Monday, August 12, 2013

Plaintiff's affidavits in debt-collection cases: Summary Judgment Affidavits, Affidavit of Claim, Attorney Fee Affidavits

Affidavits Filed by Debt Collection Attorneys in Credit Card Suits  


An affidavit is a sworn written statement signed by the person making it (affiant) and by a notary public or other official authorized to administer oaths. The notary’s certification appears at the bottom of the page, or on the last page, and is called the jurat.


In debt suits, three types of affidavits are commonly encountered: Affidavits that contain some facts about the case (or purport to do so); business records affidavits, whose purpose is to make documents admissible; and attorney fee affidavits. The first two categories may be combined into a hybrid affidavit.  

Other affidavits may be filed under specific circumstances, such as to establish the process server’s inability to effect service, and to support a motion other than a motion for summary judgment, such as a motion for continuance, or a motion for new trial. Some motions must be sworn (“verified”) or have an affidavit attached. 

An affidavit is always required for a motion for summary judgment, and for default judgment motions that are not set for an oral hearing. If a debt plaintiff seeks attorney’s fees, a fee affidavit must also be filed to support the reasonableness of the amount of fees being sought. Attorney’s fees are not liquidated damages.  


Summary judgment affidavits are governed by the summary judgment rule. They may be used to present testimony to the court that would otherwise constitute hearsay because the witness will not be present and available for cross-examination at the hearing. Such affidavits may not be used for trial, to which the summary judgment rules do not apply. They are specifically authorized for summary judgment proceedings, in which there will be no opportunity for presentation of live witness testimony because an oral hearing is only for attorney argument, assuming an oral hearing takes place at all. Many courts rule on summary judgment motions by submission.  

The quality of affidavits, of course, varies and specific affidavits may not be admissible for summary judgment purposes either, but this will in most cases require a specific objection to the affiant’s qualification, or a challenge on some other basis. Affidavits of assignee’s (debt buyers) are notorious for poor quality (-- > robosigners).

Summary judgment affidavits often do double duty as business records affidavits, even though they are not so titled. Conversely, affidavits can be found that are denominated “BUSINESS RECORDS AFFIDAVIT”, but contain factual averments in addition to the standard predicate language to make business records admissible as an exception to the hearsay rule. One-page affidavits filed by RAUSCH in Target and Capital One debt suits, for example, contain a line indicating when the account was established. 

Affidavits filed in debt collection suits are typically signed by a representative of the Plaintiff, whether that is the original creditor or a debt buyer. In some cases, several affidavits are attached to motions for summary judgment. The additional ones are typically limited-purpose affidavits that provide information on assignment or sale of an individual account or of a portfolio of accounts (“Affidavit of Sale”) or authenticate specific documents (such as a bill of sale or a document regarding a financial institution’s merger or name change).  


Leaving aside suits on sworn account and bill-of-review suits, a plaintiff is not required to attach an affidavit to the original pleadings. A number of debt collection plaintiffs nevertheless do so, presumably in aid of default judgment, should the defendant fail to answer after being served with the citation.
Occasionally a petition in a credit card debt suits invokes the sworn account rule, which requires that sworn proof be attached. But sworn account is not a proper theory of recovery in a debt collection suits involving a bank debt, and should be challenged on that basis, either by motion for summary judgment, or by special exceptions. 

Affidavits attached to pleadings are typically titled “Affidavit of Claim” or some variation thereof.  In some cases, the plaintiff’s attorney will try to make the affidavit a part of the summary judgment submission by referring to it in the motion and incorporating it by reference. In such case, the affidavit should be dealt with in the defendant’s response, in addition to any affidavit and exhibits attached to the motion for summary judgment itself.


Attorney fee affidavits are limited-purposes affidavits, as the name implies. They also constitute an exception to affidavits for summary judgment generally in that the Plaintiff’s attorney is allowed to sign such an affidavit, and thus appears as a witness. When the attorney testifies on fees incurred in the lawsuit, he or she acts as an expert witness (with respect to reasonableness of fees in the relevant legal market), but also as a fact witness with respect to the efforts made in the specific case, such as time expended, and attorney qualifications and experience, which are relevant to the hourly rate. 

Many law firms representing creditors in mass debt collection litigation do not seek fees, or no longer do so, even though attorney’s fees are authorized by statute (Chapter 38 of the CPRC) in breach of contract cases.
Any one attorney’s involvement in such a case is bound to be minimal because the firms that specialize in litigating on behalf of leading card issuers and their assignees all use automated document production systems to generate pleadings, motions, affidavits, and other documents. 

If there is an oral hearing or bench trial, an attorney will have to appear (and incur billable time), but in many instances it will not even be the attorney of record whose signature appeared on the pleading.


Among the debt collection attorneys who seek fees, the amounts vary widely, starting with $400 or $500 at the low end up to thousands of dollars at the other end of the scale. The higher amounts are typically seen in cases involving high balances (-- > amount in controversy). Some debt collection attorneys will simply divide the amount by 3 and claim the resulting amount as a reasonable fee for a case of this nature. 

The Texas Supreme Court has set some guidelines for the determination of what is a reasonable amount of fees (-- > Arthur Andersen fee factors), but the criteria are numerous, and vague.  Given such ambiguity, the trial courts have considerable discretion on the matter, and may also take into account variation in the cost of legal services among urban and rural counties. Because there is no hard and fast rule for computing attorney’s fees comparable to the federal “loadstar”, there is also a considerable amount of case law resulting from appellate litigation over the fee factors and their relative weight, fee segregation, and other issues. 


No comments:

Post a Comment