CACH, LLC v. deNourie

IN THE NEBRASKA COURT OF APPEALS
MEMORANDUM OPINION AND JUDGMENT ON APPEAL
(Memorandum Web Opinion)
CACH, LLC V. DENOURIE
NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION
AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E).
CACH, LLC, APPELLEE,
V.
JON DENOURIE, APPELLANT.
Filed January 17, 2017. No. A-15-1034.
Appeal from the District Court for Douglas County, W. RUSSELL BOWIE III, Judge, on
appeal thereto from the County Court for Douglas County, DEREK R. VAUGHN, Judge. Judgment
of District Court affirmed.
Jerrold L. Strasheim for appellant.
John T. Rogers for appellee.
MOORE, Chief Judge, and INBODY and PIRTLE, Judges.
INBODY, Judge.
INTRODUCTION
Jon deNourie appeals from an order of the district court for Douglas County affirming the
county court’s award of summary judgment in favor of CACH, LLC.
STATEMENT OF FACTS
CACH filed a complaint in county court on April 4, 2012, against deNourie, claiming that
deNourie obtained credit and borrowed money from HSBC Consumer Lending USA, that
deNourie was in default for failing to make payments on the money borrowed, and that HSBC
assigned its account claim to CACH.
On October 28, 2012, the county court issued an order to show cause and provided that the
action would be dismissed in 30 days from the date of the order unless good cause was shown.
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CACH filed a response to the order to show cause on November 30 and, on the same day, the
county court cancelled the order to show cause and retained the case on the active docket. On July
29, 2013, the county court issued a second order to show cause, again stating that the action would
be dismissed in 30 days from the date of the order unless good cause was shown.
In May 2014, CACH filed a motion for summary judgment. The hearing on the motion for
summary judgment took place in September. At the hearing, CACH offered exhibits 10, 11, and
12, which consisted mostly of affidavits. However, exhibit 12 included documents showing: a
personal credit line account between Beneficial Nebraska and deNourie with deNourie’s signature;
a loan summary line of credit between Beneficial Nebraska and deNourie with deNourie’s
signature; a preauthorized loan voucher between Beneficial Nebraska and deNourie with
deNourie’s signature; and an assignment and bill of sale between HSBC, as the managing company
for Beneficial Nebraska, to CACH. deNourie objected to the exhibits and the county court reserved
ruling on their admissibility. deNourie also provided an affidavit in which he denied obtaining a
credit card or receiving a loan from HSBC, obtaining credit from CACH, or being in a business
relationship with HSBC or CACH. deNourie also included an unsigned copy of the request for
admission along with his affidavit. The county court allowed counsel to submit briefs and took the
matter under advisement.
On November 25, 2014, the court admitted exhibits 10, 11, and 12, stating that the exhibits
qualified as business records under Neb. Rev. Stat. § 27-803(5)(b) (Cum. Supp. 2014). Moreover,
the county court determined that deNourie entered into an agreement with Beneficial Nebraska,
that HSBC is the managing company of Beneficial Nebraska, and that CACH “provided sufficient
and competent evidence to show that HSBC is the managing company of Beneficial who by a valid
assignment assigned this claim for collection to [CACH].” The county court determined CACH
made a prima facie case establishing it was entitled to judgment as a matter of law, deNourie did
not offer sufficient evidence to show the existence of a material fact, and granted CACH’s motion
for summary judgment.
In December 2014, deNourie appealed the county court’s decision to the district court
which affirmed the entry of summary judgment in favor of CACH. deNourie has now timely
appealed to this court.
ASSIGNMENTS OF ERROR
On appeal, deNourie’s assignments of error, consolidated and restated, are that the district
court erred in affirming the county court’s award of summary judgment because (1) the county
court lacked subject matter jurisdiction to grant summary judgment; (2) the cause of action pled in
the complaint is different than the cause on which summary judgment was granted; (3) there was
a genuine issue of material fact; (4) evidence in support of the motion for summary judgment was
admitted erroneously; and (5) the district court erroneously made findings of fact.
STANDARD OF REVIEW
The district court and higher appellate courts generally review appeals from the county
court for error appearing on the record. Griffith v. Drew’s LLC, 290 Neb. 508, 860 N.W.2d 749
(2015). When reviewing a judgment for errors appearing on the record, the inquiry is whether the
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decision conforms to the law, is supported by competent evidence, and is neither arbitrary,
capricious, nor unreasonable. Id. In instances when an appellate court is required to review cases
for error appearing on the record, questions of law are nonetheless reviewed de novo on the record.
Id.
An appellate court will affirm a lower court’s grant of summary judgment if the pleadings
and admitted evidence show that there is no genuine issue as to any material facts or as to the
ultimate inferences that may be drawn from those facts and that the moving party is entitled to
judgment as a matter of law. Edwards v. Hy-Vee, 294 Neb. 237, 883 N.W.2d 40 (2016). In
reviewing a summary judgment, an appellate court views the evidence in the light most favorable
to the party against whom the judgment is granted and gives such party the benefit of all reasonable
inferences deducible from the evidence. Strode v. City of Ashland, 295 Neb. 44, 886 N.W.2d 293
(2016).
The exercise of the power to dismiss a matter for lack of prosecution rests in the sound
discretion of the trial court, whose ruling will not be disturbed on appeal in the absence of a
showing of an abuse of discretion. Marcuzzo v. Bank of the West, 290 Neb. 809, 862 N.W.2d 281
(2015).
In proceedings where the Nebraska Evidence Rules apply, the admissibility of evidence is
controlled by such rules; judicial discretion is involved only when the rules make discretion a
factor in determining admissibility. Pierce v. Landmark Mgmt. Group, 293 Neb. 890, 880 N.W.2d
885 (2016). When the Nebraska Evidence Rules commit the evidentiary question at issue to the
discretion of the trial court, an appellate court reviews the admissibility of evidence for an abuse
of discretion. Id.
ANALYSIS
SUBJECT MATTER JURISDICTION OF COUNTY COURT
deNourie contends the county court lacked subject matter jurisdiction to grant CACH’s
motion for summary judgment because CACH did not timely respond to the two show cause orders
within 30 days. deNourie contends CACH untimely responded to the first show cause order and
failed to respond at all to the second show cause order, resulting in a dismissal by operation of law.
When a cause is dismissed for want of prosecution, a dismissal order must be entered
following the issuance of an order to show cause. See A. Hirsh, Inc. v. National Hair Co., 210
Neb. 397, 315 N.W.2d 236 (1982) (trial court granting plaintiff’s motion to vacate the dismissal
order was an abuse of discretion, as an order to show cause was filed followed by the entry of a
dismissal order for want of prosecution well after the time plaintiff was required to show cause).
The exercise of the power to dismiss a matter for lack of prosecution rests in the sound discretion
of the trial court. Marcuzzo v. Bank of the West, supra. Trial courts possess the inherent power,
independent of any statute or court rule, to dismiss a case for failure to prosecute with due
diligence. Roemer v. Maly, 248 Neb. 741, 539 N.W.2d 40 (1995).
Although the county court filed two orders to show cause for lack of prosecution, in its
discretion, the county court chose not to exercise its power to dismiss the matter for lack of
prosecution. Rather, in its November 30, 2012, order, the county court cancelled the initial October
28 order to show cause, retained the case on the active trial docket, and did not enter an order of
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dismissal. Additionally, the county court did not enter an order of dismissal following the issuance
of the July 29, 2013, order to show cause. The district court noted in its findings that the clerk of
court did not take any action to dismiss the case following the orders to show cause. As it was
within the county court’s discretion to dismiss the case for lack of prosecution, the show cause
orders did not automatically dismiss the case 30 days after they were issued, and deNourie’s
assignment of error is without merit.
DIFFERENCES IN CAUSES OF ACTION BETWEEN
COMPLAINT AND SUMMARY JUDGMENT
deNourie argues that the motion for summary judgment granted by the county court was
not within the issues framed by the initial pleadings. deNourie claims that CACH’s initial cause
of action was that it was the assignee of a purported claim against HSBC to CACH, but that the
county court’s granting of summary judgment was based on the cause of action that CACH was
the assignee of a claim from Beneficial Nebraska.
In its review of the county court case, the district court summarized that CACH’s initial
complaint was a collection action; that Beneficial Nebraska loaned money to deNourie; that HSBC
is the parent/managing company of Beneficial Nebraska; the loan agreement lists Beneficial
Nebraska and deNourie; and deNourie does not deny that his signature appears on the loan
agreement, but denies that he ever borrowed from CACH or HSBC. More simply, the district court
provided that CACH’s complaint alleges that deNourie “borrowed money from [CACH]’s
assignor [HSBC], which the evidence on the motion for summary judgment shows, is the
parent/managing company of Beneficial Nebraska.” The district court relied on Neb. Rev. Stat.
§ 25-302 (Reissue 2008), which provides that “[a]n assignee of a thing in action may maintain an
action in the assignee’s own name and behalf, without the name of the assignor.”
We agree with the district court’s summation and its determination based on § 25-302. In
our review of the record, it is clear that HSBC is the parent company to Beneficial Nebraska and
that the claim for collection was assigned to CACH. As CACH was the assignee of the claim for
collection, it was within CACH’s right to maintain an action without the name of HSBC or
Beneficial Nebraska. Therefore, we determine that the motion for summary judgment granted by
the county court was within the issues framed by the initial pleadings and deNourie’s assignment
of error is meritless.
GENUINE ISSUE OF MATERIAL FACT
deNourie claims that there was a genuine issue of material fact regarding whether CACH
was the assignee of his debt because the proof offered by CACH to the trial court did not show
any credit extended by HSBC to him. deNourie argues that the proof offered by CACH to the trial
court showed a supposed contract and account assignment between him and Beneficial Nebraska.
deNourie claims the county court’s decision was reversible error because he submitted an affidavit
to the county court that he had never been in a business relationship with, or obtained credit from,
HSBC and that he responded properly to CACH’s discovery requests.
As noted previously, the pleadings and admitted evidence show that there is no genuine
issue as to any material facts or ultimate inference from those facts that Beneficial Nebraska
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entered into an agreement with and loaned money to deNourie, that HSBC is the parent and
managing company of Beneficial Nebraska, and that HSBC assigned the claim of collection to
CACH. Therefore, we affirm the lower court’s granting of the motion for summary judgment and
determine that deNourie’s assignment of error is without merit.
ADMITTED EVIDENCE
deNourie disputes the admission of exhibits 10, 11, and 12, under the business records
exception to the hearsay rule. deNourie contends that exhibits 10 and 12 were not business records,
as they were affidavits of individuals.
Neb. Rev. Stat. § 25-1334 (Reissue 2008) provides that “[s]upporting 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.”
Neb. Rev. Stat. § 27-803(5) provides an exception to the hearsay rule for business records
kept in the ordinary course of business. Under § 27-803(5)(b), the following items are not excluded
by the hearsay rule:
A memorandum, report, record, or data compilation, in any form, of acts, events, or
conditions, other than opinions or diagnoses, that was received or acquired in the regular
course of business by an entity from another entity and has been incorporated into and kept
in the regular course of business of the receiving or acquiring entity; that the receiving or
acquiring entity typically relies upon the accuracy of the contents of the memorandum,
report, record, or data compilation; and that the circumstances otherwise indicate the
trustworthiness of the memorandum, report, record, or data compilation, as shown by the
testimony of the custodian or other qualified witness[.]
The party seeking admission of a business record under this hearsay rule exception bears
the burden of establishing the components of the following three-part test: First, the proponent
must establish that the activity recorded is of a type that regularly occurs in the course of the
business’ day-to-day activities. Hoelck v. ICI Americas, Inc., 7 Neb. Ct. App. 622, 584 N.W.2d 52
(1998). Second, the proponent must establish that the record was made as part of a regular business
practice at or near the time of the event recorded. Id. Finally, the proponent must authenticate the
record by a custodian or other qualified witness. Id.
In this instance, exhibits 10 and 12 were included as affidavits in support of the motion for
summary judgment to establish that the additional documents included with exhibit 12 are the type
of records maintained in CACH’s day-to-day business activities near the time of the events
recorded and that the individuals signing the affidavits are custodians of those records. Therefore,
exhibits 10 and 12 were properly admitted and deNourie’s assignment of error regarding the
admissibility of exhibits 10 and 12 is without merit.
deNourie also claims that exhibit 11 was inappropriately admitted using the business
records exception to the hearsay rule. This exhibit consists of CACH’s attorney’s affidavit in
support of the motion for summary judgment and includes CACH’s first set of requests for
admissions, interrogatories, and requests for production of documents. The request for admissions
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was previously filed on April 4, 2012, is part of the transcript, and, based on the affidavit, is
provided to show that deNourie was served with the request and failed to answer. Although exhibit
11 was inappropriately admitted under the business records exception to the hearsay rule, the
exhibit’s admission was harmless error because the request for admissions document was already
contained in the transcript and there were no answers contained in our record to the request for
admissions. However, since the request for admissions document is in the transcript rather than
the bill of exceptions, we will disregard this exhibit in our review of the case.
DISTRICT COURT’S FINDINGS
Finally, deNourie argues that the district court inappropriately made findings of fact by
determining that he did not answer requests for admission served by CACH with its complaint
because it is disputed by him in his affidavit. Specifically, deNourie claims that the affidavit he
provided to the court, which was received into evidence, denies that he originated any debt with
HSBC and that he provided a proper response to CACH’s discovery request.
deNourie appears to be referring to the district court’s determination that “there is no
evidence that [deNourie] ever executed and returned [CACH]’s requests for admission. While
there are answers to the requests for admission, they are not signed, and there is no evidence that
they ever were.”
Statements in affidavits as to opinion, belief, or conclusions of law are of no effect, and
mere formal denials or general allegations which do not show the facts in detail and with precision
are insufficient to prevent the award of summary judgment. Boyle v. Welsh, 256 Neb. 118, 589
N.W.2d 118 (1999). deNourie’s affidavit consists of paragraphs where he denies obtaining a credit
card or receiving a loan from HSBC, that he never obtained credit from CACH, and that he has
never been in a business relationship with HSBC or CACH. deNourie also includes an alleged
copy of his answer to CACH’S request for admission along with his affidavit, but it is, as the
district court noted, unsigned. Moreover, in our review of the case, there is no indication that a
similar document was ever filed by deNourie. A party moving for summary judgment makes a
prima facie case for summary judgment by producing enough evidence to demonstrate that the
movant is entitled to judgment if the evidence were uncontroverted at trial. Cisneros v. Graham,
294 Neb. 83, 881 N.W.2d 878 (2016). Once the moving party makes a prima facie case, the burden
shifts to the party opposing the motion to produce admissible contradictory evidence showing the
existence of a material issue of fact that prevents judgment as a matter of law. Id. Because the
statements found within deNourie’s affidavit were not sufficient to show the existence of a material
issue of fact, the district court did not err in affirming the county court’s award of summary
judgment.
CONCLUSION
We find the district court did not err in affirming the county court’s award of summary
judgment as it was supported by competent evidence, conforms to the law, and was neither
arbitrary, capricious, nor unreasonable.
AFFIRMED.
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