In Citibank, N.A., v. HS Index No. 101954/2009, Supreme Court Justice Judith McMahon dismissed a suit which purportedly sought to enforce a note against Defendant in the amount of $495,000.00 Dollars. But there’s a little problem—no such note exists. In his motion to dismiss Robert Brown, Esq., the attorney for the Defendant pointed out that the Citibank, N.A., was attempting to enforce an instrument that the Defendant never actually executed. In this case, the Defendant executed a home-equity line of credit which is not memorialized by a note, as for instance in a traditional home mortgage, since the principal loan amount of a line of credit fluctuates in a manner similar to a credit card.
Even more disturbing is the apparently false affidavit of service submitted by Citibank’s counsel, Foster & Garbus, Esqs., of Farmingdale, New York. An affidavit of service is evidence that defendants received sufficient notice for a law suit to proceed. Without proper service, defendants, more often than not, find out that a lawsuit had been commenced only after a judgment is entered against them.
Foster & Garbus is one of the largest debt collecting law firms in New York State and is alleged to have abused serving process in a lawsuit instituted by Attorney General Andrew Cuomo for “Sewer Service.” The affidavit of service proffered by Foster & Garbus is this case is yet another example of such abuse.
Attorney General Cuomo has made an example of Forster & Garbus in order to put all law firms engaged in high-volume debt collections (also know as “foreclosure mills”) on notice that they are responsible for the conduct of the companies they use to serve complaints and other legal documents. Law firms cannot turn a blind-eye to the abuses perpetrated on their behalf. The Attorney General’s Office has made two press releases on this matter, dated April 14, 2009 and July 22, 2009 where Cuomo notes that Forster & Garbus LLP “relied on legal papers… that it knew or should have known were false.”
“Sewer service” is the term used when the process server states in an affidavit that he served the defendant when he did not. When a defendant fails to respond to a law suit, as is so often the case in collection matters, the plaintiff wins by default. Armed with a default judgment, a creditor can garnish the defendant’s wages or bank account.
Sewer service is worse today than ever before. In 1986, 48,000 default judgments due to sewer service were entered annually in New York City. Today, 300,000 debt collection suits are filed annually in New York City of which more than 80% result in default. The majority involve debt collectors who pay process servers as little as $5 per service which leads to sewer service.
Because sewer service undermines the legitimacy of the judicial system while preventing defendants from raising legitimate defenses, it is of great concern to judges, the Department of Consumer Affairs (DCA), public interest lawyers and the media. Indeed, Administrative Judge Fern A. Fisher of the Civil Court of the City of New York laments that “many defendants” are not receiving notice from process servers.
When a process server actually attempts service in accordance with the law, he is able to personally serve the defendant about 40% of the time. This finding was made by the undercover detective who worked as a process server in 1986. When one examines affidavits of service involving debt collectors, personal service is rarely made. Indeed, South Brooklyn Legal Services examined 324 affidavits of service related to eight process serving agencies and found a highly suspect personal service rate of 2.73%.
Acknowledging these defects among others, Justice McMahon dismissed the lawsuit brought by Foster & Garbus against the Defendant herein. This is the second time Justice McMahon has thrown out such a case by Foster & Garbus—see Citimortgage, Inc., v. Maria Gil, Index No. 100830/2009. Maria Gil was also represented by foreclosure defense attorney, Robert E. Brown, Esq.
Justice Judith McMahon is an Acting Supreme Court Justice presiding in Richmond County Supreme Court since January 2006. Justice McMahon has a predominately civil caseload but also sits in Criminal Court on weekends in the arraignment part. Previously, she had been elected in November 2002 to New York City Civil Court and was also a court attorney to Justice John Leone and Justice Eric Vitaliano. Prior to working in the court system, she was a trial lawyer involved in complex tort litigation for the law firm of Julian and Schlesinger. She had attended Rutgers College of Pharmacy and practiced pharmacy for five years before attending New York Law School.