Panel Censures Lawyer and His Debt Collection Firm

, New York Law Journal

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a gavel on top of debt paperwork

A state appeals court has censured attorney David A. Cohen and his Long Island firm for trying to collect debts from people who had already paid their bills or were not the ones who owed money to the firm's client-creditors.

The Appellate Division, Second Department, said Cohen had been advised as early as 2002 by the counsel to the Grievance Committee for the Tenth Judicial District that he could be held personally responsible for any abusive collection practices by his firm's employees. Nonetheless, the court said, Cohen and the Cohen & Slamowitz firm of Woodbury had a "voluminous history" of complaints about its methods that from 1996 to 2012 resulted in a letter of reprimand, seven letters of caution, two admonitions and three personally delivered admonitions against either Cohen or the firm.

The judges said a public censure was the proper sanction based on the complaints of six people from whom Cohen & Slamowitz sought to collect debts on behalf of creditors from 2003 to 2006.

The judges noted they were taking into consideration that Cohen & Slamowitz said it had established a compliance department and taken other steps to reform its collection practices. Among the department's duties is to review complaints about collection practices from debtors and alleged debtors, the court said.

The court concluded in Matter of Cohen & Slamowitz, 2008-10218, that Cohen and Cohen & Slamowitz "engaged in a pattern and practice of conduct prejudicial to the administration of justice" under the Code of Professional Responsibility DR 1-102(A)(5)(223 NYCRR 1200.3[a][5].

The judges said an attorney does not necessarily have to have personal knowledge of the specifics of his firm's misconduct to be held responsible.

"Even if the individual respondent lacked personal knowledge of the particular client matters ... the pattern and practice of misconduct established at the hearing, which were pervasive within C&S [Cohen & Slamowitz] since 1996, were sufficient to impute such knowledge to him as senior partner of C&S," the panel held in its per curiam ruling.

The judges added that not only was Cohen personally advised in 2002 to "exercise caution," "supervise [his] staff adequately," and put in place "appropriate and reasonable procedures" that could be monitored, but he and his firm also received numerous letters of caution and admonition.

The court said Cohen & Slamowitz has about 300 employees, including attorneys, paralegals and other staff.

Among the problems noted by the court was an attempt in 2005 to collect from a debtor identified as "Ghulam Mujtaba" of Flushing. The court said that Cohen & Slamowitz mistakenly pursued collection from Dr. Gholam Mujtaba of Corona.

The firm abandoned the collection against the doctor in 2005 but was retained the following January to again collect a debt from "Gulam Mujtaba." It went after Dr. Mujtaba again and, despite being notified he was not the debtor, caused a summons and complaint to be served in October 2006, the court said.

In another instance, the firm was retained in 2004 to collect $5,107 from Peter Kerschhagel of Dobbs Ferry. Despite having information that the debt had been satisfied in 2003, the court said Cohen & Slamowitz continued to pursue collection, securing a default judgment for the firm's client-creditor in 2006 and then causing Kerschhagel's bank account to be restrained.

In a case involving debtor Barbara Durand, the court said Cohen & Slamowitz were sent a check satisfying her debt in June 2006 but that the firm had not properly made a satisfaction of judgment with Syracuse City Court nearly a year later.

Another complaint concerned efforts in 2005 to collect $1,450 from "Mohammad Qader" of Brooklyn. The grievance committee said Cohen & Slamowitz instead went after Mohammad Quader of Rego Park. Despite being advised that Quader was not the debtor, the firm caused a summons and complaint to be served on him, the court noted.

The disciplinary charges stemmed from a grievance committee petition served on Cohen & Slamowitz in November 2008. Over the intervening years, special referees Charles Cacciabaudo and Joseph Esquirol Jr. were appointed to hear the case but were later relieved.

The report from a third special referee, Kenneth Davis, was before the Second Department on Feb. 13.

Of the four charges brought by the grievance committee, Davis had sustained the misconduct allegations in the Quader and Kershhagel matters but found no pattern or practice of misconduct. Davis did not sustain two other charges on the same grounds. He upheld the charge by the Durand case.

All four misconduct charges were upheld by the Second Department panel.

Presiding Justice Randall Eng (See Profile) and Justices William Mastro (See Profile), Reinaldo Rivera (See Profile), Peter Skelos (See Profile) and Cheryl Chambers (See Profile) were on the panel.

The judges said that while Cohen did not testify in the firm's defense, attorney Ronald Abramson did. Abramson is a creditors' attorney and a member of the grievance commission of Maryland.

Abramson said that in his opinion, Cohen & Slamowitz's actions were "reasonable and proper" in the six cases. Abramson testified that the Cohen & Slamowitz employees could not assume that the denials of the persons identified to them as debtors were true and that the onus was on the debtors to establish that they did not owe money.

The appellate panel disagreed, finding the conduct by Cohen and Cohen & Slamowitz was "neither reasonable nor proper." In at least three of the six cases, the court said the law firm had information at its disposal that indicated it was going after the wrong people, yet the collection actions continued.

Cohen's lawyer, Chris McDonough of McDonough & McDonough in Garden City, said his client is "very disappointed" in the ruling.

Chiefly, McDonough said, "the decision sets a dangerous precedent in that the Court rejected the expert testimony and seems to have adopted the position that a lawyer collecting a debt has an enhanced duty to the debtor, which is contrary to the FDCPA [Federal Debt Collection Practices Act] and which dilutes the lawyer's obligation of zealous advocacy to the client."

McDonough said he also could not understand how the court "could reject the finding of the Referee in deciding that minor errors involving five collection matters over a three year period was a 'pattern' of misconduct; when the evidence at the hearing demonstrated that the firm successfully and ethically handled many thousands of cases each year during that time period."

Staff attorney Leslie Anderson argued for the grievance committee.

Cohen & Slamowitz also was criticized by Western District Chief Judge William Skretny (See Profile) for seeking to add $140 in court costs to a consumer's credit card arrears. Skretny said the claim by Cohen & Slamowitz and Midland Funding was contrary to the Fair Debt Collection Practice Act and "borders on the frivolous" (NYLJ, Jan. 16).

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