Rainford G. Bartlett v. Portfolio Recovery Associates, LLC, No. 64, September Term 2013,
and James Townsend v. Midland Funding, LLC, No. 76, September Term 2013, Opinion by
Greene, J.

SMALL CLAIM ACTIONS – JUDGMENT ON AFFIDAVIT – ASSIGNED
CONSUMER DEBT CASES

In pursuing a judgment on affidavit, involving a small or large claim, a debt buyer plaintiff
must produce certain documents, as contemplated by Maryland Rule 3-306(d), sufficient to
pass muster under the business records exception. Once a small claim action is contested and
proceeds to a trial on the merits, the parties are not constrained by the Rules of Evidence, as
contemplated by Maryland Rule 3-701.
Circuit Court for Baltimore City
Bartlett v. PRA, Case No. 24-C-13-001323
Townsend v. Midland, Case No. 24-C-13-001033
Argued: March 10, 2014
                                                     IN THE COURT OF APPEALS
                                                          OF MARYLAND

                                                             Nos. 64 and 76
                                                          September Term, 2013


                                                       RAINFORD G. BARTLETT

                                                                    v.

                                               PORTFOLIO RECOVERY ASSOCIATES, LLC


                                                          JAMES TOWNSEND

                                                                    v.

                                                       MIDLAND FUNDING, LLC


                                                   Barbera, C.J.
                                                   Harrell
                                                   Battaglia
                                                   Greene
                                                   Adkins
                                                   McDonald
                                                   Watts,

                                                                    JJ.


                                                          Opinion by Greene, J.
                                               Adkins and McDonald, JJ., concur and dissent.
                                                           Watts, J., concurs.


                                                           Filed: May 19, 2014
       In these consolidated “debt buyer” small claim actions,1 we must determine whether

the plaintiffs are permitted to satisfy their respective burdens of proof to establish liability

and damages on the basis of hearsay evidence. Both cases originated in the District Court

of Maryland sitting in Baltimore City. The plaintiffs filed small claim actions for money

damages and demanded judgment on affidavit at the time of filing the complaint

commencing the actions. Md. Rule 3-306 (“Judgment on Affidavit”); Md. Rule 3-701

(“Small Claim Actions”). The defendants filed timely notices of intention to defend,

pursuant to Md. Rule 3-307. Rule 3-306, which addresses judgments on affidavit, was

amended in 2011 to include special provisions related to cases involving assigned consumer

debt (“debt buyer cases”).      See One Hundred Seventy-First Report of the Standing

Committee on Rules of Practice and Procedure, 6-9 (July 1, 2011). Rule 3-307(e) requires

that a defendant file a timely notice of intention to defend to avoid, on the date set for trial,

the court’s determination of liability and assessment of damages based on the plaintiff’s ex

parte proof. In other words, timely filing of a notice of intention to defend entitles the

defendant to a trial on the merits.

       The intersection between Rules 3-306 and 3-701 involves two competing interests.



       1
         “Debt buyer cases” refer to debt collection actions filed by a plaintiff who is not the
original creditor. For a more thorough discussion of the debt buying industry and debt buyer
cases, see Peter A. Holland, The One Hundred Billion Dollar Problem in Small Claims
Court: Robo-Signing and Lack of Proof in Debt Buyer Cases, 6 J. Bus. & Tech. L. 259
(2011). We granted separate petitions for certiorari in Bartlett v. Portfolio Recovery Assoc.,
432 Md. 466, 69 A.3d 474 (2013) and Townsend v. Midland Funding, LLC, 433 Md. 513,
72 A.3d 172 (2013). Because of the common issues of law and fact, we have consolidated
these cases for the purpose of this opinion.
First, Rule 3-306, as amended in 2011, is designed to raise the bar for plaintiff debt buyers

who desire to obtain a judgment on affidavit by requiring them to establish a prima facie case

on the basis of evidence that would satisfy the business records exception to the hearsay rule.

For example, if the consumer debt is an unpaid credit card balance, the plaintiff’s evidence

must show that the plaintiff owns the debt sued upon and that the defendant debtor owes that

debt. Second, small claim actions, by definition, shall be “informal” and the rules of

evidence are not applicable to these proceedings, in order to enable all parties to adequately

participate in the proceedings without the benefit of counsel.

       With these principles in mind, we address the following questions:2

       1. Does the evidentiary standard under Md. Rule 3-306(d), which contemplates
       that the documents submitted to support a judgment on affidavit pass muster
       under the business records exception, apply to a contested small claim
       proceeding?


       2
         We have rephrased these questions for organization and clarity. The questions posed
by Petitioners, respectively, in their Petitions for Certiorari are as follows:
Bartlett asks:
       Did the trial court err in a small claims collection action brought by a debt
       buyer when it admitted hearsay evidence and testimony from a witness who
       did not have personal knowledge of the matters about which he testified given
       that the legislative history of newly enacted Rule 3-306 provides that a debt
       buyer must prove its case with evidence that would pass muster under the
       business records exception to the hearsay rule?
Townsend asks:
       Did the trial court err in a small claims collection action brought by a debt
       buyer when it allowed a debt buyer to prove its case by merely submitting an
       affidavit of an individual not employed by the original creditor along with
       unauthenticated documents and data of the original creditor, given that the
       legislative history of newly enacted Rule 3-306 provides that a debt buyer must
       prove its case with evidence that would pass muster under the business records
       exception to the hearsay rule?

                                               2
       2. Did the trial courts abuse their discretion when they considered business
       records and hearsay evidence in entering judgment for the plaintiffs in the
       present cases?

       3. Did the trial courts commit clear error when they found in favor of the
       Plaintiffs in the present cases?


       We shall hold that in pursuing a judgment on affidavit, involving a small or large

claim, a debt buyer plaintiff must produce certain documents, as contemplated by Rule 3-

306(d), sufficient to pass muster under the business records exception. Once a small claim

action is contested and proceeds to a trial on the merits, the parties are not constrained by the

Rules of Evidence, as contemplated by Rule 3-701.3

                                    I. INTRODUCTION

       Generally, in debt buyer cases, the debts sued upon arise from consumer credit, such

as credit card accounts and other unsecured debts. In the typical debt buying situation, a

debtor has an account with a large bank or credit card company (the “original creditor”), and

at some point the debtor ceases to make payments on the account. Although the original

creditor may intend to collect on the delinquent account, in cases where the amount owed is



       3
          The dissenting opinion in this case asserts that “[i]t is not self-evident why there
would be a lesser standard of proof when the allegations of the complaint are contested and
a trial must be held at which the plaintiff still bears the burden of proof.” Dissent slip op.
at p. 2. The dissenting opinion overlooks, however, the difference between the amendment
to Rule 3-306 which heightened the pleading requirements for a judgment on affidavit only,
and the inherent informal nature of a contested small claim action. In a small claim trial on
the merits the trial judge, as the gatekeeper, determines the reliability and probative value of
the evidence introduced by the parties, under circumstances where the Rules of Evidence are
not applicable.

                                               3
relatively small or unlikely to be paid without collection efforts, the original creditor may

“charge off”4 that account. In other words, the original creditor may not desire to prosecute

a claim against the debtor because it deems the debt “uncollectible.” A “debt buyer” can buy

these “charged-off” debts from the original creditor at a low price, often mere pennies on the

dollar, and often in bulk, and then go about collecting the account balance from the debtor.

       In Maryland, many debt buyers file their collection actions in the District Court,

seeking a judgment on affidavit pursuant to Rule 3-306. According to one study, in 99% of

debt collection cases surveyed, the debt buyer plaintiff obtained a judgment against a

defendant debtor without a trial. See Peter A. Holland, Junk Justice: A Statistical Analysis

of 4,400 Lawsuits Filed by Debt Buyers, 26 Loy. Consumer L. Rev. 179, 187 (2014). Similar

studies have found that many debt buyer plaintiffs lack adequate proof and obtain improper

uncontested judgments as a result, leading to calls for substantial debt collection reform in

the United States.   See, e.g., U.S. Fed. Trade Comm’n, Repairing a Broken System:

Protecting Consumers in Litigation and Arbitration (2010).

       In response to this growing problem, in 2011, this Court’s Standing Committee on

Rules of Practice and Procedure (“the Rules Committee”) proposed amendments to Rule 3-

306, to become effective January 1, 2012. The Rules Committee’s 171st Report explained

that “[t]hese amendments [to Rule 3-306 were] designed to address a problem that has

received national attention . . . , namely, the flood of thousands of judgment by affidavit


       4
         “‘Charge off’ means the act of a creditor that treats an account receivable or other
debt as a loss or expense because payment is unlikely.” Md. Rule 3-306(a)(1).

                                              4
cases filed in the District Court by companies that purchase, usually in bulk and with little

supporting documentation, consumer debt that has been charged off by the original creditor.”

Specifically, the Rules Committee explained:

       The major thrust of the proposed amendments is in a new section (d), which
       deals specifically with claims arising from assigned consumer debt. With
       respect to those claims, (1) the affidavit must contain averments or be
       accompanied by documents that (i) more adequately establish the existence
       and identification of the debt and the plaintiff’s ownership of the debt and (ii)
       provide specific information if the account was charged off, other information
       if the account was not charged off, particular information if the claim is based
       on a future services contract, and information regarding the licensure of the
       plaintiff debt buyer, and (2) subject to an exception, if there was a document
       evidencing the terms and conditions to which the consumer debt was subject,
       a certified or authenticated copy of that document must be attached.

Accordingly, the Rule as amended was intended to raise the requirements for debt buyer

plaintiffs to prove their claim before the trial judge grants a judgment on affidavit. It is this

Rule and subsequent amendment, adopted by the Court, that is the primary subject of the

instant appeals.

                                          II. FACTS

                        A. Bartlett v. Portfolio Recovery Associates

       Respondent Portfolio Recovery Associates, LLC (“PRA”) filed a small claim action

in the District Court, sitting in Baltimore City, on October 3, 2012, to recover $2,897.88

against Petitioner Rainford G. Bartlett (“Bartlett”), arising originally from a delinquent credit

card account with Chase Bank USA, N.A. (“Chase”). Bartlett’s account became delinquent

after he failed to make monthly payments or honor special payment arrangements offered to



                                               5
him by Chase. Bartlett’s purchases on his Chase credit card were in excess of the $2500 limit

by January 2009, at which time a 90 day payment delinquency notice was mailed to his home

as part of his monthly credit card statement. From February to October 2009, Bartlett made

several $40 monthly payments to Chase under a special payment program. After Bartlett’s

failure to make any payments after October 2009, Chase charged-off Bartlett’s account. In

June 2011, PRA purchased Bartlett’s delinquent account as part of a package of debts sold

directly to it by Chase.

       Along with its complaint, PRA filed a form affidavit and Assigned Consumer Debt

Checklist, and attached three exhibits. Exhibit One was entitled “Proof of Existence of the

Debt or Account, Rule 3-306(d)(1),” and consisted of Chase monthly credit card account

statements bearing Bartlett’s name, address, and original account number that reflected credit

card charges, payments, finance charges and late fee charges on the account. Exhibit Two

was entitled “Proof of the Plaintiff’s Ownership, Rule 3-306(d)(3)” and consisted of a copy

of the Bill of Sale memorializing the June 28, 2011 sale of delinquent accounts from Chase

to PRA and an excerpt from the Final Data File referenced in the Bill of Sale and printed

from the electronic records PRA received from Chase when it purchased Bartlett’s account.

Exhibit Three was titled “Account Charge Off Information, Rule 3-306(d)[(6)]” and

consisted of PRA’s Statement of Account and Interest Worksheet.

       Subsequently, Bartlett filed a notice of intention to defend, and following a District

Court trial on the merits, judgment was entered in favor of PRA. Bartlett filed a timely



                                              6
notice of appeal pursuant to Rule 7-112, and his appeal was heard de novo in the Circuit

Court for Baltimore City on April 24, 2013. Prior to the commencement of trial on the merits

in that court, the following colloquy, relevant to this appeal, took place between Bartlett’s

counsel and the trial judge concerning the applicability of the Rules of Evidence and Md.

Rule 3-306 to the present case:

       [Trial Judge]: Is this a small claim action?

       [Petitioner’s Counsel]: Yes, Your Honor, it is.

       [Trial Judge]: So, the Rules of Evidence don’t apply, do they?

       [Petitioner’s Counsel]: Well, we have a different view of that, Your Honor.
       All of the Rules of Evidence may not apply, except for the basic rule of
       competency. And competency, at its heart, requires evidence that’s reliable,
       and can be supported by firsthand knowledge.
       ...

       [Trial Judge]: I’m not sure it’s anything goes [if the Rules of Evidence don’t
       apply], but maybe there’s an alternative here because the rules that were
       created earlier – I guess, last year – for affidavit judgments; one could say,
       even though they don’t apply once we go to trial – perhaps furnish some
       guidelines as to what the Court of Appeals thought would be appropriate
       benchmarks or milestones.

       [Petitioner’s Counsel]: You know, your Honor is absolutely right, and this is
       an argument we make all the time.

       [Trial Judge]: Um-hmm.

       [Petitioner’s Counsel]: That at trial the standard of proof in a purchased debt
       account, can be no less than the standard of proof under 3-306, to obtain an
       Affidavit of Judgment.
       ...

       [Trial Judge]: [Having sat through all the rule making] proceedings, it’s my


                                              7
       recollection – and I apologize for taking up all this time – but you know part
       of the concern [of] the Rules Committee, and I emphasize “part of the
       concern,” but certainly, a major part of the concern was to establish a standard
       for judges to make these determinations on affidavit judgments because at that
       point, there’s nobody opposing the judgment.

       [Petitioner’s Counsel]: The defendant is not present, Your Honor.

       [Trial Judge]: Right. Now, here, the defendant is present.

       [Petitioner’s Counsel]: And the standard can be no less –

       [Trial Judge]: Well, I –

       [Petitioner’s Counsel]: – for that very reason.

       [Trial Judge]: – don’t know about that. I’m saying, if the standard was
       adopted for the purpose of protecting someone who’s not there –

       [Petitioner’s Counsel]: Right.

       [Trial Judge]: – maybe it doesn’t apply.
       ...

       [Trial Judge]: I think what makes sense, is for me to hear all the testimony, and
       then assess what I think is reliable and probative. And I may be talking about
       admissibility at that point; I may be talking about weight at that point, but I
       think it will be faster if we do it that way.

       Once the judge proceeded with trial, PRA offered into evidence all the attachments

to the original complaint, as well as an Affidavit of Sale from Chase memorializing the sale

of Bartlett’s debt to PRA, as well as additional credit card statements from January 2009 to

May 2010. David Sage, PRA’s custodian of records, testified about the documents included

as exhibits at trial, his knowledge of the business practices of PRA, that he was taught how

Chase maintains their records, and the process by which PRA purchased the portfolio of


                                              8
delinquent accounts from Chase. Bartlett also testified at the merits trial, and confirmed that

he had a Chase credit card and that he previously received monthly credit card statements at

the mailing address reflected in the statements. He further indicated that he recalled

receiving a letter from PRA stating that it now owned his Chase account and that he had to

go to court for the money he owed Chase. Bartlett testified that at one time, the balance on

his account was “$2,800 and some dollars.” Following the conclusion of the trial on the

merits, the trial judge made his evidentiary rulings and entered judgment in favor of PRA,

stating, in pertinent part:

       I think ultimately that the rule says that it depends upon the amount of the
       claim. And given the amount of the claim, that we’re under 3-701. . . . So
       ultimately, as I say, I am going to admit Plaintiff’s Exhibits 1 and 2. And I
       have, as I say, scrutinized them and compared them to what Rule 3-306(d)
       requires. And I don’t have any question that the Plaintiff has proved by a
       preponderance of the evidence the existence of the account. The Chase
       records, and I’ve determined that they are admissible, do reflect, in accordance
       with 3-306(d)(1), the existence of the account and the balance. And as has
       been averted [sic] to, it is corroborated by Mr. Bartlett’s candid testimony.
       And I appreciate his candor. That he did have an account with Chase, and they
       did send him statements, and the balance was something like what was claimed
       here today. The more difficult question, it seems to me, is the proof of
       Plaintiff’s ownership. And I’ve gone back and forth on this, but ultimately I
       conclude that the Bill of Sale does comply with 3-306(d)(3). . . . So, for those
       reasons, I find that the Plaintiff has proven by a preponderance of the evidence
       that it is entitled to recover having proven both the existence of the debt and
       its ownership of the debt. And I will enter judgment in favor of the Plaintiff
       for $2,789.18.

Thereafter, Bartlett filed a petition for certiorari,5 which this Court granted on July 3, 2013.


       5
         “[T]he only review available to a party disappointed by the judgment of the circuit
court [after appeal de novo in that court] is by way of petition for certiorari to this Court[.]”
                                                                                    (continued...)

                                                9
Bartlett v. Portfolio Recovery Assoc., 432 Md. 466, 69 A.3d 474 (2013).

                         B. Townsend v. Midland Funding, LLC

       Respondent Midland Funding, LLC (“Midland”) filed a small claim action in the

District Court, sitting in Baltimore City, on December 22, 2011,6 to recover $1,905.21 plus

interest against Petitioner James Townsend (“Townsend”), arising from an unpaid balance

on a consumer credit account that Midland purchased from Chase. In support of its claims,

Midland attached to its complaint the Affidavit of Ashley Lashinski, a legal specialist with

access to the account records of Midland Credit Management, Inc., the account servicer for

Midland, stating the amount of the debt owed by Townsend, that Midland is the owner of the

debt, and that the account records are maintained in the regular course of business. In

addition, Midland attached a copy of a redacted “Bill of Sale” from Chase to Midland

indicating that Midland purchased certain accounts from Chase, which included an express

warranty as to the accuracy of the documents, but did not specify which accounts were

transferred to Midland during this transaction. Midland also attached photocopies of credit

card statements from Chase to Townsend, showing the balance due on the account, itemized




(...continued)
Shum v. Gaudreau, 322 Md. 242, 245, 587 A.2d 248, 249 (1991). See also Md. Code (1973,
2013 Repl. Vol.), § 12-305 of the Courts and Judicial Proceedings Article; Md. Rule 8-
302(b).
       6
         Midland filed its Complaint against Townsend prior to January 1, 2012, the effective
date of the amendment to Rule 3-306. From the record, however, it appears that both the
District Court and Circuit Court relied on Rule 3-306 as amended in 2011 in deciding the
case.

                                             10
transactions and previous payments made on the account, and Townsend’s name and address.

       Townsend was served with a copy of the complaint and filed a notice of intention to

defend on January 23, 2012. A merits trial was to be held in the District Court on November

7, 2012. Counsel for both parties appeared at trial, however Townsend was not present. At

trial in the District Court, Midland argued that judgment should be entered in favor of

Midland based on the affidavit and supporting documents attached to the complaint, which

it offered as evidence at trial. To the contrary, Townsend argued that the case should be

dismissed because Midland had provided insufficient identification of his account and the

documents submitted by Respondent were inadmissible as evidence to prove its claim. The

District Court judge issued an Opinion & Order on January 16, 2013, granting judgment in

favor of Midland. In its Opinion & Order, the court determined that (1) the account

statements were admissible because they were sufficiently authentic, based on the corporate

logo and that they were issued to Townsend’s address, and because Rule 3-306 contemplates

the use of third party business records, i.e., records from the original creditor; and (2) the

affidavit plus the account statements from the original creditor established by a

preponderance of the evidence that Townsend’s account was transferred to Midland.

       Thereafter, Townsend filed a timely notice of appeal to the Circuit Court for

Baltimore City pursuant to Md. Rule 7-112. A de novo trial was held in the Circuit Court on

May 2, 2013. Counsel for both parties appeared at the de novo trial, however Townsend did

not appear and no witnesses were called at trial. Midland submitted as “Exhibit 1” the



                                             11
documents attached to the original complaint. Townsend objected to the admission of the

documents based on Rule 3-306, hearsay, and lack of personal knowledge. He further argued

that because Rule 3-701 cross-references Rule 5-101, the rules regarding competency still

apply even in small claims, and in this case Midland needed a competent witness to introduce

documents, which it failed to do because the affiant lacked personal knowledge. Midland

responded that the Rules of Evidence do not apply in this small claim case, and therefore the

documents are admissible in evidence for the trial judge to consider. At the conclusion of

counsel’s arguments, the judge announced that the court would hold the matter sub curia and

issue a written opinion.

       The Circuit Court filed its Order on May 15, 2013, entering judgment for Midland.

In its Order, the court made the following findings:

       1. Pursuant to Md. Rules 3-701 and 7-112(d), the Maryland Rules of Evidence
       (Title 5) do not apply to these small claim proceedings. See Rule 5-101. This
       [c]ourt has determined to receive and consider the Affidavit of Ashley
       Lashinski (Plaintiff’s Exhibit 1) pursuant to the instruction and guidance of
       Md. Rule 3-306.

       2. With the contents and attachments of [Midland]’s Exhibit 1, over
       [Townsend]’s objection(s), [Midland] has proven its claim by a preponderance
       of evidence. Specifically, the Affidavit conforms to the requirements of Md.
       Rule 3-306 in this “debt buyer” case.

       3. [Midland] was “assigned all the rights, title and interest” to [Townsend]’s
       credit card account with Chase Bank. The account is a consumer debt account
       at issue as defined in Md. Rule 3-306(a)(3). [Midland] is not the “original
       creditor” but its claim arises from consumer debt (Rule 3-306(d)).

       4. The Affidavit of Ashley Lashinski is expressly found to have established:



                                             12
             a. The existence of [Townsend]’s account and debt by certifying
             photocopies of several monthly statements showing payments on the
             account by [Townsend]. Rule 3-306(d)(1);

             b. The existence of an unpaid balance due on [Townsend]’s credit card
             account with Chase Bank in the amount of $1,905.21, without any
             claim for interest or fees. Rule 3-306(d)(2)(b);

             c. [Midland]’s ownership of [Townsend]’s consumer debt upon transfer
             of the ownership of that debt by the original creditor, Chase Bank, to
             [Midland], on June 30, 2011, according to the certified copy of the Bill
             of Sale attached to the Affidavit. Rule 3-306(d)(3);

             d. The Ashley Lashinsky Affidavit (with account documents) properly
             includes: the name of the original creditor (Chase Bank); [Townsend]’s
             full name as it appeared on the original credit card account; the last four
             digits of [Townsend]’s social security number; the original account
             number; the nature of the credit card account; and the itemization of
             money claimed and payments credited from [Townsend]. Rules 3-
             306(d)(4, (d)(7)[.]

Townsend thereafter filed a petition for certiorari with this Court, which we granted on

August 14, 2013. Townsend v. Midland Funding, 433 Md. 513, 72 A.3d 172 (2013).

                            III. STANDARD OF REVIEW

      In the present cases, we discuss three standards of review. The three standards of

review coincide with the three questions before this Court. Our first inquiry, whether the

Rules of Evidence apply in debt buyer small claim proceedings, is a question of law. It is

well established that pure conclusions of law are reviewed de novo.             See Nesbit v.

Government Employees Ins. Co., 382 Md. 65, 72, 854 A.2d 879, 883 (2004); J.L. Matthews,

Inc. v. Md.-Nat’l Capital Park & Planning Comm’n, 368 Md. 71, 92, 792 A.2d 288, 300

(2002). Accordingly, we shall review de novo the question of whether Md. Rule 3-306(d)


                                             13
requires documentary evidence to pass muster under the business records exception in a

small claim proceeding once the case is contested.

       Next, we review the Circuit Court judges’ “evidentiary rulings” involving weighing

the reliability and probative value of the evidence to determine its admissibility pursuant to

the abuse of discretion standard. See Dehn v. Edgecombe, 384 Md. 606, 628, 865 A.2d 603,

616 (2005); McCormack v. Bd. of Educ. of Baltimore Cnty., 158 Md. App. 292, 302, 857

A.2d 159, 164 (2004) (“When the trial judge’s ruling involves a weighing, we apply the more

deferential abuse of discretion standard.”). Because, as we shall explain, the Rules of

Evidence do not apply in a small claim proceeding, the admissibility of evidence in such

circumstances is left to the sound discretion of the trial judge.7 See Goodman v. Commercial

Credit Corp., 364 Md. 483, 491, 773 A.2d 526, 531 (2001) (“Necessarily, when there is no

hard and fast rule governing the situation, in arriving at a decision, the trial judge must

exercise his or her judicial discretion . . . .”). A trial court only “abuses its discretion when

it acts without reference to any guiding principles or rules of law or where no reasonable

person would take the view adopted by the court.” Matoumba v. State, 390 Md. 544, 552,

890 A.2d 288, 293 (2006); Bern-Shaw Ltd. P’ship v. Mayor of Baltimore, 377 Md. 277, 291,


       7
         We note that some types of evidentiary rulings are pure questions of law, for which
de novo review is appropriate. Indeed, “a circuit court has no discretion to admit hearsay in
the absence of a provision providing for its admissibility. Whether evidence is hearsay is an
issue of law reviewed de novo.” Gordon v. State, 431 Md. 527, 536, 66 A.3d 647, 652
(2013) (citations omitted). Here, however, where Rule 3-701 provides that the Rules of
Evidence do not apply in small claim actions, the District Court judges and Circuit Court
judges, on de novo appeal, had discretion to weigh whether the evidence was reliable and
probative in determining its admissibility.

                                               14
833 A.2d 502, 510 (2003) (noting “that absent a showing of abuse of [the trial judge’s]

discretion, its ruling will not be disturbed on appeal”) (quotations omitted). We point out that

“a ruling reviewed under an abuse of discretion standard will not be reversed simply because

the appellate court would not have made the same ruling.” North v. North, 102 Md. App. 1,

14, 648 A.2d 1025, 1031-32 (1994).

       Finally, we review the judgments of the trial courts for clear error. As stated in our

rules, an appellate court “will not set aside a judgment of the trial court on the evidence

unless clearly erroneous[.]” Md. Rule 8-131(c); Marwani v. Catering by Uptown, 416 Md.

312, 318-19, 6 A.3d 928, 931 (2010) (reviewing a de novo trial in the Circuit Court on direct

appeal from the District Court, and stating that “[t]he Court of Appeals will set aside the

judgment of a court based on the factual findings of that court only when those findings are

clearly erroneous.”). “The appellate court must consider evidence produced at the trial in a

light most favorable to the prevailing party and if substantial evidence was presented to

support the trial court’s determination, it is not clearly erroneous and cannot be disturbed.”

Ryan v. Thurston, 276 Md. 390, 392, 347 A.2d 834, 835-36 (1975). Ultimately, we conclude

that the judges conducting trials de novo in the present cases neither erred nor abused their

discretion in entering judgment in favor of Respondents, respectively.

                                     IV. DISCUSSION

                                      A. Small Claims

       Historically, the purpose of small claims courts is to provide greater access to justice



                                              15
for the public by allowing claims for small amounts of money to be litigated inexpensively

and efficiently. See Eric H. Steele, The Historical Context of Small Claims Courts, 6 Am.

B. Found. Res. J. 293 (1981) (providing a broad historical background and analysis of small

claims courts in the United States). To achieve this goal, small claim cases in Maryland

proceed “informally.” That is, “the rules of evidence and procedure in small claims cases are

simplified to make it easier for individuals to represent themselves.” Maryland Courts, Small

Claims:   How     to   File   a   Small   Claim    in   the   District   Court   of   Maryland,

http://www.courts.state.md.us/district/forms/civil/dccv001br.pdf (last visited April 1, 2014).

       By statute, small claims are defined as claims for monetary judgments not exceeding

$5,000, and are under the exclusive jurisdiction of the District Court. Md. Code (1973, 2013

Repl. Vol.), § 4-405 of the Courts and Judicial Proceedings Article. Title 3 of the Maryland

Rules governs civil procedure in District Court. Chapter 700 of Title 3 deals with “special

proceedings,” which includes small claims. Specifically, Md. Rule 3-701 governs “Small

Claim Actions.” Rule 3-701(a) specifies and explains that “[t]he rules of this Title apply to

small claim actions, except as provided in this Rule.” Nothing in Rule 3-701 exempts small

claims from Rule 3-306 regarding judgments on affidavit, so the procedures outlined therein

certainly apply in small claim actions as well as large claim actions. Conduct of trials for

small claim actions is governed under subsection 3-701(f), however. It provides that “[t]he

court shall conduct the trial of a small claim action in an informal manner. Title 5 of these

rules [(Rules of Evidence)] does not apply to proceedings under this Rule.” Subsection (f)



                                              16
is plain and unambiguous: the rules of evidence do not apply to a trial in a small claim

proceeding.8

       Under Md. Rule 7-112(d)(2), a judgment entered in the District Court is subject to an

appeal to be heard de novo in the circuit court. Like a small claim action in the District

Court, the de novo trial in the circuit court “shall [be] conduct[ed] . . . in an informal manner,

and Title 5 of these rules does not apply to the proceedings,” Rule 7-112(d)(2), “other than

those [rules] relating to the competency of witnesses.” Md. Rule 5-101(b). Accordingly, the

Rules of Evidence codified in Title 5 of the Maryland Rules, except for the rules of

competency, do not apply to trial in small claim proceedings, either in the District Court or

on “de novo appeal” in the circuit court, provided the claim does not exceed the jurisdictional




       8
         Petitioners argue that the cross-reference to Rule 5-101 under Rule 3-701 means that
the rules of competency still apply to small claim actions, and that a competent witness must
have personal knowledge pursuant to Rule 5-602. We agree that Rule 5-101 states that the
rules of competency apply in small claim actions under Rule 3-701 and appeals under Rule
7-112. Md. Rule 5-101(b)(4). “The rules of competency” referred to in Rule 5-101(b)
include Rule 5-601 (General rule of competency), Rule 5-605 (Competency of judge as
witness), and Rule 5-606 (Competency of juror as witness). Petitioners’ argument that the
competency rules require a witness in a small claim action to have personal knowledge
pursuant to Rule 5-602 is misplaced, however. It is well established that competency is not
synonymous with personal knowledge. See Matoumba, 390 Md. at 553, 890 A.2d at 293
(holding that “competency” as used in Rule 5-101 “refers to the traditional notion of
competency, i.e., that the witness has sufficient mental capacity to understand the nature and
obligation of an oath and is possessed of sufficient mind and memory to observe, recollect,
and narrate the things he or she has seen or heard”); Perry v. State, 381 Md. 138, 145, 848
A.2d 631, 635 (2004) (stating that a witness is “competent” where the witness “has sufficient
capacity to observe, recollect, and recount pertinent facts and . . . demonstrates an
understanding of the duty to tell the truth) (citations and quotations omitted). Accordingly,
Petitioners’ argument to the contrary is without merit.

                                               17
amount of $5,000.

                           B. Judgment on Affidavit: Rule 3-306

       Maryland Rule 3-306 governs the procedure for judgment on affidavit.9 Pursuant to

Rule 3-306, a plaintiff may file a demand for judgment on affidavit with the complaint, and

must provide an accompanying affidavit and supporting documents showing that the plaintiff

is entitled to judgment as a matter of law. Sections (b) and (c) of Rule 3-306, as amended

and recodified in 2011, codify the general requirements of the documents needed to support

a demand for judgment on affidavit. Specifically, Rule 3-306(b) provides that “[i]n an action

for money damages a plaintiff may file a demand for judgment on affidavit at the time of

filing the complaint commencing the action. The complaint shall be supported by an

affidavit showing that the plaintiff is entitled to judgment as a matter of law in the amount

claimed.”     Subsection (c) then outlines the general requirements for an affidavit and

supporting documents, applicable to all types of cases, which must be submitted along with

the complaint.10 See Goodman, 364 Md. at 489, 773 A.2d at 530 (stating that subsection (a),


       9
           A judgment on affidavit is a procedure peculiar to the District Court. It is a
procedure whereby the trial court enters judgment based on documents without proceeding
to a trial on the merits.
       10
            Specifically, newly codified Rule 3-306(c) provides that:

       The affidavit shall:
       (1) be made on personal knowledge;
       (2) set forth such facts as would be admissible in evidence;
       (3) show affirmatively that the affiant is competent to testify to the matters
       stated in the affidavit; and;
                                                                               (continued...)

                                              18
which is now codified as subsection (c), “prescribes the pleading prerequisites” for a

judgment on affidavit).

       Next, new subsection (e) provides the procedures for “subsequent proceedings,” and

explains how the case will proceed if the action moves beyond the demand for judgment on

affidavit stage. Whether the action proceeds beyond the purview of Rule 3-306 depends on

how the defendant responds. See Rule 3-306(e). This procedure was described in Goodman:

       The effect of the filing of, or the failure to file, a notice of intention to defend
       is the subject of [Rule 3-306(e)]. Subsection [(e)(1)] requires the plaintiff to
       appear in court on the trial date prepared for a trial on the merits. It also
       prescribes what happens when the defendant fails to appear in court on the trial
       date, ‘the court may proceed as if the defendant failed to file a timely notice
       of intention to defend.’ When the defendant does not file a notice of intention
       to defend, subsection [(e)(2)] excuses the plaintiff from appearing for trial on
       the trial date, permits the court to determine liability and damages on the basis
       of the complaint, affidavit, and supporting documents and, if they are
       sufficient to entitle the plaintiff to judgment, requires the court to grant the
       demand for judgment on affidavit.

Goodman, 364 Md. at 489-90, 773 A.2d at 530-31 (footnote omitted). In other words, if the




(...continued)
         (4) include or be accompanied by:
         (A) supporting documents or statements containing sufficient detail as to
         liability and damages, including the precise amount of the claim and any
         interest claimed;
         (B) if interest is claimed, an interest worksheet substantially in the form
         prescribed by the Chief Judge of the District Court;
         (C) if attorneys’ fees are claimed, sufficient proof evidencing that the plaintiff
         is entitled to an award of attorneys’ fees and that the fees are reasonable; and
         (D) if the claim is founded upon a note, security agreement, or other
         instrument, the original or a photocopy of the executed instrument, or a sworn
         or certified copy, unless the absence thereof is explained in the affidavit.

                                                19
defendant fails to file a notice of intention to defend pursuant to Rule 3-307,11 the trial judge

evaluates the merits of the plaintiff’s case based solely on the complaint, affidavit, and

accompanying documents. The Rule also provides that the court may proceed as if no notice

of intention to defend was filed if the defendant fails to appear at trial, despite filing a timely

notice of intention to defend. See Rule 3-306(e)(1). Under those circumstances, then, if the


       11
          Md. Rule 3-307 provides:
(a) To be Filed with Court–When Service Not Required. The defendant, including a
counter-defendant, cross-defendant, and third-party defendant, shall file with the court a
notice of intention to defend which may include any explanation or ground of defense. When
the defendant is represented by an attorney, the notice shall be served in accordance with
Rule 1-321. A defendant not represented by an attorney need not serve the notice on any
party.
(b) Time for Filing.
        (1) Generally. Except as provided by subsection (b)(2) of this Rule, the notice shall
        be filed within 15 days after service of the complaint, counterclaim, cross-claim, or
        third-party claim.
        (2) Exceptions. A defendant shall file the notice within 60 days after being served if
        the defendant is:
                (A) served outside of the State;
                (B) a person who is required by statute of this State to have a resident agent
                and who is served by service upon the State Department of Assessments and
                Taxation, the Insurance Commissioner, or some other agency of the State
                authorized by statute to receive process; or
                (C) the United States or an officer or agency of the United States served
                pursuant to Rule 3-124 (m) or (n).
(c) Identity of Attorney. If the defendant is represented by an attorney, the notice shall
contain the attorney’s name, office address and telephone number.
(d) Notice to Parties. When the defendant files a notice pursuant to this Rule, the clerk
promptly shall mail notice of the filing to other parties.
(e) Effect of Failure to File Notice. If a defendant fails to file a timely notice of intention to
defend pursuant to this Rule, the court, on the date set for trial, may determine liability and
assess damages based on ex parte proof by the plaintiff, unless the defendant appears and the
court is satisfied that the defendant may have a defense to the claim. In that event, the court
shall proceed with trial or, upon request of the plaintiff, may grant a continuance for a time
sufficient to allow the plaintiff to prepare for trial on the merits.

                                                20
trial judge is satisfied that the documents establish the merits of the plaintiff’s claim and the

defendant’s liability, the judge may grant judgment on affidavit in favor of the plaintiff.

       On the other hand, if the defendant files a timely notice of intention to defend under

Rule 3-307, he or she is entitled to a trial on the merits and Rule 3-306(e)(1) expressly

requires the plaintiff to “appear in court on the trial date prepared for a trial on the merits.”

The matter then proceeds to trial pursuant to the applicable rules. For small claim actions,

the trial is conducted pursuant to Rule 3-701. As required by Rule 3-701(f), “[t]he court shall

conduct the trial of a small claim in an informal manner[, and] Title 5 of these rules does not

apply” (except for the rules regarding competency of witnesses). Therefore, once the small

claim action proceeds to trial, the parties are not constrained by the Rules of Evidence.

                               Rule 3-306 in Debt Buyer Cases

       The 2011 amendment to Rule 3-306 added a special provision relating to debt buyer

cases. See One Hundred Seventy-First Report of the Standing Committee on Rules of

Practice and Procedure, 8 (July 1, 2011) (“The major thrust of the proposed amendments is

in a new section (d), which deals specifically with claims arising from assigned consumer

debt.”).   The new subsection (d) requires debt buyer plaintiffs to provide additional

documents with its complaint and affidavit to satisfy the “Assigned Consumer Debt

Checklist.” Rule 3-306(d) provides in pertinent part:

       (d) If Claim Arises from Assigned Consumer Debt. If the claim arises from
       consumer debt and the plaintiff is not the original creditor, the affidavit also
       shall include or be accompanied by (i) the items listed in this section, and (ii)
       an Assigned Consumer Debt Checklist, substantially in the form prescribed by


                                               21
       the Chief Judge of the District Court, listing the items and information
       supplied in or with the affidavit in conformance with this Rule. Each document
       that accompanies the affidavit shall be clearly numbered as an exhibit and
       referenced by number in the Checklist.

       (1) Proof of the Existence of the Debt or Account. Proof of the existence of the
       debt or account shall be made by a certified or otherwise properly
       authenticated photocopy or original of at least one of the following:
       (A) a document signed by the defendant evidencing the debt or the opening of
       the account;
       (B) a bill or other record reflecting purchases, payments, or other actual use of
       a credit card or account by the defendant; or
       (C) an electronic printout or other documentation from the original creditor
       establishing the existence of the account and showing purchases, payments, or
       other actual use of a credit card or account by the defendant.

In essence, subsection (d) provides “heightened pleading and evidentiary requirements” for

the documents submitted in all assigned consumer debt cases. See Jan I. Berlage, Ronald S.

Canter & William M. Rudow, Nuts and Bolts of Collection Law 65 (2012). In order to

succeed by judgment on affidavit in a debt buyer case, the plaintiff must submit the

documents required by the Rule. Specifically, the plaintiff must produce a “certified or

otherwise properly authenticated photocopy or original” document proving the existence of

the debt. Md. Rule 3-306(d). Based on the language of the Rule and a comment by Judge

Wilner, Chairman of the Rules Committee, during this Court’s adoption of the amendment

to Rule 3-306, requiring a “certified or otherwise properly authenticated” document means

that those documents must satisfy the business records exception to the hearsay rule. See

Transcript of Rules Committee Meeting July 1, 2011, at 94-95 (“What we mean by certified

or authenticated copy, is what would pass muster under the business records exception to the



                                              22
hearsay rule.”). As expressed in the Rules Committee’s Report, the purpose of the 2011

amendment was to prevent debt buyers from obtaining a judgment without properly serving

debtors and to make it more difficult for debt buyers to prove their case when it is

uncontested, i.e., when judgment on affidavit is the preferred procedure. Therefore, the

amendment to Rule 3-306 not only set forth a heightened pleading requirement in that

specific documents must now be presented in order for a debt buyer plaintiff to obtain a

judgment on affidavit, but also in that those specific documents must pass muster under the

business records exception to the hearsay rule.

       To be clear, Rule 3-306 is a rule of procedure, not a rule of evidence. In assigned

consumer debt cases, subsections (b), (c), and (d) describe the burden on the plaintiff to

prepare and submit the complaint, demand for judgment on affidavit, and required supporting

documentation in order to be successful in obtaining a judgment on affidavit. As we have

explained, the next step in the case depends on whether the defendant files a notice of

intention to defend. See Rule 3-306(e). If the defendant fails to respond by filing a timely

notice of intention to defend, or the defendant files a timely notice of intention to defend but

fails to appear at trial,12 the trial judge will evaluate the merits of the debt buyer plaintiff’s


       12
          Alternatively, in a case where the trial judge denies plaintiff’s request for judgment
on affidavit and the defendant fails to appear at trial, the case could proceed as a trial upon
default. See Rule 3-509(a) (prescribing the procedures “[w]hen a motion for judgment on
affidavit has been . . . denied by the court, and the defendant has failed to appear in court at
the time set for trial”). Like Rule 3-306, Rule 3-509 was amended in 2011 to include special
provisions for debt buyer cases to require the trial court to “consider the requirements set
forth in Rule 3-306(d)” before granting a default judgment. Rule 3-509(a) provides:
                                                                                     (continued...)

                                                23
case based on the affidavit and accompanying documents under the purview of Rule 3-

306(d). If the judge is satisfied that the plaintiff met its burden, the court may then grant

judgment on affidavit in favor of the plaintiff.

       On the other hand, if the defendant files a notice of intention to defend and contests

the case, the case proceeds to a trial on the merits. In a small claim action, as here, the trial

proceeds pursuant to Rule 3-701. As required by Rule 3-701(f), the “court shall conduct the

trial of a small claim in an informal manner[, and] Title 5 of these rules does not apply”

(except for the rules regarding competency of witnesses). Therefore, once the small claim

action moves beyond the demand for judgment on affidavit stage, the plaintiff will have to

present evidence at trial to prove that the defendant owes the debt to the plaintiff, but will not


(...continued)

       (a) Requirements of Proof. When a motion for judgment on affidavit has not
       been filed by the plaintiff, or has been denied by the court, and the defendant
       has failed to appear in court at the time set for trial:

       (1) if the defendant did not file a timely notice of intention to defend, the
       plaintiff shall not be required to prove the liability of the defendant, but shall
       be required to prove damages; except that for claims arising from consumer
       debt, as defined in Rule 3-306 (a)(3), when the plaintiff is not the original
       creditor, as defined in Rule 3-306 (a)(5), the court (A) may require proof of
       liability, (B) shall consider the requirements set forth in Rule 3-306 (d), and
       (C) may also consider other competent evidence;

       (2) if the defendant filed a timely notice of intention to defend, the plaintiff
       shall be required to introduce prima facie evidence of the defendant’s liability
       and to prove damages. For claims arising from consumer debt, as defined in
       Rule 3-306 (a)(3), when the plaintiff is not the original creditor, as defined in
       Rule 3-306 (a)(5), the court shall consider the requirements set forth in Rule
       3-306 (d) and may also consider other competent evidence.

                                               24
be constrained by the Rules of Evidence in doing so. This is true for all small claims,

including a debt buyer case.13 Therefore, in a debt buyer small claim action, once the case

is contested, the plaintiff need not conform its proffer to the Rules of Evidence. Specifically,

in this context, hearsay evidence need not pass muster under the business records exception

in order to be admissible.14 Notwithstanding the pleading requirements of Rule 3-306(d) as

they relate to the grant of a judgment on affidavit, the evidence must satisfy the trier of fact

(in a small claim proceeding in District Court or in Circuit Court pursuant to a de novo


       13
         Now, in cases filed by debt buyer plaintiffs on or after January 1, 2012, to obtain
judgment on affidavit, the complaint and supporting documents must comply with Rule 3-
306(d). If the case is a small claim and is contested by the defendant, and the plaintiff still
wishes to rely on the submitted documents that comply with Rule 3-306(d) and the business
records exception to the hearsay rule, the court’s reliance on those documents would not be
inconsistent with this opinion.
       14
          To be sure, the trial judge must still weigh the reliability and probative value of
hearsay evidence before admitting it in the small claims context. Small claim proceedings
are analogous to other situations where the formal Rules of Evidence do not strictly apply;
in those proceedings it is well-established that hearsay evidence must still be reliable to be
admissible. See In re Billy W., 387 Md. 405, 434, 875 A.2d 734, 751 (2005) (concluding that
“in permanency planning hearings when the Rules of Evidence are not strictly applied, the
trial court must evaluate whether evidence proffered for admission is sufficiently reliable and
probative prior to its admission”); Motor Vehicle Admin. v. McDorman, 364 Md. 253, 262,
772 A.2d 309, 314 (2001) (“It is hornbook law that hearsay evidence, if reliable, is
admissible at administrative proceedings. . . . Moreover, not only is hearsay evidence
admissible in administrative hearings in contested cases but such evidence, if credible and
of sufficient probative force, may indeed be the sole basis for the decision of the
administrative body.”); Baker v. State, 332 Md. 542, 558, 632 A.2d 783, 790 (1993) (stating
that “while the strict Rules of Evidence do not apply at a sentencing proceeding, unreliable
hearsay is inadmissible”). Whether hearsay evidence or not, a trial judge in the small claims
context must ensure that the evidence is sufficiently reliable and probative before accepting
it. Ultimately, then, the evidence presented must be sufficient to establish by a
preponderance of the evidence that the plaintiff owns the debt sued upon and that the
defendant owes the outstanding debt.

                                              25
appeal) that it possesses sufficient indicia of reliability.

       As we previously noted, the purpose of Rule 3-701’s informality requirement is to

make small claim actions accessible for all, whether represented by counsel or self-

represented. To require otherwise would make it substantially more difficult for self-

represented defendants to participate in debt buyer proceedings such as these. If we were to

require that evidence introduced at a small claim merit trial must satisfy a hearsay exception,

this would call for the unrepresented public to be familiar with, and apply, the Rules of

Evidence. This would be in contradiction to the very purpose underlying small claim

proceedings, i.e., that they be conducted in an informal manner to simplify the proceedings

for self-represented parties. This Court should not draw a distinction in the contested small

claims context between an institutional plaintiff and an unsophisticated defendant, and

therefore, we will not require only one of the parties to introduce into evidence documents

that satisfy the business records exception. Accordingly, the admissibility of evidence in a

small claim action, including debt buyer cases, is left to the sound discretion of the trial

judge, who is able to weigh, in an informal manner, the reliability and probative value of the

evidence before him or her, as well as the arguments and defenses presented by the parties.

                                          V. MERITS

       In the instant cases, the defendants both filed a notice of intention to defend, and each

case proceeded to a trial on the merits. Either the defendant or defendant’s counsel appeared

at the separate trials.   The trial judges, respectively, rendered judgment after hearing



                                               26
arguments and accepting evidence on the merits. Thus, the prevailing plaintiffs did not

obtain judgments on affidavit under Rule 3-306, but rather, prevailed under the procedural

rules governing small claim actions (Rule 3-701 in District Court and Rule 7-112 in Circuit

Court pursuant to a de novo appeal). Because the Rules of Evidence do not apply in the

instant situations and because of the informal nature of a small claim proceeding, a trial court

is tasked only with weighing the reliability and credibility of the evidence before it, and then

considering such evidence on a discretionary basis when making its determination. See

Goodman, 364 Md. at 491, 773 A.2d at 531 (“Necessarily, when there is no hard and fast rule

governing the situation, in arriving at a decision, the trial judge must exercise his or her

judicial discretion and the resulting decision is reviewed for the soundness and

reasonableness with which the discretion was exercised.”); In re Billy W., 387 Md. at 434,

875 A.2d at 751 (holding that, where the Rules of Evidence were not strictly applied, the trial

judge “must evaluate whether evidence proffered for admission is sufficiently reliable and

probative prior to its admission”); cf. Della Rata v. Dyas, 414 Md. 556, 583-84, 996 A.2d

382, 398 (2010) (quoting State v. Smith, 374 Md. 527, 533-34, 823 A.2d 664, 668 (2003)

(“Weighing the credibility of witnesses and resolving any conflicts in the evidence are tasks

proper for the fact finder.”)). We review the judge’s weighing of the evidence here for an

abuse of discretion.

       To address the contention that the trial judges abused their discretion in considering

some of the evidence before them, we note that a significant portion of the evidence before



                                              27
the respective courts consisted of bank records submitted by Respondents. We recognize

generally that bank records are a form of business records, and that “[t]he trustworthiness and

reliability of any business record arises from the fact that entries recording an act or event

are made in the regular course of business and it is the regular course of business to record

those entries at the time of that act or event or soon thereafter.” State v. Garlick, 313 Md.

209, 222, 545 A.2d 27, 33 (1988) (quotations omitted) (noting that the business records

exception applies to both civil and criminal cases). This Court has recognized that bank

records, particularly when the bank has no stake in the outcome of the litigation, have a

strong indicia of reliability, Chapman v. State, 331 Md. 448, 459, 628 A.2d 676, 682 (1993),

so it follows that such documents could carry substantial weight with the trial court.

       Moreover, it is well-established that a custodian of business records does not have to

be the custodian “who was such at the time the record was made.” Killen v. Houser, 251 Md.

70, 76, 246 A.2d 580, 583 (1968). To be sure, “there is no requirement that the witness have

first-hand knowledge of the matter reported or that the witness actually have prepared or

observed the preparation of the report.” Dep’t of Pub. Safety & Corr. Servs. v. Cole, 342 Md.

12, 29, 672 A.2d 1115, 1123 (1996). If this were not the case, the business records exception

“would lose much of its utility and effectiveness.” Killen, 251 Md. at 76, 246 A.2d at 583.

Because the admissibility of the evidence in these small claims cases is left to the sound

discretion of the trial judge, the outcomes in the two cases under review depends on the

reliability and credibility of the evidence presented at trial. We also review the judgments



                                              28
rendered by the Circuit Courts for clear error.

                     A. Bartlett v. Portfolio Recovery Associates, LLC

       PRA filed its complaint against Bartlett after the effective date of the amendments to

Rule 3-306(d).15 In order to succeed on a demand for judgment on affidavit, then, the

documents filed by PRA with its complaint, namely the form affidavit and Assigned

Consumer Debt Checklist and supporting documents, had to comply with the heightened

pleading requirements set forth in the amendment to Rule 3-306(d). Bartlett filed a timely

notice of intention to defend, however; hence the case proceeded as a contested small claim

action rather than as a demand for judgment on affidavit. Both the plaintiff and defendant

appeared at the merit trial before the District Court judge and again at the trial de novo on the

merits in the Circuit Court. We shall hold that the Circuit Court did not abuse its discretion

and that there was no clear error in entering judgment for the plaintiff in the present case.

       As detailed extensively in Section II.A. of this opinion, the evidence before the Circuit

Court judge was as follows: documents including (1) an Affidavit of Sale from a Chase

attorney stating Bartlett’s account was sold to PRA, (2) a Bill of Sale, (3) a Final Data File,

(4) Chase monthly credit card statements from January 2009 to May 2010, and (5) PRA’s

Account Charge Off Information; and testimony from (1) David Sage, PRA’s custodian of

records (“Sage”), and (2) the debtor, Rainford Bartlett.

       To be sure, at a minimum, Bartlett’s monthly credit card statements are considered


       15
        PRA filed its complaint on October 3, 2012, that is, after the amendments to Rule
3-306 had become effective on January 1, 2012.

                                               29
bank records. Not only do such records have a strong indicia of reliability, but the trial judge

evaluated the documents before him under the “guideposts” of Rule 3-306. He stated that

“one could look to the provisions of [Rule] 3-306(d) as sort of a guidepost for what the proof

has to show [a]nd I’ve been considering the evidence in light of that.” Under that standard,

the judge concluded that the documents produced were in fact admissible in accordance with

3-306(d), despite the fact that they need not be admissible in accordance with this Rule in the

small claims context. He elaborated that the more difficult question to satisfy was whether

PRA owned the debt in question, but ultimately concluded that the Bill of Sale complied with

3-306(d) as well, and this document was also considered when making his determination.

Although compliance with Rule 3-306(d) is not required in either a trial on the merits in a

small claim proceeding in District Court or appeal of a small claim action to be heard de novo

in the circuit court, there was no abuse of discretion when the Circuit Court judge considered

the heightened pleading standard in order to guide his review of the evidence in this case.

       Moreover, the judge noted that while he did not find some aspects of Sage’s testimony

persuasive, the parts of Sage’s testimony that demonstrated “a more precise knowledge” of

some of the data provided “was credible and persuasive, and satisfied the preponderance of

the evidence test.” Indeed, while Sage did not have personal knowledge of all aspects of the

debt buying process he was testifying about, personal knowledge is not always necessary in

this context. The judge clearly exercised his discretion when considering the reliability of

such testimony. Even if the documents and Sage’s testimony alone were not sufficient, the



                                              30
addition of Bartlett’s testimony was sufficient to satisfy PRA’s burden of proof. The judge

compared Bartlett’s “candid testimony” to support facts put forth in the documents and in

Sage’s testimony in order to weigh their credibility. Because the judge referenced “guiding

principles or rules of law” and a reasonable person could reach the same conclusion, we hold

that there was no abuse of discretion in the instant case.

       We shall also hold that in light of the evidence presented, there was no clear error in

entering judgment in favor of the plaintiff. The court determined that Bartlett was liable for

payment of the debt at issue based on the evidence before the court, which included the

documents submitted by PRA and the testimony of both PRA’s custodian of records and of

the debtor himself. Accordingly, we shall affirm the judgment of the Circuit Court in Bartlett

v. PRA.

                          B. Townsend v. Midland Funding, LLC

       As a threshold matter, Midland filed its complaint prior to January 1, 2012, and

therefore, the heightened pleading requirements of Rule 3-306(d) as amended did not apply.

Nevertheless, the judges in both the District Court trial and the de novo trial in the Circuit

Court indicated that they considered Rule 3-306 as a guideline and further concluded that the

documents satisfied the requirements of Rule 3-306 as amended in 2011.16 In any event, as



       16
         Because the trial judge found that the documents submitted met the requirements
of Rule 3-306(d), it is reasonable to infer that she believed the records would pass muster
under the business records exception. While it is not necessary to comply with the business
records exception in this situation, it certainly adds to the reliability and probative value that
these records would in fact be admissible as an exception to the hearsay rule.

                                               31
explained below, because the action proceeded to a trial on the merits, we shall hold that the

Circuit Court did not abuse its discretion in admitting the evidence offered at trial and did

not commit error in entering judgment for the plaintiff after weighing the evidence in the

case.

        In this case, Midland filed with its complaint and demand for judgment on affidavit,

(1) the Affidavit of Ashley Lashinski, legal specialist with access to account records of

Midland Credit Management, Inc., the account servicer for Midland, stating the amount of

the debt owed, that Midland is the owner of the debt, and that the records are maintained in

the regular course of business; (2) a copy of a redacted Bill of Sale from Chase to Midland;

and (3) copies of credit card statements from the original creditor showing the balance due

and Townsend’s mailing address. Townsend filed a notice of intention to defend and the

case proceeded to a trial on the merits. Although Townsend did not attend, his counsel

appeared on his behalf at the District Court trial and again at the Circuit Court trial de novo.

        At the trial de novo in the Circuit Court, Midland offered as evidence the documents

attached to its complaint, namely, the Affidavit of Ashley Lashinski, the “Bill of Sale” from

Chase to Midland, and the photocopies of Townsend’s credit card account statements. The

court correctly concluded that “the Maryland Rules of Evidence (Title 5) do not apply to

these small claim proceedings” and “determined to receive and consider” the evidence

offered by Midland. As we have discussed, in this small claim case the admission of the

evidence was within the trial judge’s discretion. We conclude that it was not an abuse of



                                              32
discretion for the court to admit Midland’s affidavit and supporting documents, where the

court had “determined to receive and consider [the affidavit and supporting documents]

pursuant to the instruction and guidance of Md. Rule 3-306.” To be sure, a “reasonable

person would take the view adopted by the trial court” and would conclude that the rulings

were not “clearly against the logic and effect of facts and inferences before the court.” North

v. North, 102 Md. App. 1, 13, 648 A.2d 1025, 1031 (1994) (citations and quotations omitted).

Contrary to the views espoused in the dissenting opinion in this case, it would be

inappropriate for this Court to reverse the judgment of the Circuit Court simply because

members of this Court would not reach the same conclusions. See id.

       Although the signed but redacted “Bill of Sale” was not reliable evidence of the

purchase of the Chase account, the Affidavit of Ashley Lashinski was sufficiently reliable

evidence. Her affidavit was “based upon personal knowledge of [the] account records

maintained on [Midland’s] behalf” by Midland Credit Management, Inc., the account

servicer. In addition, Lashinski’s affidavit references Townsend’s Chase account and the

account number. The last four digits of that account number appear in each of the eighteen

separate billing statements attached to Midland’s Exhibit One and issued by Chase to

Townsend. The statements show the account summary and account activity, including the

payment date, new balance, past due amount, and minimum payment due. We note further

that the defendant did not attend or participate in the trial. Had he participated, the judge

would have had the additional benefit of any evidence the defendant wished to present.



                                              33
Under the circumstances, however, all the judge had to consider was the plaintiff’s evidence

and the argument of defense counsel. Accordingly, the plaintiff should not be penalized

because the defendant failed or refused to participate in the proceedings.

       Townsend contends that because Ashley Lashinski’s assertions are hearsay, the

Circuit Court committed reversible error by admitting Exhibit One (Affidavit and supporting

documents).17    This is not correct.     Hearsay evidence is admissible in small claim

proceedings. A live witness at trial seems to be always preferable, but, in the context of

small claims, the presence of a witness is not always necessary. The trial judge, in the

exercise of his or her discretion, must weigh the reliability of the evidence in the case. We


       17
          More specifically, Townsend argues that by admitting and relying on hearsay
evidence in the form of an affidavit, without the opportunity to cross-examine, he was denied
procedural due process. This argument is without merit. First, as to the admission of
hearsay, we have noted, in the context of an administrative hearing, that “procedural due
process does not prevent an agency from supporting its decision wholly by hearsay, if there
is underlying reliability and probative value.” Maryland Dep’t of Human Res. v. Bo Peep
Day Nursery, 317 Md. 573, 595, 565 A.2d 1015, 1026 (1989) (emphasis in original). In the
context of small claims, where the Rules of Evidence are not applicable, the circumstances
are similar. Second, as to due process, “[t]his Court has long held that procedural due
process requires that litigants must receive notice, and an opportunity to be heard.” Pickett
v. Sears, Roebuck & Co., 365 Md. 67, 81, 775 A.2d 1218, 1226 (2001). Cross-examination,
on the other hand, is not a prerequisite, but instead is an additional procedural protection to
be considered when the courts engage in a due process analysis. See Bo Peep Day Nursery,
317 Md. at 597, 565 A.2d at 1026-27 (noting that “a chance to confront and cross-examine
witnesses or evidence” is one of the “different elements of the adversary process which may
be required as part of” due process (emphasis added)). Further, we have recognized that
“due process is flexible and calls only for such procedural protections as the particular
situation demands.” Miserandino v. Resort Props., Inc., 345 Md. 43, 52, 691 A.2d 208, 212
(1997) (citations and quotations omitted). In this civil small claim case, Petitioner received
adequate due process where he was served with the complaint, filed a timely notice of
intention to defend, was represented by counsel, and had the opportunity to attend the merits
trial before a neutral judge, even though he chose not to attend the trial.

                                              34
are satisfied that the evidence before the Circuit Court judge taken as a whole, with the

exception of the Bill of Sale, was sufficiently reliable for the judge to admit it, and to

conclude that Midland purchased the debt and that Townsend owed a principle balance of

$1,905.21 as of the date of the trial.

       Finally, there was no clear error in entering judgment in favor of the plaintiff, where

the court found that “[w]ith the contents and attachments of Plaintiff’s Exhibit 1, over

Defendant’s objection(s), the Plaintiff has proven its claim by a preponderance of the

evidence. Specifically, the Affidavit conforms to the requirements of Md. Rule 3-306 in this

‘debt buyer’ case.” Although the court is not bound by the heightened pleading requirements

of Rule 3-306(d) in a contested small claim proceeding, it did not err in using 3-306(d) as a

guide in its disposition of this case. The trial judge expressly found that the documents

presented at trial demonstrated both the existence of Townsend’s debt and Midland’s

ownership of the debt. In light of the evidence presented, the judge’s consideration of the

reliability and weight of the evidence before her, and the absence of any rebuttal evidence

by Respondent, who chose not to attend or testify at trial, we find no clear error on the part

of the trial judge. Accordingly, we affirm the judgment of the Circuit Court for Baltimore

City in both cases under review.18

                                                  JUDGMENTS OF THE CIRCUIT
                                                  COURT FOR BALTIMORE CITY


       18
        In light of our disposition of this case, Respondent Midland’s Motion to Strike the
Licensing Board’s amicus curiae brief is hereby denied.

                                             35
     AFFIRMED. COSTS TO BE PAID BY
     PETITIONERS.




36
Circuit Court for Baltimore City
No. 24-C-13-001323 (Bartlett)
No. 24-C-13-001033 (Townsend)
Argument: March 10, 2014
                                            IN THE COURT OF APPEALS
                                                 OF MARYLAND

                                                   Nos. 64 and 76

                                               September Term, 2013


                                            RAINFORD G. BARTLETT

                                                          v.

                                   PORTFOLIO RECOVERY ASSOCIATES, LLC



                                               JAMES TOWNSEND

                                                          v.

                                            MIDLAND FUNDING, LLC


                                                     Barbera, C.J.
                                                     Harrell
                                                     Battaglia
                                                     Greene
                                                     Adkins
                                                     McDonald
                                                     Watts,

                                                               JJ.


                                     Opinion by McDonald, J., concurring in the
                                    judgment in part and dissenting in part, which
                                                  Adkins, J., joins.


                                                Filed: May 19, 2014
       I would decide these two appeals differently. The purchase of a debt from the original

creditor and the pursuit of its collection in the District Court is a legitimate economic

enterprise. But the prosecution of a collection action by a debt buyer should conform to the

standards of fairness normally required by our rules and constitutions. My disagreement with

the Majority arises from three considerations.

Some Considerations in Deciding These Cases

       Whether There are Different Standards of Proof for Summary Disposition and Trial

       The summary disposition rule in the District Court – i.e., judgment by affidavit under

Maryland Rule 3-306 – spells out specific requirements for the contents of affidavits in debt

buyer cases.1 These requirements were explicitly designed to satisfy the business records

exception to the hearsay rule,2 a principle that is not only codified in Maryland Rule 5-

803(6), but that has long been a part of the common law as well as other statutes and rules.3

Thus, as the Majority opinion acknowledges,4 a debt buyer plaintiff must satisfy the business

records exception to prevail if a defendant does not respond to the complaint. As the




       1
        As the Majority opinion correctly notes, the amended version of Rule 3-306 did not
technically apply to the Townsend case, although the parties and the courts below apparently
used it as a benchmark. See Majority slip op. at p. 10 n.6. The amendments became
effective as of January 1, 2012, while the complaint in the Townsend case was filed on
December 22, 2011.
       2
           See Transcript of Rules Hearing of Court of Appeals (July 1, 2011) at pp. 94-95.
       3
           See L. McLain, Maryland Evidence (1987) at pp. 376-84.
       4
           Majority slip op. at p. 22.
Majority opinion also acknowledges,5 if the defendant files a notice of intention to defend

but fails to appear for trial, the court is still to consider whether the debt buyer plaintiff has

met the requirements of Rule 3-306. See Maryland Rules 3-306(e), 3-509(a).

       Under the Majority’s approach, it is only when the defendant puts the debt buyer

plaintiff to its proof that the rules are relaxed for the plaintiff. It is not self-evident why there

would be a lesser standard of proof when the allegations of the complaint are contested and

a trial must be held at which the plaintiff still bears the burden of proof. I would not relax

the normal standard of proof when the plaintiff’s case depends entirely on the reliability of

certain records, some of which originated with the plaintiff and some of which the plaintiff

purchased from a third party, and about which there may be legitimate questions as to their

trustworthiness.

       Whether Bank Records are Always Inherently Reliable

       Second, in affirming the judgments in these cases, the Majority opinion notes that this

Court in Chapman v. State, 331 Md. 448, 628 A.2d 676 (1993), characterized bank records

as having “strong indicia of reliability.” Majority slip op. at p. 28. That case was a criminal

prosecution in which the bank was simply a witness and had no stake in the outcome – unlike




       5
           Majority slip op. at pp. 23-24 n. 12.

                                                   2
a collection case involving a debt allegedly owed to a bank.6 Indeed, this Court made just

that point in Chapman:

              While it is true that documents that parties prepare for the
              purpose of litigation are often suspect because of their apparent
              self-serving ends, such is not the case when a bank completes an
              affidavit of account status [in a bad check prosecution]. There
              is no enhanced motive for insincerity or fabrication under these
              circumstances. This is not a case where a party to the litigation
              generates a document for self-serving means.... The bank has
              neither a position to advocate nor a stake in the outcome of a
              criminal trial.

Chapman v. State, 331 Md. at 464 (emphasis added) (citations omitted).

       As the Federal Trade Commission has found, banks that sell debt accounts to debt

buyers often disclaim the reliability of the records and accounts that they are providing to the

debt buyer. Federal Trade Commission, The Structure and Practices of the Debt Buying

Industry (2013) at p. 25; see also Holland, Junk Justice: A Statistical Analysis of 4,400

Lawsuits Filed by Debt Buyers, 26 Loyola Consumer L. Rev. 179, 193-94 & nn. 45, 50

(2014). It seems odd to accord special reliability to those records when the business that

actually created and maintained them may have disclaimed their reliability.

       In addition, in Chapman and in the other cases cited by the Majority opinion involving

business records, the courts appropriately qualified their holdings by noting that records that

otherwise satisfy the conditions of the business records exception are not admissible if



       6
        Chapman was a prosecution for obtaining a television from a department store by
means of a bad check. The statutory basis for admitting bank records in that case was unique
to “bad check” cases – a provision that currently is codified in Maryland Code, Criminal Law
Article, §8-104(c).

                                               3
circumstances      concerning   their source    or preparation      indicate   that they lack

“trustworthiness.”7 As this Court has frequently stated, the key mechanism for testing

trustworthiness in our adversary system is cross-examination.8

       Whether There Should be an Opportunity for Cross-Examination

       Finally, under the Majority’s approach, a defendant may be precluded from any

opportunity to cross-examine the plaintiff’s witnesses. It is true that small claims trials under

Rule 3-701 are to be conducted informally, but that does not mean that “anything goes” –

in particular, that a party that has the burden of proof can avoid having any of its evidence

tested through cross-examination. As the Majority opinion notes, the primary purpose of

small claims courts is to provide greater access to justice. Majority slip op. at p. 15. That

goal involves not only increasing the efficiency of the judicial system, but also “increasing

the access of the poor to equal justice.” Eric H. Steele, The Historical Context of Small

Claims Courts, 6 Am. B. Found. Res. J. 293 (1981). Rule 3-701, and its predecessor rule,9

was designed to permit the efficient resolution of small claims in which one or both parties

were without lawyers, and thereby to make the justice system more accessible for low income




       7
       E.g., Department of Public Safety and Correctional Services v. Cole, 342 Md. 12, 31,
672 A.2d 1115 (1996).
       8
           See, e.g., Myer v. State, 403 Md. 463, 477, 943 A.2d 615 (2008).
       9
           Maryland District Court Rule 568.

                                               4
and unrepresented parties. It was not meant to allow institutional parties to shield themselves

from cross-examination.10

       In sum, we should not decide these cases by according special reliability to the

business records offered by one party to a dispute, particularly when they belong to a third

party and there may be a legitimate question as to their accuracy, and certainly not without

the possibility of cross-examination.11 These considerations bring me to the same place as

the Court in one case, but to a different outcome in the second case.

Deciding These Cases

       Bartlett

       In the trial of the Bartlett case, Mr. Bartlett himself was called as a witness by PRA

in its own case. He conceded the existence and the amount of his debt to Chase Bank. In

light of this corroboration, there is no reason to doubt the accuracy of the information set

forth in the records from Chase Bank.

       A representative of PRA also testified and was cross-examined concerning PRA’s

records in the Circuit Court. The Circuit Court itself noted that PRA’s witness was present




       10
        I agree with the statement in Judge Watts’ concurring opinion that the right of cross-
examination may be a fundamental element of due process in a small claims case.
Concurring Opinion of Judge Watts, slip op. at 4. I disagree as to whether it can be
dispensed with in these cases.
       11
         This consideration would not establish different rules for institutional parties and pro
se individuals, but rather is based on the nature of the evidence being proffered. Were a pro
se party to purchase a debt from a third party creditor, file suit to collect it, and attempt to
prove the existence and ownership of the debt on the basis of the third party’s records alone
without any opportunity for cross-examination of anyone, the rule should be the same.

                                               5
and subject to cross-examination. Trial Transcript at p. 16 (“You have the full ability to

plumb the testimony and expose whether it’s based upon reliable and probative evidence, or

not.”). In finding that PRA had proven its ownership of Mr. Bartlett’s debt to Chase Bank,

the Circuit Court relied on the testimony of PRA’s representative, although the Court

expressed skepticism about some aspects of that testimony. Id. at p. 129.

       In light of the corroborating evidence of the debt, it was not necessary for PRA to

prove its existence and amount solely through the business records of Chase Bank. The

witness sponsoring PRA’s business records testified and was available for cross-examination.

The conclusions drawn by the Circuit Court were not clearly erroneous.       Accordingly, I

would affirm the judgment of the Circuit Court, although not on the basis stated in the

Majority opinion.

       Townsend

       The Townsend case is a different matter.

       Midland appeared at trial in both the District Court and the Circuit Court without any

witnesses and attempted to prove its case simply by submitting an affidavit and copies of

various documents. The affidavit of its absent agent – Ashley Lashinski, an employee of a

Midland affiliate – did not specifically identify the documents that comprised Midland’s

proof, perhaps because those documents differed in the two courts.12



       12
        Although the same affidavit, signed by Ms. Lashinski and dated November 18, 2011,
was submitted in both the District Court and the Circuit Court, an additional document was
attached to the affidavit in the Circuit Court – raising the question as to what, if any,
documents were attached to the affidavit when Ms. Lashinski executed it.

                                             6
       One of the key exhibits that accompanied the affidavit in both courts was a redacted

“bill of sale” that purportedly documented the sale of certain debts by Chase Bank, including

the debt attributed to Mr. Townsend, to Midland. This bill of sale was apparently an exhibit

to a purchase and sale agreement that was not itself submitted to the courts below.13 While

the bill of sale recites statements similar to the requirements of the business records rule, it

is not an affidavit, the statements are not made under oath, and it is not clear to whom those

statements are to be attributed – i.e., who would be cross-examined by a defendant who

wished to test the truth of those assertions. In any event, the redacted bill of sale submitted

with Ms. Lashinski’s affidavit contained no reference to Mr. Townsend’s account – or any

other account, for that matter.14

       The District Court judge noted the gap in Midland’s proof – none of the records

submitted in the District Court actually documented that Mr. Townsend’s debt had been sold

to Midland – but was willing to find that Midland had covered that gap, by a preponderance

of the evidence, through a reference to Mr. Townsend’s Chase account number in Ms.

Lashinski’s affidavit. The Circuit Court similarly relied on Ms. Lashinski’s affidavit to




       13
         Notably, the missing purchase and sale agreement is the type of document in which
a bank typically disclaims the reliability of the records it provides to the debt buyer. See
Federal Trade Commission, The Structure and Practices of the Debt Buying Industry (2013)
at pp. 24-25.
       14
        While Rule 3-306(d)(3) contemplates that a bill of sale may be redacted, the bill of
sale should at least contain the terms of the sale and a “specific reference to the debt sued
upon.” Rule 3-306(d)(3), Committee note. Midland apparently attempted to remedy this
problem by submitting an additional document with the affidavit in the Circuit Court.

                                               7
conclude that Midland had satisfied the requirements of Rule 3-306 15 and proven its claim

by a preponderance of the evidence. Thus, even if one accepted the proffered bank records

as business records of Chase Bank simply because they contained a bank logo, they could not

advance Midland’s claim without the testimony of Ms. Lashinski, who did not appear at

either trial and therefore was not subject to cross-examination.

       The Majority opinion only briefly addresses the possibility that due process would

require an opportunity to cross-examine Ms. Lashinski, citing the Bo Peep case for the

proposition that an administrative agency may base a decision on hearsay evidence. Majority

slip op. at p . 34 n.17 citing Maryland Department of Human Resources v. Bo Peep Day

Nursery, 317 Md. 573, 565 A.2d 1015 (1989). In Bo Peep, the hearsay evidence consisted

of certain statements made by children concerning acts of abuse allegedly committed against

them. However, in contrast to this case, in Bo Peep the adult witnesses who introduced that

hearsay into evidence were all subject to significant cross-examination at the hearing, as the

Bo Peep opinion recounts at some length. See Bo Peep, 317 Md. at 586-95. Indeed, in Bo

Peep this Court favorably contrasted the procedures in the case before it – in which there was

cross-examination – with another case in which there was “no opportunity for cross

examination” and the proceedings thereby lacked “fundamental fairness.” Bo Peep, 317 Md.

at 598-601 describing Rogers v. Radio Shack, 271 Md. 126, 314 A.2d 113 (1974). In Mr.

Townsend’s case, no one from Midland was available for cross-examination. If the trial of


       15
        This may not be entirely correct – Ms. Lashinski’s affidavit and attachments do not
appear to contain account charge-off information or licensing information. See Maryland
Rule 3-306(d)(6)-(8).

                                              8
this case had proceeded similarly to the administrative hearing in Bo Peep, Ms. Lashinski

(like the adult witnesses in Bo Peep through whom the hearsay was admitted) would have

been available for cross-examination when she laid the foundation for the introduction of

hearsay statements in the Midland and Chase Bank records under the business records

exception.

       On its face, Ms. Lashinski’s affidavit raises some obvious questions that might be

explored on cross-examination. Her affidavit speaks generally of her familiarity with

Midland’s records and makes certain assertions about amounts owed by Mr. Townsend to

Chase Bank, but says nothing specifically about the bill of sale or other documents attached

to her affidavit. Nor does her affidavit indicate whether Midland has records related to the

account that were not attached to the complaint or her affidavit – e.g., the purchase and sale

agreement for which the bill of sale identifies itself as an “exhibit” – and whether the omitted

records contain any disclaimers or other representations concerning the accounts or the

records.

       It may be that Ms. Lashinski could have answered any questions that Mr. Townsend’s

counsel might have posed in a way that advanced Midland’s case. But we do not know

because, without a witness to cross-examine, the defendant never had that opportunity.16


       16
         It is the opportunity for cross-examination that is critical. Ordinarily, when a party
seeks to admit business records without a live witness, it must provide notice to the opposing
party. See Maryland Rule 5-902(b). This allows the opposing party to object or to subpoena
the witness itself if it wishes to cross-examine that witness. See L. McLain, Self-
Authentication of Certified Business Records, 24 U. Balt. L. Rev. 27, 59-60, 72 (1994)
(Maryland rule allowing admission of business records without live witness likely
constitutional because of advance notice provision and provision that rule does not apply

                                               9
Under the Majority’s holding, an affidavit that failed to provide sufficient support for

summary disposition under Rule 3-306 could be used to prevail at trial without affording the

defendant any opportunity to cross-examine the affiant or other representative of the plaintiff,

who has the burden of proof, about the defects in the affidavit. As federal courts have noted

in two recent cases involving Midland, when the documentary evidence of a sale of a debt

is incomplete, “the possibility of a debt collector attempting to collect a debt that it does not

actually own, either through assignment or otherwise, is very real.” Henggeler v. Brumbaugh

& Quandahl, P.C., LLO, 894 F.Supp.2d 1180, 1188 (D. Neb. 2012) quoting Webb v. Midland

Credit Management, Inc., 2012 WL 2022013 (N.D. Ill. 2012) at *5 n.8. Even if the

statements in the Lashinski affidavit had been sufficient to admit all of the records under the

business records exception, the defendant should have an opportunity to cross-examine a

witness who establishes the prerequisites to the business records exception. Accordingly, I

would reverse the judgment in the Townsend case and remand for a new trial.

Summary

       It may be that, in most debt buyer cases, the defendant owes the debt and the debt

buyer owns the debt. But that is not a reason to discard the normal standards of proof,

forgive gaps in the debt buyer’s own records, and treat certain bank records as infallible,

particularly when a bank itself may have disclaimed their accuracy. It is ironic that a trial

process designed to allow unrepresented lay people to find justice in the legal system, and



when circumstances indicate a “lack of trustworthiness”). Under the procedure approved by
the Court in this case, a debt buyer plaintiff need not provide any notice that it intends to
prove its case without any witnesses available for cross-examination.

                                               10
a rule on summary disposition designed to require debt buyer plaintiffs to satisfy the business

records exception to the hearsay rule, have been transformed into a streamlined debt

collection process under which a sophisticated institutional litigant avoids even the

possibility that its evidence will be subject to testing by cross-examination.

       Judge Adkins joins this opinion.




                                              11
Circuit Court for Baltimore City
Case No. 24-C-13-001323
Circuit Court for Baltimore City
Case No. 24-C-13-001033
                                         IN THE COURT OF APPEALS

Argued: March 10, 2014                        OF MARYLAND

                                                Nos. 64 & 76

                                             September Term, 2013
                                   ______________________________________

                                          RAINFORD G. BARTLETT

                                                      v.

                                    PORTFOLIO RECOVERY ASSOCIATES,
                                                    LLC
                                   ______________________________________

                                             JAMES TOWNSEND

                                                      v.

                                          MIDLAND FUNDING, LLC
                                   ______________________________________

                                             Barbera, C.J.,
                                             Harrell
                                             Battaglia
                                             Greene
                                             Adkins
                                             McDonald
                                             Watts,

                                                   JJ.
                                   ______________________________________

                                         Concurring Opinion by Watts, J.
                                   ______________________________________

                                             Filed: May 19, 2014
       Respectfully, I concur in the judgment in both cases, Bartlett v. Portfolio Recovery

Associates, LLC and Townsend v. Midland Funding, LLC, but I write separately to

explain my reasons.

       Like the Majority, I conclude that Rule 3-306 sets forth the requirements for

obtaining a judgment on affidavit, not the requirements for prevailing at a trial. Upon the

filing of a timely notice of intention to defend pursuant to Rule 3-306(e)(1), the case

proceeds as any other small claims action, and, pursuant to Rule 3-701(f), the District

Court would conduct the trial in an informal manner, and Title 5, the Rules of Evidence,

would not apply.1 A de novo appeal of the District Court’s decision is similarly handled

in an informal manner, and the Rules of Evidence do not apply. See Md. R. 7-112(d)(2)

(“If the action in the District Court was tried under Rule 3-701, . . . the circuit court shall

conduct the trial de novo in an informal manner, and Title 5 of these rules does not apply

to the proceedings.”). It is undisputed that a contested small claims trial is conducted

informally and the Rules of Evidence (except the Rules applicable to the competency of

witnesses) do not apply.

                                           Bartlett

       I agree that this Court should affirm the judgment of the circuit court, but not for

the reasons stated in the Majority opinion. Like the Majority, I conclude that the circuit

court did not err in admitting the documents included in PRA’s Exhibits 1 and 2, over

       1
        Bartlett appears to concede as much in stating: “Rule 3-306(d) technically does not
apply at trial[.]” I decline Bartlett’s and Townsend’s invitation to consider Rule 3-306(d)
“persuasive authority as to what a debt buyer must prove to obtain a judgment . . . at a
contested trial[,]” as Rule 3-306(d)’s plain language establishes that Rule 3-306(d) applies
only to a judgment on affidavit.
Bartlett’s objection that the documents failed to satisfy Rule 5-803(b)(6). Because the

Rules of Evidence do not apply in contested small claims cases, whether the documents

included in PRA’s Exhibits 1 and 2 were hearsay or excepted hearsay under Rule 5-

803(b)(6) was simply not a determination that was before the circuit court.

         The circuit court did not err in admitting PRA’s Exhibits 1 and 2–which included

records from the original creditor, Chase–over Bartlett’s objection that Sage lacked

personal knowledge of the creation and maintenance of the records. As discussed by the

majority, an alleged lack of personal knowledge did not render Sage incompetent to

testify or to serve as the proponent of the documents in the small claims trial, as a

witness’s personal knowledge is distinct from the witness’s competency.

         But PRA raises a point that the Majority does not address. PRA contends that, if

the Rules of Evidence were applicable, under Md. Code Ann., Cts. & Jud. Proc. (1973,

2013 Repl. Vol.) (“CJP”) § 10-101, in a small claims action, a sponsoring witness with

personal knowledge is not required for admission of business records into evidence. I

agree.    If the documents at issue were deemed to be business records, a sponsoring

witness’s lack of personal knowledge would not be fatal to the admission of the

documents. CJP § 10-101(d), concerning evidence of proof of accounts and records,

provides: “The lack of personal knowledge of the maker of the written notice may be

shown to affect the weight of the evidence but not its admissibility.” In Bethlehem-

Sparrows Point Shipyard v. Scherpenisse, 187 Md. 375, 381, 50 A.2d 256, 260 (1946),

we explained that Maryland modeled its business records statute–now codified at CJP §

10-101–after the Model Act for Proof of Business Transactions, stating:


                                           -2-
          The [Maryland] Act also provides that all other circumstances of the
          making of such writing or record, including lack of personal knowledge by
          the entrant or maker, may be shown to affect the weight, but not the
          admissibility thereof. The purpose of the Act is to put an end to narrowness
          in the use of the familiar rule of evidence that the person whose statement is
          received as testimony should speak from personal observation or
          knowledge, and to bring the rule of evidence nearer to the standards in
          responsible action outside of the courts.

(Citation omitted).

          Accordingly, I agree that this Court should affirm the judgment of the circuit court,

but not entirely on the grounds stated in the Majority opinion.2

                                           Townsend

          As to Townsend’s contention that the circuit court’s admission of Lashinski’s

affidavit violated his right to due process because Lashinski was not available for cross-

examination, in my view, this case’s particular circumstances do not establish a due

process violation. An appellate court reviews without deference whether a trial court

violated a constitutional right. See Ellis v. Hous. Auth. of Balt. City, 436 Md. 331, 353,

82 A.3d 161, 174 (2013), reconsideration denied (Jan. 23, 2014) (“[I]n reviewing a

possible violation of a constitutional right, this Court conducts its own independent

constitutional analysis. We perform a de novo constitutional appraisal in light of the

particular facts of the case at hand[.]” (Alterations in original) (citation and internal

quotation marks omitted)).

          In Rhoads v. Sommer, 401 Md. 131, 160, 931 A.2d 508, 525 (2007), this Court

stated:

          2
        Indeed, Bartlett has never even disputed the merits of PRA’s claim or otherwise
asserted that he did not have a delinquent credit card account.


                                              -3-
       “[I]dentification of the specific dictates of due process generally requires
       consideration of three distinct factors: First, the private interest that will be
       affected by the official action; second, the risk of an erroneous deprivation
       of such interest through the procedures used, and the probable value, if any,
       of additional or substitute procedural safeguards; and finally, the
       Government’s interest, including the function involved and the fiscal and
       administrative burdens that the additional or substitute procedural
       requirement would entail.”

(Quoting Mathews v. Eldridge, 424 U.S. 319, 335 (1976)).

       In certain cases, this Court has determined the right to cross-examination to be a

fundamental part of due process. In Md. Dep’t of Human Res. v. Bo Peep Day Nursery,

317 Md. 573, 597, 565 A.2d 1015, 1026-27 (1989), cert. denied sub nom. Cassilly v. Md.

Dep’t of Human Res., 494 U.S. 1067 (1990), an administrative appeal, this Court referred

to the right to cross-examination as an “essential element[]” of due process. (Citation

omitted). See also Archer v. State, 383 Md. 329, 356, 859 A.2d 210, 226 (2004) (This

Court referred to the right to cross-examination as a “fundamental element[]” of due

process in criminal cases. (Citation omitted)); In re Thomas J., 372 Md. 50, 65, 811 A.2d

310, 319 (2002) (This Court referred to the right to cross-examination as a “fundamental

right[]” that is part of due process in juvenile cases. (Citation omitted)).

       Although the right of cross-examination may indeed be determined to be a

fundamental element of due process in small claims cases, I do not believe the test in

Mathews, 424 U.S. at 335, compels that result in this particular case; nor do I believe that

the issue is before this Court. At the de novo appeal in the circuit court, Townsend’s

counsel appeared, but did not object on the ground that he could not cross-examine

Lashinski. Thus, the issue of Townsend’s right to cross-examination and any alleged



                                             -4-
deprivation of due process are matters that were neither “raised in [nor] decided by the

[circuit] court.” Md. R. 8-131(a).

       If the merits were to be addressed, this case’s circumstances do not warrant a

finding of a due process violation. On appeal, Townsend has challenged the process and

Midland’s manner of proof, but he has not alleged that he is, in fact, not the debtor, or that

there is an error as to the debt. Applying the Mathews test, the private interest affected is

a property interest. The amount at stake in this case is $1,905.21. Although small claims

actions involve smaller amounts than other civil actions for damages, admittedly, the

amount at stake may constitute a considerable amount for any defendant. Here, however,

other than referencing the amount, Townsend has not alleged the amount to constitute a

substantial property interest. Similarly, it has not been established that the risk of an

erroneous deprivation of property is high. Townsend has not alleged any circumstances

such as an error in paperwork–i.e., that Midland does not own the debt or the amount is

incorrect–or misidentification of himself as the debtor. Thus, in this case, there is no

probable value of additional safeguards necessary to prevent an erroneous result. In sum,

although cross-examination may indeed be determined to be a fundamental aspect of due

process in small claims cases, an analysis of this case’s circumstances does not result in

the conclusion that Townsend was deprived of due process.



                                        Conclusion

       Although I agree that this Court should affirm the judgment of the circuit court in

both cases, in light of the issues raised by Bartlett, Townsend, and amici, and those


                                            -5-
discussed by Judge Robert N. McDonald in his concurring and dissenting opinion–most

notably, the observation that the small claims trial process was designed “to make the

justice system more accessible for low income and unrepresented parties” rather than to

“allow institutional parties to shield themselves from cross-examination,” see Concurring

and Dissenting Opinion at 4-5–I would urge the Standing Committee on Rules of Practice

and Procedure to investigate whether there should be changes to the Maryland Rules

concerning the level and type of proof in assigned consumer debt small claims contested

trials.




                                          -6-
