Last week insideARM reported on a case where New Jersey Judge Renée Marie Bumb dismissed what she termed a “frivolous” lawsuit against Experian in the recent, twinned cases Glenn Williams v. Experian and Lorissa Williams v. Experian (United States District Court for the District of New Jersey, Case Nos. 14-8115 and 14-8116).
The case was interesting for the ARM industry because the Judge discussed “meaningful review or investigation” by an attorney prior to filing a complaint. The “meaningful review” standard had been used in lawsuits and regulatory actions involving collection attorneys.
As part of the Opinion dismissing the lawsuits Judge Bumb ordered plaintiff’s counsel to show cause why he should not be sanctioned.
On Tuesday, June 28th, plaintiff’s attorney, Brent F. Fullings, filed his Response to Order to Show Cause Why Plaintiff’s Counsel Should Not Be Sanctioned.
As noted in our article last week, the case involves credit disputes filed by both Williamses against Experian, which had determined and reported that each Plaintiff had filed two chapter 13 bankruptcies in the District Court of NJ. Both plaintiffs had disputed the bankruptcies, prompting Experian to reinvestigate. Experian sent an Automated Consumer Dispute Verification (ACDV) to Lexis Nexis, which is Experian’s public records vendor. Lexis Nexis subsequently confirmed the accuracy of the bankruptcy attributions. Experian then informed the plaintiffs of the dispute process results.
In the 17-page response (total filing with Exhibits was 165 pages) Mr. Fullings says he believes his clients were victims of a scam perpetuated by an individual named Andrew Bartok (who had been sentenced in 2013 to 22 years in prison and $2,000,000 in restitution for mail fraud and filing fraudulent bankruptcies).
Fullings tells Judge Bum that his conduct in the case does not meet the legal standards for sanctions under Rule 11(b) of the Federal Rules of Civil Procedure. Fed. R. Civ. P. 11(b)
Editor’s Note: Rule 11(b) of the Federal Rules of Civil Procedure provides,
“By presenting to the court a pleading, written motion, or other paper– whether by signing, filing, submitting, or later advocating it–an attorney or unrepresented party certifies that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances: (1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation; (2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law; (3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and (4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information.”
In the filing, Fullings details his pre-filing inquiries of his client, and his research of the facts and circumstances told to him by his clients. The Plaintiffs had told Mr. Fullings that they had “worked with” a man named “Andrew Bartok,” whom they had paid monthly for his services in an attempt to avoid foreclosure. Following substantial research on “Andrew Bartok,” Fullings found Bartok’s indictment for, among other things, “defraud[ing] … clients … by use of the United States Bankruptcy courts.”
Fullings noted that the Bartok indictment read, “From in or about 2000 through in or about February 2011, … Andrew Bartok … knowingly and willfully, having devised and intending to devise a scheme and artifice to defraud and for the purpose of executing and concealing such a scheme and artifice and attempting to do so, filed a petition under Title 11, filed a document in a proceeding under Title 11, and made a false and fraudulent representation, claim, and promise concerning and in relation to a proceeding under Title 11 at any time before or after the filing of the petition, and in relation to a proceeding falsely asserted to be pending under such title, to wit, Bartok filed with bankruptcy courts: (i) fraudulent voluntary bankruptcy petitions and (ii) fraudulent letters and motions.” Fullings also noted that the Plaintiff’s bankruptcy filings were within this time period. After some additional research, Fullings had contact with other suspected victims of Andrew Bartok to learn more about the illegal actions of Mr. Bartok and to compare the Plaintiffs’ allegations with that of others similarly affected.
Fullings argues that after numerous conversations with his clients, a review of Andrew Bartok’s method of operation and subsequent indictment, a review of Plaintiffs’ personal identification, and the credit reporting agencies’ lack of reasonable investigation into allegations which clearly have impacted many consumers, he strongly believed that a violation of the Fair Credit Reporting Act and applicable statutes existed and therefore proceeded accordingly.