One of the downfalls of writing these posts very early in the morning while not being a lawyer is that there are times where I have to make decisions about things that appear interesting, but may not be because I’m not a lawyer. I’m saying this because in case this isn’t interesting to anyone else or isn’t a big deal and should’ve been left alone, I apologize. A District Court judge in New York has denied a plaintiff’s motion for contempt in a Fair Debt Collection Practices Act case, and ordered the defendant to comply with subpoenas as part of the enforcement of a judgment after the defendant attempted to argue that the suit was brought against the wrong corporate entity despite engaging in litigation for three years.
A copy of the ruling in the case of Lichter v. Bureau of Accounts Control can be accessed by clicking here.
The plaintiff filed suit back in 2019 against BAC Inc., which allegedly sent a collection letter under the name “Bureau of Accounts Control, Inc.” regarding an unpaid medical debt. The defendant admitted this allegation in its response to the suit. In a motion filed a year later, the defendant’s attorney stated that his office represented “Bureau of Account Control, Inc.”
Both parties engaged in discovery and a representative of the defendant admitted that it sent two letters to the plaintiff.
Ultimately, the defendant was ordered in November 2021 to pay more than $35,000 in attorney’s fees and damages to the plaintiff. When negotiations to settle the judgment failed, the plaintiff served a subpoena on the defendant in February 2022 to depose the owner of the agency and enforce the judgment. The owner never showed for the deposition.
Three months later, the defendant’s attorney sent the plaintiff a letter stating that Bureau of Account Control, Inc. had been defunct since 2015. The name of the current company was BAC Services, Inc. d/b/a Bureau of Account Control, Inc. The defendant thus took the position that the judgment was against a defunct corporation.
Wrote Judge Edgardo Ramos of the District Court for the Southern District of New York:
“To summarize, the defendant: was sued as ‘Bureau of Accounts Control, Inc.;’ answered the complaint and admitted that it was ‘Bureau of Accounts Control, Inc.;’ it further admitted that it was the entity that sent Lichter the collection letter that was the basis of the complaint; and litigated this matter from the moment it was served on June 5, 2019, Doc. 7, through and including the three years that followed until May 4, 2022, as Bureau of Accounts Control, Inc. But now, after judgment has been entered against it and damages calculated, the defendant wants to avoid liability because for three years it purportedly neglected to notice that the wrong corporate entity was sued. Because the defendant, who was admittedly doing business as Bureau of Accounts Control, Inc., cannot, at this late date, and in the face of its numerous admissions that it was the entity that sent Lichter the collection letter, deny accountability, it will be held responsible for its violation of the Fair Debt Collection Practices Act. However, the sanctions will not be granted at this time. Rather, the Court will allow the defendant, and its successor BAC Services LLC, to comply with the subpoenas So Ordered by the Court on April 19, 2022.”
While Judge Ramos rejected the defendant’s arguments about why it did what it did, he gave the defendant an opportunity to comply with the subpoenas before making a decision on whether it should be found in contempt.
