Chase Bank, USA v. Curren

[Cite as Chase Bank, USA v. Curren, 191 Ohio App. 3d 507, 2010-Ohio-6596.]
IN THE COURT OF APPEALS OF OHIO
FOURTH APPELLATE DISTRICT
HIGHLAND COUNTY
CHASE BANK, USA, : Case No. 10CA2
:
Appellee, :
: DECISION AND
v. : JUDGMENT ENTRY
:
CURREN, : RELEASED 12/21/10
:
Appellant. :
______________________________________________________________________
APPEARANCES:
Weltman, Weinberg & Reis Co., L.P.A., and Jon P. Clemons, for appellee.
Jon C. Hapner, for appellant.
______________________________________________________________________
Harsha, J.
{¶ 1} Chase Bank, USA brought this action to recover a debt purportedly owed
to it by Conrad Curren on a credit card account. The trial court granted a summary
judgment in favor of Chase and ordered Curren to pay $10,385.53 along with various
amounts of interest and costs. On appeal, Curren contends that Chase failed to
properly support its motion for summary judgment. He also contends that even if Chase
had met its initial burden to demonstrate its entitlement to a summary judgment, he put
forward sufficient evidence to create genuine issues of material fact for trial.
{¶ 2} To support its motion for summary judgment, Chase submitted an affidavit
from its “duly authorized agent” that had copies of account statements attached to it.
Curren contends that the trial court abused its discretion when it considered this
Highland App. No. 10CA2 2
evidence. We agree. No evidence indicates that the agent made his averments based
on personal knowledge, as Civ.R. 56(E) requires. Moreover, the agent’s averments fail
to properly authenticate the account statements as business records under Evid.R.
803(6), so the documents constitute inadmissible hearsay. Because Chase failed to
support its motion with admissible evidence that would allow the trial court to
independently calculate the balance due, Chase was not entitled to judgment as a
matter of law. Therefore, we reverse the trial court’s judgment. This decision renders
moot Curren’s additional argument that he properly rebutted Chase’s summary-
judgment motion.
I. Facts
{¶ 3} Chase filed a complaint in the Highland County Court alleging that Curren
had applied for a credit-card account with Chase, that Chase had exercised its right
under the account agreement to “accelerate the time for payment of the entire balance
due,” that the amount then due was $10,385.53, and that Curren had failed to pay the
balance on demand. Chase sought a judgment for (1) the “principal sum” of
$10,385.53, (2) $1,160.91 in interest accrued “through November 18, 2008,” (3) interest
on the principal balance after November 18, 2008 “at the rate of 8.000% per annum,”
and (4) costs. Chase attached a copy of a “Cardmember Agreement” and an account
statement depicting a $10,385.53 balance to the complaint. In his answer, Curren
admitted that he applied for a credit-card account with Chase but denied the remaining
allegations. Curren also filed a counterclaim, which prompted the court to transfer the
matter to the Highland County Court of Common Pleas. However, Curren subsequently
dismissed the counterclaim under Civ.R. 41(A).
Highland App. No. 10CA2 3
{¶ 4} Following a number of motions not relevant here, Chase filed a motion for
summary judgment and attached the affidavit of Ruben A. Alcaraz to its motion. Alcaraz
made the following averments:
Now comes Ruben A. Alcaraz, who first being duly sworn, deposes
and states as follows:
That s/he is the duly authorized agent of Chase Bank, the Plaintiff
in the within matter.
Affiant states that there is due from the Defendant, Conrad Curren,
in this matter the principal sum of $10,385.53 plus accrued interest in the
sum of $971.98 through August 28, 2008, plus interest thereafter on the
principal balance at the rate of 8.000% per annum and costs.
Attached hereto as Exhibit A are true and exact copies of Account
Statements sent to Defendant. These Account Statement [sic] evidence
Defendant’s acceptance of the credit card at issue, his use of the account,
and numerous purchases and payments made by Defendant.
Attached hereto as Exhibit B is a true and correct copy of the
Platinum Visa Credit Card Application executed by Defendant. The
Application bears Defendant’s signature and personal identification, and
evidences his Application for the Credit Card Account at issue.
Affiant further states that there have been no payments made nor
are there any credits due the Defendant* [sic] which would reduce the
above mentioned balance.
Affiant further states that to the best of his/her knowledge, the
Defendant Conrad Curren is not a minor, not in the military service and
under no mental defect.
Apparently the following documents were attached to the affidavit: (1) a credit card
application purportedly signed by Curren and dated May 4, 2005, and (2) account
statements that show the progression of the account from a balance of $0 to $10,385.53
as of August 11, 2007.1
1
These exhibits total 61 pages and immediately follow the affidavit in the record on appeal. The
documents appear to have once been physically attached to the affidavit (as evidenced by staple holes)
but currently are not. In addition, we note that the affidavit misidentifies the exhibits. The first page of the
Highland App. No. 10CA2 4
{¶ 5} In his opposing memorandum, Curren argued that Alcaraz’s affidavit did
not comply with Civ.R. 56(E) because it “[did] not state the authority or the position of
the affiant in the matter, and clearly [did] not state any personal knowledge of the
affiant.” He claimed that the interest rate applied to his account was “usurious.” He
also argued that there were “discrepancies in the various charges set forth by [Chase]”
and that “it appears there are charges in this case that could not have been made by
[him] * * *.” Curren attached his own affidavit to support his arguments.
{¶ 6} The trial court found that Alcaraz’s affidavit was admissible, that there
were no genuine issues of material fact, and that Chase was entitled to judgment as a
matter of law. The court awarded Chase “$10,385.53 plus interest accrued in the sum
$971.98 through August 28, 2008, plus interest at the rate of 8.0% per annum until
judgment.” The court found that after the judgment, interest would accrue at the
“judgment rate” and awarded Chase costs. This appeal followed.
II. Assignments of Error
{¶ 7} Curren assigns the following errors for our review:
FIRST ASSIGNMENT OF ERROR
The Trial Court erred to the detriment of the defendant in granting
summary judgment in favor of the plaintiff and against the defendant when
genuine issues of material fact do exist, to wit:
1. Many of the charges claimed by the plaintiff were not
made by the defendant.
2. The plaintiff changed the terms of the contract without
notice or consent of the defendant.
3. The interest charges were usurious, against the
exhibits appears to be the card application Alcaraz designates as Exhibit B; however, it does not contain
an exhibit number. The remaining 60 pages of exhibits appear to be the account statements Alcaraz
refers to as Exhibit A, but the first page of the statements is marked “EXHIBIT B.”
Highland App. No. 10CA2 5
statutory limit and against public policy.
SECOND ASSIGNMENT OF ERROR
The Trial Court erred to the detriment of the Defendant/Appellant as
a genuine issue of material fact existed when the Defendant/Appellant
submitted an affidavit denying charges on the credit card bills and the Trial
Court awarded damages without a hearing on said account.
{¶ 8} In between his first and second assignments of error, Curren states: “The
Trial Court erred to the detriment of the defendant when it granted summary judgment
on the basis of an improper affidavit and unauthenticated document.” Although Curren
characterizes this statement as an “Issue[ ] to be Decided” within the first assignment of
error, the subject matter of the statement bears no relation to any of the topics specified
in that assignment. Therefore, this “issue” should have been characterized as a
separate assignment of error, and we will treat it as Curren’s third assignment of error.
{¶ 9} Chase contends that under App.R. 9(B), we should disregard this
assignment of error. App.R. 9(B) involves the record on appeal and provides:
Unless the entire transcript is to be included [in the record on appeal], the
appellant, with the notice of appeal, shall file with the clerk of the trial court
and serve on the appellee a description of the parts of the transcript that
the appellant intends to include in the record, a statement that no
transcript is necessary, or a statement that a statement pursuant to either
App.R. 9(C) or 9(D) will be submitted, and a statement of the assignments
of error the appellant intends to present on the appeal. If the appellee
considers a transcript of other parts of the proceedings necessary, the
appellee, within ten days after the service of the statement of the
appellant, shall file and serve on the appellant a designation of additional
parts to be included. The clerk of the trial court shall forward a copy of this
designation to the clerk of the court of appeals.
(Emphasis added).
{¶ 10} Because Curren did not request a transcript, he served Chase with a
statement of the errors he intended to present on appeal under App.R. 9(B). This
Highland App. No. 10CA2 6
statement included only the first assignment of error listed above. Chase does not
complain about Curren’s addition of the second assignment of error to his brief,
presumably because Chase considers his first and second assignments of error to be
“interrelated.” However, Chase argues that Curren waived his third assignment of error
because he did not include it in the App.R. 9(B) statement. However, the purpose of
App.R. 9(B)’s notification rule is to give the appellee an opportunity to add portions of
the transcript to the record that he thinks might be necessary for resolution of the issues
the appellant intends to raise. See generally Painter and Pollis, Ohio Appellate Practice
(2010-2011 Ed.), Section 4:11. Chase does not complain that Curren’s failure to
include the third assignment of error in his App.R. 9(B) statement prejudiced it because
the record lacks pertinent portions of the transcript that Chase could have ordered with
sufficient notice. Moreover, all of Curren’s assignments of error address the propriety of
the court’s award of summary judgment. The court did not hold an oral hearing on the
summary-judgment motion, and the record does not indicate the existence of any other
transcript potentially relevant to this appeal. Therefore, we conclude that Curren did not
waive his third assignment of error by failing to include it in the App.R. 9(B) statement.
{¶ 11} In addition, we note that due to Curren’s erroneous characterization of his
third assignment of error as an “Issue[ ] to be Decided,” Curren presented only one
argument for his first and third assignments of error. App.R. 16(A)(7) requires separate
arguments for each assignment of error. “While appellate courts may jointly consider
two or more assignments of error, the parties do not have the same option in presenting
their arguments.” Keffer v. Cent. Mut. Ins. Co., Vinton App. No. 06CA652, 2007-Ohio-
3984, at ¶ 8, fn. 2. Thus, we would be within our discretion to simply disregard Curren’s
Highland App. No. 10CA2 7
first and third assignments of error and summarily affirm the trial court’s judgment with
regard to them. App.R. 12(A)(2); Keffer at ¶ 8, fn. 2. Nonetheless, we will review all
Curren’s arguments. But for ease of analysis, we will address his assignments of error
out of order.
III. Standard of Review
{¶ 12} Curren contends that the trial court erred in granting Chase a summary
judgment. When reviewing a trial court’s decision on a motion for summary judgment,
we conduct a de novo review governed by the standard set forth in Civ.R. 56. Comer v.
Risko, 106 Ohio St. 3d 185, 2005-Ohio-4559, 833 N.E.2d 712, at ¶ 8. Summary
judgment is appropriate when the movant has established (1) that there is no genuine
issue of material fact, (2) that reasonable minds can come to but one conclusion, and
that conclusion is adverse to the nonmoving party, with the evidence against that party
being construed most strongly in its favor, and (3) that the moving party is entitled to
judgment as a matter of law. Bostic v. Connor (1988), 37 Ohio St. 3d 144, 146, 524
N.E.2d 881, citing Harless v. Willis Day Warehousing Co. (1978), 54 Ohio St. 2d 64, 66,
375 N.E.2d 46. See Civ.R. 56(C).
{¶ 13} The burden of showing that no genuine issue of material fact exists falls
upon the party who moves for summary judgment. Dresher v. Burt (1996), 75 Ohio
St.3d 280, 294, 662 N.E.2d 264. To meet its burden, the moving party must specifically
refer to “the pleadings, depositions, answers to interrogatories, written admissions,
affidavits, transcripts of evidence, and written stipulations of fact, if any, timely filed in
the action,” that affirmatively demonstrate that the nonmoving party has no evidence to
support the nonmoving party’s claims. Civ.R. 56(C); See also Hansen v. Wal-Mart
Highland App. No. 10CA2 8
Stores, Inc., Ross App. No. 07CA2990, 2008-Ohio-2477, at ¶ 8. Once the movant
supports the motion with appropriate evidentiary materials, the nonmoving party “may
not rest upon the mere allegations or denials of the party’s pleadings, but the party’s
response, by affidavit or as otherwise provided in this rule, must set forth specific facts
showing that there is a genuine issue for trial.” Civ.R. 56(E). “If the party does not so
respond, summary judgment, if appropriate, shall be entered against the party.” Id.
IV. Proving an Account
{¶ 14} “Because an action on an account is founded upon contract, the plaintiff
must prove the necessary elements of a contract action, and, in addition, must prove
that the contract involves a transaction that usually forms the subject of a book
account.” Crown Asset Mgt., L.L.C. v. Gaul, Washington App. No. 08CA30, 2009-Ohio-
2167, at ¶ 10, quoting Asset Acceptance Corp. v. Proctor, 156 Ohio App. 3d 60, 2004-
Ohio-623, 804 N.E.2d 975, at ¶ 12. For a creditor to adequately plead and prove an
account, the account “must show the name of the party charged.” Id., quoting Asset
Acceptance Corp. at ¶ 12, quoting Brown v. Columbus Stamping & Mfg. Co. (1967), 9
Ohio App. 2d 123, 126, 223 N.E.2d 373. Moreover, the account must “begin[ ] with a
balance, preferably at zero, or with a sum recited that can qualify as an account stated,
but at least the balance should be a provable sum.2 Following the balance, the item or
items, dated and identifiable by number or otherwise, representing charges, or debits,
and credits, should appear. Summarization is necessary showing a running or
2
“An ‘account stated’ exists where the account has been examined and the balance admitted as the true
balance between the parties. It is based upon an assent to its correctness and can be implied when an
account is rendered by the creditor to the debtor and the debtor fails to object within a reasonable amount
of time.” Crown Asset Mgt., L.L.C. at ¶ 10, fn. 1, citing Capital One Bank v. Nolan, Washington App. No.
06CA77, 2008-Ohio-1850, at ¶ 9.
Highland App. No. 10CA2 9
developing balance or an arrangement which permits the calculation of the balance
claimed to be due.” Id.
V. Chase’s Initial Summary-Judgment Burden
{¶ 15} In his third assignment of error, Curren complains that Chase failed to
meet its initial burden to demonstrate its entitlement to a summary judgment. Chase
filed Alcaraz’s affidavit to support its summary-judgment motion. Curren complains that
the court erred when it considered the affidavit and attached account statements
because Alcaraz’s averments were not based on personal knowledge and failed to lay
the proper foundation for admission of the attached documents. He also contends that
Alcaraz failed to properly sign the affidavit because it is “initialed[,] not signed.”
{¶ 16} “For evidentiary material attached to a summary judgment motion to be
considered, the evidence must be admissible at trial.” See Civ.R. 56(E) and Pennisten
v. Noel (Feb. 8, 2002), Pike App. No. 01CA669, 2002 WL 254021, at *2. Although we
conduct a de novo review of the trial court’s decision to grant summary judgment, we
review the court’s rulings on the admissibility of evidence for an abuse of discretion.
Lawson v. Y.D. Song, M.D., Inc. (Sept. 23, 1997), Scioto App. No. 97 CA 2480, 1997
WL 596293, at *3. See State v. Sage (1987), 31 Ohio St. 3d 173, 510 N.E.2d 343, at
paragraph two of the syllabus. The term “abuse of discretion” implies that the court’s
attitude is unreasonable, arbitrary, or unconscionable. State v. Adams (1980), 62 Ohio
St.2d 151, 157, 404 N.E.2d 144. When applying the abuse-of-discretion standard, a
reviewing court may not substitute its judgment for that of the trial court. Berk v.
Matthews (1990), 53 Ohio St. 3d 161, 169, 559 N.E.2d 1301.
{¶ 17} Civ.R. 56(E) states: “Supporting and opposing affidavits shall be made on
Highland App. No. 10CA2 10
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 in the
affidavit. Sworn or certified copies of all papers or parts of papers referred to in an
affidavit shall be attached to or served with the affidavit.” “Personal knowledge” is “
‘[k]nowledge gained through firsthand observation or experience, as distinguished from
a belief based on what someone else has said.’ ” Bonacorsi v. Wheeling & Lake Erie
Ry. Co., 95 Ohio St. 3d 314, 2002-Ohio-2220, 767 N.E.2d 707, at ¶ 26, quoting Black’s
Law Dictionary (7th Ed.Rev.1999) 875. It is “ ‘knowledge of factual truth which does not
depend on outside information or hearsay.’ ” Residential Funding Co., L.L.C. v. Thorne,
Lucas App. No. L-09-1324, 2010-Ohio-4271, at ¶ 64, quoting Modon v. Cleveland (Dec.
22, 1999), Medina App. No. 2945-M, 1999 WL 1260318, at *2.
{¶ 18} Here, Alcaraz did not explicitly state that his averments were made on
“personal knowledge.” Contrary to Curren’s assertion, this omission is not fatal to the
affidavit’s admissibility. “[P]ersonal knowledge may be inferred from the contents of an
affidavit * * *.” Carter v. U-Haul Internatl., Franklin App. No. 09AP-310, 2009-Ohio-
5358, at ¶ 10; Flagstar Bank F.S.B. v. Diehl, Ashland App. No. 09 COA 034, 2010-Ohio-
2860, at ¶ 25.
{¶ 19} However, in this case, the contents of Alcaraz’s affidavit were insufficient
for the trial court to make such an inference. Alcaraz vaguely avers that he is a “duly
authorized agent of Chase Bank” and that “there is due” from Curren various amounts
of money. But none of Alcaraz’s averments demonstrate that he has any personal
knowledge about Curren’s account. The basis for Alcaraz’s knowledge of the balance
due appears to be his review of the account statements attached to the affidavit, which
Highland App. No. 10CA2 11
as we explain below, constitute inadmissible hearsay. Moreover, we note that Alcaraz’s
averments standing alone would be insufficient to prove the claimed account balance of
$10,385.53 because the court could not independently calculate the balance from those
averments. See Crown Asset Mgt., L.L.C., 2009-Ohio-2167, at ¶ 11.
{¶ 20} The account statements attached to Alcaraz’s affidavit constitute the only
evidence Chase submitted from which the court could independently calculate the
alleged $10,385.53 balance. However, they constitute inadmissible hearsay. Hearsay
is an out-of-court statement offered for the truth of the matter asserted. Proctor v. Hall,
Lawrence App. Nos. 05CA3 and 05CA8, 2006-Ohio-2228, at ¶ 37, citing Evid.R.
801(C). Chase submitted the account statements to prove the truth of the matters those
documents asserted, i.e., that Curren made various purchases and payments on the
account, resulting in a $10,385.53 balance. These records might have qualified for the
business-records exception to the hearsay rule, see Evid.R. 803(6), but Alcaraz’s
affidavit failed to lay the proper foundation for their admissibility.
{¶ 21} Evid.R. 803(6) provides:
The following are not excluded by the hearsay rule, even though the
declarant is available as a witness:
***
(6) Records of regularly conducted activity. A memorandum, report,
record, or data compilation, in any form, of acts, events, or conditions,
made at or near the time by, or from information transmitted by, a person
with knowledge, if kept in the course of a regularly conducted business
activity, and if it was the regular practice of that business activity to make
the memorandum, report, record, or data compilation, all as shown by the
testimony of the custodian or other qualified witness or as provided by
Rule 901(B)(10), unless the source of information or the method or
circumstances of preparation indicate lack of trustworthiness. The term
“business” as used in this paragraph includes business, institution,
association, profession, occupation, and calling of every kind, whether or
Highland App. No. 10CA2 12
not conducted for profit.
{¶ 22} “While the witness need not have personal knowledge of the creation of
the particular record in question, and need not have been in the employ of the company
at the time the record was made[,]* * * he must be able to vouch from personal
knowledge of the record-keeping system that such records were kept in the regular
course of business.” State v. Davis (1991), 62 Ohio St. 3d 326, 342, 581 N.E.2d 1362,
quoting Dell Publishing Co. v. Whedon (S.D.N.Y.1984), 577 F. Supp. 1459, 1464, fn. 5.
But here, Alcaraz did not aver that he had personal knowledge of the creation of these
records or of Chase’s record-keeping system, and that knowledge cannot be inferred
from the affidavit. Thus, Alcaraz’s affidavit did not authenticate the attached documents
under Evid.R. 803(6). Therefore, the trial court abused its discretion when it considered
the affidavit and account statements to decide the summary-judgment motion. See
generally Great Seneca Fin. v. Felty, 170 Ohio App. 3d 737, 2006-Ohio-6618, 869
N.E.2d 30, at ¶ 11 (in deciding summary-judgment motion, trial court erred by
considering documents that purported to assign a credit-card account when the
documents were not filed “with an accompanying affidavit setting forth a proper
foundation under Evid.R. 803(6) for their admissibility into evidence”).
{¶ 23} Curren did not admit that he owed Chase the $10,385.53 balance alleged
due. And without the account statements, Chase had no other evidence that would
permit the court to independently calculate the claimed balance. Accordingly, Chase
was not entitled to judgment as a matter of law. See Crown Asset Mgt., L.L.C., 2009-
Ohio-2167, at ¶ 16.
{¶ 24} We sustain Curren’s third assignment of error in part, reverse the trial
Highland App. No. 10CA2 13
court’s judgment, and remand for further proceedings consistent with this opinion. This
decision renders moot Curren’s argument that Alcaraz did not properly sign the affidavit.
It also renders moot Curren’s first and second assignments of error, in which he
contends that he properly rebutted Chase’s summary-judgment motion, so we need not
address them. App.R. 12(A)(1)(c).
Judgment reversed
and cause remanded.
MCFARLAND, P.J., and ABELE, J., concur.