Polanco v. Mel S. Harris and Associates, LLC.

Background

The parties submitted a joint pretrial scheduling order identifying disputes about what would remain for trial. Polanco asserted claims under the Fair Debt Collection Practices Act, a federal law governing certain debt-collection practices, and for conversion, a tort involving wrongful control over another person’s property.

The claims involved two alleged events:

1. NCO, through counsel, prosecuted a debt-collection action in New York State Court using an affidavit of service that falsely stated Polanco had been served. The opinion refers to this alleged practice as “sewer service.” 2. After the state court vacated a judgment in NCO’s favor and ordered NCO to return money collected from Polanco, NCO did not return the money until August 2011.

Prior summary-judgment rulings and trial scope

Judge Deborah A. Batts had previously granted Polanco summary judgment on liability for the delayed-return claim under both the Fair Debt Collection Practices Act and conversion. Only damages on that claim remained. Judge Liman stated that this ruling was the law of the case, meaning the parties could not relitigate that decided issue in the same case.

Judge Batts had denied summary judgment on the alleged sewer-service claim because there was a factual question about whether service was actually made or whether Polanco was properly served. Judge Liman explained that the earlier ruling did not prevent NCO from presenting any legally available defense and did not remove Polanco’s burden of proof. Polanco therefore had to prove all elements of both the statutory and conversion claims related to the alleged sewer service. The court reserved for the stage after NCO had presented its evidence whether the evidence was sufficient for the claim to go to the jury.

Emotional-distress damages

NCO argued that Polanco lacked enough evidence to receive emotional-distress damages under the Fair Debt Collection Practices Act. The court noted that NCO had not raised the issue in its summary-judgment motion and that courts in the district generally recognize emotional-distress damages as actual damages under that statute.

The court chose not to prevent Polanco from presenting evidence of emotional distress at trial. It reserved the question whether the evidence, after being fully presented, would be sufficient to support a jury verdict.

Punitive damages

NCO also argued that Polanco could not prove punitive damages for conversion. Because the earlier summary-judgment ruling established liability for conversion based on the failure to return the money ordered by the state court, Judge Liman treated that ruling as controlling. The court stated that whether the circumstances supported punitive damages was an issue for trial, subject to a later determination that no reasonable jury could find for Polanco on that issue.

Evidence from another case

Polanco asked the court to take judicial notice—treat certain facts as established without requiring ordinary proof—of allegations against Mel Harris and findings by Judge Denny Chin in a class-action case. Judge Liman stated that allegations in another lawsuit could not be treated as proof of the facts asserted there. The opinion also stated that Judge Chin’s findings did not have preclusive effect against NCO because, among other reasons, they were not final and NCO was not a party to that lawsuit.

The court further stated that, based on Polanco’s proposed use of the material, it would exclude the evidence if offered to prove the truth of the allegations. The court cited rules concerning similar-act evidence and unfair prejudice, distraction, delay, and waste of time.

Disposition

The memorandum and order resolved the identified pretrial disputes. It left the alleged sewer-service claim, emotional-distress damages, and the availability of punitive damages for further proceedings at trial or later review of the evidence. It did not state that the case was dismissed or enter a final judgment.