New York City Debt Collection Defense Attorney

Key consumer law holdings arising from a recently decided FDCPA case against Mel Harris & Associates, LR Credit 10, LLC, and process server for allegedly conspiring to engage in "sewer service"

Mel Harris again found itself in the hot seat for its process serving practices following the widely known class action, Sykes v. Mel Harris & Assoc., in which it is targeted as a defendant in a federal "RICO" (Rackateer Influenced and Corrupt Organizations Act) case.

The case we report on today, Bowens v. LR Credit 10, LLC, 07-civ-459s, of the Western District was actually decided in favor of the defendants but we applaud the unrepresented consumer's stab at taking action against the debt buying defendants and process server, who together, served an address where Mr. Bowens was not living. As a result, LR Credit obtained a default judgment and left Mr. Bowens to contend with a frozen bank account.

Mr. Bowens challenged the process server's alleged discussion with a "neighbor" who confirmed that he lived where allegedly served. Mr. Bowens further disputed that any required, follow-up mailing of the summons and complaint had occurred.

Two core issues in this heavily litigated case:

  1. Can process servers be subject to the Fair Debt Collection Practices Act?
  2. Can attorneys who engage them be vicariously liable (responsible) for their conduct?

The court answered yes to these two questions, respectively, finding that:

  1. The act of perjuring an affidavit of service removes the general FDCPA exemption applicable to process servers; and
  2. Lawyers can be held responsible for process servers if they knew the affidavit(s) of service were highly likely to be false.

Although Mr. Bowens did not identify which specific provisions of the FDCPA were violated, the court inferred that he alleged the judicial interpretation that the "falsification of an affidavit of service violates the FDCPA." (See Coble v. Cohen & Slamowitz, LLP, 11 civ 1037, S.D.N.Y. Oct. 31, 2011).

Here, unfortunately, Mr. Bowens did not submit evidence that the process server, LR Credit, and Mel Harris "colluded" to intentionally deprive him of service. The defendants convinced the court that they were reasonable in committing the "mere error" of serving him at an address he had lived 6 years prior. The defendants showed that Accurint (a well-known, paid database) and the United States Postal Service supported the belief that he lived where allegedly served. In light of this evidence, the court found that the process serving defendants were acting within their roles as process servers and therefore enjoyed the exemption applied to process servers under FDCPA § 1692A(6)(D) that protects them "while they serve process."

Another important holding of this case (citing the NY appellate division):

"New York law supports a claim of abuse of process where defendants fraudulently served process on a debtor to obtain a default judgment." See Phillipe v. American Exp. Travel Related Servs. Co., 174 A.D.2d 470, 571 N.Y.S.2d 711 N.Y.App. Div.1991).

But Mr. Bowens' abuse of process claim did not survive here because the court found that he did not show the necessary intent to do harm.

If you have been sued for debt, especially if you think you may not have been properly served, call us right away to preserve important rights and defenses.