COVER NL 09_06.qxd - Nassau County Bar Association

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8 n July/August 2012 n Nassau Lawyer IN BRIEF Member Activities Doris L. Martin, partner and director at Garfunkel Wild, P.C., was named one of Long Island Business News’ Top 50 Most Influential Women in Business. The award recognizes significant contributions of women professionals throughout Long Island. Ms. Martin currently heads the firm’s Personal Services and Estate Planning and Tax Practice Groups. She also co-chairs the Discharge Planning, Patient Rights and Elder Law Practice Group. Ms. Martin served several terms as a Board Member for North Shore Child and Family Guidance Center, a mental health services provider for children and families, and helped found the Tender Loving Care Foundation, an organization devoted to improving the experience of parents with children in neonatal intensive care units. She frequently publishes and is a past secretary of the Bar Association of the City of New York’s Trusts, Estates and Surrogate Courts Committee. Ms. Martin earned her Juris Doctor from New York University School of Law. Eric M. Kramer, a trusts and estates partner and Certified Public Accountant at Farrell Fritz, P.C., was recently appointed to the New York State Society of CPAs PAC Board of Trustees. Mr. Kramer, who earned his Juris Doctor from St. John’s University School of Law, concentrates his practice in estate planning and serves on the Society of CPA’s Governance Committee. He is a past president of the organization’s Nassau Chapter. Richard K. Zuckerman of Lamb & Barnosky, LLP recently co-presented on at the 12th Annual School Attorney Law Conference sponsored by the New York State Association of School Attorneys. Mr. Zuckerman and Sharon N. Berlin, also of the firm, co-authored an article entitled “Court of Appeals Update: Contractual No-Layoff Provisions” for the State Bar Association Labor and Em ployment Law Journal. Karen Tenenbaum of Melville-based Karen J. Tenenbaum, P.C., recently appeared on the cable television show “Something to Talk About” where she discussed New York State tax audit pitfalls and financial literacy for children. Eun Chong Thorsen, an attorney in the Litigation Practice Group with Vishnick McGovern Milizio LLP, was installed to the Board of Directors of the Queens County Women’s Bar Association. Ms. Thorsen concentrates her practice in the areas of commercial and employment litigation, estate litigation and matrimonial and family law litigation. She is also a member of the Korean American Lawyers Association of Greater New York and the International Association of Korean Lawyers. Barbara Stegun Phair, a partner at Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara & Einiger, LLP, was recently appointed to the Board of Directors of the New York Member MMe Member b er r r Benefits Be Benefits efi f s s Corner Cor Corner er A Realtime Reporting CCOUNNTING Holtz Rubenstein Remin ick C OUURT R & B USINESS EPORTING S V ALLUATION 631-719-3456 x x. 226 ~ hdeiters@hrrllp.com ERVIICES 516-938-4000 ~ info@realtimereporting.com NSURANCE CBS Coverage Group 516-394-7562 2 ~ rvetere@cbscoverage.com Nor t th Park Consultants 8 800-250-2283 ~ wil l liam_d_mur p phy@strategiesforwealth. com VIRRTUAL Champion Office Suites I O FFICE OLUTIIONS Please make use of f all the discounts and s special of off ff fffer ffer rss the h he f ffollo follo ll wing i co ommpanies panies i mak makk ke a available ailable ill bl t tto t o N N CBA A member b rs s CAR RENTAL Av vis AWD # A534100 Budget BCD# U1662922 800-831-8000 www. avis. co m www.budget.com Equinox Fitness Clubs www.equinoxfitness.com 1-800-flowers 1-800-baskets 1800flowers.com Davis Optical 516-932-9500 R F Hon. Stephen L. Ukeiley & W S & OTHER 866-505-1225 ~ rogerk@virtualofficeny.com ITNESS ELLNESSS Healthtrax Fitness 516-741-1057 Sky Athletic Club 516-678-9400 Caroline@skyathletic.com EETAIL FFERRS O STAPLES APLES 516-747-4070 x226 Jamar Printing 631-694-3232 NEFCU 516-561-0030 Hertz CDP# 1141602 800-654-2200 United Parcel Service 800-742-5877 Brooks Brothers 866-515-4747 Metropolitan Chapter of The American Association of Nurse Attorneys. Robert S. Barnett and Gregory L. Matalon of Capell Barnett Matalon & Schoenfeld, LLP recently appeared on the internet radio show “Behind the Curtain,” where they discussed Federal and local tax issues regarding married same-sex couples. Kristina S. Heuser-DiMascio of Kristina S. Heuser-DiMascio, P.C. recently attended the Alliance Defending Freedom’s Legal Training Academy. Ms. Heuser-DiMascio is an allied attorney with Alliance Defending Freedom. Robert M. Harper, an associate in the Trusts and Estates Practice Group at Farrell Fritz, P.C., was elected as an officer of the Suffolk Academy of Law. Mr. Harper, who concentrates his practice in trusts and estates-related litigation, also serves as co-chair of the Suffolk County Bar Association’s Member Services and Activities Committee and vice chair of the New York State Bar Association’s Trusts and Estates Law Section’s Governmental Relations and Legislation Committee. He earned his Juris Doctor from Hofstra University School of Law. New Partners, Of Counsel and Associates Assemblyman Edward P. Ra has joined Forchelli, Curto, Deegan, Schwartz, Mineo & Terrana LLP as Counsel in the Land Use and Zoning Practice Group. Mr. Ra was elected to represent the 21st district in the New York State Assembly in 2010. He has previously served as the Deputy Town Attorney for the Town of Hempstead and as a legal aide in the Office of the New York State Attorney General. Alicia A. Weissmeier, former Chief Miscellaneous Clerk of the New York County Surrogate’s Court, has joined Miller & Milone, P.C as Managing Attorney. Ms. Weissmeier, who earned her Juris Doctor from Pace University School of Law, concentrates her practice on litigation and Trusts & Estates. Joseph R. Bjarnson has joined Sahn Ward Coschignano & Baker as a commercial litigation associate. Mr. Bjarnson graduated from the Maurice A. Deane School of Law at Hofstra University, cum laude, where he was an Associate Editor of Hofstra Law Review and a member of the Dean’s Scholar Program. New Firms and Locations Forchelli, Curto, Deegan, Schwartz, Mineo, Cohn & Terrana LLP has been renamed Forchelli, Curto, Deegan, Schwartz, Mineo & Terrana LLP. Cullen & Dykman, LLP has opened an office at 99 Washington Avenue in Albany, New York. Garden City-based Davidoff Malito & Hutcher LLP has changed its name to Davidoff Hutcher & Citron LLP. The Honorable Stephen L. Ukeiley is a Suffolk County District Court Judge and author of The Bench Guide to Landlord & Tenant Disputes in New York. © PLEASE E-MAIL YOUR SUBMISSIONS TO Nassau Lawyer: nassaulawyer@nassaubar.org with subject line: IN BRIEF
Let the Buyer Beware Historically, collection of consumer credit card debt may have presented relatively few obstacles for creditors seeking money judgments. However, a growing trend of sales of credit card accounts after they have gone delinquent, to third-party assignees (hereinafter referred to as “debt buyers”) has created an industry that is able to capitalize on buying pools of debt at a deep discount, and then turning them into judgments that can be enforced dollar for dollar. As one local court recognized, such delinquent debt is often purchased by debt buyers for as little as pennies on the dollar, given the difficulty of collection, the costs associated with that effort, and the poor recordkeeping that debt buyers often inherit from the original creditor. 1 What may have once been taken for granted by debt buyers is no longer the case, as courts in recent years have been scrutinizing lawsuits and motions for default judgments or for summary judgment, and discovering mistakes or deficiencies in proof submitted, which in turn, results in relief to debt buyers being denied. As we have seen in the recent past in the mortgage foreclosure context, the courts have become equally sensitive to the due process rights of consumers with credit card debt and the impact of judgments and delinquencies on their credit ratings. This is especially the case since many claims brought by the credit card industry and debt buyers are often not defended by consumers, or are defended without counsel; furthermore, the amounts involved are often relatively small and such cases are typically not appealed. The starting point for a debt buyer seeking a money judgment is the equivalent of what its assignor had to provide, since an assignee has the same burden as its assignor to show evidentiary proof in admissible form, of the original agreement, mailing of same to the cardholder, and the statements reflecting the unpaid charges and payments made. 2 However, a debt buyer must go further to sustain its claim. Most significantly, it must demonstrate its “standing” to sue as an assignee of the particular credit card account on which it seeks to collect at the time the action was commenced, and without sufficient proof of the complete chain of assignments of the specific account sold from the original creditor to the entity seeking to collect on the debt, it will not prevail. This was set forth in the leading case of Citibank (South Dakota) N.A. v. Martin. 3 A long line of cases from lower courts have followed Martin as to this standard of proof and have consistently denied relief to debt buyers where sufficient proof was lacking. 4 Analysis From The Bankruptcy Court A recent decision in the U.S. Bankruptcy Court Eastern District of New York, in In re Taranto5 dealt with these issues in the context of examining the validity of three separate proofs of claim filed in a Chapter 13 case by ECast, as assignee of two claims from HSBC, and one from FIA Card Services. ECast initially relied upon a) a blanket assignment of accounts from the respective original creditors that did not specifically identify the debtor or any specific accounts sold; b) reference to an unavailable document listing only the original creditor and the last four digits of the account, which was part of what was classified as a “voluminous” electronic file; and c) an “Account Summary,” with the debtor’s name and address, last four digits of account number, Social Security number, balance due and date account opened. In addition, affidavits were furnished by ECast representatives stating that it had purchased the two accounts from HSBC, and from an FIA representative as to the sale of the third account to ECast. All of this was sufficient to provide ECast with a prima facie valid claim. The burden of proof then shifted to the debtors to rebut the presumption as to validity of the claim. They claimed they never did business with ECast, owed no money to ECast, received no notice of the assignment, and that there was no evidence of a specific assignment of their debts to ECast, all of which served to rebut the presumption, and shifted the burden back to ECast. In applying New York law and Martin, Bankruptcy Judge Trust then examined the evidence submitted by ECast to determine if it had proved its claims by a preponderance of the evidence. He concluded that its own affidavits as to purchasing the two HSBC accounts were self-serving, whereas the sworn affidavit from FIA was clear and direct evidence of the sale of that specific debt to ECast, with the debtor’s name, date of transfer, balance owed, and last four digits of the account. On this basis, only the claim assigned from FIA was allowed as a valid claim. There was no equivalent proof from HSBC as to the assignment of the other two claims. 6 The debtors also argued that the lack of notice of the assignments to ECast should serve to invalidate the claims pursuant to U.C.C. 9-406. That section allows a discharge of debts by paying the assignor until the debtor gets notice of an assignment, so that the debtor is not paying different creditors twice. 7 Judge Trust rejected this argument, since the debtors could not show that they paid the debts to the original creditors before getting any notice of the assignments. Consistent with Judge Trust’s ruling, other lower courts in New York have denied applications by assignees where they lacked sufficient proof of the assignment of the particular credit card account in question. A major defect that many assignees cannot overcome is that they try to rely on business records from the original creditor/assignor, without laying a proper foundation to avoid the hearsay rule. Courts have routinely rejected affidavits from employees or agents of assignees who had no personal knowledge of the assignor’s business record keeping practices; those records need to be authenticated by one with personal knowledge in order to be considered admissible evidence. 8 Therefore, the plaintiff-assignee cannot solely rely upon the business records of its assignor in order to lay a proper foundation. It is not enough that the affidavit comes from one who reviewed, filed, and retained the Nassau Lawyer n July/August 2012 n 9 The Pitfalls of Acquiring Credit Card Debt Jeff Morgenstern Edwin J. Mulhern, Esq. COUNSEL TO THE PROFESSION AV RATED LAW FIRM ESTABLISHED IN 1954 Representing Clients In The Areas Of: GRIEVANCE COMPLAINTS GRIEVANCE PROCEEDINGS Edwin J. Mulhern, Esq. Former Chairman of Nassau County Bar Assn. Grievance Committee Former Member of the Grievance Committee For The 10th Judicial District Past President Criminal Courts Bar Assn. of Nassau County One Old Country Rd. • Carle Place • New York 11514 • 516-294-8000 1225 Franklin Ave., Suite 325 ● Garden City ● New York 11530 ● 516-294-8000 Donate Blood Save a Life assignor’s records on behalf of the debt buyer, because the records were not made in the ordinary course of business of the debt buyer. Contrary to Judge Trust’s ruling, these courts have also required proof that notice of the assignment of the account was given to the debtor prior to commencement of the suit, concluding that notice of the assignment from the assignor to the debtor is necessary before the debtor has a duty to pay the assignee. 9 In light of the flurry of cases being brought by debt buyers, the courts have become increasingly sensitive to the frequency in which papers submitted are insufficient. 10 Some courts have gone as far as imposing sanctions against creditors, or their counsel, for bringing actions without what was deemed to be due diligence on their part in reviewing the validity of the chain of assignments of claims to the debt buyers. 11 Another issue that has arisen from this line of cases, is the statutory prohibition against buying claims for the pri- Nassau County Bar Association Annual Blood Drive Thursday, July 26, 2012 1:30 – 7 p.m. Nassau County Bar Association 15th & West Streets, Mineola, NY 11501 516-747-4070 Eligibility Criteria: Must have valid ID with signature and photo Minimum weight 110 lbs. Between 16 & 75 years of age (16 year old must have parental permission, Age 76 and over need doctor’s note) Questions about your eligibility? Call 1-800-688-0900. Eat well (low fat) and drink fluids No tattoos in the past 12 months To schedule an appointment, contact Kim Gonzalez at Kgonzale@pch.com, or call (516) 944-4736. See DEBT, Page 18
Page 1 and 2: THE JOURNAL OF THE NASSAU COUNTY BA
Page 3 and 4: By Christopher J. DelliCarpini and
Page 5 and 6: Personal Injury Focus The Emergency
Page 7: Personal Injury Focus Muhammad v. F
Page 11 and 12: School was just the beginning N BOT
Page 13 and 14: REVEL IN YOUR ACCOMPLISHMENTS SEPTE
Page 15 and 16: DOCTORS ... Continued From Page 3 J
Page 17 and 18: EMERGENCY DOCTRINE ... Continued Fr
Page 19 and 20: LAWYER TO LAWYER DIVORCE MEDIATION

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