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CA says they only need provide amount, no detail needed


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I sent a Validation letter to MRS Associates requesting a detail of the charges of debt etc. that compiled the amount stated. Today I received from Allegis Group, a notarized leter and affidavit of debt that says: enclosed is an affidavit of debt to the verification of debt you requested. The court case of Chaudhry v. Gallerizzo, 174F.3d974 (4th Cir. 1999) states this is sufficient for account verification:

"verification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed; the debt collector is not required to keep detailed files of the debt. There is no concomitant obligation to forward copies of bills or other detailed evidence of the debt."

The affidavit of Debt (Buyer) states they affirm that the amount against me account number provided principal plus interest is $$$$. They further cerfity that debt was purchased by Sherman Acquisition from Sears.

Now what?

I am in Ohio.

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You HAVE TO dispute that affidavit of debt. If you don't, they can use it to sue you with as an 'account stated' and say because you didn't dispute it, you agreed that it was true.

With that said, thier affidavit doesn't really MEAN anything. I can type up an affidavit and say you owe me $4,987,593,857,329 if I wanted. But it just ain't true. In there somewhere it probably says something along the lines of "So-and-so has actual first-hand knowledge of this debt"...well, that would be true if they worked for the OC. They don't. Call them on this affidavit.

Read this:

http://www.debt-consolidation-credit-repair-service.com/phpBB2/viewtopic.php?t=22475&highlight=affidavit

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On the affidavit of Debt there is a signature and under that is says "Attorney In Fact" Since the affidavit quoted "Chaudhry v Gallerizo" what appears to me to be pretending to be an attorney or pretending to be communication from an attorney have they made violations that I can sight

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What the hell is an 'attorney in fact' ?? ?I'll have to look that up.. sure sounds bogus !

Chaudry v. Gallerizo is totally IRRELEVENT !! That case had NOTHING to do with validation !! The defendents main claim was that they hadn't gotten bills... when they had lived at the same address for something like 40 years !!

Besides, Chaudry is a moldy oldy of a case and you need to counter it with Spears v. Brennan, which WAS about validation. Its also a more recent case. The court's decision in Spears was that the signed agreement alone proves nothing and neither does a full accounting of the debt's history - in essence saying they need BOTH the contract AND a full accounting to adequately prove the alleged debt.

Just write them saying you dispute and reject their affidavit as the signer of the affidavit had NO firsthand knowledge of the history of the account with the OC and therefore the affidavit is swearing to bullshit. I asked Edeldman about these things, his response was they're junk and you MUST dispute them.

Then I'd hit them with Spears v. Brennan and the fact that Chaudry is irrelevent for validation.

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Attorney in fact is a term of art that has nothing to do with lawyers. It means the person who signed it has power of attorney to make the affirmation fro its principal. You will want to see that POA at some point.

The FTC Wollman letter says the CA must do more than regurgitate numbers it received from the forwarder. If you tell them you never had a Sears card, or it was paid off, they are under obligation, as a third party collector, to get such info from the creditor. Chances are, they use this bluff since those documents do not exist.

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Sherman, Palisades, and many others will spit out that rotten old Chaudry case hoping that you aren't saavy enough to know what the case is or that Spears DOES say they have to produce proof. They are counting on ignorant consumers being buffaloed by the citation of some case law - irrelevent or not !!

I wouldn't mention the 4th vs. 6th circuit - unless Spears was also in the 6th circuit and it definitely WOULD hold more weight.

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Actually that was Mahon v Credit Bureau that lived at the same address for 40 years and had the same doctor for 30 years and claimed to never receive any notices from the doctor or the CA.

I have every FCRA and FDCPA court case from federal courts in Ohio and all appeals from the the 6th Circuit in Cincinnati.

Chaudhry doesn't work in Ohio, unless you are the consumer. If you are the consumer you can cite Chaudhry in your favor to win for continued collection activity. A junk debt buyers wouldn't cite Chaudhry in court since it would only hurt them.

If you send an ITS letter demanding payment and deletion they will fold.

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Chaudhry is real easy to understand and it is a consumer's best friend. People make much more out of it than it actually is.

I'll try to explain it in a way that everyone can easily understand.

There's a man named Mohammed with a wife named Diane. They own a home. They want to build another. They choose a lot on Inglewood Drive in Potomac, Maryland and they have NationsBank, with whom they have been long time customers, finance the purchase of the lot and the construction of a new home. The Chaudhry's defaulted on the loans. The home construction loan was actually financed by NationsBank Mortagage Company.

NationsBank hires Gallerizo to do something with the Chaudhry's defaulted construction loan. They have a meeting that doesn't go too well because Mohammed still thinks he is in the Middle East and can haggle on everything. Gallerizo, shortly after the meeting sends a letter demanding accelerated payment (the bank's right to do so in accordance with the loan agreement). He lists the principal, interest accrued and interest rate. He also advises the Chaudhry's that they must pay attorney fees and costs, but provides no amount for that.

The Chaudhry's hire an attorney who sends a letter demanding verification under the FDCPA. Gallerizo, upon receipt of the validation demand, contacts NationsBank Mortgage Company who provides Gallerizo with a complete up-to-date account history, showing the opening balance, and each and every single payment the Chaudhry's made by date, and each accrual of interest on the principal by date. Gallerizo forwards that to the Chaudhry's. IMPORTANT NOTE: GALLERIZZO DOES NOT PROVIDE AN ITEMIZATION OF THE ATTORNEY FEES AND COSTS.

However, at this time, Gallerizo does provide the total of attorney fees and costs to date.

The Chaudhry's, through their attorney, notify Gallerizo that the verification of the loan amount is acceptable and they are willing to work to settle the matter, but IMPORTANT NOTE: THE CHAUDHRY'S WANT AN ITEMIZATION OF THE ATTORNEY FEES AND COSTS.

From the district court case: On January 22, 1996, Kiley wrote to Gallerizzo and indicated that he still needed verification of the attorneys' fees. Relying on this letter and his earlier telephone conversation with Kiley, Gallerizzo forwarded copies of the legal bills of Gebhardt & Smith IMPORTANT NOTE: but did not forward any additional [**7] information regarding the inspection fees. Believing the legal bills contained privileged information, Gallerizzo used a black marker to redact portions of several time entries on the bills.

The Chaudhry's file suit.

The story so far: The Chaudhry's default on a home construction loan. The mortgage company calls the loan. The Chaudhry's demand AND receive verification of the debt by way of a complete itemized account history but the attorney refuses to provide a description of itemized entries for legal fees on grounds that they are priviledge and confidential and/or work product. The Chaudhry's sue for numerous FDCPA violations including section 1692(g). Back to the story.

The trial judge sides with Gallerizo and says this:

The Chaudhrys first claim that the district court erred in refusing to grant their motions to compel Defendants to produce unredacted legal bills and the entire Research Memorandum. Appellants insist that Defendants improperly prevented the discovery of certain relevant information by asserting attorney-client and work product privileges, without establishing any factual basis proving the asserted privileges. We review the district court's decision that certain documents are subject to privilege de novo, since it involves a mixed question of law and fact. See In re Grand Jury Proceedings, 33 F.3d 342, 353 (4th Cir. 1994).

Under the attorney-client privilege, confidential [**11] communications made between a client and an attorney in an effort to obtain legal services are protected from disclosure. Typically, the attorney-client privilege does not extend to billing records and expense reports. See id. at 353-54. In Clarke v. American Commerce National Bank, 974 F.2d 127 (9th Cir. 1992), however, the Ninth Circuit distinguished between privileged and discoverable information contained in an attorney's billing records:

The identity of the client, the amount of the fee, the identification of payment by case file name, and the general purpose of the work performed are usually not protected from disclosure by the attorney-client privilege. However, correspondence, bills, ledgers, statements, and time records which also reveal the motive of the client in seeking representation, litigation strategy, or the specific nature of the services provided, such as researching particular areas of law, fall within the privilege. Id. at 129 (citations omitted).

Furthermore, the work product doctrine prohibits the disclosure of the Research Memorandum. Under the work product rule, codified in Fed. R. Civ. P. 26(B)(3), "an attorney is not required to divulge, by discovery or otherwise, facts developed by his efforts in preparation of the case or opinions he has formed [**13] about any phase of the litigation." In re Doe, 662 F.2d 1073, 1077 (4th Cir. 1981), cert. denied, 455 U.S. 1000, 71 L. Ed. 2d 867, 102 S. Ct. 1632 (1982). Fact work product is discoverable only "upon a showing of both a substantial need and an inability to secure the substantial equivalent of the materials by alternate means without undue hardship." In re Grand Jury Proceedings, 33 F.3d at 348. Opinion work product is even more carefully protected, since it represents the thoughts and impressions of the attorney. See id. at 348. As we explained in In re Doe, "'an attorney's thoughts are inviolate, ... and courts should proceed cautiously when requested to adopt a rule that would have an inhibitive effect on an attorney's freedom to express and record his mental impressions and opinions without fear of having these impressions and opinions used against the client.'" 662 F.2d at 1080. As a result, "opinion work product enjoys a nearly absolute immunity and can be discovered only in very rare and extraordinary circumstances." In re Grand Jury Proceedings, 33 F.3d at 348; see [**14] also In re Doe, 662 F.2d at 1079, 1080.

The materials sought by Appellants relate to legal research conducted in connection with collection of the Construction Loan and detail the mental impressions, conclusions, and legal theories of NMC's attorneys. As opinion work product, the materials are entitled to substantially greater protection than fact work product. Yet, Appellants fail to establish even the minimal required showing of a substantial need for the materials and undue hardship in obtaining their equivalent. Indeed, they advance no compelling arguments toward that end. Under the circumstances, we cannot conclude that the facts of the instant case constitute the "very rare and extraordinary" situation justifying disclosure of opinion work product. The materials, therefore, are not subject to discovery.

Appellants, as the party asserting the crime/fraud exception, must make a prima facie showing that the privileged communications fall within the exception. Appellants must prove that "(1) the client was engaged in or planning a criminal or fraudulent scheme when he sought the advice of counsel to further the scheme and (2) the documents containing [the privileged materials] ... bear a close relationship to the client's existing or future scheme to commit a crime or fraud." In re Murphy, 560 F.2d 326, 338 (8th Cir. 1977); see also In re Grand Jury Proceedings, [*404] 33 F.3d at 349 n.13 (quoting In re Murphy favorably). Appellants produced no evidence addressing either [**16] element of the required showing, so their claim must fail.

Under the circumstances, the district court did not abuse its discretion by denying Appellants' motion to compel production of the unredacted legal bills and the Research Memorandum. See In re Grand Jury Proceedings, 33 F.3d at 348 (noting that "[a] district court's determination of whether the government satisfied the standard [for the crime-fraud exception] will not be reversed absent a clear showing of abuse of discretion").

The judge rejected all other arguments by the Chaudhry's and rendered this decision:

Plaintiffs, Mohammad and Diana Chaudhry, filed the present action against Defendants Michael Gallerizzo and his law firm, Gebhardt & Smith, in the United States District Court for the District of Maryland, alleging various violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C.A. § 1692a, et seq. (West 1998). The district court granted a motion for judgment as a matter of law [**2] in favor of Defendants on all counts. In addition, the district court levied sanctions against Plaintiffs and their attorney for filing frivolous claims. We affirm.

Now the whole story is simple:

1) The Chaudhry's requested verification of a debt (construction loan)

2) The Chaudhry's received a total and complete account history of the loan including all payments and interest charges.

3) The Chaudhry's also received an itemized statement showing attorney fees and costs. However, several items had been lined out with a black magic marker (probably a Sharpie), because the attorney thought that the descriptions of those items were priviledged and confidential.

4) The Chaudhry's believed that because the description of itemized entries had been blacked out, the statement did not meet the requirements of the FDPCA

5) The Chaudhry's sued

6) The Chaudhry's lost and their attorney was sanctioned

7) The Chaudhry's appealed

8) The Chaudhry's lost the appeal.

9) The Chaudhry's appealed to the US Supreme Court but were denied.

So, when a debt collector sends you a letter quoting Chaudhry v Gallerizo, it violates section 1692e(10), because it is a misrepresentation. The Chaudhry's received itemized statements showing the enitre account history of the loan and an itemized bill for attorney fees and costs, albeit with the description of the items blacked out. So if you don't get an itemized account history of your debt, it is a misrepresentation.

Most debt collectors give you this part of the ruling:

Contrary to Appellants' contention, verification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed; the debt collector is not required to keep detailed files of the alleged debt. See Azar v. Hayter, 874 F. Supp. 1314, 1317 (N.D. Fla.), aff'd, 66 F.3d 342 (11th Cir. 1995), cert. denied, 516 U.S. 1048, 133 L. Ed. 2d 666, 116 S. Ct. 712 (1996). Consistent with the legislative history, verification is only [**24] intended to "eliminate the ... problem of debt collectors dunning the wrong person or attempting to collect debts which the consumer has already paid." S. Rep. No. 95-382, at 4 (1977), reprinted in 1977 U.S.C.C.A.N. 1695, 1699. There is no concomitant obligation to forward copies of bills or other detailed evidence of the debt.

But what they don't give you, is this part:

Contrary to Appellants' contention, verification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed; the debt collector is not required to keep detailed files of the alleged debt. See Azar v. Hayter, 874 F. Supp. 1314, 1317 (N.D. Fla.), aff'd, 66 F.3d 342 (11th Cir. 1995), cert. denied, 516 U.S. 1048, 133 L. Ed. 2d 666, 116 S. Ct. 712 (1996). Consistent with the legislative history, verification is only [**24] intended to "eliminate the ... problem of debt collectors dunning the wrong person or attempting to collect debts which the consumer has already paid." S. Rep. No. 95-382, at 4 (1977), reprinted in 1977 U.S.C.C.A.N. 1695, 1699. There is no concomitant obligation to forward copies of bills or other detailed evidence of the debt.

In the present case, Gallerizzo, after receiving assurances from NationsBank that the sums were owed, verified the debt amounts in his January 18th letter to Plaintiffs' counsel and forwarded a copy of the bank's computerized summary of the Chaudhrys' loan transactions. The summary included a running account of the debt amount, a description of every transaction, and the date on which the transaction occurred. See Graziano v. Harrison, 950 F.2d 107, 113 (3d Cir. 1991) (holding that computer printouts which confirmed amounts of debts, the services provided, and the dates on which the debts were incurred constituted sufficient verification). Thereafter, in a January 19th letter to counsel, Gallerizzo restated the amount of the inspection fees and indicated that the amounts were correct. Nothing more is required.

The blue part, or paragraph, immediately follows the first. Now you can see what debt collectors don't want you to see, which is also why it is a misrepresentation.

So, why do you think debt collectors don't quote Graziano v Harrison?

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I can see why the plaintiff's lawyer was sanctioned, And teh defendant, to his credit, gave them more than enough information. I am not one who believes the CA has to bare legally competent proof as a verification, but this case and Graziano are instructive that more than lip service is needed.

The real problems are with the JDB, who do not have the level of documentation this defendant had. They will try to throw this at you as a smoke screen

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Yep, that is EXACTLY what they do and the part that GDL quoted about 'all that is required for verification....' is exactly the piece that JDB's like to toss around.

So, you could throw it back at them, toss their grenade back in THEIR foxhole as it were, AND you can toss in your own extra ammo of Spears v. Brennan.

Brennan maintains, however, that there was no violation of the FDCPA because he “sent adequate verification of the debt [to Spears] in the October 30, 1996 notice of claim.” Brief of Appellee at 13. Specifically, Brennan claims that a copy of the consumer credit contract between Spears and American General attached to the notice of claim provided sufficient verification of the debt within the meaning of 15 U.S.C. § 1692g(B). We cannot agree.

The contract in no way provides sufficient verification of the debt. A review of the document reveals that it identifies only the terms of Spears’ loan, including a 17.99% annual interest rate and the original loan amount of $2,561.59. The loan agreement contains no accounting of any payments made by Spears, the dates on which those payments were made, the interest which had accrued, or any late fees which had been assessed once Spears stopped making the required payments. Indeed, the existing unpaid contract balance at the time Brennan sent the debt collection notice was at least $350.00 more than the original loan amount. Therefore, Brennan violated 15 U.S.C. § 1692g(B) when he failed to cease collection of the debt by obtaining a default judgment against Spears after Spears had notified Brennan in writing that he was disputing the debt but before Brennan had mailed verification of the debt to Spears

Essentially this is saying neither the contract nor an accounting history alone is suffficient -- BOTH are needed.

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I can see why the plaintiff's lawyer was sanctioned, And teh defendant, to his credit, gave them more than enough information. I am not one who believes the CA has to bare legally competent proof as a verification, but this case and Graziano are instructive that more than lip service is needed.

The real problems are with the JDB, who do not have the level of documentation this defendant had. They will try to throw this at you as a smoke screen

It was appropriate to sanction the defendant's attorney. I think Gallerizo's actions were just and proper. Intent is not an issue with the FDCPA but it is clear that Gallerizo's intent was to do everything possible to comply with the FDCPA, while at the same time, protect the interests of his client. When asked to validate the debt, Gallerizo immediately contacted NationsBank and obtained the entire account history and forwarded it to the Chaudhry's. He also provided an itemization of the legal fees. It may not be clear from what I posted, but he only redacted some, not all, of the descriptions of the items charged for legal fees (those that were subject to attorney-client privilege or work-product). He also provided the inspection fees but redacted the reason for the inspections, which were also protected by attorney-client privilege or work-product.

This was a case that should have never been brought before the court, at least the part dealing with section 1692g. The Chaudhry's only real protest was with the descriptions of the legal fees and inspection fees not the loan itself.

I think the remarks by judge in his opinion should be taken sarcastically or tongue-in-check and were directed at the legal and inspection fees not the loan. He clarifies himself somewhat later, but there is no doubt that Sherman/Alegis and others quote the ruling out of context.

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