Prage v. Kavulich & Associates

In April 2016, New Economy Project and co-counsel filed a federal lawsuit against the debt collection law firm Kavulich & Associates on behalf of Brooklyn resident Romain Prage. The lawsuit alleged that Kavulich violated federal debt collection and state consumer protection laws, and explicitly subverted New York’s Exempt Income Protection Act. Mr. Prage sought monetary and injunctive relief.

We successfully settled the lawsuit in May 2018, winning redress for Mr. Prage and barring Kavulich from putting other New Yorkers through the same ordeal that Mr. Prage experienced — including by lying about legal protections that New Yorkers have under state law. Read press release here.

Background

In April 2015, the law firm and its principal, Gary Kavulich, restrained Mr. Prage’s bank account, which contained only his unemployment benefits. Despite being promptly notified that the funds in the account were statutorily exempt from collection, Kavulich refused to release Mr. Prage’s account for nearly two months, and released it only when directly ordered to do so by a state court in late May 2015. Incredibly, Kavulich improperly restrained Mr. Prage’s account yet again two months later, in July 2015. By doing so, Kavulich repeatedly and unjustifiably undermined Mr. Prage’s ability to pay bills, put food on the table, and otherwise lead a safe and healthy life.

In 2009, New Economy Project helped win passage of New York’s Exempt Income Protection Act (EIPA). We fought for the legislation to close a loophole in New York law that allowed debt collectors to freeze the bank accounts and seize the subsistence income of thousands of New Yorkers every year. We fought to protect seniors, veterans, people with disabilities, and all New Yorkers on fixed incomes from abusive debt collection practices. We fought precisely to protect people in situations like Mr. Prage’s. By improperly restraining Mr. Prage’s exempt funds, Kavulich flouted the very spirit and purpose of the EIPA.

New Economy Project was pleased to file the lawsuit with The Law Office of Ahmad Keshavarz.