Portfolio Recovery v. Markley

STATE OF MAINE CUMBERLAND, ss:

PORTFOLIO RECOVERY, ) ) Plaintiff ) v. ) SMALL CLAIMS JUDGMENT ) LISA MARKLEY, ) ) Defendant ) ., ,--. :: --· .··. .i.,~i · ;;_ ·:, , ,

This matter came before the court for hearing on plaintiff's claim seeking recovery of $775.90 alleged to be the w1paid balance for charges and fees owed on an assigned/ purchased credit card account. Plaintiff appear d by counsel. Defendant was also represented by c unsel but did not appear h rself. Plaintiff did not present any wimess, and based its claim for recovery on the statement of claim, the affidavit by plaintiff's 'repres ntative' and attached documents that were submitted along with the original statement of claim. Defendant's counsel objected to the admission of the affidavit and documents. Defendant did not testify or present any other testimony or evidence. Counsel then argued their respective positions and the court took this case under advisement to review the documentary evidence presented and the argument of counsel.

In general, the rules of small claims procedure must be applied in these proceedings, and where no procedure or rule is presclibed, the court is instructed to proceed in a maimer consistent with an analogous provision of the Maine Rules of Civil Procedure. M.R.Sm.Cl.P. 15. Ther are several sp cific rules which have a bearing on the determination of this case. For example, M .R.Sm.Cl.P. 3(b) does not require the filing of any responsive pleading and specifically provides that " .. [i]f no responsive pleading is filed, all facts in the statement of claim shall be taken as denied.... ". Thus, unlike M.R.Civ.P 8(d), defendants in small claims' cases have no obligation to file anything, and their silence or inaction does not preclude or limit their defense. Plaintiff therefore retains the burden of proof to establish its claim by competent evidence at trial upon challenge by the defendant.

In its recent decision of Portfolio Recovery Associ.ates, LLC v. B£ckford, 2017 ME 140, <fi[ 12, 13 the Law Court has clearly stated that affidavits submitted as vid nee in lieu of testimony in small claims proceedings are admissible since there is no requirement that the plaintiff present a 'live' wih1ess to support its claim. At the same time, the Law Court specifically deferred to the ·trial court's assessment of th quality of the evidence pl'esented, as well as the weight given by the trial judge to that evidence in determining the claim. Id . at<[ 9. Previously this

Court has denied the admissibility of affidavits if the Plaintiff did not have a live witness to support its claim. The Court now reconsiders its position with regard to this issue upon re-examination of the Bickford cas . Therefore, this court now determines that it is required to accept the evidence presented by plaintilf and must then determine the weight and the sufficiency of this evidence in deciding this claim.

1. this case, the sta tement of claim avers that plaintiff is a purchaser of a credit card account originally owned by Synchrony Bank. The affiant, an employee of Portfolio Recovery Associates, states that she is "authorized to make the statements, representations and averments herein and do so based upon a review of the business records of [... JSynchrony Bank. She further describes the business records as maintained in the ordinary course of business. The affidavit however does not describe what first-hand knowledge, or any knowledge the affiant has regarding the ordinary course of business of Synchrony Bank. Nor does she state in the affidavit what personal know! dge she has with regard to Portfolio's business records practice. The photocopy of th affidavit of sale (completed by an "Affidavit D0cun1entation Specialist") is dated over a month after the date of sale and does not specifically reference or identify the defendant's alleged account. It contains the conclusion that the records transferred were " ... kept in the ordinary course of business ... " and that "the Creditor" has a process to detect and correct errors on these accounts ... " without further explanation.'

Additionally, the "Bill of Sale" references a Forward Flow accounts Purchase Agreem nt (the "Agreem nt) between Synchrony and Portfolio R covery, but no agreement is attached other than a two page print out of a chart with no title, or date, or signatures. The court finds that overall the quality, nature and manner of the evidence that plaintiff has submitted does not support its claim.'

The plaintiff's counsel aiiiculated the le.gal claims of 'breach of contract'. In order to .support a claim for breach of contract, plaintiff is first required to prove that the parties had a contract that evidences a meeting of the minds between the parties and mutual assent to by bom1.d by the material terms of that contract. Sullivan v. Porter, 2004 :rvIB 134, CJ[ 13; Ouellette v. Bolduc, 440 A.2d 1042, 1045 (Me. 1982). There must be credible evidence presented as to the specific material terms of the alleged contract existing between the partie . In the present case, there is no contract, no agreement and n explanation provided in supporting affidavit(s). In addition, plaintiff has simply produced copies of two bills, which simply document the credito.r 's demand for payment at that tim.e and a clain1 for interest

• • No information is given about the 'process', how the affiant knows about this 'process' or whether it was performed on the subject account record(s). ' The court notes that recent changes to legislation will require plaintiff in future cases of this type to provide a different quality and type of evidence in support of these claims. See, P.L. 2017 ch. 216, 32 M.R.S. § 11019 and§ 11013. To be clear, the court is not applying these standards or criteria to the transaction or claim in this case. However, it is an indication that the Maine Legislature has found fault with the quality of the evidence that creditors of assigned collection accounts like the plaintiff in this case have presented to the court in the past, as well as the manner in which these debts have been collected in this State.

or fees as of tha.t da,te in a specified amount without any proof that these were agreed upon terms between the parties.

In order to obtain relief for a breach of contract, a plaintiff must demonstrate that the defendant breached a material term of the contract and that the breach caused the plaintiff to suffer damages. Tobin v. Barter, 2014 ME 51, 9I 10. Again, plaintiff has failed to state or document the material term of the contract breached by the defendant, or that it ha suffered specific and justifiable damages.'

othing requires plaintiff or any creditor to file an action in small claims court.• The advantage of small claims actions is that the credjt r may obtain a faster judgment through less formal proceedings. At the sam tilne, despite the relaxation of the rules of evidence, nothing suggests that a plaintiff is still not required to meet the same burden of proof and Jegal standard for recovery required in other civil cases in order to obtain judgment in a contested case. The decision of this cow·t is not a barrier to recovery and several alten1atives are available to plaintiff in future cases of this type. Plaintiff can comply with the requirements of 16 M.R.S. § 355 and seek judgment on that basis.• Plaintiff can offei· supporting t stimony, which could include a prim request to allow a witness to testify by telephone or by other means of communication with proper safeguards imposed. Plaintiff can also seek to introduce other business records or documents through competent testimony to support its claim, which may include compelling the appearance of the defendant as a witness.• Instead, Plaintiff asks the Court to rely on minimal, mostly unreliable, evidence.

Therefore, for th reasons set forth ab ve, plaintiff has failed to meet its burden of proo( and it is HEREBY ORDERED that judgm · nt will be entered for the defendant.

, 14 M.R.S. § 7481 establishes that small claims is an alternative, and not an exclusive proceeding. •The court acknowledges that in light of Law Court decisions interpreting this statute and its requirements, it will be difficult for creditors like the present plaintiff (an assignee of an account) to meet the required legal standard for recovery as an account annexed. •The court does not suggest or impose the requirement that plaintiff produce and meetthe standard for affidavits or admission of business required by the rules of evidence or other ci vi1 cases at this time. See, P.L 2017, ch. 216, and future application of th provisions of 32 M.R.S. § 11013 to accounts purchased after 1/1/18. Cf. Arrow Financial Services v. Guiliani, 2011 ME 135, ~ 3, 32 A.3d 1055, 1056; Beneficial Maine v. Carter, 2011 ME 77, ~14, 25 A.3d 6,102. Ho, ever, depending on ils theory of recovery , plaintiff must still provide some crerubJe evidence demonstrating (1) that it is the owner of an account; (2) that defendant is liable on the account; (3) the contractual tenns and conditions of the account (rates of interest, fees charged, payment dates and amendments), and (4) how the damage claim was calculated.

The Clerk of Court is instructed pursuant to M.R.Civ. P. 79(a) to incorporate this order by making the following reference notation on the civil docket: "Judgment for defendant".

\.__j{ n ~ aria A. Woodman Judge, District Court Maine District Court