Jimmy Troung v. Dodeka LLC

Affirmed and Memorandum Opinion filed July 12, 2011.

In The

Fourteenth Court of Appeals

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NO. 14-10-00818-CV

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Jimmy Troung, Appellant

V.

Dodeka, L.L.C., Appellee

On Appeal from the County Civil Court at Law No. 1

Fort Bend County, Texas

Trial Court Cause No. 07-CCV-034797

MEMORANDUM OPINION

            Following a bench trial in this lawsuit to collect a credit card debt, the trial court rendered judgment in favor of appellee Dodeka, L.L.C.  In three issues, appellant Jimmy Troung[1] contends (1) Dodeka failed to introduce any evidence to support a judgment in its favor, (2) the trial court erroneously admitted untrustworthy and unreliable exhibits that failed to meet the requirements of the business records exception to hearsay evidence, and (3) the trial court improperly precluded Troung from cross-examining the custodian of records.  We affirm.

I.  Factual and Procedural Background

            Troung initially opened a credit card account with a predecessor to Chase Bank, USA, N.A.  Troung made his last payment to Chase on February 13, 2004, leaving a balance due on the account.  Chase subsequently sold the account to Unifund Portfolio A, LLC, who, in turn, sold it to Dodeka.

            Dodeka, as assignee, sued Troung for breach of the loan contract.  On February 22, 2010, Dodeka filed a Notice of Filing Business Records and an Affidavit of Assignment, Damages and Business Records, with attached records.  On March 30, 2010, counsel for both parties appeared for a trial to the bench.  By written motions filed March 30 and orally, Troung’s counsel made several objections to the affidavit and attached records.  The court continued trial to June 22, 2010.

On April 19, 2010, Dodeka timely filed a Notice of Filing Amended Business Records and an Amended Affidavit of Assignment, Damages and Business Records, with attached records. By written motions filed June 22 and orally, Troung objected to the amended affidavit and attached records.  After hearing Troung’s objections that the business records were untimely filed and untrustworthy and his argument that the bills of sale did not establish Dodeka was the owner of the account, the trial court ruled, “I’m going to allow the amended affidavit and I’m going to accept the Bill of Sale as supplied and I’m going to grant judgment . . . [i]n favor of Dodeka, L.L.C.”  The court then allowed Troung to put additional objections on the record.  In response, the court stated it would “allow” or “accept” the evidence to which Troung was objecting.[2] None of the documents, however, was marked as an exhibit or formally admitted.

By written judgment signed June 22, 2010, the trial court awarded Dodeka $3,779.18 in damages and $400.00 in attorney’s fees.  The trial court subsequently filed findings of fact and conclusions of law.  Troung filed a motion for new trial, which was overruled by operation of law.

II.  Discussion

A.  Whether Dodeka’s Evidence was Admitted

            In issue one, Troung argues the “[t]rial court erred because there was no evidence admitted at trial to support judgment for [Dodeka].”  He bases his argument on the facts that Dodeka did not formally offer the affidavit and attached records into evidence and they do not appear as part of the reporter’s record.[3]

            In addition to ruling on the affidavit and bills of sales, the court also ruled as follows:

· Regarding Troung’s objection that the affidavit was beyond the scope of a business record affidavit in that it contained factual testimony and legal opinion, the court responded, “I’m going to allow that”;

· Regarding Troung’s objection that the affiant had no personal knowledge of   the record-keeping practices of Chase’s predecessors, the court responded, “I’m going to allow that information”;

· Regarding Troung’s request to strike the credit card agreement, the court responded, “I’m going to deny your request”;

· Regarding Troung’s hearsay and relevance objection to the affidavit, the court responded, “I accepted the affidavit”; and

· Regarding Troung’s final request for a ruling to protect the record, the court responded, “I already accepted. I ruled on the Bill of Sales. I accepted that. I’m going to accept the information; and I’m, again, going to grant judgment.”

Given the preceding statements, it is clear the trial court considered the affidavit and records as admitted into evidence.  It is equally clear that, until his appeal in this court, Troung considered the affidavit and records as being in evidence.  Virtually all of his points of error in his motion for new trial began, “The trial court erred in overruling Defendant’s objections to the admission into evidence . . . .”  Troung did not make an objection at trial that the affidavit and records never were admitted.[4] Finally, Dodeka sponsored the documents and treated them as admitted.

Appellate courts generally hold that when the trial court and parties treat evidence as if it had been admitted, for all practical purposes, it is admitted.  See Travelers Indem. Co. of R.I. v. Starkey, 157 S.W.3d 899, 904 (Tex. App.—Dallas 2005, pet. denied) (citing cases).  Although formal presentment and acceptance of the affidavit and records is the appropriate method to admit evidence and would have been preferable, our review of the record indicates both the court and counsel considered the documents to be in evidence and the court in fact received the affidavit in evidence.  We also note that the court incorporated certain information from these documents into its findings of fact.  The record thus precludes any complaint the documents were not in evidence.  See Farrell v. Evans, 517 S.W.2d 585, 586–87 (Tex. Civ. App.—Houston [1st Dist.] 1974, no writ) (concluding same on facts before the court).

For the preceding reasons, we overrule Troung’s first issue.

B. Whether Dodeka’s Evidence was Admissible under Texas Rule of Evidence 803(6)

            In issue two, Troung argues “the trial court erred because [it] admitted hearsay exhibits into evidence that were not trustworthy or reliable and that failed to meet requirements of [Texas Rule of Evidence] 803(6).”  The records to which Troung refers are (1) the affidavit of Dodeka’s custodian of records, Holly M. Chaffin, (2) a Chase credit card agreement, and (3) the bill of sale between Chase and Unifund. [5]

            In reviewing the trial court’s decision to admit evidence, we apply an abuse-of-discretion standard.  See In re J.F.C., 96 S.W.3d 256, 285 (Tex. 2002).  A trial court abuses its discretion when it rules without regard for any guiding rules or principles.  Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998).  We must uphold a trial court’s evidentiary ruling if there is any legitimate basis for the ruling.  Id.

“‘Hearsay’ is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.”  Tex. R. Evid. 801(d).  The proponent of hearsay has the burden of showing that the testimony fits within an exception to the general rule prohibiting the admission of hearsay evidence.  Volkswagen of Am., Inc. v. Ramirez, 159 S.W.3d 897, 908 n.5 (Tex. 2004).

Under the business records exception to the hearsay rule, the following is not excluded even though the declarant is available as a witness:

            A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinions, or diagnoses, 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 by affidavit that complies with Rule 902(10), unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness. . . .

Tex. R. Evid. 803(6).   

Thus, the proponent of records under the business records exception must show (1) the records were made and kept in the course of a regularly conducted business activity, (2) it was the regular practice of the business activity to make the records, (3) the records were made at or near the time of the event that they record, and (4) the records were made by a person with knowledge who was acting in the regular course of business.  See In re E.A.K., 192 S.W.3d 133, 141 (Tex. App.—Houston [14th Dist.] 2006, pet. denied).

On appeal, Troung does not dispute that the records in question meet these four requirements.[6]  Instead, pointing to discrepancies between the affidavit and documents filed on February 22, 2010, and those filed on April 19, 2010, he argues the records are not reliable or trustworthy.  When records meet the requisites for admissibility under Rule 803(6), the opponent of the evidence bears the burden of establishing untrustworthiness.  See Texon Energy Corp. v. Dow Chem. Co., 733 S.W.2d 328, 330 (Tex. App.—Houston [14th Dist.] 1987, writ ref’d n.r.e.) (“Once the necessary predicate [under rule 803(6)]was laid, it became appellant’s burden to show that there was some underlying reason why the records were inadmissible.”); see also Graef v. Chem. Leaman Corp., 106 F.3d 112, 118 (5th Cir. 1997) (“[T]he burden of establishing the untrustworthiness of such documents is on the opponent of the evidence.”).[7]

The first discrepancy Troung cites concerns inclusion of different card member agreements in the two proffers and a notation on the agreement in the April affidavit that Troung interprets to mean that agreement had been revised in October 2004, i.e., after Troung stopped paying on the account.[8] The second discrepancy concerns differences in the dates of the bill of sale of the account from Chase to Unifund.  The bill of sale in the February affidavit was dated February 23, 2007; that in the April affidavit was dated December 20, 2005.[9]

Troung brought these differences to the trial court’s attention.  It was within the trial court’s discretion to determine whether such differences established that “the source of [Dodeka’s proffered] information or the method or circumstances of preparation indicate[d] untrustworthiness.”  Tex. R. Evid. 803(6); see United States v. Patterson, 644 F.2d 890, 900–01 (1st Cir. 1981) (“The determination of . . . whether the circumstances indicate untrustworthiness[] is within the discretion of the district court.”); see also Fleming v. Fannie Mae, No. 02–09–00445–CV, 2010 WL 4812983, at *3–4 (Tex. App.—Fort Worth Nov. 24, 2010, no pet.) (mem.op.) (indicating determination of admissibility of business records affidavits involves deciding whether source of information or method or circumstances of preparation indicate lack of trustworthiness and admission or exclusion of evidence rests within sound discretion of trial court).  “The mere fact that errors or deviations have occurred from time to time does not destroy the inference of underlying trustworthiness which a judge may choose to draw from proof of a general practice.”  United State v. McGill, 953 F.2d 10, 15 (1st Cir. 1992). Based on the record, we cannot conclude the trial court abused its discretion in admitting the records at issue.

For the preceding reasons, we overrule Troung’s second issue.

C.  Whether Troung was Improperly Denied Cross-Examination of Dodeka’s Affiant

In issue three, Troung argues the trial court erred by allowing inconsistent hearsay testimony via the business records affidavit of the custodian of records whom Troung could not cross-examine.  He further argues, “Due process requires an opportunity to confront and cross-examine adverse witnesses.”

In the trial court, Troung objected to the affidavit on the ground that it contained “several statements . . . that are beyond the scope of a business record affidavit and are testifying as to factual issues for which the affiant has no personal knowledge of and has not established that she has personal knowledge of.”  At no point, however, did Troung object to not being able to cross-examine the affiant or apprise the trial court he was being denied due process.  In this court, he does not identify the specific statements he contends are beyond the scope of a business records affidavit.  Troung has not preserved this issue for appeal.  See Tex. R. App. P. 33.1(a) (regarding preservation of error in trial court); Tex. R. App. P. 38.1(i) (stating appellant’s brief “must contain a clear and concise argument for the contentions made, with appropriate citations to authorities and to the record”).  His complaints have been waived.

For the preceding reasons, we overrule Troung’s third issue.

Conclusion

            Having overruled Troung’s three issues, we affirm the judgment of the trial court.

                                                                        /s/        Martha Hill Jamison

                                                                                    Justice

Panel consists of Justices Frost, Jamison, and McCally.

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[1] Appellant’s name appears as “Troung” and “Truong” in the record.  We use the spelling found in Troung’s notice of appeal and appellate brief.

[2] An expanded version of the interactions between counsel and the court appears in section II.A., below.

[3] The reporter’s record contains no exhibits. The affidavit and attachments are included in the clerk’s record.

[4] In the trial court, Troung referred to the amended affidavit as the “admitted affidavit.”

[5] In the trial court, Troung also argued that the bills of sale did not establish Dodeka’s final ownership of Troung’s account.   The trial court, however, found:

15. Following default, FIRST USA/CHASE sold and assigned the account, along with all rights inherent in the account, to Unifund Portfolio A, LLC.

16. Pursuant to a Master Servicing Agreement, Unifund Portfolio A assigned the account, along with all rights inherent in the account, to Unifund CCR Partners.

17. Unifund CCR Partners sold and assigned the account, along with all rights inherent in the account, to Plaintiff Dodeka, LLC. on July 23,2007.

18. Plaintiff [Dodeka] is the current assignee and owner of the Account.

Troung does not challenge these findings on appeal, and we do not interpret his argument on appeal as renewing his trial court argument regarding the alleged deficiency of the bills of sale.

[6] Troung also does not complain that the documents attached to Chaffin’s affidavit were created by a third party or argue that a different burden of establishing untrustworthiness applies in such a case.  See Simien v. Unifund CCR Partners, 321 S.W.3d 235, 240, 243 (Tex. App.—Houston [1st Dist.] 2010, no pet.) (setting forth three-prong test for admission of third party documents, with third prong being “that the circumstances indicate the trustworthiness of the third-party document”).  In Simien, the appellate court upheld the admissibility of documents virtually identical to those at issue in the present case.  Id. at 245.

[7] The Texas Supreme Court has instructed:  “Considering federal precedent as to evidentiary matters is appropriate.”  Guevara v. Ferrer, 247 S.W.3d 662, 667 n.3 (Tex. 2007).

[8] Troung’s last payment on the account had allegedly occurred eight months earlier, in February 2004.

[9] Troung refers to “different agreements between CCR Partners [i.e., Unifund] and Dodeka.”  We find no support for this reference.