451 B.R. 213
Bankr. M.D. Ga.2011Background
- Three objections to proofs of claim were filed in three separate bankruptcies where eCAST Settlement Corporation is the common claimant.
- Putative assignors were Citibank (South Dakota), N.A. for Pursley and Crane, and Chase Bank USA, N.A. for Hamby; all debtors scheduled the respective creditors as originating entities.
- eCAST claimed to have purchased the debts postpetition and attached blanket assignments and voluminous summaries in each claim.
- Debtors contested sufficiency of documentation and the identity of the real party in interest; eCAST declined to provide underlying documents.
- Amendments to the claims added affidavits of sale/assignment and additional account statements, but no direct copies of electronic files or exhibits were produced at hearing.
- Court conducted a joint hearing and issued a memorandum sustaining all three objections to claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Stephens law rejection | Pursley/Crane/Hamby urge Stephens overruled or distinguished against aggressive proof burden. | eCAST defends Stephens-based rationale for strict assignment proofs and summaries. | Stephens disapproved to the extent it heightens proof-of-claim burden; still requires state-law proof of assignment. |
| Rule 3001 and Official Form 10 compliance | Claimants may rely on summaries per Form 10, with attached documents not always available. | Attachments and summaries must sufficiently prove the writing basis and ownership to sustain prima facie validity. | eCAST claims provided sufficient documentation for prima facie validity under Rule 3001 and Form 10. |
| Effect of noncompliance on disallowance | Noncompliance alone should disallow a claim under exclusive view. | Noncompliance may not alone disallow; objections require evidence shifting burden depending on view. | Court adopts nonexclusive view, allowing objections based on lack of ownership or enforceability under state law when documentation is insufficient. |
| Evidence required to shift burden on objection | If prima facie validity exists, objector must present sufficient evidence to negate essential claim elements. | If no prima facie validity, objector's burden is lower; need not meet 3001(f) presumption. | Burden shifts to objector when prima facie valid; otherwise state-law burden prevails; here burden shifted due to noncompliant assignment proofs. |
Key Cases Cited
- In re Stephens, 443 B.R. 225 (Bankr.M.D.Ga.2010) (an assignee must prove a valid chain of assignment under state law)
- In re O'Brien, 440 B.R. 654 (Bankr.E.D.Pa.2010) (Rule 3001 and Form 10; prima facie evidence; assignment documentation debated)
- In re Kirkland, 572 F.3d 838 (10th Cir.2009) (lack of documentation can disallow a claim under 502(b); exclusive vs nonexclusive views)
- In re Shank, 315 B.R. 799 (Bankr.N.D.Ga.2004) (burden and evidentiary standards for claims with insufficient documentation)
- In re Cluff, 313 B.R. 323 (Bankr.D.Utah.2006) (summary in lieu of documents; production of underlying documents upon request)
- In re Relford, 323 B.R. 669 (Bankr.S.D.Ind.2004) (summary of charges and required breakdowns; open-end vs closed-end distinctions)
- In re Moreno, 341 B.R. 813 (Bankr.S.D.N.Y.2006) (case-by-case assessment of documentation necessity for proofs of claim)
- In re Kemmer, 315 B.R. 706 (Bankr.E.D.Tenn.2004) (basis of credit card debt may include underlying agreement and transactions)