Judge: Cobb law firm was wrong in collecting wages from former d - CBS46 News

Judge: Cobb law firm was wrong in collecting wages from former debtor

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A federal lawsuit that alleges controversial law firm Frederick J. Hanna & Associates violated federal debt collection laws by garnishing wages to which it wasn't entitled, will likely continue.

In a recommendation filed Thursday, U.S. Magistrate Judge Janet King, rejected the firm's motions calling for the case to be dismissed. A U.S. district judge will now review the report and issue an order to officially dismiss the motions.

Eduardo Austin, of Sandy Springs, filed the class action lawsuit in February which accused the Cobb County firm of garnishing Austin's wages for a debt he didn't owe and claimed it may have happened to up to approximately 1,900 others.

"I am happy the court sees things my way but it's still a long way away until justice is served,"  Austin told CBS46 investigator Jeff Chirico.

According to the lawsuit, Hanna garnished Austin's wages for $3,300 in 2010 to cover an unpaid Discover Card account. Austin paid the debt in full to the Fulton County State Court registry by October 2010 but that court failed to forward Austin's payments to Hanna.

In fact, a CBS46 investigation discovered the court kept $2 million worth of garnishments from Hanna's firm. According to court records, the payments of 1,910 individuals were held for up to four years until they were paid in February 2013.

After Hanna's firm received Austin's payment, it attempted to garnish Austin's wages to cover interest that accrued during the time Fulton County State Court kept the funds. A Gwinnett County judge ruled in 2013 that the firm wasn't entitled to the funds.

Hanna & Associates argued to the court that Georgia law and a previous appellate court ruling allowed the firm to collect post-judgment interest. King rejected that argument as "misplaced" and found the firm wasn't entitled to interest after the plaintiff had paid the debt in full.

Steve Koval, Austin's attorney, said the judge's decision appears to settle the most critical issue in the case.

"This is one of those cases that makes you shake your head and say, 'really?'," said Steve Koval, Austin's attorney.

If the district judge sides with King's recommendation, Koval said he will request that the case become a class action lawsuit which will enable him to see how many former debtors had their wages improperly garnished by Hanna & Associates. 

In response to the recommendation, Joseph Cooling, managing partner of the Hanna Law Office, wrote "The magistrate's recommendation is for the benefit of the district judge who will make the ultimate decision as to whether the case will move forward. We anticipate filing a further brief before the district judge makes that decision and believe that we will ultimately prevail."

CBS46 reported in June that an investigative panel with the State Bar of Georgia began investigating Hanna for possible violations of professional rules of conduct based on a complaint filed by Austin.

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