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MIDLAND FUNDING, LLC, Plaintiff(s), v. Denise DAVID, Defendant(s).
In this action for breach of contract and account stated, plaintiff moves for an order granting it summary judgment. Specifically, plaintiff contends that it is entitled to summary judgment because defendant breached the relevant agreement between the parties and because she failed to object to statements sent to her and which memorialized the debt. Defendant opposes the instant motion, saliently arguing that plaintiff, who purchased defendant's debt from the original creditor, has not established that it owns the debt in question. Thus, defendant contends that plaintiff fails to establish prima facie entitlement to summary judgment.
For the reasons that follow hereinafter, plaintiff's motion is granted, in part.
The complaint alleges that plaintiff's predecessor in interest, Synchrony Bank (Synchrony), issued a credit card to defendant, that defendant agreed to make payments for goods and services charged thereon, and that defendant failed to make payments for charges made using said card. Thus, plaintiff asserts a cause of action for breach of contract. Plaintiff also asserts a cause of action for account stated alleging that Synchrony sent defendant statements memorializing the indebtedness, which defendant accepted without objection. Plaintiff also claims that on January 28, 2016, it purchased defendant's debt from Synchrony. Based on the foregoing, plaintiff seeks judgment in the amount of $5,963.55, said sum representing charges made by defendant on the foregoing card.
Plaintiff's motion for summary judgment is granted, in part. Plaintiff establishes, with admissible evidence, that it now owns the debt alleged herein insofar as plaintiff purchased defendant's debt from Synchrony in 2016. Furthermore, with respect to its breach of contract claim, plaintiff establishes, with admissible evidence, that defendant breached the agreement between the parties by failing to make the required payments for charges on the credit card issued to her by Synchrony. Plaintiff, however, fails to establish entitlement to summary judgment on its claim for account stated insofar as it does not demonstrate that plaintiff sent defendant the statements memorializing the instant debt and that defendant failed to object to them.
The proponent of a motion for summary judgment carries the initial burden of tendering sufficient admissible evidence which demonstrates the absence of a material issue of fact as a matter of law (Alvarez v. Prospect Hospital, 68 NY2d 320, 324 ; Zuckerman v. City of New York, 49 NY2d 557, 562 ). Thus, a defendant seeking summary judgment must establish prima facie entitlement to such relief by affirmatively demonstrating, with admissible evidence, the merits of the claim or defense, and not merely by pointing to gaps in the proof (Mondello v. DiStefano, 16 AD3d 637, 638 [2d Dept 2005]; Peskin v. New York City Transit Authority, 304 AD2d 634, 634 [2d Dept 2003]). There is no requirement that the proof be submitted by affidavit, but rather that all evidence proffered be in admissible form (Muniz v. Bacchus, 282 AD2d 387, 388 [1st Dept 2001], revd on other grounds Ortiz v. City of New York, 67 AD3d 21, 25 [1st Dept 2009]). Notably, the court can consider otherwise inadmissible evidence when the opponent fails to object to its admissibility and instead relies on the same (Niagara Frontier Tr. Metro Sys. v. County of Erie, 212 AD2d 1027, 1028 [4th Dept 1995]).
Once movant meets the initial burden on summary judgment, the burden shifts to the opponent who must then produce sufficient evidence, generally also in admissible form, to establish the existence of a triable issue of fact (Zuckerman at 562). It is worth noting, however, that while the movant's burden to proffer evidence in admissible form is absolute, the opponent's burden is not. As noted by the Court of Appeals,
[t]o obtain summary judgment it is necessary that the movant establish his cause of action or defense ‘sufficiently to warrant the court as a matter of law in directing summary judgment’ in his favor, and he must do so by the tender of evidentiary proof in admissible form. On the other hand, to defeat a motion for summary judgment the opposing party must ‘show facts sufficient to require a trial of any issue of fact.’ Normally if the opponent is to succeed in defeating a summary judgment motion, he too, must make his showing by producing evidentiary proof in admissible form. The rule with respect to defeating a motion for summary judgment, however, is more flexible, for the opposing party, as contrasted with the movant, may be permitted to demonstrate acceptable excuse for his failure to meet strict requirement of tender in admissible form. Whether the excuse offered will be acceptable must depend on the circumstances in the particular case
(Friends of Animals v. Associated Fur Manufacturers, Inc., 46 NY2d 1065, 1067-1068  [internal citations omitted] ). Accordingly, generally, if the opponent of a motion for summary judgment seeks to have the court consider inadmissible evidence, he must proffer an excuse for failing to submit evidence in admissible form (Johnson v. Phillips, 261 AD2d 269, 270 [1st Dept 1999]).
When deciding a summary judgment motion, the role of the Court is to make determinations as to the existence of bonafide issues of fact and not to delve into or resolve issues of credibility. As the Court stated in Knepka v. Talman (278 AD2d 811, 811 [4th Dept 2000]),
[s]upreme Court erred in resolving issues of credibility in granting defendants' motion for summary judgment dismissing the complaint. Any inconsistencies between the deposition testimony of plaintiffs and their affidavits submitted in opposition to the motion present issues for trial
(see also Yaziciyan v. Blancato, 267 AD2d 152, 152 [1st Dept 1999]; Perez v. Bronx Park Associates, 285 AD2d 402, 404 [1st Dept 2001]). Accordingly, the Court's function when determining a motion for summary judgment is issue finding, not issue determination (Sillman v. Twentieth Century Fox Film Corp., 3 NY2d 395, 404 ). Lastly, because summary judgment is such a drastic remedy, it should never be granted when there is any doubt as to the existence of a triable issue of fact (Rotuba Extruders v. Ceppos, 46 NY2d 223, 231 ). When the existence of an issue of fact is even debatable, summary judgment should be denied (Stone v. Goodson, 8 NY2d 8, 12 ).
Defendant claims that plaintiff lacks standing to bring this action because that plaintiff fails to establish that it owns defendant's original debt to Synchrony. Specifically, defendant asserts that the records submitted by plaintiff demonstrating the purchase of the relevant debt lack the requisite evidentiary foundation to render them admissible as a business record so as to allow the Court consider the same. As will be discussed below, defendant's claim lacks merit.
It is well settled that in order to initiate suit, a party must have legal standing to bring such an action. On the issue of legal standing, the test was initially one which focused on the existence of a legal right, described as follows:
[t]he court has no inherent power to right a wrong unless thereby the civil, property, or personal rights of the plaintiff in the action or the petitioner in the proceeding are affected. The rights affected must be personal as distinguished from the rights in common with the great body of people.
(Schieffelin v. Komfort, 212 NY 520, 530 ). Over time, however, the threshold inquiry has evolved, so that the relevant inquiry is now injury in fact (The Society of Plastics Industry, Inc. v. County of Suffolk, 77 NY2d 761, 773 ). Under the injury in fact analysis, standing exists when the plaintiff has sustained actual injury, meaning that he or she has an actual legal stake in the in the matter being litigated (id. at 773). In order to establish standing, not only must a plaintiff demonstrate injury in fact, meaning actual harm, but a plaintiff must also establish that the injury falls within certain zones of interest protected by law (Caprer v. Nussbaum, 36 AD3d 176, 183 [2d Dept 2006]). Whether standing exists is a threshold matter which must be resolved at the outset of any litigation (id. at 182; Dairylea Cooperative, Inc. v. Walkley, 38 NY2d 6, 9 ). When standing is lacking, the “pathway to the courthouse is blocked” (Saratoga County Chamber of Commerce, Inc. v. Pataki, 100 NY2d 801, 812 ).
In cases involving the use of a credit card and a debt resulting therefrom, a subsequent owner of the debt establishes standing by submitting evidence that it was assigned the debt for which it sues the defendant (Palisades Collection, LLC v. Kedik, 67 AD3d 1329, 1330 [4th Dept 2009] [“to establish standing to sue, plaintiff was required to submit admissible evidence that Discover assigned its interest in defendant's debt to plaintiff.”]; Gemini Asset Recoveries, Inc./Cohen and Slamowitz, LLP v. Portoff, 23 Misc 3d 139(A), *1 [App Term 2009] [“In this action to collect on a credit card debt, plaintiff failed to demonstrate a prima facie entitlement to summary judgment as a matter of law, since it submitted no competent proof of its standing as an assignee of the debt.”]; CACH LLC v. George, 56 Misc 3d 591, 592 [NY Dist Ct 2017] [“In assigned debt cases, a plaintiff-assignee must establish standing to pursue a claim by submitting proof in admissible form of a complete chain of assignment beginning with the original creditor.”] ). This is because generally, “[a]n assignment of a security interest conveys to the assignee all rights and interests of the secured party-assignor, including the right to seek payment of the secured obligation or to recover the collateral (Rockland Lease Funding Corp. Inc. v. Waste Mgt. of New York Inc., 245 AD2d 779, 779 [3d Dept 1997]).
In support of the instant motion, plaintiff submits two affidavits by Tanya Dowell (Dowell), who states, in relevant part, as follows. Dowell is a Legal Specialist employed by Midland Credit Management, Inc. (MCM). MCM services defendant's account on behalf of plaintiff. Dowell reviewed plaintiff's business records, which she states were made in the ordinary course of plaintiff's business, that it was the regular course of plaintiff's business to make the records, and that the records were made near or at the time of the events described therein. With regard to Synchrony's records, Dowell states that the same were sent to plaintiff when it purchased defendant's debt and that those records were incorporated into MCM's records and then maintained by MCM in the ordinary course of its business along with plaintiff's records. Based on her review of the foregoing records, Dowell states that on January 28, 2016 1 , plaintiff purchased and/or was assigned defendant's account with Synchrony. At that time, defendant owed Synchrony $5,963.55. Dowell incorporates by reference several documents appended to her affidavit, stating that the same evince the purchase of defendant's account from Synchrony as well as records related to that account. The records appended to Dowell's affidavits include an affidavit by Kenneth Hughes (Hughes), who states, in pertinent part, as follows. Hughes is employed by Synchrony. He states that he has personal knowledge of Synchrony's records, which he reviewed, were appended to his affidavit, and which were made in the ordinary course of Synchrony's business. Hughes states that it was the regular course of Synchrony's business to make the records and that the records were made near or at the time of the events described therein. Specifically, Hughes reviewed records related to a pool of charged-off consumer credit accounts sold or assigned to plaintiff on January 20, 2016. Said pool included an account ending in 7547, which is further identified in the documents appended to Hughes' affidavit. With regard to the accounts in the pool, Synchrony and the respective consumers were parties to a credit agreement, whereby the consumers agreed to pay Synchrony for goods and services, and cash advances obtained by the consumers. The amounts owed by the consumers were, according to Hughes, reflected in the documents appended to his affidavit. Said documents also identify the consumers by name and by the last four digits of their account numbers.
There are several documents annexed to Hughes' affidavit. First, there is a document appearing to be a screen-shot, which indicates that the account ending in 7547 belonged to defendant. The document indicates that defendant's account was sold. Second, there is a document titled CareCredit Credit Card Agreement (agreement). The agreement indicates that it is between the consumer (referred to as “you” in the agreement) and Synchrony (referred to as “us” in the agreement) for a credit card account and that “[b]y opening or using your account, you agree to the terms of the entire [a]greement.” Per the agreement, “the consumer “promise[d] to pay for all amounts owed to us,” and the failure to pay constituted a default, upon which Synchrony could “take legal action to collect the amounts owed.” Third, there are two statements bearing defendant's name, address and account number. The first is dated May 28, 2015 and indicates that defendant owed Synchrony $5,278.56. The second statement is dated December 27, 2015 and indicates that defendant owed owed Synchrony $5,926.55. Lastly, there is a Forward Flow Receivables Purchase Agreement (Purchase Agreement) dated January 20, 2016 and a Bill of Sale dated January 2016. The Purchase Agreement indicates that it is between plaintiff and Synchrony. The Bill of Sales states that Synchrony “transfers, sells, conveys, grants, and delivers” to plaintiff the receivables delivered by Synchrony to plaintiff on January 20, 2016.
Based on the foregoing, plaintiff establishes prima facie entitlement to summary judgment on the issue of its standing to maintain this action. As noted above, in cases involving the use of a credit card and a debt resulting therefrom and where a plaintiff acquires a defendant's original debt from another, the plaintiff establishes standing by submitting evidence that it was assigned the debt for which it sues the defendant (Palisades Collection, LLC at 1330; Gemini Asset Recoveries, Inc./Cohen and Slamowitz, LLP at *1; CACH LLC at 592). Such evidence must, of course, be submitted in admissible form (Alvarez at 324; Zuckerman at 562).
Here, the documents submitted by plaintiff, for which Hughes lays a business records foundation, sufficiently establish plaintiff's standing. To be sure, records can generally be admitted for consideration at trial or on a motion for summary judgment upon a proper foundation that the same are business records - namely, that (1) the record be made in the regular course of business; (2) it is the regular course of business to make said record; and (3) the records were made contemporaneous with the events contained therein (CPLR § 4518; People v. Kennedy, 68 NY2d 569, 579 ). Here, the foregoing foundation was laid by Hughes insofar as within his affidavit he incorporated the relevant records by reference and asserted that the same were made in the ordinary course of Synchrony's business - the original creditor - that it was the regular course of Synchrony's business to make the records, and that the records were made near or at the time of the events described therein. Significantly, Hughes' assertion that on January 20, 2016 Synchrony sold plaintiff's debt to plaintiff - namely, the account ending with 7547 - coupled with the Bill of Sale and Purchase Agreement for the debt pool in question - which Hughes states included defendant's debt - establish that plaintiff acquired this debt in 2016. Thus, Hughes' affidavit and the records appended thereto are sufficient to satisfy plaintiff's burden.
Nevertheless, contrary to defendant's assertion, it bears noting that Dowell's affidavits are also sufficient to establish that the records appended thereto, although created by Synchrony, are also plaintiff's business records, thereby making the same admissible on this motion. To be sure, records of a third-party are not generally admissible via the testimony of an employee of another company when the latter does not create the records and there is no showing that the latter's employee is familiar with the particular record-keeping procedures of the third-party (Carothers v. GEICO Indem. Co., 79 AD3d 864, 864-865 [2d Dept 2010], overruled on other grounds Viviane Etienne Med. Care, P.C. v. Country-Wide Ins. Co., 114 AD3d 33 [2d Dept 2013], affd, 25 NY3d 498 ). To be sure, “the mere filing of papers received from other entities, even if they are retained in the regular course of business, is insufficient to qualify the documents as business records” (Std. Textile Co., Inc. v. Natl. Equip. Rental, Ltd., 80 AD2d 911, 911 [2d Dept 1981]). There is an exception, however, and records of a party are admissible as business records of another party when such records are used in the preparation of the proponent's business records such that they are fully incorporated into the proponent's business records (Andrew Carothers, M.D., P.C. at 864—865; Plymouth Rock Fuel Corp. v. Leucadia, Inc., 117 AD2d 727, 728 [2d Dept 1986]; see also People v. DiSalvo, 284 AD2d 547, 548 [2d Dept 2001]). Here, Dowell, an employee of MCM, plaintiff's servicer, successfully lays a foundation for Synchrony's records inasmuch as she states that MCM, on behalf of plaintiff, incorporates Synchrony's records into plaintiff's records and maintains them in the ordinary course of plaintiff and MCM's business.
Nothing submitted by defendant in opposition or argued by her raises an issue of fact with regard to standing so as to preclude summary judgment.
Breach of a Credit Card Agreement and Account Stated
Plaintiff's motion seeking summary judgment on its cause of action for breach of contract is granted. Here, the admissible evidence establishes that the debt acquired by plaintiff arose from the issuance of a credit card to defendant, which by her use bound her to the terms of the relevant agreement. That agreement required defendant to repay all sums incurred by her, which pursuant to the record, defendant failed to do.
In an action to recover amounts due and owing as a result of the failure to pay a credit card debt, a plaintiff can establish entitlement to judgment in two ways. First, a plaintiff establishes entitlement to judgment for breach of the relevant credit card agreement by tendering sufficient evidence that there was an agreement, which the defendant accepted by his use of a certain credit card issued by the plaintiff and payments made thereon, and which was breached by the defendant when he failed to make the required payments (Citibank (S. Dakota), N.A. v. Keskin, 121 AD3d 635, 636 [2d Dept 2014]; Portfolio Recovery Assoc., LLC v. Lall, 127 AD3d 576, 576 [1st Dept 2015] [“Plaintiff's proof of the underlying debt obligation was shown through defendant's testimony that he used the credit card issued by plaintiff's assignor and by the self-authenticating account statement.”]; Citibank (S. Dakota), N.A. v. Brown-Serulovic, 97 AD3d 522, 524 [2d Dept 2012]; Citibank (S. Dakota) N.A. v. Sablic, 55 AD3d 651, 652 [2d Dept 2008]). Essentially, a credit card agreement is a contract like any other and the essential elements in an action for breach of contract “are the existence of a contract, the plaintiff's performance pursuant to the contract, and damages resulting from the breach” (Dee v. Rakower, 112 AD3d 204, 209 [2d Dept 2013]; Elisa Dreier Reporting Corp. v. Global Naps Network, Inc., 84 AD3d 122, 127 [2d Dept 2011]; Brualdi v. IBERIA Lineas Aeraes de España, S.A., 79 AD3d 959, 960 [2d Dept 2010]; JP Morgan Chase v. J.H. Elec. of NY, Inc., 69 AD3d 802, 803 [2d Dept 2010]; Furia v. Furia, 116 AD2d 694, 695 [2d Dept 1986]). Second, a plaintiff establishes entitlement to judgment when it establishes an account stated (Keskin at 636; Brown-Serulovic at 523). An account stated is an agreement with respect to the correctness of the account items and balance due between parties to an account based upon prior transactions between them (Keskin at 636; Brown-Serulovic at 523). Significantly, an agreement may be implied where a defendant retains bills sent to him without objecting to them within a reasonable period of time, or when the defendant makes partial payment on the account (Keskin at 636; Brown-Serulovic at 523). Thus, a plaintiff establishes entitlement to judgment on a cause of action to recover on an account stated by tendering sufficient evidence that it generated account statements for the defendant in the regular course of business, that it mailed those statements to the defendant on a monthly basis, and that the defendant accepted and retained these statements for a reasonable period of time without objection, and made partial payments thereon (Keskin at 636; see also Am. Exp. Centurion Bank v. Gabay, 94 AD3d 795, 795 [2d Dept 2012]). Notably, bank and credit card account statements are self-authenticating, and require no foundation for admission into evidence (Portfolio Recovery Assoc., LLC at 576; Merrill Lynch Bus. Fin. Services, Inc. v. Trataros Const., Inc., 30 AD3d 336, 337 [1st Dept 2006]; Elkaim v. Elkaim, 176 AD2d 116, 117 [1st Dept 1991], appeal dismissed 78 NY2d 1072 ; Capital One Bank (USA) v. Koralik, 51 Misc 3d 74, 76 [App Term 2016]).
In support of its motion, plaintiff submits the evidence discussed at length above, which included the affidavit by Hughes. Said affidavit establishes that defendant's account was subject to a credit agreement requiring defendant to pay Synchrony for goods and services, and cash advances obtained by her. The agreement, also submitted by plaintiff, made applicable to defendant by Hughes' affidavit establishes that defendant, by opening or using the account, agreed to the terms of the agreement, including the promise to pay for all amounts owed to Synchrony. The agreement also indicated that upon default, Synchrony could take legal action to collect all amounts owed. Lastly, the two statements submitted by plaintiff bearing defendant's name, address and account number, indicate that as of December 27, 2015, defendant owed $5,926.55 on the instant account.
Based on the foregoing, plaintiff establishes prima facie entitlement to summary judgment on its cause of action for breach of contract. A plaintiff establishes prima facie entitlement to summary judgment on the foregoing cause of action when it tenders sufficient evidence that there was an agreement, that defendant accepted the same through use of the credit card issued by the plaintiff, that payments were made thereon, and that defendant breached the agreement by failing to make the required payments (Keskin at 636; Portfolio Recovery Assoc., LLC at 576; Brown-Serulovic at 524; Sablic at 652). Moreover, in any cause of action for breach of contract, the requisite elements to prevail on the same “are the existence of a contract, the plaintiff's performance pursuant to the contract, and damages resulting from the breach” (Dee at 209; Elisa Dreier Reporting Corp. at 127; Brualdi at 960; JP Morgan Chase at 803; Furia at 695). Here, plaintiff, via Hughes' affidavit, the agreement between the parties, and the billing statements, establishes that defendant was issued a credit card, bound herself to an agreement requiring that she repay all sums arising from charges made thereon, and failed to pay as required.
Plaintiff, however, fails to establishes prima facie entitlement to summary judgment on its cause of action for account stated. The proponent of summary judgment on a cause of action for account stated must prove that it generated account statements for the defendant in the regular course of business, that it mailed them to the defendant on a monthly basis, and that the defendant accepted and retained these statements for a reasonable period of time without objection, and made partial payments thereon (Keskin at 636; Am. Exp. Centurion Bank at 795). Here, none of plainitff's evidence establishes that the statements appended to its motion were mailed to defendant, let alone that she retained the same without objection. Thus, on this record, plaintiff fails to establish prima facie entitlement to summary judgment on this cause of action.
Nothing submitted by defendant raises an issue of fact sufficient to preclude summary judgment on the cause of action for breach of contract. Defendant's argument that the record is bereft of any evidence that the agreement in question is one to which defendant bound herself is unavailing. To be sure, Hughes stated that the agreement appended to his affidavit is the one to which defendant bound herself and defendant submits no evidence to the contrary. Indeed, it is well settled that mere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient to warrant or defeat summary judgement (Zuckerman at 562).
Even if the record failed to establish that the agreement in question was not the one to which defendant was bound, it would not avail her. While aberrant to ordinary principals of law applicable to summary judgment, it is nevertheless well settled that in the arena of credit card debts and the suits that arise therefrom, “the absence of an underlying agreement, if established, [does] not relieve defendant of his obligation to pay for goods and services received on credit (Citibank (S.D.) N.A. v. Roberts, 304 AD2d 901, 902 [3d Dept 2003]; Discover Bank v. Witt, 62 Misc 3d 139(A), *1 [App Term 2019]; Capital One Bank (USA), N.A. v. Stewart, 60 Misc 3d 132(A) [App Term 2018]). Thus, here, even in the absence of any agreement, the statements alone, which show that defendant used the card, is sufficient to establish the obligation to pay and the breach of such obligation. It is hereby
ORDERED that the Clerk enter judgment in favor of plaintiff in the amount of $5,963.55, plus costs, disbursements, and interest. It is further
ORDERED that plaintiff serve a copy of this Decision and Order with Notice of Entry upon defendant within thirty (30) days hereof.
This constitutes this Court's decision and Order.
1. Notably there is a discrepancy between Dowell and Hughes as regards the date the instant debt was sold to plaintiff. This discrepancy, while an issue of fact is not material because it does not change the fact that the debt in question was sold to plaintiff in January 2016.
Fidel E. Gomez, J.
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