Establishing Debt-Collection Proof: Alaska Supreme Court’s Portfolio Recovery Decision

Introduction

In May 2025, the Alaska Supreme Court consolidated three appeals arising from related suits brought by Portfolio Recovery Associates, LLC (“Portfolio”) against credit-card holders Jeannie Duvall, Allease Riddle, and Lorrena Terry. Portfolio, a large‐scale purchaser of charged-off debts, sued each consumer in district court to recover principal, interest, and fees. Each consumer asserted counterclaims under Alaska’s Unfair Trade Practices & Consumer Protection Act (“UTPA”), alleging that Portfolio’s debt-collection tactics unfairly sought to collect amounts neither expressly authorized by contract nor supported by admissible proof of debt ownership.

The cases reached the superior court on motions for summary judgment, motions in limine, and three separate bench trials. The key issues were:

What evidence must a debt purchaser produce to prove it owns the underlying credit card debt?
Does Alaska recognize an “account stated” cause of action in a consumer debt context?
How do the business-records exception and adoptive-records doctrine apply when the debt purchaser relies on the original creditor’s files?
What standards govern UTPA claims for suing without proof of a valid contract or attempting to collect unauthorized fees?
When and how should a prevailing consumer recover statutory damages and full attorney’s fees?

Summary of the Judgment

The Supreme Court of Alaska affirmed the superior courts on nearly all points, holding that:

Alaska has not recognized an account stated cause of action in consumer debt suits; debt purchasers must plead and prove a traditional breach‐of‐contract claim.
Debt purchasers must establish by admissible evidence (under the business-records exception to hearsay or other appropriate authentication) both the material terms of the original credit-card agreement and a complete chain of assignment showing ownership of the specific account.
Seeking to collect interest, late fees, or other incidental charges not “expressly authorized by the agreement creating the debt or permitted by law” (15 U.S.C. §1692f(1)) violates Alaska’s UTPA by way of the FDCPA.
Filing suit without admissible proof of debt ownership or ability to obtain that proof is an unfair or deceptive practice under the UTPA.
Consumers who prevail on UTPA counterclaims are entitled to statutory damages ($500 or treble actual damages) for any “ascertainable loss” (including modest out-of-pocket expenses) and to full reasonable attorney’s fees. However, courts must carefully segregate attorney’s fees by claim and justify any reductions.

Remands: Two narrow remands were ordered on attorney’s-fees awards—one for clarification of the reasons for fee reductions, the other to correct a small mathematical error.

Analysis

1. Precedents Cited

FDCPA & UTPA integration: The Court reiterated that every FDCPA violation is necessarily a UTPA violation (Alaska Tr., LLC v. Ambridge, 372 P.3d 207, 226 (Alaska 2016)).
Contract formation and assignment: Borrowing from decisions across jurisdictions, the Court held that debt purchasers must prove a valid contract (offer, acceptance, consideration, definite terms) and a specific chain of assignment (see Askew, 358 S.W.3d 58 (Mo. 2012); Bazemore v. Jefferson Cap. Sys., LLC, 827 F.3d 1325 (11th Cir. 2016)).
Business-records exception: The Court applied Alaska Rule of Evidence 803(6), requiring a qualified witness with personal knowledge of record-keeping practices of the entity that created the documents (Wassillie v. State, 411 P.3d 595 (Alaska 2018)).
Account stated: The Supreme Court noted that Alaska has never recognized this cause of action (see Foltz‐Nelson Architects v. Kobylk, 749 P.2d 1347, 1349 n.2 (Alaska 1988)) and declined to be the first.
Unauthorized fees (FDCPA §1692f(1)): Citing McCollough v. Johnson, Rodenburg & Lauinger, LLC, 637 F.3d 939 (9th Cir. 2011), the Court held that generic or unauthenticated agreements are insufficient to show express authorization of incidental charges.
Discovery sanctions: Alaska Civil Rule 37(c)(1) makes exclusion the presumptive sanction for failure to disclose witnesses without substantial justification (Adkins v. Collens, 444 P.3d 187 (Alaska 2019)).
Attorney’s-fees allocation: The ruling drew on Hensley v. Eckerhart, 461 U.S. 424 (1983), and Alaska’s modified lodestar approach (Adkins, 444 P.3d at 199) to explain how to calculate and adjust full fees under the UTPA versus percentage awards under Rule 82.

2. Legal Reasoning

Pleading & account stated: Alaska follows liberal notice-pleading (Alaska R. Civ. P. 8(a)), but a novel cause of action must still give fair notice of its elements. An account stated requires proof of a final statement, debtor’s assent, and a promise to pay—none of which was pled in Portfolio’s complaint. Motions in limine to exclude an unpled claim were proper.

Hearsay & business records: Portfolio sought to rely on Synchrony and Citibank files as “adoptive” business records. Alaska Rule 803(6) requires a custodian or qualified witness with personal knowledge of record-making practices. The court found Portfolio’s witnesses lacked first-hand knowledge of the original creditor’s systems, and admissibility was properly denied.

Evidence of debt ownership: To succeed on contract claims, Portfolio had to present the actual cardholder agreement governing the account when charged-off and documentary proof linking that specific account through each assignment. Generic “sample” agreements and bulk-assignment affidavits do not suffice.

UTPA counterclaims—unauthorized fees: Section 1692f(1) of the FDCPA (incorporated by the UTPA) prohibits collecting incidental charges without express contractual or statutory authorization. Post-charge-off, generic or unknown versions of the agreement cannot bear the weight of that express authorization. Summary judgment (Duvall) and post-trial rulings (Terry) properly found UTPA violations.

UTPA counterclaims—no proof of claim: Suing on a debt without admissible proof of ownership or ability to obtain it is an “unfair” or “deceptive” practice under AS 45.50.471. The Court held that lacking evidence at summary judgment or trial demonstrates inability to produce proof when required, a UTPA violation.

Statutory damages: “Ascertainable loss” under AS 45.50.531(a) need not be large—minimal out-of-pocket expenses (parking, lost wages) suffice. Attorney’s fees, by contrast, belong under the separate fee‐shifting section (AS 45.50.537).

Attorney’s fees: Full reasonable fees under AS 45.50.537(a) apply only to work “reasonably connected” to successful UTPA claims. Courts must use a lodestar baseline and may adjust it under the Johnson-Kerr factors. Where fee reductions were made, specific findings must support them. The Court remanded two fee awards for clarification or correction.

3. Impact

This decision will reshape consumer-debt litigation in Alaska by raising the bar for debt purchasers:

They must maintain or obtain the original cardmember agreement and a detailed chain of assignment identifying each account purchased.
They must designate witnesses with first-hand knowledge of the original creditor’s record-keeping for hearsay‐exception purposes.
Alaska courts will not permit generic or unpled theories such as account stated as a backstop for weak proof.
UTPA counterclaims for unauthorized fees and lack of evidence will become standard defensive tools.
Statutory damages for consumers will often exceed the small debts at issue, and courts will scrutinize attorney’s-fee claims carefully, ensuring proper allocation between statutory and non-statutory work.

Debt purchasers should overhaul their acquisition files and litigation practices now to meet these standards—preserve original contracts, audit assignment processes, secure qualified witnesses, and tailor pre-suit documentation to anticipate UTPA challenges.

Complex Concepts Simplified

Account Stated: A legal theory allowing a creditor to collect a sum the debtor failed to dispute after receiving a final statement. Alaska has not recognized it in consumer debt cases.
Business-Records Exception (Alaska R. Evid. 803(6)): Allows a document created in the ordinary course of business to be admitted without live testimony about every transaction—so long as a qualified witness knows how the documents are made and kept.
FDCPA §1692f(1): Federal rule prohibiting debt collectors from collecting any interest, fee, or charge unless the original contract or law plainly allows it. Alaska’s UTPA incorporates this prohibition.
Ascertainable Loss: Under Alaska’s UTPA, consumers may recover statutory damages if they suffer any measurable loss—such as parking, phone calls, or lost work time—due to an unfair practice.
Modified Lodestar Method: Calculating full attorney’s fees by multiplying reasonable hours by a reasonable rate, then adjusting up or down based on factors like complexity, results, and customary fees.

Conclusion

The Alaska Supreme Court’s Portfolio Recovery decisions establish rigorous evidentiary and procedural requirements for debt-collection suits. Debt purchasers must now:

Document every assignment by account number and preserve the original cardholder agreement.
Secure qualified witnesses to authenticate the original creditor’s records under Alaska Rule 803(6).
Plead and prove traditional breach-of-contract elements; account stated is not available.
Avoid collecting unauthorized fees—otherwise face UTPA counterclaims and statutory damages.
Prepare for aggressive consumer challenges and be ready to justify any incurred attorney’s fees.

This precedential ruling reinforces consumer protections in Alaska while guiding courts toward a consistent, principled approach to evidence, pleading, and fees in debt-collection litigation.