# Chain of Title — Debt-Buyer Standing

A debt buyer suing on a purchased account must prove **standing**:
that it owns the specific debt it claims to collect, traced from the
original creditor through each assignment.

## What the debt buyer must show

To prove the chain, the debt buyer typically must produce:

1. **Original signed cardholder agreement** between original creditor
   and defendant (or other documentation establishing the underlying
   debt)
2. **Final billing statement** or charge-off statement from original
   creditor
3. **Bill of sale / purchase agreement** from original creditor to
   first buyer — with schedule identifying this specific account
4. **Assignment document(s)** for each subsequent transfer, each
   identifying this specific account
5. **Affidavit from someone with personal knowledge** of each step

Missing any link — especially the specific account identification on
a bill of sale — defeats standing.

## UCC Article 3 / RCW 62A.3

Credit-card debt historically was treated as arising from a written
contract, not a negotiable instrument. Washington courts have
generally held that consumer credit-card accounts are **not**
negotiable instruments for UCC purposes (see *Discover Bank v.
Bridges*), which means the more stringent Article 3 endorsement
requirements do not strictly apply.

However, UCC Article 9 (assignments of accounts receivable, RCW
62A.9A-406 and related) still requires identification of the specific
account being assigned.

### Why this matters

- **Article 3 approach**: debt buyer must be a "holder" of the
  instrument — specific endorsement or possession
- **Article 9 / assignment approach**: debt buyer must be an assignee
  of the specific account — identifiable in the assignment schedule

Either way, a blank or missing assignment is fatal.

## RCW 19.16.250 — Prohibited Practices

Sub-sections relevant to chain-of-title issues:

- **Making false or misleading representations about the character
  of the debt** — misrepresenting ownership is a per se violation
- **Attempting to collect amounts not owed to the collector** —
  collecting without proven assignment

Violations trigger **per se CPA liability via RCW 19.16.440**.

## Legal theories challenging the chain

### 1. Standing (threshold)

Plaintiff must plead and prove it is the real party in interest
(CR 17(a)). A debt buyer without a complete assignment chain lacks
standing. Challenge by:

- Motion to dismiss under CR 12(b)(1) (subject-matter jurisdiction)
  or CR 12(b)(6) (failure to state a claim)
- Motion for summary judgment (CR 56) after discovery

### 2. Hearsay / foundation

See `evidence-rules.md`. The bill of sale, account statements, and
custodian affidavit typically fail ER 803(a)(6) foundation when:

- The affidavit is from the buyer's custodian, not the original
  creditor's
- No monthly statements are produced to show the account history
- The purchase agreement excludes warranty of accuracy

### 3. Best evidence (ER 1002)

Original signed contract required unless unavailability shown.
Many debt buyers cannot produce the original cardholder agreement;
summary-judgment denials frequently rest on this.

### 4. FDCPA § 1692f(1)

Collecting without a proven assignment is collecting an "amount not
expressly authorized" — § 1692f(1) violation. Pair with § 1692e(2)(A)
(false representation of ownership).

### 5. CPA via RCW 19.16.440

RCW 19.16.250 violation = per se CPA violation via the 440 bridge.

## Discovery requests to break the chain

### Requests for Production

1. All documents evidencing the agreement between the original
   creditor and Defendant, including the signed cardholder agreement
2. All monthly account statements from the inception of the account
   to the date of charge-off
3. The bill of sale from original creditor to [first buyer],
   including the schedule or exhibit identifying Defendant's account
4. All subsequent assignments, bills of sale, or purchase agreements
   transferring Defendant's account to successive owners, including
   schedules identifying this account
5. Any documents showing the specific amount paid for Defendant's
   account in each transfer
6. The complete transaction history for the account from origination
   to the present

### Interrogatories

1. Identify each entity that has ever held ownership of Defendant's
   account from origination to the present
2. For each such entity, state the date of transfer and the document
   evidencing the transfer
3. Identify the person(s) with personal knowledge of each transfer
4. State the legal basis on which Plaintiff claims ownership of
   Defendant's account

### Requests for Admission

1. Admit that Plaintiff does not possess the original signed
   cardholder agreement for Defendant's account
2. Admit that Plaintiff's bill of sale from [prior owner] does not
   identify Defendant's account by name or account number in the
   body of the document
3. Admit that no employee or agent of Plaintiff has personal
   knowledge of how [original creditor] created or maintained
   records of Defendant's account

Admissions unanswered within 30 days are **deemed admitted** (CR 36).

## Motion to compel

If the debt buyer fails to produce chain documents, move to compel
under CR 37(a) with a CR 26(i) certification. Include a request for
fees under CR 37(a)(4).

If the debt buyer cannot produce the documents (often the case —
original creditors frequently do not transfer complete records),
the debt buyer's claim fails at summary judgment.

## Leading cases

- *Discover Bank v. Bridges*, 154 Wn. App. 722, 226 P.3d 191 (2010)
- *CACH, LLC v. Kulas*, 21 A.3d 1015 (Me. 2011) — persuasive, bill
  of sale without account schedule insufficient
- *Unifund CCR Partners v. Youngman*, 932 N.E.2d 1253 (Ohio App.
  2010) — persuasive, requiring specific account identification
- *Midland Funding LLC v. Brent*, 644 F. Supp. 2d 961 (N.D. Ohio
  2009) — FDCPA violation for filing without evidence of the debt
- *Palisades Collection, LLC v. Kalal*, 324 Wis. 2d 180, 781 N.W.2d
  503 (2010) — persuasive, applying similar standards

## Sample argument pattern

```
The chain of title is fatally incomplete. Plaintiff has produced
no bill of sale identifying Defendant's account. No assignment
document connects Plaintiff to [original creditor]. Plaintiff's
own affidavit states only that "records were received" — it does
not identify Defendant's account within those records.

Without proof of ownership, Plaintiff is not the real party in
interest under CR 17(a) and lacks standing. The claim must be
dismissed.

Further, the attempt to collect without such proof violates
15 U.S.C. § 1692e(2)(A), § 1692e(10), and § 1692f(1), and is a
per se violation of RCW 19.16.250 and, via RCW 19.16.440, of
RCW 19.86.020.
```

## Notes

- Chain-of-title challenges succeed most often at **summary judgment
  opposition**, not at motion to dismiss (12(b)(6) takes the complaint
  as true)
- The specific language of the bill of sale and each assignment
  controls — read them word by word
- Do not concede that a "portfolio" reference or "all accounts of
  [creditor]" language identifies a specific account — it does not