In a recent decision approved for publication, the New Jersey
Superior Court, Appellate Division, clarified the standard of proof
required to obtain summary judgment in a suit to collect on a
revolving credit card account. In LVNV Funding, L.L.C. v.
Colvell, A-1313-10 (July 12, 2011), the court held that the
creditor must "prove more than merely the total amount
remaining unpaid" and must set forth: (a) the previous
balance; (b) all transactions and credits; (c) the periodic rates;
(d) the balance on which the finance charge is computed; (e) any
other charges applied; (f) the closing date of the billing cycle;
and (g) the new balance.
The plaintiff, LVNV Funding, L.L.C. ("LVNV"), was a
credit agency that purchased a portfolio of debt from Citibank,
including the MasterCard account of defendant Mary B. Colvell
("Colvell"). LVNV brought suit in the Special Civil Part
for $12,060.75 in damages, including interest, service charges,
costs and attorney fees. Prior to trial, LVNV moved for summary
judgment, attaching a computer-generated report supporting its
claim as to the amount due. The court granted LVNV's motion.
Colvell appealed.
Colvell argued that the computer-generated report attached to
LVNV's motion did not meet the requirements set forth in New
Jersey Court Rule 6:6-3(a), which governs entry of
judgment by default and requires the inclusion of "forms of
proof, consistent with federal regulations for credit card account
periodic billing statements." Specifically, the rule requires
that, where the plaintiff's records are maintained
electronically and the "claim is founded on an open-end credit
plan," the plaintiff must attach "a copy of the periodic
statement for the last billing cycle" or a
"computer-generated report setting forth the previous balance,
identif[ying] ... transactions and credits, if any, periodic rates,
[the] balance on which the finance charge is computed, the amount
of the finance charge, the annual percentage rate, other charges,
if any, the closing date of the billing cycle, and the new
balance." The Appellate Division found that, although
Rule 6:6-3 "does not generally apply in a summary
judgment situation," it "provides a guide to the proofs
necessary to grant summary judgment in a credit card collection
matter."
The court found the statement provided by LVNV did not comply with
Rule 6:6-3(a). It did not specify any transactions
comprising the debt owed and, in fact, the only transaction listed
on the statement was LVNV's purchase of the account.
"Additionally, and incredibly," the statement indicated
that the finance charge percentage rate, annual percentage rate,
and other fees were zero. The statement also failed to include the
closing date of the billing cycle. Accordingly, despite that
Colvell did not dispute that she used the card or held the account,
the Appellate Division reversed the trial court's grant of
summary judgment.
While the LVNV Funding decision sets forth a clear and
concise blueprint, the court's decision may have limited
application. Rule 6:6-3 applies only to matters in the
Special Civil Part, which does not hear cases in which the amount
in controversy exceeds $15,000. The Appellate Division in LVNV
Funding did not comment on whether its holding would have
broader application to matters not brought in the Special Civil
Part. Additionally, the court did not opine on whether the standard
set forth in Rule 6:6-3 would govern proof at trial.
However, the court did note that the requirements of Rule
6:6-3(a) were also "set forth in federal law." In any
event, the standard established by LVNV Funding is not a
difficult one to meet, and creditors seeking judgment on a
revolving credit card account in situations not expressly covered
by Rule 6:6-3 or the LVNV Funding decision may
thus want to consider conforming to that standard in order to avoid
challenges to their proofs.
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