New Century Financial Services, Inc. v. Oughla, 437 N.J. Super. 299 (App. Div. 2014). This case encompassed two consolidated collection cases. Opposing counsel in these matters regularly face off against each other in high-volume collection cases and each is familiar with many of the tactics employed by the other. [Disclosure: I have represented the law firm that acted as counsel for plaintiffs in these cases]. Cases like these rarely reach the appellate courts, and when they do they rarely produce comprehensive opinions that serve as guideposts for an entire bar. The opinion in these cases, however, by Judge Accurso, is one that any collection lawyer, whether representing plaintiffs or defendants, will have to know and follow.
The cases involved charged-off credit card debt that plaintiff, a debt buyer, had purchased. Plaintiff won summary judgment in both cases. On appeal, the Appellate Division upheld one summary judgment while reversing the other and remanding for further proceedings.
After explaining the structure of the debt-buying industry, Judge Accurso carefully laid out the nature of the proofs required for collection plaintiffs to prove their ownership of debts (an issue that defendants contended was one of standing that needed to be litigated first, with which the Appellate Division did not agree) and the amounts allegedly owed, the two essential elements of a collection plaintiff’s proofs. She also dealt with a number of arguments that defendants often interpose in order to defeat collection claims.
Among other things, the panel ruled that “lack of notice to the debtor of the sale of the debt does not affect the validity of the assignment; the assignment need not specifically reference defendant’s name or account number and instead may refer to an electronic file containing that information; a plaintiff need not procure an affidavit from each transferor in its chain of assignments and may instead establish prima facie proof of ownership on the basis of business records documenting its ownership; and that an electronic copy of the periodic billing statement for the last billing cycle is prima facie proof of the amount due on the account at charge off.” Judge Accurso went on to discuss in detail these and other issues, including the business records exception to the hearsay rules, in the context of the introduction in evidence of computer records relating to the debt, and their application to these two cases resulted in one affirmance of summary judgment and one reversal and remand.
Overall, the decision can be seen as a win for collection plaintiffs, though not a complete win. The panel disagreed with many of defendants’ contentions as to the proofs that collection plaintiffs must present. Judge Accurso did emphasize, however, that Rule 1:6-6 requires that certifications containing facts must be on personal knowledge, and that “[a]ffidavits in which the affiant fails to identify specifically his position, or explain the source of his personal knowledge of the facts to which he attests, or attempts to authenticate attached documents without explaining precisely what each is and how it came into the affiant’s hands should be rejected.” Collection defendants will thus continue to be able to attack deficient proofs offered by plaintiffs.
This decision was actually issued on March 5, 2014 but was only recently approved for publication. Defendants sought Supreme Court review of the Appellate Division’s ruling, but the Supreme Court denied certification. As a result, Judge Accurso’s decision will be required reading for collection attorneys for the foreseeable future.