The District Court of Nassau County, New York denied Rushmore Recoveries' motion for summary judgment in Rushmore Recoveries X, LLC v. Skolnick (Nassau Cty. Dist. 2007). Rushmore Recoveries sued a defendant consumer pursuant to a retail charge account agreement between the consumer and Citibank. Rushmore Recoveries claimed to be a purchaser and assignee of the account.
Rushmore Recoveries moved for summary judgment against the consumer. In order to prevail against the consumer, Rushmore Recoveries was required to make a showing of entitlement to judgment as a matter of law by tendering evidentiary proof in admissible form.
To support its motion, Rushmore Recoveries provided the court with an affidavit of an individual who claimed he was an "authorized custodian of records [for Rushmore Recoveries]." This individual described his duties as "obtaining, maintaining and retaining, all in the regular course of…business,…records and documents from Citibank…regarding the present debt." However, although the individual attempted to demonstrate that he was personally familiar with, and had personal knowledge of the facts and proceedings, the court found that his familiarity with the matter was merely taken from documents and records created by Citibank itself – not by Rushmore Recoveries.
Additional documents that Rushmore Recoveries submitted to the court, including account statements and assignments, were insufficient to establish a prima facie case for summary judgment. There was no proper evidentiary foundation laid for the annexed documents "supporting" the motion. The account statements and assignments were offered for the truth of the statements contained within the documents, thus constituting hearsay. Rushmore Recoveries attempted to rely on the business records exception to the hearsay rule to establish a prima facie case.
In order to fall within the business records exception to the hearsay rule and be deemed admissible in court, the proponent of such evidence must establish that: the documents were made in the regular course of business; that it was the regular course of the business to make the documents; and that the documents were made contemporaneously with the recorded event.
The affidavit from the "custodian of records" for Rushmore Recoveries frequently used the phrase "in the regular course of plaintiff's business," but the court chastised Rushmore's insistence on using this "magic phrase." The court found that merely filing papers from other entities, even if retained in the regular course of business, would not qualify the documents as business records. The "custodian of records" simply obtained his records from another entity that actually produced the documents.
Further, Rushmore Recoveries failed to provide any proper proof of the alleged assignment to establish standing, and did not attempt to authenticate any alleged assignments. The court found a break in the chain of the assignments from Citibank down to Rushmore Recoveries (another reason it declined to grant summary judgment), and found that Rushmore Recoveries failed to submit proof of an agreement between Citibank and the consumer. The account statements that Rushmore Recoveries relied upon did not show any usage of the consumer's credit card – only an open balance with accruing fees and finance charges.
Because Rushmore Recoveries clearly failed to demonstrate its entitlement to entry of judgment as a matter of law by tendering proof in admissible form, its motion for summary judgment was denied.