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Midland Funding, LLC v. Fernandez

Superior Court of New Jersey, Appellate Division

May 31, 2013

MIDLAND FUNDING LLC, Plaintiff-Respondent,
MICHELLE FERNANDEZ, Defendant-Appellant.


Submitted: May 15, 2013

On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. DC-2457-12.

Michelle Fernandez, appellant pro se.

Pressler and Pressler, LLP, attorneys for respondent (Lawrence J. McDermott, Jr., on the brief).

Before Judges Axelrad and Sapp-Peterson.


Defendant Michelle Fernandez appeals from the grant of summary judgment to plaintiff, Midland Funding, the assignee of a credit card previously issued to her by Bank of America (BOA). Defendant claimed there were disputed facts that justified denial of summary judgment. However, beyond her allegations and mere denials, the court found she presented no competent proof that would warrant denying plaintiff's claim. On appeal, defendant contends the court improperly relied on inadmissible hearsay documents, applied the incorrect standard of proof, and violated canons of judicial conduct. She also asserts defenses, for the first time, under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C.A. § 1692g(c). We are not persuaded by these arguments and affirm.

We recite the facts and evidence presented in the light most favorable to defendant, the nonmoving party, Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

On June 4, 2010, plaintiff purchased a portfolio of debt from BOA and its subsidiary FIA Card Services, N.A., which included a revolving VISA credit card account opened on August 12, 2002 by defendant and charged off on March 29, 2008. Records reflect that after the account was credited with two $160 payments by phone on March 31, 2008, the outstanding balance on the account was approximately $3900.

When plaintiff's pre-litigation attempts at collection were unsuccessful, it filed suit against her for the outstanding balance plus interest and costs.[1] Defendant filed an answer denying plaintiff's allegations, elaborating that she "can neither admit nor deny [p]laintiff's statement on the grounds that [d]efendant does not have current knowledge, possession, custody, or control of any contractual agreement with [p]laintiff(s)."

Plaintiff moved for summary judgment, supported by billing statements for the period from June 2007 through April 2008; defendant's credit report dated October 7, 2010, reflecting the underlying debt and assignment; a June 8, 2011 affidavit of sale and certificate of debt executed by Melinda Stephenson, a bank officer of FIA Card Services; a March 19, 2012 affidavit of Paula Hansen, a legal specialist for plaintiff's servicer; and brief. Defendant opposed the motion, contending she "never owned the subject account" and challenged the authenticity of the billing statements.

Following oral argument on June 20, 2012, the court granted plaintiff's motion and entered judgment in plaintiff's favor in the amount of $3922.34 plus costs. This appeal ensued.

On appeal, defendant argues: (1) the court improperly admitted Stephenson's and Hansen's affidavits into evidence as they failed to comply with the business records exception to the hearsay rule, N.J.R.E. 803(c)(6); (2) the documents submitted by plaintiff do not meet the requirements to obtain a default judgment as established by Rule 6:6-3(a); (3) the court erroneously stated that plaintiff did not need to prove it had the right to collect on this debt; (4) the FDCPA holds that failure to dispute a debt does not make a consumer responsible for that debt; and (5) the court violated Canons 1, 2(A), and 3(A)(3) of the Code of Judicial Conduct.

Based on our review of the record and applicable law, we are not persuaded by any of these arguments and affirm. When reviewing the grant of summary judgment, we apply the same standard as the trial court. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J.Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). We first decide whether there is a genuine issue of fact, and if there is not, we decide whether the trial court's ruling on the law was correct. Ibid. "[W]hen the evidence is so one-sided that one party must prevail as a matter of law, the trial court should not hesitate to grant summary judgment." Brill, supra, 142 N.J. at 540 (internal quotation marks and citation omitted). "Bare conclusions in the pleadings, without factual support in tendered affidavits, will not defeat a meritorious application for summary judgment." U.S. Pipe & Foundry Co. v. Am. Arbitration Ass'n, 67 N.J.Super. 384, 399-400 (App. Div. 1961). The legal conclusions of the trial court are reviewed de novo, without any special deference. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).

Defendant's initial settlement discussions with plaintiff are not evidential of her ownership of the account or liability for the debt. See N.J.R.E. 408 (offers of compromise are not admissible to prove liability); Wyatt v. Wyatt, 217 N.J.Super. 580, 686 (App. Div. 1986) (holding that payment offers do not imply a belief that a plaintiff's contentions are well-founded, but rather reflect "a purchase of the offeror's peace"). Accordingly, the FDCPA is irrelevant to this action.

Based on our review of the competent proofs in the record, we are satisfied that plaintiff presented sufficient undisputed evidence of the credit card debt warranting the entry of summary judgment in its favor as a matter of law. Stephenson is an authorized representative of the assignor's subsidiary and certifies that she has personal knowledge of the facts after having reviewed the account records maintained by the initiating entity in the normal course of business. Hansen, an authorized representative of plaintiff's servicer, attested to her personal knowledge of the account records pertaining to defendant maintained on plaintiff's behalf. The affidavits were properly considered as business records pursuant to N.J.R.E. 803(c)(6). We further note that defendant's credit report an objective document corroborates the underlying debt

Defendant misconstrues the judge's comment regarding plaintiff's burden of proof The judge did not rule that plaintiff did not need to prove its right to collect on the subject debt The challenged comments were made in the context of plaintiff's application to compel defendant to provide more responsive answers to its interrogatories Essentially defendant argued that she would not respond unless and until plaintiff first provided information proving the account belonged to defendant The judge merely reminded defendant that plaintiff did not have to provide proof prior to obtaining her answers to interrogatories.

Defendant's argument that the judge violated the Code of Judicial Conduct by exhibiting bias towards her attempting to coerce her into assuming responsibility for the debt repeatedly calling her a liar making threatening comments to her and interrupting her during oral argument is not supported by the record This argument is without sufficient merit to warrant further discussion R 2:11-3(e)(1)(E).


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