Appellate Decision is Victory for Debt Buying Industry
Participated on appellate team of attorneys and successfully obtained an opinion from the Court of Appeals of Maryland that will prove beneficial for all debt buyers who utilize litigation as a means of debt collection. Our client, a third-party debt buyer, filed suit in the District Court of Maryland for Baltimore City to recover a purchased consumer debt. The consumer filed a Notice of Intention to Defend, retained counsel and appeared at trial to defend himself against the collection claim. The consumer acknowledged opening, using and defaulting on his credit card obligation and confirmed that he received statements both from the original creditor and, subsequently, from our client. He, nevertheless, argued that our client failed to prove its ownership of his debt because the records attached to the collection complaint, and subsequently introduced into evidence, did not meet the business records exception to the Maryland's hearsay rule. After the District Court entered judgment in our client's favor, and after an unsuccessful de novo appeal to the Circuit Court for Baltimore City, the consumer petitioned Maryland's highest court for review of the standards of proof a third-party debt buyer must meet when filing complaints and trying contested small claim matters. The Court of Appeals held that when debt buyers file complaints to collect assigned consumer debt under Maryland Rule 3-306(d), it must attach documents sufficient to pass muster under the business records exception to the rule against hearsay. Once a small claim action is contested and proceeds to a trial on the merits, however, the parties are not bound by the rules of evidence because, under Maryland's rules of court, evidentiary rules do not apply to small claim proceedings. Finding no error of law or abuse of discretion in the lower court's rulings, the Court of Appeals affirmed judgment in favor of our client.