What Impact will the Federal District Court’s decision in Lee v. Kucker & Bruh, LLP, et ano., have on current Landlord-Tenant practice?
On August 2, 2013, Judge Lorna G. Schofield issued an Opinion and Order in the matter of Lee v. Kucker & Bruh, LLP, et ano., denying the defendants’ motion for summary judgment and setting a trial on the issue of damages. By way of background, plaintiff, Rafael Lee, an 82-year old tenant in a rent controlled apartment brought an action against the defendants Kucker & Bruh, LLP and Alan D. Kucker, for violation of the Federal Debt Collection Practices Act (FDCPA). Specifically, Mr. Lee argued that the defendants, who previously brought a non-payment proceeding in Housing Court against him, commenced the proceeding without verifying whether arrears were actually owed to the landlord/petitioner. In addition, Mr. Lee argued that the defendants claimed SCRIE payments were owed to the landlord/petitioner, however, records from SCRIE showed that the payments were made to the landlord/petitioner prior to service of the rent demand. When the defendants served the predicate notice on Mr. Lee, claiming a certain amount was due and owing to the landlord/petitioner, Mr. Lee argued that the defendants did not verify whether the amounts were accurate and had they done so, they would have been made aware that plaintiff did not owe any arrears. When the defendants subsequently filed the Notice of Petition and Petition, in the same month that the predicate notice was served, the amount due and owing in the Petition increased, despite no additional rent being due and owing or late fees or attorneys’ fees. On the return date, defendants were made aware by counsel for the plaintiff that SCRIE had, in fact, paid the landlord/petitioner and that no arrears were due. Defendants then entered into a stipulation with plaintiff’s counsel, discontinuing the proceeding. Plaintiff subsequently filed a federal lawsuit claiming a violation of the FDCPA. During discovery of the federal case, defendant Alan D. Kucker submitted to a deposition and was asked whether any measures were taken by him or his law firm, to ensure that rental histories and breakdowns are accurate and current. Mr. Kucker responded with an astounding “Yes. It’s called my law license.” Mr. Kucker was also asked about reasonable procedures he undertook to avoid errors. Again, Mr. Kucker responded with an astounding “I believe – I believe that as an attorney, since I am ethically mandated to understand the law, that my law license is – and my good standing in the bar…are reasonable procedures under the statute….” In their motion for summary judgment, the defendants argued the bona fide error defense by stating that once plaintiff’s counsel provided proof to them that plaintiff did not owe any arrears, they immediately discontinued the landlord-tenant proceeding. Judge Schofield, however, found that the defendants were strictly liable under the FDCPA for alleging a debt that was not due and owing and further found that the defendants did not have any procedures to ensure that the rent demand was accurate and therefore the bona fide error defense was not applicable.In her Opinion and Order, Judge Schofield did not elaborate on what measures or procedures the defendants could or should have taken to avoid such errors. Rather, Judge Schofield found that the defendants had no procedures to avoid such errors. The impact of Judge Schofield’s Opinion and Order leaves those practicing in Housing Court in a very precarious position. I have heard, whether true or not, that sometimes some practitioners tend to rely on the faxed or emailed rental history from their clients without corroboration or verification, pushing forward in Housing Court and seeking to recover arrears due and owing and at other times, eviction. Landlord-Tenant attorneys can no longer practice in such fashion. At Rozario & Associates, P.C., we have taken additional steps to ensure that our clients’ rental histories and breakdowns are accurate by personally reviewing the breakdowns for errors, by speaking to the clients and inquiring about payments received, abatements applied and credited and that arrears do not include Section 8 subsidies. Further we require all of our clients to sign a Certification of Rental Breakdown prior to serving a rent demand and prior to serving a Notice of Petition and Petition on each and every summary proceeding we commence. We understand that mistakes do occur. So does the Court. Nonetheless, the smart practitioner will have a provable system that avoids systemic errors and avoids taking a tenant to court for arrears that are not due and owing.