A District Court judge in New York has granted a defendant’s motion for summary judgment on a claim it violated the Fair Debt Collection Practices Act by communicating false information concerning a debt or misrepresenting the amount of a debt because a separate lawsuit in State Court had already essentially ruled on the claim.
The judge also granted the defendant’s motion for summary judgment on a claim it violated New York General Business Law, but denied the motion on a claim it violated New York Judicial Law.
A copy of the ruling in Kravitz v. Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrera & Wolf, LLP can be accessed by clicking here.
Back in 2014, the defendant commenced an action in State Court against the plaintiff in relation to a breach of contract claim in relation to the placement of the plaintiff’s mother in a nursing home. The nursing home was awarded summary judgment, a ruling the plaintiff appealed. That appeal is still pending.
The plaintiff turned around and filed suit against the defendants, alleging they violated the FDCPA by “engag[ing] in deceptive business practices by attempting to turn questionable and unverified consumer debt or collection accounts into enforceable court judgments, regardless of whether the consumer actually owes the alleged underlying debt, in whole or in part,” according to the original complaint.
Under the legal principle of collateral estoppel, because the State Court already verified the correct amount of the debt in its summary judgment ruling, the District Court must honor the ruling.
“The State Lawsuit disproves an essential element of the FDCPA claim, namely that Defendants misrepresented the debt or communicated false credit information,” wrote Judge Denis Hurley. “Accordingly, this issue was actually and necessarily decided in the State Lawsuit.”
