By: Robert J. Nahoum
THE PROBLEM
Anyone who has been sued for an old debt will tell you that the process can be terribly confusing. The court papers used by the debt collectors are filled with legal jargon that makes little if any sense to non-lawyers. Debt collectors are always – 100% percent of the time – represented by attorneys in debt collection lawsuits that use their training and experience to their advantage.
The initial steps in the court process is not necessarily complicated – the debt collector commences the case by filing a “summons and complaint†with the court.  Next, the defendant (the party being sued) has to file an answer to the complaint. It’s one of the next steps that can reasonably overwhelm a pro se (self represented) defendant – the debt collectors filing of a motion for “summary judgmentâ€.
What is summary judgment in a debt collection lawsuit?
THE RULES
It is always the burden of the plaintiff (the party suing) to prove all of the facts alleged in the complaint and to demonstrate that those facts, when applied to the law, make the defendant liable to the plaintiff for the amounts demanded.
Trials only need to happen when there are facts in dispute. It is the job of a jury (or a judge in some circumstances) to decide which telling of the facts is true. However, when there are no facts in dispute, the plaintiff’s burden has been automatically met and no trial is necessary. When this happens, the party who believes that there are no facts in dispute will likely make a motion for “summary judgmentâ€.
A motion for “summary judgment†is based upon a claim by one party that all necessary factual issues are settled or so one-sided that no trial is necessary. The summary judgment is appropriate when the court determines there no factual issues remaining to be tried, and therefore a cause of action or all causes of action in the complaint can be decided without a trial.
When deciding a motion for summary judgment, the judge needs to take the undisputed facts and apply them the law. If the judge decides that the facts as applied to the law establish liability, the court will grant summary judgment in favor of the moving party. If the judge decides that there are facts in dispute, the court will deny the motion for summary judgment and order a trial.
The two predominant causes of action in debt collection cases are (1) breach of contract (usually breach of a credit card or similar agreement) and (2) account stated.
As you might expect, breach of contract simply means that there was a contract between the consumer and the company extending credit and the consumer breached that contract by failing to pay the bill.
However, in cases brought by debt buyers who buy debts from original creditors, breach of contract is rarely a slam dunk for the debt collector because it routinely lacks the evidence to prove the contract was created or what the terms of the contract were.
So, to hedge its bets, in addition to alleging breach of contract, debt buyers include a cause of action for “account stated.â€
Account stated is a theory of liability used in debt collection cases to prove a consumer’s liability for a debt when the contract giving rise to the debt cannot be proven. The theory behind an account stated claim is that if a debtor receives an account statement of what he or she owes the creditor, and he or she does not object to the account statement, the law assumes that he or she has agreed that the correctness of that statement and so has promised to pay the debt.
Courts vary on what evidence is required to prove an account stated claim. However, in New York, it is generally accepted that an account stated can be supported by showing (1) an account statement was presented to the consumer; (2) it was accepted by the consumer as correct (which can be inferred from his or her failure to raise a timely objection to the amount stated as due); and (3) the debtor promised to pay the amount stated.
Summary judgment on an account stated claim can be defeated by proof of a timely objection to the account statement, whether ultimately meritorious or not. A consumer challenging an account stated claim must raise specific allegations of protest, indicating when, how and/or to whom objections were made.
WHAT YOU SHOULD DO:
If you are defending a debt collection case and the plaintiff has made a motion for summary judgment, consider whether any facts are in dispute. Â For example, did you ever dispute account statements, did you not receive account statements?
Also, keep in mind that you are always bettered protected when you are represented by a skilled and experienced attorney. Consider speaking with a debt defense attorney to better understand your options and the cost of defense.
If you need help settling or defending a debt collection law suit, stopping harassing debt collectors or suing a debt collector, contact us today to see what we can do for you. With office located in the Bronx, Brooklyn and Rockland County, the Law Offices of Robert J. Nahoum defends consumers in debt collection cases throughout the Tristate area including New Jersey.
The Law Offices of Robert J. Nahoum, P.C
(845) 232-0202
www.nahoumlaw.com
[email protected]