Holmes v. Nat'l Collegiate Student Loan Trust

Decision Date27 February 2018
Docket NumberCourt of Appeals Case No. 87A05–1711–CC–2517
Citation94 N.E.3d 722
Parties Alexander HOLMES, Appellant–Defendant, v. NATIONAL COLLEGIATE STUDENT LOAN TRUST, Appellee–Plaintiff
CourtIndiana Appellate Court

Attorney for Appellant : Thomas G. Bradburn, Bradburn Law Firm, Noblesville, Indiana

Attorneys for Appellee : Seth Row, Daniel Bogatz, Javitch Block LLC, Cleveland, Ohio

Crone, Judge.

Case Summary

[1] Alexander Holmes appeals the trial court's entry of summary judgment in favor of National Collegiate Student Loan Trust ("NCSLT"). Concluding that Holmes has met his burden to persuade us that the grant of summary judgment was erroneous, we reverse and remand.

Facts and Procedural History

[2] On November 30, 2006, Holmes cosigned a Loan Request/Credit Agreement with Charter One Bank on behalf of his son, Nicholas Holmes. The loan was an education loan for Nicholas to attend the University of Southern Indiana from August 2006 through May 2007. In March 2007, Charter One Bank sold a pool of student loans to National Collegiate Funding LLC, which in turn sold the loans to NCSLT. This pool of loans allegedly contained Holmes's specific loan account.

[3] On August 15, 2016, NCSLT filed a complaint against Holmes alleging that it was the owner of Holmes's account and that Holmes owed $16,578.60 plus accrued interest. Holmes filed his answer and affirmative defenses, including the defense that NCSLT lacked standing to bring its claim.

[4] On March 22, 2017, NCSLT filed a motion for summary judgment and designation of evidence. In response, Holmes asserted that NCSLT failed to prove that it owned his account and further that much of NCSLT's designated evidence was inadmissible pursuant to Indiana Trial Rule 56(E). Following a hearing, the trial court entered summary judgment in favor of NCSLT. The court ordered Holmes to pay NCSLT $18,183.26 plus interest and costs. Holmes filed a motion to correct error, which the trial court denied. This appeal ensued.

Discussion and Decision

[5] Holmes appeals the trial court's entry of summary judgment in favor of NCSLT. Summary judgment is appropriate only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Wagner v. Yates , 912 N.E.2d 805, 808 (Ind. 2009). "The party moving for summary judgment has the burden of making a prima facie showing that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Goodwin v. Yeakle's Sports Bar & Grill, Inc. , 62 N.E.3d 384, 386 (Ind. 2016). Once that showing is made, the burden shifts to the nonmovant to come forward with contrary evidence showing the existence of an issue for the trier of fact. Hughley v. State , 15 N.E.3d 1000, 1003 (Ind. 2014). In determining whether the moving party is entitled to summary judgment, "[w]e consider only those materials properly designated pursuant to Trial Rule 56 and construe all factual inferences and resolve all doubts ... in favor of the non-moving party." Young v. Hood's Gardens, Inc. , 24 N.E.3d 421, 424 (Ind. 2015).

[6] Holmes contends that NCSLT has failed to establish the absence of a genuine issue of material fact. Particularly, Holmes argues that much of NCSLT's designated evidence is inadmissible hearsay, and thus the evidence presented is insufficient to make a prima facie showing that NCSLT is entitled to summary judgment on its claim against Holmes. We agree.

[7] To make its prima facie case in support of summary judgment, NCSLT was required to show that Holmes executed a contract for the student loan with Charter One Bank, that NCSLT was the assignee and is now the owner of that debt, and that Holmes owed the original lender, Charter One Bank, the amount alleged. See Seth v. Midland Funding, LLC , 997 N.E.2d 1139, 1140 (Ind. Ct. App. 2013) (discussing designated evidence necessary to make prima facie case in support of summary judgment in favor of creditor claiming breach of credit card contract). In support of summary judgment, NCSLT designated the affidavit of Jacqueline Jefferis, an employee of Transworld Systems, Inc. ("TSI"), the loan subservicer for U.S. Bank, National Association, the "Special Servicer" of NCSLT. Appellant's App. Vol. 2 at 14. Jefferis stated that she was the "designated custodian of records" for TSI. She stated that she was "familiar with the process by which TSI received prior account records," that it was "TSI's regularly-conducted business practice to incorporate prior loan records ... into TSI's business records," and therefore she was competent and authorized to testify regarding Holmes's specific loan and "the business records attached" to the affidavit. Id. The purpose of the Jefferis affidavit was to authenticate and lay the foundation for the admissibility of several attached documents, the most relevant for our review being the loan contract between Holmes and Charter One Bank, and the schedule of pooled loans transferred from Charter One Bank to National Collegiate Funding LLC, before then being sold and assigned to NCSLT.1

[8] Indiana Trial Rule 56(E) provides that supporting and opposing affidavits on summary judgment "shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." The requirements of Trial Rule 56(E) are mandatory, and a court considering a motion for summary judgment should disregard inadmissible information contained in supporting or opposing affidavits. Seth , 997 N.E.2d at 1143. Inadmissible hearsay contained in an affidavit may not be considered in ruling on a motion for summary judgment. Breining v. Harkness , 872 N.E.2d 155, 158 (Ind. Ct. App. 2007), trans. denied (2008).

[9] NCSLT admits that the Jefferis affidavit and supporting documents are hearsay.2 However, NCSLT argues that the material offered is admissible because it falls within the business records exception to the hearsay rule. Specifically, Indiana Evidence Rule 803(6) provides that records of a regularly conducted business activity are not excluded by the rule against hearsay if: the record was made at or near the time by—or from information transmitted by—someone with knowledge; the record was kept in the course of a regularly conducted activity of a business; making the record was a regular practice of that...

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