Housing Court Decision Summaries
Hodes v. Vermeer Owners, Inc.
Nov. 15, 2006
Appellate Court:
Trial Court:
Civil Court, New York County
Trial Judge:
Hon. Schlomo Hagler
Type of Action or Proceeding:
Small Claims -- Legal Fees
Issues/Legal Principles:
Automatic debits of tenant's bank account by landlord require advance notice of the amount to be deducted.
Source:
NYLJ 23:1, Nov. 15, 2006
Referred Statutes:
CCA §1804, 15 USC §§1653,1693,1693e, 12 CFR §205.10(d)
Summary:
Tenant-shareholder of cooperative apartment commenced a small claims action against the cooperative seeking to recover $1,566 as a result of an unauthorized deduction from his bank account. The tenant had authorized monthly debits from his account for the payment of the monthly maintenance charges. In February, 2006, the cooperative billed the tenant $1,066 for legal fees. By letter dated February 6, 2006, the tenant requested that the legal fees be removed prior to March 1, 2006 billing cycle. Nonetheless, the cooperative electronically debited the tenant's account for payment of the legal fees. When the cooperative and the tenant's bank failed to reverse the unauthorized debit, tenant filed the instant small claims action. The landlord claimed that the legal fees were incurred due to tenant's breach of house rules. The court found that the electronic debits were covered under the Federal Consumer Credit Protection Act and 12 CFR §205 and any pre-authorized electronic fund transfer that varies in amount requires the payee to provide reasonable advance notice of the amount to be transferred and the date of the transfer. The Court held that other than the landlord's bill for legal fees, the tenant did not receive reasonable advance notice of the amount to be transferred and the scheduled date of transfer. The Court determined that the tenant was entitled to a refund of $1,066 from the landlord as it constituted an unauthorized transfer under 15 USC §1693e. The Court further held that it is well settled law that attorney's fees are only available to a prevailing party pursuant to statute or agreement and that a party may only be entitled to fees if it obtains a judgment.
Notes:
Decision:
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