THIRD DIVISION MIKELL, P. J., MILLER and BLACKWELL, JJ.
NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. (Court of Appeals Rule 4 (b) and Rule 37 (b), February 21, 2008) http://www.gaappeals.us/rules/
June 15, 2012
In the Court of Appeals of Georgia A12A0343. ANGEL BUSINESS CATALYSTS, LLC et al. v. BANK OF THE OZARKS.
MILLER, Judge.
Bank of the Ozarks (the “Bank”), as successor to the original lender, pursued
an action to recover the outstanding balance on a promissory note guaranteed by
Charles Merrill, III, Lee D. Gaskins, III, and Eric Fitchner (the “Guarantors”).1 The
Bank moved for summary judgment, which the trial court granted. On appeal, the
Guarantors contend that the trial court erred in granting the Bank’s motion for
summary judgment because the Bank failed to show that a supporting affidavit and
the attached documents were admissible as business records, and that the attached
1 The complaint also named as a defendant Angel Business Catalysts, LLC, which had executed the underlying note. The Bank received a default judgment against Angel Business Catalysts. The Guarantors do not challenge the entry of the default judgment against Angel Business Catalysts. documents did not establish the amounts they owed. For the reasons set forth below,
we affirm.
“Summary judgment is proper when there is no genuine issue of material fact
and the movant is entitled to judgment as a matter of law. We review the grant of
summary judgment de novo, construing the evidence in favor of the nonmovant. “
(Citation and punctuation omitted.) Kensington Partners v. Beal Bank Nevada, 311
Ga. App. 196 (715 SE2d 491) (2011).
So viewed, the evidence shows that on October 4, 2006, Angel Business
Catalysts executed a promissory note in favor of Unity National Bank (“Unity”), in
the principal sum of $440,943. The Guarantors executed individual guarantees of the
note. In March 2010, after Angel Business Catalysts failed to meet its repayment
obligations under the note, Unity filed suit against Angel Business Catalysts and the
Guarantors to recover the outstanding balance on the note. Unity was subsequently
closed, and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as
receiver for Unity.
Through a purchase agreement, FDIC assigned its interest in the note, the
individual guarantees, and other related loan agreements to the Bank. The Bank was
subsequently substituted as the party plaintiff. Thereafter, the Bank moved for
2 summary judgment. In support of its summary judgment motion, the Bank submitted
the affidavit of its special assets manager, which set forth the parties’ contracts, debt
obligations, and amounts due. Following a hearing, the trial court granted the Bank’s
motion.
1. The Guarantors contend that the trial court erred in granting the Bank’s
motion for summary judgment because the Bank failed to show that the affidavit and
the attached documents were admissible as business records . We disagree.
Creating an exception to the hearsay rule, the Business Records Act provides: Any writing or record . . . made as a memorandum or record of any act, transaction, occurrence, or event shall be admissible in evidence in proof of the act, transaction, occurrence, or event, if the trial judge shall find that it was made in the regular course of any business and that it was the regular course of such business to make the memorandum or record at the time of the act, transaction, occurrence, or event or within a reasonable time thereafter.
(Punctuation omitted.) OCGA § 24-3-14 (b).
However, before such a writing or record is admissible, a foundation must be laid through the testimony of a witness who is familiar with the method of keeping records and who can testify thereto and to facts which show that the entry was made in the regular course of a business at the time of the event or within a reasonable time thereafter.
3 (Footnote omitted.) Ishak v. First Flag Bank, 283 Ga. App. 517, 519 (642 SE2d 143)
(2007). “A trial court’s decision to admit evidence as an exception to the hearsay rule
will not be disturbed absent an abuse of discretion.” (Footnote omitted.) Id.
Here, the Bank’s special assets manager, who previously held the same position
for Unity, averred that he was the custodian of records for the Bank; that the business
records relating to the note were transferred and delivered to the Bank from the FDIC
as the receiver for Unity; that these documents included the original note and
individual guaranties; that the records were obtained in the regular course of business;
and that the Bank relied upon information provided by the FDIC regarding the
payment history of the note. Although the Guarantors claimed that any documents
transferred to the Bank were inadmissible since the special assets manager failed to
state that he had personal knowledge as to how the documents were prepared and
maintained by Unity,2 “where routine, factual documents made by one business are
2 Contrary to the Guarantors’ claim, this Court’s decision in Arrow Financial Svcs.v. Wright, 311 Ga. App. 319 (715 SE2d 725) (2011), does not squarely support their argument that the Bank’s affidavit was inadmissible since the affiant did not state that he had personal knowledge of the manner in which Unity’s documents were created. In Arrow, the trial court found that the witness did not have the requisite personal knowledge to authorize admission of documents sent from the original lender to the assignee regarding the debt’s origins. Arrow, supra, 311 Ga. App. at 319-320. Although the assignee appealed the trial court’s ruling, this Court did not reach the issue of whether the trial court erred by excluding the documents as
4 transmitted and delivered to a second business and there entered in the regular course
of business of the receiving business, such documents are admissible under OCGA
§ 24-3-14 (b).” (Footnote and punctuation omitted.) Boyd v. Calvary Portfolio Svcs.,
285 Ga. App. 390, 391 (1) (646 SE2d 496) (2007). Interpreting and applying OCGA
§ 24-3-14 (b) liberally,3 we hold that the Bank established that the affidavit and
attached exhibits were admissible as business records. See id. at 391-392 (1)
(business documents attached to affidavit, which stated that the business acquired
documents through purchase in regular course of its business, were admissible);
Walter R. Thomas Assoc. v. Media Dynamite, 284 Ga. App. 413, 416 (1) (a) (643
SE2d 883) (2007) (invoices sent to company can be considered the company’s
business record if kept in the ordinary course of business, notwithstanding absence
of testimony from a representative who prepared the invoice, since the company’s
president testimony was sufficient to lay foundation). Consequently, the trial court
did not abuse its discretion in admitting these documents pursuant to the Business
Records Act.
business records. Id. at 322 (1). 3 “[T]he General Assembly has instructed that the Business Records Act ‘shall be liberally interpreted and applied.’” (Footnote and punctuation omitted.) Ishak, supra, 283 Ga. App. at 519; see also OCGA § 24-3-14 (d).
5 2. The Guarantors next contend that the documents attached to the affidavit did
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THIRD DIVISION MIKELL, P. J., MILLER and BLACKWELL, JJ.
NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. (Court of Appeals Rule 4 (b) and Rule 37 (b), February 21, 2008) http://www.gaappeals.us/rules/
June 15, 2012
In the Court of Appeals of Georgia A12A0343. ANGEL BUSINESS CATALYSTS, LLC et al. v. BANK OF THE OZARKS.
MILLER, Judge.
Bank of the Ozarks (the “Bank”), as successor to the original lender, pursued
an action to recover the outstanding balance on a promissory note guaranteed by
Charles Merrill, III, Lee D. Gaskins, III, and Eric Fitchner (the “Guarantors”).1 The
Bank moved for summary judgment, which the trial court granted. On appeal, the
Guarantors contend that the trial court erred in granting the Bank’s motion for
summary judgment because the Bank failed to show that a supporting affidavit and
the attached documents were admissible as business records, and that the attached
1 The complaint also named as a defendant Angel Business Catalysts, LLC, which had executed the underlying note. The Bank received a default judgment against Angel Business Catalysts. The Guarantors do not challenge the entry of the default judgment against Angel Business Catalysts. documents did not establish the amounts they owed. For the reasons set forth below,
we affirm.
“Summary judgment is proper when there is no genuine issue of material fact
and the movant is entitled to judgment as a matter of law. We review the grant of
summary judgment de novo, construing the evidence in favor of the nonmovant. “
(Citation and punctuation omitted.) Kensington Partners v. Beal Bank Nevada, 311
Ga. App. 196 (715 SE2d 491) (2011).
So viewed, the evidence shows that on October 4, 2006, Angel Business
Catalysts executed a promissory note in favor of Unity National Bank (“Unity”), in
the principal sum of $440,943. The Guarantors executed individual guarantees of the
note. In March 2010, after Angel Business Catalysts failed to meet its repayment
obligations under the note, Unity filed suit against Angel Business Catalysts and the
Guarantors to recover the outstanding balance on the note. Unity was subsequently
closed, and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as
receiver for Unity.
Through a purchase agreement, FDIC assigned its interest in the note, the
individual guarantees, and other related loan agreements to the Bank. The Bank was
subsequently substituted as the party plaintiff. Thereafter, the Bank moved for
2 summary judgment. In support of its summary judgment motion, the Bank submitted
the affidavit of its special assets manager, which set forth the parties’ contracts, debt
obligations, and amounts due. Following a hearing, the trial court granted the Bank’s
motion.
1. The Guarantors contend that the trial court erred in granting the Bank’s
motion for summary judgment because the Bank failed to show that the affidavit and
the attached documents were admissible as business records . We disagree.
Creating an exception to the hearsay rule, the Business Records Act provides: Any writing or record . . . made as a memorandum or record of any act, transaction, occurrence, or event shall be admissible in evidence in proof of the act, transaction, occurrence, or event, if the trial judge shall find that it was made in the regular course of any business and that it was the regular course of such business to make the memorandum or record at the time of the act, transaction, occurrence, or event or within a reasonable time thereafter.
(Punctuation omitted.) OCGA § 24-3-14 (b).
However, before such a writing or record is admissible, a foundation must be laid through the testimony of a witness who is familiar with the method of keeping records and who can testify thereto and to facts which show that the entry was made in the regular course of a business at the time of the event or within a reasonable time thereafter.
3 (Footnote omitted.) Ishak v. First Flag Bank, 283 Ga. App. 517, 519 (642 SE2d 143)
(2007). “A trial court’s decision to admit evidence as an exception to the hearsay rule
will not be disturbed absent an abuse of discretion.” (Footnote omitted.) Id.
Here, the Bank’s special assets manager, who previously held the same position
for Unity, averred that he was the custodian of records for the Bank; that the business
records relating to the note were transferred and delivered to the Bank from the FDIC
as the receiver for Unity; that these documents included the original note and
individual guaranties; that the records were obtained in the regular course of business;
and that the Bank relied upon information provided by the FDIC regarding the
payment history of the note. Although the Guarantors claimed that any documents
transferred to the Bank were inadmissible since the special assets manager failed to
state that he had personal knowledge as to how the documents were prepared and
maintained by Unity,2 “where routine, factual documents made by one business are
2 Contrary to the Guarantors’ claim, this Court’s decision in Arrow Financial Svcs.v. Wright, 311 Ga. App. 319 (715 SE2d 725) (2011), does not squarely support their argument that the Bank’s affidavit was inadmissible since the affiant did not state that he had personal knowledge of the manner in which Unity’s documents were created. In Arrow, the trial court found that the witness did not have the requisite personal knowledge to authorize admission of documents sent from the original lender to the assignee regarding the debt’s origins. Arrow, supra, 311 Ga. App. at 319-320. Although the assignee appealed the trial court’s ruling, this Court did not reach the issue of whether the trial court erred by excluding the documents as
4 transmitted and delivered to a second business and there entered in the regular course
of business of the receiving business, such documents are admissible under OCGA
§ 24-3-14 (b).” (Footnote and punctuation omitted.) Boyd v. Calvary Portfolio Svcs.,
285 Ga. App. 390, 391 (1) (646 SE2d 496) (2007). Interpreting and applying OCGA
§ 24-3-14 (b) liberally,3 we hold that the Bank established that the affidavit and
attached exhibits were admissible as business records. See id. at 391-392 (1)
(business documents attached to affidavit, which stated that the business acquired
documents through purchase in regular course of its business, were admissible);
Walter R. Thomas Assoc. v. Media Dynamite, 284 Ga. App. 413, 416 (1) (a) (643
SE2d 883) (2007) (invoices sent to company can be considered the company’s
business record if kept in the ordinary course of business, notwithstanding absence
of testimony from a representative who prepared the invoice, since the company’s
president testimony was sufficient to lay foundation). Consequently, the trial court
did not abuse its discretion in admitting these documents pursuant to the Business
Records Act.
business records. Id. at 322 (1). 3 “[T]he General Assembly has instructed that the Business Records Act ‘shall be liberally interpreted and applied.’” (Footnote and punctuation omitted.) Ishak, supra, 283 Ga. App. at 519; see also OCGA § 24-3-14 (d).
5 2. The Guarantors next contend that the documents attached to the affidavit did
not establish the debts owed by each individual. Their contention is without merit.
By using an affidavit to establish the balance due on an agreement, the Bank
was “required to attach to the affidavit copies of the records relied upon and referred
to therein that were pertinent to [the Guarantors’] debt.” (Footnote and punctuation
omitted.) Melman v. FIA Card Svs., 312 Ga. App. 270, 272-273 (2) (718 SE2d 107)
(2011).
Here, the special assets manager’s affidavit referred to payoff statements listing
the total amount owed by each of the Guarantors. These payoff statements, which
were attached as exhibits to the affidavit, qualified as business records since the
special assets manger testified that he had personal knowledge that the statements
were made in the regular course of the Bank’s business. Cf. Ishak, supra, 283 Ga.
App. at 519 (loan history report admissible as a business record where bank president
averred that, based upon his personal knowledge, the report was maintained in the
ordinary course of business); Wickes Lumber v. Energy Efficient Homes, 157 Ga.
App. 303, 303 (1) (277 SE2d 298) (1981) (summary account statement was
admissible where company’s accounts receivable clerk identified it as a business
record).
6 [Since] the [payoff statements] conform[ed] to the provisions of the [Business Records Act], they themselves stand as a witness of the correctness of the account and ma[d]e a prima facie case which shift[ed] the burden of proof to the defendant debtor to show the items contained in the records, or some of them, [were] not correct.
(Footnote and punctuation omitted.) Melman, supra, 312 Ga. App. at 273-274 (2); cf.
Kensington, supra, 311 Ga. App. at 198-199 (3) (affidavits which provided that bank
received loan and related documents, including guaranties, from FDIC in normal
course of business, and which attached as an exhibit the loan payment history, were
sufficient to set forth debt and interest due).
Once the Bank made its prima facie case of their entitlement to recover against
the Guarantors, the burden then shifted to the Guarantors to “come forward with
rebuttal evidence. To do so, the [Guarantors] must set forth specific facts showing the
existence of a genuine issue of disputed fact.” (Citations and punctuation omitted.)
Dawson Pointe, LLC v. SunTrust Bank, 312 Ga. App. 338 (718 SE2d 570) (2011).
The Guarantors, who admitted guaranteeing a certain amount, presented no evidence
that the items contained in the payoff statement were incorrect, or that there was a
genuine issue to be tried. Since the Guarantor’s failure to come forward with evidence
to create a genuine issue of material fact as to the amount of debts owed, the trial
court properly granted summary judgment to the Bank. Cf. Melman, supra, 312 Ga.
7 App. at 273-274 (2) (summary judgment properly awarded to creditor when debtor
failed to introduce evidence rebutting creditor’s affidavit and an attached business
record establishing debt owed); Kensington, supra, 311 Ga. App. at 199 (3) (summary
judgment properly awarded to creditor where debtor presented no evidence
contradicting affidavits and business records that established debt owed); Gerben v.
Beneficial Ga., 283 Ga. App. 740, 742-743 (642 SE2d 405) (2007) (affidavit and
documents named in affidavit and included in record were sufficient evidence to
support creditor’s motion for summary judgment).
Judgment affirmed. Mikell, P. J., and Blackwell, J., concur.