MAIN STREET ACQUISITION CORP., Plaintiff–Respondent, v. ROBERT L. NEMETH, Defendant–Appellant.
Defendant Robert L. Nemeth appeals from the August 29, 2012 order granting summary judgment to plaintiff Main Street Acquisition Corp., a debt buyer, seeking to collect a $7731.68 balance defendant purportedly owed on a closed and charged-off Chase/Washington Mutual (WaMu) credit card account. He also appeals the October 26, 2012 order denying his motion for reconsideration. After reviewing the record in light of the controlling legal principles, we affirm.
We glean the following facts from the record provided. Plaintiff and Chase Bank USA, N.A.1 executed a bill of sale with a closing date of June 29, 2011, whereby plaintiff purchased 8842 delinquent debts, including one purported to belong to defendant. The account belonging to defendant was identified by: defendant's name; the account number; defendant's address; defendant's home and work phone numbers; defendant's social security number; the payment history, including the date of first delinquency and date of last payment; and the outstanding balance of $7731.68. The Chase periodic credit card statements confirmed that defendant began failing to make the minimum payments in August 2009. Chase closed the account on December 3, 2010.
The transfer of defendant's debt from Chase was affirmed by Jason S. Williams, the vice-president and custodian of business records for plaintiff. In a certification, Williams attested that the transfer and assignment of defendant's debt to plaintiff by Chase “was a valid and lawful business transaction that transferred ownership of [defendant's] [a]ccount to [plaintiff.]” Williams also averred that the transfer and assignment of defendant's account to plaintiff “occurred pursuant to a routine, industry standard business transaction.”
Williams based this statement on his review of plaintiff's business records along with his expertise in the industry practices. Williams asserted that he had negotiated, reviewed, and verified all of the Chase/WaMu records. Williams stated that the Chase/WaMu records were “acquired in the ordinary course of business by transfer and assignment pursuant to the Agreement” and “were kept in the regular course of business[.]”
On January 24, 2012, plaintiff sent defendant a debt collection letter informing defendant that it had acquired defendant's debt on his Chase/WaMu account and seeking payment. On February 17, 2012, defendant sent plaintiff a letter disputing the claim. Plaintiff sent defendant a debt verification letter on April 27, 2012.
On May 10, 2012, plaintiff filed a complaint against defendant alleging that it purchased a monetary obligation defendant owed on the Chase/WaMu account in the amount of $7731.68 and sought judgment in the amount owed plus interest. On June 6, 2012, defendant filed his answer denying the allegations in the complaint and setting forth numerous affirmative defenses.
Plaintiff filed a motion for summary judgment on July 18, 2012. The trial judge granted the motion on August 29, 2012, and awarded plaintiff $7731.68 plus $170.31 interest.
The trial judge found that the summary judgment motion was “meritorious” and “supported by verified business records,” which established that “the credit card agreement was used by defendant, confirming the card agreement, and the proofs [were] in accord with R. 6:6–3(a), while defendant's objections [did] not set forth facts in accord with the [summary judgment] standard.” The judge concluded that “the motion [was] granted for the reasons set forth in the moving papers” pursuant to Rule 1:6–2.2
Defendant filed a motion for reconsideration and to vacate summary judgment on September 18, 2012. After hearing oral argument, the trial judge denied defendant's motion on October 26, 2012. This appeal followed.
On appeal, defendant argues that plaintiff lacked standing to bring this suit because it cannot establish a valid chain of assignment and thus cannot prove ownership of the alleged debt. In addition, defendant contends that the documents plaintiff presented as proof of assignment of defendant's debt constituted hearsay, lacked a competent witness to authenticate them, were not originals, and their source indicated a lack of trustworthiness.3 Thus, defendant contends the documents should have been excluded. We disagree.
In an appeal from the grant of summary judgment, we utilize “ ‘the same standard [of review] that governs the trial court.’ ” Mem'l Props., LLC v. Zurich Am. Ins. Co., 210 N.J. 512, 524 (2012) (alteration in original) (quoting Henry v. N.J. Dep't of Human Servs., 204 N.J. 320, 330 (2010)). Thus the evidence must be viewed “in the light most favorable to the non-moving party” and must be analyzed to determine “whether the moving party was entitled to judgment as a matter of law.” Ibid. (citing Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995)).
A plaintiff suing on an assigned, charged-off credit card debt must prove both ownership of the defendant's debt and the amount due to the card issuer when it closed defendant's account. Thus, plaintiff must prove it owned defendant's credit card debt, whether one characterizes this as standing to sue or an essential element of proof on an assigned claim. See Wells Fargo Bank, N.A. v. Ford, 418 N.J.Super. 592, 599–600 (App.Div.2011); Triffin v. Somerset Valley Bank, 343 N.J.Super. 73, 79–82 (App.Div.2001).
“[A]ny beneficial contract may be assigned, and courts of law will protect the rights of the assignee suing in the name of the assignor.” Somerset Orthopedic Assocs. v. Horizon Blue Cross & Blue Shield of N.J., 345 N.J.Super. 410, 415 (App.Div.2001). Indeed, the assigned credit card debt on which plaintiff sued constitutes a chose in action arising on a contract, which is specifically assignable pursuant to N.J.S.A. 2A:25–1. In order for such assignment to be valid, it “must contain clear evidence of the intent to transfer the person's rights and ‘the subject matter of the assignment must be described sufficiently to make it capable of being readily identified.’ ” Berkowitz v. Haigood, 256 N.J.Super. 342, 346 (Law Div.1992) (citations omitted). Moreover, “[o]nce properly notified of the assignment, the obligor is charged with the duty to pay the assignee and not the assignor.” Ibid.
We are satisfied that the documents show that plaintiff has a valid assignment of debt from Chase. The bill of sale is clear evidence of Chase's intent to transfer the debts to plaintiff; defendant's accounts are sufficiently described in the spreadsheet appended to the bill of sale as well as the purchase file layout; and defendant was notified of the assignment via letter. Hence, if the documents were properly admitted in evidence, plaintiff had standing in this case. See Triffin, supra, 343 N.J.Super. at 81.
The central question presented regarding the assignment is whether plaintiff submitted competent evidence demonstrating “the full chain of the assignment of the claim[.]” R. 6:6–3(a); see also LVNV Funding, L.L.C. v. Colvell, 421 N.J.Super. 1, 6 (App.Div.2011) (stating Rule 6:6–3(a) provides a guide to the proofs necessary for summary judgment in credit card collection cases). We reviewed the requirements for affidavits purporting to establish a party's ownership of an assigned debt in Ford, supra, 418 N.J.Super. at 597–98. An affiant must aver that the facts presented are on personal knowledge, identify the source of such knowledge, and must properly authenticate any certified copies of documents referred to therein and attached to the affidavit or certification. Id. at 599–600. Here, Williams identified his position with plaintiff, stated that he personally participated in the acquisition of defendant's debt from Chase, and certified that the attached assignments were true copies of the ones provided to plaintiff by its assignor Chase. Nothing further was required to authenticate them under N.J.R.E. 901. See Celino v. Gen. Accident Ins., 211 N.J.Super. 538, 544 (App.Div.1986).
As to the assignment of defendant's debt from WaMu to Chase, there is no explicit evidence in the record on appeal of this asset transfer.4 However, many state and federal courts have deemed the fact that the Federal Deposit Insurance Corporation (FDIC) took over WaMu and subsequently sold all of its assets to Chase a proper subject of judicial notice under N.J.R.E. 201(a) or (b). See, e.g., Carswell v. JPMorgan Chase Bank, N.A., 500 Fed. App'x 580, 583 (9th Cir.2012); Arguenta v. J.P. Morgan Chase, 787 F.Supp.2d 1099, 1101–04 (E.D.Cal.2011); Stewart v. JPMorgan Chase Bank, N.A., 473 B.R. 612, 618 n.2 (Bankr.W.D.Pa.2012), aff'd, No. 12–1243, 2013 U.S. Dist. LEXIS 111516 (W.D.Pa. Aug. 8, 2013); Shirk v. JPMorgan Chase Bank, N.A., 437 B.R. 592, 596 & n.1 (Bankr.S.D.Ohio 2010); Scott v. JPMorgan Chase Bank, N.A., 154 Cal.Rptr.3d 394, 401–09 (Ct.App.2013), modified, No. A132741, 2013 Cal.App. LEXIS 290 (Ct.App. Apr. 16, 2013), rev. denied, No. S210315, 2013 Cal. LEXIS 4861 (June 12, 2013).
More to the point, while defendant's account originated with WaMu, the seventeen periodic Chase credit card account statements sent to defendant itemized numerous monthly credit card transactions between defendant and Chase after Chase acquired the WaMu account. The Chase account statements establish a direct contractual relationship between plaintiff and Chase. See Garden State Bank v. Graef, 341 N.J.Super. 241, 246 (App.Div.2001) (accepting records of successor bank as prima facie evidence of outstanding loan where account holder continued making payments to successor bank); Novack v. Cities Serv. Oil Co., 149 N.J.Super. 542, 548 (Law Div.1977) (noting use of credit card constitutes acceptance of offer of credit), aff'd o.b., 159 N.J.Super. 400 (App.Div.), certif. denied, 78 N.J. 396 (1978). Accordingly, if those statements are properly admissible, no further proof of Chase's assumption of defendant's account was necessary.
As we have concluded that these documents were properly authenticated by Williams and properly demonstrated the assignment of defendant's debt to plaintiff, we now turn to the nature of the documents themselves and whether they constituted inadmissible hearsay. The business records hearsay exception provides:
A statement contained in a writing or other record of acts, events, conditions, and, subject to Rule 808, opinions or diagnoses, made at or near the time of observation by a person with actual knowledge or from information supplied by such a person, if the writing or other record was made in the regular course of business and it was the regular practice of that business to make it, unless the sources of information or the method, purpose or circumstances of preparation indicate that it is not trustworthy.
Records such as bank statements, cancelled checks, and books of account generally fall under the business record exception. Biunno, Weissbard & Zegas, Current N.J. Rules of Evidence, comment 2 on N.J.R.E. 803(c)(6) (2013). To qualify under this exception, three conditions must be satisfied by the proponent:
“First, the writing must be made in the regular course of business. Second, it must be prepared within a short time of the act, condition or event being described. Finally, the source of the information and the method and circumstances of the preparation of the writing must justify allowing it into evidence.”
[State v. Sweet, 195 N.J. 357, 370 (2008) (quoting State v. Matulewicz, 101 N.J. 27, 29 (1985)), cert. denied, 557 U.S. 934, 129 S.Ct. 2858, 174 L. Ed.2d 601 (2009).]
The foundation witness need not “have personal knowledge of the facts contained in the record.” Hahnemann Univ. Hosp. v. Dudnick, 292 N.J.Super. 11, 17–18 (App.Div.1996). Indeed, “documents may properly be admitted ‘as business records even though they are the records of a business entity other than one of the parties, and even though the foundation for their receipt is laid by a witness who is not an employee of the entity that owns and prepared them.’ ” Id. at 17 (citation omitted). It follows that “the foundation for systematically prepared computer records” may be competently laid “if the witness (1) can demonstrate that the computer record is what the proponent claims and (2) is sufficiently familiar with the record system used and (3) can establish that it was the regular practice of that business to make the record.” Id. at 18.
In this case, the bill of sale and corresponding documents all clearly fall within the business records exception as examples of business records transferred on sale and incorporated in the purchaser's records to document proof of ownership of the thing transferred. See, e.g., State v. Mazowski, 337 N.J.Super. 275, 291–92 (App.Div.2001) (pawnshop receipts); Scott v. Greengos, 95 N.J.Super. 96, 99–100 (App.Div.1967) (stock sale confirmation sheets). Here, Williams had personal knowledge of these documents and certified that they were kept in the ordinary course of plaintiff's business, thus satisfying the evidentiary requirements. Hence, the documents are admissible as business records under N.J.R.E. 803(c)(6).
We next turn to the amount of defendant's debt, which plaintiff also had to demonstrate using admissible evidence. We are convinced that defendant's statements from Chase, as well as the credit card terms, also qualify as business records as certified by Williams. Williams explicitly detailed the “due diligence” he undertook in learning the internal procedures for Chase/WaMu's record management and certified that they were kept in the regular course of business. These account statements are the types of documents our courts have long accepted as business records excepted from the hearsay rule under N.J.R.E. 803(c)(6). See Graef, supra, 341 N.J.Super. at 244–45; Sears, Roebuck & Co. v. Merla, 142 N.J.Super. 205, 207–08 (App.Div.1976).
Even more important in the context of this action, Rule 6:6–3(a) provides that “if plaintiff's records are maintained electronically and the claim is founded on an open-end credit plan,” as defined in 15 U.S.C.A. § 1602(i), the Truth in Lending Act, and 12 C.F.R. § 226.2(a)(20) (2013), Regulation Z, as this claim is, “a copy of the periodic statement for the last billing cycle, as prescribed by 15 U.S.C.A. § 1637(b) and 12 C.F.R. § 226.7 ․ if attached to the affidavit, shall be sufficient to support the entry of judgment.” 5 Such was the case here. Not only was a copy of the last periodic statement attached to Williams' affidavit, but the statements for July 2009 through December 2010 were included.
In addition, the Chase records were admissible as they “ ‘appear[ ] perfectly regular on [their] face and as having been issued in the regular course of business prior to the inception of any controversy between the parties.’ ” Graef, supra, 341 N.J.Super. at 246 (alterations in original) (quoting Mahoney v. Minsky, 39 N.J. 208, 213 (1963)); see also Carmona v. Resorts Int'l Hotel, Inc., 189 N.J. 354, 380 (2007) (holding that no reason existed to find computerized business records untrustworthy unless the opposing party presented evidence to question their reliability).
Accordingly, we conclude that the bill of sale and corresponding documents, as well as the Chase account statements, submitted by plaintiff were admissible as business records and properly authenticated by Williams. These documents taken together provided prima facie proof of plaintiff's ownership of defendant's debt and the amount of the debt due. See New Century Fin. Servs., Inc. v. Dennegar, 394 N.J.Super. 595, 599 (App.Div.2007) (concluding trial judge acted within discretion in admitting monthly credit card statements on assigned claims).
The admission of the chain of assignment and account statements did not assure the entry of summary judgment. They provided only prima facie proof that plaintiff is the owner by assignment of defendant's Chase/WaMu charged-off credit card on which $7731.68 is due. See Mangual v. Berezinsky, 428 N.J.Super. 299, 312–13 (App.Div.2012) (where party demonstrated prima facie right to summary judgment, opposition could defeat motion with evidence of genuine issue of material fact). But, in order to stave off summary judgment, defendant had to come forward with evidence sufficient to create a genuine issue as to those material facts on which plaintiff's prima facie claim was based. Brill, supra, 142 N.J. at 529.
Defendant failed to come forward with any evidence raising a genuine dispute as to either the assignment or the account statements. Specifically, defendant does not deny owing the debt. Accordingly, we affirm the trial judge's entry of summary judgment in favor of plaintiff.
Defendant's remaining arguments are without sufficient merit to warrant discussion in a written opinion. R. 2:11–3(e)(1)(E).
1. FN1. Defendant's account was originally with WaMu. Chase acquired most of WaMu's assets from the FDIC after WaMU's financial collapse in 2008. See Puig v. Citibank, N.A., 514 Fed. App'x 483, 484 (5th Cir.2013). The seventeen credit card statements in the record from July 2009 through December 2010 clearly state they are from Chase and payment was to be made to Chase card services.
2. FN2. We note that the record here appears to be incomplete. In an appeal from summary judgment, the appendix must include “a statement of all items submitted to the court on the summary judgment motion and all such items shall be included in the appendix” except, generally, the briefs. R. 2:6–1(a)(1). No such list was included. While defendant submitted “Additional Parts of the Record,” including some of plaintiff's exhibits, it is not possible to ascertain if all the documentary evidence submitted to the court is included. In addition, where, as here, the judge's order was based “on the reasons set forth in the moving papers,” all the moving papers should have been included. R. 2:6–1(a)(1)(I) (noting that appellant's appendix shall contain “such other parts of the record, ․ as are essential to the proper consideration of the issues”). The failure to include a complete record of items often impedes appellate review. See Johnson v. Schragger, Lavine, Nagy & Krasny, 340 N.J.Super. 84, 87 n.3 (App.Div.2001). In any event, we have no reason to believe that a fuller appendix would alter our legal analysis, which clearly shows why defendant's arguments lack merit.
3. FN3. Notably, in defendant's appeal papers, he does not argue that he does not owe the debt.
4. FN4. Without a complete listing of documents plaintiff submitted in support of summary judgment and the documents themselves, we cannot know what evidence, if any, was presented on this point.
5. FN5. As the account statements were before the trial court, the concerns we raised in Covell, supra, where such statements were not admitted, are not present here. 421 N.J.Super. at 6–8.