On May 19, 2014, the Maryland Court of Appeals held that plaintiff-debt buyers that pursue judgments against defaulted debtors based on affidavits must produce certain documents that are “sufficient to pass muster” under the business records exception to the hearsay rule. Nevertheless, the high court further ruled that, once a small-claim action is contested and proceeds to trial, the parties are not constrained by the Maryland Rules of Evidence.
The ruling was underscored by the court’s finding that many debt buyers file their collection actions in Maryland District Court, seeking a judgment on an affidavit according to Rule 3-306 of the Maryland Rules of Civil Procedure. According to the opinion, ninety-nine percent (99%) of the debt collection cases surveyed resulted in the plaintiff-debt buyer obtaining a judgment against the debtor without a trial. This trend, in part, led to the amendment of Rule 3-306 in January 2012, which set forth a heightened pleading requirement in that certain documents were required for debt buyers to obtain judgments on affidavits. The rule also provided that those specific documents “must pass muster under the business records exception to the hearsay rule.”
Fundamentally, the Maryland high court’s ruling solidifies the basis for Rule 3-306 in providing “heightened pleading and evidentiary” requirements for the documents submitted in all assigned consumer debt cases.