Tennessee Appeals Court Nixes Zombie Debt Buyer's Attempt To Enforce Money Claim Based On Crappy Paperwork

From a recent press release from the law firm Ballard Spahr LLP:

• A recent decision by the Tennessee Court of Appeals illustrates the documentation-related challenges faced by creditors and debt buyers in credit card collection actions.
  
  
• In its April 30, 2012, opinion in LVNV Funding, LLC v. Mastaw, the appellate court held that the buyer of a credit card account cannot rely on affidavits of an “authorized representative” of the debt buyer and its parent corporation to establish in a collection action that the defendant owed a debt or the amount owed.
  
  
• The buyer had purchased the account from its parent corporation, which, in turn, had purchased the account from a bank that was either the card issuer or had purchased the account from the issuer.
  
  
• With the debt buyer’s trial witness having conceded that she had no personal knowledge of the information in the affidavits, the appellate court found that the affidavits could be properly admitted as evidence only under the business records exception to the hearsay rule. That exception allows the admission of records made and maintained in the regular course of business.
  
  
• As described by the appellate court, the affidavits did not identify or attach any specific records that included the debtor’s identity or his account number but sought to establish that information based on references to unspecified records that were described as maintained by the debt buyer as part of its normal business records.
  
  
• In addition, the affidavits claimed such unspecified records were “represented” to include information provided by the original creditor without identifying who made such representation. They also did not explain the affiant’s relationship to the parent company or the basis for her designation as “authorized representative” of the debt buyer and parent company.

For more, see Tennessee Appeals Court Reverses Debt Buyer’s Win for Insufficient Evidence.

For the Court ruling, see LVNV Funding, LLC v. Mastaw, No. M2011-00990-COA-R3-CV (Tenn. App. April 30, 2012).