================================ IN THE MATTER OF: . . JASON LEVI KODESS and . ANGELA JEAN KODESS . Debtors. . ================================
Case #10-31776 Springfield, Massachusetts May 12, 2011 11:22:07 a.m. Oclock
TRANSCRIPT OF HEARING ON: (#41) DEBTORS SECOND OMNIBUS OBJECTION TO CLAIMS OF CR EVERGREEN, LLC BEFORE THE HONORABLE HENRY J. BOROFF, J.U.S.B.C.
APPEARANCES: For the Debtors: L. JED BERLINER, ESQ. Berliner Law Firm 95 State Street Suite 1010 Springfield, MA 01103 SHAWN MASTERSON, ESQ. Shechtman Halperin Savage, LLP 1080 Main Street Pawtucket, RI, 02860
Electronic Sound Recording Operator: Laura Chambers Proceedings Recorded by Electronic Sound Recording Transcript Produced by Certified Transcription Service
Page 2 1 (At 11:22:07 a.m.) 2 3 4 MR. REYNOLDS: THE COURT: MR. REYNOLDS: All rise. Please be seated. Case #10-31776. Jason Levi Kodess
6 objection of the debtors to claims filed by CR Evergreen. 7 8 9 10 MR. MASTERSON: THE COURT: Good morning, Your Honor.
Good morning. Shawn Masterson, CR Evergreen. Good morning, Your Honor. Jed
11 Berliner for the debtor, the objecting party. 12 Weve narrowed down the issues to two: Whether the
13 signer of the proof of claims needs to have a power of 14 attorney, and whether the loose pages attached to the amended 15 three proofs of claim need to be linked to the transfer 16 document from Chase to CR Evergreen. 17 THE COURT: Now --
18 but I dont understand the second. 19 MR. BERLINER: The documentation attached to the
20 amended proofs of claim have loose sheets which identify the 21 three claims at issue that were assigned. 22 looking at Claim #8. In particular Im
23 the last page attached to the amended claim is the assignment 24 of accounts and waiver of notice of transfer of claims, where 25 Chase assigns, sells, delivers to CR Evergreen accounts.
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2 better word, identification of three credit card accounts that 3 Chase had. 4 5 Theres nowhere -THE COURT: MR. BERLINER: Thats an evidentiary issue. Yes. Ive suggested an affidavit of
6 somebody saying that, These three accounts were covered by 7 that transfer agreement meets my objection, and my brother 8 has a different response. 9 10 THE COURT: Okay. Your Honor, as to the first point
MR. MASTERSON:
11 on the power of attorney issue, under 3001 there is no 12 requirement that a power of attorney be attached to a proof of 13 claim. In fact, Rule 9010(c) goes on to say, for purposes of
14 filing the proof of claim, it specifically says that there 15 shall not be a requirement of a power of attorney. So I
16 think thats an issue as a matter of law under the Rules that 17 my client is not obligated to attach a power of attorney to 18 the proof of claim that they filed for an unsecured debt. 19 The second issue goes to whether the three accounts The debtor has
21 listed three accounts on their Schedule F that were Chase 22 accounts. They havent disputed that they owe the money. They
24 havent alleged that there is another entity that has filed a 25 proof of claim as to those three debts, whether it be Chase or
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Page 4 1 some other entity; nor have they presented any evidence that 2 would indicate that CR Evergreen is not the owner of those 3 three accounts. 4 My client has produced the assignment in the
5 redacted computer file, showing that those three accounts were 6 part of this larger purchase and assignment of accounts from 7 Chase to CR Evergreen. My client cant -- theres thousands
8 of accounts that are sold in these bulk transfers from Chase 9 to CR Evergreen. 10 THE COURT: CR Evergreen cant come up with an
11 affidavit of a record keeper and say, Im aware of the 12 assignment. Ive seen the documents. Ive reviewed them, and
13 these particular accounts have been transferred? 14 MR. MASTERSON: At this point, Your Honor, my
15 clients position as to the affidavit is that its not 16 required. 17 18 THE COURT: WELL -What theyre willing to do, Your
MR. MASTERSON:
19 Honor, is give it on a computer disk with the entire 20 transaction and allow you to review it in camera, and you can 21 see where those three specific accounts were part of that -22 THE COURT: I dont -- I dont think so. I -- I
Federal Rule of
24 Bankruptcy Procedure 9010(c) does seem to except the 25 requirement of a power of attorney. Nevertheless, the debtor
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Page 5 1 never dealt with Evergreen. The objection, based on the fact
2 that the debtor doesnt know who Evergreen is, is a colorable 3 objection. Burden now passes to Evergreen, which must show
4 that it is something more than a stranger who showed up and 5 filed the proof of claim after examining the Schedules. 6 So if you want to produce the whole document, and if If, on the If its
7 Mr. Berliner is satisfied with that, thats fine. 8 other hand, its to be an affidavit, thats fine.
9 neither of those, and you think you have a witness, Ill 10 conduct an evidentiary hearing. But if there isnt going to
11 be the full agreement or the affidavit or a witness who can 12 testify, then youre done. 13 So any more than if Donald Trump came in here today
14 and said that he owns these claims because hes got a deal 15 with Chase. 16 MR. MASTERSON: Well, I think my clients produced
17 that documentation, Your Honor, in the form of the copy of the 18 assignment, and a copy of the redacted computer file. If you
19 dont feel that thats sufficient, I will instruct my client 20 to present an affidavit. Theres no way -- theres no
21 reasonable way that we can allow the entire file, absent in 22 camera review, just because it contains other account numbers 23 and personal information. 24 25 other-THE COURT: The other account numbers are the
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2 3,000 accounts that will contain personal information and 3 account numbers -4 5 6 THE COURT: And by personal information --- for the other credit cards --
9 the entire computer file would have, you know, name, address, 10 identifying information, plus the account number -- all things 11 that, you know, were restricted from filing anything that has 12 that identifying information. 13 THE COURT: Well, cant you -- rather than my
14 looking at it in camera, cant you develop a confidentiality 15 agreement between yourself and debtors counsel, and let 16 debtors counsel simply examine the document without retaining 17 a copy? 18 19 20 21 22 23 MR. MASTERSON: THE COURT: Okay. I think an af -Theoretically, yes.
24 acceptable, but I do think that Mr. Berliner is -25 MR. MASTERSON: I think --
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5 than through his clients; but his-- the debtors are entitled 6 to know that Evergreen really does own this debt. So debtors,
7 I think, are being generous in saying, Well take it in 8 affidavit form. But if its not in affidavit form, then its If not by testimony, then I have to
9 got to be by testimony.
10 conclude that this is -- that these people are strangers. 11 MR. MASTERSON: I will do my best, Your Honor, to
12 do produce that affidavit to my brother. 13 14 sorry. 15 THE COURT: Mr. Berliner? MR. BERLINER: If I might address the first point, How long do you think you need? Im
16 Your Honor. 17 18 THE COURT: MR. BERLINER: Yes. On the power of attorney I agree
19 that the Rule allows the filing of a claim with prima facie 20 effect with a proof of power of attorney; but I think Im 21 allowed to then contest the objection and suggest that Steven 22 Kane, who has an e-mail address with B-line, a separate 23 entity, may not have the authority to sign this proof of 24 claim. Its one thing to say the claim can be filed. Its
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2 thought that you meant the proof of claim -- Im sorry -- that 3 the power of attorney needed to be filed with the proof of 4 claim. 5 6 7 true. 8 9 10 MR. BERLINER: THE COURT: Yes. Okay, so, Mr. Masterson? Again, Your Honor, theres no But what youre saying is that it -MR. BERLINER: THE COURT: I just want to see it. -- you just want to know whether its
MR. MASTERSON:
11 requirement under the Rules that the agent whos signing the 12 proof of claim has to file a power of attorney. And I dont
13 believe that the debtor has standing to challenge the 14 relationship between the person that signed a proof of claim, 15 which is signed for B-Line -- that relationship between B-Line 16 and CR Evergreen -- I dont see where that -- where the debtor 17 has standing. 18 Now certainly I think were all in agreement that my
19 client has to establish that, in fact, those three accounts-20 21 22 THE COURT: Well, why cant --- were part of that purchase.
23 form, or by testimony, This particular person was my agent 24 for the purpose of filing the proof of claim? 25 MR. MASTERSON: Well, I think, Your Honor, it goes
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2 require it, why am I then forced to have to produce that? 3 4 THE COURT: Because Evergreen is a stranger. Which, Your Honor, in filing the
MR. MASTERSON:
5 affidavit from -- I assume its going to be -6 7 8 9 10 THE COURT: Well, in the typical --- a combination between --
11 assume that Chase had not assigned this, assuming that they 12 did; if they had not assigned it, it would be a proof of claim 13 that would be filed by somebody who said that they were a 14 vice-president of Chase. And if the debtor said, Well, prove
15 theyre the vice-president, I frankly wouldnt spend very 16 much time talking about that, unless the debtor provided some 17 colorable evidence that the person wasnt the vice-president. 18 But I would think that it would be appropriate to accept that 19 at face value. 20 21 22 23 the debt. 24 25 But now along comes Evergreen -MR. MASTERSON: THE COURT: Mmhmm.
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3 lack of a better term, servicing agent. 4 THE COURT: A servicer. Okay. And B-Line says, Well, frankly, the
6 -- the authority doesnt shout out from the proof of claim, 7 and I think that the debtor has the right to say, Well, if 8 theres going to be that kind of a thing, then why not -- 9 since Evergreen is filing an affidavit anyway, why not say, 10 Oh, and by the way, B-Line is my agent. 11 12 MR. MASTERSON: THE COURT: Very well. So --
-- I spoke too quickly when I dismissed How long did you say you needed? Your Honor, my -- normally I could
MR. MASTERSON:
15 probably get that in a few days, but my main contact is 16 leaving that company, so within thirty days I should be able 17 to get that affidavit. 18 19 20 21 days out? 22 23 24 25 MR. REYNOLDS: THE COURT: (Pause) MR. BERLINER: Thank you, Your Honor. June 23? Okay. June 23 at 10:30. THE COURT: Okay. If not sooner.
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4 by -- the last seven or eight years -- I have to tell you that 5 the argument, Were too big to make evidentiary 6 presentations, a problem that these companies have foisted 7 upon themselves, has grown tiresome. 8 MR. MASTERSON: Well, I apologize. Thats not
9 necessarily what Im -- what Im getting at, Your Honor. 10 11 12 it -13 14 15 THE COURT: -- thats what you are telling me. -- its going to be -THE COURT: Well -I mean, this is a situation where
MR. MASTERSON:
16 and thousands.
17 maybe they shouldnt have bought thousands and thousands at 18 once. 19 Okay. Thanks. Thank you, Your Honor.
MR. MASTERSON:
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/s/
Glor ia C. Irwin
7/2/2011
Date
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