LVNV FUNDING, LLC v. MASTAW
LVNV FUNDING, LLC AS ASSIGNEE OF SEARS GOLD MASTERCARD,
v.
KEVIN MASTAW.
No. M2011-00990-COA-R3-CV.
Court of Appeals of Tennessee, at Nashville.
December 14, 2011 Session.
Filed April 30, 2012.
James E. Kirby, Antioch, Tennessee for Defendant/Appellant Kevin Mastaw.
Byron C. Hamlett, Nashville, Tennessee for Plaintiff/Appellee LVNV Funding, LLC as assignee of Sears Gold MasterCard.
HOLLY M. KIRBY, J., delivered the opinion of the Court, in which DAVID R. FARMER, J., and J. STEVEN STAFFORD, J., joined.
OPINIONHOLLY M. KIRBY, JUDGE.
This appeal concerns the collection of credit card debt. The plaintiff, a subsequent purchaser of the debt, filed this collection action against the appellant debtor. On appeal, the appellant debtor argues, inter alia, that the trial court erred in admitting into evidence various documents from a previous owner of the debt, pursuant to the hearsay exception for business records under Tenn. R. Evid. Rule 803(6). We hold that two of the exhibits were not appropriately admitted into evidence under the business records exception. Without those exhibits, we find that the evidence preponderates against the trial court's judgment in favor of the creditor, and reverse.
FACTS AND PROCEEDINGS BELOWIn December 2009, Plaintiff/Appellee LVNV Funding, LLC, ("LVNV") as assignee of Sears Gold MasterCard, filed a civil warrant in the General Sessions Court of Davidson County against Kevin J. Mastaw ("Mastaw"). The warrant asserted that Mastaw owed $15,101.23 plus pre- and post-judgment interest on his MasterCard credit card. The General Sessions Court conducted a trial in June 2010 and a judgment in favor of LVNV was entered in the amount of $16,406,77.
Mastaw filed an appeal to the Circuit Court of Davidson County ("trial court"). The de novo trial was held on March 21,2011.1 The record does not contain a transcript of the trial, but the trial court entered an approved Statement of the Evidence. Our recitation of the facts is taken from this Statement.2 At the outset of the trial, Mastaw made an oral motion to bar LVNV from proceeding with the debt collection against him, arguing that LVNV is a purchaser of accounts and engaged in debt collection as defined under Section 62-20-101, et seq. As such, Mastaw contended, LVNV was required to be licensed as a collection agency before attempting to collect the alleged debt.3 The trial court reserved its ruling on the motion until it heard the evidence regarding this issue.
1. Tenn. Code Ann. § 27-5-108(c) (2000).
2. We note that Mastaw's appellate argument on one issue is recited from his proposed statement of evidence, which was rejected by the trial court, instead of the statement of the evidence that was approved by the trial judge. Unless an issue is raised on appeal regarding the statement of the evidence, we will not consider a statement of the evidence proffered by a party and expressly rejected by the trial judge.
3. Mastaw made another oral pretrial motion to bar LVNV from proceeding because it did not have a certificate of authority to transact business in the state of Tennessee pursuant to Tennessee Code Annotated § 48-25-102(a). Ultimately, the trial court held that Mastaw did not show that LVNV is a foreign corporation, and even if he had, the trial court held, the collection of debts does not constitute "transacting business" under Section 48-25-101, and thus LVNV was not required to obtain a certificate of authority. This issue is not raised on appeal, so we do not address it.
4. Exhibit 2 references an agreement between Citibank and Sherman dated January 18, 2008 which describes the accounts being transferred from Citibank to Sherman in Section 1.2 of that agreement. This agreement is not included in the record; however, Exhibit 2 states that Sherman transfers to LVNV and LVNV's successors and assigns "the Accounts described in Section 1.2 of the Agreement."
5. Exhibit 3 references a separate agreement dated April 29, 2005, setting forth the terms of the sale; it identifies the receivable assets as delivered to LVNV with this document. Exhibit 3 also attaches a document entitled "Receivable File-Portfolio IDs," dated July 31, 2008, highlighting portfolio number 11474.
6. The record fails to specify the gender of Tobie Griffin. For the purpose of this appeal, we will assume Griffin is female.
7. Exhibit 6 indicates that payments of approximately $500 were made on the account in July, September, October, and November 2007, with no payments after November 2007.
8. Mastaw concedes that Exhibit #1 "Limited Power of Attorney" executed between LVNV and Resurgent was properly introduced into evidence.
9. Under Rule 902(11) of the Tennessee Rules of Evidence, a business record may also be authenticated through an accompanying affidavit, with the following requirements:
The original or a duplicate of a domestic record of regularly conducted activity that would be admissible under Rule 803(6) if accompanied by an affidavit of its custodian or other qualified person certifying that the record:
(A) was made at or near the time of the occurrence of the matters set forth by, or from information transmitted by, a person with knowledge of and a business duty to record or transmit those matters;
(B) was kept in the course of the regularly conducted activity; and
(C) was made by the regularly conducted activity as a regular practice.
A party intending to offer a record into evidence under this paragraph must provide written notice of that intention to all adverse parties, and must make the record and declaration available for inspection sufficiently in advance of their offer into evidence to provide an adverse party with a fair opportunity to challenge them.
Tenn. R. Evid. 902 (11) (2011). In this case, the trial court relied only on Rule 803(6), with Parks as the custodian, so we do not address Rule 902(11).
10. Despite this language, there is no indication in the record that Griffin's affidavit was submitted pursuant to Tenn. R. Evid. 902(11), or that the trial court considered it as such.
11. The Palmer Court quoted Judge Learned Hand:
The routine of modern affairs, mercantile, financial and industrial, is conducted with so extreme a division of labor that the transactions cannot be proved at first hand without the concurrence of persons, each of whom can contribute no more than a slight part, and that part not dependent on his memory of the event. Records, and records alone, are their adequate repository, and are in practice accepted as accurate upon the faith of the routine itself . . . . Unless they can be used in court without the task of calling those who at all stages had a part in the transactions recorded, nobody need ever pay a debt, if only his creditor does a large enough business.
Palmer, 318 U.S. at 112 n.2 (quoting Mass. Bonding & Ins. Co. v. Norwich Pharmacal Co., 18 F.2d 934, 937 (2d Cir. 1927).
12. In Fusner v. Coop Contruct. Co., LLC, 211 S.W.3d 686 (Tenn. 2007), the Supreme Court held that a compilation of business records, compiled for specific litigation, may be admissible as a "summary" of "voluminous writings" under Tenn. R. Evid. 1006, "so long as the data included in a compilation otherwise satisfies the business records exception . . . ." Id. at 693. We note that Exhibit 6 in this case, is a compilation of Mastaw's MasterCard statements. However, even if Exhibit 6 is admissible under the principle in Fusner, it is not sufficient in and of itself because it does not "link up" LVNV with the debt nor does it show LVNV's ownership of the debt. The assignment agreements in Exhibits 2 and 3 show the trail of assignment of debts to LVNV, but do not sufficiently identify Mastaw's debt as among those assigned.
13. Having determined that this appeal should be decided on the inadmissability of Exhibits 4 and 5, this Court expressly declines to determine whether the trial court erred in finding Parks was a qualified witness to authenticate the inherited documents at issue. However, we note that Tennessee courts have broadly defined the term "qualified witness" as a witness with "personal knowledge of the business's record-keeping methods and can explain same to the court" and is not "required to have personal knowledge of the facts recorded, nor to have been personally involved in preparing the documents or even know who did." See Beal Bank S.S.B. v. RBM Co., No. E2001-00520-COA-R3-CV, 2002 WL 43604, at *2; 2002 Tenn. App. LEXIS 21, at * 5-6 (Tenn. Ct. App. Jan. 11, 2002) (citing Alexander, 903 S.W.2d at 700).