American Express Bank FSB v. Diane Deering , 2016 Me. LEXIS 129 ( 2016 )

MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2016 ME 117 Docket: Yor-15-458
Submitted
On Briefs: June 22, 2016
Decided: July 26, 2016
Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.
AMERICAN EXPRESS BANK FSB
v.
DIANE DEERING
SAUFLEY, C.J.
[¶1] Diane Deering appeals from a judgment entered in the District
Court (Biddeford, Foster, J.) in favor of American Express Bank FSB in the
amount of $22,339.94 after a trial during which American Express argued that
Deering owed that amount in credit card debt. Deering argues that the court
erred in admitting records pursuant to the business records exception to the
hearsay rule.1 We discern no error in the court’s findings or evidentiary
rulings, and we affirm the judgment.
1 Deering also argues that the court erred in finding that the parties had entered into a binding
contract and that American Express proved the amount due; that the court erred in permitting
acceleration of the debt; and that “to the extent the district court relied upon Utah law, it is
inappropriate in this case.” We are not persuaded by these arguments and do not address them
further in this opinion.
2
I. BACKGROUND
[¶2] On January 20, 2011, American Express filed a complaint in the
District Court alleging that Deering had entered into a credit card agreement
with American Express, used the credit card to make purchases and/or cash
advances, and failed to make payments. The complaint sought a judgment in
the amount of $22,339.94 “plus interest, costs, legal fees,” and “such other
relief” as the court deemed “just and proper.” On December 6, 2012,2 Deering
denied the allegations. On August 19, 2013, the parties convened for a
hearing but, due to pretrial issues raised by Deering, the hearing was
continued.
[¶3] On May 27, 2015, Deering filed a motion in limine seeking to
exclude from evidence “any business records for which [American Express’s]
witnesses cannot provide the required foundation pursuant to M.R. Evid.
803(6).” The court held a trial on June 2, 2015, almost three years after
Deering was served. Deering appeared through counsel but did not appear
personally and did not offer any witnesses or exhibits. American Express
2 This initial two-year delay was due in part to American Express’s inability to successfully serve
Deering after the complaint was filed. American Express ultimately filed proof of service on August
6, 2012.
3
presented the testimony of one witness—agent and employee Edmond
Garabedian.
[¶4] Because Deering challenges the court’s determination that
American Express provided the required foundation for admission of the
company’s business records, we review Garabedian’s testimony in detail. He
testified to the following. Garabedian has worked for American Express for
almost forty years in several departments. He currently works in the global
collections department, where he is a department manager and the records
custodian. He has handled hundreds of cases similar to this case.
[¶5] Garabedian provided the following details for the process of
issuing a credit card and creating account statements. Individuals can apply
for the American Express Delta SkyMiles Credit Card through a paper
application, online, or over the telephone. No account can be created without
an application. If the individual qualifies after a credit assessment, American
Express assigns a unique account number and sends the individual a card.
American Express statements are created based on the activity of the
cardholder. When a cardholder uses his or her credit card, the merchant then
uses that account number to submit a charge to American Express. American
Express stores the account number, the date and place of use, and the amount
4
of money charged. After a period of approximately twenty-eight days,
American Express gathers all of the charges, creates a monthly statement, and
makes that statement available to the cardholder. This is done in the ordinary
course of business.
[¶6] During Garabedian’s testimony, American Express offered two
exhibits pursuant to the business records exception to the hearsay rule: sixty-
two monthly statements documenting Deering’s account activity from March
2005 to September 2010 and a 2008 Delta SkyMiles Business Credit Card
Agreement. The parties agree that several monthly statements were missing
from the large group of statements. Garabedian testified that American
Express maintains these records electronically. It is not possible to change a
document after it has been printed or sent by American Express.
[¶7] With regard to the monthly statements, Garabedian testified that
someone in his office generated the statements by sending an electronic
request for their reproduction. The electronic request generates a “job”
within the archive system, which pulls the electronic information based on the
account number and time frame. The archives, which are stored on
computers located in Phoenix, Arizona, are secure, and the records are
properly maintained and stored. The reprinting is then done within the
5
American Express global mail services department, which sends the
documents to Garabedian’s office. Garabedian did not know why a few
months of statements were missing from the statements that American
Express sought to admit in evidence. Garabedian personally reviewed
monthly statements associated with Deering and identified a particular
unique account number associated with Deering’s name.
[¶8] With regard to the credit card agreement, Garabedian testified that
it was obtained by his office in the same manner as the statements. After the
agreement was created in 2008, it was automatically mailed to every new and
ongoing cardholder with a Delta SkyMiles account.
[¶9] Deering moved to exclude the records. The court found that the
statements were reliable despite the fact that a few months of statements
were missing, noting that the fact that there were missing statements “goes to
weight and not whether or not the exhibit itself is admissible.” The court also
found that Garabedian had laid a proper foundation pursuant to the business
records exception and admitted both of the exhibits.
[¶10] After trial, the court entered a written judgment in favor of
American Express. The court made extensive factual findings, including the
following. Deering obtained a Delta SkyMiles Credit Card, used it on a regular
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basis, and made periodic payments up until the spring of 2010. The card’s
monthly statements were all sent to Deering at her address in Hollis Center.
The statements detailed new charges, payments made, amounts due, and
directions as to what the cardholder should do in case of errors or questions.
The January 2009 statement warned Deering that her account was “overdue.”
Subsequent charges were made to the account. The August 2009 statement
cautioned Deering, “Your account is over-limit and past due.” Several
payments were then made. The June 2010 statement informed Deering that
her account was in default and a balance of $22,339.94 was due in full.
[¶11] Addressing the business records challenge, the court found that
Garabedian had “demonstrated an intimate and extensive knowledge of the . . .
operations, including the manner in which records are generated and
maintained.” Based on Garabedian’s testimony, the court found that the
records constituted a data compilation of acts and events made at or near the
time by, or from information transmitted by, a person with knowledge; that
such data compilation was kept in the course of a regularly conducted
business; and that it was the regular practice of American Express to make
such data compilations. See M.R. Evid. 803(6). The court concluded that the
records fell within the business records exception to the hearsay rule and
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admitted the records. See id. The court further concluded that American
Express proved that Deering and American Express had entered into a
contract and that Deering was obligated to pay the entire card balance of
$22,339.94.3 Deering timely appealed. See 14 M.R.S. § 1901 (2015); M.R.
App. P. 2.
II. DISCUSSION
[¶12] Deering argues that the court erred in admitting the monthly
statements and the credit card agreement pursuant to the business records
exception to the hearsay rule. When admission of evidence under the
business records exception to the hearsay rule is challenged, “we review a
trial court’s foundational findings to support admissibility for clear error and
its ultimate determination of admissibility for an abuse of discretion.” State v.
Abdi, 2015 ME 23, ¶ 16, 112 A.3d 360. “The admissibility of a business record
is governed by M.R. Evid. 803(6), which dictates both (1) what foundation
must be laid to admit such evidence as an exception to the rule excluding
hearsay evidence, and (2) the type of witness required to lay that
3
The balance of $22,339.94, identified by American Express as owed on May 17, 2010,
represents amounts charged by Deering, resulting interest on unpaid balances, and fees due to
Deering’s failure to make timely payments. American Express did not seek additional interest
during or after trial, and the court did not award any additional interest, costs or legal fees.
8
foundation.”4 Bank of Am., N.A. v. Greenleaf, 2014 ME 89, ¶ 25, 96 A.3d 700;
see M.R. Evid. 803(6)(D) (“All these conditions [must be] shown by the
testimony of the custodian or another qualified witness . . . .”). Deering
primarily argues that Garabedian was not qualified to lay the foundation for
entry of the documents pursuant to the business records exception to the
hearsay rule.5
4 The business records exception to the hearsay rule states:
(6) Records of a regularly conducted activity. A record of an act, event,
condition, opinion, or diagnosis [is not excluded by the rule against hearsay] 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, or by a certification that complies with Rule
902(11), Rule 902(12) or with a statute permitting certification; and
(E) Neither the source of information nor the method or circumstances of
preparation indicate a lack of trustworthiness.
M.R. Evid. 803(6).
5
To the extent Deering argues that Garabedian failed to lay the proper foundation for the
admission of the documents, the record supports the court’s findings that Garabedian’s testimony
demonstrated that the records were made from information transmitted by someone with
knowledge, see M.R. Evid. 803(6)(A); the record was kept in the course of a regularly conducted
activity of a business, see M.R. Evid. 803(6)(B); making the record was a regular practice of that
activity, see M.R. Evid. 803(6)(C); and “[n]either the source of information nor the method or
circumstances of preparation indicate a lack of trustworthiness,” see M.R. Evid. 803(6)(E). Further,
we are not persuaded by the argument that the unexplained omission of a few months of
statements indicates a lack of trustworthiness that would prevent the documents from falling
within the business records exception to the hearsay rule.
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[¶13] The foundation for the admission of records pursuant to the
business records exception “must be laid by a witness who is a ‘custodian or
another qualified witness.’” Homeward Residential, Inc. v. Gregor, 2015 ME
108, ¶ 14 n.11, 122 A.3d 947. “A qualified witness is one who was intimately
involved in the daily operation of the business and whose testimony showed
the firsthand nature of his or her knowledge.” Id. (quotation marks omitted).
[¶14] Here, Garabedian testified in extensive detail regarding his
knowledge of the daily operations and record-keeping practices of American
Express. This is not a case where the witness laying the foundation for
admission of the documents learned information regarding the operations
and the records secondhand, see, e.g., id., or where the witness failed to testify
as to the source of her knowledge regarding the operations of the business
and testified that she had received some of the records through the law firm
hired to represent the business, see, e.g., Greenleaf, 2014 ME 89, ¶ 26, 96 A.3d
700. Instead, Garabedian testified in great detail as to his involvement in the
operations in the business over the past forty years and his firsthand
knowledge of the process that resulted in the records that American Express
offered. There was ample competent evidence in the record for the court to
find that Garabedian possessed personal knowledge and was “intimately
10
involved in the daily operation of the business.” Greenleaf, 2014 ME 89, ¶ 25,
96 A.3d 700 (quotation marks omitted); see M.R. Evid. 803(6)(D). Thus, the
court did not err or abuse its discretion in admitting the documents over
Deering’s objections. Cf. Abdi, 2015 ME 23, ¶¶ 19-20, 112 A.3d 360.
The entry is:
Judgment affirmed.
On the briefs:
Mark A. Kearns, Esq., and Mark L. Randall, Esq., Portland, for
appellant Diane Deering
Randall L. Pratt, Esq., Portsmouth, New Hampshire, for
appellee American Express Bank FSB
Biddeford District Court docket number CV-2011-27
FOR CLERK REFERENCE ONLY