New York City Debt Collection Defense Attorney

Plaintiff's claim that Cohen & Slamowitz violated FDCPA by repeatedly threatening to restrain bank account containing social security funds survives summary judgment

In this case, Henneberger v. Cohen & Slamowitz, LLP, 2010 WL 1405578 [W.D.N.Y. March 31, 2010, No. 07-CV-814 (SR)], the plaintiff Ms. Hennenberger, a senior citizen living on social security income, brought suit against Cohen & Slamowitz, LLP for violations of the Fair Debt Collection Practices Act ("FDCPA"). Ms. Henneberger alleged that Cohen & Slamowitz had violated the FDCPA, § 1692f, by freezing her bank account even though it had express knowledge, through previous telephone conversations with her, that her account contained only fully exempt funds from social security payments. She also alleged that the defendant violated 15 U.S.C. §§ 1692d, 1692e, 1692e(4) and 1692(5) by repeatedly representing in telephone conversations that it could or would seize her exempt social security funds. The case was before the court on Cohen & Slamowitz's motion for summary judgment.

The court granted summary judgment to Cohen & Slamowitz on plaintiff's claim that defendant had violated the FDCPA by freezing her bank account. The court stated that it was neither unfair nor unconscionable for the defendant to utilize New York's post-judgment remedies to enforce its judgment. Relying on McCahey v. L.P. Investors,[1] the court stated that it is established that New York's post-judgment remedies appropriately balance the competing interests of creditors, debtors and the state, thereby satisfying due process. The Court of Appeals in McCahey specifically rejected plaintiff's argument that notice and a hearing be afforded before a bank account is restrained.

On this point, the court also quoted from Shrestha v. State Credit Adjustment Bureau, Inc.,[2] which stated:

Defendant is not required to rely on a debtor's assertion of his financial status but rather is entitled to a hearing. Defendant did not know what property was exempt until plaintiff followed the statutory procedure to claim it.

The court also cited to cases from the Seventh Circuit and the District of Montana to support the same proposition. In conclusion, stated the court, "As the issuance of the restraining notice in the instant case was proper under New York's statutory scheme for post-judgment enforcement, it cannot be deemed unfair or unconscionable under the Fair Debt Collection Practices Act."

Defendant Cohen & Slamowitz also argued in its summary judgment motion that the plaintiff had failed to establish entitlement to damages. Here, the court disagreed, quoting Miller v. Midpoint Resolution Group, LLC,[3] which held, "When the emotional distress alleged to have been suffered is the sort that would be experienced by reasonable people under the circumstances, some damage, even if merely nominal damage, can be presumed. […] The extent of plaintiff's injury can be proved by plaintiff's testimony alone."

The court held that the plaintiff's claims that Cohen & Slamowitz's phone calls violated the FDCPA could not be resolved on summary judgment, and could proceed to trial.

Sheril Stanford

[1] 774 F.2d 543, 548-549 (2nd Circ.1985).

[2] 117 F. Supp.2d 142, 145 (D. Conn. 2000).

[3] 608 F. Supp.2d 389, 394 (W.D.N.Y. 2009).