Opinion
Index No. CV-3105/20
03-24-2023
LVNV Funding LLC, Plaintiff, v. Yvette Rouget, Defendant.
Unpublished Opinion
Saul Stein, J.
Recitation, as required by CPLR § 2219 (a) of the papers considered in the review of this Motion:
Papers Numbered
Notice of Motion and Affidavits Annexed 1
Answering Affidavits 2
Reply Affidavits 3
Plaintiff's motion for summary judgment is denied. Plaintiff filed this action against defendant seeking $1,193.52 for an alleged credit card debt originally owed to Credit One Bank, N.A. (the "Original Creditor" or "Credit One"). The debt was allegedly sold and transferred several times until ultimately being purchased by plaintiff. The Complaint lists two causes of action: (i) breach of contract; and (ii) account stated. By her answer, defendant denied owing the debt, denied having a business relationship with plaintiff, and asserted that plaintiff lacked standing to sue.
Plaintiff now moves for summary judgment solely on the second cause of action, account stated. The motion is denied, as plaintiff has not established that it actually acquired the alleged debt and that it therefore has standing to sue plaintiff. Further, plaintiff did not meet its prima facie burden to recover on its account stated cause of action.
Summary judgment is a drastic remedy that should not be granted where there exists a triable issue of fact (T. Mina Supply, Inc. v Clemente Bros. Contr. Corp., 194 A.D.3d 879 [2d Dept 2021]; Marino v Jamison, 189 A.D.3d 1021, [2d Dept 2020]; Integrated Logistics Consultants v Fidata Corp., 131 A.D.2d 338 [1st Dept 1987]; Ratner v Elovitz, 198 A.D.2d 184 [1st Dept 1993]). This burden is a heavy one, and all facts must be viewed in a light most favorable to the non-moving party (Jennack Estate Appraisers and Auctioneers, Inc. v Rabizadeh, 22 N.Y.3d 470 [2013]; Cach, LLC v Khan, 188 A.D.3d 1135 [2d Dept 2020]; Marino, 189 A.D.3d at 1022; Rodriguez v. Parkchester South Condominium Inc., 178 A.D.2d 231 [1st Dept 1991]). The moving party must establish a prima facie case showing that it is entitled to judgment as a matter of law (Alvarez v Prospect Hosp., 68 N.Y.2d 320 [1986]; Idi Jewels, Inc. v Abramov, 193 A.D.3d 699 [2d Dept 2021]).
The proponent of a summary judgment motion makes a prima facie showing by tendering sufficient evidence to eliminate any material issues of fact from the case (Winegrad v New York Univ. Med. Ctr., 64 N.Y.2d 851 [1985]; Kao v Folan, 202 A.D.3d 878 [2d Dept 2022]). Once the moving party has demonstrated its prima facie showing, the burden then shifts to the non-moving party to demonstrate by admissible evidence the existence of a triable issue of fact necessitating a trial (Jacobsen v New York City Health and Hospitals Corp., 22 N.Y.3d 824 [2014]; Alvarez, 68 N.Y.2d at 324; Zuckerman v City of New York, 49 N.Y.2d 557 [1980]).
Where a plaintiff claims standing as the assignee of a debt, it must submit, as part of its motion for summary judgment, proof of a complete chain of assignment, beginning with the original creditor, and then for each subsequent link in that chain (Credit Corp Solutions, Inc. v Christie, 63 Misc.3d 1207 [A] [Civ Ct, Kings County 2019]; see also PRA III, LLC v Gonzalez, 54 A.D.3d 917 [2d Dept 2008]; Palisades Collection, LLC v Kedik, 67 A.D.3d 1329 [4th Dept 2009]; Gemini Asset Recoveries, Inc./Cohen and Slamowitz, LLP v Portoff, 23 Misc.3d 139[A] [App Term, 1st Dept 2009]; Cach LLC v George, 56 Misc.3d 591 [Nassau Dist Ct 2017]; Cach, LLC v Sliss, 28 Misc.3d 1230 [A] [Auburn City Ct 2010]; Citibank [S.D], N.A. v Martin, 11 Misc.3d 219 [Civ Ct, NY County 2005]). The proof must establish that defendant's specific account was included in those assignments (Credit Corp Solutions, 63 Misc.3d at 1207[A]; Cach LLC v George, 56 Misc.3d at 592; Martin, 11 Misc.3d at 226).
In the instant matter, plaintiff has failed to meet this burden as the documents submitted with the motion do not establish that defendant's specific account and debt were assigned to plaintiff. According to plaintiff, after defendant allegedly obtained and used credit from Credit One, the subsequent chain of title of defendant's debt has five (5) links:
1) Credit One sold and assigned defendant's debt to MHC Receivables LLC ("MHC");
2) MHC sold and assigned defendant's debt to FNBM, LLC ("FNBM");
3) FNBM sold and assigned defendant's debt to Sherman Originator III LLC ("SOIIILLC");
4) SOIIILLC sold and assigned defendant's debt, to Sherman Originator LLC ("SOLLC"); and
5) SOLLC sold and assigned defendant's debt to plaintiff.
There are deficiencies in the evidence submitted by plaintiff to establish every one of the links in this chain of title. The most glaring of these deficiencies is the lack of any bill of sale or assignment to plaintiff, establishing Link 5 in the above chain, the link by which this plaintiff claimed to have obtained the defendant's debt. Having failed to show that transfer, plaintiff did not establish its standing in this case.
Further, in its attempt to prove Links 1 though 4 in the chain, plaintiff submitted several documents, including bills of sale and assignments (collectively, the "Transfer Documents"), to establish that defendant's debt was transferred from Credit One to MHC, and then on to FNBM, SOIIILLC and SOLLC. However, the Transfer Documents do not actually show that this defendant's specific account was transferred. These documents only establish, generally, that pools of accounts were sold and assigned. According to the Transfer Documents, attached as exhibits were data files with information identifying the specific accounts transferred. However, neither the data files, nor a description of their contents, were in fact attached or included in the papers submitted with the motion. Thus, the Transfer Documents for Links 1 - 4 fail to establish that this defendant's alleged debt was ever transferred from Credit One and then to each entity in the chain.
Plaintiff did submit several affidavits by authorized representatives of the different entities in the chain of title which assert that defendant's specific account was transferred through each link of the alleged chain of title. However, attached to the affidavits as proof were only the problematic Transfer Documents for Links 1 - 4 referred to above (and no documents were attached for the fifth and final link in the chain of title). While the affidavits did state that they were made based on the affiants' knowledge and review of the business records of those entities, no descriptions or other information of those business records were given. Finally, the affiants did not disclose their job titles, duties or even employers, nor did they claim any familiarity with the business records of any of the other entities in the chain of title, other than the specific entity that each affiant purported to represent. Such affidavits, made by the representatives of one entity in reliance upon the records of other entities, are of no probative value (Autovest, LLC v Cassamajor, 195 A.D.3d 672 [2d Dept 2021]; Aurora Loan Servs., LLC v Mercius, 138 A.D.3d 650 [2d Dept 2016]; Citibank, N.A. v Cabrera, 130 A.D.3d 861 [2d Dept 2015]). Thus, plaintiff's motion must be denied for failure to establish its standing, as it lacks proof of a complete chain of assignment.
Had plaintiff established the chain of title, the motion would still fail, as plaintiff has failed to prove the elements of an account stated. "An account stated is an agreement between parties, based upon their prior transactions, with respect to the correctness of the account items and the specific balance due. Although an account stated may be based on an express agreement between the parties as to the amount due, an agreement may be implied where a defendant retains bills without objecting to them within a reasonable period of time, or makes partial payment on the account" (Citibank, N.A. v Abraham, 138 A.D.3d 1053, 1056 [2d Dept 2016]; citing Citibank [S.D.], N.A. v Brown-Serulovic, 97 A.D.3d 522 [2d Dept 2012]; Fleetwood Agency, Inc. v Verde Elec. Corp., 85 A.D.3d 850 [2d Dept 2011]; American Express Centurion Bank v Cutler, 81 A.D.3d 761 [2d Dept 2011]).
To establish a prima facie case for an account stated, a plaintiff must prove that it mailed invoices and that the defendant retained them without objection for an unreasonable period of time (Bank of Am., N.A. v Ball, 188 A.D.3d 974 [2d Dept 2020]; Finger & Finger, A Professional Corp. v Buckingham Owners, Inc., 165 A.D.3d 887 [2d Dept 2018]). In support of a motion for summary judgment for an account stated, any affidavits submitted to establish that invoices were mailed and retained without objection must be made based on "personal knowledge of the mailings or [knowledge] of a standard office practice and procedure designed to ensure that items were properly addressed and mailed" (Ball, 188 A.D.3d at 975). Alternatively, a movant may submit business records or other evidence that "evince the mailing of the account documents" (Id.; see also Am. Express Natl. Bank v Saadati, 77 Misc.3d 126[A] [App Term, 2d Dept 2022]). Here, plaintiff has not claimed personal knowledge of mailing, nor has it submitted competent evidence to evince the alleged mailing.
Plaintiff did submit an affidavit of an employee of Credit One, the Original Creditor. The employee stated that they had reviewed the Original Creditor's business records with regard to the defendant's account, that they had "personal knowledge of the Original Creditor's procedures for generating and mailing account statements to customers," and that "it is the regular practice of the Original Creditor's business to provide periodic statements to its customers." The employee's affidavit further stated that the Original Creditor had mailed statements, copies of which were attached to the affidavit, to defendant's last known address.
However, the affiant did not claim to have personally mailed the statements and did not specify how the statements were mailed. No business records or other evidence were provided by plaintiff showing that the statements were actually mailed, such as postal service receipts or other tracking information. Furthermore, while the affiant professed familiarity with the Original Creditor's mailing practices and procedures, the affidavit did not provide any details of those practices and procedures and did not describe how they were designed to ensure that items were properly addressed and mailed. In fact, the affiant did not even state that whatever practices and procedures the Original Creditor had in place were actually followed in this case.
Hence, the Original Creditor's employee's bare-bones and conclusory allegations are insufficient to establish a prima facie entitlement to judgment for an account stated (Ball, 188 A.D.3d at 975; Am. Express Natl. Bank v Saadati, 77 Misc.3d 126[A[ [App Term, 2d Dept 2022]; Morrison Cohen Singer & Weinstein, LLP v Brophy, 19 A.D.3d 161 [1st Dept 2005]; see also Deutsche Bank Natl. Tr. Co. v Dennis, 181 A.D.3d 864, 867 [2d Dept 2020]). For the above reasons, it is therefore
ORDERED that Plaintiff's motion for summary judgment is denied in its entirety, and it is further
ORDERED that this matter is set for a trial on August 1, 2023.
This constitutes the decision and order of the Court.