                                                                  FILED
                                                             Jan 20 2017, 8:09 am

                                                                  CLERK
                                                              Indiana Supreme Court
                                                                 Court of Appeals
                                                                   and Tax Court




ATTORNEY FOR APPELLANT
Judith Fox
Alan Grigorian, Certified Legal Intern
Notre Dame Clinical Law Center
South Bend, Indiana



                                            IN THE
    COURT OF APPEALS OF INDIANA

Kevin T. Williams,                                         January 20, 2017
Appellant-Defendant,                                       Court of Appeals Case No.
                                                           71A04-1604-CC-901
        v.                                                 Appeal from the St. Joseph Circuit
                                                           Court
Unifund CCR, LLC,                                          The Honorable John E. Broden,
Appellee-Plaintiff.                                        Judge
                                                           The Honorable Larry L. Ambler,
                                                           Magistrate
                                                           Trial Court Cause No.
                                                           71C01-1401-CC-78



Riley, Judge.




Court of Appeals of Indiana | Opinion 71A04-1604-CC-901 | January 20, 2017             Page 1 of 10
                                    STATEMENT OF THE CASE

[1]   Appellant-Defendant, Kevin T. Williams (Williams), appeals the trial court’s

      judgment in favor of Appellee-Plaintiff, Unifund CCR, LLC (Unifund), on

      Unifund’s Complaint against Williams for nonpayment of credit card debt.


[2]   We reverse.


                                                      ISSUE

[3]   Williams raises four issues on appeal, one of which we find dispositive and

      which we restate as: Whether the evidence admitted at trial supports Unifund’s

      claim.


                            FACTS AND PROCEDURAL HISTORY

[4]   Unifund is a debt-buying company that purchases charged-off accounts from

      credit card companies by way of large portfolios of debt. When acquiring credit

      card accounts through assignment agreements, the accounts are handled by

      several assignees before being ultimately assigned to Unifund. Here, the

      account at issue was purchased by Pilot Receivables Management (Pilot), who

      assigned it to its affiliated entity Unifund CCR Partners (Unifund Partners),

      after which Unifund Partners assigned the account to Unifund. The account

      was transferred to Unifund in a very large Excel file, which “can contain

      anywhere from one to several thousand credit card accounts all displayed as a

      single line in that Excel spreadsheet.” (Transcript p. 29). Unifund altered this

      spreadsheet in anticipation of trial.


      Court of Appeals of Indiana | Opinion 71A04-1604-CC-901 | January 20, 2017   Page 2 of 10
[5]   On April 29, 2002, Williams opened a credit card account with Citibank. By

      2009, Williams had accumulated monthly credit card debt in the aggregate

      amount of $10,402.90. On or about March 25, 2013, Citibank sold a block of

      charged-off accounts, including Williams’ account, to Pilot who, in turn,

      assigned the account to Unifund Partners. The information listed on the

      spreadsheet that Citibank provided to Pilot included the account number, the

      account balance, the date of the last payment, the account holder’s name and

      social security number. On July 1, 2013, Pilot assigned “Receivables” to

      Unifund Partners “for collection purposes only,” with Pilot retaining “title and

      ownership of such Receivable.” (Appellant’s App. Vol. III, p. 107). That same

      day, Unifund Partners assigned these “Receivables” to Unifund. (Appellant’s

      App. Vol. III, p. 108).


[6]   On January 21, 2014, Unifund filed a Complaint, alleging breach of contract,

      account stated, promissory estoppel, and unjust enrichment. On February 13,

      2014, Williams filed his answer and motion to dismiss Unifund’s Complaint, as

      well as a motion to strike Unifund’s exhibits, arguing that the affidavit of debt,

      account statement, and bill of sale and assignment were based on hearsay and

      therefore inadmissible under Indiana Evidence Rule 802. On January 12, 2015,

      Unifund filed its motion for summary judgment to which Williams filed a brief

      in opposition. On April 1, 2015, following a hearing, the trial court denied

      Unifund’s motion for summary judgment. On July 27, 2015, the trial court

      ordered Unifund to provide proof of the last payment date in Williams’

      account, as well as proof of ownership of the account. The trial court


      Court of Appeals of Indiana | Opinion 71A04-1604-CC-901 | January 20, 2017   Page 3 of 10
      additionally directed that any additional exhibits offered at trial should be

      exchanged by the parties by August 17, 2015.


[7]   On August 31, 2015, the trial court conducted a bench trial. During trial,

      Unifund offered two Exhibits into evidence, both of which contained

      documents which had not previously been provided to Williams pursuant to the

      trial court’s order. After a timely objection by Williams, the trial court took the

      admission of the Exhibits under advisement. On October 22, 2015, the trial

      court issued its judgment, admitting the Exhibits and awarding Unifund

      $10,402.90 plus costs. On November 23, 2015, Williams filed a motion to

      correct error, which was denied by the trial court on March 28, 2016.


[8]   Williams now appeals. Additional facts will be provided as necessary.


                                   DISCUSSION AND DECISION

[9]   Williams appeals from the trial court’s denial of his motion to correct error.

      Our standard of review in such cases is well established. We review a trial

      court’s ruling on a motion to correct error for an abuse of discretion. McEntee v.

      Wells Fargo Bank, N.A., 970 N.E.2d 178, 182 (Ind. Ct. App. 2012). An abuse of

      discretion occurs when the trial court’s decision is contrary to the logic and

      effect of the facts and circumstances before it or the reasonable inferences

      therefrom. Id. It should be noted that Unifund did not file an appellee’s brief.

      When the appellee does not submit a brief, we need not undertake the burden

      of developing an argument on his behalf. Howard v. Daugherty, 915 N.E.2d 998,

      999 (Ind. Ct. App. 2009). We will, however, apply a less stringent standard of

      Court of Appeals of Indiana | Opinion 71A04-1604-CC-901 | January 20, 2017   Page 4 of 10
       review with respect to the showing necessary to establish reversible error.

       Wolverine Mut. Ins. Co. v. Oliver, 933 N.E.2d 568, 570 (Ind. Ct. App. 2010), trans.

       denied. It is within our discretion to reverse the trial court’s decision if the

       appellant can establish prima facie error. Howard, 915 N.E.2d at 999.


[10]   Williams contends that the trial court abused its discretion when it admitted

       Unifund’s Exhibits into evidence over his objection. In order to be successful at

       trial, Unifund needed to establish that (1) Williams owed Citibank $10,402.90

       and (2) Unifund was the assignee or owner of that debt. See Seth v. Midland

       Funding, LLC, 997 N.E.2d 1139, 1140 (Ind. Ct. App. 2013). Unifund’s evidence

       presented at trial consisted of two Exhibits. Exhibit 1 contained seventeen

       credit card statements produced by Citibank. Exhibit 2 included five separate

       documents: (1) a Bill of Sale and Assignment, signed by Patricia Hall,

       Financial Account Manager at Citibank; (2) an affidavit, signed by Aimee

       Dykes, a document control officer at Citibank; (3) a redacted thirty-page

       spreadsheet; (4) an Assignment dated July 1, 2013, between Pilot and Unifund

       Partners; and (5) an Assignment, dated July 1, 2013, between Unifund Partners

       and Unifund. Unifund offered both Exhibits into evidence through the

       testimony of Nathan Duvelius (Duvelius), an authorized representative and

       custodian of records for Unifund. Both Exhibits were admitted over Williams’

       objections. We will discuss the admissibility of each document in turn.


                                                     I. Exhibit 1




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[11]   Exhibit 1 consists of seventeen credit card statements produced by Citibank for

       the account at issue, bearing the credit card account number, Williams’ name,

       and the balance due. However, hearsay statements are generally not admissible

       unless they fall within one of the hearsay exceptions. See Ind. Evidence Rule

       802. Under Indiana Evidence Rule 803(6), otherwise inadmissible hearsay may

       be admitted if it consists of records of regularly conducted business activity,

       provided certain requirements are met. Specifically, in order to admit these

       unsworn and unverified statements as business records pursuant to Indiana

       Evidence Rule 803(6), Unifund was required to establish that these statements

               (A)      [] [were] made at or near the time by—or from
                     information transmitted by—someone with knowledge;


               (B)      The record was kept in the course of a regularly conducted
                     activity of a business, organization, occupation, or calling,
                     whether or not for profit;


               (C)      Making the record was a regular practice of that activity;


               (D) All these conditions are shown by the testimony of the
                  custodian or another qualified witness []; and


               (E)       Neither the source of information nor the method or
                     circumstances of preparation indicate a lack of
                     trustworthiness.


[12]   The Exhibit was admitted at trial through the testimony of Duvelius, who

       testified to be “Unifund’s authorized representative and custodian of the

       records.” (Tr. p. 14). He affirmed to be “familiar with the standard business

       Court of Appeals of Indiana | Opinion 71A04-1604-CC-901 | January 20, 2017    Page 6 of 10
       practices of Unifund.” (Tr. p. 14). However, Duvelius conceded that he was

       “not familiar with Citibank’s records or operations” and did “not know

       Citibank’s records or bookkeeping methods.” (Tr. p. 48). Additionally, he was

       unfamiliar with Citibank’s accounting procedures and was unaware as to

       Citibank’s accounting practices or regular business practices. Accordingly, as

       Duvelius did not have personal knowledge of Citibank’s regularly conducted

       business activities and record keeping, the trial court abused its discretion by

       admitting Exhibit 1. See Speybroeck v. State, 875 N.E.2d 813, 821 (Ind. Ct. App.

       2007) (“[A] business could not lay the proper foundation to admit the records of

       another business because the requesting business lacked the personal knowledge

       required to ensure reliability”), reh’g denied.


                                                    II. Exhibit 2


[13]   Again, through Duvelius’ testimony, Unifund introduced Exhibit 2, which was

       admitted by the trial court over Williams’ objection. This Exhibit included five

       separate documents: (1) a Bill of Sale and Assignment, signed by Patricia Hall,

       Financial Account Manager at Citibank; (2) an affidavit, signed by Aimee

       Dykes, a document control officer at Citibank; (3) a redacted thirty-page

       spreadsheet; (4) an Assignment dated July 1, 2013, between Pilot and Unifund

       Partners; and (5) an Assignment, dated July 1, 2013, between Unifund Partners

       and Unifund.


[14]   The Bill of Sale and Assignment, signed by Citibank’s financial account

       manager, states that Citibank “does hereby transfer, sell, assign, convey, grant,


       Court of Appeals of Indiana | Opinion 71A04-1604-CC-901 | January 20, 2017   Page 7 of 10
       bargain, set over, and deliver to [Pilot], and to [Pilot’s] successors and assigns,

       the Accounts described in Exhibit 1 and the final electronic file.” (Plaintiff’s

       Exh. 2). However, as noted before, because Duvelius is unfamiliar with

       Citibank’s regularly conducted business practices, he could not testify as to the

       document’s reliability and authenticity. Therefore, lacking the proper

       foundation, the trial court abused its discretion by admitting the Bill of Sale and

       Assignment into evidence.


[15]   The thirty-page spreadsheet was initially generated in full by Citibank and was

       later redacted by Unifund for trial purposes. At trial, the spreadsheet was

       offered into evidence through Duvelius’ testimony. Because Duvelius conceded

       that he did not know whether Citibank kept these records in accordance with its

       regular business practices, the reliability of the document cannot be attested to

       and should not have been admitted by the trial court. See Ind. Evid. R. 803(6).


[16]   Next, Exhibit 2 contains two Assignments. The first Assignment is between

       Pilot and Unifund Partners, and the second Assignment between Unifund

       Partners and Unifund. Both Assignments state that

               Assignor, for value received and in connection with the
               Agreement, transfers and assigns to Assignee all of Assignor’s
               rights in the Receivables, for collection purposes only, including
               conducting litigation in Assignee’s name, for those Receivables
               which Assignor owns or may acquire from time to time.
               Assignor shall retain title and ownership of such Receivables.


       (Plaintiff’s Exh. 2). Both Assignments were offered through Duvelius’

       testimony. Although Duvelius stated that he was Unifund’s authorized
       Court of Appeals of Indiana | Opinion 71A04-1604-CC-901 | January 20, 2017   Page 8 of 10
       representative and custodian of the records, without further evidence he also

       stated that he was “authorized to testify on Pilot’s behalf by an officer of the

       company.” (Tr. p. 18). As such, in those capacities, Duvelius could

       presumably affirm that the Assignments were kept in the regular course of

       business. See Ind. Evid. R. 803(6).


[17]   Nonetheless, although the Assignments indicate certain rights were assigned

       from one company to another, the Assignments fail to specify the transfer of

       rights in Williams’ account. While the Assignments refer to “rights in the

       Receivables,” these “Receivables” are purportedly more closely defined in the

       Servicing Agreement entered into between the Assignor and Assignee, which

       was not presented to the trial court or admitted into evidence at trial.

       Accordingly, we agree with Williams that the Assignments fail to adequately

       establish that Unifund has been assigned or owns Williams’ account.


[18]   Finally, we address the admissibility of the affidavit, signed by Aimee Dykes

       (Dykes), a document control officer at Citibank. Dykes affirmed that she has

       knowledge of the business records relating to Williams’ account, which are kept

       by Citibank in the regular course of business. In her affidavit, she attested that

       Williams’ account was sold to Pilot and that Citibank had prepared and

       forwarded to Pilot a spreadsheet reflecting the relevant account information.

       She also confirmed the account’s balance due. Although the affidavit is

       admissible as a business record pursuant to Indiana Evidence Rule 803(6), it

       falls short of satisfying Unifund’s burden of proof. While the affidavit



       Court of Appeals of Indiana | Opinion 71A04-1604-CC-901 | January 20, 2017   Page 9 of 10
       establishes that Williams’ account was sold to Pilot, Unifund failed to present

       any admissible evidence indicating that it now owns the account.


[19]   Based on the totality of the evidence before us, Unifund failed to satisfactorily

       establish that it owns Williams’ account and is entitled to collect the debt

       associated with it.


                                                CONCLUSION

[20]   Based on the foregoing, we hold that the trial court abused its discretion by

       entering judgment in favor of Unifund.


[21]   Reversed.


[22]   Baker, J. and Mathias, J. concur




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