Tag Archives: assignments

Documentation Bogs-Down an Attempted Assignment

A recent entry in the expanding line of cases where lenders’ fail to retain appropriate documentation is Gemini Capital Group, LLC v. Tripp, 2013 WL 5872742 (Mo. App. S.D.,2013).

The putative assignee, Gemini, initiated proceedings against the debtor.  When faced with an inability to document ownership of the claims, the creditor, at the very last minute, sought a voluntary dismissal.  Faced with counterclaims and a request for class certification, the tide seems to have turned.  What about the agreement to arbitrate:

Here, Gemini asserts that the right to collect under the retail installment contract and the corresponding right to compel arbitration under the arbitration agreement were assigned from Auto Master to SHAC, from SHAC to Sagres, and finally, from Sagres to Gemini. In the trial court, Gemini asserted this chain was demonstrated by the affidavits provided in support of their motion. However, the documentation Gemini provided fails to demonstrate the assignment of Tripp and Thoms’s account. Although Gemini provided the written agreements purporting to prove the assignments, the documents merely reference lists of purchased accounts and corresponding account-holder information. The two Exhibits “A” were not included with the documentation provided to the trial court or filed as part of the record on appeal. Gemini failed to prove the chain of assignment, and its motion to compel arbitration was properly denied.

This conclusion is not altered by the affidavits and computer printouts Gemini provided. The affidavits did not provide substantial evidence of the assignments because they contained only legal conclusions as to the critical facts surrounding the assignment of Tripp and Thoms’s account.

 

unPeeling the Impact of Assignments on MMPA Rights

Can a seller, in a transaction covered by the MMPA, by assigning rights and delegating duties pretermit the other’s rights under the MMPA?  There appears to be some question.  Peel v. Credit Acceptance Corp., 2013 WL 2301095 (Mo. App. W.D. May 28, 2013), and prior authority, raise some interesting questions.  We below provide a somewhat complicated discussion of certain issues raised.  As an introduction, let us not provide some basic observations under the common law of contracts (understanding that FTC rules also may apply):

  • An obligor cannot assign rights without the consent of the obligee if the assignment operates to materially affect the rights of the obligee.
  • An assignment of the right to payment under a contract, where the payee’s performance is subject to the MMPA, would materially affect the rights of the obligee if the assignment operated to eliminate protections in the debt collection process that would be otherwise available absent the assignment.
  • It would appear that a party cannot consent to elimination of protection of the MMPA.  There would not seem to be a useful reason not to apply that to consenting to an assignment in circumstances that operated to eliminate MMPA protections.
  • Were a court to determine an assignee of a debt representing deferred payments from a payor benefitting from the MMPA was not subject to the MMPA, effectiveness of the assignment would therefore require the assignor remained liable for any practice engaged-in by the assignee that would be actionable had there not been an assignment and it had been performed by the assignor.

More after the break …

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