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Nat'l Collegiate Student Loan Tr. 2007-2 v. Villalva

ARIZONA COURT OF APPEALS DIVISION ONE
Jun 14, 2018
No. 1 CA-CV 17-0449 (Ariz. Ct. App. Jun. 14, 2018)

Opinion

No. 1 CA-CV 17-0449

06-14-2018

NATIONAL COLLEGIATE STUDENT LOAN TRUST 2007-2, Plaintiff/Appellee, v. JULIETA VILLALVA, Defendant/Appellant.

COUNSEL Sessions, Fishman, Nathan & Israel, LLP, San Diego, CA By Damian P. Richard Counsel for Plaintiff/Appellee Arizona Consumer Law Group, PLC, Mesa By John N. Skiba Counsel for Defendant/Appellant


NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

Appeal from the Superior Court in Maricopa County
No. CV2016-050281
The Honorable John R. Hannah, Judge

AFFIRMED

COUNSEL

Sessions, Fishman, Nathan & Israel, LLP, San Diego, CA
By Damian P. Richard
Counsel for Plaintiff/Appellee

Arizona Consumer Law Group, PLC, Mesa
By John N. Skiba
Counsel for Defendant/Appellant

MEMORANDUM DECISION

Judge Kent E. Cattani delivered the decision of the Court, in which Presiding Judge Diane M. Johnsen and Judge Jennifer M. Perkins joined.

CATTANI, Judge:

¶1 Julieta Villalva appeals the superior court's judgment requiring her to pay the balance of her student loan to the current holder of the debt, National Collegiate Student Loan Trust 2007-2. Villalva argues that the court erred by admitting National Collegiate's exhibits under the business records exception to the hearsay rule. For reasons that follow, we affirm.

FACTS AND PROCEDURAL BACKGROUND

¶2 In April 2007, Villalva signed a note for a $30,000 student loan from Charter One Bank. Several months later, Charter One assigned the loan to National Collegiate. After Villalva failed to make required payments for several months, National Collegiate filed a lawsuit.

¶3 The parties proceeded to a bench trial at which Villalva was not present but was represented by counsel who challenged the admissibility of National Collegiate's proffered evidence. The only trial witness, Alicia Holiday, was National Collegiate's custodian of records. National Collegiate sought to introduce records of Villalva's loan through Holiday, and, although Holiday did not have personal knowledge of the loan's creation in 2007 nor of Villalva's payment history, she testified to National Collegiate's receipt, maintenance, and use of the loan documents. Over Villalva's objections, the superior court admitted all nine of National Collegiate's exhibits, including several that were created after the lawsuit was filed.

¶4 After the close of evidence, the superior court found that National Collegiate established that Villalva breached the contract and entered judgment against Villalva for the principal balance of the loan plus accrued interest and costs, totaling $48,928.12. Villalva timely appealed, and we have jurisdiction under Arizona Revised Statutes ("A.R.S.") § 12-2101(A)(1).

DISCUSSION

¶5 Villalva contends that the court erred by admitting National Collegiate's exhibits as business records to prove the existence and validity of the debt. Villalva argues specifically that: (1) National Collegiate did not present sufficient foundation to support the reliability of the exhibits and (2) some of the exhibits were created in preparation for litigation. We review the superior court's evidentiary rulings for abuse of discretion. Sitton v. Deutsche Bank Nat'l Tr. Co., 233 Ariz. 215, 220, ¶ 23 (App. 2013).

¶6 Under the business records exception, a record of a regularly conducted activity is admissible if (A) it is made at or near the time of the entry by—or from information transmitted by—someone with knowledge, (B) it is kept in the ordinary course of business, (C) it is made as a regular practice, (D) a qualified witness testifies to these criteria, and (E) the opponent does not show the record lacks indicia of trustworthiness. Ariz. R. Evid. 803(6).

¶7 Villalva first contends that Holiday lacked sufficient knowledge to testify about the exhibits' authenticity. But to lay adequate foundation under the business records exception, the testifying witness need not have personal knowledge of the creation of the document, nor does the entity that has custody of the document need to have created it. State v. Parker, 231 Ariz. 391, 401-02, ¶ 33 (2013) (holding that a credit card company's custodian laid sufficient foundation for admitting business records even though the company's merchant—not the company or its custodian—created the records); see also United States v. Adefehinti, 510 F.3d 319, 325-26 (D.C. Cir. 2007) (holding that "a record of which a firm takes custody is thereby 'made' by the firm within the meaning of [Rule 803(6)]," and thus admissible so long as the rule's other requirements are also met). Thus, a witness for an entity that has custody of—but did not create—a business record nevertheless may lay adequate foundation by testifying to the creator's transfer of the business record to the custodial entity, that entity's maintenance of the record, and its reliance upon the record in its ordinary course of business, each of which reflects the record's trustworthiness and reliability. See Parker, 231 Ariz. at 401-02, ¶¶ 31, 33; see also United States v. Childs, 5 F.3d 1328, 1333-34 (9th Cir. 1993) (upholding the admission of records regularly relied on by an auto dealer, even though not created by the dealership, because the rule's other requirements were met and the records were sufficiently trustworthy).

¶8 Here, neither National Collegiate nor Holiday participated in the creation of the original loan or its corresponding documentation in 2007.

Although Holiday therefore could not testify about the loan's creation, she testified that Charter One transferred Villalva's loan agreement and the corresponding records to National Collegiate upon the sale of the loan, and that the records had been filed with the Securities and Exchange Commission. Holiday also testified about her familiarity with National Collegiate's record-keeping system, that National Collegiate integrated Villalva's loan records with its own records, and that it relies on all of those records in its ordinary course of business. She also explained that the original loan agreement resembled other agreements that National Collegiate had purchased from Charter One, noting that Charter One placed a code at the bottom of Villalva's agreement—as it did with others—at the time of the sale to indicate the loan's repayment terms. Accordingly, Holiday's testimony provided the court with a reasonable basis from which to conclude that the exhibits were admissible as business records. See Ariz. R. Evid. 803(6); see also Parker, 231 Ariz. at 401, ¶ 31.

¶9 Villalva also contends that the superior court erred by admitting as business records documents that were prepared for litigation purposes. "Documents prepared solely for purposes of litigation generally are not made in the regular course of business," Parker, 231 Ariz. at 401, ¶ 30, and are therefore not business records under Rule 803(6). But if documents prepared for litigation are "mere reproductions" of regularly-kept records, they are admissible as business records to the same extent as the regularly-kept records themselves. Id. In Parker, for example, the records custodian testified to copying and pasting information from a database created in the ordinary course of business onto a separate document intended to aid a police investigation. Id. at ¶ 32. The court held that the police investigation document was admissible because it "simply repeated information that was admissible as a business record." Id.

¶10 Here, Villalva points to several exhibits that National Collegiate created after it filed the lawsuit, and argues that they were created solely for litigation purposes. Although Holiday testified that certain exhibits were prepared with an eye towards litigation, she also testified that the information in the exhibits was "pulled" from pre-existing records maintained by National Collegiate in the ordinary course of its business (collecting payments on loans). For example, Holiday testified that a "roster" attached to Exhibit 4, which charts pertinent information about the loan terms and repayment, consisted of information pulled from Villalva's file and was "created for the litigation process . . . and further collection of this loan." (Emphasis added.) Holiday also testified that Exhibit 6, which lists Villalva's monthly amounts due, balance, and repayment status, was compiled from information originally stored for

business purposes. And, despite Villalva's contentions otherwise, there was also sufficient evidence to support finding that Exhibits 7, 8, and 9—which, similar to Exhibit 6, were post-litigation documents compiling repayment information—consisted only of information kept in a database in the ordinary course of National Collegiate's business. Although the superior court acknowledged minor foundational deficiencies in some of the admitted exhibits, the court correctly found that any such deficiencies were not relevant to the elements of National Collegiate's breach of contract claim against Villalva. Accordingly, the court did not abuse its discretion by admitting the exhibits created after the initiation of the lawsuit.

¶11 Because the documentary exhibits presented by National Collegiate satisfied the requirements of Rule 803(6)(A)-(D), and because Villalva did not show the documents lacked indicia of trustworthiness, the superior court properly admitted the exhibits in evidence.

CONCLUSION

¶12 For the foregoing reasons, we affirm the superior court's judgment.


Summaries of

Nat'l Collegiate Student Loan Tr. 2007-2 v. Villalva

ARIZONA COURT OF APPEALS DIVISION ONE
Jun 14, 2018
No. 1 CA-CV 17-0449 (Ariz. Ct. App. Jun. 14, 2018)
Case details for

Nat'l Collegiate Student Loan Tr. 2007-2 v. Villalva

Case Details

Full title:NATIONAL COLLEGIATE STUDENT LOAN TRUST 2007-2, Plaintiff/Appellee, v…

Court:ARIZONA COURT OF APPEALS DIVISION ONE

Date published: Jun 14, 2018

Citations

No. 1 CA-CV 17-0449 (Ariz. Ct. App. Jun. 14, 2018)