DeKalb County State Court ORDER: Cach, LLC v. Cain (2009)

CACH, LLC, Successor in Interest of BANK OF AMERICA, N.A., Plaintiff,
v. SHARON D. CAIN, Defendant.
State Court of DeKalb County
CIVIL ACTION FILE NO. 08A90282-3

ORDER

This is a credit-card debt collection case in which the Defendant asserts that Plaintiff, an assignee, has no standing to collect the debt and has counterclaimed for violations of the Fair Debt Collection Practices Act and the Georgia Fair Business Practices Act. The case came before the Court on July 6, 2009, for a hearing on Defendant’s Motion for Summary Judgment, filed April 28, 2009, and Plaintiffs Motion for Summary Judgment, filed May 29, 2009. For reasons articulated more thoroughly below, the Court denies in part and grants in part each of the parties’ motions. Thus, Defendant’s Motion to Exclude Plaintiffs Affidavits and Motion in Limine are denied as moot.

Defendant’s Motion for Summary Judgment

Defendant filed a Motion for Summary Judgment on April 28, 2009, relying on Plaintiff’s responses to Defendant’s Requests for Admissions. Defendant asserts that Plaintiff’s responses are sufficient to overcome her liability for the debt that she is alleged to owe and are sufficient to set forth the requisite bad faith and deceptive practices to establish her Counterclaims alleging violations of the Federal Fair Debt Collection Practices Act Defendant relies on the responses to three Requests for Admission. [1]

Defendant’s Request for Admission No.3 states:

A bank, credit card company, or other entity (“third-party entity”) assigned or purported to assign a debt allegedly due it from the Defendant/Plaintiff in Counterclaim to the Plaintiff/Defendant in Counterclaim for collection at some time prior to the filing of Plaintiff/Defendant in Counterclaim’s complaint herein.

Plaintiffs Response to No .3 states:

Objection. Plaintiff objects to Defendant’s request as it is vague and ambiguous, ill-defined, and made with the intent to harass the Plaintiff as it is irrelevant and not reasonably calculated to lead to the discovery of admissible evidence. Subject to and without waiving the foregoing objections, Plaintiff states: admit in part and deny in part. Plaintiff admits that it was assigned Defendant’s account from the original creditor and denies the remainder of the request.

Defendant’s Request for Admission No. 4 states:

The debt referred to in Request No.3 above constituted a “debt” as that term is defined in 15 U.S.C.A. §1692a.

Plaintiffs Response to No.4 states:

Objection, the request calls for a legal interpretation and conclusion. As such, Plaintiff is unable to admit or deny and therefore states: Denied.

Defendant’s Request for Admission No. 41 states:

You are unable to produce a complete copy of each, every and all documents making up and/or referenced in and/or incorporated by reference in the agreement of assignment to you of the debt sued on herein.

Plaintiff’s responses stopped at No. 40, and there was no response numbered 41.  However, the Court notes that the response No. 40 referenced in quotations “all documents” and those words are not used in Defendant’s Request for Admission No. 40. The response labeled 40 states:

Objection, the request is overly broad, unduly burdensome, vague, ambiguous, non-specific and ill-defined in its request regarding “all documents.” Plaintiff further objects as the request is made with the intent to harass the Plaintiff and is an attempt to discover information that may be subject to attorney-client privilege; the work-product doctrine; that is of a confidential and proprietary nature to the Plaintiff; and, that is irrelevant and not reasonably calculated to lead to the discovery of admissible evidence. Subject to and without waiving the foregoing objection, due to the nature of the request, Plaintiff is unable to admit or deny and therefore must state: Denied.

Defendant asserts that the responses to admissions 3 and 4 and the failure to respond to 41 establish that there is no debt and that there are no documents to establish Plaintiffs case.

As for Defendant’s counterclaims, she argues that Plaintiff violated 15 USC §1692e(l0), which prohibits “[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.” Because Plaintiff has responded to the admissions that there was no debt, and that there is no documentation to establish its case, Defendant contends that she has established that Plaintiff made a false representation or used deceptive means to collect the debt.

Defendant asserts that she is entitled to statutory damages under 15 USC §1692k(a)(2)(A) and attorney’s fees under 15 USC §1692k(a)(3). On May 29, 2009,  Plaintiff filed its own Motion for Summary Judgment, along with a response to Defendant’s motion. Plaintiffs Response to Defendant’s Motion for Partial Summary Judgment and Memorandum in Support Thereof, filed on May 29, 2009, does not address the Defendant’s assertions regarding the Requests for Admissions. Instead, Plaintiff erroneously asserts that Defendant has cited Ponder v. CACV of Colorado, LLC, 289 Ga. App. 858,658 S.E.2d 469 (2008), which holds that “an assignment must be in writing in order for the contractual right to be enforceable by the assignee.” Plaintiff asserts that a Ponder argument fails because Plaintiff has provided evidence that it holds a written assignment. (Plaintiff does not address Defendant’s arguments regarding the Fair Business Practices Act claims in the response, but does discuss them in its own Motion for Summary Judgment filed the same day as the response.)

Plaintiff asserts that its Affidavits, Bill of Sale, Account Statements and Account Information Report are admissible to prove a proper assignment and a valid debt. Plaintiffs evidence is an Affidavit of Olga Zhivnitskaya, who says she is a custodian of records of CACH, LLC. The Affidavit references Exhibits A, B and C, but of the documents attached only one, Exhibit A, is labeled.

Exhibit A is an October 30, 2006, Bill of Sale from Bank of America, N.A., to CACH, LLC. It references an Exhibit B, which is not attached, but which purportedly sets forth “those certain Accounts” that are subject to the agreement. The Exhibit A Bill of Sale does not make any specific mention of the debt at issue in this case.

There also is a copy of an Affidavit of Claim and Certification of Debt by Brian Kilpatrick of Bank of America who says that the original contract in this matter has been destroyed and is no longer available but that based on computerized records and hard copy books and records that the debt at issue in this was sold to CACH, LLC. Attached are Bank of America Visa Account statements from July 2004 to November 2004. There are no records attached to the Kilpatrick Affidavit to indicate the account was sold to CACH, LLC

Plaintiff contends that these document are business records that prove a valid assignment, prove the existence of the account and the balance due. Plaintiff contends its records custodian lays the foundation for these business records under the hearsay exception in O.C.G.A. §24-3-14(b). Plaintiff asserts that under Boyd v. Calvary Portfolio Services, LLC , 285 Ga. App. 390, 646 S.E.2d 496 (2007), it can rely on routine business records transferred to it by Bank of America to establish the existence of the debt and Plaintiffs right to collect it.

Defendant filed a consolidated Motion to Exclude Plaintiffs Affidavits, Defendant’s Reply Brief on Summary Judgment, and Defendant’s Opposition to Plaintiffs Motion on June 1, 2009. [2]   Defendant’s reply relies in large part on the recent decision of Nyankojo v. North Star Capital Acquisition, 298 Ga. App. 6, 679 S.E.2d 57 (2009) (holding that “testimony regarding the contents of business records, unsupported by the records themselves, by one without personal knowledge of the facts constitutes inadmissible hearsay”). Defendant asserts that both of Plaintiffs Affidavits fail because they are unsupported by records and are not based on personal knowledge.

Following the motions hearing, Plaintiff on July 10, 2009, filed a Supplemental Memorandum in Support of Plaintiffs Motion for Summary Judgment and Motion to Dismiss Counterclaim and in Opposition to Defendant’s Motion for Summary Judgment. In this, Plaintiff insists that the Zhivnitskaya Affidavit has the requisite evidentiary foundation with its Exhibit A Bill of Sale executed by Bank of America. Plaintiff states in Section A of the supplement:

Defendant appears to argue that the introduction of this Bill of Sale is insufficient to establish Plaintiffs entitlement to proceed upon the subject account in that the Master Purchase and Sale Agreement originally executed by and between Plaintiff and Bank of America and referenced in the Bill of Sale is not before the Court. Although the particular terms of the purchase by and between Plaintiff and Bank of America (e.g. sales price, quantity, duration) as may be contained in the Purchase Agreement are not before the Court, and, for that matter, are not material to any of the pertinent issues in this case, nonetheless, the record does contain through the Bill of Sale clear evidence that all rights of Bank of America with respect to the subject account were transferred on the date indicated to Plaintiff and that the latter clearly has standing to sue in its own name and on its own behalf with respect to the subject account.

Plaintiff attempts to distinguish Nyankojo, which involved two assignments for which the Court of Appeals found there was no competent evidence to establish that they involved the same account that was at issue in this case. Plaintiff insists that it has provided such evidence in this case through the Bill of Sale which shows “ownership of the subject account owed by the Defendant, originally to MBNA and Bank of America as its successor in interest, and later sold to the Plaintiff herein.”)[3]

Plaintiffs Motion for Summary Judgment and Motion to Dismiss Counterclaim, filed on July 17, 2009, points out that Plaintiffs assertion does not recognize that the Bill of Sale makes no specific reference to the account at issue in this case and that while it references an exhibit that might contain information about the accounts that were transferred, that exhibit is not attached and has not been put into evidence elsewhere in the record. Defendant’s response also continues to argue that the Plaintiffs Affidavits contain inadmissible hearsay. In addition, Defendant notes an unexplained discrepancy between the account number referenced in those Affidavits and the account number on the billing statements that Plaintiff has introduced.

Plaintiffs Motion for Summary Judgment

In Plaintiffs Motion for Summary Judgment, filed on May 29, 2009, along with its response to Defendant’s motion, Plaintiff asserts that Defendant entered into a contract on February 28, 2003, with Bank of America, N.A. for a credit card which she used to make purchases. Plaintiff contends that the outstanding balance at the time of Defendant’s default was $5,887.12 and that the terms of the contract provided for the recovery of attorney’s fees.  Plaintiff CACH, LLC states that it is the successor in interest for the Bank of America, N.A. account as reflected by business records attached to the motion.[4]

Plaintiff contends it is the holder of a valid assignment and thus a contract exists between it and the Defendant; that Defendant has breached the terms of the cardholder agreement by failing to make required payments; and, that Plaintiff is entitled to reasonable attorney’s fees and costs pursuant to the cardholder agreement. Plaintiff further asserts that Defendant’s affirmative defenses regarding the statute of limitations, laches and a lack of consideration must fail. In addition, Plaintiff asserts it did not violate the Fair Debt Collection Practices Act (FDCPA) and that the Georgia Fair Business Practices Act (FBPA) does not apply in this case because it only applies to the unregulated consumer marketplace.

As to Defendant’s FDCPA allegation, Plaintiff asserts that there is no evidence that the amount or character ofthe debt was misrepresented and there is no evidence that Plaintiff does not have the legal right to collect the debt. Plaintiff further argues that Defendant can offer no evidence that Plaintiff knew or should have known that such information was false.

In addition, Plaintiffs motion contends that Count Three of Defendant’s Counterclaim for litigation costs and attorney’s fees pursuant to O.C.G.A. §9-15-14 should fail because the Plaintiffs claim against the Defendant is justified.

As stated supra, Defendant filed a consolidated Motion to Exclude Plaintiffs Affidavits, Defendant’s Reply Brief on Summary Judgment, and Defendant’s Opposition to Plaintiffs Motion on June 1, 2009.

Defendant argues that Plaintiff has failed to establish that it has standing, since both of Plaintiffs affidavits constitute inadmissible hearsay. Because Plaintiff has no standing, Defendant asserts she “has avoided all liability to Plaintiff for any alleged debt, and Defendant has simultaneously established that Plaintiff violated the federal Fair Debt Collection Practices Act by pursing an action that it had not right to pursue.” Thus, Defendant contends that her consolidated motions should be gramed and the Plaintiff’s Motion for Summary Judgment

Analysis

Generally, in order

[t]o prevail at summary judgment under O.C.G.A. § 9-11-56, the moving party must demonstrate that there is no genuine issue of material fact and that the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law. O.C.G.A. § 9-11-56(c).A defendant may do this by showing the court that the documents, affidavits, depositions and other evidence in the record reveal that there is no evidence sufficient to create  a jury issue on at least one essential element of plaintiffs case. If there is no evidence sufficient to create a genuine issue as to any essential element of plaintiffs claim, that claim tumbles like a house of cards. All of the other disputes of fact are rendered immaterial.

Lau’s Corp. Inc. v. Haskins, 261 Ga. 491, 491, 405 S.E. 2d 474,475-76 (1991) (Emphasis in original). Not only must a plaintiff establish every element of its claim as a matter of law, but also it must “pierce the defenses set up in [the] answer.” Crown Ford, Inc. v.  Crawford, 221 Ga. App. 881, 882, 473 S.E.2d 554 (1996).

1.   Standing

The Plaintiff in this case, CACH, LLC, asserts that it is a successor in interest to a credit-card contract that Defendant allegedly entered and breached with Bank of America, N.A. Although the law generally requires that contract provisions may be enforced only by a party to that contract, there is an exception that allows a party to assign the contractual right to collect payment, even where a lawsuit must be brought to enforce that right. See, Scott v. Cushman & Wakefield of Ga., 249 Ga. App. 264, 265, 547 S.E.2d 794 (2001). However, “the assignment must be in writing in order for the contractual right to be enforceable by an assignee.” Ponder v. CACV of Colorado, 289 Ga. App. 858, 859, 658 S.E. 2d 469, 470 (2008) (citing Scott, 249 Ga. App. at 266, 547 S.E.2d 794). In Ponder, the Georgia Court of Appeals held that summary judgment in favor of an assignee was improper because there was no evidence in the record to support the assignee’s assertion that it was a successor in interest to the right of recovery that originally belonged to the bank that had entered into the contract at issue in that case. Ponder, 289 Ga. App. at 859-60, 658 S.E. 2d 470.

Unlike Ponder, in which the only assertion of the assignee’s interest was in the style of the complaint, Id, the Plaintiff in this case has filed two Affidavits, which it contends proves that it is the successor in interest to the Bank of America, N.A. contract with Defendant and that it has a right to sue to recover the debt allegedly owed as a result of her default under the tenns of that credit card agreement. However, the Court agrees with Defendant that this case is controlled adversely to Plaintiff by Ponder’s only progeny: Nyankojo v. North Star Capital Acquisition, 298 Ga. App. 6, 679 S.E.2d 57 (2009).

In Nyankojo, the Court of Appeals held that the affidavit of a company president that he had reviewed certain documents that showed his company was the assignee of the subject debt was legally insufficient without producing the actual records. As in Nyankojo, the Plaintiff in this case has not produced any business records to show that the account that Defendant allegedly had with Bank of America, N.A. was assigned in writing to CACH, LLC.

Plaintiff presented the Affidavit of Olga Zhivnitskaya, who says she is a custodian of records of CACH, LLC. The Affidavit references Exhibits A, Band C, but of the documents attached only one, Exhibit A, is labeled. While Exhibit A is an October 30, 2006, Bill of Sale from Bank of America, N.A., to CACH, LLC, it contains no reference to the account at issue in this case. Instead, the Bill of Sale references an Exhibit B, which is not attached, but which purportedly sets forth “those certain Accounts” that are subject to the agreement. Thus, there is no evidence that the right to sue for the debt at issue in this case was among those sold to CACH, LLC on October 30, 2006.

Plaintiff also filed a copy of an “Affidavit of Claim and Certification of Debt” by Brian Kilpatrick of Bank of America who says that the original contract in this matter has been destroyed and is no longer available but that based on computerized records and hard copy books and records that the debt at issue in this was sold to CACH, LLC. Filed along with this are Bank of America billing statements, but nothing to show that the right to sue for the debt at issue in this case was assigned in writing to CACH, LLC.

Accordingly, the Court finds that Plaintiff has failed to prove that it has standing to bring this claim and that Defendant is entitled to summary judgment on this issue. The question then becomes what effect Plaintiffs failure to prove it has standing to bring the claim has on the debt itself and on Defendant’s counterclaims under the Fair Debt Collection Practices Act and the Georgia Fair Business Practices Act.

O.C.G.A. § 9-11-17 (a) provides that “[e]very action shall be prosecuted in the name of the real party in interest… No action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of, the real party in interest; and such ratification, joinder, or substitution shall have the same effect as if the action had been commenced in the name of the real party in interest.”

Plaintiff has had ample time after objection for ratification, joinder, or substitution and has not done so. Defendant has repeatedly and clearly pointed out that Plaintiff has the burden of showing an appropriate written assignment; accordingly, it was incumbent upon Plaintiff to produce evidence (and perhaps move to set aside an admission, see n.5, infra) which has not been done. Accordingly, Defendant is entitled to summary judgment on the Plaintiffs claim.

2.         Fair Debt Collection Practices Act

Defendant asserts in her Motion for Summary Judgment on her counterclaim that Plaintiff, by seeking to collect a debt to which it is not legally entitled, has made false representations and has used deceptive means in violation of 15 U.S.C. §1692e(10).[5]  Plaintiff responds that Defendant can offer no evidence that Plaintiff knew or should have known that the information it was communicating was false.

However, the Court finds that the Plaintiff misstates the burden of proof on this issue.

Because the Act imposes strict liability, a consumer need not show intentional conduct by the debt collector to be entitled to damages. However, a debt collector may escape liability if it can demonstrate by a preponderance of the evidence that its “violation [of the Act] was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.” § 1692k(c).

Russell v. Equifax A.R.S, 74 F.3d 30, 33 -34 (C.A.2 (N.Y.), 1996). See also Edwards v. Niagra Credit Solutions, Inc., 2009 U.S. App. LEXIS 22500 (decided October 14, 2009)  (stating “[a] debt collector asserting the bona fide error defense must show by a preponderance of the evidence that its violation of the Act: (1) was not intentional; (2) was a bona fide error; and (3) occurred despite the maintenance of procedures reasonably adapted to avoid any such error”).

Nevertheless, Defendant has not met her burden in summary judgment as to this defense.

“[A]t summary judgment a party who will not bear the burden of proof at trial need not conclusively prove the opposite of each element of the non-moving party’s case. Rather, that party must demonstrare hy reference to evidence in the record that there is an absence of evidence for support at least one essential element of the non-moving party’s case.”

Lau’s, 261 Ga. at 495 (Emphasis supplied). Although Plaintiff has failed to come forward with evidence that its actions in this regard were not intentional, were a bona fide error or occurred despite maintenance of procedures that could reasonably be expected to avoid such an error, Defendant has not pointed out the absence of such evidence and Plaintiffs responsibility to produce it. Instead, Defendant asserted that she had conclusively demonstrated her case without conclusively showing the absence of this defense or the absence of evidence satisfying Plaintiff’s affirmative burden.

Accordingly, as to the Fair Debt Collection Practices Act, Defendant’s motion is denied. Defendant may proceed to trial or may file a renewed motion which points out the absence of evidence to support this defense.

3.         Georgia Fair Business Practices Act

Plaintiff asserts that Defendant’s claim under the Georgia Fair Business Practices Act must fail because it only applies to the unregulated consumer marketplace. The Court notes that Defendant has not responded to this argument. The Court agrees with Plaintiff that the Georgia Act does not apply in this case such as this where proper trade practices are defined and consumer remedies are provided by other bodies of law, i.e., the Fair Debt Collection Practice Act. See O.C.G.A. § 10-1-396 and Chancellor v. Gateway Lincoln-Mercury, LLC, 233 Ga. App. 38, 502 S.E. 2d 799 (1998). Accordingly, Plaintiffs Motion for Summary Judgment is GRANTED IN PART as to this issue.

4.         O.C.G.A. §9-15-14 Claim

Finally, Plaintiff contends that Count Three of Defendant’s Counterclaim for litigation costs and attorney’s fees pursuant to O.C.G.A. §9-15-l4 should fail because the Plaintiffs claim against the Defendant is justified. In light of the analysis in Part 2, supra, this claim is not ripe for resolution.

Summary

For the foregoing reasons Defendant’s Motion for Summary Judgment is GRANTED as to its challenge to Plaintiffs standing to bring this claim. As to Plaintiffs alleged violation of the Fair Debt Collection Practices Act, the motion is DENIED WITHOUT PREJUDICE to filing a renewed motion for summary judgment. Plaintiffs Motion for Summary Judgment is GRANTED as to Defendant’s claim under the Georgia Fair Business Practices Act. The claim for attorney fees under O.C.G.A. § 9-15-14 is DEFERRED. Defendant’s Motion to Exclude Plaintiffs Affidavits and Motion in Limine are DENIED AS MOOT.

SO ORDERED, this 22nd day of October, 2009.

WAYNE M. PURDOM, JUDGE STATE COURT OF DEKALB COUNTY

 


[1] Although Defendant filed a Request for Filing Original Discovery on April 28, 2009, to make Plaintiffs responses to discovery a part of the record, Plaintiff was unable to locate the originals and submitted copies, along with an explanatory letter dated August 4, 2009, which were received by the Court on August 13,2009. Defendant has filed no objection to the filing of these copies.

[2] Also on June 1, 2009, Defendant filed a Motion in Limine asking the Court to exclude evidence that had not been produced in response to Defendant’s earlier discovery requests or evidence seeking to explain or contradict admission or evidence and witnesses not previously identified in Plaintiffs Pre-Trial Order. Defendant argues that the individuals who supplied the affidavits in support of Plaintiffs response to the summary judgment motion had not previously been identified and erroneously asserts that they were being filed “on the very last business day prior to the date of trial.” The Court notes that this case had been scheduled for a motions calendar, and not for trial. And “while a proposed Consolidated Pre-Trial Order was received by the Court on April 28, 2009, it has not yet been signed or filed while the potentially dispositive Motions for Summary Judgment have been pending.

[3] Plaintiff also asserts that Defendant has not presented any evidence in support of its counterclaim.

[4]  Plaintiff contends it is the holder of a valid assignment and thus a contract exists between it and the Defendant; that Defendant has breached the terms of the cardholder.  The Court notes that the copy of the Bill of Sale attached to the Plaintiffs Motion for Summary Judgment, unrelated to an affidavit, does not constitute admissible evidence. However, the Bill of Sale is the same as that attached to the Affidavit of Olga Zhivnitskaya filed in conjunction with Plaintiffs response to Defendant’s Motion for Summary Judgment, which references an Exhibit B, which is not attached, but which purportedly sets forth “those certain Accounts” that are subject to the agreement.

[5] For this point, Defendant relies upon Plaintiffs responses or lack of response to the aforementioned Requests for Admission. The Court notes that a denial of a Request for Admission does not establish an evidentiary point. Moreover. Plaintiffs improper objections and equivocal responses to these Requests for Admission arguably deem them to be admitted.

Related Posts

Comments are closed.