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Here's as good a place as any to link to an interesting 12(b)(6) dismissal ruling from a class action suit in US Eastern District of Michigan Southern Division 8/14/17:

Newman v Encore Capital Group, et al, pg.22

OPINION AND ORDER (1) DISMISSING SOME OF PLAINTIFFS’
CLAIMS FOR LACK OF SUBJECT-MATTER JURISDICTION; AND (2)
GRANTING IN PART AND DENYING IN PART DEFENDANTS’
MOTION TO DISMISS (ECF #20) 

"In order to understand the effect of the fraudulently-notarized Ownership and Delinquency Affidavits in the Collection Actions, one must begin with the Michigan Court Rule that governs responsive pleadings, MCR 2.111(C). Under that rule, a defendant may respond to an allegation by, among other things, denying the truth of the allegation, MCR 2.111(C)(2), or by stating that he “lacks knowledge or information sufficient to form a belief as to the truth of an allegation” – a response that “has the effect of a denial.” MCR 2.111(C)(3). Where a defendant denies the truth of an allegation or pleads that he lacks information concerning its truth, he has no burden to come forward with any evidence unless and until the plaintiff carries its burden of production at trial or in connection with a dispositive motion.

But a Michigan statute, MCL § 600.2145 (the “Affidavit Statute”), creates an exception to this ordinary course of events when a plaintiff bringing an action for an account stated attaches to his complaint an affidavit attesting to the amount owing. The Affidavit Statute provides that such an affidavit, unless countered by an opposing sworn affidavit, is prima facie evidence of the defendant’s indebtedness: [Emphasis mine-Brotherskeeper]

"In all actions brought in any of the courts of this state, to recover the amount due on an open account or upon an account stated, if the plaintiff or someone in his behalf makes an affidavit of the amount due, as near as he can estimate the same, over and above all legal counterclaims and annexes thereto a copy of said account, and cause a copy of said affidavit and account to be served upon the defendant, with a copy of the complaint filed in the cause or with the process by which such action is commenced, such affidavit shall be deemed prima facie evidence of such indebtedness, unless the defendant with his answer, by himself or agent, makes an affidavit and serves a copy thereof on the plaintiff or his attorney, denying the same. … Any affidavit in this section mentioned shall be deemed sufficient if the same is made within 10 days next preceding the issuing of the writ or filing of the complaint or answer. "

MCL § 600.2145. The Affidavit Statute, “when correctly followed, eases the burden on a creditor” because “[a] proper affidavit … shifts to the debtor the burden of going forward with proof that the amount claimed is inaccurate.” Lipa v. Asset Acceptance, LLC, 572 F. Supp. 2d 841, 850 (E.D. Mich. 2008). If a debtor faced with a proper affidavit cannot come forward with such evidence, judgment will be entered against him. However, “f the affidavit is defective or is rebutted by the [debtor] with competent proof, the [creditor] simply is left with the burden to prove its case in the usual fashion.” Id.  

Against this background, it is clear that the Defendants’ filing of the fraudulently-notarized Ownership and Delinquency Affidavits with the Collection Complaints caused both Newman and Ryan to suffer a real and concrete harm. Due to the filing of the affidavits, Newman and Ryan could not respond to the Collection Complaints by merely denying the allegations and/or pleading that they lacked information concerning the allegations as they could in a normal case; doing so would have given Midland a clear path to the entry of judgment. In order to avoid the entry of judgment against them, Newman and Ryan had to come forward with a competing affidavit denying that they owed the debt to Midland. But they could not do so because at the time they received the Collection Complaints, they had no idea who Midland was and did not know whether Midland had, in fact, purchased their debts to Citibank. (See Newman and Ryan Declarations, ECF #13-12.) Thus, the only way that Newman and Ryan could avoid the entry of judgment against them was to file a motion attacking the validity of the affidavits.

In summary, the filing of the falsely-notarized affidavits (1) shifted to Newman and Ryan a burden of production that they could not carry and (2) forced Newman and Ryan to file a motion to strike the affidavits in order to prevent the entry of judgment against them. Put differently, the Defendants’ fraudulent notarization forced Newman and Ryan’s hand in state court and put them at an unfair disadvantage in the state court collection proceedings. This was a real and concrete injury."

# # #

" The only claims remaining in this action are Plaintiffs’ claims that Defendants (other than Pettway and Encore) violated 15 U.S.C. § 1692e, 15 U.S.C. § 1692f, MCL § 445.252 (a), and MCL § 445.252 (e), by filing fraudulently-notarized Ownership and Delinquency Affidavits in state court. The action may proceed with respect to these claims."

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5 hours ago, Goody_Ouchless said:

I can't wait until next Michigan defendant comes along and we can watch you in action under the Klieg lights. That shtick about live witnesses is exactly what Self Authenticating business records have done away with. 

I have nothing to prove. Ask Brothers Keeper, BV and a host of others on here about my track record. I though it could be assumed that any poster on here has to make a proper challenge. Im not going to look up what rule it is right now, but the Plaintiff needs to make available the person who makes the affidavit for cross-examination. MRE 803 is a precursor to MRE 902. You cannot use MRE 902 without first satisfying MRE 803. I am going to start going into some very technical details which most posters on here never fully understand. I will post a request for discovery on here for use that I kept in my email.

@Harry Seaward A JDB decarant cannot make true statements about documents created from another company that this person never worked at, does not know how or when the document was created...etc. It needs to be properly challenged. If not, a judge will allow it in. As BV stated, it is not up to the judge to use his/her discretion. The parties need to know how and when to challenge it.

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Of course not, because it would be a disaster and you know it. The entire point of 902 is that an affidavit that makes specific claims is admitted as if a warm body sat there and said the same thing under 803. Every affidavit in a modern debt collection case covers all of these bases and replaces the need for a live witness. Maybe this wouldn't be the case if there was evidence of rampant fraud, but there simply isn't. Every person in court, with the exception of the occasional delusional defendant, knows the score - "Mr. Defendant bought stuff he didn't want to pay for. OC Bank sold his defaulted account to Debt Buyers R Us and they are here to collect what we all know he owes."

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1 hour ago, Goody_Ouchless said:

Of course not, because it would be a disaster and you know it. The entire point of 902 is that an affidavit that makes specific claims is admitted as if a warm body sat there and said the same thing under 803. Every affidavit in a modern debt collection case covers all of these bases and replaces the need for a live witness. Maybe this wouldn't be the case if there was evidence of rampant fraud, but there simply isn't. Every person in court, with the exception of the occasional delusional defendant, knows the score - "Mr. Defendant bought stuff he didn't want to pay for. OC Bank sold his defaulted account to Debt Buyers R Us and they are here to collect what we all know he owes."

95% plus success rate getting these cases tossed. The only people stuck with judgments are posters who did not follow what I told them to do. I have Consumer Law Attorneys using arguments that I created....good luck. Read my sticky and pull up Michigan poster threads pre-2015. I wrote their pleadings their defenses to MSJ....etc. My brain is 10 steps ahead of you

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This is a transcript of a recent debt case that went to trial where a friend of mine who is using a similar argument as I am stating got the case tossed against Midland.

https://www.collectionstopper.com/wp-content/uploads/sites/99/2018/05/Basset-Transcript.pdf

They start discussing the business records exception around page 48.

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1 hour ago, bmc100 said:

This is a transcript of a recent debt case that went to trial where a friend of mine who is using a similar argument as I am stating got the case tossed against Midland.

https://www.collectionstopper.com/wp-content/uploads/sites/99/2018/05/Basset-Transcript.pdf

They start discussing the business records exception around page 48.

That's Midland v. Bassett that debtzapper posted.  It went to the Court of Appeals, and the court ruled that Midland authenticated the records and that the records were admissible.

  • Haha 2

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4 hours ago, bmc100 said:

A JDB decarant cannot make true statements about documents created from another company that this person never worked at, does not know how or when the document was created...etc.

They can. And did in the case posted earlier in this thread. The appellate court found no abuse of discretion when the trial court admitted 3rd party business records. Are you more versed in the law than appellate court judges? 

4 hours ago, bmc100 said:

I am going to start going into some very technical details which most posters on here never fully understand.

You said this before and I was waiting for "details" that never came.  I'm not sure if you're oblivious to how condescending this sounds or if you're actually this arrogant. I thinks us hillbillies can figger it out iffin yous use small words fer us.

Seriously. This is not nearly as complicated as you want to think it is. You made a purchase at Best Buy. That purchase shows up on your credit card statement. Do you refuse to pay your bill until you get witness affidavits from every person at Best Buy that was involved in that transaction? There is no legal difference between this arrangement and a JDB obtaining transactional data from an OC. In both cases, 3rd party records are acquired, incorporated and relied upon by the successor. 

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6 hours ago, Harry Seaward said:

 Yep, you really are that arrogant. 

No. Not at all. I just do not like being told that I am stupid.  It wasnt you Harry or BV. My first post was about chain of title and 99% of the time a JDB cannot prove they legally required a debtor's debt. This is factually true, but most people do not properly challenge the assignments and additional documents. My second post was that the declarant needs to be available for cross-examination and when you ask for the contact information of that person in discovery, it is normally met with an objection. An affidavit is an out-of-court statement and for it to be admitted into evidence that person needs to be a trial to testify their statements, but it needs to be properly challenged. In the Midland case, the declarant was at trial. How many times does a JDB attorney bring a witness?

In this case, the COA stated the witness laid a proper foundation for the admittance of records. In all of my posts, I said one needs to challenge everything. Even if one faces a biased judge, you need to have every challenge and objection on the record for the COA to review the lower courts decision. If Midland's declarant never showed up at trial, the affidavit would not have been enough to prove Midland legally acquired the debt and an unbiased judge would not of entertained the admission of the affidavit as evidence. The precursor is if the Defendant submitted a counter-affidavit. An uncontested affidavit would be accepted as evidence. This is not about posters on here know the deal, they walk into court and the judge favors the Plaintiff and the debtor get stuck with a judgment. In the Midland case, you will see during testimony and cross-examination, BPP challenged everything, beat the witness up and asked the judge to stay neutral multiple times and stop helping the Plaintiff.

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4 hours ago, bmc100 said:

In this case, the COA stated the witness laid a proper foundation for the admittance of records. In all of my posts, I said one needs to challenge everything. Even if one faces a biased judge, you need to have every challenge and objection on the record for the COA to review the lower courts decision.

Brian Parker even states in the transcript @bmc100 posted that his intention was to get statements clearly on the record. 

 

4 hours ago, bmc100 said:

If Midland's declarant never showed up at trial, the affidavit would not have been enough to prove Midland legally acquired the debt and an unbiased judge would not of entertained the admission of the affidavit as evidence. The precursor is if the Defendant submitted a counter-affidavit. An uncontested affidavit would be accepted as evidence.

In the class action lawsuit I quoted from in a post above, the same Brian Parker, as counsel, just survived a motion to dismiss on FDCPA and state consumer law violations against Midland/Encore for submitting fraudulently notarized affidavits in account stated claims. (Brian actually posted here in a thread with a falsely notarized affidavit.)

16 hours ago, bmc100 said:

I have nothing to prove. Ask Brothers Keeper, BV and a host of others on here about my track record.

This is certainly true during my time here. Countless Michigan defendants have (gratefully!) used your arguments and summary disposition oppo template with great success. However, time is not standing still. Big losses in court over robo affidavits like the Brent class action fiasco, coupled with CFPB consent orders with large fines, have resulted in Midland and other JDBs adapting. Harry's right that the adoptive business records doctrine is gaining steam with judges. Early on in Harry's own saga, I came across a case with Harry's JDB successfully using that argument against noted Chicago consumer attorney Daniel Edelman. My heart sank at the discovery.

"Properly" challenging the admissibility of evidence or the chain of assignment may not get you anything if you aren't able to file an appeal. Outside of our California brethren, most posters on CIC these days skip the uncertainty of judges and find success in compelling arbitration--when the credit card agreement allows for it. So far, the JDBs haven't been able to mount much of an argument against arb, but they'll no doubt keep trying as we continue to use this strategy. 

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14 hours ago, bmc100 said:

pull up Michigan poster threads pre-2015. I wrote their pleadings their defenses to MSJ....etc. My brain is 10 steps ahead of you

Perhaps, but your stale defenses are almost four years behind the times.

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6 hours ago, bmc100 said:

An affidavit is an out-of-court statement and for it to be admitted into evidence that person needs to be a trial to testify their statements

The problem is a trial in a credit card lawsuit is a rare thing. These cases are won almost exclusively via  affidavit with MSJ. I agree you have much greater chances of success in challenging the introduction of the evidence if you can cross their witness, but the only way you can do that with a pending MSJ is via deposition. Most people that can't pay their debts don't have $5,000 to spend deposing a witness.

Sometimes we get lucky and judges deny opposed MSJs, but there's no guaranteed formula to make this happen. When an affiant hits all the required beats in an affidavit (made at or near the time, incorporated and relied upon, etc), it's rare for an appellate court to disturb the trial court's admission of 3rd party business records with an MSJ. 

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Does anyone know if there are any threads that discuss how a JDB's chain of ownership documents stood up in arbitration?

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3 minutes ago, LaneBlane said:

Does anyone know if there are any threads that discuss how a JDB's chain of ownership documents stood up in arbitration?

There isn't one because JDBs rarely actually arbitrate.  The other issue the arbitrator is free to use their own judgment in considering what is sufficient proof of chain of ownership.  They are not bound by rigid rules and the law like the courts.  It is one of the risks of arbitrating.  The whole point of using arbitration against a JDB is to get them to drop it not to actually arbitrate.  

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Final paperwork finally came today, it definitely states when I complete my payment, they will not pursue any legal action on this in the future, so it’s as a good as a dismissal with prejudice, I just wanted it in writing with their signature before I paid anything. Took them long enough to send it, it's the same one piece of paper I signed at court aside from the dismissal.

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This case, similar to the "Bassett" case out of MI that I cited earlier, was decided by the TN Court of Appeals about two weeks ago in a published opinion.  The JDB could not prove an unbroken chain of ownership and lost.

https://scholar.google.com/scholar_case?case=12203742873897682673&q=credit+card+debt&hl=en&scisbd=2&as_sdt=ffffffffffffe04

Emphasis in original.) In this case, because Converging Capital is not the original owner, it must likewise prove "every link in the chain" between it and Matthews. Matthews argues that a link is missing, pointing out in his brief that "Ms. Baker never testified that Matthews's Citibank account was included in the respective exhibits that listed the accounts being purchased pursuant to the Bill of Sale between Citibank and Pilot nor pursuant to the Assignment of Bill of Sale between Pilot and Converging Capital." We agree. Converging Capital did not meet its burden of proof to establish it is the owner of the debt. See Mastow, 2012 WL 1534785, at *8 n.12 (similarly observing that "[t]he assignment agreements in Exhibits 2 and 3 show the trail of assignment of debts to LVNV, but do not sufficiently identify Mastaw's debt as among those assigned."). Converging Capital's complaint is hereby dismissed with prejudice.

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This is a published January 2017 decision from the Idaho Supreme Court. The court held  Portfolio Recovery Assoc,  did not prove its case because an affidavit lacked adequate foundation.  It is interesting what the court says about  electronic documents.

 

s://scholar.google.com/scholar_case?case=5217588372009441389&q=credit+card+debt&hl=en&scisbd=2&as_sdt=ffffffffffffe04

MacDonald argued that the statements contained in the Robertson Affidavit are likely based on information contained on a computer screen. We agree. The fact that Robertson's statements are based on electronic information, however, still implicates Rule 803(6). The Rule makes it clear that a business record can be in any format. In other words, a paper printout is not required to fall under the Rule. Having said that, however, we recognize that electronic information raises heightened concerns about accuracy and authenticity. This is where the foundation for Robertson's statements falls apart.

Robertson stated in his affidavit that Citibank records showed that the account linked to MacDonald was sold to PRA. He did not identify the records he examined and did not explain when or how the information was entered into the Citibank records. Robertson also stated that Citibank prepared and delivered a spreadsheet to PRA reflecting account information as of the sale date. Robertson does not explain, however, how that spreadsheet was made or the procedural safeguards that were used to make sure that the information taken from Citibank records and put on the spreadsheet was accurate. His affidavit also does not contain any statement verifying that the information on the spreadsheet was still accurate at the time of his affidavit. The reality is that consumers do not always know or understand when accounts are sold and may make payments to their credit card company that are not reflected on a spreadsheet created at the time of the sale of the debt. For these reasons we find that the foundation for the statements contained in the Robertson Affidavit was not adequate under Rule 803(6).

 

 

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3 hours ago, debtzapper said:

Matthews argues that a link is missing, pointing out in his brief that "Ms. Baker never testified that Matthews's Citibank account was included in the respective exhibits that listed the accounts being purchased pursuant to the Bill of Sale between Citibank and Pilot nor pursuant to the Assignment of Bill of Sale between Pilot and Converging Capital." We agree.

Of course.  This isn't what we're debating.  bmc says 99% of affidavits are garbage.  If 99% of them fell into the above category, then yes, I would agree that 99% of all affidavits were garbage.  The fact is that very few debt collection lawsuits *today* involve more than one change of hands.  I can't remember the last time I saw one on the board.  It's probably only been a month or two, but what is that? 3%-5%? 10%? It's nowhere near 99%, that's a fact.

2 hours ago, debtzapper said:

He did not identify the records he examined and did not explain when or how the information was entered into the Citibank records.  ...   Robertson does not explain, however, how that spreadsheet was made or the procedural safeguards that were used to make sure that the information taken from Citibank records and put on the spreadsheet was accurate. His affidavit also does not contain any statement verifying that the information on the spreadsheet was still accurate at the time of his affidavit.

Here again, the affidavit missed the required info.  PRA blew it, but guess what?  Now they have a roadmap on how to get their records admitted in Idaho.  I bet they don't make that mistake again.

Once the courts in AZ started turning to Parker for 3rd party records admission, JDB affidavits here suddenly became very specific in their wording and content.  Parker told them precisely what they needed to get their records in, and now they all provide exactly that.

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I was reading through caselaw over the weekend and the affidavit on it's own e

On 5/12/2018 at 9:31 PM, debtzapper said:

This is a published January 2017 decision from the Idaho Supreme Court. The court held  Portfolio Recovery Assoc,  did not prove its case because an affidavit lacked adequate foundation.  It is interesting what the court says about  electronic documents.

 

s://scholar.google.com/scholar_case?case=5217588372009441389&q=credit+card+debt&hl=en&scisbd=2&as_sdt=ffffffffffffe04

MacDonald argued that the statements contained in the Robertson Affidavit are likely based on information contained on a computer screen. We agree. The fact that Robertson's statements are based on electronic information, however, still implicates Rule 803(6). The Rule makes it clear that a business record can be in any format. In other words, a paper printout is not required to fall under the Rule. Having said that, however, we recognize that electronic information raises heightened concerns about accuracy and authenticity. This is where the foundation for Robertson's statements falls apart.

Robertson stated in his affidavit that Citibank records showed that the account linked to MacDonald was sold to PRA. He did not identify the records he examined and did not explain when or how the information was entered into the Citibank records. Robertson also stated that Citibank prepared and delivered a spreadsheet to PRA reflecting account information as of the sale date. Robertson does not explain, however, how that spreadsheet was made or the procedural safeguards that were used to make sure that the information taken from Citibank records and put on the spreadsheet was accurate. His affidavit also does not contain any statement verifying that the information on the spreadsheet was still accurate at the time of his affidavit. The reality is that consumers do not always know or understand when accounts are sold and may make payments to their credit card company that are not reflected on a spreadsheet created at the time of the sale of the debt. For these reasons we find that the foundation for the statements contained in the Robertson Affidavit was not adequate under Rule 803(6).

 

 

Here is another case from Idaho that the mere cition of Rule 902(11) is not enough. https://www.gpo.gov/fdsys/pkg/USCOURTS-idd-4_03-cv-00049/pdf/USCOURTS-idd-4_03-cv-00049-135.pdf

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