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Filed 9/6/16

CERTIFIED FOR PUBLICATION

APPELLATE DIVISION

SUPERIOR COURT OF CALIFORNIA

COUNTY OF ORANGE

MIDLAND FUNDING LLC,

Plaintiff and Respondent,

v.

MICHAEL ROMERO,

Defendant and Appellant.

CASE NO. 30-2015-00780720

(Super. Ct. No. 30-2013-00683295)

OPINION

Appeal from a judgment of the Superior Court of Orange County, Central Justice 

Center, Timothy J. Stafford, Judge. Reversed and remanded.

Defendant/Appellant Michael Romero appeals the judgment entered against him 

and in favor of Plaintiff/Respondent Midland Funding LLC in a collection action.

Defendant argues the trial court erred in overruling his objections to Plaintiff’s 

declaration in lieu of testimony because: (1) the declarant, Kenneth Smith, was not 

available for service of process pursuant to Code of Civil Procedure section 98;1(2) the 

declaration did not properly authenticate the attached documents, and the business 

records exception does not apply; and (3) there was insufficient evidence that Plaintiff 

had standing to sue. For the reasons discussed below, we agree that the declaration did 

not comply with section 98 and that the attached documents were inadmissible.

 

1 All statutory references will be to the Code of Civil Procedure unless otherwise stated.
2

FACTUAL AND PROCEDURAL HISTORY

On October 24, 2013, Plaintiff filed a complaint as assignee to a defaulted credit 

card account originally owned by Credit One Bank, N.A. against Defendant seeking to 

recover money relating to that account.2 Defendant answered. Prior to trial, Plaintiff filed 

a declaration by Kenneth Smith in lieu of testimony pursuant to section 98. The 

declaration set forth the following:

Smith is an officer of Plaintiff and employed as a Legal Specialist by 

Midland Credit Management Inc. (MCM), servicer of the subject account. He has 

personal knowledge of the account records maintained on Plaintiff’s behalf. 

Plaintiff is the current owner of, and/or successor to, the obligation sued upon, and 

was assigned all rights, title, and interest to Defendant’s Credit One Bank, N.A. 

account ending in 8739 (hereafter “the account”). Smith has access to and has 

reviewed the records pertaining to the account and was authorized to make the 

affidavit on Plaintiff’s behalf.

Plaintiff purchases portfolios of delinquent accounts from the original 

creditor or subsequent purchaser of the account, and MCM services the accounts 

on Plaintiff’s behalf. MCM operates and maintains computer systems into which 

Plaintiff integrates electronic records and information received from the seller 

regarding the individual accounts.

Smith is familiar with and trained on the manner and method by which 

MCM creates and maintains its business records pertaining to this account. The 

records are kept in the regular course of business. It was in the regular course of 

business for a person with knowledge of the act or event recorded to make the 

record or data compilation, or for a person with knowledge to transmit information 

 

2

The complaint was not designated as part of the record on appeal by the parties. This 

court augments the record on its own motion to include the complaint. (Cal. Rules of 

Court, rule 8.841(a)(1)(A).)
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thereof to be included in such record. In the regular course of business, the record 

or compilation is made at or near the time of the act or event.

On or about May 15, 2012, Plaintiff became the successor in interest to the 

account. MCM acquired and incorporated the attached account records into its 

permanent business records as a result of Plaintiff’s purchase of the account. 

These records are kept in the regular course of business on Plaintiff’s behalf, and 

along with the electronic records provided at purchase, are Plaintiff’s primary 

source of business records for this account.

Plaintiff and/or its servicer relied upon the accuracy of such records in 

purchasing and collecting this account. The records are trustworthy and relied 

upon because the original creditor was required by law to keep careful records of 

the account or suffer business loss.

MCM’s records show the following: (a) Plaintiff is the sole owner of the 

account; (b) the account was opened on April 11, 2006 and charged off on April 

17, 2012 with a balance of $1,772.29; (c) MCM’s records show that the balance of 

$1,772.29 remains due and owing as of October 2, 2013; (d) the last payment was 

posted on September 13, 2012; (e) the charge off creditor was Credit One Bank, 

N.A.; and (f) the charge off account number associated with the debt ends in 8739.

MCM’s records state MCM or its agents made demand for payment of the 

balance herein prior to making the affidavit and Defendant failed to make full 

payment of the amount owed on the account. MCM’s records state there is no 

record of an active dispute or of a prior unresolved dispute.

The exhibits attached to the declaration contained Credit One Bank, N.A.

Credit Card Statements, documents relating to the sale of the account, and MCM’s 

notices to Defendant regarding collection of the debt.

For a reasonable period of time, during the 20 days immediately prior to 

trial, Smith agreed to accept service at any of the following locations: (1) c/o 

Brooks Houghton, Esq., 2531 Forest Avenue 110, Chico, CA 95928; (2) c/o Diane 

Devine, Esq., 8300 Fair Oaks Blvd. #405, Fair Oaks, CA 95608; (3) c/o Hunt & 
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Henriques, 151 Bernal Rd., Suite 8, San Jose, CA 95119; (4) David Lange, Esq., 

720 W. Center Ave., Suite B, Visalia, CA 92391; (5) c/o Steve Levy, Esq., 6055 

E. Washington Blvd., Suite 290, Commerce, CA 90040; (6) Kenneth Smith, 3111 

Camino Del Rio North, Suite 1300, San Diego, CA 92108; and (7) Kenneth Smith, 

8875 Aero Dr., Suite 200, San Diego, CA 92123.

Defendant objected to the declaration because it listed multiple addresses for 

service of process of Smith with four of the addresses – Chico, Fair Oaks, San Jose and 

Visalia – being more than 150 miles from the court and five of the addresses required

substituted service despite the Code requiring personal service. Defendant also stated he 

attempted to personally serve Smith with a subpoena to appear at trial, but Smith was not 

available for personal service at the nearest address – the Commerce location “c/o Steve 

Levy, Esq.” Since Smith was not available for personal service of process, Defendant 

argued Plaintiff did not comply with section 98. Defendant further objected to the 

declaration on the ground that it constituted inadmissible hearsay.

The trial court overruled Defendant’s objections to the declaration and, after a 

bench trial, entered judgment in favor of Plaintiff. Defendant timely appealed.

DISCUSSION

Defendant contends Smith’s declaration did not comply with section 98 and the 

attached documentary evidence was inadmissible. Trial court rulings on the admissibility 

of evidence are generally reviewed for abuse of discretion. (Pannu v. Land Rover North 

America, Inc. (2011) 191 Cal.App.4th 1298, 1317.) However, questions of law involving 

statutory interpretation and the proper application of a statute are reviewed de novo. 

(Florez v. Linens ‘N Things, Inc. (2003) 108 Cal.App.4th 447, 451.) A judgment will be 

reversed based upon a trial court’s error in excluding evidence only if the appealing party 

demonstrates a miscarriage of justice – “ ‘a different result would have been probable if 

the error had not occurred.’ [Citation.]” (Pannu v. Land Rover North America, Inc., 

supra, 191 Cal.App.4th at p. 1317; Evid. Code, § 353.)
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Plaintiff’s Declaration in Lieu of Testimony Did Not Comply with Section 98

Defendant argues Smith was not available for service of process as required by 

section 98. Section 98 permits a party to offer prepared testimony of a witness in the form 

of affidavits or declarations under penalty of perjury if “[a] copy has been served on the 

party against whom it is offered at least 30 days prior to the trial, together with a current 

address of the affiant that is within 150 miles of the place of trial, and the affiant is 

available for service of process at that place for a reasonable period of time, during the 20 

days immediately prior to trial.” (§ 98, subd. (a).)

Smith’s declaration listed seven addresses, five of which permitted substituted 

service. Defendant attempted personal service of a subpoena pursuant to section 1987, 

subdivision (a) on Smith at the Commerce location “c/o Steve Levy, Esq.” According to 

the proof of service, he left the subpoena with “YESSINIA MALDONADO –

CALENDAR REP.” Defendant relies on Target National Bank v. Rocha (2013) 216 

Cal.App.4th Supp. 1 (Rocha) and CACH LLC v. Rodgers (2014) 229 Cal.App.4th Supp. 1 

(Rodgers) for the proposition that Smith had to be available for personal service at a 

current address. Although published decisions by the Appellate Division are persuasive 

and not binding (see Velasquez v. Superior Court (2014) 227 Cal.App.4th 1471, 1477, fn. 

7), the Rocha and Rodgers cases are instructive here.

Rocha, which was a case of first impression regarding this issue (Rocha, supra, 

216 Cal.App.4th Supp. at p. 6), involved the following facts: plaintiff’s section 98 

declarant executed her declaration in Minnesota and stated she would be available for 

service of process 20 days prior to trial via plaintiff’s counsel located in San Jose, which 

was within 150 miles of the trial court; plaintiff’s counsel’s business address was actually 

in San Diego, and the San Jose address was for ABC Legal Services; defense counsel 

issued a civil subpoena for plaintiff’s declarant for her appearance at trial; defendant’s 

process server made two separate attempts to personally serve the subpoena at the San 

Jose address; someone from ABC Legal Services told the process server the declarant 

was not at the office but the person would accept the service on her behalf; and the 
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process server left without serving the subpoena since he was only authorized to 

personally serve the declarant. (Ibid.)

The plaintiff in that case did not disagree that section 98 required personal service, 

but instead argued the declarant was available for service of process because defendant 

could have compelled her to attend trial if she served plaintiff’s counsel with a notice to 

appear pursuant to section 1987, subdivision (b). (Id. at p. 8.) The reviewing court was 

unpersuaded by this argument since the declarant did not meet any of the criteria set forth 

in that subsection: she was “not a party to the action, a person for whose immediate 

benefit the action [was] prosecuted, or an officer, director, or managing agent of 

[plaintiff].” (Id. at p. 9, fn. omitted.) The Rocha court also noted that section 1987, 

subdivision (a) allows for the service of summons only by personal delivery. (Id. at p. 7.) 

That court ultimately held that the plaintiff did not comply with section 98 because the 

declarant was not available for service of process within 150 miles of the courthouse, and 

the trial court therefore abused its discretion in admitting the declaration as evidence. (Id.

at p. 9.) The Rocha court reversed the judgment and remanded the matter for a new trial. 

(Id. at p. 10.)

In Rodgers, the plaintiff assignee’s declarant stated in the section 98 declaration 

that he was currently located in Denver, Colorado and authorized service to be accepted 

on his behalf at plaintiff’s counsel’s office in Woodland Hills, California, which was 

within 150 miles of the trial court. (Rodgers, supra, 229 Cal.App.4th Supp. at p. 3.) The 

defendant objected to the declaration and attached documentation to her trial brief 

showing a failed service attempt upon the declarant because he did not work at that 

address. (Ibid.) The appellate division agreed with the holding and reasoning in Rocha

and held the declarant was not available for service within 150 miles as required by 

section 98. (Id. at p. 7.)

The reasoning in Rocha and Rodgers is sound, and this court adopts it in finding 

that Smith’s declaration did not comply with section 98. “Although requiring personal 

service, or having a local declarant literally available for service within 150 miles, is 

unwieldy in cases of this nature, in a contested matter, where the litigant has made efforts 
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to effectuate service, the right of cross-examination at trial should prevail over the 

convenience of the litigants and the witnesses.” (Rodgers, supra, 229 Cal.App.4th Supp. 

at p. 7.) Section 98 requires the declarant to be available for personal service, and the 

addresses provided in Smith’s declaration were therefore insufficient. The declaration did 

not comply with the statutory requirements set forth in section 98. Therefore, the trial 

court abused its discretion in admitting it into evidence.

Plaintiff’s Documentary Evidence Was Not Properly Authenticated

Defendant also made a hearsay objection to Smith’s declaration, which contained 

documentation purportedly indicating Defendant’s indebtedness and Plaintiff’s 

ownership of the account as the assignee.

Writings must be authenticated before they are received into evidence or before 

secondary evidence of their contents may be received. (Evid. Code, § 1401.) 

Authentication means either the introduction of evidence sufficient to sustain a finding 

that the writing is what the proponent claims it is, or “the establishment of such facts by 

any other means provided by law” (e.g., by stipulation or admissions). (Evid. Code, § 

1400.)

Here, there were no “short-cuts” to authentication of the documents offered as 

evidence in Exhibits 1 and 2 by way of stipulations, admissions in the answer, admissions 

of genuineness per requests for admissions, judicial notice, or self-authentication. (See 

Evid. Code, §1400 comments.) The party offering the writing has the burden of 

presenting sufficient evidence of its authenticity to sustain a finding of fact to that effect. 

(Evid. Code, § 403(a)(3).)

The business records exception to the hearsay rule is set forth in Evidence Code 

section 1271, which provides: “Evidence of a writing made as a record of an act, 

condition, or event is not made inadmissible by the hearsay rule when offered to prove 

the act, condition, or event if: (a) The writing was made in the regular course of a 

business; [¶] (b) The writing was made at or near the time of the act, condition, or event; 

[¶] (c) The custodian or other qualified witness testifies to its identity and the mode of its 
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preparation; and [¶] (d) The sources of information and method and time of preparation 

were such as to indicate its trustworthiness.”

“The witness need not have been present at every transaction to establish the 

business records exception; he or she need only be familiar with the procedures 

followed.” (Jazayeri v. Mao (2009) 174 Cal.App.4th 301, 322.)

Defendant relies on Sierra Managed Asset Plan, LLC v. Hale (2015) 240 

Cal.App.4th Supp. 1 (Sierra). In Sierra, the plaintiff was the assignee of an unpaid credit 

card account originating from Citibank, N.A. (Citibank) (Id. at p. 3.) Plaintiff filed a 

section 98 declaration of Marc Roberts. (Id. at p. 4.) The declaration attached exhibits 

showing assignments of the account, the account agreement, and account statements 

reflecting the unpaid balance due. (Ibid.) Roberts was personally present at trial and was 

cross-examined by the defendant. (Ibid.) The trial court, over defendant’s objections 

based on lack of personal knowledge and hearsay, received the declaration and exhibits. 

(Ibid.) None of the documents attached to the declaration were created by plaintiff, and 

Roberts was not the authorized custodian of the Citibank documents. (Id. at p. 8.) Roberts 

stated in the declaration that he had never worked for Citibank and “did not have personal 

knowledge about the account or charges in question, other than the information he knew 

from acquiring the documents from Citibank.” (Id. at p. 9.) The defendant testified and 

“acknowledged the account, but denied any knowledge of the purchases or the balance 

due on the account.” (Id. at p. 4.) The Sierra court held Roberts’s declaration and 

testimony did not meet the “necessary foundation,” and that “at best,” his declaration and 

testimony established that plaintiff as assignee received records originating from 

Citibank. (Id., at p. 9) That court concluded the records were inadmissible hearsay and 

the result was prejudicial. (Id. at pp. 9-10.)

In contrast, Unifund CCR, LLC v. Dear (2015) 243 Cal.App.4th Supp. 1 (Unifund) 

disagreed with Sierra. In Unifund, Citibank was the original creditor. (Id. at p. 4.) It sold 

defendant’s unpaid credit card account to Pilot Receivables Management (Pilot). (Ibid.) 

Pilot later assigned the account to Unifund CCR Partners, which then assigned it to 

plaintiff Unifund CCR, LLC. (Ibid.) Plaintiff submitted a section 98 declaration of 
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Autumn Bloom with exhibits showing the assignments and the monthly billing 

statements. (Id. at p. 5.) The declaration also included a signed affidavit by Citibank’s 

Document Control Officer stating that Defendant’s account was assigned to Pilot. (Ibid.) 

The defendant testified that he obtained the credit card from Citibank, made purchases on 

the account, and never objected to any of the charges. (Ibid.) However, he could not 

remember receiving monthly statements or making payments on the card. (Ibid.) The 

Unifund court held the records were admissible. (Unifund, supra, 243 Cal.App.4th Supp. 

at pp. 8-9.) Moreover, because the defendant failed to demonstrate any prejudice from the 

plaintiff’s “failure to specifically detail the mode of preparation of the business records,” 

and plaintiff showed Bloom was the custodian of its records to competently establish the 

authenticity of the disputed records, the Unifund court concluded that the trial court did 

not abuse its discretion in admitting the evidence. (Id. at p. 9.)

In disagreeing with Sierra, the Unifund court found the holding in Sierra “too 

rigid in the consumer debt collection action setting.” (Id. at p. 11.) Unifund adopted a 

more pragmatic approach to the issue, and, in our view, relaxed the requirements under 

the Evidence Code regarding the business records exception to hearsay. We find Sierra

instructive and respectfully disagree with Unifund’s holding concerning the business 

records exception to hearsay.

Here, Smith had personal knowledge that the documents were part of Plaintiff’s 

business records, but did not satisfactorily establish those documents were a part of the 

prior creditor’s business records under Evidence Code section 1271. That is, there was

no evidence regarding the mode of preparation or other information indicating 

trustworthiness. Therefore, the trial court abused its discretion by overruling Defendant’s 

objections to Plaintiff’s evidence.
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As to whether there was a miscarriage of justice here, a different result would have 

been probable if the objections were sustained. Plaintiff would not have been able to get

Credit One Bank’s statements into evidence and establish Defendant’s indebtedness.3

DISPOSITION

The judgment is reversed, and the matter is remanded for further proceedings 

consistent with this court’s opinion. Defendant is entitled to costs on appeal.

Ronald Bauer

Acting Presiding Judge

Geoffrey Glass

Judge

Walter Schwarm

Judge

 

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Since there was a miscarriage of justice, there is no need to discuss whether Plaintiff 

had standing to sue or whether there was evidence showing a valid assignment of the 

account.
Trial Court: Orange County Superior Court

Trial Judge: Hon. Timothy J. Stafford

Counsel:

Law Office of Ian Chowdhury, Ian Chowdhury, for Defendant and Appellant.

Midland Funding LLC, Patrick T. Sullivan, for Plaintiff and Respondent on Appeal.