Familiarity with predecessor business record practice

US Bank N.A. v Ballin, 2018 NY Slip Op 01212 (2d Dept 2018)

“Thrasher averred, in relevant part, that her affidavit was based upon her review of Ocwen’s business records, and that upon review of such records, the note was physically transferred to the plaintiff on December 1, 2006. The plaintiff failed to demonstrate that the records relied upon by Thrasher were admissible under the business records exception to the hearsay rule (see CPLR 4518[a]) because Thrasher, an employee of Ocwen, did not attest that she was personally familiar with the plaintiff’s record-keeping practices and procedures (see Bank of N.Y. v Willis, 150 AD3d 652, 653; Arch Bay Holdings, LLC v Albanese, 146 AD3d 849, 852; Aurora Loan Servs., LLC v Mercius, 138 AD3d 650, 652). Thus, the plaintiff failed to establish, prima facie, that it had standing to commence the action.”

The question as you could imagine is what is sufficient to prove sufficiency of a prior entities practices.

Mailing – CPLR 4518(a)

Bank of Am., N.A. v Wheatley, 2018 NY Slip Op 01175 (2d Dept. 2018)

“The plaintiff failed to make the requisite showing. In support of its motion, the plaintiff submitted the affidavit of Sherry Benight, an officer of Select Portfolio Servicing, Inc. (hereinafter SPS), the loan servicer, along with two copies of a 90-day notice addressed to the defendant and a proof of filing statement pursuant to RPAPL 1306 from the New York State Banking Department. While mailing may be proved by documents meeting the requirements of the “business records exception” to the hearsay rule, Benight, in her affidavit, did not aver that she was familiar with the plaintiff’s mailing practices and procedures, and therefore did not establish proof of a standard office practice and procedure designed to ensure that items are properly addressed and mailed”

I have to imagine this would be a mailing ledger or some other documentary proof showing that an item was mailed?  A little different than in the no-fault scenario

 

Hearsay – business records

People v Jones, 2018 NY Slip Op 00710 (4th Dept. 2018)

“First, the court “erred in admitting in evidence a printout of electronic data that was displayed on a computer screen [after] defendant presented a check, the allegedly forged instrument, to a bank teller. The People failed to establish that the printout falls within the business records exception to the hearsay rule . . . [because they] presented no evidence that the data displayed on the computer screen, resulting in the printout, was entered in the regular course of business” (People v Manges, 67 AD3d 1328, 1329 [4th Dept 2009]; see generally CPLR 4518 [a]; CPL 60.10). Moreover, although the printout was initially admitted only for the limited purpose of establishing “that the statement [reflected therein] was made,” the court thereafter instructed the jury that the printout was permitted to show that the person with the Social Security number tendered by defendant was already a customer at the bank, thereby allowing the jury to consider the printout for the truth of the matter asserted therein. As such, the People were still obligated to establish that the ” entrant was under a business duty to obtain and record the statement [reflected in the printout]’ ” (People v Patterson, 28 NY3d 544, 550 [2016], quoting Hayes v State of New York, 50 AD2d 693, 693-694 [3d Dept 1975], affd 40 NY2d 1044 [1976]; see Matter of Leon RR, 48 NY2d 117, 122 [1979]; People v McKinley, 72 AD2d 470, 476-477 [4th Dept 1980]). The People failed to fulfill that foundational requirement here (see Manges, 67 AD3d at 1329; compare Patterson, 28 NY3d at 547-548; People v Ferone, 136 AD2d 282, 289-290 [2d Dept 1988], lv denied 72 NY2d 859 [1988]).

Second, the court improperly admitted an investigator’s testimony about the results of a search he ran in a credit bureau’s commercial database for email addresses and a telephone [*2]number contained in a cover letter that enclosed the counterfeit check defendant tried to cash. The People failed to establish the requisite foundation for this testimony inasmuch as the investigator did not testify that he “is familiar with the practices of [the] company that produced the records at issue” and that he “generally relies upon such records” (People v Brown, 13 NY3d 332, 341 [2009]; see People v Cratsley, 86 NY2d 81, 89 [1995]).”

The world of business records, duties to impart and familiarity with the original entrants business practices.

A business record can be anything

Here is an irony. Now that the notion of a business record plays a minimal role in no-fault practice, where do we now see intense skirmishes over this item?  Mortgage Foreclosure actions and credit card collections.  Oh and here is more irony for those who have been in the no-fault game for too long.  Which Department requires a more particularized affidavit to satisfy 4518(a), and which requires watered down, conclusory assertions?    the answer is below, but you should know it already.

Bank of Am., N.A. v Brannon, 2017 NY Slip Op 07578 (1st Dept. 2017)

(1) “Furthermore, under the circumstances before us, the flaws in the notarization of Mattera’s affidavit are not fatal to plaintiff’s summary judgment motion (see Matter of Cubisino v Cohen, 47 NYS2d 952, 953-954 [Sup Ct, NY County 1944], affd 267 App Div 891 [1st Dept 1944]; Fisher v Bloomberg, 74 App Div 368, 369 [1st Dept 1902]; see also Sirico v F.G.G. Prods., Inc., 71 AD3d 429, 434 [1st Dept 2010]; Todd v Green, 122 AD3d 831, 832 [2d Dept 2014]). Pursuant to CPLR 2101(f) the court can disregard a defect in the Uniform Certificate of Acknowledgment unless a defendant has demonstrated that a substantial right of hers has been prejudiced. As no prejudice has been shown by defendant, the alleged defect should have been disregarded”

This is a bonus citation to those who enjoy arguing that irregularities in the notarization voids an affidavit.  It is not related to the substance of the post.

(2) “Furthermore, CLPR 4518(a) does not require a person to have personal knowledge of each of the facts asserted in the affidavit of merit put before the court as evidence of a defendant’s default in payment (see Citigroup v Kopelowitz, 147 AD3d 1014, 1015 [2d Dept 2017] [“There is no requirement that a plaintiff in a foreclosure action rely on any particular set of business records to establish a prima facie case, so long as the plaintiff satisfies the admissibility requirements of CPLR 4518(a), and the records themselves actually evince the facts for which they are relied upon”]; Citibank, NA v Abrams, 144 AD3d 1212 [3d Dept 2016]). Thus, in seeking to enforce a loan, an assignee of an original lender or intermediary predecessor may use an original loan file prepared by its assignor, when it relies upon those records in the regular course of its business (see Landmark Capital Invs., Inc. v Li-Shan Wang, 94 AD3d 418 [1st Dept 2012]; see also State of New York v 158th St. & Riverside Dr. Hous. Co., Inc., 100 AD3d 1293, 1296 [3d Dept 2012], lv denied 20 NY3d 858 [2013] [records admissible “if the recipient can establish personal knowledge of the maker’s business practices and procedures, or that the records provided by the maker were incorporated into the recipient’s own records or routinely relied upon by the recipient in its business”]).”

(2a)

“Here, Mattera, a representative of IFS, which has held the note and mortgage since November 2009, satisfied these standards, stating that

“I make this affidavit with personal knowledge of the facts and circumstances herein which are derived from personal knowledge and/or an independent examination of the financial books and business records made in the ordinary course of business maintained by or on behalf of Plaintiff to be an accurate and fair representation of the occurrences with which the record purports to represent as well as business records relative to the within litigation. I am familiar with the record keeping systems that Plaintiff and/or its loan servicer uses to record and create information related to the residential mortgage loans that it services, including the processes by which Plaintiff and/or its loan servicer obtains the loan information in those systems. While many of those processes are automated, where the employees of the Plaintiff and/or its servicer manually enter data relating to loans on those systems, they have personal knowledge of that information and enter it into the system at or near the time they acquired that knowledge. The records relied upon are made in the regular course of business made at or about the time the event is being recorded, systematically made for the conduct of business and are relied upon as the accurate routine reflections of the day-to-day regularly conducted business activity and so they may be relied upon as being truthful and accurate. In connection with making this affidavit, I have personally examined these business records reflecting data and information as of January 31, 2015. . . .

* * *

“I have also reviewed Plaintiffs books and records, and the payments of principal and interest made by Defendant(s) to Plaintiff. Any allegation of either full or timely payment after default is simply not substantiated by these records. All notices of default as required in the Note have been sent as prescribed in the Mortgage . . . . All time frames set forth in the notice and /or notices, as required by the Mortgage have elapsed and the Defendant(s) have not taken the necessary action to correct the default and or defaults as specified herein and in the Complaint. . . .

* * *

“The simple uncontroverted fact is that Defendant, SARAH BRANNON, was loaned and did receive $360,000.00, as is confirmed by the Mortgage and Note. Defendant did not uphold this obligation, to the detriment of Plaintiff. Defendant breached his/her obligations under the Mortgage by failing to successfully tender funds for the August 1, 2007 payment and all successive payments thereafter.”

(2b) “While the dissent finds the affidavit deficient because Mattera did not state that he was familiar with the records of GE, the Default Notice was sent by Litton, plaintiff’s agent, and Mattera stated that he was familiar with the recordkeeping systems that plaintiff and/or its loan servicer used. He also stated that he personally reviewed plaintiff’s books and records, and the payments made by defendant”

What was missing from what was a 2-3 page affidavit?  How was the affiant familiar with the antecedent entity’s record keeping?  The dissent harped on this issue and, under a technical reading of 4518(a), the dissent is correct.  The First Department accepts the legal fiction that a current entity can have personal knowledge about a prior entity and, therefore, establish the requisite personal knowledge to substantiate a business record.  But in my mind, if you are going to head down this path, take ownership of it.  Do not hide behind cases that are not directly on point.

Business records again

Cadlerock Joint Venture, L.P. v Trombley, 2017 NY Slip Op 03927 (2d Dept. 2017)

“Contrary to the Supreme Court’s determination, the plaintiff failed to demonstrate the admissibility of the records relied upon by its account officer under the business records exception to the hearsay rule (see CPLR 4518[a]), and thus, failed to establish a default in payment under the note. “A proper foundation for the admission of a business record must be provided by someone with personal knowledge of the maker’s business practices and procedures” (Citibank, N.A. v Cabrera, 130 AD3d 861, 861). Here, the plaintiff’s account officer did not allege that she was personally familiar with HSBC’s record keeping practices and procedures, and thus failed to lay a proper foundation for the admission of records concerning the payment history under the note”

The assignee to the record cannot articulate how the assignor generated the note.

Intersection between collateral source hearing and no-fault

 

Having been involved in the thicket of the collateral source hearing, it can be very frustrating to obtain the information and evidence necessary to oftentimes reduce the medical and wage portion of a verdict that is being compensated through another source.

(1)

Here, contrary to the plaintiff’s contention, the Workers’ Compensation and Social Security benefits that she was receiving as a result of the 2002 accident constitute a collateral source that could potentially offset her award from this action to recover damages in connection with the 2010 accident. Both the plaintiff and her vocational rehabilitation specialist testified that the plaintiff’s benefits would have ceased if she had begun to work again. Therefore, although the

(1) “plaintiff was not receiving Workers’ Compensation and Social Security benefits as a result of the 2010 accident, under the unique circumstances of this case, those benefits constituted collateral sources that could potentially offset her award”

(2) “However, the defendants, who did not submit any documentation from the Social Security Administration and who elicited the plaintiff’s inconsistent testimony as to the amounts she was receiving per month in Social Security disability benefits, failed to establish with reasonable certainty that the plaintiff had been receiving, or would continue to receive, Social Security disability payments”

(3) “Additionally, the defendants failed to establish with reasonable certainty that they paid for some of the plaintiff’s past medical bills through no-fault insurance. At the collateral source hearing, the plaintiff testified that she had taken out a loan of approximately $60,000 to pay for some of her treatment, and that some of her treating physicians had taken liens against her. Further, the defendants offered only copies of the plaintiff’s medical bills without any testimony from an expert or no-fault insurance adjuster to explain them (see Lahren v Boehmer Transp. Corp., 49 AD3d 1186, 1188). This evidence was insufficient to establish with reasonable certainty which portions, if any, of the plaintiff’s bills the defendants had paid”

Here, the Defendant’s failed to obtain the SSD records and therefore could not reduce past wages.  More problematic, Defendant failed to subpoena that no-fault carrier in order to obtain the proofs necessary to show the portions of the past medical billings that were paid or should have been paid under the PIP policy.

The issue in collateral source hearings is that you are attempting to obtain evidence, never received in disclosure after you got the hell beaten out of you at trial.  In addition, you need to prove the issue through clear and convincing evidence.  Not an easy task.

Police report and CPLR 4518(a)

Shehab v Powers, 2017 NY Slip Op 03790 (2d Dept. 2017)

“Information in a police accident report is “admissible as a business record so long as the report is made based upon the officer’s personal observations and while carrying out police duties” (Memenza v Cole, 131 AD3d 1020, 1021; see Matter of Chu Man Woo v Qiong Yun Xi, 106 [*2]AD3d 818, 819; Yeargans v Yeargans, 24 AD2d 280, 282). Conversely, information in a police accident report is inadmissible where the information came from witnesses not engaged in the police business in the course of which the memorandum was made, and the information does not qualify under any other hearsay exception (see Matter of Chu Man Woo v Qiong Yun Xi, 106 AD3d at 819; Holliday v Hudson Armored Car & Courier Serv., 301 AD2d 392, 396).

Here, the Supreme Court did not err in redacting certain information from the police report with respect to the location of the accident. There was insufficient evidence at trial to demonstrate that the disputed information was derived from the personal observations of the responding police officer, who did not witness the subject accident (see Wynn v Motor Veh. Acc. Indem. Corp., 137 AD3d 779, 780; Memenza v Cole, 131 AD3d at 1022; Noakees v Rosa, 54 AD3d 317, 318; Gagliano v Vaccaro, 97 AD2d 430). Moreover, the court did not err in precluding the plaintiff from cross-examining his own witness, the responding police officer, with respect to the accident location”

The police report many times is a vital piece of information in PI cases.  The rules regarding their admissibility becomes a hot bed of issues.

Business records and copies

76-82 St. Marks, LLC v Gluck, 2017 NY Slip Op 01329 (2017)

(1) “Moreover, the Supreme Court properly determined that the proffered copy of the guaranty was inadmissible as secondary evidence of the terms of the guaranty or pursuant to CPLR 4539(a). Under an exception to the best evidence rule, “secondary evidence of the contents of an unproduced original may be admitted upon threshold factual findings by the trial court that the proponent of the substitute has sufficiently explained the unavailability of the primary evidence and has not procured its loss or destruction in bad faith”.  (Compare this to 4539[b] – note the differences in foundations)

(2) “The plaintiff’s principal was not present when the original guaranty was executed, and thus could not testify as to whether the original guaranty was similarly missing a portion of paragraph 4, while Gluck testified that the guaranty she executed contained complete paragraphs. Further, the copy was not satisfactorily identified as a copy of the guaranty so as to be admissible as a reproduction pursuant to CPLR 4539(a)”

(3) “Furthermore, Gluck is correct that the plaintiff failed to make a prima facie case regarding its damages, since the summary chart of charges and payments made under the lease was prepared solely in anticipation of litigation and should not have been received in evidence, and the plaintiff failed to provide any underlying documents to establish the proper charges and payments made”

Just amazing how another Plaintiff came to court unprepared to put documents into evidence.

 

Business record discussion in foreclosures

CitiMortgage, Inc. v McKinney, 2016 NY Slip Op 08037 (2d Dept. 2016)

“Stringer further asserted that she was personally familiar with the plaintiff’s record-keeping practices and procedures, the records were made in the regular course of business, it was the regular course of the plaintiff’s business to make them, and the records were made at or near the time of the occurrence of the matters set forth in the records. This was sufficient to establish, prima facie, that the plaintiff was the holder of the note at the time the action was commenced (see CPLR 4518[a];”

Business records play a much less prominent role nowadays in our realm of practice.

Another unsuccessful 4518(a) challenge

Sin Med., P.C. v Travelers Ins. Co., 2016 NY Slip Op 51246(U)(App. Term 2d Dept. 2016)

(1) Contrary to the Civil Court’s conclusion, defendant’s failure to establish that the EUO scheduling letters constituted evidence pursuant to the business records exception to the rule against hearsay as set forth in CPLR 4518 is of no consequence. Defendant did not offer the EUO scheduling letters to establish the “truth” of any matters asserted therein, but rather to show that the letters had been sent. As the letters were not offered for a hearsay purpose, they did not need to qualify as business records pursuant to CPLR 4518

(2) Furthermore, defendant established, based upon sworn stenographic transcripts, that plaintiff’s assignor had failed to appear for the duly scheduled EUOs

The 4518 argument lost luster when the Court held that policy declaration sheets did not have to be in evidence to be considered along with denial of  claim forms.  By analogy, EUO letters and IME letters were next to be considered under the “it is not a 4518 rule” doctrine.