Bank of America v. Mohamed

Bank of America v. Mohamed, No. 690-8-18 Cncv (Toor, J., July 19, 2019).
[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the original. The accuracy of the text and the
accompanying data included in the Vermont trial court opinion database is not guaranteed.]
STATE OF VERMONT
SUPERIOR COURT CIVIL DIVISION
Chittenden Unit Docket No. 690-8-18 Cncv
Bank of America, N.A,
Plaintiff
v.
Ragab Mohamed,
Defendant
RULING ON THE MERITS
This is a credit card collections case. The case was tried to the court on April 25,
2019. Jeanine Dumont and Michael Williams represent plaintiff Bank of America (the
Bank); Jean Murray represents defendant Ragab Mohamed (Mohamed). Post-trial
memos were complete May 30.
Discussion
The legal issue in this case is whether the records proffered in evidence by the Bank
are properly admitted as business records.1 The business record exception requires proof
that the records were (1) made at or near the time of the transaction, (2) by or from
information transmitted by a person with knowledge, (3) kept in the regular course of a
regularly conducted business activity, and (4) part of the business’ regular practice of
recordkeeping. V.R.E. 803(6). Even if these criteria are established, the record is not
admissible if “the source of the information or the method or circumstances of
preparation indicate lack of trustworthiness.” Id.
1 The court admitted the records conditionally, so that the parties could brief the evidentiary issue.
Mohamed does not admit having an account with the Bank or owing anything to
the Bank. The Bank’s claims are based entirely on documents: credit card statements and
a copy of a check, all printed from the Bank’s electronic records system. Mohamed argues
that there is not an adequate foundation for their admission. Specifically, he argues that
the only witness at trial, a bank employee by the name of Pamela Ritter, was not an
adequate witness to establish the exception. “The qualification of the witness and the
sufficiency of [her] testimony are to be determined by the trial court in the exercise of its
discretion in light of the sources of information, and the time and method of its
preparation.” Westinghouse Electric Supply Co. v. B.L. Allen, 138 Vt. 84, 99 (1980).
The problem before the court is one arising from the computerization of everything
these days. Instead of a bookkeeper who herself records charges and payments for a small
business, and can testify to how and when she makes the entries, the witness here is
essentially a professional witness who testifies when there is litigation. Her role is to pull
records from the computer and testify that they are the records in the electronic system.
She has no personal knowledge of the inner workings of the computer system or how
accurate they are. She has no personal knowledge of how the charges are conveyed to the
system from a store or how accurate those transmissions are. She has no personal
knowledge of the transactions themselves. Her testimony was essentially that she can
verify that the paper copies of the exhibits are the same as what shows up in the Bank’s
electronic system; that she knows charges are automatically transmitted to the system;
that the system is password protected; that statements are generated monthly; that they
show charges and payments; and that she has had training to show her how statements
are generated. While she testified to the details of this account, her testimony was entirely
from review of the electronic records, not through having handled the account herself.
2
The question is how businesses that rely almost entirely on electronic records
rather than human interactions are to properly establish the business records exception.
It is a reality that the business world has to a great extent moved in this direction—the
court system itself is headed down that same path at this very moment—and the courts
must continue to function in the modern world. “[I]t is the purpose of the [business
records exception] to provide relief from rigid common law rules on the admissibility of
business records. . .” Westinghouse, 133 Vt. at 99; see also State v. Burclaff, 138 Vt. 461,
467 (1980)(“the stringent common law rule that all participants in the document
production process must be called as witnesses has been abandoned”). However, it is also
incumbent upon companies choosing to do business in this fashion to create appropriate
processes for establishing the reliability of their records in court.
The Court in Westinghouse stated that even when the witness “is unfamiliar with
the physical operation of the computerized information storage and computation process,
but has a general understanding of the accounting procedures and personal familiarity
with the account,” the evidence should be admitted unless there are other reasons to
question its reliability. Id. at 101 (emphasis added). The problem here is that the witness
lacks any personal familiarity with the account. Her knowledge stems entirely from
logging into the electronic system and printing out what she saw. She never talked to
Mohamed; she is not the person who opened his account, or handled his alleged fraud
report, or allegedly issued a new card number because of a concern about fraud. No
contract with Defendant’s signature on it has been presented. No evidence was presented
that someone else within the Bank has a duty to assure the accuracy of the records or to
“observe the matter recorded.” Burclaff, 138 Vt. at 461.
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Nor was any evidence presented as to the overall accuracy of the Bank’s records.
Surely they have done studies to determine how often errors are reported by customers,
how often fake charges appear on statements, how often numbers are transposed, how
often similar names or account numbers are confused, and the like. For example, in
Burclaff the proponent of the records testified that “there were a number of checks built
into the system” and that she “was required to compare the information” on the records
with other documents to assure its accuracy. Id.
What the court is left with here is essentially testimony that because information
is in the Bank’s electronic records, it must be true. That cannot be all that is required to
establish reliability. The “ever-expanding complexity of the cyberworld has prompted the
authors of the current version of the Manual for Complex Litigation to note that a judge
should ‘consider the accuracy and reliability of computerized evidence’ and that a
‘proponent of computerized evidence has the burden of laying a proper foundation by
establishing its accuracy.’” In re Vee Vinhnee, 336 B.R. 437, 445 (B.A.P. 9th Cir. 2005),
quoting Manual For Complex Litigation (Fourth) § 11.446 (2004); see also, Midland
Funding, LLC v. Mitchell-James, 137 A.3d 1, 7 (Conn. App. 2016) (“In view of the complex
nature of the operation of computers and general lay unfamiliarity with their operation,
courts have been cautioned to take special care to be certain that the foundation is
sufficient to warrant a finding of trustworthiness. . . ”)(citation omitted); 5 Federal
Evidence § 9:20 (4th ed.) (“When evidence has been generated or collected by means of a
process or system of some sort, its probative worth depends upon the validity of the
underlying method.”). 2
2 “We note that ‘[r]eliability problems may arise through or in: (1) the underlying information itself; (2)
entering the information into the computer; (3) the computer hardware; (4) the computer software (the
programs or instructions that tell the computer what to do); (5) the execution of the instructions, which
4
Thus, “the proponent of the computer generated business records must establish
that the basic elements of the computer system are reliable.” Midland Funding, 137 A.3d
at 7 (internal quotation omitted). “When computer information is at issue, there must be
competent admissible evidence about the computer hardware and software to show that
what is presented is really accurate.” Supermedia LLC v. Law Firm of Asherson, No. CV
12-3834 JAK (RZX), 2013 WL 12113386, at *1 (C.D. Cal. Feb. 13, 2013). Many courts,
therefore, “have required testimony by a person with some degree of computer expertise,
who has sufficient knowledge to be examined and cross-examined about the functioning
of the computer.” Am. Oil Co. v. Valenti, 426 A.2d 305, 310 (Conn. 1979). One court has
declared that computer-generated records require, inter alia, “a showing that standard
equipment was used; the particular computer generates accurate records when used
appropriately; [and that] the computer was used appropriately. ” People v. Morrow, 628
N.E.2d 550, 554 (Ill. App. 3d 1993).3
Here, there is insufficient evidence to establish the reliability of the electronic
system used by the Bank to open and maintain accounts, to process charges, to check for
accuracy, or to create the paper records. The witness herself had no ability to confirm the
transforms the information in some way—for example, by calculating numbers, sorting names, or storing
information and retrieving it later; (6) the output (the information as produced by the computer in a useful
form, such as a printout of tax return information, a transcript of a recorded conversation, or an animated
graphics simulation); (7) the security system that is used to control access to the computer; and (8) user
errors, which may arise at any stage.’” State v. Swinton, 847 A.2d 921, 942–43 (Conn. 2004), quoting R.
Garcia, ‘Garbage In, Gospel Out’: Criminal Discovery, Computer Reliability, and the Constitution,’ 38 UCLA
L. Rev. 1043, 1073 (1991).
3 One treatise explains: “At least five factors have been examined in determining whether the method and
circumstances from which the computer printout was made demonstrate sufficient accuracy and reliability
to justify admission. These factors include: (1) the competency of the operators; (2) the type of computer
used and its acceptance in the field as standard and efficient equipment; (3) the procedures used for
generating input and output, including the controls, tests and checks for accuracy and reliability; (4) the
mechanical operations of the computer; and (5) the meaning and identity of the records themselves.” Guide
to Computer Law P 16195 (CCH), 2015 WL 6987376.
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reliability of any of the records based upon personal knowledge of Mohamed or specific
transactions on his alleged account. The court therefore finds the records do not satisfy
the requirements of the business records rule and are inadmissible.
Plaintiff also argues that it is entitled to recover on a theory of “account stated.”
However, that theory also relies upon the same records that the court has held
inadmissible.
Order
Judgment will be entered in favor of defendant Mohamed.
Dated at Burlington this 17th day of July, 2019.
___________________
Helen M. Toor
Superior Court Judge
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