New York City Debt Collection Defense Attorney

Judge denies Chase Bank's request to serve alleged debtor through Facebook

This case began in state court, where Chase Bank (USA), N.A. brought a collections case against Lorri Fortunato, alleging she had defaulted on a Chase credit card account. Chase obtained a default judgment against Ms. Fortunato in New York State Supreme Court, garnished her wages, and ultimately obtained full satisfaction of the debt.

Ms. Fortunato, however, claimed she had never lived at the address at which Chase allegedly attempted to serve her, and she alleged that her daughter had fraudulently opened the Chase credit card in her name and made charges without her knowledge or authorization.

Ms. Fortunato retaliated against Chase with a lawsuit of her own. She sued for violations of the Fair Credit Reporting Act (FCRA), abuse of process, and conversion.

In the federal case against Chase, the court granted Chase's request to implead (bring into the case) Nicole Fortunado, Lorri's estranged daughter. Chase alleged that Nicole opened the account in her mother's name and charged $1,243.09 on it. Chase made claims against Nicole for contribution, indemnification, breach of contract, account stated, fraud and unjust enrichment. Chase hired an investigator, but was unable to locate Nicole, or a physical address where she resided. For that reason, Chase requested permission from the court to serve Nicole via a combination of Facebook, email, publication and delivery to Nicole's mother, Lorri.

The court noted at the outset of its analysis the general standard for service in New York, adopted from Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950), that "constitutional due process requires that service of process be 'reasonably calculated, under all circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.'" The court also noted that under New York CPLR § 308(5), when service by traditional methods proves "impracticable," service may be made "in such manner as the court, upon motion without notice, directs."

Given Chase's numerous attempts to effect personal service, as well as its diligent search for alternative addresses, and Nicole's history of providing fictional addresses to various state and private parties, the court stated that it was satisfied that normal methods of service were "impracticable."

The court then turned to whether the methods suggested by Chase were reasonably calculated to notify Nicole of the proceedings. Not surprisingly, the court concluded that delivery to Nicole's mother did not meet this standard, since mother and daughter are estranged and are essentially opposing parties in the litigation.

As to service by email and Facebook, the court stated, "Chase has not set forth any facts that would give the Court a degree of certainty that the Facebook profile its investigator located is in fact maintained by Nicole or that the email address listed on the Facebook profile is operational and accessed by Nicole. Indeed, the Court's understanding is that anyone can make a Facebook profile using real, fake, or incomplete information, and thus, there is no way for the Court to confirm whether the Nicole Fortunato the investigator found is in fact the third-party defendant to be served."

Under the circumstances, the court concluded the most likely way to apprise Nicole is through publication in a local newspaper. Chase's investigator found four possible addresses for Nicole, plus another listed on her Facebook page, so the court directed Chase to publish in all five locations.

-Sheril Stanford