La' Shaun Clark v. Jefferson Capital Systems, LLC as Assignee of One Main Financial Group, LLC

• Court: Court of Appeals of Georgia
• Decided: January 28, 2025
• Docket: A24A1225
• Status: Published

Opinion

SECOND DIVISION DAVIS, J., MARKLE and LAND, 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. https://www.gaappeals.us/rules

January 28, 2025

In the Court of Appeals of Georgia A24A1225. CLARK v. JEFFERSON CAPITAL SYSTEMS, LLC.

DAVIS, Judge.

In May 2023, Jefferson Capital Systems, LLC (“Jefferson Capital”) filed a suit

on account against La’Shaun Clark in magistrate court and obtained a money

judgment against her. Clark filed a petition for review in superior court, and the

superior court affirmed the magistrate court’s judgment. Clark filed the instant appeal

after this Court granted her application for discretionary review. For the reasons

discussed below, we affirm the superior court’s decision.

On appellate review of a bench trial, “we construe the evidence in favor of the

judgment.” (Citation and punctuation omitted.) Braswell v. Benton, 351 Ga. App. 372

(830 SE2d 758) (2019). “We review any questions of law decided by the trial court, however, de novo.” (Citation omitted.) Agricommodities, Inc. v. Moore, 359 Ga. App.

1, 2 (854 SE2d 781) (2021).

So viewed, the record shows that Jefferson Capital was the assignee and owner

of a promissory note Clark originally obtained from OneMain Financial Group, LLC

(“OneMain Financial”). Jefferson Capital filed suit in Douglas County Magistrate

Court, alleging that Clark was in default and that the outstanding balance was

$5,704.34. To support its claim, Jefferson Capital submitted an affidavit from its

Records Custodian for accounts, Heather Whitehill. Whitehall testified in the affidavit

that she had personal knowledge of the books and records maintained by Jefferson

Capital and was familiar with its record-keeping system, including the records for

Clark’s account. Whitehill attached documents regarding Clark’s account to the

affidavit and testified to the following regarding the records. The records were true

and accurate records maintained by Jefferson Capital, were kept in the course of a

regularly conducted business activity, and were made at or near the time of the

transactions reflected therein. Based upon the information provided by OneMain

Financial in the ordinary course of business to Jefferson Capital, which included the

assignment, bill of sale, and a spreadsheet summarizing and detailing the accounts

2 included in the pool of debts, the records reflected that Clark’s account remained

unpaid after all lawful offsets, payments, and credits, and that the principal balance

due and owing to it was $5,704.34. The records attached to the affidavit included

Clark’s loan agreement with OneMain Financial, a “Statement of Account Activity”

showing a history of Clark’s payments on the account and that she owed $5,704.34,

and an “Assignment and Bill of Sale” in which OneMain Financial assigned the

account to Jefferson Capital.

Following a hearing,1 the magistrate court entered judgment in favor of

Jefferson Capital in the amount of $5,704.34. Clark filed a petition for review with the

Douglas County Superior Court in August 2023. Apparently, Jefferson Capital did not

respond to the petition, but its counsel was present for at least parts of a final hearing

before the superior court. Following the final hearing, the superior court affirmed the

magistrate court’s judgment.2 Clark filed an application for discretionary review,

which this Court granted. Clark then filed this appeal.

1 The record does not contain any hearing transcripts. 2 Clark filed a motion for reconsideration of the superior court’s decision, which the court denied. 3 1. Clark argues that the superior court erred in denying her “default judgment”

under OCGA § 5-3-8 (a) based on Jefferson Capital’s failure to file a response to her

petition for review.3 We disagree and conclude that Jefferson Capital’s failure to file

a response to Clark’s petition did not require a reversal of the magistrate court’s

judgment.

In interpreting a statute, “we apply the fundamental rules of statutory

construction that require us to construe the statute according to its terms, to give

words their plain and ordinary meaning, and to avoid a construction that makes some

language mere surplusage. At the same time, we must seek to effectuate the intent of

the legislature.” (Citation and punctuation omitted.) City of Atlanta v. City of College

Park, 292 Ga. 741, 744 (741 SE2d 147) (2013). We must also

presume that the statute was enacted by the legislature with full knowledge of the existing condition of the law and with reference to it. It is therefore to be construed in connection and in harmony with the existing law, and as a part of a general and uniform system of jurisprudence, and its meaning and effect is to be determined in connection, not only with the common law and the constitution, but also with reference to other statutes and the decisions of the courts.

3 We address Clark’s arguments in a different order than how she has presented them on appeal. Jefferson Capital has not filed a responsive brief. 4 (Citation omitted.) Id.

The new Superior and State Court Appellate Practice Act, OCGA § 5-3-1 et

seq., became effective on July 1, 2023. See Ga. Laws 2022, Act 875, §§ 1-1 & 3-1. The

Act “[p]rovide[s] a single, modern, and uniform procedure called a ‘petition for

review’ for appealing a decision made by a lower judicatory to a superior or state

court.” OCGA § 5-3-2 (b) (1).

OCGA § 5-3-8 (a) states:

The respondent shall file a response to a petition for review with the reviewing court within 30 days after being served with a copy of the petition for review. If a de novo proceeding is required as specified in subsection (b) of Code Section 5-3-5, the response shall include any counterclaim, cross appeal, defense, or third-party claim asserted by the respondent.

OCGA § 5-3-5 (b) provides that “[a] reviewing court shall conduct a de novo

proceeding under this chapter if a de novo proceeding is specified by law.” A de novo

proceeding is specified by law for appeals from magistrate court to superior court.

Specifically, OCGA § 15-10-41 (b) provides that “appeals may be had from judgments

returned in the magistrate court to the state court of the county or to the superior

court of the county and the same provisions now provided for by general law for

5 appeals contained in Chapter 3 of Title 5 shall be applicable to appeals from the

magistrate court, the same to be a de novo appeal.”

OCGA § 5-3-8 (a) states that a respondent “shall” file a response to the

petition for review within a certain time frame, and “in its ordinary signification

‘shall’ is a word of command[.]” (Citation omitted.) Glass v. City of Atlanta, 293 Ga.

App. 11, 15 (2) (a) (666 SE2d 406) (2008). However, “in the absence of injury to the

defendant, a statute which directs that some act be done within a given time period,

but prescribes no penalty for not doing it within that time, is not mandatory but

directory.” (Citation omitted.) Id. “[I]n such instances ‘shall’ denotes simple futurity

rather than a command.” (Citation omitted.) Id. OCGA § 5-3-8 (a) does not specify

a penalty for a respondent’s failure to respond to a petition for review, indicating that

such failure alone does not entitle the petitioner to reversal of the lower court’s

judgment. See id. (because an ordinance providing that an appellate hearing “shall”

be held within a certain timeframe did not specify a penalty for failure to comply, such

failure did not require reversal of the decision appealed). Similarly, although Uniform

Superior Court Rule 6.2 provides that “each party opposing a motion shall serve and

file a response, reply memorandum, affidavits, or other responsive material not later

6 than 30 days after service of the motion,” this Court has explained that under the rule

“[t]he failure of a nonmoving party to file responsive material . . . does not

automatically entitle the moving party to judgment. There is no such thing as a default

judgment on the pleadings.” (Citation and punctuation omitted.) Neely v. Jones, 264

Ga. App. 795, 796 (592 SE2d 447) (2003). And OCGA § 5-3-8 (a) may be contrasted

with OCGA § 9-11-55 (a), which specifically provides that the failure to file a timely

answer to a complaint results in default. See OCGA § 9-11-55 (a) (“If in any case an

answer has not been filed within the time required by this chapter, the case shall

automatically become in default unless the time for filing the answer has been

extended as provided by law. . . .”).

Clark was not prejudiced by Jefferson Capital’s failure to respond to her

petition for review because she was already aware of the nature of its claims based on

its original suit on account and supporting documents filed in magistrate court. See

McRae v. Hogan, 317 Ga. App. 813, 817 n.8 (3) (732 SE2d 853) (2012) (respondent to

motion for summary judgment had already placed evidence into the record prior to

when trial court granted the motion, despite her failure to timely respond to the

motion); Neely, supra, 264 Ga. App. at 796, 797 (response to motion to dismiss or for

7 summary judgment was not nullified by renewed motion to the same effect). A de

novo appeal “brings up the whole record from the court below; and either party is

entitled to be heard on the whole merits of the case. . . . The filing of such an appeal

has the same effect as if the case had been commenced originally in the superior

court.” (Citation and punctuation omitted.) Jessup v. Ray, 311 Ga. App. 523, 524 (1)

(716 SE2d 583) (2011). Significantly, this Court has previously held that a default

judgment will not lie for failure to file defensive pleadings in a de novo hearing on

appeal in superior court from a property evaluation, explaining that “because the

issues have been defined prior to the filing of the appeal in superior court, the failure

to file a response to the appeal in no way works a hardship on the appellant.” Hall

County Bd. of Tax Assessors v. Reed, 142 Ga. App. 556, 560 (236 SE2d 532) (1977); see

also Scott v. Aaron, 221 Ga. App. 254, 254-255 (471 SE2d 55) (1996) (a de novo appeal

from magistrate court to state or superior court “may not be dismissed simply because

of the absence of one of the parties to the cause”) (citation omitted). The lack of

prejudice to Clark from Jefferson Capital’s failure to comply with OCGA § 5-3-8 (a)

reinforces our conclusion that such failure alone did not entitle her to reversal of the

magistrate court’s judgment.

8 Our conclusion is also in accord with the well-established rule that “[w]henever

possible[,] cases should be decided on their merits for default judgment is not favored

in law.” (Citation omitted.) Gilliam v. Love, 275 Ga. App. 687, 688 (621 SE2d 805)

(2005). Indeed, in passing the Superior and State Court Appellate Practice Act the

General Assembly declared its intent to “[i]ncrease access to justice through the

greater resolution of appeals on the basis of substantive issues rather than on complex

procedural grounds.” OCGA § 5-3-2 (b) (2); see also OCGA § 5-3-2 (c) (1) (“[T]he

courts shall . . . [c]onstrue the provisions of this chapter broadly so as to render

decisions based on the merits of each case and avoid dismissal of any case or refusal

to consider any points raised therein unless such dismissal or refusal is expressly

required by statute.”). Accordingly, Jefferson Capital’s mere failure to respond to

Clark’s petition for review did not entitle her to victory in superior court.4

4 We do not address whether the case should have been dismissed by the superior court based on Jefferson Capital’s failure to prosecute, because Clark has not argued for a dismissal on this basis and we are “a court for correction of errors of law committed by the trial court where proper exception is taken.” (Citation omitted.) Calhoun, GA NG, LLC v. Century Bank of Ga., 320 Ga. App. 472, 477 (2) (740 SE2d 210) (2013); see also Byers v. Byers, 41 Ga. App. 671 (154 SE 456) (1930) (“An appeal from the court of ordinary is a de novo investigation, and should not be dismissed because of the absence of either party to the cause. The action may be dismissed for such absence and failure to prosecute the case on the part of the plaintiff, but the appeal cannot be dismissed for that reason.”) (citations and punctuation omitted); 9 2. Clark argues that the superior court erred in considering the records attached

to Whitehill’s affidavit because they constituted hearsay and Jefferson Capital did not

lay a proper foundation for their admission under the business records exception.

Clark specifically asserts that Jefferson Capital did not prove that it purchased the debt

from OneMain Financial. This argument lacks merit.

Under Georgia’s Evidence Code, a business record is admissible as an

exception to the rule barring hearsay if the record was:

(A) made at or near the time of the described acts, events, conditions, opinions, or diagnoses; (B) made by, or from information transmitted by, a person with personal knowledge and a business duty to report; (C) kept in the course of a regularly conducted business activity; and (D) it was the regular practice of that business activity to make the memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness or by certification that complies with paragraph (11) or (12) of Code Section 24-9-902 or by any other statute permitting certification.

Rousch v. Green, 2 Ga. App. 112, 112-115 (58 SE 313) (1907) (where plaintiff filed de novo appeal to superior court but failed to appear when the case was called, the court should have dismissed the plaintiff’s case based on failure to prosecute rather than dismiss the appeal, because the proceeding was considered an original suit brought in that court). However, we note that Jefferson Capital’s counsel was apparently present for at least parts of the final hearing in superior court. 10 OCGA § 24-8-803 (6). “[I]t is within the trial court’s discretion to determine whether

a proper foundation was laid for application of the business records exception to a

particular document and whether the circumstances of the document’s preparation

indicate trustworthiness. Thus, we review the court’s ruling in this regard for an abuse

of that discretion.” (Citation and punctuation omitted.) Jones v. State, 345 Ga. App.

14, 17-18 (2) (b) (812 SE2d 337) (2018).

Here, the superior court did not abuse its discretion in determining that the

records attached to Whitehill’s affidavit were admissible under the business records

exception. Whitehill testified that (1) she had personal knowledge of Jefferson

Capital’s records as Records Custodian for its accounts; (2) the attached records were

made at or near the time of the transactions reflected therein and were kept in the

course of a regularly conducted business activity; and (3) Jefferson Capital’s record-

keeping system included Clark’s account. See In the Interest of L-M. C. L., 362 Ga.

App. 520, 527 (1) (869 SE2d 161) (2022) (drug test results were admissible under

OCGA § 24-8-803 (6) where the drug testing company’s research and development

manager testified that the samples were received and tested in the normal course of

11 procedures at the business, she knew about the business’s testing process, and the

tests and records indicated a proper collection and chain of custody to protect the

integrity of the samples); Lockwood v. Fed. Deposit Ins. Corp., 330 Ga. App. 513, 516-517

(2) (a) (767 SE2d 829) (2014) (FDIC’s asset manager had personal knowledge of

business records attached to his affidavit, where he set out his role and personal access

to and knowledge of the records that were transmitted to the FDIC when a bank was

placed into receivership, the records included the payment records attached to his

affidavit, and he averred that the records were kept and maintained in the course of

regularly and necessarily conducted business activity).

Clark’s assertion that Jefferson Capital did not prove that it purchased her debt

from OneMain Financial is unavailing, as the records included the assignment and bill

of sale showing that OneMain Financial assigned the debt to Jefferson Capital. See

Roberts v. Community & Southern Bank, 331 Ga. App. 364, 372 (2) (771 SE2d 68)

(2015) (“[T]he business record exception applies to ‘data compilations’ such as loan

or payment history reports prepared by a bank. And a successor bank can rely upon

and integrate into its own business records its predecessor’s business records so long

as a proper foundation is laid under OCGA § 24-8-803 (6).”); see also Ciras, LLC v.

12 Hydrajet Technology, LLC, 333 Ga. App. 498, 501 (773 SE2d 800) (2015) (trial court

abused its discretion by finding that the business records exception did not apply to

the routine bank records authenticated by affidavit as having been transferred to Wells

Fargo, and integrated into its own business records, as part of its acquisition of

Wachovia); Lockwood, supra, 330 Ga. App. at 516 n. 13 (2) (a) (when routine, factual

documents made by one business are transmitted and delivered to a second business

and then entered in the regular course of business of the receiving business, such

documents are admissible as business records). Accordingly, the superior court did

not abuse its discretion in determining that the records attached to Whitehill’s

affidavit were admissible business records.

3. Clark argues that the case should not have proceeded in court because any

disputes between her and the lender were subject to binding arbitration under her loan

agreement. We disagree.

Clark’s loan agreement provided that she and the lender generally waived the

right to resolve disputes between them in court and that either party could elect to

resolve such disputes through binding arbitration. However, in a paragraph titled

13 “MATTERS NOT COVERED BY ARBITRATION,” the loan agreement provided

that

[i]nstead of pursuing arbitration, either Lender or [Clark] also have the option to bring a lawsuit in court to seek to recover the monetary jurisdictional limit of a small claims or equivalent court in [Clark’s] state (including costs and attorneys’ fees), provided that no relief other than such recovery is required in such lawsuit (an “Excluded Damages Lawsuit”). If an Excluded Damages Lawsuit is filed, the other party cannot require that the claims in that lawsuit be arbitrated.

In Georgia, magistrate courts are the equivalent of small claims courts and have

jurisdiction over civil claims in which the amount demanded does not exceed $15,000.

OCGA § 15-10-2 (a) (5); see Ga. Const. of 1983, Art. VI, Sec. X, Par. I (6) (“Justice

of the peace courts, small claims courts, and magistrate courts operating on the

effective date of this Constitution . . . shall become and be classified as magistrate

courts.”). Because Jefferson Capital only sought to recover in this suit the outstanding

principal of $5,704.34 from Clark, the clear language of the loan agreement permitted

it to bring the suit in court.

4. Finally, Clark argues that at the final hearing the superior court violated her

constitutional rights to due process and equal protection by not allowing her to be

14 heard on the merits and by showing prejudice against her based on her race. However,

Clark “ha[s] the burden of showing harmful error” and is “required to show this by

the record on appeal, not by assertions appearing only in [her] brief or enumeration

of errors.” (Citation and punctuation omitted.) Robinson v. Professional Truck Towing,

Inc., 273 Ga. App. 680, 681 (615 SE2d 795) (2005). “Therefore, in the absence of a

transcript, we must assume . . . the [superior] court’s actions during the [final hearing]

were appropriate. Further, a presumption of regularity of all proceedings in a court of

competent jurisdiction exists.” (Citation omitted.) Id. Because review of Clark’s

argument requires a transcript of the final hearing, her argument must fail in the

absence of a transcript. Id.

For the foregoing reasons, we affirm the superior court’s decision to affirm the

Judgment affirmed. Markle and Land, JJ., concur.