Plaintiff, Discover Bank, commenced this action against the defendant, Ronald Washington, alleging that the defendant owed money on a credit card obligation. Previously, the plaintiff had filed a motion for summary judgment, which the court denied owing to deficiencies in the documentation attached in support. The defendant had raised as a defense that he had thought he had purchased insurance from the plaintiff which would be activated in the event he could not make monthly payments owing to a pre-existing medical problem. Although the court denied the motion for summary judgment, it did schedule a hearing on the issue of whether the defendant had an insurance plan issued by and purchased from the plaintiff which would make payments for him or whether he had contracted for some other credit card protection coverage. The hearing was scheduled on May 2, 2011. Plaintiff appeared by its local per diem counsel and the defendant appeared without counsel. Defendant has not had counsel throughout this litigation.

Although scheduled for a "hearing" on May 2, 2011 by the court's decision dated April 4, 2011, plaintiff did not produce any person to testify as to details of the credit protection plan purchased by the defendant. It did not even submit an affidavit from someone with "personal [*2]knowledge" of the defendant's account or of the protection plan. It did not produce an attorney's affirmation on any of the issues. Instead, plaintiff produced a letter on "Zwicker & Associates" letterhead signed "Respectfully yours, Steven P. Baum, Esq." Attached to the letter was a copy of the court's April 4, 2011 decision and a document purporting to be the "Discover Payment Protection Terms and Conditions" plan purchased by the defendant. The document is copyrighted 2005. Additionally, the court is in receipt of a letter from Discover Financial Services dated May 10, 2010 and addressed to the defendant denying activation of the plan's coverage. This letter presumably does not bear the signature of any individual but is signed "Sincerely, Payment Protection Customer Care Team." (The court uses the word "presumably" in regard to the signature not being made by an "individual" owing to the fact that the Civil Court has dealt with hundreds of unusual name change applications over the years, so anything is possible).

The court was a little surprised at plaintiff's response owing to the fact that the matter was set down for a "hearing" on this issue, having rejected a seance, transcendental meditation and telepathy as efficient methods to resolve the issue presented. Concerned that the court was mistaken as to the nature of a hearing and that it was operating under some bizarre local interpretation of the word, such as regional differences between "soda and pop," or "hero, submarine and hoagie," the court decided to consult Blacks' Law Dictionary, 5th edition. It defines "hearing" as: "Proceeding of relative formality (though generally less formal than a trial), generally public, with definite issues of fact or of law to be tried, in which witnesses are heard and parties proceeded against have right to be heard, and is much the same as a trial and may terminate in final order."

Counsel for the plaintiff is "Zwicker & Associates, PC." This is an interstate law firm with its main office located in Andover, Massachusetts. The Department of State lists it with an address in Rochester, New York. A review of the file has that address as 120 Allens Creek Road, in Rochester on the summary judgment papers; the summons and complaint and a stipulation with the defendant lists 150 Allens Creek Road, while correspondence submitted in regard to the scheduled hearing lists 120 Allens Creek Road as well as a New York City office at 299 Broadway, New York, New York. The letterhead does not contain the name of any attorney admitted to practice in New York State. A check of the attorney registration file discloses no one admitted in New York with the name "Steven P. Baum," the person who signed the letter sent to the court in lieu of appearing for the "hearing."

The letter head from Zwicker also discloses: "This Law Firm Employs One Or More Attorneys Admitted To Practice In The Following States:..." What follows is a list of twenty-two jurisdictions, including New York, in which the plaintiff's attorneys apparently practice law. The multi-jurisdictional nature of counsel's practice may explain why counsel was confused as to what to expect when the court indicated a "hearing" was to be conducted.

One of the reasons the court sought to have a hearing on this issue, was because this is not the first case in which a defendant indicated he or she had purchased some sort of credit card insurance or protection and that when the debtor became unable to work, the protection plan did [*3]not go into effect. In previous cases, the court was not able to inquire as to the cause of the lack of coverage. Other creditors indicated that although they sold the coverage, the protection was being provided by a third-party entity over which the creditor had no control and that they had no input into the process of evaluating claims. The court was interested in determining if denial was because the debtor failed to comply with the terms of the agreement, or was there some misunderstanding as to the nature of the plan?

Based on statements made by the defendant, the court was under the impression that he believed that he was paying for coverage which would pay his credit card debt if he was unable to work. In reality what defendant had purchased from Discover was not insurance which would pay his credit card debt during any period of his inability to do so, but was an agreement by Discover "not to impose any Periodic Finance Charges, Late Fees, Minimum Payment Due, Overlimit Fees or Payment Protection fees" during a qualifying benefit period. Once the benefit period ends, all of these fees would be resumed. It appears that in reality by purchasing the insurance, the debtor is really pre-paying any or all of these fees which might be assessed during the disability period.

It appears that the defendant sought this coverage because he had a medical condition which arose when he was in the military and that if the condition recurred, he would be unable to work. Based on the letter issued by the plaintiff on May 10, 2010 denying defendant's claim, Discover denied defendant's claim because his inability to pay was caused by a pre-existing condition. There was no coverage because "benefits cannot be activated for events that occur prior to your enrollment." So the very reason the defendant purchased the coverage is the reason the claim was denied. The coverage is not an insurance plan which would make payments in the event defendant was unable to do so, it is a deferral of charges incurring.

Based on the above, the issue of what the defendant thought he was purchasing, how much he paid each month for the coverage and whether he was properly denied the coverage by plaintiff all remain issues to be resolved at trial.

The court will also inquire as to whether the monthly fee which the plaintiff assessed and was paid by defendant, was higher, lower or about the same as the monthly charges incurred on the account.

This matter is scheduled for trial on Monday, June 27, 2011 at 11:00 `AM at the courthouse, 927 Castleton Avenue, Staten Island, New York. The failure of the plaintiff to produce a witness with knowledge of how the protection plan as well as defendant's account will result in dismissal of the action.

The foregoing constitutes the decision and order of the court.

Dated: May 26, 2011

Staten Island, NYHON. PHILIP S. STRANIERE

Judge, Civil Court