New Century Financial Services Inc. v. Oughla
437 N.J. Super. 299
| N.J. Super. Ct. App. Div. | 2014Background
- Debt buyers sue to collect assigned, charged-off credit card debts, seeking summary judgments on ownership and amount due.
- Two consolidated actions: New Century v. Oughla and MSW Capital v. Zaidi, both involving debts originating with Credit One and Chase/WAMU families.
- Issuers typically sell portfolios via electronic data files; purchasers rely on business records and periodic statements to prove ownership and amounts due.
- The trial court granted some summary judgments based on certifications and account statements, prompting appeals and an amicus brief.
- Key legal framework requires proof of ownership (full chain of title) and the amount due, with admissibility of electronic business records under NJR.E. 803(c)(6).
- Court analyzes whether lack of notice of assignment affects validity, whether assignments need to name specific accounts, and whether affidavits from all transferors are required.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was the full chain of assignments proven for Oughla’s debt? | New Century established ownership through a sequence of bill of sale/assignments and supporting electronic data files. | First link (Credit One to MHC Receivables) lacking; chain incomplete. | Oughla: reversed; full chain not proven; remand for admissible proof. |
| Was the chain of assignments proven for Zaidi’s debt? | MSW Capital proved ownership via Whipple certifications with attached bills of sale and multiple assignments. | Certifications insufficient to prove the transfer from WAMU to Chase and some assignments unclear. | Zaidi: affirmed; MSW Capital established ownership; summary judgment upheld. |
| Are the account statements admissible as business records to establish the amount due? | Statements qualify under NJR.E. 803(c)(6) as routine business records, especially for open-end credit regulated by TILA/Regulation Z. | Statements are hearsay without adequate foundation, especially after multiple transfers. | Admissible; statements provide prima facie proof of the amount due. |
Key Cases Cited
- New Century Fin. Servs., Inc. v. Dennegar, 394 N.J. Super. 595 (App. Div. 2007) (admissibility of monthly statements on assigned claims)
- Ford v. Ford, 418 N.J. Super. 596 (App. Div. 2011) (affidavits establishing ownership must meet specific authentication standards)
- Colvell v. LVNV Funding, LLC, 421 N.J. Super. 1 (App. Div. 2011) (summary judgment standards for credit card claims; Rule 6:6-3(a) guide)
- Sullivan v. Visconti, 68 N.J.L. 543 (Sup. Ct. 1902) (standing to sue in assigned claims; essential element of proof)
- Hahnemann Univ. Hosp. v. Dudnick, 292 N.J. Super. 11 (App. Div. 1996) (business records foundation for NJR.E. 803(c)(6))