Washington v. Yellowfin Loan Servicing Corp.

• Decision Date: 03 November 2022
• Docket Number: 02-21-00215-CV
• Parties: Demetria Washington, Appellant v. Yellowfin Loan Servicing Corp., as the Successor in Interest to Option One Mortgage Corporation, Appellee
• Court: Texas Court of Appeals

Demetria Washington, Appellant v. Yellowfin Loan Servicing Corp., as the Successor in Interest to Option One Mortgage Corporation, Appellee

No. 02-21-00215-CV

Court of Appeals of Texas, Second District, Fort Worth

November 3, 2022

On Appeal from County Court at Law No. 3 Tarrant County, Texas Trial Court No. 2020-003712-3

Before Sudderth, C.J.; Birdwell and Bassel, JJ.

MEMORANDUM OPINION

Dabney Bassel, Justice

I. Introduction

This is an appeal from a suit to recover the balance due on a second lien purchase money note. Following a bench trial, the trial court awarded Appellee Yellowfin Loan Servicing Corp. a judgment against Appellant Demetria Washington for $22,517.11, as well as attorney's fees. In eight issues Washington argues that the debt was not properly accelerated due to notice not being sent in the required manner and that the trial court therefore erred by awarding damages, that the trial court abused its discretion by overruling her objections to the notice documents, and that the trial court abused its discretion by admitting testimony about the notice documents and the amount due. Because we hold that none of Washington's issues have merit, we affirm.

II. Factual Background^[1]

At the bench trial, Matthew Miller, the President of Yellowfin, testified that he is the custodian of records and that he is familiar with the manner in which records are created and maintained by Yellowfin. He explained that he had executed a business-records affidavit and that the records attached to the business-records affidavit were contained within Yellowfin's business records. The business-records affidavit and attached business records were included in Plaintiff's Exhibit No. 1, which was the sole exhibit admitted during the bench trial. The business records included the following documents:

• "Purchase Money Note (Fixed Rate - Second Lien)";

• various allonges to the note;

• "Purchase Money Deed of Trust";

• "Assignment of Deed of Trust";

• "Loan Amortization Schedule";

• a letter from Yellowfin to Washington with the heading "Notice Under Fair Debt Collection Practices Act";

• a document from Hatteras-a vendor that generated documents on Yellowfin's behalf-stating that it had received a request from its client "SFYELL10" to generate a demand letter to Washington on January 14, 2020;

• a letter from Yellowfin to Washington with the heading "Notice of Intent to Accelerate and Right to Cure";

• a document from Hatteras stating that it had received a request from its client "SFYELL10" to generate an intent letter to Washington on February 25, 2020;

• a letter from Yellowfin to Washington with the heading "RE: Notice of Acceleration"; and

• a document from Hatteras stating that it had received a request from its client "SFYELL10" to generate an acceleration notice to Washington on March 25, 2020.

The three Hatteras documents concluded with "I certify that the above is true and correct to the best of my knowledge" and a line stating, "Signature of Hatteras, Inc. Representative."

Before the exhibit was admitted, Washington asked and received permission to take Miller on voir dire. Washington questioned Miller about the three notice letters, and Miller explained that the notice letters were generated and sent by his letter vendor Hatteras. Miller said that he gives Hatteras "the information and the letter[,] and they mail the letter." He stated that he had "included an affidavit" to reflect that the notice of acceleration had been sent. Miller's reference to the Hatteras documents as "affidavits" caused some confusion, but Yellowfin's counsel clarified that the Hatteras documents were actually certifications.^[2] Washington objected to the admission of the exhibit, arguing that the notice letters were generated by a third party; that the business records were untrustworthy and constituted hearsay; and that if they were admissible, they should be given no probative weight.

The trial court stated,

I think what you're [Washington's counsel] arguing really goes to the weight and not the admissibility of the document because --

. . . .

. . . [Miller is] saying, ["T]hese are in my business records, I asked these people to send a letter, [and] they told me they did.["] Now, whether or not the trier of fact believes that they did based on [Miller's] statement to the best of [his] knowledge . . . goes to the weight that a finder of fact gives to these documents. But I don't think it goes to the fact that they can be . . . admitted.

The trial court overruled Washington's objections and admitted the exhibit.

Throughout the bench trial, although Washington did not testify, her counsel argued that Yellowfin had not proved that it had sent notice of intent to accelerate to Washington. The trial court, however, disagreed and concluded, "So it seems like certainly by the time [Washington] was served she had notice. But I also have documents that indicate that [Yellowfin] transmitted the notice. And . . . more likely than not, I believe the notice was sent and the acceleration as well."

III. Analysis^[3]

A. Evidentiary Challenges - the Admissibility of and the Weight to be Given to the Notice Documents and the Hatteras Documents, as well as to the Testimony on Such Documents

In her third, fourth, fifth, and sixth issues, Washington challenges the following documents that were admitted into evidence: "Notice Under Fair Debt Collection Practices Act," "Notice of Intent to Accelerate and Right to Cure," and "Notice of Acceleration" (collectively, the Notice Documents). Washington contends that the trial court abused its discretion by admitting the Notice Documents, by giving the Notice Documents any probative value, by overruling her hearsay objection to the Notice Documents, and by overruling her lack-of-trustworthiness objection to the Notice Documents. In her seventh issue, Washington argues that the trial court abused its discretion by overruling her lack-of-personal-knowledge objections to Miller's testimony about the Notice Documents. We set forth the standard of review applicable to these issues and then address and reject each of Washington's arguments.

We review a trial court's evidentiary rulings for abuse of discretion. Owens- Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998). A trial court abuses its discretion when it acts without regard for any guiding principles. City of Brownsville v. Alvarado, 897 S.W.2d 750, 754 (Tex. 1995). We must uphold the trial court's evidentiary ruling if there is any legitimate basis for the ruling. State Bar of Tex. v. Evans, 774 S.W.2d 656, 658 n.5 (Tex. 1989).

1. The Notice Documents are admissible under the business- records exception to the hearsay rule.

In Washington's third issue, she generally challenges the trial court's admission of the Notice Documents. Because Washington failed to delineate her arguments in the argument section of her brief, it is unclear what her specific argument is as to the Notice Documents' admissibility. She includes one statement that the Notice Documents "fail to meet the business[-]records predicate of TRE 902(10) and TRE 803[](6) as their forwarding to the maker of the documents has been disclaimed."

Additionally, in her fifth issue, Washington argues that the trial court abused its discretion by overruling her hearsay objection to the Notice Documents. We address these issues together and conclude that the Notice Documents were properly admitted under the business-records exception to the hearsay rule.

Properly authenticated records of regularly conducted business activity can be admitted into evidence as an exception to the hearsay rule. Tex. R. Evid. 803(6). The law on the admissibility of business records was succinctly stated by the First Court of Appeals as follows:

Under Rule 902(10), business records are self-authenticating and require no extrinsic evidence of authenticity if they meet the requirements of Rule 803(6) and are accompanied by an affidavit that complies with subparagraph (B) of the rule and any other requirements of law. Tex. R. Evid. 902(10). Subparagraph (B) provides a template for a sufficient affidavit, which enumerates the elements of Rule 803(6), discussed above. Tex. R. Evid. 902(10)(B).

Rule 902(10)(B) "does not require the affiant to identify the particular person who originally created the business record in order to satisfy the authentication predicate." H2O Sols., Ltd. v. PM Realty Grp., LP, 438 S.W.3d 606, 622 (Tex. App.-Houston [1st Dist.] 2014, pet. denied). "Testimony by a witness or affiant identifying the exhibits as the business records of the proponent of the evidence 'is sufficient evidence to satisfy the authentication requirement of Rule 901(a), regardless of whether the witness had personal knowledge of the contents of this evidence.'" Id. (quoting Concept Gen. Contracting, Inc. v. Asbestos Maint. Servs., Inc., 346 S.W.3d 172, 181 (Tex. App.-Amarillo 2011, pet. denied)[] (brackets omitted)[)].

Savoy v. Nat'l Collegiate Student Loan Tr. 2005-3, 557 S.W.3d 825, 834 (Tex. App.- Houston [1st Dist.] 2018, no pet.); see also Simien v. Unifund CCR Partners, 321 S.W.3d 235, 242 (Tex. App.-Houston [1st Dist.] 2010, no pet.) (op. on reh'g) (holding that business records that were generated by a third party were admissible with a standard business-records affidavit).

Here the crux of Washington's arguments takes aim at the admissibility of the Notice Documents while ignoring the business-records affidavit to which they were attached and under which they were admitted. Washington's argument-that "their forwarding [of the Notice Documents] to the maker of the documents has been disclaimed"-appears to be a reference to when Miller was asked if he had sent out the notice of acceleration...