LLC v. Karen Copes (2012)

CORRECTED MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT (# 111)

FACTS

The present motion stems from a debt collection action.   On August 31, 2010, the plaintiff, Midland Funding LLC, filed a complaint alleging that the defendant, Karen Copes, through the use of a credit card, became indebted to an entity known as Washington Mutual Bank N.A. (Washington Mutual) in the amount of $8,856.70.   The plaintiff further alleges that it purchased title to this debt for valuable consideration and the defendant has refused to pay the amount owed.   The plaintiff seeks damages, attorneys fees, interest and costs of suit.   The defendant filed an answer on October 28, 2010, denying the material allegations of the complaint and asserting a special defense.¹  On July 15, 2011, the plaintiff filed the present motion for summary judgment on the ground that no genuine issues of material fact exist as to whether the defendant owes the plaintiff $8,856.70 plus interest and attorneys fees.   In support of its motion, the plaintiff filed a memorandum of law, the signed and sworn affidavit of Susan Rasmussen, an officer of the plaintiff, and various documentary exhibits, including a copy of the sale of the account to the plaintiff and copies of interrogatory requests and responses.   On September 1, 2011, the defendant filed an objection to the motion for summary judgment, a memorandum in support of her objection, her signed and sworn affidavit, the sworn and signed verification as to responses of Lauren Jones, an authorized representative of the plaintiff, which contained two exhibits including a generic Visa credit card agreement and copies of the assignment and bill of sale from two separate entities to the plaintiff.   On September 2, 2011, the plaintiff filed a supplemental brief in support of its motion for summary judgment.   On January 27, 2012, the plaintiff filed the affidavit of Holly Kearns, the custodian of records of an intermediary entity where the plaintiff argues it purchased the defendant's account.   The matter was heard at short calendar on April 23, 2012.

DISCUSSION

“Practice Book § 17–49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.”  (Internal quotation marks omitted.)  Sherman v. Ronco, 294 Conn. 548, 553, 985 A.2d 1042 (2010).   “Because the burden of proof is on the movant, the trial court must view the evidence in the light most favorable to the nonmoving party ․ In ruling on a motion for summary judgment, the court's function is not to decide issues of material fact, but rather to determine whether any such issues exist ․ [O]nce the moving party has met its burden [of production] ․ the opposing party [to survive summary judgment] must present evidence that demonstrates the existence of some disputed factual issue.”  (Citations omitted, internal quotation marks omitted.)  Maltas v. Maltas, 298 Conn. 354, 365–66, 2 A.3d 902 (2010).

The plaintiff argues that it has carried its burden entitling it to summary judgment by demonstrating that it generated monthly statements for the defendant in the regular course of business and mailed those statements to the defendant who retained them without objection.   In short, the plaintiff argues it has proven that there is a balance due and owing, and the defendant is liable for this amount.   The plaintiff argues that each use of the credit card by the defendant constitutes a representation that the defendant agreed to pay the credit card debt according to its terms and the defendant's failure to dispute the charges in a timely manner constitutes a waiver of claims of error on the plaintiff's part.

The defendant counters that the plaintiff has not established the absence of any genuine issues of material fact because the statements provided by the plaintiff are self-serving and reflect a balance higher than the amount in dispute.   Further, the defendant argues that the plaintiff has not proven that it owns the debt in question.   The defendant does not deny the existence of the charges but instead argues that the debt is beyond the statute of limitations because she has not received a statement from Washington Mutual or made any payments or purchases on the account in over six years.

This court has established that, “[i]n order for [a] plaintiff to prevail on its causes of action, namely, that the defendant is obligated to pay a debt by virtue of a credit card agreement and an account stated, the plaintiff must demonstrate that it is the valid assignee of the account and debt in question.”   U.S. Equities Corp. v. Marrone, Superior Court, judicial district of New Haven, Docket No. CV 10 6013021 (November 15, 2011, Woods, J.) (where the court found that “[t]he plaintiff's evidence purporting to establish ‘a complete chain of title’ as to the defendant's debt [was] insufficient to meet its burden of production [for summary judgment]”).   See Cuda & Associates, LLC v. Lumpkin, Superior Court, judicial district of New Haven, Docket No. CV 09 5031901 (November 29, 2011, Woods, J.).   It is a well-established principle of contract law that assignment of one's rights under a contract results in, “[s]uccession by an assignee to exclusive ownership of all or part of the assignor's rights respecting the subject matter of the assignment, and a corresponding extinguishment of those rights in the assignor.”  Bouchard v. People's Bank, 219 Conn. 465, 473, 594 A.2d 1 (1991).   In other words, an “assignee steps in [the] shoes of [the] assignor and obtains all rights and obligations of [the] assignor ․” Daimler Chrysler Services North America, LLC v. Commissioner, 274 Conn. 196, 212, 875 A.2d 28 (2005).  “If [however] the assignor suffered no damages, or is not owed anything under a contract, the assignee cannot recover anything.   Nothing will pass to the assignee if the assignor never had the right claimed under the assignment.”   6A C.J.S. Assignments § 110 (2004).   Moreover, “[t]he assignee's burden of proving the existence of the assignment is met by evidence that is satisfactory in character to protect the defendant from another action by the alleged assignor, and which shows that there was a full and complete assignment of the claim from an assignor who was the real party in interest with respect to the claim.”   6A C.J.S. Assignments, supra, § 147.

In Cuda & Associates, LLC v. Lumpkin, supra, Superior Court, Docket No. CV 09 5031901, the plaintiff, a collection agency, sued the defendant on causes of action sounding in breach of contract and accounts stated.   At trial the plaintiff provided a “generic ‘cardholder agreement’ that [did] not reference the defendant in any manner,” a bill of sale reflecting a transaction between the initial account and the intermediary creditor where “the defendant [was] not named or referenced in any way,” and an affadivit that did not constitute a record of the intermediary's purchase of the plaintiff's alleged debt, “but instead [was] merely a document purporting to authenticate such a record.”   Id. Additionally, the plaintiff provided this court with a bill of sale describing an assignment of “certain” accounts from an intermediary creditor to the plaintiff, a spreadsheet with the defendant's personal information and testimony from the vice-president of the plaintiff company.   This court found however, that this evidence proved “only that the plaintiff purchased information purporting to be an account and debt from an entity with no relationship with the defendant.”  Id. This court found that the plaintiff failed to prove that it was the assignee of a credit card account and debt, or even that the defendant entered into a credit card agreement and, therefore, the plaintiff could not prevail on its claims.  Id.

In the present case, there is a genuine issue of material fact as to whether the plaintiff is the valid assignee of an existing debt.   The plaintiff has failed to prove that the defendant ever had a credit card account with Washington Mutual, that the defendant was indebted to Washington Mutual, or that Washington Mutual ever sold such an account and debt to the first intermediary entity, Arrow Financial Services, LLC. As evidence of a credit card account, the plaintiff submits what appears to be a statement created by Midland Credit Management, Inc., the plaintiff's service provider, which states that “the above-referenced account” was purchased by the plaintiff and is now serviced by Midland Credit Management, Inc. The name on the referenced account was redacted, however, and thus does not reference the defendant in any way.   The plaintiff also submits the affidavit of Susan Rasmussen, an officer of the plaintiff company, where she states that “based upon her review of the records kept on behalf of the plaintiff,” the defendant did, in fact, open an account with Washington Mutual, that account was charged off on September 30, 2004, and that the last payment posted to the account was on September 19, 2008.   The plaintiff later submits the affidavit of Holly Kearns, the custodian of records of CACH, LLC, another intermediary entity, which states that CACH, LLC is the predecessor in interest of the defendant's account.   Kearns further states that the account was purchased from Arrow Financial Services, LLC and that entity purchased the defendant's account from Chase Bank USA, N.A., a successor in interest to Washington Mutual.   The plaintiff has not submitted the defendant's signed credit card application or any credit card statements to support the claim that the defendant had an account and debt with Washington Mutual.   Additionally, the plaintiff does not provide a bill of sale of the defendant's account from Arrow Financial, LLC or CACH, LLC, and the statement it does provide, which states that the plaintiff purchased an unidentified account, was created by the plaintiff's service provider.   The plaintiff's evidence, at best, proves that the plaintiff purchased accounts and debt from CACH, LLC, an entity that has no relationship with the defendant.

Our Supreme Court has emphasized that “[t]he courts hold the [summary judgment] movant to a strict standard.   To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact.”   (Internal quotation marks omitted.)  Maltas v. Maltas, supra, 298 Conn. 366.   The plaintiff has not satisfied this strict standard and, therefore, its motion for summary judgment cannot be granted.

CONCLUSION

For the foregoing reasons, the plaintiff has failed to establish that no genuine issue of material fact exists as to its ownership of the debt in question.   Therefore, the court denies its motion for summary judgment.

Woods, J.

FOOTNOTES

FN1. The defendant's counterclaim was stricken by the court (Robaina, J.) on January 21, 2011..  FN1. The defendant's counterclaim was stricken by the court (Robaina, J.) on January 21, 2011.

Woods, Glenn A., J.