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Midland Funding LLC v. Walton

Supreme Court of Maine

February 2, 2017

MIDLAND FUNDING LLC
v.
MARK WALTON

         Reporter of Decisions

          Submitted On Briefs: November 29, 2016

          Daniel L. Lacasse, Esq., Calais, for appellant Mark Walton

          Ashley Janotta, Esq., Susan J. Szwed, P.A., Portland, for appellee Midland Funding, LLC

          Panel: SAUFLEY, C.J., and ALEXANDER, MEAD. JABAR, HJELM, and HUMPHREY, JJ.

          MEAD, J.

         [¶1] Mark Walton appeals from a judgment entered in the District Court (Calais, Romei, J.) in favor of Midland Funding LLC in the amount of $5, 684.72 plus costs of court. Walton argues that the District Court lacked jurisdiction over the matter pursuant to language in the credit card agreement and asserts that the court erred in admitting documentation of the assignment of his debt to Midland Funding from Barclays Bank Delaware pursuant to the business records exception to the hearsay rule. We affirm the judgment.

         I. BACKGROUND

         [¶2] On February 26, 2015, Midland Funding filed a complaint against Walton alleging that he had entered into a credit card agreement with Barclays Bank Delaware in April 2008, used the card to obtain extensions of credit, and failed to make payments on the account since March 2009. The complaint asserted that "[a]ll of the rights, titles, and interest" in Walton's account had been "assigned, endorsed and set over" to Midland Funding, and it sought to collect an outstanding balance of $5, 684.72.

         [¶3] On October 26, 2015, Walton filed a motion to dismiss alleging that the District Court did not have jurisdiction over the matter. He argued that pursuant to language in his credit card agreement, the matter should have instead been brought in "small claims" court.[1] The following day, the court granted the motion. On October 30, Midland filed a motion for findings of fact and conclusions of law and a motion for reconsideration, to which Walton filed no response. Noting that no opposition had been filed, the court granted the motion for reconsideration and denied Walton's motion to dismiss.

         [¶4] The court held a bench trial on February 8, 2016. Walton asked the court to reconsider his motion to dismiss based on lack of jurisdiction, but the court reaffirmed its prior ruling denying the motion. In support of its complaint, Midland called as a witness Cassandra Praught, an employee of Midland Credit Management (MCM). Praught has worked for two years as a "legal specialist and custodian of records" for MCM; her job duties require her to "review legal documents and verify information contained within Midland's business records, as well as testify telephonically."

         [¶5] According to Praught, MCM is a debt servicer and affiliate company of Midland Funding. She explained that Midland is in the business of purchasing distressed debt, including from Barclays Bank. While Midland Funding, which has no employees and is controlled by a board of directors, handles the debt purchasing process, MCM incorporates pertinent documents into its business records. Praught testified that when Midland purchases debt from Barclays, records from the assignment are transferred electronically with an electronic sale file and are uploaded to a secure website. MCM then pulls the records from that website and loads them into its system. Praught has been trained in these "on-boarding processes" and on the computer systems used to hold the records, and she has access to the electronic records for defaulted accounts. She explained that once the documents are integrated into Midland's records, they are password protected and not altered.

         [¶6] Praught testified that part of her job is to verify that information in relevant documents matches the information in Midland's system that it received from Barclays. Praught testified she does not have any particularized knowledge of the internal policies or practices of any of the companies from which Midland purchases debt, but that "Midland buys from reputable sellers and we work with them on a regular basis." She does have "an overview training of the process" by which Midland purchases accounts.

         [¶7] At the trial, Midland sought to introduce in evidence a bill of sale as proof of the assignment of Walton's debt from Barclays to Midland. Praught identified the specific bill of sale between Barclays and Midland and explained that this document was obtained from Barclays on or about the time of sale. She noted that such bills of sale and assignment are always obtained when Midland purchases debt and are transferred to Midland electronically and incorporated into its business records. Praught testified that she knew Walton's account was included in the sale because each included account is listed in the electronic sale file, and when the data is entered into Midland's system, a "field data sheet"[2] is created that includes extracted, isolated account information. A field data sheet for Walton's account was proffered with the bill of sale, and it indicates that it was printed by MCM from the electronic records provided by Barclays in connection with the sale from Barclays to Midland. Praught testified that she personally checked the documents that she testified from at trial against the information in the electronic sale file to verify that the information "matched." Walton objected to the admission of these documents on the basis that they lacked foundation, but the court admitted the records.

         [¶8] Midland also introduced in evidence over Walton's objection Walton's credit card application to Barclays and several of Walton's credit card statements. Praught testified that Midland's regular business practice was to send out a validation letter to each consumer stating the amount owed on the account, the original account number, the original creditor, and a statement that Midland has purchased the account and is attempting to collect the debt. She testified that a copy of this document for Walton's account was stored in the electronic files, and that she had the ability to produce it if requested. She testified that Midland received no reply disputing Walton's account.

         [¶9] Following Praught's testimony, Midland offered in evidence a set of admissions by Walton pursuant to M.R. Civ. P. 36. In the admissions, Walton admitted that he was issued a credit card from Barclays, used the card to purchase goods and services or make cash advances, failed to make payments on the card, and breached the card agreement. He denied that Barclays mailed him an account statement on November 16, 2009, stating the balance due on his account, but he admitted that he had received the statement and that the amount owed according to the statement was $5, 684.72. He denied that the rights to his account were transferred to Midland and that he owed the balance on his account to Midland. Walton presented no witnesses or exhibits at the trial.

         [¶10] The court entered judgment in favor of Midland Funding for $5, 684.72 plus costs of court. ...


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