Key Takeaway
New York court ruling demonstrates critical requirements for business records admissibility when assignees lack knowledge of original recordkeeper's practices and procedures.
Understanding Business Records Evidence in Assignment Cases
The admissibility of business records under CPLR 4518 remains a cornerstone of commercial litigation in New York. When financial institutions assign debts and loans, the acquiring entities often struggle to establish proper foundation for the original lender’s records. This challenge becomes particularly acute when the assignee’s personnel lack firsthand knowledge of how the original creditor maintained and generated its documentation.
The business records exception to hearsay rules requires more than simply possessing documents—it demands testimony from someone with personal knowledge of the record-keeping practices that created those documents. This requirement has consistently tripped up assignees who attempt to introduce evidence without proper foundation, as demonstrated in recent appellate decisions addressing business records from various departments.
Jason Tenenbaum’s Analysis:
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), 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.
Key Takeaway
This case reinforces that assignees cannot simply rely on transferred documents without establishing proper foundation. The witness must have personal knowledge of the original institution’s record-keeping practices, not just familiarity with the documents themselves. This requirement often proves fatal to cases where assignments occur during ongoing litigation without adequate preparation for evidentiary requirements.
