In what is absolutely a ridiculous ruling, and one which raises suspicion of deep pockets being invovled somewhere, the Maryland Court of Appeals essentially ruled that a debt collection agency can win a judgment despite having only hearsay evidence of their right to collect a debt.
The consolidated cases, Rainford G. Bartlett v. Portfolio Recovery Associates, LLC, No. 64, September Term 2013, and James Townsend v. Midland Funding, LLC, No. 76, September Term 2013, Opinion by Greene, J, held that debt buyers must produce certain documents sufficient to pass muster under the business records exception of the rules of evidence in order to pursue a judgment on an affidavit against a consumer. However, the ridiculous part occurs when the court went on to hold that once a consumer contests a small-claim action and it proceeds to trial on the merits, the parties do not need to conform the documents and testimony they offer to the rules of evidence.
This means that the rules of evidence do not apply and/or are relaxed in debt-buyer small-claim trials, despite there being elevated standards for the pleadings that require debt buyers to comply with the rules of evidence in order to obtain judgment by affidavit when the consumer does not defend against the case and it proceeds without a trial. Of course, everyone knows that in a default judgment situation the judges normally just "rubber stamp" whatever the debt collection agency places in front of them and never actually challenges them on the sufficiency of the pleadings so essentially the debt collection/buyer companies now have free rein to do as they please in the Maryland small claims court system.
The only solution we can suggest, assuming that this case stands, is to ask for a jury trial and then rigorously cross examine the debt collection witnesses on their inability to actually prove they own or have the right to collect the debt, as set forth in our books The Guerrilla Guide to How to Fight a Debt Collection Lawsuit and The Guerrilla Guide to Picking a Jury. It's my opinion that a jury which has been properly questioned and prepared for the issues will quickly return a verdict in favor of the debtor and against the creditor.
I predict we will be seeing this tactic appearing on appeal in all the states which have relaxed rules of evidence for the small claims court, which may mean the defendants would want to countersue for an amount in excess of the small claims court's jurisdiction and remove the case to a higher court using the stricter Rules of Evidence.