Stop us if you've heard this before…. In a Tennessee case, debt buyer LVNV Funding claimed it had purchased a Sears MasterCard credit card account, and was now trying to collect $15,101.23 from the alleged debtor, a consumer named Kevin Mastaw. At his bench trial, Mr. Mastaw objected to LVNV's witness and the exhibits the witness sought to introduce, on the basis of hearsay. The trial court overruled the objections, held that the records were admissible as business records, and ultimately found for LVNV.
On appeal, the court first addressed the two affidavits LVNV had introduced to establish its alleged ownership of the debt. The court pointed out a plethora of flaws in these documents:
- Both affidavits were prepared by one Tobie Griffin, who claimed to be an "authorized representative for LVNV" but failed to identify by whom she was authorized.
- Griffin did not otherwise explain her relationship with or role within LVNV.
- Her affidavit referred generally to a review of documents, including computer records, but she did not specify any documents, and no documents were attached.
- Griffin stated in her affidavit that records provided to LVNV were "represented to include information provided by the original creditors," such as the debtor's identity, and the identity of the original creditor. She did not say who made such representations.
- She stated Mastaw's alleged account number, then stated that the account was opened with Sears, later came to be owned by Citibank, which later assigned a "numbered portfolio" to LVNV's assignor (which she did not identify) and that the portfolio included Mastaw's account. She then asserted that ownership rights were assigned to LVNV, and concluded by stating an alleged balance due and owing. Again, no specific documents were referenced or attached.
- In the second affidavit, Ms. Griffin, the same affiant, claimed she was an authorized representative of Sherman. She did not explain how she came to be an authorized representative of both Sherman and LVNV.
- She stated Mastaw's alleged account number, said it was owned by LVNV, and explained that LVNV acquired it from Sherman.
It was undisputed that the affidavits contained hearsay; the only issue on appeal was whether the affidavits could be admissible as business records. Regarding this, the court stated, "Documents prepared specifically for the for the subject litigation are properly excluded because of motivational concerns arising from the fact that they were generated for litigation purposes as opposed to records generated for business purposes."
The court cited to Palmer v. Hoffman, 318 U.S. 109 (1943), which concerned a statement prepared by a railroad engineer after a train accident. In arguing that the document was admissible, the railroad claimed that the statement was a business record because it was the railroad's practice to prepare such statements after accidents. The
Palmer court disagreed, stating, "Unlike payrolls, accounts receivable, accounts payable, bills of lading and the like, these reports are calculated for use essentially in the court, not in the business. Their primary utility is in litigating, not railroading."
Id. at 114.
The Court of Appeals concluded that the situation with LVNV's affidavits was similar, and, reversing the lower court, declined to admit them into evidence. Having concluded that neither affidavit was admissible, the court found that the evidence on the record was insufficient to establish that Mastaw was indebted to LVNV.