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Third party business records admissible


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In my searching I have come across information that seems to contradict what I have heard here about the business records exception.

 

http://federalevidence.com/blog/2010/january/admitting-third-party-business-records-maintained-another-company

 

(third party) “testimony is not necessary where an organization incorporated the records of another entity into its own, relied upon those records in its day-to-day operations, and where there are other strong indicia of reliability”

 

'...we have established that the custodian or other qualified witness need not have personal knowledge regarding the creation of the document offered, or personally participate in its creation, or even know who actually recorded the information.' 

 

http://www.txcba.org/uploads/Doc_-_Third-Party_Business_Records.v2.pdf  <-- more particularly debt collection related.

 

'Simien involved an affidavit offered by the representative of a debt purchaser to prove-up that party’s claim. The court held that the admission of the affidavit over a hearsay objection was not an abuse of discretion. In so doing, it determined that the affidavit fell within an allowed exception to the hearsay rule under Tex.R.Evid. Rule 803(6) [1]because it met certain criteria. These criteria constitute a three-pronged test which has become the Simien standard. Specifically, for third-party records to be admissible as a proponent’s own business records, the affiant must show that: 1) the documents are incorporated and kept in the course of the testifying witness's business; 2) the business typically relies upon the accuracy of the contents of the document; and 3) circumstances otherwise indicate the trustworthiness of the document.' (granted, this is a collection industry document)

 

Anyway, this seems to indicate that a jdb can indeed 'take a record from another business' file, drop it into their file, and then call it their business record'

 

Discuss.

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They can take a German Shepherd, drop it into their bathtub, wash it, and call it Lady Gaga. Doesn't make it true. In some cases (you cited federal rules) records are admissible sans a witness, that does not mean you can't challenge them. Who cares what a JDB swears to, get the OC custodian of records on paper.

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Very interesting indeed.  This is a federal case, you say?

 

It's a TX Court of Appeals case.  I've been saying this.  Some courts have ruled that 3rd party documents are admissible based on a JDB affidavit.  It doesn't matter that we disagree or that the affidavit can't testify. 

 

Business records used in one business, created by a third party at their behest, may be admissible under Rule 803(6) of the Texas Rules of Evidence if (1) the incorporating business relies upon the information transmitted in the records in the normal course of its business and (2) the circumstances otherwise indicate the trustworthiness of the document.   Bell v. State, 176 S.W.3d 90, 94 (Tex.App.-Houston [1st Dist.] 2004, no pet.).

 

We have to show that the circumstances or source of the information are untrustworthy or that the documents are somehow inaccurate. 

 

 

 

Key words are strong idicia of reliability, and trustworthiness of the documents. Since when are junk debt buyer records trustworthy?

 

 

I agree.  But we have to have more than just "a JDB is untrustworthy". 

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This is exactly why you need to get the Forward Flow Agreement and every other document related to the sale. The Forward Flow Agreement will say there are errors, the records are not accurate and the OC has not responsibility that they are accurate. Of course they are going to fight you tooth and nail to not allow access to those records.

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Yes I read "a consensus among the federal courts of appeal that third party business records are admissible evidence under the hearsay exception in FRE 803(6)." The second article I linked (via the Texas Creditor’s Bar Association) seems to indicate Texas agrees in the case Simien v. Unifund CCR Partners, 321 SW 3d 235 - Tex: Court of Appeals 2010. There is a lengthy opinion in this about each point of the relevant Federal interpretation of Rule 803(6). Here is something from WI saying not admissible for a summary judgment Palisades Collection LLC v. Kalal, 781 NW 2d 503 - Wis: Court of Appeals 2010.

 

All in all, I feel a little disturbed and confused, just a little.

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Well, as BV80 and I sort of said, (I think we're on the same page on this one) the records may be deemed admissible under 803-6. Many states use 803-6 and even keep the statute number. The thing is, you can still challenge them. Proving that a JDB's records are not trustworthy shouldn't be that hard to do. You can always subpoena the affiant and trear them apart on the stand, that's a good start. The OC records keeper should be the responsibility of the JDB and it is highly doubtful that they will pay to have one appear in court.

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In my searching I have come across information that seems to contradict what I have heard here about the business records exception.

 

http://federalevidence.com/blog/2010/january/admitting-third-party-business-records-maintained-another-company

 

(third party) “testimony is not necessary where an organization incorporated the records of another entity into its own, relied upon those records in its day-to-day operations, and where there are other strong indicia of reliability”

 

'...we have established that the custodian or other qualified witness need not have personal knowledge regarding the creation of the document offered, or personally participate in its creation, or even know who actually recorded the information.' 

 

http://www.txcba.org/uploads/Doc_-_Third-Party_Business_Records.v2.pdf  <-- more particularly debt collection related.

 

'Simien involved an affidavit offered by the representative of a debt purchaser to prove-up that party’s claim. The court held that the admission of the affidavit over a hearsay objection was not an abuse of discretion. In so doing, it determined that the affidavit fell within an allowed exception to the hearsay rule under Tex.R.Evid. Rule 803(6) [1]because it met certain criteria. These criteria constitute a three-pronged test which has become the Simien standard. Specifically, for third-party records to be admissible as a proponent’s own business records, the affiant must show that: 1) the documents are incorporated and kept in the course of the testifying witness's business; 2) the business typically relies upon the accuracy of the contents of the document; and 3) circumstances otherwise indicate the trustworthiness of the document.' (granted, this is a collection industry document)

 

Anyway, this seems to indicate that a jdb can indeed 'take a record from another business' file, drop it into their file, and then call it their business record'

 

Discuss.

 

But it fails for the reasons cited in Re: Vinhee because more recent federal cases which 803 is based on show a different standard. read Lorraine v. Markel American Ins. Co., 241 F.R.D. 534 (D. Md. 2007)(proper foundation and admissibility of electronic records under Rules 902 and 803)(which cites in re: vinhee) The texas case law lags behind the fed standard on which it is based. So finding cases that cite the test would be abnalgous to the CACH LLC. v. Askew case:

“All of the requirements of § 490.680 must be satisfied for a record to be admitted as competent evidence. State v. Graham, 641 S.W.2d 102, 106 (Mo. banc 1982). To satisfy these requirements, the records "custodian" or "other qualified witness" has to testify to the record's identity, mode of preparation, and that it was made in the regular course of business, at or near the time of the event that it records. State v. Sutherland, 939 S.W.2d 373, 377 (Mo. banc 1997). For that reason, a document that is prepared by one business cannot qualify for the business records exception merely based on another business's records custodian testifying that it appears in the files of the business that did not create the record. State v. Anderson, 413 S.W.2d 161, 165 (Mo.1967); Zundel v. Bommarito, 778 S.W.2d 954, 958 (Mo.App. 1989) ("The business records exception to the hearsay rule applies only to documents generated by the business itself.... Where the status of the evidence indicates it was prepared elsewhere and was merely received and held in a file but was not made in the ordinary course of the holder's business it is inadmissible and not within a business record exception to the hearsay rule under § 490.680, RSMo 1986.") A custodian of records cannot meet the requirements of § 490.680 by simply serving as "conduit to the flow of records" and not testifying to the mode of preparation of the records in question. C. & W. Asset, 136 S.W.3d at 140.” id at pg. 63" CACH LLC. v. Askew, 358 S.W.3d 58(2012)

 

The Mo Supreme Court basically shows how it arrived at that even though the statutes pointed at the way you were laying out the majority of the states and federal courts are finding that what was once true with paper records is now different with alterable electronic records.

 

I hear you on texas courts trying to bend the evidence codes to suit the debt collectors but there is a new way that the texas code has udated as the fed updated and new way of dealing with electonic evidence.

 

Not being contentious just discussing the ramifications of lorraine and vinhee and how it has changed the federal courts for the better.

 

and If you are in a state that mirrors the Federal rules you might just be better off removing to federal court. The federal judges wouldn't risk their job to cover a jdb's coulo. I am serious here If you can make strict deadlines then it might be a better option.

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Even if the judge were to admit, with objection and then subpoena a witness from JDB. JDB will probably never provide the forward flow agreement, however, get a witness, who works for the JDB and then start questioning them about the sales of these documents, warranties, guarantees being free from errors, etc. If the Affiant cannot testify as to the process or any of these things within the sell, then, affidavit or not, and making it their business record, you have just shown that the information is not trustworthy or reliable.

Also, since they will not provide all of the records, you have been left unable to verify the accuracy of those records. How many people handled those records, what are their history of making mistakes, mis-keying numbers, amounts, etc, etc.

Worst case, you have set the stage for an appealable issue. Best case, let their attorney object to all of your questions and watch them squirm. :-)

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Well, as BV80 and I sort of said, (I think we're on the same page on this one) the records may be deemed admissible under 803-6. Many states use 803-6 and even keep the statute number. The thing is, you can still challenge them. Proving that a JDB's records are not trustworthy shouldn't be that hard to do. You can always subpoena the affiant and trear them apart on the stand, that's a good start. The OC records keeper should be the responsibility of the JDB and it is highly doubtful that they will pay to have one appear in court.

Exactly.  Simien did not challenge the authenticity of the records or the preparation of them, only that the affiant made false statements in the affidavit.  It does not go into any detail about the rest of the trial- we have no way of knowing what she (or her attorney) said about or objected to concerning the JDB's  proof they purchased the debt.  In other words she was barking up the wrong tree.  The affidavit would have been irrelevant if she had challenged the bill of sale and the attachments and/or exhibits that it referred to.  Personally I believe she had a spineless attorney with very little experience against JDB's.  There was also an issue with not getting a deposition admitted into evidence.  There is no record of how her attorney argued this in the trial.  He obviously didn't try hard enough.

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This is where I believe in submitting your own affidavit specifically denying anything the JDB's affiant states. You will be there in court, the JDB's affiant will not. Who is the Judge to believe?

 

It depends upon what is stated in the JDB's affidavit.  If the JDB states that the records show YOU had an account with the OC that was opened in a certain year, and if it is your account, how do you deny that or counter it?

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I finally found the article that I had been searching for since this thread was started.  The second half is an excellent analysis of Simien. 

https://www.yourhonor.com/in-chambers/single-issue-feature/Spring-2012/Issues-in-Credit-Card-Cases-Part-I

 

For anyone in Texas who is faced with this in a MSJ there is case law to use against it and a good explanation of how the precedents that the appeals court used to come to their conclusion in Simien are not actually related to business records transferred from an OC to a JDB.  In those cases there was an ongoing business relationship between the parties involved.  There is no such relationship between banks and JDB's.

Study this part extensively-  "When Are Documents 'Incorporated' into Another Party’s Business?" and the Bell and Harris cases it refers to. You will have a legitimate argument to show the court how Simien should be invalid. 

 

Still I believe it is much more important to unrelentingly raise issues regarding the generic incomplete bill of sale that they always come up with.  Once you are to the point of a hearing being scheduled to compel production of the complete bill of sale with all of its attachments, exhibits (or the "credit card account agreement" that the bill of sale itself may be an attachment to) then the affidavit and any of their other "evidence" will be of no value.  At that point it does not matter whether or not the account with the OC was yours.  Someone could just as well have found your account information, copies of statements, cardholder agreement, etc. in a dumpster behind a bank and typed up an affidavit and taken it to a notary.  

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  • 3 weeks later...

You see how the law gets changed for these jerks. anyway for the records indicia of reliability you have to subpoena the affiants for trial. then you can tear them down. also the bill of sale has a no warranty as to accuracy. Estoppel would prevent the jdb affiant from taking a different and more accurate stance than their assignor.

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