Discover Bank v Kenney

[*1] Discover Bank v Kenney 2017 NY Slip Op 51179(U) Decided on September 14, 2017 District Court Of Suffolk County, Third District Matthews, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on September 14, 2017
District Court of Suffolk County, Third District

Discover Bank, Plaintiff,

against

Adam K. Kenney, Defendant.



HUCV 50193-16
James F. Matthews, J.

Upon the following papers numbered 1 to 24 read on this motion for summary judgment by plaintiff by Notice of Motion/Order to Show Cause and supporting papers 1-20 ; Notice of Cross Motion and supporting papers; Answering Affidavits and supporting papers 21,22 ; Replying Affidavits and supporting papers 23,24 ; Filed papers;

Other; and after hearing counsel in support of and opposed to the motion)

it is,

ORDERED that the motion by plaintiff for an order granting summary judgment in its favor, for the relief demanded in the Complaint, is denied.

The Court determines that plaintiff has failed to meet its burden of demonstrating prima facie entitlement to judgment, as a matter of law, on its claims that defendant breached the contract terms of the retail credit card agreement with plaintiff by failure to make payments for accumulated credit card debt in the sum of $3,545.51, and failed to make payments for an account stated in the same amount.

A proponent of a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law with proof in admissible form sufficient to establish the lack of any material issues of fact (see Alvarez v Prospect Hospital, 68 NY2d 320, 324 [1986]; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). Submission of evidentiary proof must be in admissible form (see Friends of Animals v Associated Fur Mfgs., NY2d 1065 [1979]). Moreover, the submitted facts must be viewed in a light most favorable to the non-moving party (see William J. Jenack Estate Appraisers and Auctioneers, Inc. v Rabizadeh, 22 NY3d 470, 475 [2013]). If the moving party fails to make such prima facie showing, then denial is required "regardless of the sufficiency of the opposing papers" (see Alvarez v Prospect Hospital, supra at 324; Winter v [*2]Black, 95 AD3d 1208, 1208 [2nd Dept 2012]).

Once a showing of entitlement to summary judgment has been made, the burden shifts to the party opposing the motion for summary judgment, to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action (see CPLR 3212 [b]; Alvarez v Prospect Hospital, supra at 324; Zuckerman v City of New York, supra at 562). Evidentiary proof must be in admissible form, and cannot be "mere conclusions, expressions of hope or unsubstantiated allegations or assertions" (Id. at 562; Javaheri v Old Cedar Development Corp., 84 AD3d 881, 887 [2nd Dept 2011]).

Here, plaintiff has failed to establish prima facie proof of the specific terms of the credit card agreement in effect when the credit account was opened, with revisions, or the outstanding balance due, through the date of the final statement (see Citibank (S.D.), N.A. v Martin, 11 Misc 3d 219 [NY City Civ. Ct 2005]). New York law also requires that a copy of any credit card agreement be mailed to a New York cardholder (see Personal Property Law §413[11][e], captioned "Retail Installment Credit Agreements").

The affidavit of Phyllis Scholey ("Scholey" or "Scholey's Affidavit"), a Litigation Support Specialist for Discover Products Inc., a successor by merger to DB Servicing Corporation, the servicing affiliate for Discover Bank, an FDIC insured Delaware State Bank, states "this is an action to recover a balance due under a Credit Card Agreement entered into by the defendant and the plaintiff." The statement is conclusory, with no factual information affirmatively explaining how the Credit Card Agreement was entered into by defendant. Indeed, plaintiff has failed to show as part of its prima facie case that a copy of the retail installment credit agreement was ever mailed to defendant, with revisions, in the ordinary course of plaintiff's business (see Discover Bank v Shimer, 36 Misc 3d 1214[A][D Ct, Nassau Cty, First District, 2012]), and in compliance with the mailing requirement of Personal Property Law §413[11][e]. Without proof of actual mailing, or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed, plaintiff cannot avail itself of the rebuttable presumption of receipt by the addressee (see Matsil v Utica First Ins. Co., 150 AD3d 982 [2nd Dept 2017]).

Nevertheless, plaintiff's summary judgment motion relies upon the submission of a purported copy of the terms and conditions of plaintiff's retail credit card installment agreement with defendant ("agreement"), and statements of account, without proper foundation for admission as evidence. The purported agreement and account statements are being offered for the truth and veracity of the contents of the statements, and are hearsay documents, which may be considered only if they fall within one of the recognized exceptions to the hearsay rule (see Rushmore Recoveries X, LLC. v Skolnick, 15 Misc 3d 1139[A][D Ct, Nassau Cty, 2007]).

Plaintiff's reliance upon the business records exception to the hearsay rule, requires the showing of a proper foundation, before the agreement and statements of account can be accepted as prima facie evidence of their contents (Id.; CPLR 4518[a]). "A proper foundation for the admission of a business record must be provided by someone with personal knowledge of the maker's business practices and procedures" (see Discover Bank v Shimer, supra, citing Unifund CCR Partners v Youngman, 89 AD3d 1377 [4th Dept 2011]).

Scholey's affidavit attempts to portray her as "knowledgeable" of the matters set forth, by reason of her "examination of the books and records of the plaintiff maintained in the regular [*3]course of business" because she "has access to these records."[FN1] Scholey further states she is "familiar with the manner and method by which plaintiff maintains its normal business books and records including computer records of defaulted accounts."

Scholey then continues:

"the books and records are made in the course of regularly conducted business activity: (1) at or near the time the events they purport to describe occurred by a person with knowledge of the acts and events, or(2) by a computer or other similar digital means, which contemporaneously records an event as it occurs."

Scholey then concludes:

"The contents of this affidavit are believed to be true and correct based upon my personal knowledge (emphasis added) of the processes by which plaintiff maintains its books and records. These books and records are made in the course of regularly conducted business activity of the plaintiff and it is plaintiff's regular course of business to make such records."

The Court finds that Scholey's affidavit fails to demonstrate her personal knowledge of the plaintiff's business practices and procedures (see Discover Bank v Shimer, supra). The repetitive use of the phrase "in the regular course of business" standing alone, "does not establish that the records upon which plaintiff relies were made in the regular course of the plaintiff's business, that it was part of the regular course of the plaintiff's business to make such records, or that the records were made at or about the time of the transaction recorded" (see Rushmore Recoveries X, LLC. v Skolnick, supra at *3; CPLR 4518 [a]).

Scholey's statements are conclusory and lack any distinct facts which would support her claim of "personal" knowledge of any of the plaintiff's business practices and procedures (see Discover Bank v Shimer, supra at *2). There are no factual explanations which describe her duties as an employee and her length of time of employment (Id. at *3). There is no sworn statement demonstrating Scholey's personal knowledge of how and when the retail installment credit agreement and statements of account were mailed to defendant, or a description of the regular office practices and procedure of plaintiff for the mailing of the documents designed to insure that they are always properly addressed and mailed (see Matsil v Utica First Ins. Co.,supra; Rushmore Recoveries X, LLC. v Skolnick, supra at *4). There is no factual statement demonstrating Scholey's personal knowledge of how plaintiff maintains its normal business practices and procedures including computer records of defaulted accounts (Id. at *3). There is no factual statement showing Scholey's personal knowledge of the business practices and procedures used by plaintiff to show how the "monthly statements were forwarded to the defendant at the address provided by the defendant since the opening of the account" (Id. at 3). Nor is there any factual statement of how Scholey had personal knowledge of defendant's receipt and retention of the monthly statements from plaintiff. Indeed, Scholey's conclusory statements in her affidavit could be used repetitively for any other defaulting credit card holder, merely by changing the dates and balance due.

It is readily apparent that Scholey's alleged personal knowledge was obtained from the documents and records ostensibly created by plaintiff which have now come into Scholey's [*4]possession (Id. at 3). Indeed, Scholey's affidavit states she is an employee of Discover Products Inc., which is the "successor by merger to DB Servicing Corporation,, the servicing affiliate for Discover Bank." Where, as here, in the absence of proof from a representative of plaintiff attesting to its own record keeping practices and procedures relating to defendant's credit account, and related proof of its business duty to provide accurate information to its "servicing affiliate," a proper foundation for plaintiff's business records is insufficient (see Discover Bank v Shimer, supra at *3).

The Court notes there is no explanation concerning the attached purported agreement, as it is not attached as an exhibit nor identified as such, nor is it referred to or supported by Scholey's affidavit.

Moreover, it is not referred to or explained by a supporting attorney's affirmation, and no foundation is made for its submission as evidentiary proof. But, Plaintiff's attorney states in his reply papers that:

"Plaintiff has submitted an affidavit of an officer of the plaintiff as well as the credit card agreement and statements of account (emphasis added) showing the balance due. The statements were sent to the defendant and received on a monthly basis without objection by the defendant thereby creating an account stated."

However, the attorney's statements are insufficient, as an attorney's affirmation without personal knowledge of the facts has no probative value and should be disregarded (see Warrington v Ryder Truck Rental, Inc., 35 AD3d 455, 456 [2nd Dept 2006]; Key Bank of Me. v Lisi, 225 AD2d 669 [2nd Dept 1996]).

Furthermore, counsel for plaintiff disingenuously states in his affirmation to the Court that "plaintiff has submitted an affidavit of an officer of the plaintiff." However, Scholey's s affidavit clearly states she is "a Litigation Support Specialist for Discover Products Inc..." There are no other affidavits submitted to the Court. Therefore, Scholey is a mere employee of Discover Products Inc., which she states is the "successor by merger to DB Servicing Corporation, the servicing affiliate for Discover Bank."

Also, the significance of defendant's credit card agreement and statements of account are not linked to either Discover Products Inc. or DB Servicing Corporation, as part of Scholey's personal knowledge of the business practices or procedures of plaintiff, sufficient to set a proper foundation for admission of plaintiff's business records for these items (see Discover Bank v Shimer, supra).

Nevertheless, a review by the Court of the purported agreement attached to plaintiff's papers shows it is undated, and fails to demonstrate defendant's name, address or other personal data, nor are there signatures of any of the parties, nor are any revisions attached. This set of circumstances contrasts with Scholey's sworn statement that "your deponent knows of no defense to this action upon a credit card agreement executed by the defendant (emphasis added)..."

Plaintiff's own papers demonstrate prima facie contradictions concerning whether the defendant "executed" an agreement with plaintiff, or whether the credit card was "entered into by the defendant" by ratification of its terms through subsequent use of the credit account.

For the foregoing reasons, plaintiff has failed to establish its prima facie entitlement to judgment as a matter of law on its cause of action for breach of contract, as plaintiff has failed to establish by sufficient proof in admissible form that plaintiff mailed to defendant the specific terms of the credit card agreement in effect when the retail credit installment account was opened, with revisions, or the outstanding balance due, through the date of the final statement.

Moreover, plaintiff has failed to establish its prima facie entitlement to judgment as a matter of law on its cause of action for an account stated, since plaintiff did not demonstrate by sufficient proof in admissible form that statements of account were mailed and received by defendant, and defendant retained such statements of account for an unreasonable period of time without objection thereto (see Discover Bank v Williamson, 14 Misc 3d 136[A][App Term, 9th & 10th Jud Dists 2007]).

Accordingly, plaintiff's motion for summary judgment is denied.

As plaintiff has failed to meet its burden of proof in establishing a prima facie case, there is no need for the Court to address the sufficiency of the opposing papers (see Alvarez v Prospect Hospital, supra at 324; Winter v Black, 95 AD3d 1208, 1208 [2nd Dept 2012]).

The foregoing constitutes the decision and order of this Court.

Dated: September 14, 2017

J.D.C Footnotes

Footnote 1: Nothing in Scholey's affidavit states she actually accessed the records of which she had access, for purposes of her affidavit.