Diana F. Zelman v. Capital One Bank (USA) N.A. ( 2019 )

FILED
Oct 10 2019, 6:47 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT
Jason R. Delk
Muncie, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Diana F. Zelman, October 10, 2019
Appellant-Defendant, Court of Appeals Case No.
19A-CC-989
v. Appeal from the Delaware Circuit
Court
Capital One Bank (USA) N.A., The Honorable Thomas A.
Appellee-Plaintiff Cannon Jr., Judge
Trial Court Cause No.
18C05-1609-CC-714
Bailey, Judge.
Court of Appeals of Indiana | Opinion 19A-CC-989 | October 10, 2019 Page 1 of 11
Case Summary
[1] Diana Zelman (“Zelman”) appeals the trial court’s order granting summary
judgment to Capital One Bank (USA) N.A. (“Bank”) on its claim against
Zelman for nonpayment of credit card debt. Zelman raises one issue on appeal
which we restate as whether the trial court erred when it concluded that Bank
had satisfied its burden of proof under Indiana Trial Rule 56.
[2] We reverse and remand.
Facts and Procedural History
[3] On September 30, 2016, Bank filed a complaint alleging that Zelman had an
unpaid credit card balance owed to Bank. On December 15, 2016, Zelman filed
an answer in which she denied all the allegations of the complaint. On January
3, 2019, Bank filed a motion for summary judgment in which it designated the
following evidence in support: the complaint and exhibits; Zelman’s answer;
Bank’s memorandum in support of summary judgment; and Bank’s “Affidavit
of Debt,” attached to the memorandum as Exhibit A. The latter document
stated, in relevant part:
PERSONALLY APPEARED before the undersigned officer.
duly authorized to administer oaths, Jamie Williams, who states
under oath as follows:
l. I am over 18 years old and competent to testify to the
matters set forth herein. I am an employee of Capital One
Services, LLC, (“COSLLC”), an agent and affiliate of Plaintiff
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CAPITAL ONE BANK (USA), N.A. (“Capital One”).
COSLLC provides services to Capital One in connection with its
credit card and related banking practices and my job
responsibilities as Litigation Support Representative provide me
with access to all relevant systems and documents of Capital One
needed to validate the below information. I am authorized by
Capital One to testify to the matters set forth herein. As a result
of the scope of my job responsibilities, I have personal knowledge
of the manner and method by which Capital One creates and
maintains certain business books and records, including
computer records of customer accounts.
2. The Capital One books and records are made in the course
of Capital One’s regularly conducted business activity and it is a
regular practice-of Capital One to make these books and records.
Each of the Capital One books and records reviewed are made:
(l) at or near the time the events they purport to describe
occurred, by a person with knowledge of the acts and events; or,
(2) by a computer or other similar digital means, which
contemporaneously records an event as it occurs.
3. The books and records of Capital One show that
Defendant(s) opened a credit card account with Capital One on
03/01/1997 for the purpose of obtaining an extension of credit
and did thereafter use or authorize the use of the account for the
acquisition of goods, services, or cash advances in accordance
with the Customer Agreement governing use of that account.
The last payment attempt in the amount of $141.00 on
03/13/2015 did not satisfy the outstanding balance and thus
created a default on the account.
4. The books and records of Capital One show that at the
time Defendant’s(s’) account, XXXXXXXXXXXX7308, charged
off in the ordinary course of business, the just and true sum of
$6292.34 remained due and owing as of 10/17/2015. There
have been no late fees assessed after 10/17/2015.
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5. The books and records of Capital One show that credit has
been given to Defendant(s) for all just and lawful offsets,
payments, and credits as of the date hereof, and there now
remains due and owing on account number
XXXXXXXXXXXX7308 the just and true sum of $6292.34 as of
07/14/2016. This balance is comprised of Defendant’s(s’)
outstanding debt on the date the account charged off (including
any pre-charge-off transactions, interest, and/or fees) less any
offsets, payments, or credits applied to the account after the
charge-off date.
App. at 28-29. Bank’s memorandum in support of summary judgment also had
as an attachment Exhibit B, which the memorandum alleged to be “copies of
the account statements for account #************7308.” Id. at 26.
[4] Zelman opposed summary judgment on the grounds that Bank had failed to
designate admissible evidence in support of its motion and moved to strike the
designated evidence from the record. At the March 4 hearing, the trial court
took the pending motions under advisement and gave Bank ten days to file a
response to Zelman’s motion to strike. On March 14, Bank filed its
“Supplement to Motion for Summary Judgment” and supporting memorandum
in which it argued that its previously-filed designated evidence was admissible
and supported its motion for summary judgment. On April 2, 2019, the trial
court granted Bank’s motion for summary judgment. Specifically, the trial
Court of Appeals of Indiana | Opinion 19A-CC-989 | October 10, 2019 Page 4 of 11
court held that Bank’s designated evidence was admissible1 and supported its
motion. Zelman now appeals.
Discussion and Decision
[5] Our standard of review for summary judgment is well settled. When
reviewing a grant or denial of summary judgment, we apply the same
standard as the trial court.
The party moving for summary judgment has the burden of
making a prima facie showing that there is no genuine issue
of material fact and that the moving party is entitled to
judgment as a matter of law. Once these two requirements
are met by the moving party, the burden then shifts to the
non-moving party to show the existence of a genuine issue
by setting forth specifically designated facts. Any doubt as
to any facts or inferences to be drawn therefrom must be
resolved in favor of the non-moving party.
Daviess-Martin Cty. Joint Parks and Recreation Dep’t v. Estate of Abel by Abel,
77 N.E.3d 1280, 1285 (Ind. Ct. App. 2017) (citations omitted), trans.
denied.
[6] However, Bank has not filed an appellee’s brief. Therefore, we apply a less
stringent standard of review and may reverse the grant of summary judgment if
1
By holding the Bank’s designated evidence was admissible, the court, in effect, denied Zelman’s motion to
strike.
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Zelman has shown prima facie error. Ind. Appellate Rule 45(D); see also, e.g.,
First Am. Title Ins. Co. v. Calhoun, 13 N.E.3d 423, 430-31 (Ind. Ct. App. 2014).
“Prima facie error” is error at first sight, at first appearance, or on the face of it.
Calhoun, 13 N.E.3d at 431.
[7] Zelman contends that summary judgment was not warranted because Bank
failed to support its summary judgment motion with admissible designated
evidence. To support its motion for summary judgment, Bank was required to
show that Zelman had opened a credit card account with Bank and that Zelman
owed Bank the amount alleged in the complaint. See Seth v. Midland Funding,
LLC, 997 N.E.2d 1139, 1140 (Ind. Ct. App. 2013) (discussing designated
evidence necessary to make prima facie case in support of summary judgment
in favor of creditor claiming breach of credit card contract). Zelman alleges
Bank failed to make that showing because: (1) Bank failed to attach to its
Affidavit of Debt copies of documents to which the Affidavit refers, as required
by Indiana Trial Rule 56(E); (2) the Affidavit of Debt was not based on personal
knowledge as required by Trial Rule 56(E); and (3) Bank failed to lay a proper
foundation as to its Exhibit titled “Capital One Customer Agreement”
(“Customer Agreement”) and its Exhibit B, as required to authenticate those
documents under the business record exception to hearsay, Indiana Evidence
Rule 803(6).
[8] Indiana Trial Rule 56 permits parties to submit affidavits in support of their
motions for summary judgment. However, subsection E of that rule imposes
certain mandatory requirements; it states, in relevant part:
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Supporting and opposing affidavits shall be made on personal
knowledge, shall set forth such facts as would be admissible in
evidence, and shall show affirmatively that the affiant is
competent to testify to the matters stated therein. Sworn or
certified copies not previously self-authenticated of all papers or
parts thereof referred to in an affidavit shall be attached thereto
or served therewith.
T.R. 56(E).
[9] Thus, in ruling on a motion for summary judgment, the trial court will consider
only properly designated evidence which would be admissible at trial. E.g.,
D.H. by A.M.J. v. Whipple, 103 N.E.3d 1119, 1126 (Ind. Ct. App. 2018), trans.
denied. Such evidence does not include inadmissible hearsay contained in an
affidavit. See, e.g., Holmes v. Nat’l Collegiate Student Loan Trust, 94 N.E.3d 722,
725 (Ind. Ct. App. 2018). Nor does it include documents that are unsworn
statements or unverified exhibits. Greenfield v. Arden Seven Penn Partners, L.P.,
757 N.E.2d 699, 702 n.3 (Ind. Ct. App. 2001), trans. denied. Moreover, it is well
settled that “‘if a document is relied upon to support a motion for summary
judgment, it must be exhibited in full; affidavits as to its substance, effect or
interpretation are not sufficient.’” Reef v. Asset Acceptance, LLC, 43 N.E.3d 652,
654 (Ind. Ct. App. 2015) (quoting Marich v. Kragulac, 415 N.E.2d 91, 100 (Ind.
Ct. App. 1981), disapproved of on other grounds by Presbytery of Ohio Valley, Inc. v.
OPC, Inc., 973 N.E.2d 1099 (Ind.2012)); see also Lukacs v. Kluessner, 154 Ind.
App. 452, 456-57, 290 N.E.2d 125, 128 (1972).
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[10] Here, neither the “Customer Agreement”2 attached to Bank’s complaint, nor
Zelman’s purported credit card statements attached to the summary judgment
motion as Exhibit B were certified or sworn; therefore, they were inadmissible
hearsay and were not proper Rule 56 evidence. See Seth, 997 N.E.2d at 1140-41
(holding uncertified, unsworn exhibits consisting of alleged transaction history,
credit card statement, and terms of credit card agreement were inadmissible and
not proper Rule 56 evidence).
[11] Further, the Affidavit of Debt does not authenticate those unsworn and
unverified documents as records of regularly conducted business activity
pursuant to the hearsay exception specified in Rule of Evidence 803(6). 3 The
affiant, a “Litigation Support Representative” employed by Bank’s affiliate,
stated that she had “access to” the Bank’s “relevant systems and documents …
needed to verify” the information in the affidavit, but never states what those
documents are. App. at 28-29. The affiant further states that she has “personal
2
We note that the “Customer Agreement” did not anywhere contain Zelman’s name, signature, or credit
card account number. App. at 11-16.
3
A record is an exception to the rule against hearsay under that rule if:
(A) the record was made at or near the time by—or from information transmitted by—someone
with knowledge;
(B) the record was kept in the course of a regularly conducted activity of a business, organization,
occupation, or calling, whether or not for profit;
(C) making the record was a regular practice of that activity;
(D) all these conditions are shown by the testimony of the custodian or another qualified witness …;
and
(E) neither the source of information nor the method or circumstances of preparation indicate a lack
of trustworthiness.
Evid. R. 803(6).
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knowledge of the manner and method by which [Bank] creates and maintains
certain business books and records, including computer records of customer
accounts.” However, she does not identify the “books and records” to which
she refers. She also fails to identify the Customer Agreement attached to the
complaint as “the Customer Agreement governing use of [Zelman’s] account,”
id. at 29, or identify the Customer Agreement or credit card statements in
Exhibit B as “computer records of customer accounts,” id. at 28. Similarly, the
affiant refers to the Bank “books and records reviewed,” but does not identify
any such documents. Id.
[12] Thus, the Affidavit of Debt did not lay a proper foundation to authenticate the
Customer Agreement or credit card statements as business records admissible
under Evidence Rule 803(6)’s hearsay exception. See, e.g., Williams v. State, 64
N.E.3d 221, 225 (Ind. Ct. App. 2016) (holding that, in order to admit
documents under the business records exception, “the proponent of the exhibit
may call a witness who has a functional understanding of the record-keeping
process of the business with respect to the specific entry, transaction, or declaration
contained in the document.” (emphasis added)). Rather, the affiant’s knowledge
of the facts asserted in her affidavit “is limited to what she has gleaned from her
review of unspecified business records,” and her affidavit is, therefore, “based
entirely upon hearsay, in violation of Trial Rule 56(E).” Seth, 997 N.E.2d at
1142; see also Holmes, 94 N.E.3d 722, 725 (“As an exception to the hearsay rule,
the business record exception must be strictly construed.”). And the affiant’s
employment as a litigation support representative of Bank’s affiliate does not, in
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itself, establish her personal knowledge of any of the facts relating to the
complaint. Seth, 997 N.E.2d at 1142.
[13] In addition, because the affiant explicitly states that her affidavit is based upon
her personal knowledge of facts obtained from Bank’s business records, she was
required to attach to, or submit with, her affidavit sworn, certified, or self-
authenticated copies of any such records upon which she relied. Id. at 1143.
She did not attach to or submit with her affidavit any such records, and her
failure to do so means we must disregard her affidavit.4 T.R. 56(E); see also Reef,
43 N.E.3d at 654 (stating documents in support of summary judgment must be
exhibited, and affidavits as to their substance are not sufficient).
Conclusion
[14] Bank failed to designate admissible evidence establishing that Zelman had
opened a credit card account with Bank and that Zelman owed Bank the
amount alleged in the compliant. Zelman has shown prima facie error in the
trial court order granting Bank summary judgment; therefore, we reverse that
order and remand for further proceedings.
4
In reaching the opposite conclusion, the trial court erroneously relied upon Meyer v. Nat’l City Bank, 903
N.E.2d 974 (Ind. Ct. App. 2009). App. at 52. Meyer is inapplicable as it did not involve a challenge to the
designated evidence or otherwise address admissibility of such evidence under Trial Rule 56(E). Id. Of
course, in any case, on review of a summary judgment decision we are not bound by trial court findings and
conclusions. E.g., Webb v. City of Carmel, 101 N.E.3d 850, 861 (Ind. Ct. App. 2018) (“Where a trial court
enters specific findings and conclusions, they offer insight into the rationale for the trial court’s judgment and
facilitate appellate review but are not binding upon this court.”).
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[15] Reversed and remanded.
Najam, J., and May, J., concur.
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