This exceptional material that I have placed here for my readers was shared with permission from Rodney Miner. Kudos to Rodney for sharing this, and kudos to him for his great win! May this material help others in the battle.
Kellogg, Idaho 83837
IN THE DISTRICT COURT FOR THE FIRST JUDICIAL DISTRICT FOR THE STATE OF IDAHO, IN AND FOR THE COUNTY OF SHOSHONE
Cavalry SPV I, LLC,
Case No.: CV-2017-586
RESPONSE TO MOTION FOR SUMMARY JUDGMENT
Rule 56 states that a court should only grant summary judgment if the moving party shows that there is no genuine issue of material fact. Defendant Rodney Miner, pro se, does hereby submit his Response to Plaintiff’s Motion for Summary Judgment. Defense shows that none of the evidence submitted in PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT is admissible, therefore, Cavalry SPV I, LLC failed to demonstrate that it is the owner of the account in question. Defendant asks the court to deny the PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT.
MEMORANDUM OF POINTS AND AUTHORITIES
Cavalry SPV I, LLC Has Failed to Provide Any Admissible Evidence to the court.
The supporting affidavits and the documents attached to them lack evidentiary underpinnings.
There is not sufficient demonstration of the competency of the affiants to testify, there is not sufficient foundation for the documentary evidence, and there is no evidence of the necessary linkage between the bulk account sale and the individual account of the defendant. The entirety of the documents submitted for motion for summary judgment by Plaintiff consist of two affidavits, Bill of Sale, Notification File, four credit card statements and a copy of the cardholder agreement.
The affidavits would be admissible under the Idaho rules which state that business records are admissible given a statement from a custodian of business records which are created in the normal course of business. This rule has long been held to a high degree of veracity. Christensen v. Rice, 763 P.2d 302, 114 Idaho 929, 934, 763 P.2d 302, 307 (Ct.App. 1088).
Idaho rule 803(6) Hearsay Exceptions; Availability of Declarant Immaterial outlines what are not excluded by the hearsay rule for records of regularly conducted activity.
Idaho Rule of Evidence 902(11) provides for the self-authentication of certified records of regularly conducted activity.
The two affidavits submitted with the request for summary judgment must meet the stipulation of these two Idaho Rules.
The Affidavit by Shannon Wiltgen, the only one offered by an employee of Synchrony Bank, states that she is a Documentation Specialist and that her bank sold a pool of chart-off accounts to
Cavalry SPVI, LLC on 3/23/2017. Wiltgen states, “As part of the sale of the Accounts, electronic records and other records were transferred on individual Accounts to the debt buyer.” Wiltgen also states, “These records were kept in the ordinary course of business of Synchrony Bank.” Wiltgen, as employee of Synchrony Bank working with the ordinary business records of Synchrony Bank falls under the exception to the hearsay rule.
The Synchrony Bank records would have been ordinary records until the account data files were were culled, separated, reorganized and restructured into a separate electronic file. This process of creating the new electronic data file was not the mere daily data entry of ordinary record keeping. Nor was it ordinary record handling to transfer this reorganized file to another business. Wiltgen states, “The Creditor has a process to detect and correct errors,”. Though Wiltgen is a Documentation Specialist there is no evidence of the algorithms or criteria used for the selection of accounts or error free process. If this file were to be used in evidence, substantially more foundational information would have to be provided, probably by an expert witness who has substantially more background knowledge than demonstrated by Shannon Wiltgen’s Affidavit. The affidavit does not provide the foundation to testify that this file was accurate, or complete, or reliable for later use by Cavalry SPV I, LLC. The reorganization of the ordinary data into a culled data file to be transferred to another company created non-ordinary business data that falls outside of the rules of I.R.E 902(11) and I.R.E. 803(6), making Shannon Wiltgen’s Affidavit inadmissible. MIDLAND FUNDING, LLC,. CV- 1 4- 8 3 O-C. Plaintiff/Respondent, vs. MEMORANDUM DECISION. BARRY STIMPSON.
In the second affidavit Sheila Pinckney states she is employed by Cavalry Portfolio Services, LLC (CPS), but “preforms collection services for Cavalry SPV I, LLC”. Under her signature line is says, “Legal Administrator”. Pinckney states, “I am familiar with the manner and method by which CPS and Plaintiff maintain computerized account records and documents for account holders.” It is unclear how these two companies share computer information. Pinckney goes on to state, “CPS and Plaintiff maintain such records in the ordinary and routine course of business and it is their regular business practice to accurately record any business act, condition or event onto the computer record maintained for the accounts, with the entries made at or very near the time of any such occurrence.” In effect, Pinckney as Legal Administrator of Cavalry SPV I, LLC, is testifying that Cavalry SPV I, LLC by Pinckney has authorized CPS, acting through Pinckney as its legal specialist, to prepare the identified documents. Therefore, the same person is authorizing the action and carrying out the action. It is a stretch to put all of these evidentiary steps onto a single witness. The real problem is a different one. Though we don’t know which company holds the business data or how they share it, we do know the relevant information is the electronic data file that was transferred to Cavalry SPV I, LLC from Synchrony Bank. The relevant data is the existence of the separate account for the Defendant, the identifiers of that account, the transaction history of that individual account while it was active, and the balance due upon its transfer to Cavalry SPV I, LLC. None of this data was created or sourced into the computer records while they were maintained by Cavalry SPV I, LLC or CPS; all of it would have been created or sourced by the bank.
Sheila Pinckney may be qualified to explain what CPS did or Cavalry SPV I, LLC, with respect to its own records or data created during its time, but she cannot establish a foundation for the bank data — she has no personal knowledge, she was not a custodian of the bank’s records while they were with Synchrony Bank, and the records in the Plaintiff’s possession do not qualify as ordinary business records. Because the electronic file transferred to Cavalry SPV I, LLC did not come to the Plaintiff as ordinary business records of Synchrony Bank, it cannot be said that the data in this file became routine business records of Cavalry SPV I, LLC or CPS, maintained in the ordinary course of business. Therefore, the documents created by Pinckney from Cavalry SPV I, LLC’s or CPS’s copy of the electronic file from the transferred accounts could not be said to be routine records maintained in the ordinary course of Cavalry SPV I, LLC business. This means that Sheila Pinckney’s Affidavit is inadmissible and Pinckney did not have a foundation to be a witness to identify the source documents, the monthly statements or the cardholder agreement. Furthermore, she avers that she is an employee of Portfolio Services, LLC. This means she is not an employee of the bank or Cavalry SPV I, LLC, and therefore has no cognizable standing as either a custodian or qualified person to establish the nature of file data as a business entity, without first establishing an adequate foundation of the witness as a person with actual knowledge, and then establishing how she obtained any of the knowledge to which she testifies.
Without a witness from Synchrony Bank with knowledge and expertise to walk the court through the steps of culling the necessary data pertaining to the accounts which were to be transferred from the regular business records of the bank, then getting the data into particular computer files for transfer from one system to another, and finally in actually getting the data files transferred and up and running with Cavalry SPV I, LLC, there is no one to testify on behalf of the Plaintiff. Therefore the Plaintiff has no way to prove he owns an account for which he seeks payment and reimbursement of costs.
Finally, the transferred data files were not regularly conducted business activity and therefore are not admissible Hearsay exceptions as defined by Idaho Rules of Evidence Rule 803.
Next, we address The BILL of SALE. The bill of sale is signed by Ken Wojcik, SVP Collections & Recovery for Synchrony Bank. The BILL of SALE states that the Seller hereby transfers, sells, conveys, grants, and delivers to Buyer, its successors and assigns, without recourse except as set forth in the Agreement, to the extent of its ownership, the Accounts as set forth in the Notification File. There were no representations or warranties provided in the attached bill of sale. He would be competent to testify from personal knowledge that the electronic file was the mechanism used to transfer the accounts to Cavalry SPV I, LLC. He does not have the foundation to testify that the file transferred was accurate, or complete, or reliable for later use by Cavalry SPV I, LLC in managing collection efforts.
Further, Plaintiff does not include in Exhibits a copy of its contract with Synchrony Bank. It is therefore not shown whether Synchrony Bank has expressly disclaimed all representations as to the accuracy of information or the accuracy of the current balance or interest on the accounts it has sold to Cavalry SPV I, LLC. The Federal Trade Commission has stated that sellers disclaiming the accuracy of the information they sell to debt buyers is common and recurrent (FTC DEBT BUYER REPORT, supra note 2, at iii, 25). The Restatement (Second) of Torts describes a fraudulent misrepresentation as being when the maker “does not have the confidence in the accuracy of his representation that he states or implies” or “knows that he does not have the basis for his representation that he states or implies.” Without a copy of the underlying contract, Defendant has no objective way to assess the veracity of Plaintiff’s claim. The FDCPA is a strict liability statute intended to be “liberally construed to protect consumers” (Owen v. I.C. Sys., Inc., 629 F.3d 1263, 1271 (11th Cir 2011). Scienter is not an element of proving an FDCPA violation. Misleading or deceptive representations made as a result of carelessness or negligence are actionable under the FDCPA. All a court needs to find for an FDCPA violation is that the communications from the debt buyer to the consumer would have been misleading to the least sophisticated consumer (Weston v. Northampton Personal Care, Inc., 62 A.3d 947, 1019 (Pa. Super. 2013)).
In Plaintiff’s submitted documents and brief there are two contradictory Balances which Plaintiff claims Defendant owes, in Exhibit 1 for $4,078.57 and in Exhibit 2 for $4,116.57, demonstrating thereby a lack of sufficient indicia of trustworthiness for accounting in this instance to be considered reliable (Thanongsinh v. Board of Education, 462 F.3d 762, 778 (7th Cir. 2006)).
Defendant is entitled to recover its costs.
There is a genuine issue of material fact that Cavalry SPV I, LLC cannot show ownership of the alleged Synchrony Bank credit card debt. Defendant respectfully asks that Summary Judgment be denied.
DATED this fourth day of January, 2018
Defendant Pro Se
COPY of the foregoing sent via U.S. mail this fourth day of January, 2018to:
John H. Wilkinson ISB #8597
Machol & Johannes, LLC
1412 W. Idaho Street, Set 238
Boise, ID 83702
Attorney for Plaintiff
Sent by: Rodney Miner
Assignment is the foundation of the debt-buying industry, and the industry is built on sand. Or a swamp. Because assignment is also the industry’s weak spot, and the reason why most—if not all—debt-buyer lawsuits should fail.
Debt buyers must prove they have the right to collect a debt. To do this, it must show an unbroken, valid chain of assignment back to the original creditor. Most debt buyers cannot do this.
The Smoking Gun (Or the Lack Thereof)
Think of a chain of assignment like a chain of evidence in a criminal case.
In order to connect the smoking gun to the crime scene, the police and prosecutor must be able to account for its whereabouts at every moment from the time the detective put it into an evidence bag at the crime scene to the time it is shown to the jury during trial. If they lose track of it, the evidence is no longer reliable. In order to prove that the gun in court is the same one found at the scene, everyone who was in possession of the gun must come into court to testify, from the detective to the forensics expert to the guy in charge of the evidence room.
The same thing has to happen with a debt. The evidence of the debt is the smoking gun, and the contract from the original creditor to a debt buyer (and from one debt buyer to the next) proves where the debt came from and where it has been since then.
Debt Buyers’ Proof Problems
Debt buyers definitely could prove up the chain of assignment; it just goes against their business model. That business model is to file thousands (or tens or hundreds) of lawsuits without checking to see whether those lawsuits have merit, and hoping to intimidate most consumers/defendants into paying up without asking any more questions.
And most of the time that is exactly what happens. The business model works. But most consumers should actually win their debt buyer lawsuits because the debt buyers in those cases have not and cannot produce any competent evidence to support their claims.
The evidence problems start with the original creditor. Until recently, few kept copies of credit applications with the consumer’s signature, or even a complete set of account statements. Some creditors have improved their record-keeping, but those records rarely travel with the debt as it is bought and sold. That means debt buyers generally do not have those records when they collect on the debts, and most file lawsuits without ever bothering to get this basic evidence.
In part, this is because requesting proof before starting a lawsuit would probably slow down the debt collection gravy train. Also, the debt buyers might actually have to pay for that proof out of their own pockets, which would add expense on top of delay.
But even if debt buyers did spend the money and take the time to get the evidence from the original creditors, there remains the problem of proving its whereabouts from the time the original creditor sold it (think: detective picking up the smoking gun from the crime scene) to the time it wound up in court. It’s highly unlikely that the original creditor and the debt buyer who started a lawsuit are the only two companies who had the debt during that time.
The (Faulty) Paper Trail
Generally, debt buyers produce only a bill of sale as their “proof” of the sale. However, the bill of sale is a generic document that never mentions the debt at issue. That makes it no good proof of anything. What the bill of sale generally does is refer to an exhibit with the list of accounts sold—which is never attached. At best, a debt buyer may produce a single line printed from a spreadsheet (the exhibit is rarely an actual document).
A chain of assignment generally needs to show who/what was transferred and to whom/to where it was transferred. Debt buyers typically purchase debt in bulk—hundreds of accounts at one time.
For example, the bill of sale typically says “Creditor agrees to sell all accounts listed in Exhibit 1 to Debt Buyer.” Exhibit 1 is usually an electronic file that contains of hundreds or thousands of accounts and account information.
When challenged on whether a debt buyer owns an account, a debt buyer will typically produce a one-page redacted spreadsheet that is usually titled Exhibit A. The only viewable information will be the alleged account at issue. It will generally look like a spreadsheet that a five-year old could generate on an iPad.
Are you paying attention? The bill of sale referenced Exhibit 1, and the document produced was titled Exhibit A. On that basis alone, you can argue its not the same document.
Perhaps more importantly, the document produced is maybe 1% (that’s being generous) of the actual Exhibit 1. You’ll never know what the actual file looks like, because they will never produce it. According to them, its a trade secret.
Think of it this way. If someone shows you a small and unidentifiable snippet of the Mona Lisa, and then swears it is the Mona Lisa—how would they know that? Same thing with the alleged documentation in a debt buyer case. Under the rules of evidence, it should not be considered enough to prove their claim of ownership.
Finally, when a debt buyer does produce what seems to be adequate proof, watch out for robo signing, which has long been business as usual in the debt-buying industry.
Challenging the Evidence of Assignment
If you challenge the debt buyer with well-drafted discovery requests, you can poke some major holes in their case.
At a minimum, poking those holes will put you in a better position to try and negotiate a reasonable settlement. Those holes will also put you in a stronger position if you decide to move the case forward and fight the case.
Proceed with caution, however. Some judges will find an argument about chain of assignment persuasive, and some will not. If you are rolling the dice on having a potential judgment against you, you need to make a calculated decision about whether the risk is worth the reward (or penalty).
Originally published 2011–05–02. Last updated 2017-01-24.
Featured image by ZEISS Microscopy / CC BY-NC-ND 2.0.