Sherri R. Dicks v. Delaware Acceptance Corporation

IN THE COURT OF COMMON PLEAS FOR THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
SHERRI R. DICKS, )
Defendant-Below/Appellant, )
)
)
)
v. ) C.A. No.: CPU4-11-002660
)
DELAWARE ACCEPTANCE )
CORPORATION, )
Plaintiff-Below/Appellee. )
Submitted: January 24, 2014
Decided: February 18, 2014
Elwood T. Eveland, Jr., Esquire Patrick Scanlon, Esquire
715 N. King Street, Suite 200 203 NE Front Street, Suite 101
Wilmington, DE 19801 Milford, DE 19963
Attorney for Appellant Attorney for Appellee
MEMORANDUM OPINION AND ORDER
ON APPELLEE’S MOTION FOR SUMMARY JUDGMENT
PROCEDURAL HISTORY
This is an appeal from the Justice of the Peace Court. On April 9, 2010, Delaware
Acceptance Corporation (hereinafter “DAC”) filed a Complaint in the Justice of the Peace
Court against Defendant, Sherri R. Dicks (hereinafter “Dicks”), alleging that Ms. Dicks
entered into a credit card agreement with Chase Manhattan Bank (hereinafter “Chase
Manhattan”), whereby Chase Manhattan issued Ms. Dicks a credit card with an account
number ending in 5749. The account was allegedly assigned to Vion Holdings, LLC
(hereinafter “Vion Holdings”), then to Portfolio Investment Exchange, Inc. (hereinafter
“Portfolio Investment”), and finally to DAC. DAC claims Ms. Dicks defaulted on the
account, and DAC, as assignee of the account, seeks damages in the amount of $8,002.49.
DAC also seeks court costs and post-judgment interest at the legal rate. On March 16, 2011,
trial was held, and on April 13, 2011, the Honorable Robert C. Lopez issued a decision in
favor of DAC in the amount of $8,002.49 plus pre-judgment interest of $1,571.17, court
costs of $40.50, and post-judgment interest at a rate of 9.75%.
On April 27, 2011, following the Justice of the Peace decision, Ms. Dicks appealed to
the Court of Common Pleas. Ms. Dicks denies the debt and default thereon. She also
brings a Counterclaim against DAC for falsely representing the amount of the debt in
violation of 15 U.S.C. §1692(e)(2). The Counterclaim was dismissed on December 9, 2011.
This Court previously denied DAC’s Motions for Summary Judgment on May 3, 2012, on
the basis that a genuine issue of material fact existed as to the actual owner of the account.1
On September 10, 2013, DAC brings this Motion for Summary Judgment. DAC
allege it did provide sufficient documentation to support a finding that DAC is the assignee
of the account, and therefore, is entitled to judgment on the proceedings.2
On November 15, 2013, the Court held a hearing on DAC’s Motion. The Court
ordered both attorneys to submit supporting arguments regarding the assignment and
validity of the debt.
1 Judge Davis based his ruling on his previous decision in the case Delaware Acceptance Corp. v. Swain, 2012
WL 830563 (Com. Pl. Jan. 31, 2012) (relating to the admissibility of affidavits and spreadsheets describing the
chain of custody of certain accounts).
2 The sole issue remaining in this matter is the ownership of the account after it was charged off. Ms. Dicks
is no longer denying that this is her account, nor is she pursuing a challenge to the balance owed.
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PARTIES’ CONTENTIONS
DAC contends that it is entitled to Summary Judgment because there exists no
genuine issue of material fact regarding Ms. Dicks’ account. Ms. Dicks has previously
admitted to the existence of the account, admitted that she made charges on the account,
and that a balance still remains due on the account.
Ms. Dicks contends that Summary Judgment should be denied because DAC has
failed to show that it is the actual owner of the account. Ms. Dicks asserts that the
documents upon which DAC bases its arguments to establish ownership do not contain
specific detail sufficient to identify which accounts were bought and sold to the various
purchasers in this matter, and therefore DAC cannot conclusively establish its ownership.
DAC counters Ms. Dicks’ ownership argument by alleging that it has provided a
chain of title, affidavits, and documents supporting its position that it is the proper owner of
the account. DAC contends that the affidavits are not hearsay, as the affiants have personal
knowledge of the matters to which they attest.
DISCUSSION
Under CCP Rule 56(c), “[t]he judgment shall be rendered forthwith if the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, show that there is no genuine issue as to any material fact and that the moving party is
entitled to judgment as a matter of law.”3 If the Court determines that material issues of fact
3 CCP Civ. R. 56(c).
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do exist, then summary judgment must be denied. DAC has the burden to show the chain
of title in order to prove that it is the proper party to bring the action.4
DAC argues that it has proven its ownership of Ms. Dicks’ account by a
preponderance of the evidence, relying upon the affidavits of both Bruce Gilmore
(hereinafter “Gilmore”)5 and Daniel Scanlon (hereinafter “Scanlon”)6 in addition to
documents from Global Debt Registry, LLC’s (hereinafter “GDR”) databases.
Gilmore’s first affidavit, dated January 26, 2011, outlines the transfer of accounts
originating from Chase Bank USA, N.A. (hereinafter “Chase Bank”) to DAC using GDR’s
databases. Gilmore affirmed the following:
1) On June 29 2009, CHASE BANK USA, N.A. registered with GDR a
portfolio of account receivables with Portfolio Certification Number
1000001;
2) On June 29 2009, CHASE BANK USA, N.A. sold to VION HOLDINGS
LLC a portfolio of account receivables with Portfolio Certification
Number 1000002...
4) On August 03 2009, VION HOLDINGS LLC sold to PORTFOLIO
INVESTMENT EXCHANGE, INC. a portfolio of account receivables
with Portfolio Certification Number 1000032…
6) On August 31 2009, PORTFOLIO INVESTMENT EXCHANGE, INC.
sold to DELAWARE ACCEPTANCE CORPORATION a portfolio of
account receivables with Portfolio Certification Number 1000035.
7) Portfolio Certification Number 1000035 is made up of selected accounts
from Portfolio Certification Number(s) 1000001, 1000002, 1000003,
1000032, 1000033. These transfers were recorded by GDR.7
4 Dahlink Financial Corp. v. Bochniak, 2012 WL 1415815 at *6 (Del. Com. Pl. Mar. 13, 2012).
5 Gilmore is the President and Chief Information Officer of Global Debt Registry, LLC. He affirms in his
affidavits that he has personal knowledge of GDR’s practices involving the registration, sale, and transfer of
accounts. He does not specify whether he is the custodian of the books and records.
6 Scanlon is an authorized representative of DAC who has personal knowledge of the books and records of
DAC, which are kept in the ordinary course of business and the entries in which are made at or near the time
of occurrence.
7 Pl. Mot. Summ. J., Ex. E, at 8.
4
Gilmore’s affidavit identifies that Chase Bank registered a portfolio of account
receivables with GDR. However, Plaintiff has not provided an affidavit from a Chase Bank
representative who possesses personal knowledge of the books and records, that Chase Bank
did, in fact, transfer particular documents and account information related to Ms. Dicks’
account to GDR. Plaintiff has also not produced any documentation detailing the contents
of the Chase Bank portfolio received by GDR, including specific information about
individual accounts within the portfolio.
Plaintiff has attempted to rely upon its Exhibit 1, which is the “Chain of Title” for
Ms. Dicks’ account, as proof of the transfer of the account from Chase Bank through to
DAC. However, Plaintiff’s Exhibit 1 states that Chase Manhattan is the original issuer of the
account, not Chase Bank.8 Plaintiff identifies its Exhibit 4 as giving rise to this assertion.
However, Exhibit 4 shows that Chase Bank, not Chase Manhattan, transferred accounts to
Vion Holdings LLC (hereinafter “Vion Holdings”). The failure to identify which of the
Chase companies was the original holder of Ms. Dicks’ account creates confusion about the
actual owner of the account, and put in question the entire chain of title proffered by the
Plaintiff, and relied upon in its arguments.
A similar situation was considered in Klinedinst v. CACH, LLC.9 In Klinedinst, Judge
Graves noted that an affidavit in which the affiant mentions multiple banks,10 and then fails
to “clearly establish what entity transferred the account to [the Plaintiff],” ultimately results
8 Pl. Mot. Summ. J., Ex. E, at 1.
9 Judge Graves noted that CACH’S failure to properly identify the original owner of the account affects its
ability to properly establish which entity transferred the account at issue to CACH. Klinedinst v. CACH,
LLC, Del. Super., C.A.No. S13A-07-004, Graves, J.
10 “The affidavit mentions Bank of America; Bank of America, NA; MBNA Bank NA; Fleet Bank, NA; Bank
of America Card Services; and FIA Card Services.”
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in “confusion about what entity actually owned the account and/or whether several entities
owned the account over the years.”11 Judge Graves continued to analyze this chain of title
problem, and noted that CACH identified the assignor as MBNA Bank, N.A., but the Court
determined that the assignor was actually FIA Card Services, NA. The Court noted that the
documents produced failed to correctly establish the chain of title, leaving CACH with a
“problematical” position.12 In this matter, while all of the banks involved are not expressly
written out in a single affidavit, the name of the account originator in DAC’s chain of title
chart and the name of the account originator in DAC’s Transfer of Ownership Reports do
not match. Identifying banks with different names causes confusion regarding the name of
the actual account originator, because there cannot be two. A genuine issue therefore exists
as to the actual account owner.
Gilmore’s second affidavit, dated October 15, 2010, explains the registration,
verification, and transfer of ownership processes within GDR, and discusses the security
measures in place for GDR’s databases. Gilmore affirmed that each account registered with
GDR is given an identifying number and placed in a “portfolio,” which also has an
identifying number different from the original account numbers. When accounts and
portfolios are bought and sold using GDR’s system, each participant will electronically sign
the transfer documents, which are then recorded by GDR, along with any other business
records associated with the particular accounts.13 DAC attached as exhibits the “Transfer of
11 Klinedinst v. CACH, LLC, Del. Super., C.A.No. S13A-07-004, at *2.
12 Id. at *8.
13 Pl. Mot. Summ. J., Ex. 11. The affidavit states: “The information provided by the Issuer to GDR include,
but are not limited to, the identity of the original Issuer, account number, debtor name(s), debtor social
security number(s), date of account origination, date of first delinquency, charge off date, last payment date
and amount, and balance(s) at charge off.”
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Ownership Reports,” each of which have been electronically generated and electronically
signed by representatives of Chase Bank, Vion Holdings, Portfolio Investment, and DAC,
respectively.14
While Gilmore’s affidavits are quite detailed as to the process of purchasing and
selling charged-off accounts, they lack the necessary specificity to overcome any doubts that
Ms. Dicks’ account in particular was properly transferred to each of the parties in the
ownership chain above. Gilmore’s affidavits may detail the transfer of particular portfolios
of account receivables, but they fail to detail which individual accounts were contained
within the portfolios.
The “Transfer of Ownership Reports” generated for each sale of accounts using
GDR’s system identifies the number of accounts contained in a particular portfolio, but does
not detail which accounts were included in the portfolios. With respect to the Chase Bank
to Vion Holdings transfer, 32,158 accounts were sold. In the Vion Holdings to Portfolio
Investment transfer, 334 accounts were sold. Finally, in the Portfolio Investment to DAC
transfer, only 96 accounts were sold. DAC has provided no documents, i.e., a verified
spreadsheet, that would confirm that Ms. Dicks’ account was actually one of the 96 accounts
transferred to DAC.15 However, it seeks to have the Court accept only on the “Account
14 Pl. Mot. Summ. J., Ex. E, at 4-6. Mr. Gilmore affirms in his affidavit that “[t]he identity of each
participant in the debt sale is authenticated by GDR and has attested to its authority to sign legal documents
on behalf of the Issuer, Debt Buyer, or Debt Owner.” The affidavit does not state whether the individuals
signing the Transfer of Ownership Reports has personal knowledge of the books and record keeping
procedures of the companies they represent.
15 In Delaware Acceptance Corp. v. Swain, 2012 WL 6042644, at *1 (Del.Super. Nov. 30, 2012), the Court
noted that at trial, “Scanlon acknowledged…that the Assignment and Bill of Sale did not specifically identify
which accounts were transferred in that sale.” The Court did note, however, that “Scanlon testified that,
following DAC’s acquisition of the accounts, GACC transmitted a multi-page spreadsheet listing the accounts
transferred, along with identifying information, such as the account holder’s name, address, and social
security number.” In the instant matter, Plaintiff attached what appears to be an entry in a spreadsheet,
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History Report” for Ms. Dicks’ account as generated by GDR.16 The Court, therefore, has
no means to verify that Ms. Dicks’ account was actually included in all of the
aforementioned portfolio transfers, even if DAC could somehow prove that Chase Bank
was the proper owner of the account, rather than Chase Manhattan.17
While it appears that DAC seeks to rely upon Gilmore’s affidavit describing the
Account History Report for Ms. Dicks’ particular account,18 it cannot show that the records
from Chase Bank were “made by or from information transmitted by a person with
knowledge.”19 Thus, the Court is not satisfied that the records and documents provided by
DAC is sufficient to show that Ms. Dicks’ account was transferred to the particular parties,
thus this is a factual matter for trial.
DAC also relies upon the September 9, 2013 affidavit of Mr. Scanlon to prove its
ownership. Scanlon’s affidavit provides as follows:
which includes Ms. Dicks’ name, account number 5749, Ms. Dicks’ address, and other identifying
information. The entry lists Chase Manhattan as the Original Client, and lists Portfolio Investments as the
Seller. However, there are no identifying features on this document that identifies the owner of the
information, nor does it provide a certification that the information contained in the document is accurate.
Additionally, DAC has not provided any affidavits that verify the accuracy of the information contained in
the entry.
16 Pl. Mot. Summ. J., Ex. E., at 2. Mr. Gilmore’s affidavit states that “[t]he Account History Report includes
a Chain of Ownership Summary beginning with the Initial Registration and details each successive Transfer
of Ownership.” The affidavit further states that the documents associated with the accounts, as provided by
the Issuer and/or the Debt Owner are transferred as well. He does not confirm whether GDR seeks
affidavits as to the validity of such documents, or whether it merely uploads what is provided, assuming it to
be valid.
17 Pl. Mot. Summ. J., Ex. E, at 4-6.
18 The “Account History Report” identifies account number 5749 as Ms. Dicks’, identifies that it was
originally issued by Chase Bank USA, N.A., and states that the charge-off balance on the account is
$8,002.49. The Report also contains a “Chain of Ownership Summary,” detailing the numerous transfers
alleged by Plaintiff in the Motion.
19 Klinedinst v. CACH, LLC, Del. Super., C.A.No. S13A-07-004, at *8; see also Commonwealth Financial
Systems v. Smith, 2010 WL 3491225 at *12 (Pa.Com.Pl. Jan. 26, 2010) (requiring an authenticating witness to
“provide sufficient information relative to the preparation and maintenance of the records to justify a
presumption of trustworthiness for the business records of a company”).
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1. That I am a representative of the Plaintiff, Delaware Acceptance Corp, in
the above-captioned action and am authorized to make this Affidavit.
2. That Delaware Acceptance Corp is the rightful owner of this account.
3. That one of my responsibilities is to serve as keeper of the books and
records of Delaware Acceptance Corp, which are kept in the ordinary
course of business, with the entries in them having been made at or near
the time of the occurrence.
4. That I have reviewed the books and records of Delaware Acceptance Corp
with respect to the indebtedness of Sherri R. Dicks, Defendant, and the
books and records reflect that as of September 9, 2013 there was a
principal amount due of $8,002.49 plus pre-judgment interest at the rate of
9.75% per annum, plus post-judgment interest at the rate of 5.75% per
annum from the date of judgment, plus costs.
5. That the facts contained in this Affidavit are true and correct to the best of
my knowledge and belief.20
Scanlon states that “DAC is the rightful owner of this account,” but does not
demonstrate that he has knowledge of the transfer of the account from the alleged assignees,
starting from Chase Bank or Chase Manhattan. As the Superior Court pointed out with
respect to an affidavit in Klinedinst, “She [affiant] cannot testify regarding how the various
parties in the chain of title… maintained their records; i.e., she cannot testify that the records
were made by or from information transmitted by a person with knowledge.”21 Scanlon’s
affidavit, similarly, cannot prove that DAC is the rightful owner of the account simply
because the “books and records” of DAC contain information regarding Ms. Dicks’ account.
Finally, DAC argues that it can prove ownership of the account because “[t]he
circumstances surrounding the sale create no suggestion of irregularity.” DAC alleges that
because it “has possession of the monthly billing statements from the original creditor,
Chase Bank, to the Defendant,” and the possession of such information “is prohibited to
anyone who is not the owner of the account, it must be the true owner.” DAC also argues
20 Pl. Mot. Summ. J., Ex. F.
21 Klinedinst v. CACH, LLC, Del. Super., C.A.No. S13A-07-004, at *8.
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that because no other creditor has come forward to claim ownership over the account, and
the statute of limitations has expired, “Defendant suffers no risk of double jeopardy.”22
This matter is not the first time a party has attempted to use such argument. In both
Delaware Acceptance Corp. v. Swain23 and Klinedinst v. CACH, LLC, DAC and CACH attempted
to rely upon this argument as a basis to prove ownership, and in both cases the Court
deemed the argument without merit.24 Based upon the conclusions reached in these
decisions, I find no basis to give weight to this argument.
The Court is not satisfied, after a review of the documents and arguments submitted
by each party, that DAC has proven by a preponderance of the evidence that it is the owner
of Ms. Dicks’ account and thus the proper party to bring this suit. DAC has not produced a
clear Chain of Title, and therefore a genuine issue of material fact exists with respect to the
true owner of Ms. Dicks’ account.
CONCLUSION
Therefore, IT IS HEREBY ORDERED this 18h day of February, 2014 that
DAC’s Motion for Summary Judgment is DENIED. The Clerk will schedule the matter for
trial.
22 Pl. Open. Br. in Support of It’s [sic] Mot. Summ. J., at 5.
23 2012 WL 830563 at *7.
24 Del. Super., C.A.No. S13A-07-004, at *9,
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IT IS SO ORDERED.
__________________________________
The Honorable Alex J. Smalls
Chief Judge
Dicks-ORD Feb 2014
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