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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