Opinion
No. CA 12-174
11-14-2012
OZARK CAPITAL CORPORATION APPELLANT v. MARY A. PULLEN APPELLEE
Hosto & Buchan, PLLC, by: Travis A. Gray , for appellant.
APPEAL FROM THE FRANKLIN
COUNTY CIRCUIT COURT,
NORTHERN DISTRICT,
[NO. CV-11-16]
HONORABLE WILLIAM M.
PEARSON, JUDGE
REVERSED AND REMANDED
JOHN B. ROBBINS , Judge
Ozark Capital Corporation appeals from an order entered on November 2, 2011, wherein the trial court ruled that Ozark's business records were inadmissible and dismissed its complaint against appellee Mary A. Pullen. On appeal, Ozark contends that the trial court abused its discretion in excluding its business records, which reflected a credit-card debt owed by Ms. Pullen. We agree that the trial court erred in excluding Ozark's business records from evidence, and we reverse and remand.
This case was initiated on January 24, 2011, when Ozark filed a complaint against Ms. Pullen. The complaint alleged that Ms. Pullen received a credit card from Chase Bank U.S.A., that there was an outstanding past-due balance that remained unpaid despite demands on Ms. Pullen, and that Ozark was the assignee of the account. Ozark claimed that the balance due on the credit card was $1502.74, and it asked for a judgment in that amount plus interest, costs, and attorney's fees.
Ms. Pullen filed a timely answer to Ozark's complaint on March 24, 2011. In her answer, Ms. Pullen asserted that she no longer had the credit card and disposed of it upon complete payment of the account balance. Ms. Pullen stated that she was unaware of any balance due and indicated that she was unaware of any contrary claim until being served with Ozark's complaint.
On September 21, 2011, Ozark filed with the trial court the following "Business Records Affidavit," which was sworn by Crystal Baker on September 15, 2011:
1. My name is Crystal Baker. I am of sound mind, capable of making this affidavit, and personally acquainted with the facts herein stated.Attached to this affidavit were copies of numerous monthly credit-card statements that had purportedly been sent to Ms. Pullen that dated back to November 2007. These records reflected that the balance due as of April 2009 was $1502.74, and that no payments had been received for the past several months. Also in the record is an undated letter from Ozark's counsel addressed to Ms. Pullen that reads: "Enclosed please find a Business Records Affidavit that Plaintiff intends to introduce into evidence at the trial/hearing of the above referenced matter pursuant to Ark. Code Ann. § 16-46-108. The name and employer of the affiant is contained in the affidavit . . . Enclosures: Affidavit with Documents."
2. I am custodian of the records of OZARK CAPITAL CORPORATION. Attached hereto are records from OZARK CAPITAL CORPORATION. These said pages of records are kept by OZARK CAPITAL CORPORATION in the regular course of business, and it was in the regular course of business of OZARK CAPITAL CORPORATION for custodian of the records of OZARK CAPITAL CORPORATION, with knowledge of the act, event, condition, opinion, or diagnosis, recorded to make the record or to transmit information thereof to be included in such record; and the record was made at or near the time or reasonably soon thereafter. The records attached hereto are the original or exact duplicates of the original.
3. After the allowance of all credits, the sum is $1,502.74 plus interest accrued in the amount of $221.82 for a total amount due of $1,724.56 as of September 15, 2011, until the date of judgment.
A bench trial was held on October 6, 2011. At the trial, Ozark moved to introduce into evidence the affidavit of Ms. Baker and attached business records pursuant to the provisions of Ark. Code Ann. § 16-46-108 (Repl. 1999). Subsection (a)(1) of that statute provides:
Any record or set of records or photographically reproduced copies of such records which would be admissible under Rule 803(6) or (7) of the Arkansas Rules of Evidence shall be admissible in evidence in any court in this state upon the affidavit of the person who would otherwise provide the prerequisites of Rule 803(6) or (7) that such records attached to such affidavit were in fact so kept as required by Rule 803(6) or (7), provided, further, that such record or records, along with such affidavit, are filed with the clerk of the court for inclusion with the papers in the cause in which the record or records are sought to be used as evidence at least fourteen (14) days prior to the day upon which the trial of said cause commences, and provided the other parties to said cause are given prompt notice by the party filing same of the filing of such record or records and affidavit, which notice shall identify the name and employer, if any, of the person making the affidavit, and such records shall be made available to the counsel for other parties to the action or litigation for inspection and copying.Ozark indicated that it would not call any witnesses and was relying strictly on the business-records affidavit that was filed with the trial court on September 21, 2011. Ozark represented that a copy of the affidavit was sent to Ms. Pullen on the same day it was filed. The trial court inquired whether Ozark would need a witness to lay a foundation to introduce the documents as an exhibit, but Ozark maintained that the affidavit was self-authenticating and did not require a witness. Ozark proffered the affidavit and attached business records, and the trial court announced that it would take the issue of admissibility under advisement. Ozark then rested its case.
Ms. Pullen, who appeared pro se, testified in her defense. Ms. Pullen testified that she paid off her credit-card balance a couple of years ago. She stated that she pays her bills with money orders and kept the receipts for the credit-card payments she made, but that she lost them in a tornado.
On November 2, 2011, the trial court entered an order dismissing Ozark's complaint with prejudice. The trial court made the following findings:
The Court finds that Plaintiff's proffer of evidence consisting of the business record affidavit is not admissible as no proof was presented at trial, or within the pleadings filed, that the other party, Mary Pullen, was given prompt notice of this filing by the Plaintiff. Ark. Code Ann. § 16-46-108(a)(1). Accordingly, Plaintiff has not met its burden of proof.
In this appeal, Ozark argues that the trial court erred in finding its business records to be inadmissible. We have held that admission of evidence is left to the sound discretion of the trial court, and on appeal, the trial court's ruling will not be reversed absent a manifest abuse of discretion. Metzgar v. Rodgers, 83 Ark. App. 354, 128 S.W.3d 5 (2003). Ozark submits that the trial court's decision to exclude its business records was an abuse of discretio
Ozark contends that its affidavit and attached documentation were admissible under Ark. Code Ann. § 16-46-108. Ozark asserts that it filed the affidavit and records at least fourteen days prior to trial as required by the statute, and further asserts that it gave prompt notice to Ms. Pullen by mailing her a copy of the affidavit and records. Ozark notes that Ms. Pullen failed to object to the business-records affidavit or attached documentation either before or during trial, and that when the trial court raised the issue of admissibility its only concern was whether the records could be introduced without a witness. Ozark complains that at no time was any objection or issue raised regarding whether Ms. Pullen had received prompt notice of the filing of the affidavit.
Ozark compares this case to Discover Bank v. Pommell, 103 Ark. App. 96, 286 S.W.3d 735 (2008). In that case Discover Bank sued Ms. Pommell for a credit-card debt, but its complaint was dismissed with prejudice because the trial court excluded Discover's account manager's affidavit and attached business records on the basis of hearsay. The trial court said that it might have been different if Discover had someone there to testify as to the account statements. We reversed and remanded, holding that Ark. Code Ann. § 16-46-108 was a valid hearsay exception and that it was unnecessary for the keeper of the accounts to testify. We noted that Ms. Pommell made no argument that she did not receive prompt notice of the affidavit.
In the case at bar, as in Discover Bank, supra, Ozark claims that it complied with the provisions of Ark. Code Ann. § 16-46-108, that no witness was necessary to admit the affidavit and documents, and that Ms. Pullen raised no objection about not receiving notice of the affidavit. Furthermore, Ozark asserts that it sent notice to Ms. Pullen at her home address. Therefore, Ozark argues that the trial court's exclusion of the affidavit and records on the grounds that no notice was provided was an abuse of discretion.
We agree that the trial court abused its discretion in excluding the evidence. The form of Ozark's affidavit was in compliance with Ark. Code Ann. § 16-46-108(b) and it was timely filed with the trial court. As asserted by Ozark, Ms. Pullen never claimed a lack of notice below and made no objection whatsoever to the admission of the business records. The trial court sua sponte questioned admissibility on the basis of whether an authenticating witness was necessary, but one was not, see Discover Bank, supra, and that was not the reason for the trial court's decision dismissing Ozark's complaint. We have held that in the exercise of its discretion to control and regulate the conduct of a trial, the court may, on its own motion, exclude or strike evidence that is wholly incompetent or inadmissible for any purpose, even though no objection is made to such evidence. See Skiver v. State, 37 Ark. App. 146, 826 S.W.2d 309 (1992). But in this case the trial court failed to apprise Ozark of any question pertaining to the notice requirement at trial, and there being no objection on that basis Ozark was not made aware that its proof of notice was at issue or that additional proof might be necessary. As in Discover Bank, supra, there was simply no argument raised pertaining to the notice requirement. Under such circumstances, we hold that the trial court erred in excluding the documents on the basis of inadequate notice, and we reverse and remand fo further proceedings. The trial court is instructed on remand to consider the affidavit and business records and to weigh that evidence against Ms. Pullen's testimony in reaching its decision.
Reversed and remanded.
WYNNE, GRUBER, and ABRAMSON, JJ., agree.
PITTMAN and GLADWIN, JJ., dissent.
ROBERT J. GLADWIN, Judge, dissenting. The question presented in this case is whether the trial court, when ruling on an evidentiary question raised by the court, must limit itself to the issue articulated from the bench or may consider all possible reasons to exclude the evidence. I find no law that limits the court's own inquiry, and I believe the majority's opinion unduly restricts trial courts. I, therefore, respectfully dissent.
The majority opinion adequately sets out the facts and our standard of review. We only reverse if we find a manifest abuse of discretion. Because the trial court ultimately made the correct evidentiary ruling, I find no abuse of discretion.
Section 16-46-108 provides for the admission of appellant's statement of account upon the affidavit of the person who would otherwise provide the prerequisites of Arkansas Rule of Evidence 803(6) and (7). I agree that the trial court was incorrect when it suggested that a witness was needed to introduce the affidavit. However, that is not the reason the trial court denied the introduction of the affidavit. It found that no proof was presented at trial, or within the pleadings filed, that appellee, Mary Pullen, was given prompt notice as required by section 16-46-108(a)(1) (Repl. 1999).
At trial, appellant introduced the affidavit, the admission of which was taken under advisement by the trial court, and then rested. Appellee then testified to the merits of the case and was cross-examined. At the conclusion of the trial, the trial court stated:
Well, I'm going to give you a chance to educate me, okay, regarding the business record affidavit, whether you have to have a witness to get the proper foundation laid is the issue here.
Section 16-46-108 provides that the party filing the affidavit must give the other party prompt notice of the filing. Appellant asserts that it gave prompt notice as indicated by the cover letter to the affidavit. This is inadequate. Section 16-46-108(a)(3) states that notice should be deemed to have been promptly given if it is served in the manner contemplated by Rule 27(a)(2) of the Arkansas Rules of Civil Procedure. Rule 27(a)(2) refers to service in the manner provided in Rule 4 of the Rules of Civil Procedure. Rule 4(d)(8)(A)(i) requires that mail be sent return receipt requested and restricted delivery, and there is nothing in the record that shows that this was done. We have only an undated cover letter addressed to appellee. Based on these facts, the trial court was correct in ruling that appellant did not comply with section 16-46-108; but this does not end the analysis.
Regarding appellee's failure to object to the affidavit, the majority cites Skiver v. State, 37 Ark. App. 146, 826 S.W.2d 309 (1992). In that case our court stated:
[W]hile we may agree with appellant that it is improper for a trial judge to needlessly inject himself into the trial, the judge is not merely the chairman of the trial, whoSkiver, 37 Ark. App. at 151, 826 S.W.2d at 312 (internal citations omitted).
must remain mute until a party calls upon him for a ruling; instead he has some responsibility for the proper conduct of the trial and achievement of justice.
Although it is a safer practice for a court to defer action on admission of evidence until a proper objection is made by the party interested in having it excluded, the court is not bound to hear and determine the case on improper evidence. In the exercise of its discretion to control and regulate the conduct of the trial, the court may, on its own motion, exclude or strike evidence which is wholly incompetent or inadmissable for any purpose, even though no objection is made to such evidence. It is the responsibility of the trial judge to maintain an appropriate balance in the performance of his role of impartiality, and a clear transgression of the proper bounds must be demonstrated before an appellate court is justified in reversing a judgment because the trial judge injected himself into the trial.
The majority states that appellant was not made aware that proof of notice was an issue. However, appellant had rested and made it clear that the documents it had proffered constituted all the evidence upon which it was going to rely.
The case Discover Bank v. Pommell, 103 Ark. App. 96, 286 S.W.3d 735 (2008), cited by the majority, is distinguishable because in that case a valid objection was made by the opposing party based on hearsay. Our court in dicta noted, however, that no objection was made about receiving prompt notice. In the present case, the evidentiary question was raised by the trial court. The trial court gave the parties an opportunity to file briefs or educate it, which they declined to do. It makes no sense to say that the trial court must ignore a portion of the statute simply because it did not specifically articulate the issue from the bench when the ultimate issue of admissibility was taken under advisement. I find no law, and the majority cites none, that holds that the trial court is precluded from ruling on its own "objection" on any basis after giving the parties the opportunity to address the issue. It is illogical to rule that a trial court must ignore a portion of a statute because it didn't discuss it while taking the ruling under advisement. Therefore, I respectfully dissent.
PITTMAN, J., joins.
Hosto & Buchan, PLLC, by: Travis A. Gray, for appellant.
One brief only