Title: American Express Bank FSB v. Deering

State: maine

Issuer: Maine Supreme Court

Document:

MAINE SUPREME JUDICIAL COURT 
Reporter of Decisions 
Decision: 
2016 ME 117 
 
Docket: 
Yor-15-458 
Submitted 
On Briefs: June 22, 2016 
Decided: 
July 26, 2016 
 
Panel: 
SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ. 
 
 
AMERICAN EXPRESS BANK FSB 
 
v. 
 
DIANE DEERING 
 
 
SAUFLEY, C.J. 
[¶1]  Diane Deering appeals from a judgment entered in the District 
Court (Biddeford, Foster, J.) in favor of American Express Bank FSB in the 
amount of $22,339.94 after a trial during which American Express argued that 
Deering owed that amount in credit card debt.  Deering argues that the court 
erred in admitting records pursuant to the business records exception to the 
hearsay rule.1  We discern no error in the court’s findings or evidentiary 
rulings, and we affirm the judgment. 
                                         
1  Deering also argues that the court erred in finding that the parties had entered into a binding 
contract and that American Express proved the amount due; that the court erred in permitting 
acceleration of the debt; and that “to the extent the district court relied upon Utah law, it is 
inappropriate in this case.”  We are not persuaded by these arguments and do not address them 
further in this opinion. 
 
2 
I.  BACKGROUND  
[¶2]  On January 20, 2011, American Express filed a complaint in the 
District Court alleging that Deering had entered into a credit card agreement 
with American Express, used the credit card to make purchases and/or cash 
advances, and failed to make payments.  The complaint sought a judgment in 
the amount of $22,339.94 “plus interest, costs, legal fees,” and “such other 
relief” as the court deemed “just and proper.”  On December 6, 2012,2 Deering 
denied the allegations.  On August 19, 2013, the parties convened for a 
hearing but, due to pretrial issues raised by Deering, the hearing was 
continued.   
[¶3]  On May 27, 2015, Deering filed a motion in limine seeking to 
exclude from evidence “any business records for which [American Express’s] 
witnesses cannot provide the required foundation pursuant to M.R. Evid. 
803(6).”  The court held a trial on June 2, 2015, almost three years after 
Deering was served.  Deering appeared through counsel but did not appear 
personally and did not offer any witnesses or exhibits.  American Express 
                                         
2  This initial two-year delay was due in part to American Express’s inability to successfully serve 
Deering after the complaint was filed.  American Express ultimately filed proof of service on August 
6, 2012. 
 
3 
presented the testimony of one witness—agent and employee Edmond 
Garabedian.   
[¶4]  Because Deering challenges the court’s determination that 
American Express provided the required foundation for admission of the 
company’s business records, we review Garabedian’s testimony in detail.  He 
testified to the following.  Garabedian has worked for American Express for 
almost forty years in several departments.  He currently works in the global 
collections department, where he is a department manager and the records 
custodian.  He has handled hundreds of cases similar to this case.   
[¶5]  Garabedian provided the following details for the process of 
issuing a credit card and creating account statements.  Individuals can apply 
for the American Express Delta SkyMiles Credit Card through a paper 
application, online, or over the telephone.  No account can be created without 
an application.  If the individual qualifies after a credit assessment, American 
Express assigns a unique account number and sends the individual a card.  
American Express statements are created based on the activity of the 
cardholder.  When a cardholder uses his or her credit card, the merchant then 
uses that account number to submit a charge to American Express.  American 
Express stores the account number, the date and place of use, and the amount 
 
4 
of money charged.  After a period of approximately twenty-eight days, 
American Express gathers all of the charges, creates a monthly statement, and 
makes that statement available to the cardholder.  This is done in the ordinary 
course of business.     
[¶6]  During Garabedian’s testimony, American Express offered two 
exhibits pursuant to the business records exception to the hearsay rule: sixty-
two monthly statements documenting Deering’s account activity from March 
2005 to September 2010 and a 2008 Delta SkyMiles Business Credit Card 
Agreement.  The parties agree that several monthly statements were missing 
from the large group of statements.  Garabedian testified that American 
Express maintains these records electronically.  It is not possible to change a 
document after it has been printed or sent by American Express.  
[¶7]  With regard to the monthly statements, Garabedian testified that 
someone in his office generated the statements by sending an electronic 
request for their reproduction.  The electronic request generates a “job” 
within the archive system, which pulls the electronic information based on the 
account number and time frame.  The archives, which are stored on 
computers located in Phoenix, Arizona, are secure, and the records are 
properly maintained and stored.  The reprinting is then done within the 
 
5 
American Express global mail services department, which sends the 
documents to Garabedian’s office.  Garabedian did not know why a few 
months of statements were missing from the statements that American 
Express sought to admit in evidence.  Garabedian personally reviewed 
monthly statements associated with Deering and identified a particular 
unique account number associated with Deering’s name.  
[¶8]  With regard to the credit card agreement, Garabedian testified that 
it was obtained by his office in the same manner as the statements.  After the 
agreement was created in 2008, it was automatically mailed to every new and 
ongoing cardholder with a Delta SkyMiles account.  
[¶9]  Deering moved to exclude the records.  The court found that the 
statements were reliable despite the fact that a few months of statements 
were missing, noting that the fact that there were missing statements “goes to 
weight and not whether or not the exhibit itself is admissible.”  The court also 
found that Garabedian had laid a proper foundation pursuant to the business 
records exception and admitted both of the exhibits.   
[¶10]  After trial, the court entered a written judgment in favor of 
American Express.  The court made extensive factual findings, including the 
following.  Deering obtained a Delta SkyMiles Credit Card, used it on a regular 
 
6 
basis, and made periodic payments up until the spring of 2010.  The card’s 
monthly statements were all sent to Deering at her address in Hollis Center.  
The statements detailed new charges, payments made, amounts due, and 
directions as to what the cardholder should do in case of errors or questions.  
The January 2009 statement warned Deering that her account was “overdue.”  
Subsequent charges were made to the account.  The August 2009 statement 
cautioned Deering, “Your account is over-limit and past due.”  Several 
payments were then made.  The June 2010 statement informed Deering that 
her account was in default and a balance of $22,339.94 was due in full. 
[¶11]  Addressing the business records challenge, the court found that 
Garabedian had “demonstrated an intimate and extensive knowledge of the . . . 
operations, including the manner in which records are generated and 
maintained.”  Based on Garabedian’s testimony, the court found that the 
records constituted a data compilation of acts and events made at or near the 
time by, or from information transmitted by, a person with knowledge; that 
such data compilation was kept in the course of a regularly conducted 
business; and that it was the regular practice of American Express to make 
such data compilations.  See M.R. Evid. 803(6).  The court concluded that the 
records fell within the business records exception to the hearsay rule and 
 
7 
admitted the records.  See id.  The court further concluded that American 
Express proved that Deering and American Express had entered into a 
contract and that Deering was obligated to pay the entire card balance of 
$22,339.94.3  Deering timely appealed.  See 14 M.R.S. § 1901 (2015); M.R. 
App. P. 2.   
II.  DISCUSSION 
 
[¶12]  Deering argues that the court erred in admitting the monthly 
statements and the credit card agreement pursuant to the business records 
exception to the hearsay rule.  When admission of evidence under the 
business records exception to the hearsay rule is challenged, “we review a 
trial court’s foundational findings to support admissibility for clear error and 
its ultimate determination of admissibility for an abuse of discretion.”  State v. 
Abdi, 2015 ME 23, ¶ 16, 112 A.3d 360.  “The admissibility of a business record 
is governed by M.R. Evid. 803(6), which dictates both (1) what foundation 
must be laid to admit such evidence as an exception to the rule excluding 
hearsay evidence, and (2) the type of witness required to lay that 
                                         
3  The balance of $22,339.94, identified by American Express as owed on May 17, 2010, 
represents amounts charged by Deering, resulting interest on unpaid balances, and fees due to 
Deering’s failure to make timely payments.  American Express did not seek additional interest 
during or after trial, and the court did not award any additional interest, costs or legal fees. 
 
8 
foundation.”4  Bank of Am., N.A. v. Greenleaf, 2014 ME 89, ¶ 25, 96 A.3d 700; 
see M.R. Evid. 803(6)(D) (“All these conditions [must be] shown by the 
testimony of the custodian or another qualified witness . . . .”).  Deering 
primarily argues that Garabedian was not qualified to lay the foundation for 
entry of the documents pursuant to the business records exception to the 
hearsay rule.5 
                                         
4  The business records exception to the hearsay rule states:  
(6) Records of a regularly conducted activity.  A record of an act, event, 
condition, opinion, or diagnosis [is not excluded by the rule against hearsay] if:   
 
 
(A) The record was made at or near the time by—or from information 
transmitted by—someone with knowledge; 
 
 
(B) The record was kept in the course of a regularly conducted activity of a 
business, organization, occupation, or calling, whether or not for profit;  
 
(C) Making the record was a regular practice of that activity;  
 
 
(D) All these conditions are shown by the testimony of the custodian or 
another qualified witness, or by a certification that complies with Rule 
902(11), Rule 902(12) or with a statute permitting certification; and  
 
 
(E) Neither the source of information nor the method or circumstances of 
preparation indicate a lack of trustworthiness. 
M.R. Evid. 803(6).   
 
5  To the extent Deering argues that Garabedian failed to lay the proper foundation for the 
admission of the documents, the record supports the court’s findings that Garabedian’s testimony 
demonstrated that the records were made from information transmitted by someone with 
knowledge, see M.R. Evid. 803(6)(A); the record was kept in the course of a regularly conducted 
activity of a business, see M.R. Evid. 803(6)(B); making the record was a regular practice of that 
activity, see M.R. Evid. 803(6)(C); and “[n]either the source of information nor the method or 
circumstances of preparation indicate a lack of trustworthiness,” see M.R. Evid. 803(6)(E).  Further, 
we are not persuaded by the argument that the unexplained omission of a few months of 
statements indicates a lack of trustworthiness that would prevent the documents from falling 
within the business records exception to the hearsay rule.   
 
9 
[¶13]  The foundation for the admission of records pursuant to the 
business records exception “must be laid by a witness who is a ‘custodian or 
another qualified witness.’”  Homeward Residential, Inc. v. Gregor, 2015 ME 
108, ¶ 14 n.11, 122 A.3d 947.  “A qualified witness is one who was intimately 
involved in the daily operation of the business and whose testimony showed 
the firsthand nature of his or her knowledge.”  Id. (quotation marks omitted).  
[¶14]  Here, Garabedian testified in extensive detail regarding his 
knowledge of the daily operations and record-keeping practices of American 
Express.  This is not a case where the witness laying the foundation for 
admission of the documents learned information regarding the operations 
and the records secondhand, see, e.g., id., or where the witness failed to testify 
as to the source of her knowledge regarding the operations of the business 
and testified that she had received some of the records through the law firm 
hired to represent the business, see, e.g., Greenleaf, 2014 ME 89, ¶ 26, 96 A.3d 
700.  Instead, Garabedian testified in great detail as to his involvement in the 
operations in the business over the past forty years and his firsthand 
knowledge of the process that resulted in the records that American Express 
offered.  There was ample competent evidence in the record for the court to 
find that Garabedian possessed personal knowledge and was “intimately 
 
10 
involved in the daily operation of the business.”  Greenleaf, 2014 ME 89, ¶ 25, 
96 A.3d 700 (quotation marks omitted); see M.R. Evid. 803(6)(D).  Thus, the 
court did not err or abuse its discretion in admitting the documents over 
Deering’s objections.  Cf. Abdi, 2015 ME 23, ¶¶ 19-20, 112 A.3d 360. 
The entry is: 
Judgment affirmed.  
 
 
 
 
 
 
 
 
On the briefs: 
 
Mark A. Kearns, Esq., and Mark L. Randall, Esq., Portland, for 
appellant Diane Deering 
 
Randall L. Pratt, Esq., Portsmouth, New Hampshire, for 
appellee American Express Bank FSB 
 
 
 
Biddeford District Court docket number CV-2011-27 
FOR CLERK REFERENCE ONLY