Recent decisions in New Jersey and Maine demonstrate the growing burden courts are placing on creditors and debt buyers in credit card debt collection actions.
In LVNV Funding, LLC v. Colvell, the New Jersey Superior Court ruled that, to win on a summary judgment motion, a party suing on a credit card account must provide the same proof that is required for a default judgment. In its decision issued on July 12, 2011, the court found that New Jersey court rules do not allow entry of summary judgment for that party without proof of the previous balance, all transactions and credits, the periodic rates, the balance on which the finance charge was computed, any other charges, the cycle closing date, and the new balance (all from the periodic statement for the last billing cycle).
The court reversed the trial courts grant of summary judgment for the collection agency that had purchased the account at issue because the agencys computer-generated report submitted in support of its motion had no transaction information, had no billing cycle information, and showed the periodic and annual percentage rates as zero.
Asserting the need for strict adherence to court rules, the Maine Supreme Court also cited insufficient evidence as the basis for its decision in Cach, LLC v. Kulas vacating the district courts grant of summary judgment for the buyer of a credit card account.
The Cach, LLC, decision, issued on June 23, 2011, held that the affidavit of a bank officer who stated that the bank had sold the account to the debt buyer was insufficient to establish the buyers account ownership for purposes of summary judgment. According to the court, to establish ownership, copies of the banks computerized and hard copy books and records on which the affiants statement was based had to be attached to the affidavit. It also held that the amount owed on the account was not established for purposes of summary judgment by the Debtors File Balance Report prepared by the debt buyers attorney. Although the report showed the account balance as of a specific date and the amount of per diem interest, the court held it could not be considered for purposes of summary judgment because it was not accompanied by an affidavit supporting its authenticity or establishing that it was prepared by a person with personal knowledge of the credit card account.