In today's New York Law Journal appeared the decision in Unifund CCR, LLC v. Chan.[1]
This case emphasized the major legal hurdle plaguing debt buyers: hearsay.
Hearsay is broadly defined as statements (written or oral) made out of court. Debt buyers rely on records of credit-issuing banks to prove their cases. Those records constitute hearsay unless the business-records exception[2] to hearsay applies. The business-records exception would require someone to "authenticate" (validate) the records.
Using a witness at least familiar with the process of the records' creation, debt buyers like Unifund would authenticate the records by establishing the following elements to the court's satisfaction:
- The records were made in the regular course of business;
- It was the creator's regular course of business to make such records; and
- The records were made contemporaneously with the events taking place in the records.
Applied here, Unifund failed bullet points two and three. It produced an "Affidavit of Sale" by an "Account Manager" at Citibank that discussed transferring certain accounts made in the regular course of business to Pilot Receivables Management, LLC. But nowhere in the affidavit were the second and third bullet points addressed.
The purported second assignment between Pilot Receivables and Unifund failed for the same reasons. Also lacking was good evidence that the actual account in issue was included in the transfers.
The court ruled that Unifund CCR LLC lacked standing to bring the action. The complaint was dismissed. Unifund was represented by Sharinn & Lipshie, P.C.
Call us right away if you've received any document from Unifund CCR or its attorneys.
[1] 15178/14, NYLJ 1202736446427, at *1 (Civ., QU, Decided August 26, 2015).
[2] Business Records exception (New York CPLR § 4518): Generally. Any writing or record...of any act, transaction, occurrence or event, shall be admissible in evidence in proof of that act, transaction, occurrence or event, if the judge finds that it was made in the regular course of business and that it was the regular course of any business and that it was the regular course of such business to make it, at the time of the action, transaction, occurrence or event, or within a reasonable time thereafter.