CLARO BASIC TRAINING Monday, June 4, 2018 3:00 PM – 6:00 PM Fordham Law School 150 W 62nd St, New York, NY 10023, Room 3-01 Presenters Dora Galacatos Fordham Law School, Feerick Center for Social Justice Matthew Schedler CAMBA Legal Services, Inc. The CLARO Program Partners Bronx CLARO: Bronx County Bar Association, Fordham Law School Feerick Center for Social Justice, Legal Services NYC – Bronx, New York City Bar Association, NYU Law School Students for Economic Justice Brooklyn CLARO: Brooklyn Bar Association Volunteer Lawyers Project, Brooklyn Law School Manhattan CLARO: Fordham Law School Consumer Law Advocates, Fordham Law School Feerick Center for Social Justice, Fordham Law School Lincoln Square Legal Services, Manhattan Legal Services, New York County Lawyers’ Association Queens CLARO: Queens County Bar Association Volunteer Lawyers Project, St. John’s University School of Law Staten Island CLARO: Richmond County Bar Association, Staten Island Women’s Bar Association, Wagner College Westchester CLARO: Legal Services of the Hudson Valley, Pace University School of Law, Westchester County Bar Association The CLARO Programs operate under the auspices of the New York State Unified Court System’s Access to Justice Program. Justice Edwina G. Mendelson, Deputy Chief Administrative Judge for Justice Initiatives oversees the Access to Justice Program. i CLARO BASIC TRAINING Monday, June 4, 2018 3:00 PM – 6:00 PM Fordham Law School 150 W 62nd St, New York, NY 10023, Room 3-01 TIMED AGENDA WELCOME 3:00pm - 3:05pm (5) INTRODUCTION OF CLARO & ETHICAL CONSIDERATIONS Dora Galacatos 3:05pm - 3:30pm (25) CLIENT INTERACTION 3:30pm - 3:45pm (15) Dora Galacatos & Matthew Schedler DEBT COLLECTION PROCESS: PRE-LITIGATION & THE LIFE OF A DEBT Dora Galacatos 3:45pm – 4:15pm (30) BREAK 4:15pm - 4:25pm (10) THE COURT PROCESS & KEY MOTIONS 4:25pm - 4:50pm (25) Matt Schedler SUBSTANTIVE DEFENSES (CONSUMER CREDIT ACTIONS; BROKEN LEASE CASES) 4:50pm - 5:20pm (30) Dora Galacatos & Matt Schedler DISCOVERY 5:20pm – 5:30pm (10) Dora Galacatos NEGOTIATING A SETTLEMENT; 5:30pm – 5:40pm (10) STIPULATIONS Matt Schedler CLIENT-ATTORNEY SESSION SIMULATION 5:40pm - 5:45pm (5) Dora Galacatos & Camilla Leonard QUESTIONS & ANSWERS 5:45pm - 6:00pm (15) TOTAL TIME 180 MINUTES Note: 150 CLE min. + 30 non-CLE min. = 3 CLE CREDITS i BASIC CLARO TRAINING Biography of Presenters Dora Galacatos, Fordham Law School, Feerick Center for Social Justice Dora Galacatos, the Executive Director of the Feerick Center, is a Fordham Law alumna (1996), with experience working in city government, the not-for-profit sector, and legal services for low-income individuals. Prior to coming to Law School, Dora worked for the New York City Department of Juvenile Justice and the New York City for Mayor's Office of Drug Abuse Policy from 1989 to 1993. As part of a Skadden Fellowship (1997-98), Dora worked at Northern Manhattan Improvement Corporation, in Washington Heights, Manhattan. Dora was the Staff Director to the New York City Family Homelessness Special Master Panel (2003-2005). Dora also served as a law clerk to the late-Honorable Milton Pollack (1996-97) and to the Honorable Paul A. Crotty (2005-2006), both District Judges in the Southern District of New York. Dora is a graduate of the University of Pennsylvania (1987) and the New School for Social Research, where she was a Kaplan M. Fellow and received a Master of Science in Urban Policy (1993). Dora is a member of the New York County Lawyers’ Association Pro Bono Committee and the former chair of the New York City Bar Civil Court Committee. Matthew Schedler, CAMBA Legal Services Inc. Matthew Schedler is the Supervising Attorney in charge of the CAMBA Legal Services Consumer Law Project. The Consumer Law Project works in coalition with the Urban Justice Center, Housing Conservation Coordinators, Northern Manhattan Improvement Corporation, and Westside SRO Law Project to assist housing clients at these organizations with debt collection and credit issues in order to achieve self sufficiency after representation is complete. Mr. Schedler has also been a founding member of the DV CLARO Project and works with domestic violence survivors regarding financial abuse and consumer debt issues. Mr. Schedler received his B.A. from the University of Rochester and his J.D. from Boston University. ii Table of Contents I. Introducing the CLARO Program . 1 a. CLARO – 1 b. The CLARO Team – 2 c. New York City Civil Court – 3 d. Training – 3 e. CLE Credit – 3 f. How a CLARO Session Operates – 3 g. Greeting the CLARO Visitor – 4 h. Common CLARO Scenarios – 5 II. The Ethics of Working With Pro se Litigants & Unbundling Legal Services . 9 a. Access to Justice – 9 b. Legal Information versus Legal Advice – 9 c. Unbundled Legal Services and Ethical Considerations – 10 III. Debt Collection Process . 11 a. Exempt Income – 12 b. The Exempt Income Protection Act – 13 c. The 2011 Treasury Rule – 14 d. The Life of a Debt – 15 e. The Fair Debt Collection Practices Act – 17 f. The New York State Department of Financial Services – 17 g. The New York City Rules – 18 i. Sample “Verify Debt” Letter – 20 h. Telephone Harassment – 21 i. Sample “Judgment-Proof/Cease Contact/Verify Debt” Letter – 22 i. Settling with Debt Collectors Prior to Litigation – 23 j. Debt Settlement Companies – 23 IV. Court Process . 25 a. Summons and Complaint – 25 b. Summons Served Without Complaint – 26 c. Timing for Filing and Answer – 26 d. How to Serve and File the Answer – 27 e. How to File a Motion or an Application for an Order to Show Cause – 28 f. Process for Vacatur of a Default Judgment – 29 g. New York City Civil Court Directives Regarding Default Judgments – 31 h. Methods of Service on the Plaintiff – 32 i. How to Obtain Court Records – 32 j. Court Appearance and Conduct – 32 k. Enforcing Judgments – 33 l. Ways of Collecting – 33 m. Summary Judgment – 34 n. Appeals – 34 V. Substantive Defenses . .. 35 a. Substance of the Answer: Responding to Allegations in the Complaint – 35 b. Substance of the Answer: Breach of Contract - Affirmative Defenses – 35 c. Additional Defenses to Account Stated Claim – 41 VI. Counterclaims . .. 41 VII. Cross Claims. …….. .. 43 iii VIII. Broken Lease Cases . 43 IX. Negotiating Settlement . 44 X. Settlement Prior to Trial . 45 XI. Discovery Devices . … . .46 a. Demand for a Bill of Particulars – 47 b. Depositions – 47 c. Interrogatories – 47 d. Demand for Discovery and Inspection – 47 e. Request for Admissions – 48 f. If the Litigant Does not Respond to a Demand for Discovery – 48 g. Objecting to Discovery – 48 h. Serving Discovery – 48 XII. Referral of CLARO Visitors to Other Assistance . ….. .50 XIII. Tax Consequences of Settlements 51 a. General Rules – 51 b. Advising CLARO Visitors regarding tax implications of settlements – 52 c. Advising Visitors who have received a Form 1099-C – 52 d. Tax Resources for Volunteer Attorneys and Visitors – 53 Appendices iv About this Guidebook The CLARO Guidebook was developed and produced by the Brooklyn Volunteer Lawyers Project and Brooklyn Law School CLARO/SAG with major contributions from Claudia Wilner, Esq., formerly with the New Economy Project; Carolyn E. Coffey, Esq., Director of Litigation for Economic Justice at Mobilization for Justice Legal Services; Corina N. Stonebanks, Esq. formerly of the Brooklyn VLP; and the Hon. April Newbauer, former Attorney-in-Charge, The Legal Aid Society Queens Civil Practice. In July 2009, the Guidebook was adapted and updated by the sponsors of the Bronx CLARO Program to reflect developments in the law. It has been updated since then on a regular basis to reflect legal developments in the field. The Guidebook is available for use in other consumer debt programs; however, the CLARO program directors respectfully ask that future use of the materials credit the original source and authors of the Guidebook. v I. INTRODUCING THE CLARO PROGRAM A. CLARO The Civil Legal Advice and Resource Office (“CLARO”) is a limited, legal advice project for unrepresented debtor-defendants. CLARO is an innovative and collaborative effort that operates in the New York Civil Courts in all five boroughs – the Bronx, Brooklyn, Manhattan, Queens and Staten Island – and in Westchester.1 CLARO also operates in Erie County. Volunteer attorneys and volunteer students at CLARO respond to the needs of unrepresented persons in consumer credit cases in various types of courts by advising litigants on self-representation strategies. Programs such as CLARO are part of a greater national pro se movement in legal services, which seeks to maximize legal resources for low-income individuals by providing limited-scope legal advice to unrepresented litigants. In January 2006, the first Civil Legal Advice and Resource Office opened in Kings County Civil Court, after months of planning and collaborative effort by the Brooklyn Bar Association Volunteer Lawyers Project and the Public Interest Center at Brooklyn Law School, in partnership with public interest practitioners and the Supervising Judge of Kings County Civil Court. Today CLARO is a highly regarded program, which is staffed by volunteer lawyers and students from local law schools and colleges and is run with the support of the pro bono programs of bar associations and legal service providers. While rich in diversity, New York City and New York State have significant indigent populations. Nine years after the deepest recession since the Great Depression, NYC residents continue to experience disconcertingly high levels of unemployment and wage depression. According to NYC's most recent census data, 20.3% New Yorkers lived in poverty.2 According to the leading NYC child advocacy organization, a stunning 26.6% of children in the City lived in poverty in 2016.3 Since 2008, the recovery has resulted in a net loss of nearly 34,000 high and middle-wage jobs compared to a net gain of over 100,000 low-income jobs that do not bring households above 1 CLARO operates with the support and collaboration of the New York City Civil Courts and of the Honorable Fern A.