Recitation, as required by CPLR 2219(a), of the papers considered in the review of this

MOTION FOR SUMMARY JUDGMENT

PapersNumbered

Notice of Motion and Affidavits Annexed............................................1 & 2

Order to Show Cause and Affidavits Annexed.....................................

Answering Affidavits..............................................................................3

Replying Affidavit of defendant.............................................................

Exhibits.....................................................................................................

Other: ......................................................................................................

Upon the foregoing cited papers, the Decision/Order on this Motion is as follows:

Plaintiff, Citibank (South Dakota) NA, commenced this action against the defendant, Joseph W. Howley, III, alleging that the defendant failed to make payments as agreed in a credit card agreement. Defendant appeared and answered. Currently before the court is plaintiff's motion for summary judgment. Defendant has failed to submit any papers in opposition.

A review of the motion papers discloses that the plaintiff has provided copies of the underlying consumer credit agreement, monthly billings beginning March 2007 through May 2010 showing charges being incurred and payments being made, the affidavit of facts recites all of the necessary information, the acknowledgment and certificate of conformity are in proper [*2]form, and the plaintiff has attached its certificate from the comptroller of the currency recognizing its chartering as a national bank in South Dakota.

There remains the issue as to whether or not this motion pursuant to CPLR §3212 is timely.

CPLR §3212 provides:

Motion for Summary Judgment

(a) Time; kind of action. Any party may move for summary judgment in any action, after issue has been joined; provided however, that the court may set a date after which no such motion may be made, such date being no earlier than thirty days after the filing of a note of issue. If no such date is set by the court, such motion shall be made no later than one hundred twenty days after the filing of the note of issue, except with leave of court on good cause shown.

This court has determined that there is no time limit for filing of motions pursuant to CPLR §3212 because there is no note of issue in civil court and the notice of trial utilized in civil court when both sides have counsel is not required for self-represented litigants [Panicker v Northfield Savings Bank, 12 Misc 3d 1153(A) (2006); NYLJ, 5/3/2006, p.26 col.3-4]. If the time to make a motion for summary judgment was triggered from the date "issue was joined" that is the filing of the self-represented defendant's answer, then this motion would be untimely as the defendant's answer was filed on September 23, 2010 and this motion was returnable March 16, 2011, almost six months later. The timeliness issue is further complicated by the fact that the New York City Civil Court Act §902 permits a defendant to file the equivalent of an "oral" answer. This section provides:

(a) All pleadings shall be formal pleadings, as in supreme court practice, except that:...(2) Where the plaintiff's cause of action is for money only and the defendant appears without attorney, he may describe his answer to the clerk, who shall indorse the nature and substance of the answer on, or annex it to the summons.

This means that issue was joined when the "oral" answer was filed with the clerk. Thereafter the clerk "calendars" the matter, sends a copy of the answer to the plaintiff and a notice to the parties with a court date. This is the first notification the plaintiff has that an answer been filed. Yet under the statute the parties time to move for summary judgment has begun to run before any court appearance. It makes more sense to amend the statute to make the time to file a summary judgment motion no earlier than after the date of the first court appearance. In litigation where there are two attorneys and require the filing of a note of issue or notice of trial, counsel at least would have had the opportunity to conduct discovery and determine if, in fact, a summary judgment motion is warranted. All of these procedural safeguards which the CPLR puts into place for two-attorney litigation are not available prior to a court appearance when a self-represented individual is involved.

The first court appearance of the parties was scheduled for October 12, 2010, to require a summary judgment motion within 120 days of that date is unrealistic and does not reflect the [*3]practices existing in consumer credit transactions where the parties often are working in good faith to resolve the claims with payment plans affordable by the defendant. These discussions are either through direct negotiation between the creditor and the debtor or by settlement talks between a debt settlement company (which are unlicensed in New York creating a situation ripe for potential abuse) and the creditor rather than having the plaintiff enter an uncollectible judgment.

Under the case law, this application is timely.

Based on the above, plaintiff is entitled to summary judgment in the amount of $1,716.63 together with interest from May 19, 2010, costs and disbursements.

The above being said, the court is concerned about the answer filed by the defendant herein. The answer is obviously prepared by someone with legal training. However, nowhere in the document is there any indication that counsel is appearing on behalf of the defendant. The pleading is on litigation paper with numbered lines commonly used in California and not in New York. The third section of the answer is labeled "III. Defendant Currently Enrolled In National Debt Settlement Program." It states:

1. Defendant is currently enrolled in a nationally recognized "debt settlement," "debt reduction," and "debt negotiation" program administered by a New York based law firm that uses Morgan Drexen Integrated Legal Systems.

2. Morgan Drexen Integrated Legal Systems, (http://www.morgandrexen.com), located at 1600 South Douglas Road, Suite 100, Anaheim, Ca 92806, provides access to debt settlement through integrated law firms that offer legal representation and negotiate with creditors to settle consumer debt and/or claims made against clients enrolled in the program.

3. For purposes of settlement, Defendant has formally listed Plaintiff's monetary claim against the Defendant as an item to be amicably resolved at a future date using funds that are currently being accumulated on a monthly basis in a third-party trust account administered by the New York based law firm through Morgan Drexen Integrated Legal Systems.

4. Defendant has authorized the New York based law firm and Morgan Drexen Integrated Legal Systems to make an appropriate and fair settlement with the Plaintiff once enough funds have accumulated in the Defendant's trust account to reasonably satisfy the claim which is the subject of this lawsuit.

Such pleading is not an "answer" and may create a misapprehension in the debtor that a proper response has been filed on his or her behalf by the debt settlement company. [*4]

Morgan Drexen, Inc. is incorporated in Nevada. The main office is located in Anaheim, California. The company's website describes its mission statement as:

Morgan Drexen, Inc. assists lawyers by integrating an attorney's judgment and advice to his or her clients with our system engineering and Legal Specialists, which improves the productivity, efficiency, and affordability of valuable legal services provided to near-bankrupt and bankrupt debtors.

We develop and deploy state-of-the-art software and substructures that incorporate our proprietary enterprise solution programs with automated document management to provide technology innovative legal process support for attorney's online-unbundled services throughout the USA. Our Software Development Group is a proud member of SIIA (Software Information Industry Association).

We provide law firms with computer technology, market support, call centers, predictive business logic, artificial intelligence, outsourced litigation support, proprietary know-how and databases, and work-product retrieval systems, with cloud computing, facilitated by the Company's outsourced Legal Specialists (paralegals, paraprofessionals, administrators, legal information engineers, and software and user interface designers). Our legal staff and paralegals are affiliated with the American Bar association [sic].

Morgan Drexen has been the recipient of many complaints about its debt settlement practices, including a "F" rating from the Better Business Bureau, and received a "Cease and Desist" Order in May 2009 from the North Carolina Attorney General.

The answer prepared on behalf of the defendant indicates that there is New York counsel for the defendant yet makes no effort to identify who is providing this advice. An additional internet search discloses "Dirk Levinsohn" as the New York attorney affiliated with Morgan Drexen. He maintains a website which does not disclose any address New York for the law firm. The images on the website disclose it is "powered by Morgan Drexen, Inc." A check of the New York attorney registration website lists a "Dirk Scott Levinsohn" as a member of the New York State Bar with an address in Los Angeles, California. There is no New York address listed for him.

Judiciary Law§ 470 has consistently been held to require that a non-resident maintain an office in New York for the purpose of practicing law [Kinder Morgan Energy Partners, LP v Ace American Insurance, Co, 51 AD3d 580 (2008); Empire Heathchoice Assurance, Inc., v Lester, 81 AD3d 570 (2011)]. If attorney Levinsohn intends to practice law in New York and "ghostwrite" pleadings for New York residents, it is essential that he maintain a New York office.

As to the appropriateness of an attorney "ghostwriting" pleadings, the Rule of Professional Conduct provide, " A lawyer may limit the scope of the representation if the limitation is reasonable under the circumstances, the client gives informed consent and where necessary notice is provided to the tribunal and/or opposing counsel" [Rule 1.2( c)]. It is abundantly clear that the answer submitted on behalf of the defendant was prepared by someone [*5]with legal training. This is permitted under the Rule of Professional Conduct, but there is no disclosure of this fact in the pleading, no notice to the court or opposing counsel, and no indication that there was any "informed consent" by the client. The fact that the defendant defaulted in appearing and answering in regard to this motion for summary judgment leads the court to believe that there was no informed consent in that regard by the client as a judgment is to be entered against the defendant.

This court has held that it is necessary for an attorney providing "unbundled" legal services to disclose this fact to the court. This is especially needed in these consumer credit transactions where unrepresented litigants often have difficulty in understanding the legal process and then find they have failed to properly assert their rights owing to this lack of understanding or unwarranted reliance on third parties such as debt settlement or debt negotiation organizations to protect their interests.

The fact that in New York City in excess of 95% of defendants in consumer credit transactions who answer the complaint are unrepresented and two-thirds of all defendants default in appearing and answering creates a pool of vulnerable individuals who are susceptible to unscrupulous persons seeking to provide the debtor with "assistance." By requiring disclosure of who is preparing these "unbundled services" the legal system can help police the industry and as noted in the musical "Pippin," separate a "charlatan from a Charlemagne."

Judiciary Law §478 makes the unauthorized practice of law a crime. The court is forwarding a copy of this decision to the Richmond County Bar Association and the Richmond County District Attorney to investigate whether Morgan Drexen is engaged in the unauthorized practice of law in New York State.

Plaintiff's motion for summary judgment is granted.

Judgment for plaintiff in the amount of $1,716.23 with interest from May 19, 2010 costs and disbursements.

The foregoing constitutes the decision and order of the court.

Staten Island, NYHon. Philip S. Straniere

Judge, Civil Court

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