Anthony M Peck

1This matter is a core proceeding as it involves a claim against
the estate. 	See 28 U.S.C. § 157(b)(2)(B).
In 	the 	United 	States 	Bankruptcy 	Court
For 	the 	Eastern 	District 	of 	Pennsylvania
In re 	Anthony Peck 	: Chapter 13
:
:
Debtor(s) 	: Bankruptcy No. 07-12251 SR
Opinion
By: Stephen Raslavich, United States Bankruptcy Judge.
Introduction.
The Debtor has objected to the amended claim of eCast
Settlement Corporation. 	The Objection is opposed. 	A hearing was
held on December 12, 2007 after which the Court took the matter
under advisement. 	For the reasons which follow, the Objection
will be denied. 1
Grounds for Objection
Debtor makes three general objections to the eCast claim:
first that it is not self-sustaining; second, that the claim
includes excessive interest and other charges; and third, that
eCast lacks standing. 	See Objection to Amended Claim.
Responsive arguments are made to each and every objection.
The Claim’s Facial
Validity and the
Burden of Proof
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The Objection begins by stating that the “claim does not
stand on its own.” Objection ¶ 1. 	This is a threshold challenge
to the claim’s validity. 	Under the Bankruptcy Rules, a claim
will be presumed to be valid if it “conform[s] substantially to
the appropriate Official Form.” 	B.R. 3001(a), (f). 	If that is
done, then the burden of proof shifts to the party objecting to
the claim’s validity. 	In re NuNet, Inc., 348 B.R. 300, 307
(Bankr.E.D.Pa.2006)
The Claim is Based
on a “Writing”
The Debtor’s challenge to the claim’s integrity is based on
Bankruptcy Rule 3001(c):
When a claim, or an interest in property of
the debtor securing the claim, is based on a
writing, the original or a duplicate shall be
filed with the proof of claim. If the writing
has been lost or destroyed, a statement of
the circumstances of the loss or destruction
shall be filed with the claim.”
B.R. 3001(c). 	Debtor contends that the claim needs to be
supported by the account contract but is not. 	Objection, ¶ 3.
For its part, eCast originally filed the claim with an account
summary and a written explanation that the account might later be
assigned to it. 	It later amended the claim to include account
statements and a bill of sale purporting to transfer the claim
from FIA Card Services a/k/a Bank of America (FIA) to eCast. 	See
eCast Brief, 9-15. 	So the parties agree that a “writing” is
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required; where they disagree is on what that “writing” should
be.
A leading commentator points that at this point in the
proceeding, a claim serves to inform interested parties of the
creditor’s right to payment:
Proofs of claim as filed also provide a basis
for a trustee to evaluate claims and form
objections to them. 	It is to the end of
providing sufficient information to the
trustee in this task, while not overburdening
the filing creditor, that the required
contents of the proof are directed.
9 Collier on Bankruptcy ¶ 3001.02 (Matthew Bender 15 th ed.
Revised) 	Attaching a “writing” would certainly help in that
regard, but where the debtor-creditor relationship is either
based on, or generates, various “writings,” which would suffice?
Indeed, the Bankruptcy Code does not define the term “writing.”
One Bankruptcy Court reviewed generic definitions of the word and
concluded that “writing” would encompass “a legal obligation that
is evidenced by any expressive format, set down by hand or
typewriting, mechanical or electronic transmissions.” 	See In re
Cluff, 313 B.R. 323, 334 (Bankr.D.Utah 2004). 	This Court finds
that flexible, fact-specific view of the term to be sensible and
will use it here. 	What is the “legal obligation” between these
parties and is it set down in some discernible way?
As between the Debtor and eCast, the legal obligation is the
payment of charges incurred on this account on a monthly basis.
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2Defined by TILA as “a plan under which the creditor
reasonably contemplates repeated transactions, which prescribes
the terms of such transactions, and which provides for a finance
charge which may be computed from time to time on the outstanding
unpaid balance.” 	15 U.S.C. § 1602(i) (emphasis added)
4
The account contract would not document the amount of those
charges and any related costs. 	The contract would certainly be
evidence of the existence of the financial accommodation, but it
would not tell what was owed on the account. 	This is because the
relationship between a credit card issuer and user is not static.
Unlike payments under a promissory note or installment agreement,
the periodic balance due on a credit card account is variable.
That is what TILA contemplates in regulating “open-ended” lines
of credit. 2 	As the Court in Cluff observed:
Every time a debtor uses a credit card it
results in an electronic and/or written
transmission. Contrary to some of the
Debtors' arguments, it is not the underlying
credit card agreement that creates the debt-
for that only establishes a line of credit
that defines the terms of the parties future
transactions-it is the actual use of the line
of credit that creates the obligation to
repay.
313 B.R. at 334. 	How is that use documented, if at all?
TILA § 1637 requires that the credit card issuer provide a
statement of the account to the user with each billing cycle.
See 15 U.S.C. § 1637(b). 	That statement is required to contain a
great deal of information about the use of the account for that
period: the beginning balance, the amount and date of each charge
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on the account; the credits applied, the finance charges, the
variable periodic rates used to calculate the finance charge; the
total finance charge expressed as an APR; the balance on which
the finance charge is calculated; the closing balance; the
payment deadline to avoid additional accrual of finance charges;
and late fees. 	Id. 	This information would provide the
evidentiary support necessary to inform the trustee or debtor of
this claimant’s right to payment. 	As between the account
contract and the account statements then, it is the latter that
better informs the Debtor (or the trustee) of the “validity and
the amount” of the claim. 	Are account statements part of the
record?
Attached to the amended claim are account statements
beginning with the month February 2005 onward through January
2007. 	The balance due on the final statement $12,552.48. 	That
is about $820 short of the amount claimed ($13,374.24). 	The
discrepancy appears to consist of an additional two months of
finance charges accruing in February and March 2007. 	There is
attached to the original claim a summary which reflects that.
See Claim No. 6, Account Summary, filed July 18, 2007. 	Charges
ceased accruing in April, the month when Debtor filed this case.
Between what is attached to the original and amended Proofs of
Claim, the Court finds that the claim is properly filed and is
entitled to a presumption of validity. 	It is up to the Debtor to
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prove otherwise.
Interest and other Charges
The Debtor next objects to the rate of interest charged as
well as late fees and other finance charges. 	He explains that
“without a copy of the contract, there is no justification for
interest. 	Nor is their justification for late fees and other
finance charges that are indicated on the statements.”
Objection, ¶ 4. 	Alternatively, he argues that if interest is
chargeable, then it may not exceed the applicable legal rate of
6%. 	Id. ¶ 5.
Usury
The Court takes up first the usury claim. 	As a legal
matter, the argument is a non-starter. 	Section 85 of the
National Bank Act (NBA) provides that a national bank may charge
“on any loan ... interest at the rate allowed by the laws of the
State ... where the bank is located....” 12 U.S.C. § 85. 	It has
long been recognized that, under § 85, a national bank can charge
an interest rate in a foreign state higher than the laws of the
foreign state permit, if it is authorized to do so by the laws of
the state in which it is located. 	Marquette National Bank of
Minneapolis v. First of Omaha Service Corp., 439 U.S. 299, 307,
99 S.Ct. 540, 545, 58 L.Ed.2d 534 (1978). 	The High Court has
further interpreted “interest” in this context to include late
fees. 	See Smiley v. Citibank (South Dakota), N.A., 517 U.S. 735,
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747, 116 S.Ct. 1730, 1736 (1996); see also Beneficial National
Bank v. Anderson, 539 U.S. 1, 123 S.Ct. 2058 (2003) (holding that
§§ 85 and 86 of the NBA completely preempt state law usury claims
against national banks); In re Community Bank of Northern
Virginia, 418 F.3d 277, 295-96 (3d Cir. 2005) (explaining that
due to §§ 85 and 86 of NBA “there is, in short, no such thing as
a state-law claim of usury against a national bank.”) The
Debtor’s usury challenge is utterly without merit.
The Right to Charge
Interest, Late Fees
and Other Charges
Next, the Court turns to the Debtor’s challenge to the
inclusion of interest, late fees and other charges in the claim.
At the hearing, the Debtor explained that “if eCast wants to
prove late fees, interest rate, those kinds of things, then
they’re going to have to bring in a copy of the contract.”
Transcript, 4. 	As a general matter, eCast disputes Debtor’s
premise that the contract must be attached. 	See eCast Brief, 15-
17.
The Court finds eCast to be correct here. 	Given that the
Court has found the claim to be presumptively valid, it is the
Debtor who has it backwards: if the Debtor wishes to disprove the
validity of the other charges, then it is the Debtor who must
prove what fees may be charged, if any. 	And what evidence there
is falls squarely in favor of eCast. 	The account statements
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provided contain a “Finance Charge Schedule” which sets forth how
that fee is calculated. 	It categorizes each type of use on the
card (purchases, balance transfer, atm, etc.) and then sets forth
the periodic rate of interest (as well as corresponding APR)
applicable to each. 	All of the 15 months of account statement
in the record assess the finance charges he complains of.
Because there is no indication that the charges were disputed by
the Debtor during that time period, the Court finds them to be
legitimate. 	If Debtor truly believes that these finance charges
have been erroneously calculated, then he must offer proof of
that. 	Curiously, he never explicitly says that the rate is
something other than what is charged. 	Instead, he insists that
the contract must be attached in order to allow the finance
charges. 	This is offered without a shred of supporting legal
authority. 	As a result, the Debtor challenge to interest and
fees is rejected.
eCast’s Standing
The Court turns now to Debtor’s contention that eCast has
“failed to establish that it is the true owner or assignee of the
claim.” Objection, ¶ 8. 	Although it never acknowledges the
point, the dispute over “standing” is nothing more than a thinly
disguised challenge to the claim assignment. 	And this argument
is not without some irony: does the Debtor himself have standing
to raise this very issue?
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Bankruptcy Rule 3001 provides in pertinent part
If a claim other than one based on a publicly
traded note, bond or debenture has been
transferred other than for security after the
proof of claim has been filed, evidence of
the transfer shall be filed by the
transferee. The clerk shall immediately
notify the alleged transferor by mail of the
filing of the evidence of transfer and that
objection thereto, if any, must be filed
within 20 days of the mailing of notice or
within any additional time allowed by the
court. If the alleged transferor files a
timely objection and the court finds, after
notice and a hearing, that the claim has been
transferred other than for security, it shall
enter an order substituting the transferee
for the transferor.
B.R. 3001(e)(2) 1991 (emphasis added). 	The Advisory Committee
Note to the 1991 Amendment explains:
Subdivision (e) is amended to limit the
court's role to the adjudication of disputes
regarding transfers of claims.... If a claim
has been transferred other than for security
after a proof of claim has been filed, the
transferee is substituted for the transferor
in the absence of a timely objection by the
alleged transferor. In that event, the clerk
should note the transfer without the need for
court approval. If a timely objection is
filed, the court's role is to determine
whether a transfer has been made that is
enforceable under nonbankruptcy law.
B.R. 3001, Advisory Committee Note (1991). 	By eliminating notice
of claim assignment to third parties, the rule now limits the
Court’s role to determining disputes between assignee and
assignor. 	In re Lynn, 285 B.R. 858, 861 (Bankr.S.D.N.Y.2002) Was
the claim assigned to eCast in accordance with the rule?
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3The rules allow a creditor’s agent to execute a claim on its
behalf. 	See B.R. 3001(b).
10
This claim was originally filed by eCast as the agent 3 of
FIA. 	See Claims Docket, Proof of Claim #6. 	Attached to that
claim was a statement that eCast’s interest might change. 	Should
the account be charged off by FIA, it explained, then eCast would
thereafter own the claim. 	Id. 	And this appears to be what
happened: two months after filing the claim for FIA, eCast filed
a Transfer of Claim Other Than For Security to itself. 	See
Docket # 71. 	That document identifies FIA as the transferor and
eCast as transferee. 	It also identifies the amount of the claim,
the last four digits of the account number and the date that the
original claim was filed. 	Id. 	Save for Debtor’s listing the
claim as disputed, that information is otherwise consistent with
what appears in Debtor’s Schedule F. 	See Schedule F. 	Three days
after the Transfer of the Claim was filed, the Clerk’s Office
formally notified FIA of that filing. 	See Notice of Transfer,
Docket # 72. 	Significantly, FIA did not object to the transfer.
One month after that, eCast filed an Amended Proof of Claim as
assignee of FIA.
This evidence demonstrates to the Court that the claim was
assigned to eCast. 	Had there been something amiss with the
assignment, then it was the right of FIA—not the Debtor—to object
after being notified of it. 	But it did not. 	See Viking Assocs.
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v. Drewes (In re Olson), 120 F.3d 98, 102 (8th Cir.1997) (“The
text of the rule is clear that the existence of a “dispute”
depends on an objection by the transferor.”); Troy Sav. Bank v.
Travelers Motor Inn, 215 B.R. 485, 491 (N.D.N.Y.1997) (“The
Bankruptcy Court correctly informed the Appellant that (e)(2)
only permits the transferor to object to the transfer.”); accord
In re Univ. Towers, Inc., 227 B.R. 727, 729 (Bankr.W.D.Mo.1998);
In re Crosscreek Apartments, 211 B.R. 641, 646 n. 7
(Bankr.E.D.Tenn.1997) (explaining that the rule is designed
primarily to meet the due process requirement that a creditor be
given notice and an opportunity to object to any purported
transfer of its claims against the estate”); cf In re Jordan, 146
B.R. 31, 32 (D.Colo.1992) (explaining that the debtor is not
entitled to notice of the assignment); In re Lynn, 285 B.R. at
862 (holding that the debtor does not have standing to object to
a claim assignment itself); In re Premier Operations, 294 B.R.
213, 219 (S.D.N.Y. 2003) (same). 	Without an objection from the
party who would be adversely affected by an improper assignment,
the Court must conclude that the assignment was valid.
Accordingly, the Court finds eCast to very much have standing to
assert this claim.
Summary
The Objection to the Amended Claim of eCast Settlement
Corporation will be denied. 	The claim is supported by a writing
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which entitles it to a presumption of validity which the Debtor
has not rebutted. 	There is also no evidence that interest
charged or other fees assessed are not provided for by the
parties’ agreement. 	Finally, the Debtor lacks standing to
challenge the assignment of the claim.
An appropriate Order follows.
By the Court:
_________________________________
Stephen Raslavich
United States Bankruptcy Judge
Dated: 	February 13, 2008
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In 	the 	United 	States 	Bankruptcy 	Court
For 	the 	Eastern 	District 	of 	Pennsylvania
In re 	: Chapter 13
:
Anthony Peck 	:
:
Debtor(s) 	: Bankruptcy No. 07-12251 SR
Order
And now, upon consideration of the Debtor’s Objection to
claim No. 6 of eCast Settlement Corporation, after a hearing, and
for the reasons set forth in the attached Opinion, it is hereby:
Ordered, that the Objection is denied and that the claim is
allowed in full.
By the Court:
Stephen Raslavich
Dated: 	February 13, 2008 	United States Bankruptcy Judge
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Interested Parties:
George Conway, Esquire
Office Of The U.S. Trustee
833 Chestnut Street
Suite 500
Philadelphia PA 	19106
Counsel for Debtor
Vicki Piontek, Esquire
24 West Governor Road
Hershey, PA 17033
Counsel for eCast Settlement Corp
Natalie M. McGhee, Esquire
William McNeal, Esquire
16 General Warren Blvd
P.O. Box 3001
Malvern, PA 19355
Chapter 13 Trustee
Frederick J. Reigle, Esquire
Chapter 13 Trustee
2901 St. Lawrence Ave
P.O. Box 4010
Reading PA 19606
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