THI RD DI VI SI ON

ELLI NGTON, P. J.

, DI LLA RD and M C FA DDEN, JJ.

N O T IC E : M otions for r e c ons i de r a tion m us t be ph y sic a l ly r e ce iv ed i n our c le r k ’s offic e w ithin te n da y s of the da te of de c is ion to be de e m ed tim e ly file d.

http://w w w .ga a ppe a ls .us /r ule s /

Jul y 13, 2015



# I n th e Co u r t o f

A p p eals o f

G eo r g ia

A1 5 A0 35 7

. CIRAS, LLC v. HYDRAJ ET TECHNOLOGY, LLC et
al

.

M C F A D D E N , J u d g e.

Th i s ap p eal ch al l en g es t h e t ri al co u rt ’ s ex cl u s i o n o f b u s i n es s reco rd s at a b en ch

t r i a l

. Becau se t h e t ri al co u rt ab u s ed i t s d is cret i o n i n ex cl u di n g th e ev i d en c e , w e

rev ers e an d rem an d fo r reco n s id erat i o n i n l i gh t o f t h e ad m i ss i b l e ev i d en ce.

C i r as , LLC fi l ed s u i t fo r b reach o f a p ro m i s so ry n o t e an d co rres p o n d i n g

p ers o n al g u aran t i es ag ai n s t H y d rajet Tech n ol o g y , LLC, M ark Al ex an d er, Ab d el

Sh eh ad eh an d Nab i l M an s o u r. Ci ras m o v ed fo r su m m ary ju d g m en t

, al l eg i n g t h at t h e

n o t e i n t h e p ri n ci p al am ou n t o f $ 7 5 0 ,0 0 0 an d t h e p ers on al g u aran t i es h ad o ri g i n al l y

b een ex ecu t ed i n fav or o f W ach o v i a Ban k , t h at H y d rajet d efau l t ed o n t h e n o t e, t h at

W ach o v i a as s i g n ed al l o f i t s ri g h t s an d i n t eres t s in th e lo an t o C iras

, t hat aft er t h eas s i g n m en t Hy d rajet m ad e fo u r p ay m en ts to Ci ras , an d t h a t Hy d rajet an d t h e

g u aran to rs t h en fai l ed t o m ak e an y fu rt h er p ay m en t s t o s at i s fy t h e d eb t

. Th e t ri al co u rt

g ran t ed s u m

m ary ju d g m en t t o Ci ras as t o th e l i ab il i ty o f a l l defen d an t s. Th ereaft er,

a n o n -ju ry t ri al was h el d s o l el y o n t h e i s s u e o f d am ag es

.

At t ri al

, Ci ras s o u g h t t o p ro v e d am ag es b y o fferi n g t h e affi d av i t o f M arg i e

Fl i g h t t o au t h en t i cat e t h e W ach o v i a b an k reco rd s fo r t h e Hy d rajet l o an acco u n t

. In h er

affi d av i t, Fl i gh t s t at ed t h at s he i s a s en i o r v i ce p res i d en t an d lo an ad ju s tm en t m an ag er

wi t h W el l s Farg o an d Co m p an y ; t hat i n p erfo rm i ng h er d u t ies s he i s fam i l i ar wi th

W el l s Farg o ’ s l o an acco u n t i n g an d reco rd -k eep i n g m et h o d s ; t h at W el l s Farg o

acq u ired W ach o v i a i n Oct o b er 2 0 0 8 ; t h at as p art o f th at acq u i s i t i on W el l s Farg o

acq u ired v ari o u s acco u n t s fro m W ach ov i a, i n cl u d i n g t h e Hy d rajet l o an acco u n t ; t h at

t h e d o cu m en t s at t ach ed to h er affi d av i t as an ex h i b i t are t ru e an d co rrect co p i es o f t h e

H yd r a j e t acco u n t o b t ai n ed b y W el l s Farg o fro m W ach o v i a i n t h e reg u l ar co u rs e o f

b u s i n es s as p art of t he acq u i si t i on ; t h at W el ls Farg o ro u t in el y rel i es o n an d in t eg rat es

s u ch reco rd s i n t o i t s o wn fi l es ; an d t h at t h e at tach ed l o an d o cu m en ts accu rat el y refl ect

t h e p ay m en t an d t ran s act i on h is t o ry o f t he Hy d rajet acco un t

.

I n t h e l as t p arag rap h o f h er affi d av it

, Fl i g h t fu rt h er av erred n o t on l y t h a t s h e

i s fam i l i ar w i t h W el l s Farg o ’ s reco rd -k eep i n g, b u t al s o t h at sh e i s fam i li ar wi t h t h e

2m an n er i n wh i ch W ach o v i a p rep ared an d k ep t t h e at t ach ed reco rd s. Sh e s t at ed t h at

t h e reco rd s were m ad e at o r near t h e t i m e o f t h e occu rren ce o f t h e m at t ers s et fo rt h

t h erei n b y a p ers o n wi t h k n o w l ed g e o f t h e m at t ers ; th at t h e reco rd s were k ep t i n t h e

co u rs e o f W ach o v i a’ s reg ul arl y co n d u ct ed b u s in es s ; t h at t h e reco rd s were rel i ab l e.

Th e d efen d an t s o b

ject ed t o ad m i s si o n o f t h e Fl i g h t affi d av i t an d at tach ed l o an

d o cu m e n t s , bu t t h e t ri al co urt res erv ed ru l i n g u n t i l aft er t h e cl o s e o f t h e ev i d en ce.

Sev eral d ay s aft er t h e t ri al

, th e t ri al co urt i s s u ed i t s fi n al o rd er, i n wh ich i t fo u n d t h at

t h e affi d a v i t an d at t ach ed l o an d o cu m en t s w ere n ot ad m i s s ib l e b ecau se Fl i g h t

, an

em pl o y ee o f W el l s Farg o , d i d n o t h av e p ers o n al k n o wl ed g e o f t h e reco rd -k eep i n g

p ract i ces o f Wa c h o v i a. In t h e ab s en ce of t h e Fl i g h t affi d av i t an d at t ach ed b u s i n es s

reco rd s , t h e co u rt co ncl u d ed t hat t h ere was no ev i d en ce of d am ag es as t o th e t h ree

p ers o n al g u aran to rs an d en t ered ju d g m en t in t h ei r fav o r. H owev er, t h e co u rt fu rt h er

fo u n d t h at H y d rajet h ad m ad e ad m i ss i on s i n ju di ci o as t o th e am ou n t of i t s d eb t

, an d

t h e co u rt t h u s en t ered j u d g m e nt i n fav o r o f Ci ras ag ai n s t Hy d rajet i n t h e p ri n ci p al

am ou n t o f $ 7 2 9 ,8 5 6 , p l u s i n t eres t

, l at e fees an d at t o rn ey fees

.

Ci ras ap p eal s fro m t h e fi n al ju dg m en t

, co n t en d i n g th at t h e tri al co urt erred in

ex cl u d i n g t h e Fl ig h t affi d av i t an d t h e at tach ed b an k reco rd s . W e ag ree.

3Becau s e t h e b e n c h t r i al on d am ag es i n t h i s cas e t o o k p l ace i n J u n e 2 0 1 4

, t h e

p ro v is i o n s o f Geo rg i a’ s new ev i d en ce co d e, effect i ve J an u ary 1

, 2 0 1 3

, ap p l y

. See Ga.

L. 2 01 1 , p p . 9 9 , 2 1 4

, § 1 0 1

.

Un d er [OCGA § 2 4 -8 -8 0 3 (6 ) o f] o u r n ew co de, b u si n es s reco rd s m ay b e ad m i s s i b l e as a h ears ay ex cep t i o n: Un les s t h e so u rce o f i n fo rm at i o n

o r t he m et h o d o r ci rcu m s t an ces o f p rep arat i o n in d i cat e l ack o f

t ru s t wo rt h i n es s , a m em o ran du m , rep o rt

, reco rd

, o r d at a co m p i l at io n , i n

an y fo rm if (A ) m ad e at o r n ear t h e t im e o f t h e d es cri b ed act s , ev en t s ,

co n d i t i o n s, o pi n i o n s , o r d i ag n o s es ; (B) m ad e b y , o r fro m i n fo rm at i o n

t ran s m i t t ed b y , a p e r s o n wi t h p ers o n al k n owl ed g e an d a b u si n es s d u t y

t o rep o r t ; ( C) k ep t in t h e co u rs e o f a reg u larl y co n du ct ed b u s i n es s

act i v i t y ; an d (D) it w as t h e reg u l ar pract i ce of t h at b u s i n e s s act i v i t y t o

m ak e t he m em o ran d u m , rep o rt

, reco rd

, o r d at a co m p il at i o n , al l as s ho wn b y t h e t es t i m o n y o f t h e cu s to d ian o r o t h er q u al i fi ed wi t n es s o r b y

cert i fi cat i on

.

W a r e v. Mu l t i b a n k 2 00 9 -1 R ES -ADC Ven t u r e, LLC

, 3 2 7 Ga. Ap p

. 2 4 5

, 2 49 (2 ) (7 5 8

SE2 d 1 4 5) (2 0 1 4) (ci t at i o n , fo o t n o t e an d p u n ct uat i o n o m i t ted ).

Si n ce OCGA § 2 4 -8 -8 03 m i rro rs Ru l e 8 03 o f t h e Fed eral Ru l es o f Ev i d en ce,

we m ay l o o k t o fed eral cas e l aw fo r g u i d an ce i n i n terp ret i n g o u r st at ut e. W a r e , s u p ra

at 2 4 9 (2 ), n

. 11

. An d as s ev eral fed eral co u rt s hav e n o t ed un d er t h e fed eral ru l e,

“ ‘ em pl o y ees of s u cces s o r en t i t i es c an au th en t i cat e bu s i n es s reco rd s o f t h ei r

p r e d eces so r en t i t i es t h at p as s t o t h em b y v i rt u e o f m erg er.’ ” Id

. at 2 4 9 (2 ), q u o t i n g

Fed er a l D ep o s i t In s. Co r

p

. v. S r i Ch a kr a Gr o u

p LLC

, N o. 5 : 1 3 -CV-2 6 8-M TT, 2 0 1 4

4U

. S

. Di s t

. LEXIS 1 2 7 0 1, at * 1 1 (M .D. Ga. Feb

. 3

, 2 0 14 ). In d eed

, “ [i ] t i s n o t

n eces s ary t h at t h e p ers on wh o act u al l y p rep ared t h e b u si nes s reco rd tes t ify

, n o r t h at

t h e d o cu m en t b e prep ared b y t h e b u s i n es s w h i ch h as cu s to d y o f it

, so l o n g as o t h er

ci rcu m s t an t i al ev i d en ce s u g g es t s t h e t ru s t wo rt h i n es s o f t h e reco rd .” Un i ted S t a t es v.

Ha wki n s , 9 0 5 F 2 d 1 4 8 9, 1 4 9 4 (II) (A) (2 ) (1 1 th Ci r. 1 99 0 ) (ci t at i on o m i t t ed ).

M o reo v er, “ [f] ed eral co u rt s t h at h av e ex am i n ed t he t ru s t w o rt h i n es s p ro n g o f t h e

b u s i n es s reco rd ex cep t io n t o th e h ears ay ru l e h av e n o ted t hat

, g en eral ly

, ban k reco rd s

are p art i cu larl y s u i t ab l e fo r ad m i s s i o n u n d e r R u l e 8 03 (6 ) i n l i g h t o f t h e fas t i d i ou s

n at u re o f reco rd k eep i n g i n fi n an ci al i n s t i t u t i o n s , wh i ch i s oft en req u i red by

g o v ern m en t al reg u l at io n s .” W a r e , s u p ra at 2 4 9 (2 ) ( c i t a t io n s an d pu n ct u at i o n

o m it t ed ). Th us , “ a s u cces s o r b an k can rel y u p o n an d i n t eg rat e i n t o i t s o w n b u s i n es s

reco rd s i t s pred eces s o r’ s b u s i nes s reco rd s so l o n g as a p ro p er fo u n d at i o n i s l ai d u n d er

OCGA § 2 4 -8 -8 0 3 (6 ).” Ro ber ts

. v. Co mmu n i t y & S ou t h er n B an k

, 3 3 1 Ga. A p p

. 3 6 4,

3 7 2 (2 ) (7 7 1 SE2 d 6 8) (2 01 5 ) (ci t at i o n an d fo o t n o t e o m i t t ed ).

In t h e i n s t an t cas e, t h e Fl i g h t affi d av i t es t ab l i s h es t hat t h e b a n k r e c o rd s in

q u es ti o n p as s ed t o W el l s F a r g o a s part o f i t s acq u i s i t i o n o f W ach o v i a an d were

i n t eg rat ed i n t o i t s o wn b u s in es s reco rd s. As fo r t h e t ru s t wo rt h i nes s o f t he reco rd s ,

Fl i g h t ’ s av erm en t t h at t h ey are accu r a t e i s s u pp o rt ed b y t h e fact t h at t h e reco rd s

5refl ect t h e ex act rem ai n i n g p ri n ci p al b al an ce o f $ 7 2 9,8 5 6 ad m it t ed b y Hy d rajet

. An d

t h ere was n o ev i den ce p res en t ed at t ri al d is p u ti n g t hat p ri n ci p al b al an ce. Un d er t h es e

ci rcu m s t an ces , we fi n d t h at t h e Fl ig h t affi d av i t “ h as s u ffi ci en t l y au t h en t i cat ed t h o s e

reco rd s sh e rel i ed o n an d at t ach ed t o h er affi d av i t .” W a r e , s u p ra (ci t at i o n s o m i t t ed ).

Th e d o cu m en t s were t h erefo re ad m i s s i b l e as bu s in es s reco rd s. See R o b er t s , s u p ra at

3 7 1

. See al s o Lo c k

w o o d v

. F

D I C

, 3 3 0 Ga. Ap p

. 5 1 3

, 5 1 6 (2 ) (a), n

. 1 3 (7 6 7 SE2 d

8 2 9 ) (2 01 4 ) (wh en ro u t i ne, fact u al d o cu m en t s m ad e b y o n e b us i n es s are t ran s m i t t ed

an d d el i v ered t o a s eco nd bu s in es s an d t hen en t ered i n t he reg u l ar co u rs e o f b u s i n es s

o f t h e recei v i n g b us i nes s, s uch d o cu m en t s are ad m i s s ib l e as b u si n es s reco rd s ).

“ It i s wi t h i n t h e t ri al co u rt ’ s d i s cret i o n t o d e t erm i n e wh et h er a p ro p er

fo u n dat i o n was l ai d fo r ap p l i cat i o n o f t h e bu s in es s reco rd s ex cep t i o n t o a p art i cu l ar

d o cu m en t [.] ” Ro b er t

s , s u p ra at 3 6 9 (2 ) (ci t at i o n s an d p u n ct u at i o n om i t t ed ). Here, t h e

t ri al co u rt ab us ed i ts d i s cret i o n b y fi n d i n g th at t h e b u s i n es s reco rd s ex cep t i o n d o es

n o t ap p l y t o th e ro u t i ne b an k reco rd s au t hen t i cat ed b y t he Fl i g h t affi d av i t as h av i n g

b een tran s ferred t o W el l s Farg o , an d i nt eg rat ed in t o i t s o wn b u s i n es s reco rd s , as p art

o f t h e acq u i s i ti o n o f W ach o v i a. Acco rd in g l y , we re v ers e an d rem an d fo r

reco n s i d erat i on o f t h e is s u e o f d am ag es in l i g h t o f t h e ad m i s s i b l e affi d av i t an d

at t ach ed reco rd s

.

6Ju d

g men t r ever

s ed an d ca s e r ema nd

ed

. El li n g t o n

, P

. J., a n d D i ll a r d

, J.,

co n cu r

.

7