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Encore Capital (midland, asset acceptance et. al) & Portfolio Recovery gets spanked. Does this affect you? Discuss...

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More information can be found here:  http://www.consumerfinance.gov/newsroom/cfpb-takes-action-against-the-two-largest-debt-buyers-for-using-deceptive-tactics-to-collect-bad-debts/

 

Consent Orders can be downloaded here:  http://www.consumerfinance.gov/administrativeadjudication/

 

Encore Capital, and their cohorts Midland Funding, Midland Credit Management, asset acceptance, and in a separate action Portfolio Recovery Associates (PRA) have been reprimanded by the CFPB.  This includes paying restitution to some debtors which have been sued, or have paid on accounts to Encore, Midland et. al. and having judgments vacated.

 

This will obviously raise the question:  Can any of this information be used in your past, present or future collection actions taken against you.  For those that can get their judgments vacated or get their lawsuits dismissed, the answer is a resounding yes.  

 

Let's discuss the potentialities of these two consent orders, and how it may affect CIC members. 

 

 

 

 

 

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From a quick read, it seems most of the benefits are to those with time barred debts. Also looking like the robo-signing is still going on....Asset Acceptance hasn't even passed the time on the last Consent Decree.

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This is HUGE.

Yes, this absolutely will benefit many CIC members sued by Midland and PRA.

If that's you, be sure to download and read the Consent Order dated last Thursday, Sept. 3rd.

Great news for consumers.

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Looks like they will have to provide strong account-level evidence in order to litigate. How often do they get access to that level on any account they snap up in a fire sale? Hardly any, I assume. They get to peer at some numbers and letters on a screen. They do not have signed account applications, purchase activity, etc. Yeah, I think this is huge. They have 60 days to comply from what I skimmed in the ORDER. This is a potential huge win for all of us sued by these snakes.

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Excellent find.  Encore (Midland, Asset) and PRA aren't some two-bit outfits.  They are the nation's two biggest debt buyer/ collectors, who supposedly have all the evidence needed to win their cases.   So why did they engage in such massive lawbreaking?

 

Encore and Portfolio Recovery Associates illegally attempted to collect debt that they knew, or should have known, may have been inaccurate or unenforceable. Specifically, the CFPB found that the companies:

  • Attempted to collect on unsubstantiated or inaccurate debt: Encore and Portfolio Recovery Associates stated incorrect balances, interest rates, and payment due dates in attempting to collect debts from consumers. The companies purchased large portfolios of consumer debt with balances that sellers claimed were “approximate” or that otherwise did not reflect the correct amount owed by the consumer. Sellers also warned the companies that some of the debts they were buying may not have the most recent consumer payments deducted from the balance. Some sellers also represented that documents were not available for some of the accounts. The companies continued purchasing from these sellers and then collecting on that debt without first conducting any investigation to determine whether the debts were accurate and enforceable.

Illegal Litigation Practices

Encore and Portfolio Recovery Associates collected debts through lawsuits and threats of legal action in unlawful ways. Specifically, the companies:

  • Misrepresented their intention to prove debts they sued consumers over: Encore and Portfolio Recovery Associates regularly attempted to collect on debts by suing consumers in state courts across the country. In numerous cases, the companies had no intention of proving these debts. They placed tens of thousands of debts with law firms staffed by only a handful of attorneys and in many cases made no effort to obtain the documents to back up their claims. Instead, the companies relied on consumers not filing a defense and winning the lawsuits by default.
  • Relied on misleading, robo-signed court filings to churn out lawsuits:Encore and Portfolio Recovery Associates filed affidavits that contained misleading statements in debt collection lawsuits across the country. For example, they both used affidavits that misrepresented that the affiants had reviewed original account-level documentation confirming the consumers’ debts when they had not. The companies also submitted affidavits with documents attached that they claimed were the consumers’ specific account contracts or records when they weren’t. These shortcuts allowed the companies to churn through lawsuits without doing the research and due diligence required to obtain a legitimate judgment.
  • Sued or threatened to sue consumers past the statute of limitations:From at least July 21, 2011 to March 31, 2013, Encore sent thousands of letters offering a time-limited opportunity to “settle” without revealing that the debt was too old for litigation. From January 2009 to March 2012, Portfolio Recovery Associates sent similar letters to consumers. Both of the companies also filed cases past the applicable statute of limitations.
  • Pressured consumers to make payments using misrepresentations:Encore and Portfolio Recovery Associates made other inaccurate statements to consumers to press them to make additional payments. Specifically:

     

    • Encore falsely told consumers the burden of proof was on them to disprove the debt: In sworn affidavits, Encore falsely told consumers and courts that the debt should be assumed to be valid because the consumer had not disputed it within a certain time period. In fact, Encore had the burden to first prove the debt was owed and accurate before the consumer had to challenge it.
    • Portfolio Recovery Associates falsely claimed an attorney had reviewed the file and a lawsuit was imminent: The company’s collectors, who identified themselves as from the “Litigation Department,” misrepresented to consumers that litigation against them was planned, imminent, or even underway. In reality, in many cases, an attorney had not reviewed the account and the company had not decided whether to file suit.

Other Illegal Collection Practices

  • Encore disregarded or failed to adequately investigate consumers’ disputes: If a consumer disputed their debt more than 45 days after Encore started collecting, Encore would require the consumer to produce specific documents or other “proof” to support their dispute or it would not conduct the legally-required investigation of the issues raised by the consumer.
  • Encore farmed out disputed debts to law firms without forwarding required information: In numerous instances, Encore assigned disputed debt to law firms and third-party debt collectors without informing them that the debt was disputed. As a result, law firms evaluating Encore accounts for litigation did not know which accounts were disputed.
  • Encore made harassing collection calls to consumers: Encore called consumers repeatedly or continuously with the intent to annoy, abuse, or harass them into paying. Encore’s subsidiary, Asset Acceptance, made thousands of calls to consumers before 8 a.m. or after 9 p.m. and called hundreds of consumers more than 20 times in a two-day period.
  • Portfolio Recovery Associates misled consumers into consenting to receive auto-dialed cell phone calls: For approximately a year, and ending in August 2013, Portfolio Recovery Associates told consumers that they could only prevent collection calls to their cell phones before 9 a.m. if they consented to receive calls on their cell phones from a dialer. The company penalized representatives who failed to adhere to this policy.

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I'm not exactly sure how Encore (et al) are going to fulfill their refunds, lawsuit dismissals, and lawsuit vacates;  However, if anyone has current litigation with Encore et. al., then it may be a good idea to file a motion to dismiss, using the consent order as your exhibit, and claim your account is one which should be dismissed according to the order.

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@Coffee_before_tea

 

Whether or not one's lawsuit could be dismissed depends upon the circumstances.  Does the affidavit state that the account is deemed valid because the defendant didn't dispute it?  

 

It does not say that account-level documentation must have been provided in lawsuits filed before the consent date.

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Like every other time the industry gets smacked down, this involves a microscopic percentage of cases, debtors and dollars.

 

When was the last time we saw a case where plaintiff was unable to supply billing and/or charge off statements?

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Encore's statement to The Street claims a 'one time' $43 million charge.  It doesn't mention the requirement to stop collection on $125 million in assets or the $10 million to the CFPB fund.  That, ladies and gentlemen, is called glossing over the rough patches.

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@BV80

 

That is true, and it may not correlate directly with the order, but the statement of facts in the order has plenty of Ammo to get through a MSJ, or strike plaintiffs documents.  At the very least, it's another tool to be used in your arguments.

 

@Goody_Ouchless

 

The question is:  How accurate is the account-level information, and how can a JDB affiant attest to the accuracy of documents they have never seen before.  If the account is disputed in it's entirety, and the method, source, and chain of custody is untrustworthy, then it becomes more difficult for a plaintiff to say: "it's accurate, because we say so".  

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The question is:  How accurate is the account-level information, and how can a JDB affiant attest to the accuracy of documents they have never seen before.  If the account is disputed in it's entirety, and the method, source, and chain of custody is untrustworthy, then it becomes more difficult for a plaintiff to say: "it's accurate, because we say so".  

 

All this does is say that they have to present "something" with defendants name and a balance - something we've seen provided in every case for the past two years. Granted, one then argues against reliability of that evidence, but we've seen how courts outside of CA tend to rule.

 

Since arbitration appears to be 100% effective, I guess I'd spend my time finding an MTC that works in my jurisdiction, rather than still trying to play Perry Mason in court.

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This is interesting.  The language in this paragraph doesn't specifically state that it becomes in effect from the date the order is signed.  Instead it states:  "who receive actual notice of this Consent Order"
 
Presumably, you could send a copy of this order to the opposing attorney, and then motion to strike any submitted affidavit in a current case.  
 

PROHIBITION AGAINST FILING FALSE OR MISLEADING AFFIDAVITS
IT IS FURTHER ORDERED that:
132. Encore, Encore's officers, agents, servants, employees, and attorneys, and all other persons in active concert or participation with any of them, who receive actual notice of this Consent Order, whether acting directly or indirectly, are permanently restrained and prohibited from, in connection with collection of a Debt:
       a. Submitting any affidavit in which the affiant represents, expressly or by implication, that the affidavit has been notarized if the affidavit was not executed in the presence of a notary;
       b. Submitting any affidavit containing an inaccurate statement, including but not limited to a statement that attached documentation relates to the specific Consumer being sued when that is not the case;
       c. Submitting any affidavit in which the affiant represents, expressly or by implication, that any attached or unattached documents or records concerning the Debt forming the basis for the lawsuit have been reviewed by the affiant, when that is not the case;
       d. Submitting any affidavit in which the affiant represents, expressly or by implication, that the affiant has personally reviewed the affidavit, when that is not the case;
       e. Submitting any affidavit which references a Consumer's failure to dispute a Debt unless the affidavit also contains the following statement;
           Under Federal law, "[t]he failure to dispute a debt under [section 809( c) of the Fair Debt Collection Practices Act, 15 U.S.C. §1692g©] may not be considered by any court as an admission of liability."


@Goody_Ouchless

 

Not all CC Agreements have Arbitration Clauses.  But, I agree, Arb seems to be the best chance of success.  In the event that you can't do Arb, gaining *any* leverage is always wise.

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I've already argued many of these things in my pleadings against these JDBs.  Many of the affidavits are indicative of 'robo-signed' or 'robo-stamped' documents; these JDBs generally cannot produce but possibly 6 months of account statements, if that; and they pretty much all (at least in Florida) allege that the debt is valid because the debtor has not disputed or contested the statements that were sent to them (basically alluding that it's up to the debtor to prove the debt is not valid).

 

But I wonder how much this will make them change their method of doing things?  Right now the fact that they file so many lawsuits actually works in the defendant's favor at times because they just want the low-hanging fruit of easy defaults and stipulations.  If they have to change their game and don't end up filing as many lawsuits, the ones they do file may become much harder to win and they may fight back much harder than they do now...  :boxing:

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How often do they get access to that level on any account they snap up in a fire sale? Hardly any, I assume. 

 

While they do not purchase those records in the sale of the accounts, they DO have access to them.  The real issue is they do not want to PAY the OC for them. Hence the appeal of low hanging fruit in consumers who get properly served but don't show for court for the easy default judgment.

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@Coffee_before_tea

 

 

This is interesting.  The language in this paragraph doesn't specifically state that it becomes in effect from the date the order is signed.  Instead it states:  "who receive actual notice of this Consent Order"
 

 

 

Encore, Encore's officers, agents, servants, employees, and attorneys, and all other persons in active concert or participation with any of them, who receive actual notice of this Consent Order, whether acting directly or indirectly, are permanently restrained and prohibited from, in connection with collection of a Debt:

 

 

How can "are permanently restrained and prohibited from" be considered past tense?  Paragraph 130 is the order prohibiting Encore from reselling debts, and it uses the exact same language.   So how could that language be construed as to apply to debts Encore has already sold in the past?

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I've already argued many of these things in my pleadings against these JDBs.  Many of the affidavits are indicative of 'robo-signed' or 'robo-stamped' documents; these JDBs generally cannot produce but possibly 6 months of account statements, if that; and they pretty much all (at least in Florida) allege that the debt is valid because the debtor has not disputed or contested the statements that were sent to them (basically alluding that it's up to the debtor to prove the debt is not valid).

 

But I wonder how much this will make them change their method of doing things?  Right now the fact that they file so many lawsuits actually works in the defendant's favor at times because they just want the low-hanging fruit of easy defaults and stipulations.  If they have to change their game and don't end up filing as many lawsuits, the ones they do file may become much harder to win and they may fight back much harder than they do now...  :boxing:

@LawKitty

 

Well said from someone who is in the legal trenches every day.

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@Coffee_before_tea

 

How can "are permanently restrained and prohibited from" be considered past tense?  Paragraph 130 is the order prohibiting Encore from reselling debts, and it uses the exact same language.   So how could that language be construed as to apply to debts Encore has already sold in the past?

 

@BV80

 

Well considering this is a permanent injunction (an order to cease violative behaviors), I would argue the following points:

 

1.  It's an ongoing and current lawsuit

2.  Encore et. al. has a permanent injunction barring them from using misleading affidavits, put in place half way through litigation.

3.  If Encore et. al. has submitted affidavits that have been barred, and the court allows potentially prejudicial and false evidence, then it can cause irreparable harm and injustice to the defendant. 

 

Put another way:  If it had been discovered that Encore was using only a computer to generate Affidavits authenticating records, and that the signatures were digitally produced, and no real person reviewed any of the records.  Essentially creating an affidavit machine, with no human interaction.  Then they were permanently enjoined from using their affidavit machine, yet they had 1000 active cases which used the machine, I would argue that the use of any affidavits produced by the machine should be included in the injunction, because the case is ongoing.

 

At the very least, this is a good argument to have any affidavits stricken or precluded.

 

--edit--  

 

And the act of "Selling" is something that is a singular event, which would happen in the future.  Distinguishable from ongoing litigation, that has yet to be adjudicated.

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@Coffee_before_tea

 

I agree that it's a good argument, but it would be up to the judge as to which parts, if any, of the consent order would apply.   He would have to decide if the prohibitions are retroactive.

 

And the act of "Selling" is something that is a singular event, which would happen in the future.  Distinguishable from ongoing litigation, that has yet to be adjudicated.

 

 

I think that if the CFPB had intended for certain prohibitions such as in paragraphs 131 and 132 to apply to previously filed and ongoing litigation, it would have made that distinction rather than using the exact same language as it did in paragraph 130. 

 

In fact, it does lay out the requirements for restitution for past actions in paragraphs 145 and 146.  So in those paragraphs, past actions are addressed which would indicate that the prohibitions in previous paragraphs (such as P. 131) would not apply to past actions.  But again, a judge might choose to do so.

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What about a situation where a consumer was sued by MIdland or PRA, then retained an attorney and upon that attorney filing an answer, the JDB offered a dismissal (or mutual walkaway) because they knew they did not have suitable evidence or had a robo-signed affidavit.  Would that consumer be able to now go after Midland or PRA in light of this consent decree and recoup their attorney fees?

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@fisthardcheese

 

Note that the CFPB did not claim that every affidavit offered by Midland was robosigned.   As a result, such a claim made by a consumer would have to be proven. 

 

While the CFPB did accuse Midland of robosigning some affidavits, the main focus on affidavits was based upon those provided in a debt collection lawsuit that included a statement that the account was deemed valid because the consumer had failed to dispute the account.   Such a statement is in contradiction to the FDCPA.   In the Consent Order, those lawsuits are referred to as a "Dispute Affidavit Lawsuit".

 

The Order states that approximately 6300 "identified consumers" were sued using such an affidavit.  If an affidavit containing that statement was filed in a lawsuit (probably had to be in a lawsuit during the relevant time period provided in the Consent Order), that consumer MIGHT be entitled to restitution depending upon the circumstances (whether or not he's an "identified consumer").

 

I have no idea how the CFPB came up with that number.   In the event a consumer has such an affidavit, I think he would need to speak to an attorney in order to determine how he could find out if he's one of those consumers.   He'd also need to find out if restitution is available ONLY to those 6300 just in case he's not one of those "identified consumers".

 

What do you mean by "suitable evidence"?

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What about a situation where a consumer was sued by MIdland or PRA, then retained an attorney and upon that attorney filing an answer, the JDB offered a dismissal (or mutual walkaway) because they knew they did not have suitable evidence or had a robo-signed affidavit.  Would that consumer be able to now go after Midland or PRA in light of this consent decree and recoup their attorney fees?

 

JDBs offer dismissal or mutual walkaways all the time.  I think it's mostly because they don't want a long fight and would rather go after easy defaults and stipulated settlements.  You can always counter-offer with the JDB paying some or all of the attorney fees.  I'm pretty sure most JDBs don't have suitable evidence to prove standing or their case, but if a defendant admits to the debt, then they don't really have to prove anything except the amount.  And while they can't often prove that, either, many times they settle because they will take a lower lump sum or let someone make payments on the debt.  Everything in Florida small claims is geared towards settling.  That's the first thing the Judge asks a pro se defendant, is whether or not they admit or deny the debt.  If they deny, it will go to trial, but if they admit, then it's only a matter of working out a settlement where they can pay what they can afford to pay.  Robo-signed affidavits, standing, etc. don't even come up at that point.

 

I think most of Midland's and Portfolio's affidavits are at least "robo-stamped".  They generally use the same form affidavit and stamp the affiant's name at the top.  The original creditor, debtor information, and the account information change, but the rest of it stays the same.  And of course they all get notarized as well and I'm sure they have notaries in house.  I'd love to subpoena some of those notaries' journals to see how many affidavits they notarize and how they know these affiants, but I really haven't had a case get to that point.

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@LawKitty

 

I think most of Midland's and Portfolio's affidavits are at least "robo-stamped".  They generally use the same form affidavit and stamp the affiant's name at the top.  The original creditor, debtor information, and the account information change, but the rest of it stays the same.  And of course they all get notarized as well and I'm sure they have notaries in house.  I'd love to subpoena some of those notaries' journals to see how many affidavits they notarize and how they know these affiants, but I really haven't had a case get to that point.

 

 

You hit the nail on the head by mentioning a subpoena.   However, I never thought of issuing subpoenas to notaries for the reasons you stated.  What a great idea!  Thank you for that suggestion!

 

Anyway, absent a clear issue of material fact that would preclude summary judgment (such as claims unsupported by evidence, false statement in an affidavit), more consumers should probably depose the affiant robosigner before an MSJ is ruled upon. 

 

Do you have a list of specific questions you'd ask an affiant either at a deposition or a trial?

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I do have some questions that I would generally ask, but of course it depends on the case.  Most often what I do is file a Motion to Strike the Affidavit with a Memorandum of Law.  I copied a sample here but had to insert JDB or ORIGINAL CREDITOR so as not to give away any information.  This one was actually not used in a JDB lawsuit, but I think you get the idea.  

 

 

 

IN THE COURT, IN AND FOR _______________ COUNTY, FLORIDA

 

CASE NUMBER:XXXXXXXXXXX

DIV:           

                                               

JDB,

           

v

 

 

JOHN DOE,

           

_______________________________________/

 

MOTION TO STRIKE PLAINTIFF’S AFFIDAVIT IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT AND FOR ATTORNEY’S FEES

 

Defendant, JOHN DOE, by and through the undersigned counsel, hereby files this Motion to Strike Plaintiff’s Affidavit in Support of its Motion for Summary Judgment and for Attorney’s Fees, and in support thereof states as follows:

 

FACTS

 

1.                  Plaintiff initiated this action on 04/17/2015.

2.                  The Named Plaintiff in this case is JDB, a foreign corporation, incorporated in the State of Delaware. 

3.                  On 05/26/2015, Plaintiff, by and through its undersigned counsel, gave Notice of Filing of Affidavit in Support of Its Motion for Summary Judgment and the accompanying Affidavit (hereinafter "Affidavit").

4.                  The Affiant of the above-mentioned Affidavit was identified as JDB AFFIANT (hereinafter "Affiant"). The Affiant identified herself as a "Litigation Support Specialist" for JDB. (hereinafter "JDB"), successor by merger to PREVIOUS JDB, the servicing affiliate of JDB, in the opening paragraph of the Affidavit which appears to be a paragraph reserved for the Affiant's title.

5.                  Affiant averred that the affidavit is “made on the basis of my personal knowledge and in support of the Plaintiff’s suit on account against the Debtor(s)”. (Emphasis added).

6.                  Affiant also averred that

 

“in my capacity as Litigation Support Specialist, I have knowledge regarding, and access to, records regarding the Card Account of the above referenced Debtor(s).  JDB maintains these records in the ordinary course of its business, and the records are updated with information on events (such as charges and payments on the Account) by individuals with personal knowledge of those events or by automated processes that tracks such events at or near the time that the events occur.  The same systems that record this information also generate periodic statements that are sent to Account holders, such as Debtor(s) and store copies of these periodic statements.  In addition, these same record-keeping systems contain information about which version of ORIGINAL CREDITOR'S terms and conditions has been communicated to a cardholder and accepted by a cardholder through the cardholder’s use of his or her  Card after receipt of those terms and conditions.

 

These ‘terms and conditions’ were not, however, attached to the affidavit.  Further, upon information and belief, this version of the ‘terms and conditions’ along with the periodic statements (of which only one was attached) are what form the basis for the Affiant's statements.  Furthermore, Affiant averred to having knowledge (not personal knowledge) and access to the records, but that the records are updated by individuals with personal knowledge or by automated processes.  Upon information and belief, the Affiant does not have the requisite personal knowledge of the underlying transactions of Plaintiff and Defendant.

Affiant averred “THAT the business records maintained by JDB and described above show that the Debtor(s)’ account with ORIGINAL CREDITOR is governed by terms and conditions referred to by ORIGINAL CREDITOR and ORIGINAL CREDITOR SERVICER as “T&C”.   A true and correct copy of these terms and conditions have been provided to JDB’s counsel in this case”.  Again, the copy of these terms and conditions were not attached to the affidavit.  Also, JDB is not the named Plaintiff in this suit.  Upon information and belief, the Affiant does not have the requisite personal knowledge of the underlying transactions of Plaintiff and Defendant.

7.                  The Affiant, and coincidentally, the Notary, JDB NOTARY, are, upon information and belief, to both work as Litigation Support Specialists for what used to be PREVIOUS JDB, and is now known as JDB, located in the State of Ohio (which is different than the home state of ORIGINAL CREDITOR).  Upon information and belief, both the Affiant and the Notary on this particular affidavit, sign (and possibly notarize) a large number of these form affidavits every week as part of their jobs, along with testifying in courts as needed regarding business records of ORIGINAL CREDITOR.  Therefore, upon information and belief, the Affiant is not a records custodian that has the requisite personal knowledge of the underlying transactions of the Plaintiff and this particular Defendant.

 

 

MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT’S MOTION

 

I.                   The Affidavit Should be Struck because the Plaintiff Failed to Attach Documents Referred to in the Affidavit

 

a.      Legal Standards.

Fla. R. Civ. Pro. 1.510(e) provides, in part, that "worn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto or served therewith." Failure to attach such papers is grounds for reversal of summary judgment decisions. See CSX Transp.,

Inc. v. Pasco County, 660 So. 2d 757 (Fla. 2d DCA 1995) (reversing summary judgment granted below where the affiant based statements on reports but failed to attach same to the affidavit.)

 

b.      Argument

 

Here, the Affiant states in the Affidavit that she "has knowledge regarding, and access to, records regarding the Credit Card Account of the above referenced Debtor(s).”  These records, however, were not attached to the Affidavit.  The Affiant also refers to a copy of the “terms and conditions” that were accepted by the Defendant, but again, a copy of the “terms and conditions” mentioned by Affiant were not attached to the Affidavit.  Furthermore, upon information and belief, these records are what form the basis for the Affiant's statements. In essence, the Affiant has averred to records which she did not submit.

WHEREFORE, because the Plaintiff has failed to attach documents referred to in its Affidavit in violation of Fla. R. Civ. Pro. 1.510(e), the Affidavit should be struck in whole.

 

 

II.                The Affidavit Should be Struck because the Affidavit Was Not Based Upon the Affiant's Personal Knowledge

 

a.      Legal Standards

 

The Affiant must have personal knowledge as to the matters stated therein. See Rule 1.510(e), Florida Rules of Civil Procedure (“affidavits shall be made on personal knowledge”); Enterprise Leasing Co. v. Demartino, 15 So. 3d 711 (Fla. 2d DCA 2009); West Edge II v. Kunderas, 910 So. 2d 953 (Fla. 2d DCA 2005).  Most importantly, an Affiant should state in detail the facts showing that the Affiant has personal knowledge. See Hoyt v. St. Lucie County, Bd. Of County Comm'rs, 705 So. 2d 119 (Fla. 4th DCA 1998) (holding an affidavit legally insufficient where it failed to reflect facts demonstrating how the affiant would possess personal knowledge of the matters at issue in the case); Carter v. Cessna Fin. Corp., 498 So. 2d 1319 (Fla. 4th DCA 1986) (holding an affidavit legally insufficient where the affiant failed to set out a factual basis to support a claim of personal knowledge of matter at issue in the case and failed to make assertions based on personal knowledge.)

The Third District in Alvarez v. Florida Ins. Guaranty Association, 661 So. 2d 1230 (Fla. 3d DCA 1995), noted that “the purpose of the personal knowledge requirement is to prevent the trial court from relying on hearsay when ruling on a motion for summary judgment and to ensure that there is an admissible evidentiary basis for the case rather than mere supposition or belief.” Id. at 1232 (quoting Pawlik v. Barnett Bank of Columbia County, 528 So. 2d 965, 966 (Fla. 1st DCA 1988)).

The non-movant in summary judgment proceedings enjoys a higher burden of proof required against them than does a criminal defendant. While a criminal defendant enjoys the standard of “beyond a reasonable doubt,” the non-movant in summary judgment proceedings effectively enjoys beyond the “slightest” doubt. See Mivan Florida v. Metric Constuctors, Inc., 857 So.2d 901 (Fla. 5th DCA 2003).

It can be appreciated then that hearsay in summary judgment affidavits of proof is absolutely inappropriate. This is because, as recognized by Bifulco v. State Farm, 693 So.2d 707 (Fla. 4th DCA 1997), the granting of summary judgment cuts off a party’s right to trial, which the Bifulco court observes is a constitutional right.

 

b.      Argument

 

Here, the entire Affidavit is hearsay evidence as the Affiant has absolutely no personal knowledge of the facts stated therein.  As an employee of JDB, she has no personal knowledge of the underlying transactions between the Plaintiff and the Defendant.  At best, JDB, who is not the named Plaintiff, acted as a middleman of sorts, whose primary function was to transfer funds between the Bank and various affiliates. The Affiant has failed to state in detail the facts showing that she has personal knowledge.

            Because the Affiant has no personal knowledge of the underlying transaction between the

Plaintiff and Defendant, any statement she gives which references this underlying transaction (such as the fact that the Plaintiff is allegedly owed a sum of money in excess of $8000.00) is, by its very nature, hearsay.  The Florida Rules of Evidence define hearsay as "a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted." Fla. Stat. §90.801(l)©. Here the Affiant is averring to a statement (that the Plaintiff is allegedly owed sums of money) which was made by someone other than herself (namely, the Plaintiff) and is offering this as proof of the matter asserted (that Plaintiff is entitled to a judgment as a matter of law.).

            The Plaintiff may argue that while the Affiant's statements may be hearsay, because they may be based off of certain alleged "business" records, they should nevertheless be admitted under the "Records of Regularly Conducted Business Activity" exception. Fla. Stat. §90.803(6)

This rule provides that notwithstanding the provision of §90.802 (which renders hearsay statements inadmissible), hearsay statements are not inadmissible, even though the declarant is available as a witness, if the statement is

 

[a] memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinion, or diagnosis, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity and if it was the regular practice of that business activity to make such memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness, or as shown by a certification or declaration that complies with paragraph © and s. 90.902(11), unless the sources of information or other circumstances show lack of trustworthiness. Emphasis added.

There are, however, several problems with this argument. To begin, and as previously demonstrated, no memorandums, reports, records, or data compilation have been offered by the Plaintiff.  Neither does the business record exception apply as an exception to Affiant’s statements being hearsay. Authentication of a business record is different than admissibility of the record as a statement under the business exception rule. As noted above, none of the records to which Affiant avers are attached to the Affidavit and neither is Affiant the records custodian thereof even if they were attached.

 

WHEREFORE, because the Affiant's statements in the Affidavit are not based upon personal knowledge and are therefore inadmissible hearsay evidence to which no hearsay exception applies, the Affidavit should be struck in whole.

 

III.             Sanction of Attorney's Fees is Appropriate

 

Fla. R. Civ. Pro. 1.510(g) reads, in full, that

 

f it appears to the satisfaction of the court at any time that any of the affidavits presented pursuant to this rule are presented in bad faith or solely for the purpose of delay, the court shall forthwith order the party employing them to pay to the other party the amount of the reasonable expenses which the filing of the affidavits caused the other party to incur, including reasonable attorneys' fees, and any offending party or attorney may be adjudged guilty of contempt. Emphasis added.

 

The undersigned counsel has expended considerable time and resources preparing to defend against an affidavit which has, on its face, no basis in law. Both the Plaintiff and the Plaintiff’s counsel knew that the Affiant's affidavit lacked authenticity and reliability yet still chose to file it with the Court. This may be indicia of a modus operandi on the Plaintiff’s part to present misrepresentations and false affidavits to the Court which make an award of attorney's fees and costs an appropriate sanction.

 

WHEREFORE, Defendant respectfully moves this Court to enter an order granting this Motion to Strike together with any other relief deemed just and proper.

           

CERTIFICATE OF SERVICE

 

I HEREBY CERTIFY that a true and correct copy of the above and foregoing has been served upon,  via Florida's E-Filing Portal automatic e-mail notification  this 15th day of July, 2015.

 

 

                                    _________________________________

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