Today we bring you a new decision from New York City's Richmond County Civil Court in which the court denied a motion by American Express Bank seeking a default judgment against an alleged credit card debtor. The March 14, 2011 decision, written by Hon. Philip S. Straniere, set out a lengthy list of Amex's failures of proof.
The court first addressed the Affirmation submitted by Amex's counsel. The court noted the affirmation did not meet the requirements of NY State Technology Law § 306 (an electronic record may be admitted into evidence as long is its admission complies with CPLR § 4539) and CPLR § 4539 (reproduction of evidence must be authenticated by testimony/affidavit that includes a statement of the manner or method by which tampering or degradation of reproduction was prevented).
Additionally, the court said, counsel’s affirmation did not attach the electronic records he reviewed, and the affirmation was not made by someone with personal knowledge that the records are maintained in such a way that such degradation did not take place.
Next, the court stated, the plaintiff made no showing or even an allegation that the plaintiff ever attempted to deliver a copy of the agreement to the defendant. Further, as to the agreement attached to the complaint, the only date on it was one month before the date of the first monthly billing statement provided by the plaintiff, making it unlikely that this was the agreement in effect when the account was opened.
The account statements offered by plaintiff showed no purchases or other consumer generated activities which established use of the card. In addition to not showing any activity by the consumer, all billing statements submitted by plaintiff pre-dated the date on the contract.
The plaintiff failed to establish by someone with personal knowledge of the history of the defendant’s account when the agreement went into effect, when the terms were allegedly communicated to the defendant and when any of the alleged charges were incurred.
As to the Custodian of the Records Affidavit submitted by Amex, it was based only on “access to the records of the defendant;” the custodian did not state that he had personal knowledge as to how the records are gathered and maintained. This Affidavit also was not in compliance with Technology Law § 306 and CPLR § 4539.
An amendment of the alleged original cardholder agreement was also submitted by the plaintiff; it was not accompanied by an affidavit made by someone with personal knowledge of the procedures used by the plaintiff to notify cardholders of the new terms and conditions, when and how this new agreement was transmitted to defendant, and what procedures are used by the plaintiff to notify the cardholder of the new policy. The affidavit also did not indicate that the affiant had any personal knowledge as to the specifics of this particular account. The court also noted that the amendment was dated after the commencement of the litigation.
Neither the agreement nor the amendment complied with CPLR § 4544, which governs contracts in small print. Plaintiff has the obligation to make sure its contracts comply, and has the burden of proof, and thus must allege it in its application for default judgment.
Based on the documents submitted, the court said, there was no way for the court to determine how much of the amount claimed due was the result of purchases made by the defendant and to what extent the debt resulted from the interest being assessed.
Additionally, the Affidavit of Fact was styled as an Affirmation, which only attorneys can make. The Affidavit of Fact claimed personal knowledge, yet gave no explanation as to how the plaintiff's records were maintained, the method used to input information into the computer, the relationship between the computer records and the generation of monthly statements, how the computer system kept track of the original cardholder agreements and amendments, and how/when they were conveyed to the cardholder. There also was nothing to link these records to the defendant. Also, there was nothing in the affidavit to indicate when the account was opened, when charges were incurred, when the last payment was made, when changes to agreement were mailed, when changes went onto effect and how the total claimed due was calculated.
The court also noted a number of defects as to the form of several of the documents submitted which would render them inadmissible under the CPLR and court administrative rules.
Judge Straniere concluded his opinion with the following:
"This court beleives that people who make purchases using their credit cards should pay for them. However, when they do not pay the debt, and plaintiffs use the court system to enforce the obligation, the rules of evidence and legal precedents existing will then govern the transaction. If this is creating the impression that courts are "pro-consumer," the credit card industry need only look in the mirror to see the real reason for this seeming intense judicial scrutiny."
The case is called American Express Bank, FSB v Dalbis, 2011 NY Slip OP 50366 (U)
- Sheril Stanford