New York - Collection Action Lacked Evidence, Judge Noach Dear Finds

New York - A Brooklyn judge has dismissed a $7,000 collection action because the creditor “did not have even a scintilla of evidence” to present when the case was placed on the Civil Court’s trial calendar.

Acting Supreme Court Justice Noach Dear rebuffed the creditor’s request for an adjournment because it “seemed to be nothing more than another effort to contact the alleged debtor” after all other means of collecting the debt had failed.

“The courtroom is a place where the law is followed not skirted for convenience,” he said in LVNV Funding v. Hatzakis, 111517/10.
The Civil Court Act (CCA) §1301 provides a mandate for the speedy resolution of cases on its dockets by requiring that where “any party appears in person, the clerk shall fix a date for trial not less than five or more than 15 days after joinder of issue,” Justice Dear wrote.

Arthur Sanders, a partner at Mel S. Harris Associates, which represented LVNV Funding, said its client will appeal because the ruling deprives it of its statutory right to pretrial discovery.

Mr. Sanders said the passage in the Civil Court Act quoted by Justice Dear applies to situations when there has been a notice of trial.
A notice of trial, he said, contains a certification of the attorney for the party seeking a trial that discovery has been completed, which did not happen in this case.

The collection action in LVNV Funding was filed on Dec. 10, 2010, and issue was joined when the debtor, Alicia Hatzakis, who was unrepresented, appeared at the courthouse at 141 Livingston St. on Dec. 30 and filed her answer, Justice Dear wrote. The clerk’s office then put the matter on the Brooklyn court’s “trial ready” calendar for Feb. 7, 2011.

When both sides appeared on Feb. 7, LVNV requested an adjournment, stating it needed discovery to support its request for an adjournment.
Justice Dear rejected the request because LVNV “had failed to make any discovery requests, let alone an investigation into its case, from the time issue was joined.”

The judge asked an attorney representing LVNV for the basis on which the lawsuit had been filed. In his opinion, the judge characterized the lawyer’s answer as based “upon information that was predicated upon multiple layers of hearsay.”

Further, Justice Dear noted that the court had sent LVNV a notice that was sent to all creditors pursuing collection actions warning that failure to be ready for trial can result in dismissal.

After the adjournment was denied, Justice Dear dismissed the case because LVNV had “admitted it could not establish its prima facie case and could not assure the court that it would be able to do so on any adjourned date.”

In the LVNV case, like “so many others,” Justice Dear wrote, a creditor, after starting a lawsuit based on “multiple hearsay” either obtains a default judgment that “would often times not pass muster” under the CPLR or “an in person settlement discussion. Either way the [creditor] stands to gain.”

Justice Dear refused to take part in that process, which he described as allowing creditors to commandeer the court into “becoming another tool for debt collectors to force contact with alleged debtors for the statutory filing fee.”

Justice Dear served as a New York City councilman for 18 years until term limits barred him from seeking re-election in 2001. From 2002 until his election to the Civil Court in 2007, he was a commissioner of the Taxi and Limousine Commission.