Greifman v. Grossman & Karaszewski, PLLC

Background

Sarah Greifman brought a proposed class action under the Fair Debt Collection Practices Act, a federal law regulating debt collectors. She alleged that Grossman & Karaszewski, PLLC sent her a June 8, 2018 letter seeking payment of an alleged $4,071 debt on behalf of JHPDE FINANCE I, LLC. She claimed the letter did not clearly and accurately state the debt amount or creditor, did not adequately explain her rights to dispute and verify the debt, and falsely suggested meaningful attorney involvement.

The firm initially answered the complaint and participated in pretrial proceedings. Its attorney later asked to withdraw, stating that the firm had dissolved and would no longer participate in the defense or pay for future legal services. The court allowed the withdrawal and gave the firm time to retain new counsel because a corporation cannot represent itself in federal court. The firm did not obtain new counsel, did not appear at two later conferences, and was warned that its failure to obtain representation could lead to a default judgment. The Clerk then issued a certificate of default.

Default Judgment

A default judgment is a judgment entered when a party fails to defend. Under the court’s analysis, the firm’s default meant that the factual allegations in the complaint could be accepted as true, but the court still had to determine whether those facts established a valid claim and whether Greifman proved the amount of damages.

The court found that Greifman had established, at a minimum, violations of sections 1692e, 1692g(a)(1), and 1692g(a)(2) of the Fair Debt Collection Practices Act. The court relied on the admitted allegation that the firm sent the June 8, 2018 letter and that Greifman did not owe JHPDE a debt in the stated amount. The court explained that the Act imposes liability for a violation even without proof of intent, and that one violation is enough to establish liability.

Damages, Fees, and Costs

The court awarded $250 in statutory damages. In setting that amount, it considered that the letter violated the Act but did not show particularly extreme or intimidating conduct, and that the record identified the letter as the only written communication and did not allege telephone calls.

The court awarded $7,302.50 in attorney fees after reviewing counsel’s time records, hourly rates, and work performed. It also awarded $400 in costs for the filing fee. The court did not award the requested $450 filing-fee amount because Greifman provided no supporting documentation for the costs request and the court’s records showed that the filing fee paid was $400. The total award was therefore $7,952.50.

Disposition

The court granted Greifman’s motion for default judgment in the amount of $7,952.50, directed the Clerk to enter judgment in her favor against Grossman & Karaszewski, PLLC, and ordered the case closed.