On March 5, 2014, the Appellate Division for the Superior Court of New Jersey issued a 46-page consolidated opinion considering the proofs necessary for debt-buyer plaintiffs to prevail on summary judgment in an action to collect an assigned debt on a closed and charged-off credit card account. See New Century Financial Services, Inc. v. Oughla, No. A-6078-11T4 (N.J. Super. March 5, 2014); MSW Capital LLC v. Zaidi, No. A-6370-11T1 (N.J. Super. March 5, 2014). Defendant consumers appealed the lower court’s grant of summary judgment contending that plaintiffs did not submit sufficient proof of their ownership of the debts and/or did not offer admissible evidence of the amounts allegedly owed.
Plaintiffs suing on assigned, charged-off credit card debts must prove two things: (1) ownership of the defendant’s charged off debt and (2) the amount due the card issuer when it charged off the account. In considering whether plaintiffs established prima facie proof of their claims, the court held that:
- lack of notice to the debtor of the sale of the debt does not affect the validity of the assignment;
- the assignment need not specifically reference defendant’s name or account number and instead may refer to an electronic data file containing that information;
- a plaintiff need not procure an affidavit from each transferor in its chain of assignments and may instead establish prima facie proof of ownership on the basis of business records documenting its ownership; and
- an electronic copy of the periodic billing statement for the last billing cycle is prima facie proof of the amount due on the account at charge off.
Applying the aforementioned standards to the facts presented, the court affirmed the case against one consumer who claimed he had never heard of the debt buyer and reversed the decision against the other consumer finding that the debt buyer did not provide an electronic document or affidavit sufficiently proving the full chain of ownership of the claim. As to the second consumer, the court claimed to express no opinion on the method by which the debt buyer could prove ownership on remand, yet stated that is must be established by admissible evidence presented by affidavit of a witness competent to testify.
Importantly, the court also disagreed with defendants’ argument that the express disclaimers of representations and warranties in the transfer of the accounts raised sufficient reliability concerns to bar the admission of account statements. Relying on Federal Trade Commission reports, which stated that commercial debt sellers may choose not to warrant account information for reasons other than the unreliability of the information, the court held that disclaimers, standing alone, are not enough to raise serious doubt about the dependability of account statements which appear regular on their face.
The court concluded by stating that proofs in cases like these should be “presented in a clear and straightforward manner” particularly because the “sums in these are often modest and defendants commonly self-represented.” The court criticized the plaintiff debt buyers because the “presentation of their proofs needlessly complicated [the] cases.”
For more information on the New Jersey opinion, contact Katherine Olson at 312-334-3444 or firstname.lastname@example.org.