Key Takeaway
Court accepts business records from bank successor even when affiant wasn't employed during original record creation, highlighting both strengths and limitations.
Understanding Business Records in Mortgage Litigation
In mortgage foreclosure cases, banks often rely on business records to establish their standing and prove borrower default. These records become particularly complex when the original lender has been acquired or merged with another institution. The question then arises: can an employee of the successor bank authenticate records created by the predecessor bank?
This issue frequently surfaces in foreclosure litigation, where banks like JP Morgan Chase acquire failed institutions and inherit their mortgage portfolios. The challenge lies in establishing proper foundation for business records when the current employee reviewing the records wasn’t present during their creation. Courts must balance the practical realities of bank mergers against evidentiary requirements for business records.
The interplay between business records exceptions and personal knowledge requirements creates a nuanced area of evidence law. Unlike situations involving uncertified reports where authentication may be more straightforward, successor bank scenarios require careful consideration of the affiant’s relationship to the original record-keeper.
Jason Tenenbaum’s Analysis:
JP Morgan Chase Bank v Shapiro, 2013 NY Slip Op 01357 (1st Dept. 2013)
“The underlying mortgage and note were originally held by Washington Mutual Bank, FA (WAMU). Plaintiff submitted the affidavit of an employee who identified herself as having personal knowledge of, inter alia, plaintiff’s status as successor-in-interest to WAMU and defendant Saadia Shapiro’s default. This was based upon her review of plaintiff’s books and records and its account records regarding Shapiro’s delinquent account (see CPLR 3212).”
Note that affiant was related to successor entity and was not employed when record was generated. This will cut both ways.
Key Takeaway
The Shapiro decision demonstrates that courts may accept business records from successor entities even when the authenticating witness wasn’t employed during record creation. However, this creates both opportunities and vulnerabilities for the authenticating party. While it allows banks to use inherited records, it also opens potential challenges regarding the witness’s actual knowledge and the reliability of predecessor institution records.
Legal Update (February 2026): The business records authentication requirements discussed in this 2013 post may have been modified by subsequent court decisions and potential amendments to CPLR Article 45 regarding business record exceptions. Additionally, foreclosure practice and successor bank authentication standards may have evolved through appellate decisions since 2013. Practitioners should verify current CPLR provisions and recent case law regarding business record foundation requirements in mortgage litigation.
