AZ Midland Appeal

[Goody_Ouchless]

In order to return the Love, Beal, et al thread to it's rightful owner, I have started this to continue discussion. To those new, this discussion concerns an appeal of a granted Motion for Summary Judgment in an Arizona case involving Midland. The appeal text (attached) is interesting because it goes against so much of what we argue here - basically saying that Midland's documentation and affidavit(s) were garbage.

We have been trying to figure out what made this case unique. It has been argued that the allegation of a stolen credit card could be the reason, but it also looks like the Plaintiff did not follow the "road map" for self-authenticating business records.

Here was the last comment in the other thread:

Quote

Xerxes Posted:

Is it clear that the affidavits were generated 4-5 years prior?  If they were, that does explain a lot.  And then Harris is entirely consistent with her present self and the five-years-ago version of herself.

If this were true, wouldn't Midland be jumping at the chance to cure these deficiencies now by using a telephone witness in a lower court trial?  The record is consistent with such action, since Midland did move for a telephonic witness again after the case came back from appeal.

I'm reasonably convinced now that this case was a one-off from which no larger import should be taken.  Sorry for the distraction.  Apologies to OP for sidetracking your thread.  This post should be the end of it.

A review of the appeal shows that account was purchased in early 2016, so that still leaves it a mystery as to why Midland's affidavit didn't comply with Parker. 

m8028428.pdf

[Harry Seaward]

20 hours ago, Goody_Ouchless said:

account was purchased in early 2016

What was the 2012 part? 

[Goody_Ouchless]

1 hour ago, Harry Seaward said:

What was the 2012 part? 

Most of the CC statements were from 2012, and 2012 was year of default. Sued in 2016, defendant said card was stolen more than five years prior, yet continued to pay in 2011 and 2012. If any of those statements showed purchases, as well...

If Midland purchased in 2016, their affidavit should have been Parker-compliant. I figure they didn't have any business record verbiage from the original sale. Post-Parker that would be something they'd require in order to complete chain of adoption.

[Pericles]

In Harris' minute entry there is mention that in Midland's Statement of Facts (included with the msj) Midland makes claim to being the "successor-in-interest".

Midland ordinarily uses the "successor-in-interest" terminology when they are not the immediate antecedent assignee of the original creditor.

Harris doesn't reference any chain of title story or mention any predecessor(s)-in-interest of the account, but perhaps MCM's affiant (Mary Pikkaraine) swore to documents (from predecessor(s)-in-interest) that were dated in 2012.  Pikkaraine still seems to be with MCM and is mentioned in this forum in regard to other 2016 cases.

We won't know exactly what Pikkaraine swore or if there were intermediate successor(s) until we see the affidavit(s).

The ruling is still a little puzzling but in any case it is probably all academic.  We'll soon need to direct our attention to what Popko does in these types of cases.

[Goody_Ouchless]

From ruling:

"The proffered Bill of Sale and Assignment dated March 31, 2016, indicated there was a bill of sale and assignment between Citibank, B.A. and Midland Funding LLC."

Most logical explanation, so far, is that account was purchased pre-Parker and didn't come with all the links in the chain of adoption that we now see in these cases. An affidavit from bank attesting to validity of records, along with an affidavit from Midland's Custodian of Records, attesting to the adoption and integration of those records, would have carried the day.

Still, good to know if more debts from that batch are floating around.

[Pericles]

1 hour ago, Goody_Ouchless said:

Most logical explanation, so far, is that account was purchased pre-Parker and didn't come with all the links in the chain of adoption that we now see in these cases. An affidavit from bank attesting to validity of records, along with an affidavit from Midland's Custodian of Records, attesting to the adoption and integration of those records, would have carried the day.

That does seem like it could be right.  Based on the shortcomings described in the third and fourth paragraphs of the "Facts In Controversy" section of the ruling, it is plausible that the supporting documents were insufficient as you describe.

1 hour ago, Goody_Ouchless said:

Still, good to know if more debts from that batch are floating around.

Right.  It is worth pulling the documents for this case for comparison to documents from other accounts from this portfolio, should other cases be filed using like documents.

[Pericles]

On 2/1/2018 at 2:07 PM, Pericles said:

We'll soon need to direct our attention to what Popko does in these types of cases.

Reversal of a summary judgment:

m8316313.pdf

Quote

Defendant raised several arguments in his appellate memorandum. One argument is that the trial court erred when it overruled his hearsay objection and granted summary judgment based on the inadmissible hearsay contained in the attachments to the DuBois Affidavit. 

Essentially, Defendant argues that the Affidavit did not lay a sufficient foundation under the “adoptive business records” exception to the hearsay rule. Because this Court reverses on the hearsay issue, this Court does not address Defendant’s other arguments raised in his appellate memorandum.

 

Quote

The next three avowals in the second paragraph are essentially verbatim quotations of the requirements found in Evidence Rule 803(6)(A)-(C).

Missing from that Affidavit is the avowal identified by Parker (and the cases which Parker cited) as being necessary before documents may be deemed admissible under Evidence Rule 803(6) and the adoptive business records doctrine – that MCM regularly relies in the course of its regularly conducted activity on documents obtained from third parties such as Credit One, FNBM, and Sherman Originator III.

Moreover, even if the DuBois Affidavit contained the required avowal about MCM’s reliance on the third-party documents, a trial court would still be acting within its discretion if it required additional foundation. “Parker does not stand for the proposition that anything a party includes in its own business records and relies on qualifies as a business record.” Midland Funding, LLC v. Slyke, 1 CA-CV 14-0851, 2016 WL 739416, at ¶ 8 (Ariz. App. Feb. 25, 2016) (memorandum decision).  Instead, the proponent should offer evidence that the third-party records were created as part of the third party’s “ordinary course of business.” Id. For example, evidence about how the third-party information was collected either specific to those third parties or to “industry practices” generally. Id. (citing Parker, 231 Ariz. at 402, ¶ 33, and noting that the witness in Parker was able to testify about how the third parties involved in that case provided the information at issue). Here, the DuBois Affidavit is also silent on how MCM relates to Plaintiff, whether DuBois was ever trained on or familiar with any relevant record keeping practices of Plaintiff, and the basis showing MCM regularly relies on records from Plaintiff or any of Plaintiff’s three predecessors-in-interest.

It seems that the Defendant in this case also filed a motion to compel, which was denied in the lower court.  If that issue was raised in the appeal, the Commissioner did not address it because the grounds stated above were sufficient for reversal.  It seems to me that if the compel motion in the lower court was regarding arbitration, that issue should take precedence in consideration by the appeals court, both because the compel motion was denied before the summary judgment motion was granted, and because if Plaintiff's claims were subject to arbitration, the hearsay issue would be moot.

[Harry Seaward]

4 hours ago, Pericles said:

it is important to note that the admission of evidence is, to a very large extent, within the sound discretion of the trial court.

Yes, but it's not a free-for-all.  The court in the above cited ruling also said that "the proponent should offer evidence that the third-party records were created as part of the third party’s 'ordinary course of business.'"  At a certain point enough is enough and no reasonable trier of fact would refuse to recognize the records as proper "business records", just the same as no reasonable trier of fact would admit records that meet none of the Parker/Slyke criteria.

[Pericles]

2 hours ago, Harry Seaward said:

Yes, but it's not a free-for-all.  The court in the above cited ruling also said that "the proponent should offer evidence that the third-party records were created as part of the third party’s 'ordinary course of business.'"  At a certain point enough is enough and no reasonable trier of fact would refuse to recognize the records as proper "business records", just the same as no reasonable trier of fact would admit records that meet none of the Parker/Slyke criteria.

As you've pointed out before, it doesn't happen very often;

 

On 2/26/2015 at 2:09 AM, Harry Seaward said:

The problem with this approach is that evidence admission in Arizona is very discretionary.  This means the judge has very few limitations placed on him in deciding to admit or deny the JDB's evidence.  If you end up appealing your case, you will find that there has to be "a clear abuse of discretion" in admitting the evidence.  This is not something that happens very often,

 

On 12/1/2014 at 11:38 AM, Harry Seaward said:

Appeals courts are very reluctant to reverse cases on evidence rulings.  There has to be clear abuse of discretion for them to do so.

 

On 7/8/2016 at 12:31 AM, Harry Seaward said:

The appellate court in Slyke is saying the same thing as every other court has said, which is  "Whether business records are sufficiently reliable to satisfy the hearsay exception in Rule 803(6) . . . is for the trial court to determine in the exercise of its sound discretion."  They are simply saying the lower court refused to admit the evidence with sound reasoning and the appellate court found no abuse of discretion in this decision.  Based on the way the appellate court has ruled on admitted JDB evidence, there is no doubt in my mind that had the lower court admitted the records under identical circumstance, the appellate court would have also found the lower court had not abused its discretion and would have not reversed the decision to admit the records.

 

What else doesn't happen very often in arizona is a debt buyer plaintiff going to trial without at least moving for a live [telephone] witness to lay the foundation to introduce the documents into evidence, and to be subject to cross-examination.  If the defendant is represented, no telephone witness means the trial is over and the plaintiff has lost.

Some other member here suggests that a jp is making a horrible decision, or is misunderstanding the rules of evidence, if she fails to admit affidavit(s) at trial without a live [telephone] witness, even assuming corresponding objections have been raised.

[Harry Seaward]

10 hours ago, Pericles said:

As you've pointed out before, it doesn't happen very often;

But it does happen.  We have literally no details about the case that revived this nearly 2-year old thread, so it's absurd to argue against the possibility that the trial court committed an abuse of discretion.

10 hours ago, Pericles said:

If the defendant is represented, no telephone witness means the trial is over and the plaintiff has lost.

What authority are you basing this statement on?

[Pericles]

4 hours ago, Harry Seaward said:

We have literally no details about the case that revived this nearly 2-year old thread, so it's absurd to argue against the possibility that the trial court committed an abuse of discretion.

We agree. Based upon the way appeals work in PA, it's absurd to argue about discretion at all in the context of OP's posts to that thread.  I certainly wasn't arguing about it.  I said it was irrelevant in the thread.  I thought it was a disservice and a distraction to the OP of that thread for anyone to even bring it up.  Likewise about declaration admissions at trial and what jurisdictions other than PA do (or don't) essentially allow "declaration judgments" at trial.