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“Stellar” argument wins on appeal


The Circuit Court of Volusias County, Appellate Division, has ruled in favor of Stellar Recovery, Inc. (Stellar), represented by Attorney Ernest H. “Skip” Kohlmyer, III of Urban Thier & Federer, P.A. This ruling in Stellar Recovery, Inc. v. Gustavo D. Canete, in the Circuit Court, Seventh Judicial Circuit in and for Volusia County, Florida, Appellate Division, Case No.: 2015-10012 APCC, established important precedent in the debt collection industry.In this case, Stellar purchased a consumer debt as part of a bulk purchase and sale agreement from HSBC. After the underlying debt collection litigation was dismissed, the County Court judge granted Canete’s motion for entitlement to attorney’s fees and costs under Section 57.105 Fla. Stat. over the objection of Stellar’s collection counsel.

Canete’s counsel presented the credit card agreement issued by Capital One despite Stellar’s objection that the binding cardholder agreement was issued by HSBC. More important, Stellar argued that the court erred in applying Florida law when the card holder agreements contained choice of law provisions which would not recognize a reciprocal fee agreement as provided by Section 57.105.

Stellar made the following arguments on appeal:

The business records affidavit was not reliable on its face as it represented that the attached Capital One Agreement was the applicable cardholder agreement between the parties, when Capital One was never a party to the agreement at issue.

2. The date of the attached agreement postdated the date of default by the Appellee and therefore was irrelevant to this action.

3. The Capital One Agreement was patently unreliable and as such is hearsay and did not fall within the business records exception.

The Appellate court agreed with Stellar’s arguments and held that “the lower court abused its discretion by admitting the Capital One Agreement over the objection of Appellant [Stellar].” The Appellate Court vacated the judgment for attorney’s fees because the HSBC agreement was never admitted and the Capital One Agreement was “improperly admitted and relied upon, [so] there is no contractual obligation for either party to pay attorney’s fees in this cause” as afforded under Fla. Stat. 57.105(7).

The firm wishes to thank Stellar Recovery, Inc. for the opportunity to represent them in this appeal and we are pleased to obtain such a successful reversal of this opinion.

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