The Importance of Saving Proof of Payment

Posted on by

In 1994, tax payments were made to the NYC Department of Finance for several parcels of real property by a client.  In 2001, unbeknownst to the client, the Department of Finance unilaterally reversed the payments made, added interest, created tax liens, and bundled up the liens for public auction sale.

My firm commenced an action against the City of New York in 2002, after learning of the tax lien sales, to declare that the payments made in 1994 had truly been made, and that the Department of Finance acted without authority in reversing the credits.  Luckily for the client, he saved the receipts issued by the Department of Finance when he made the payments in 1994 (which receipts are stamped onto the tax bills and actually given to the taxpayer).

The case culminated with the City of New York agreeing to reverse all of the unauthorized charges in 2001, reversing the tax lien sales, and clearing the tax delinquencies on the client’s account.  A win!

What does this teach?  The importance of retaining proof of payment in various situations.  Here, proof of payment was crucial in winning the case.

Common proofs of payment include a check or credit card statement showing that the bill was paid.  Other forms of proof may be a store receipt, credit card receipt, or paid invoice.  If cash is tendered, a signed receipt should be obtained.

The general rule of thumb is that most business records should be maintained for safekeeping for seven years.  Many advocate saving records for much longer, if feasible given space considerations.

The ability to prove payment of a debt or bill comes in handy in various situations, including:

  1. Many parents pay the custodial parent their child support payments by cash.  Sometimes, the custodial parent has kept poor records and will allege non-payment.  The burden of proving payments will fall upon the person charged with making the support payments.
  2. Distribution companies, such as food wholesalers, will have the drivers pick up payments at the time of making delivery of goods.  The driver may not account for the payments and the store will be forced to show payment of the invoices.
  3. Tenants of smaller rental buildings or two-family houses will pay the landlord (who generally lives at the building) by cash and fail to obtain a rent receipt.  Afterwards, the landlord may commence an action for non-payment in the Housing Court and the tenant will be without proof of payment of the rent.

Since the general burden of proof of payment falls upon the person liable for the same, it is crucial that proof be obtained at the first instance and maintained.  This will ensure that later mistakes or intentional denials of payment are disproved.

copyr. 2014 Richard A. Klass, Esq.
The firm’s website: www.CourtStreetLaw.com
Richard A. Klass, Esq., maintains a law firm engaged in civil litigation in Brooklyn Heights, New York.
He may be reached at (718) COURT-ST or e-ml to RichKlass@courtstreetlaw.comcreate new email with any questions.
Prior results do not guarantee a similar outcome.

R. A. Klass
Your Court Street Lawyer

Previous post
Next post

Debt Collection Tips: Issuance of the Summons in a Collection Case

Posted on by

A “Summons” is a legal document which notifies a person that he is being sued by another. The requirement of issuance of a Summons is a fundamental right derived from common law.  There are specific rules relating to the methods of service of the Summons.  In a collection case, however, there are additional rules to consider:

  1. Venue
    The venue of a case relates to the jurisdiction in which the case is brought within the State.  Generally, the proper venue of a case is one in which either party resides or where the transaction took place.  The venue of a case to collect upon a consumer credit transaction — one for which the purpose of the debt was for personal use, as opposed to commercial debt; many credit card cases fall into this category — must be in one of two places, either in the county in which the debtor resides or the county in which the transaction took place.  Both New York State’s Civil Practice Law and Rules (CPLR) and the federal Fair Debt Collection Practices Act (FDCPA) require this rule.  If a debtor applied for credit in Kings County and subsequently moved to Queens County, the Summons may be issued for either county.

  2. Consumer Credit Transaction
    According to the CPLR, the top of the Summons must state that the Summons is being issued for a consumer credit transaction.

  3. Spanish Summons
    In New York City, the Civil Court Act requires that, in addition to the Summons being issued in English, there must be an additional Summons issued in Spanish.

R. A. Klass
Your Court Street Lawyer

Previous post
Next post

Klass in the News: Yoko Ono Publicist Kip Kouri Injured at NYC Restaurant, Alleges Homophobic Harassment

Posted on by

By Andrew Hampp
Billboardbiz
July 25, 2014 6:00 PM EDT

Link to original article: Yoko Ono Publicist Kip Kouri Injured at NYC Restaurant, Alleges Homophobic Harassment

Kip Kouri, founder of Tell All Your Friends PR, is one of the most familiar and well-liked faces on the New York indie-rock circuit, repping everyone from Yoko Ono to Les Savy Fav to Guided By Voices to white-hot duo Sylvan Esso.

But a recent visit to Eataly, Mario Batali’s food emporium in New York’s Gramercy Park, ended in a violent altercation with the wait staff, leaving Kouri in stitches after allegedly being thrown through a plate glass window by a security guard. Kouri declined public comment while he sought legal counsel, but clients like Frenchkiss Records’ Syd Butler and Miniature Tigers began tweeting in Kouri’s defense, suggesting the incident was a hate crime and that a security guard used homophobic slurs against Kouri….

…Kouri declined comment, but deferred to his lawyer Richard Klass, who responded to Billboard in a statement: “Mr. Kouri vehemently denies the allegations made in the statement of Eataly’s representative. Mr. Kouri was at Eataly with his stepmother, sister and boyfriend, and a disagreement arose concerning the mishandling by Eataly of Mr. Kouri’s reservation. Mr. Kouri proceeded to leave the store after being harassed by Eataly’s staff, including being called homophobic slurs and enduring the staff’s homophobic hand gestures at him.

“As Mr. Kouri was exiting,” Klass continued, “three security guards became physical and began to push Mr. Kouri, his stepmother and sister, all the while calling him names. The security guards then tackled Mr. Kouri and threw him through a glass door, causing him to sustain serious injuries. Footage from Eataly’s security cameras were reviewed by the New York City Police Department and the investigation of the matter is pending.”

R. A. Klass
Your Court Street Lawyer

Previous post
Next post

Lawyer Misses the Bus (a $300,000 tale of woe)

Posted on by

The cabbie’s nightmare began with courtesy and continued with insult and injury.

It began as just another busy day in the life of a New York livery cab driver: picking up and dropping off passengers. On this particular day, the cabbie had pulled to the curb just past a bus stop in Manhattan to let out a passenger. He then stepped out of the car to open the passenger’s door. Perhaps he thought a little extra courtesy might result in a bigger tip but, no matter the reason, in this case, it cost him dearly.

The next moment, a New York City Transit Authority (NYCTA) bus, while running its regular route, pulled behind the livery cab at the bus stop. The bus driver opened his door and shouted at the driver, “You idiot, what are you doing in the bus stop!” The cabbie calmly apologized and said he’d move his car. However, without waiting for that to happen, the bus driver drove the bus close to the cabbie, requiring him to close his passenger door slightly so as to avoid his car door being damaged by the bus. The bus driver then accelerated the bus and drove closer, striking the cabbie, and causing him severe personal injuries.

The injured driver hired a law firm to bring a personal injury claim. That law firm brought a case against the NYCTA, seemingly the owner and operator of the bus. Unfortunately, the law firm did not learn that the bus operator could only have been an employee of a separate public authority known as the Manhattan and Bronx Surface Transit Operating Authority (MABSTOA) until long past the statute of limitations period in which to make a claim. Only at the deposition of the bus depot dispatcher, held more than two years after the incident, did the law firm learn from the witness that the bus operators for that bus route were all MABSTOA employees and not NYCTA employees (and only because all bus operators listed on the “crew report” had the designation “M” for MABSTOA).

The case against the NYCTA went to trial and the jury rendered a verdict in favor of the NYCTA and dismissed the claims of the livery cab driver. The cab driver then retained Richard A. Klass, Your Court Street Lawyer to make a claim against the personal injury law firm for legal malpractice.

Time-barred by the Statute of Limitations:

The concept of a “ Statute of Limitations ” is that people are afforded a certain amount of time to take action concerning a legal claim they may have; if that period of time passes without taking action, then the ability to pursue the legal claim has been waived. Most people are familiar, for instance, that in New York State the statute of limitations period within which to file most personal injury cases is three years from the date of accident. In this particular case, though, a notice of claim had to be served upon MABSTOA within 90 days of the incident under certain rules contained in the Public Authorities Law and General Municipal Law §50-e; then, an action had to be commenced in 1 year and 90 days after the incident.

Confusion between the MTA, NYCTA and MABSTOA:

Within the “alphabet soup” letters of all of these different municipal authorities lays a trap to catch the unwary. According to the statutory scheme laid out in the Public Authorities Law §1260 et. seq., the Metropolitan Transportation Authority (MTA) is a public benefit corporation which was created to oversee the mass transportation systems of New York City, and which functions as an umbrella organization for various other independent but affiliated agencies. See, In re New York Public Interest Research Group Straphangers Campaign, Inc., 309 AD2d 127 [1 Dept. 2003]. However, aside from the MTA’s overall organization, the MTA and each of its subsidiaries (which include NYCTA and MABSTOA) must be separately sued and are not responsible for each other’s torts. See, Mayayev v. Metropolitan Transportation Authority Bus, 74 AD3d 910 [2 Dept. 2010]. As provided for in Public Authorities Law §1203-a, MABSTOA is a subsidiary, public benefit corporation.

In Nowinski v. City of New York, 189 AD2d 674 [1 Dept. 1993], the plaintiff sued MABSTOA for personal injuries sustained at a location for which the NYCTA maintained responsibility. The plaintiff sought to serve a late notice of claim and both MASTOA and NYCTA moved to dismiss the action. The court held that the injured person was time-barred from serving the late notice of claim, given that the statute of limitations had already long expired. (See, generally, Public Authorities Law §1276).

No claim for being “lulled” into a false sense of security:

To the extent that the law firm could have claimed in its defense that it could not have known of the relationship between the MABSTOA, MTA, NYCTA and the relevant bus operators identified in the crew report, the court in Delacruz v. Metropolitan Transportation Authority, 45 AD3d 482 [1 Dept. 2007], held that the injured plaintiff could not claim that, by the actions of the MTA, he was “lulled into a false sense of security” that his lawyer sued the right public authority. The court specifically held the doctrine of “equitable estoppel” applies only when a governmental subdivision acts wrongfully or negligently inducing reliance by a party who is entitled to rely and who changes his position to his detriment or prejudice. There was no evidence here of any wrongful conduct by the NYCTA; it did not hide the information about MABSTOA or mislead the injured driver’s lawyer.

The legal malpractice claim was settled for $300,000 to pay for the livery cab driver’s injuries and medical lien. This case only emphasizes the point of how important it is for a lawyer to identify the proper legal entities to be sued on behalf of a client.

copyr. 2014 Richard A. Klass, Esq.
The firm’s website: www.CourtStreetLaw.com
Richard A. Klass, Esq., maintains a law firm engaged in civil litigation in Brooklyn Heights, New York.
He may be reached at (718) COURT-ST or e-ml to RichKlass@courtstreetlaw.comcreate new email with any questions.
Prior results do not guarantee a similar outcome.

Art credits:
Image at top of page: El Gouna (Red Sea, Egypt): public transport bus, customized and highly decorated in genuine Pakistani style. Coach built by Chishti Engineering (Karachi) and decorated by S. Gulzar (Karachi). Author/photographer: Marc Ryckaert, 2009. This image is licensed under the Creative Commons Attribution 3.0 Unported license.

R. A. Klass
Your Court Street Lawyer

Previous post
Next post