Key Takeaway
Expert analysis of NY business records exception and assignment of benefits requirements. Learn how to avoid costly procedural pitfalls in Long Island and NYC courts.
Understanding Assignment of Benefits and Business Records in New York Law
In New York’s complex legal landscape, the intersection of assignment of benefits and business record evidence can create significant challenges for attorneys and their clients. Whether you’re dealing with personal injury cases, no-fault insurance claims, or commercial litigation in Nassau County, Suffolk County, or the greater New York area, understanding these legal principles is crucial for building strong cases and avoiding costly procedural pitfalls.
The relationship between standing to sue and the admissibility of business records has evolved considerably over the years, with courts becoming increasingly strict about the foundational requirements needed to establish both elements. This evolution has particularly impacted cases involving assigned claims, where third parties seek to recover on behalf of the original creditors or claimants.
The Landmark Palisades Collection Case: A Cautionary Tale
The Fourth Department in Palisades Collection, LLC v Kedik, 2009 NY Slip Op 08259 (4th Dept. 2009) discussed standing and the business record rule, all in one decision. Interestingly, the failure to get the assignment of benefits into evidence proved fatal to the Plaintiff Assignee’s prima facie case. I think Judge Billings 5 years ago wrote a similar decision in the no-fault realm, prior to the Appellate Division and Court of Appeals’ decisions, which held that technical standing is not part of a plaintiff’s prima facie case.
For those who venture outside no-fault and deal with assigned actions, here is how the Fourth Division evaluates these issues:
“Plaintiff, as the alleged assignee of Discover Bank (Discover), commenced this action for breach of contract and account stated seeking to recover the balance owed on a credit card issued to defendant. Supreme Court denied in part plaintiff’s motion for partial summary judgment dismissing seven of the affirmative defenses, reserved decision in part, and ordered plaintiff to provide evidence that it had standing. Following plaintiff’s further submissions, the court concluded that plaintiff failed to provide admissible evidence of its standing and sua sponte granted defendant summary judgment dismissing the complaint. We affirm.
To establish standing to sue, plaintiff was required to submit admissible evidence that Discover assigned its interest in defendant’s debt to plaintiff (see generally Rockland Lease Funding Corp. v Waste Mgt. of N.Y., 245 AD2d 779). Here, plaintiff submitted an affidavit from its agent with exhibits, including a printed copy of several pages from an electronic spreadsheet listing defendant’s Discover account as one of the accounts sold to plaintiff. Contrary to the contention of plaintiff, the court properly determined that it failed to establish a proper foundation for the admission of the spreadsheet under the business record exception to the hearsay rule (see generally Speirs v Not Fade Away Tie Dye Co., 236 AD2d 531).
A business record is admissible if “it was made in the regular course of any business and … it was the regular course of such business to make it, at the time of the act, transaction, occurrence or event, or within a reasonable time thereafter” (CPLR 4518 ; see generally People v Kennedy, 68 NY2d 569, 579-580). “A proper foundation for the admission of a [*2]business record must be provided by someone with personal knowledge of the maker’s business practices and procedures” (West Val. Fire Dist. No. 1 v Village of Springville, 294 AD2d 949, 950). Although plaintiff’s agent averred that the spreadsheet was kept in the regular course of business and that the entries therein were made in the regular course of business, the agent did not establish that he was familiar with plaintiff’s business practices or procedures, and he further failed to establish when, how, or by whom the electronic spreadsheet submitted in paper form was made (see CPLR 4518 ; West Val. Fire Dist. No. 1, 294 AD2d at 950). Furthermore, although an electronic record “shall be admissible in a tangible exhibit that is a true and accurate representation of such electronic record” (id.), plaintiff’s agent failed to establish that the printed electronic spreadsheet submitted to the court was a true and accurate representation of the electronic record kept by plaintiff.”
Critical Implications for Long Island and NYC Legal Practice
Standing Requirements in Assigned Claims
The Palisades decision highlights a fundamental principle that resonates throughout New York’s legal system, from the courts of Nassau and Suffolk Counties to Manhattan’s Supreme Court. When pursuing assigned claims, attorneys must be meticulous about establishing their client’s legal right to bring the action. This requirement extends beyond simply having an assignment document—the assignment itself must be properly authenticated and admitted into evidence.
In the context of personal injury practice on Long Island and in New York City, this principle frequently arises in cases involving medical providers who have received assignments of benefits from their patients. Healthcare providers seeking to recover no-fault benefits or pursue personal injury protection claims must ensure that their assignments are not only valid but also properly introduced at trial.
The Business Records Exception: More Than Just Routine
The business records exception under CPLR 4518(a) serves as a crucial tool for introducing documentary evidence that would otherwise be excluded as hearsay. However, as the Palisades case demonstrates, courts are increasingly demanding strict compliance with the foundational requirements. This trend has significant implications for practitioners handling cases in the New York metropolitan area, where electronic records are ubiquitous.
The decision emphasizes that the person laying the foundation for business records must have personal knowledge of the recordkeeping practices and procedures. This requirement can create substantial challenges in today’s business environment, where records are often maintained by third-party services or sophisticated computer systems.
Practical Strategies for Long Island and NYC Attorneys
Establishing Proper Foundation for Electronic Records
Given the court’s focus on the electronic nature of the records in Palisades, attorneys practicing in Nassau County, Suffolk County, and throughout the five boroughs must be particularly careful when dealing with computer-generated evidence. The decision makes clear that simply printing electronic records is insufficient—the proponent must establish that the printed version is a true and accurate representation of the electronic original.
This requirement demands that attorneys work closely with their clients to identify witnesses who can testify about:
- The computer systems used to create and maintain records
- The regular business practices surrounding record creation
- The accuracy and reliability of the electronic systems
- The procedures for printing or extracting data from electronic systems
Assignment Documentation Best Practices
The standing issues raised in Palisades underscore the importance of proper assignment documentation. For attorneys representing assignees in Long Island and New York City courts, this means ensuring that assignment documents are not only properly executed but also accompanied by testimony from witnesses with personal knowledge of the assignment transaction.
This principle extends beyond commercial debt collection to various practice areas, including medical malpractice, personal injury, and insurance coverage disputes where assignments of benefits are common.
Frequently Asked Questions
What is the business records exception and when does it apply?
The business records exception under CPLR 4518(a) allows certain documents to be admitted into evidence even though they would normally be considered hearsay. To qualify, records must have been made in the regular course of business, and it must have been the regular practice to make such records at or near the time of the events they describe. The person offering the records must have personal knowledge of the business’s recordkeeping practices.
How can attorneys avoid the problems highlighted in the Palisades case?
Attorneys should ensure they have witnesses who can testify about both the creation and maintenance of business records, particularly electronic records. The witness must be familiar with the specific business practices and be able to establish that printed versions of electronic records are true and accurate representations of the originals.
What constitutes proper standing in assignment cases?
To establish standing as an assignee, you must present admissible evidence that the original party assigned their rights to your client. This typically requires both the assignment document itself and testimony establishing its authenticity and the circumstances of the assignment.
Do these requirements differ between Long Island and NYC courts?
While the fundamental legal principles remain consistent across New York State, different judges may have varying approaches to evidentiary requirements. However, the Palisades decision represents binding precedent for all Fourth Department courts and persuasive authority throughout the state.
Looking Forward: The Evolution of Evidence Law
The Palisades decision reflects broader trends in New York evidence law, particularly regarding the authentication of electronic records and the requirements for establishing standing in assigned claims. As business practices continue to evolve and electronic recordkeeping becomes even more sophisticated, attorneys throughout Long Island, Queens, Brooklyn, Manhattan, the Bronx, and Staten Island must adapt their litigation strategies accordingly.
The decision also highlights the ongoing tension between the practical realities of modern business and the traditional requirements of evidence law. Courts are struggling to balance the need for reliable evidence with the challenges posed by increasingly complex electronic systems.
Contact an Experienced New York Attorney
If you’re dealing with assignment of benefits issues, business records challenges, or standing questions in your legal matter, it’s crucial to work with an attorney who understands the intricacies of New York evidence law. Whether your case is pending in Nassau County Supreme Court, Suffolk County District Court, or any of the courts throughout the New York metropolitan area, proper preparation and attention to foundational requirements can make the difference between success and failure.
The Law Office of Jason Tenenbaum has extensive experience handling complex evidentiary issues in personal injury, commercial litigation, and insurance cases throughout Long Island and New York City. Don’t let procedural missteps derail your case—call 516-750-0595 today to discuss your legal matter with an experienced attorney who understands the challenges facing practitioners in today’s legal environment.
Related Articles
- Proving standing requirements without proper assignment documentation
- Motion seeking leave to amend answer for lack of standing defense
- Standing defense applications beyond no-fault insurance cases
- Requirements for “signature on file” assignment documentation
- New York No-Fault Insurance Law
Legal Update (February 2026): Since this 2009 post, New York courts have continued to refine the standards for assignment of benefits and business records admissibility, particularly in no-fault insurance litigation. CPLR 4518 requirements and standing doctrine may have evolved through subsequent appellate decisions and rule amendments. Practitioners should verify current provisions regarding foundational requirements for both assigned claims and business record evidence before relying on the standards discussed in this older analysis.
