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Midland funding, LLC v. chau

Court of Appeals of Tennessee, Nashville

June 14, 2019

MIDLAND FUNDING,LLC
v.
THUY CHAU

          Assigned on Briefs May 1, 2019

          Appeal from the Circuit Court for Davidson County No. 16C2095 Hamilton V. Gayden, Jr., Judge

         A creditor filed suit in general sessions court to collect an outstanding debt alleged to be due on a sworn account. The debtor's counsel permitted the creditor to take a default judgment and appealed the judgment to the circuit court. In circuit court, the debtor filed a motion to strike three affidavits filed by the creditor. Later, the debtor filed another motion to strike the creditor's affidavits and a motion to dismiss for improper service of process. The trial court denied the debtor's motions to strike and to dismiss and entered judgment for the creditor in the amount of the claimed debt. On appeal, the debtor argues that the trial court erred in denying her motions and in admitting into evidence the documents by which the creditor proved the debt. We affirm the judgment of the trial court.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed

          James E. Kirby, Nashville, Tennessee, for the appellant, Thuy Chau.

          Sharon Kim, Knoxville, Tennessee, for the appellee, Midland Funding, LLC.

          Andy D. Bennett, J., delivered the opinion of the Court, in which John W. McClarty and Carma D. McGee, JJ., joined.

          OPINION

          ANDY D. BENNETT, JUDGE

         Factual and Procedural Background

         The dispute at issue in this appeal began on March 21, 2014, when Midland Funding, LLC ("Midland"), as successor in interest to Chase Bank USA, N.A. ("Chase"), filed a civil warrant in general sessions court against Thuy Chau to collect an outstanding debt alleged to be due on a sworn account in the amount of $12,467.88. The summons was served by private process on April 28, 2014. Attached to the civil warrant was the affidavit of Tanya Johnson, an officer of Midland, who testified to Midland's maintenance of account records and to her review of the records pertaining to the account at issue in this case.

         On June 27, 2016, Midland filed a Notice of Intent to Introduce Business Records Pursuant to Tenn. R. Evid. 803(6) and 902(11) with the following documents attached: (1)the certification of Sheri Meline to the accuracy of the records; (2) a May 14, 2012 bill of sale between Equable Ascent Financial, LLC, and Midland; (3) a portion of the list of receivables referenced in the bill of sale including the Chase account at issue; and (4) a bank statement for the Chase bank account at issue for July 13, 2009, through August 12, 2009, showing a balance of $12,467.88. On August 4, 2016, Ms. Chau's counsel permitted Midland to take a judgment by default in the general sessions court.

         Ms. Chau appealed the general sessions judgment to the circuit court. On June 16, 2017, Midland filed a second notice to introduce business records with similar documents attached; the certifying affidavit was completed by a different Midland employee, Mickaela Johnson. On August 21, 2017, Ms. Chau filed a motion to strike Midland's affidavits from Tanya Johnson, Sheri Meline, and Mickaela Johnson. Midland filed a third notice to introduce business records on January 16, 2018, with the following documents attached: (1) the certification of Emily Walker to the accuracy of the records; (2)the May 14, 2012 bill of sale between Equable Ascent Financial, LLC, and Midland; (3) a May 8, 2009 bill of sale between Chase and Hilco Receivables, LLC; (4) an Affidavit of Sale of Account by Original Creditor dated March 29, 2011; (5) a certification by the Delaware Secretary of State regarding the certificate of merger of Hilco Receivables, LLC, and Equable Ascent Financial, LLC; (6) a portion of the list of receivables referenced in the bill of sale; and (7) a bank statement for the Chase bank account for July 13, 2009, through August 12, 2009.

         Ms. Chau filed a second motion to strike Midland's affidavits on June 22, 2018, again requesting that the court strike the affidavits of Tanya Johnson, Sheri Meline, and Mickaela Johnson. On that same day, Ms. Chau filed a motion to dismiss for improper service of process. Midland opposed both of these motions. On July 2, 2018, Midland filed a notice of withdrawal of the certifications of Sheri Meline and Mickaela Johnson.

         On the day of trial, July 9, 2018, Ms. Chau filed a sworn statement denying that she owed the requested sum. The court denied Ms. Chau's motion to dismiss for improper service on the ground that Ms. Chau, through counsel, had "made one or more general appearances" without raising the issue and had, therefore, waived the objection. The trial court determined that Ms. Chau's motion to strike Midland's affidavits was irrelevant or moot. Furthermore, the court noted that Ms. Chau did not object to the affidavit of Emily Walker, and the documents she certified were sufficient to prove Ms. Chau's indebtedness and to meet Midland's burden of proof. The court entered judgment against Ms. Chau in the amount of $12,467.88 plus costs.

         Ms. Chau filed a notice of appeal on August 23, 2018. A statement of the evidence filed by Ms. Chau was denied by the trial court. The trial court prepared a document entitled, "Findings of Fact and Conclusions of Law and Statement of Evidence," which was filed on December 4, 2018, and submitted with the record on appeal.

         On appeal, Ms. Chau raises three issues: (1) whether the trial court erred in finding that she waived the issue of insufficient service of process; (2) whether the trial court erred in admitting the affidavit of Emily Walker into evidence; and (3) whether the trial court erred in admitting business records into evidence pursuant to Tenn. Code Ann. § 47-22-301 and the Rules of Evidence.

         Standard of Review

         With a bench trial, our review is de novo upon the record, accompanied by a presumption of correctness of the trial court's findings of fact, unless the preponderance of the evidence is otherwise. Tenn. R. App. P. 13(d); Gregg v. Estate of Cupit, No. M2018-00379-COA-R3-CV, 2018 WL 5733289, at *3 (Tenn. Ct. App. Oct. 31, 2018); Nashville Ford Tractor, Inc. v. Great Am. Ins. Co., 194 S.W.3d 415, 424-25 (Tenn. Ct. App. 2005). We afford the trial court's credibility determinations great deference because the trial court is able to assess the witnesses' demeanor as they testify. Wells v. Tenn. Bd. of Regents, 9 S.W.3d 779, 783 (Tenn. 1999). We review the trial court's legal conclusions de novo with no presumption of correctness. Nashville Ford Tractor, 194 S.W.3d at 425.

         We review a trial court's decisions regarding the admission or exclusion of evidence under an abuse of discretion standard. Mercer v. Vanderbilt Univ., Inc., 134 S.W.3d 121, 131 (Tenn. 2004). A trial court abuses its discretion "when it 'applie[s] an incorrect legal standard, or reache[s] a decision which is against logic or reasoning that cause[s] an injustice to the party complaining.'" Eldridge v. Eldridge, 42 S.W.3d 82, 85 (Tenn. 2001) (quoting State v. Shirley, 6 S.W.3d 243, 247 (Tenn. 1999)). Under the abuse of discretion standard, we are required to uphold the trial court's ruling "as long as reasonable minds could disagree about its ...


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