1. The witness is not properly qualified under the rule. Here, I argue that the only job of the witness is to travel the country and be a witness at trial. The witness has only recently reviewed the file and knows little about the actual workings of any department.
2. The records are from other similar servicing companies and Plaintiff has not questioned or reviewed any of these records.
3. The records are from untrustworthy sources based upon Billion dollar settlements and fines.
4. The records are not "business records". Plaintiff obtained an interest in the loan only to file a foreclosure action. Plaintiff has never used or relied upon any record to make a business decision. This is especially true when the employer of the witness obtained an interest in the loan shortly before the complaint was filed or after the complaint was filed.
While the business records exception is applicable to all Ohio civil litigation, it comes up in almost every foreclosure cases.
Evid.R.
803(6), states:
(6) Records of
regularly conducted activity. A memorandum, report, record, or data
compilation, in any form, of acts, events, or conditions, made at or near the
time by, or from information transmitted by, a person with knowledge, if kept
in the course of a regularly conducted business activity, and if it was the
regular practice of that business activity to make the memorandum, report,
record, or data compilation, all as shown by the testimony of the custodian or
other qualified witness or as provided by Rule 901(B)(10), unless the source of information or the method or circumstances of
preparation indicate lack of trustworthiness. The term “business” as used
in this paragraph includes business, institution, association, profession,
occupation, and calling of every kind, whether or not conducted for profit.
Plaintiff in a foreclosure case either through an affidavit of an employee or through the testimony of an employee at trial will present a statement of an employee that rotely repeats the language of Evidence Rule 803. However, the witness does not work in that office or department. Instead, the employee is hired to travel around the country providing testimony in foreclosure cases. The witness will become familiar with the account records of the defendant by reviewing a file shortly before trial. Not what the evidence rule intended.
The witness will state that he/she is familiar with the business practices of plaintiff; that the records were made at or near the time of the event, by a person with knowledge, and that it was the regular business practice to make such records. However, the witness never worked for the company that produced the records, never performed the record making, and never relied upon the records.
The witness will be employed by a company that had the rights to collect the debt transferred to it moments before the complaint was filed, or even during the litigation. The witness will discuss how the records are reviewed for any missing or abnormal item in the business records of the previous company. If an abnormality in the business records is found, the company that now owns the debt will contact the company that previously owned the debt, and the missing information or document is provided. This process is known as "boarding" and if the witness can describe the process in any detail, the business records are allowed in as evidence.
Defendant can challenge the Plaintiff's witness on the records, the record keeping process, and the record boarding process, but any inability of the witness will be overlooked because to be admissible the record does not have to be produced by the witness and the witness does not need first hand knowledge of the events recorded.
Defendant can also challenge the Plaintiff's source of the records as being untrustworthy. There is very little case law on what constitutes an untrustworthy source.
The
rationale behind Evid.R. 803(6) is that if information is sufficiently
trustworthy that a business is willing to rely on it in making business
decisions, the courts should be willing to as well. See Staff Note to Evid.R.
803(6).
Deutsche Bank Nat’l Trust Co. v. Hansen (Ohio App. 5th
Dist.), 2011-Ohio-1223, at ¶21.
This is how I would imagine the evidence rules were intended to apply to a foreclosure. The local bank would call the bookkeeper who had custody of the account records. The bookkeeper did not input every single notation in the account record of defendant homeowner, but the bookkeeper knew the tellers, has seen the defendant homeowner making payments, and had actually trained one or more of the individuals putting the notations in the records of defendant homeowner. The records before the witness are copies but she made the copies earlier in the week so that the official records did not need to leave the bank. Finally, she could rely upon the business records because no homeowner ever doubted the records, and the records were used by the bank to decide if it was going to extend any more credit to the defendant homeowner.
Today, the Plaintiff is either a multinational corporation or a trust which possesses thousands of loans. The local bank does not keep the local account. Instead, the loan is packaged and sold so many times that an industry as developed just to keep track of all the transactions (MERS). The loans are sold, or the servicing rights are sold by the thousands. Each loan would be expected to have many pages of loan documents, payments, payment histories, telephone call logs, telephone conversation transcripts, demand letters, and field visits. Many thousands of page of information have been transferred several times during the life of the loan. Each time each loan is transferred, the new servicer "boards" or reviews each paper of each loan.
Typically, as a homeowner becomes in default, the servicing rights are transferred several more times, as the value of the non-performing loan is less. Then as the loan is about to be foreclosed there is a whirlwind of activity to make certain that all the transfers of the loan are documented. The business entities that are buying and selling these loans and are reviewing all the papers regarding the loans, do not have the time or money to make certain that the transfers are properly documented until right before the complaint is filed.
The Plaintiff and the plaintiff's servicer's employee now come into court and state that Plaintiff has relied upon the business records to make business decisions. Plaintiff states that it can rely upon the business records from these other financial institutions. The financial records of these other financial institutions should not be considered untrustworthy. The financial institutions have had allegations of bad practices, but those claims of bad acts have been settled to avoid the cost of litigation. These other financial institutions have not admitted liability, they have simply paid BILLIONS to settle claims regarding their business practices.
