Justice NOT Served, by Process Server

Justice Wasn't Served: NY Process Server Hit With Criminal Charges for Failing to Deliver
The Associated Press by David B. Caruso - April 15, 2009

A company hired to serve debt collection lawsuits to thousands of cash-strapped New Yorkers did not bother to deliver the papers much of the time, leaving many people unaware they had been sued until the case was over and their bank accounts were frozen, authorities said yesterday.  Attorney General Andrew Cuomo filed criminal fraud charges against the firm, American Legal Process, of Lynbrook, and its owner and president, William Singler.  Investigators accused the Long Island company and its workers of doctoring records and filing thousands of false documents to cover up their laziness in trying to track down people being sued over alleged debts.

Mr. Cuomo said that debt-collection law firms furnished those false documents to the courts as proof that defendants had been given proper notice of lawsuits against them. In many instances, he said that the defendants did not appear, and default judgments were entered against them.  The case highlighted the problem of "sewer service," the improper disposal of legal papers by process services.  A June 2008 report by MFY Legal Services called "Justice Disserved" found that only 8.5 percent of the defendants appeared in the 180,177 Civil Court cases filed in 2007 by seven debt-collection law firms in the Bronx, Queens, Brooklyn and Staten Island.  The nonprofit legal services provider said that a review of 91 cases selected at random "raised serious questions about the propriety of service by process servers hired by plaintiff debt collectors and the accuracy of their records."

The attorney general thanked the Unified Court System and its internal audit unit for their help in the investigation of American Legal Process, which included the review of hundreds of court files and more than 100,000 records of affidavits of service.  "The integrity of the justice system depends upon the confidence of litigants and the public, and there can be no confidence when false affidavits of service are used to deprive parties of their rights to be heard," Chief Administrative Judge Ann Pfau said in a statement distributed in a press release by Mr. Cuomo's office.  "This practice also inflicts substantial harm on individuals, subjecting them to judgments they had no opportunity to contest and imposing on them the significant collateral consequences of adverse judgments."  Mr. Singler's lawyer, Corey Winograd, acknowledged that some of the people employed by the company broke rules but said his client did not know it was happening.  "He trusted those process servers," Mr. Winograd said. "We now know today that some process servers breached that trust."  Mr. Winograd said his client would plead not guilty.

Three Attempts Required

CPLR §308 explicitly states how a summons and complaint is to be served. The law generally requires process servers to make three tries at hand-delivering a lawsuit before they can resort to a tactic known as "nail and mail," where they send the lawsuit by post and affix a copy to the person's door.  But in the case of American Legal Process, the attorney general said workers routinely made one attempt and then quit. In a court complaint, investigators said the company knew what was going on and encouraged workers to cut corners.

"The law says you have to go three times, but I know that it is a lot of driving, so if you go once you can just tack it," one manager told a new employee, according to the court filing.  Court administrators and a judge in Cattaragus County became suspicious when a woman called and complained that her bank account had been frozen without her knowledge.  Other people said they first found out about lawsuits when they tried to use a cash machine and had their cards rejected. They later learned that judges had given approval for their accounts to be frozen when they did not turn up in court to defend themselves.  Investigators with the attorney general and Office of Court Administration said the company's own records revealed the fraud.  In about 21 months, American Legal Process claimed to have delivered nearly 100,000 legal notices, but many of its process servers were filing records indicating they were in as many as four places at once, sometimes at opposite ends of the state.  In one instance, a worker claimed to have attempted deliveries that would have required him to drive more than 10,000 miles in a single day, authorities said. In other cases, workers claimed to have delivered court complaints before they had actually received them.

Law Firms 'on Notice'

Mr. Cuomo's office also said yesterday that he plans to sue one of American Legal Process' largest customers, the debt-collection law firm Forster & Garbus, of Farmingdale. The attorney general accused the firm of failing to supervise the company and relying on legal papers "it knew or should have known were false."  "I am putting all law firms on notice that they are responsible for the conduct of the companies they use to serve complaints and other legal documents," Mr. Cuomo said in his statement.

Law firm co-owner Ronald Forster said he had been using American Legal Process for only about 18 months and had been unaware of the alleged violations until now.  "I'm not in the business to try and take advantage of anyone," he said. "If there were complaints, it was such a small percentage. . . . If there is a problem with service, I'll do whatever I can to help correct it and fix it."  American Legal Process and Mr. Singler both are charged with criminal possession of a forged instrument in the second degree, a class D felony, three counts of offering a false instrument for filing in the first degree, a class E felony, and scheme to defraud in the second degree, a class E felony.  The defendants also face a civil suit filed in Erie County Supreme Court.  The attorney general's criminal case is being prosecuted by Assistant Attorney General Cydney Kelly under the supervision of Gail Heatherly and Richard Ernst, bureau chief and deputy bureau chief, respectively, of the criminal prosecutions bureau. The civil suit is being handled by Assistant Attorney General James Morrissey.  Last June, the New York City Department of Consumer Affairs held a public hearing to address "unscrupulous" practices in the process server industry, including "sewer service."

Commissioner Jonathan Mintz said in June that he called the hearing to help the department, which licenses process servers, assess "whether and what steps it can take to improve the administration of existing laws" and whether regulations should be modified to ensure that New Yorkers receive adequate notice of a lawsuit.  One of the consumer advocates who testified at the hearing, Carolyn Coffey of MFY Legal Services, said in Mr. Cuomo's press release that improper services can have a "devastating effect." She cited the case of two clients who, after default judgments, were unable to pay their rent and had to borrow money for food.  In a statement yesterday, Mr. Mintz said, "The Department of Consumer Affairs has devoted significant enforcement resources to the oversight of this industry, imposing penalties ranging from violations to license revocation, in response to troubling testimony we heard at our public hearing last summer."  He added that the department is reviewing proposals for change.  "If courts cannot rely on duly served process, then justice cannot be served," Mr. Mintz said.  Law Journal reporter Noeleen G. Walder contributed to this report. She can be reached at Noeleen.Walder@incisivemedia.com