintiff’s claim for conversion. Accordingly, Plaintiff’s claim for conversion
is dismissed without prejudice.
20
III. Conclusion
For the foregoing reasons, the Court grants Defendants’ motion for summary judgment.
SO ORDERED:
s/ MKB
MARGO K. BRODIE
United States District Judge
Dated: August 2, 2017
Brooklyn, New York
21
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?