[Cite as HSBC Bank U.S.A., Natl. Assn. v. Gill, 2019-Ohio-2814.] 

IN THE COURT OF APPEALS 

FIRST APPELLATE DISTRICT OF OHIO 

HAMILTON COUNTY, OHIO 

HSBC BANK USA, NATIONAL 

ASSOCIATION, 

 Plaintiff-Appellee, 

 vs. 

KULWINDER GILL, 

 and 

AMARJIT S. GILL, 

 Defendants-Appellants. 

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APPEAL NO. C-180404 

TRIAL NO. A-1201799 

 O P I N I O N.

 

 

Civil Appeal From: Hamilton County Court of Common Pleas 

 

Judgment Appealed From Is: Affirmed 

Date of Judgment Entry on Appeal: July 10, 2019 

Buchanan Ingersoll & Rooney PC and Timothy P. Palmer, for Plaintiff-Appellee, 

Gary F. Franke, for Defendants-Appellants.
OHIO FIRST DISTRICT COURT OF APPEALS

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BERGERON, Judge.

{¶1} While the defendants-appellants challenge sundry aspects of the 

damage award in this case, at bottom, their appeal turns on the question of whether 

the plaintiff-appellee laid a proper foundation for the evidence establishing its 

award. The trial court admitted the evidence in question under the business-records 

exception to the hearsay rule, and our review of the record confirms the propriety of 

this decision. We therefore affirm the judgment of the trial court. 

I. 

{¶2} The history of this case traces to a foreclosure action on a commercial 

loan for a hotel against two sets of guarantors; defendants Amarjit S. and Kulwinder 

Gill are one set of the guarantors. The underlying note was in the principal amount 

of $1,333,000 to Business Loan Center, LLC, f.k.a. Business Loan Center Inc. 

(“BLC”), which plaintiff-appellee HSBC Bank USA, National Association (“HSBC”) 

eventually acquired via assignment. Upon default, HSBC received $1,090,018.28 

from a short sale of the collateral property in 2007. 

{¶3} HSBC then commenced a collection action against the guarantors to 

collect the balance owed on the loan, including interest and fees. In 2015, however, 

the Gills exited from this litigation after reaching a tentative settlement with HSBC 

pending Small Business Administration (“SBA”) approval. HSBC proceeded to trial 

against the other guarantors, ultimately receiving a judgment in the amount of 

$461,477.44 plus interest against the other set of guarantors, with whom it settled for 

a $400,002 payment on the deficiency. 

{¶4} The tentative settlement between the Gills and HSBC, however, 

ultimately collapsed when the SBA did not approve the deal. This prompted HSBC to 

sue the Gills to collect the balance of the deficiency from them, and when the dust 
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settled from this litigation, the trial court entered a judgment against the Gills in the 

amount of $145,274.94. 

{¶5} With no serious dispute about their liability or enforceability of their 

guaranty, the Gills’ arguments revolve around the amount and propriety of the 

damages award. The Gills frame a single assignment of error challenging the 

damages award, with multiple separate issues for review. Ultimately, the predicate 

for most of these issues concerns the admissibility of the relevant evidence, so we 

begin our analysis there. 

II. 

A. 

{¶1} Before undertaking the substantive analysis, we pause for a moment at 

the standard of review, which appears to be a bit of a quagmire. Generally, “the trial 

court enjoys broad discretion in admitting or excluding evidence. An appellate court 

will not disturb the exercise of that discretion absent a showing that the [party 

against whom the evidence was admitted] has suffered material prejudice.” 

(Citations omitted.) State v. Sage, 31 Ohio St.3d 173, 182, 510 N.E.2d 343 (1987). 

While that proposition is familiar enough, when it comes to hearsay and its 

exceptions, Ohio courts have proven less-than-precise at times in terms of the 

standard of review, generating conflicting precedent. We see this even in our own 

district. Several years ago, in Meyers v. Hot Bagels Factory, Inc., 131 Ohio App.3d 

82, 100, 721 N.E.2d 1068 (1st Dist.1999), this court held that the abuse-of-discretion 

standard is not appropriate relative to the admissibility of hearsay in the civil 

context. We squarely addressed this question and determined that deferential 

review should not govern because the admissibility of hearsay is not optional: “ ‘This 

rule does not provide the trial court with discretion to admit hearsay; rather, the rule 
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mandates its exclusion unless the exceptions found at Evid.R. 803, 804, 

or 807 apply.’ ” Id. at 100, quoting Smith v. Seitz, 4th Dist. Vinton No. 97CA515, 

1998 WL 393880, *1 (July 9, 1998). Given the distinction between hearsay and 

garden-variety evidentiary decisions, we accordingly held: “ ‘Unlike those evidentiary 

rulings which relate to matters either explicitly or implicitly within the trial court’s 

discretion, the admissibility of hearsay should be reviewed with little deference to the 

trial court’s decision.’ ” Id., quoting Smith at *1. 

{¶2} Since that time, a split developed amongst the appellate districts 

between those that view the admission of hearsay as question of law for which de 

novo review is appropriate, and those that treat hearsay as falling within the general 

abuse-of-discretion standard. Compare, e.g., John Soliday Fin. Group, L.L.C. v. 

Pittenger, 190 Ohio App.3d 145, 2010-Ohio-4861, 940 N.E.2d 1035, ¶ 28 (5th Dist.) 

(“[W]hile the trial court has discretion to admit or exclude relevant evidence, it has 

no discretion to admit hearsay. * * * Thus, we review de novo the trial court’s 

decision * * *.”); Monroe v. Steen, 9th Dist. Summit No. 24342, 2009-Ohio-5163, ¶ 

11 (“Whether evidence is admissible because it falls within an exception to the 

hearsay rule is a question of law, thus, our review is de novo.”); with Abrams v. 

Abrams, 2017-Ohio-4319, 92 N.E.3d 368, ¶ 31 (2d Dist.) (“We review rulings 

regarding hearsay under an abuse-of-discretion standard.”); Bishop v. Munson 

Transp., Inc., 109 Ohio App.3d 573, 579, 672 N.E.2d 749 (7th Dist.1996) (“The 

decision to admit a business record into evidence pursuant to Evid.R. 803(6) * * * 

will not be disturbed on appeal absent a clear showing of an abuse of discretion.”). 

{¶3} In recent years, without discussion of Meyers or of this split of 

authority, this court began applying an abuse-of-discretion standard of review to 

hearsay and hearsay exception determinations by invoking this quote from State v. 
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Issa, 93 Ohio St.3d 49, 64, 752 N.E.2d 904 (2001): “The trial court has broad 

discretion in the admission of evidence, and unless it has clearly abused its discretion 

and the defendant has been materially prejudiced thereby, an appellate court should 

not disturb the decision of the trial court.” See State v. Barnes, 1st Dist. Hamilton 

Nos. C-170355 and C-170356, 2018-Ohio-3894, ¶ 4 (citing Issa and applying to 

hearsay determination); State v. Beck, 2016-Ohio-8122, 75 N.E.3d 899, ¶ 27-28 (1st 

Dist.) (quoting Issa and applying to business-records exception). But the problem 

with this is that in Issa, the Supreme Court discussed the standard of review in the 

context of relevance and not hearsay. So we appropriated the general relevance 

standard for hearsay, at odds with our analysis in Meyers.

{¶4} But we appear to be in good company here, because the Supreme 

Court of Ohio did the exact same thing. Recently, in State v. McKelton, 148 Ohio 

St.3d 261, 2016-Ohio-5735, 70 N.E.3d 508, ¶ 97, the court held: “Ordinarily, we 

review a trial court’s hearsay rulings for an abuse of discretion.” The case that 

McKelton cited for that proposition (State v. Hymore, 9 Ohio St.2d 122, 128, 224 

N.E.2d 126 (1967)), however, like Issa, addressed a relevance determination—

suggesting that the court did not thoroughly consider the policy issues raised by the 

appellate district split (nor did the court acknowledge the split). See State v. 

Fambro, 11th Dist. Trumbull No. 2016-T-0063, 2017-Ohio-5646, ¶ 74 (Cannon, J., 

concurring) (arguing that McKelton should not be read to apply discretionary review 

to hearsay since it relied on a relevance case).

{¶5} Even if McKelton stands on a shaky foundation, other Supreme Court 

decisions have applied the abuse-of-discretion standard of review to hearsay 

determinations in both the civil and criminal context. See Beard v. Meridia Huron 

Hosp., 106 Ohio St.3d 237, 2005-Ohio-4787, 834 N.E.2d 323, ¶ 20-22; State v. 
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Dever, 64 Ohio St.3d 401, 410, 596 N.E.2d 436 (1992). To be fair, none of these 

cases actually engage in an analysis between the two dueling standards of review, 

and that debate is one that should probably warrant some attention by the high 

court. Until that time, however, we consider ourselves bound to follow the extant 

guidance from the Supreme Court, and we clarify that hearsay determinations are 

reviewed for an abuse of discretion.

B. 

{¶6} With the standard of review in mind, we turn to the substance of the 

hearsay objection at hand. Hearsay may be admissible if subject to an enumerated 

exception—here, the business-records exception found in Evid.R. 803(6). This 

excepts “Records of Regularly Conducted Activity” from the general prohibition 

against hearsay, which covers: 

A memorandum, report, record, or data compilation, in any form, of 

acts, events, or conditions, made at or near the time by, or from 

information transmitted by, a person with knowledge, if kept in the 

course of a regularly conducted business activity, and if it was the 

regular practice of that business activity to make [such records], all as 

shown by the testimony of the custodian or other qualified witness 

* * *. 

Id. Put differently, the proponent must lay a foundation “demonstrating that the 

[record] was prepared at or near the time of the recorded event or that it was the 

regular custom to make such a [record].” Meyers, 131 Ohio App.3d 82 at 101, 721 

N.E.2d 106. See Great Seneca Fin. v. Felty, 170 Ohio App.3d 737, 2006-Ohio-6618, 

869 N.E.2d 30, ¶ 10 (1st Dist.) (for purposes of Evid.R. 803(6), the proponent must 

show that “(i) the record [was] regularly made in a regularly conducted activity; (ii) 
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the contents * * * [were] entered or transmitted by a person with knowledge of the 

act, event, or condition recorded therein; and (iii) the act, event, or condition [was] 

recorded at or near the time of the transaction.”). 

{¶7} The lone witness to testify at trial was Susan Branch, and the Gills 

focus their attack on her, insisting that she lacked the competence to testify as to 

damages and could not properly authenticate pertinent documents. Ms. Branch 

testified that she was a licensed attorney, and a vice president and asset manager in 

the Special Services Department at Ciena Capital, LLC. She testified that she was 

also an officer with BLC, a subsidiary of Ciena Capital and the entity that originated 

the loan in issue. BLC (for which Ciena Capital is the parent company) assigned the 

loan to a pool; the pool was then sold and put into a trust for which HSBC ultimately 

became the trustee. She explained that Ciena’s Special Services Department handles 

defaulted loans and described her role with respect to the loan in issue as that of an 

administrator and a day-to-day manager. She had access to the loan transcript, 

accounting, payoff statements, and loan file. 

{¶8} Exhibit 12 emerges as perhaps the key document in this case because it 

is a loan history, which captures the loan payoff statement and transcript—including 

all payments made during the life of the loan, how the payments were applied, any 

BLC advanced expenses, and fees. HSBC’s counsel, after establishing Ms. Branch’s 

general credentials, laid a foundation for the admission of Exhibit 12 on her redirect 

examination: 

Q. Now, with regard to the payoff, the loan history in Exhibit 12, 

can you tell the Court what department at BLC prepares the 

accounting statements or the history statements and payoff 

statements? 
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A. That’s the loan accounting department. Asset managers need 

loan payoff statements for motions in litigation. And so asset manager 

directs the – sends a request to the loan accounting department and 

they use the software to – that tracks all the payments and fees to 

generate the payoff statement. 

Q. Okay. Now, the payments and fees that get generated on the 

payoff statement and the loan history, can you tell the Court how the 

transactions are entered into the system in the first place? Are they 

done contemporaneously as things happen? 

A. So when a payment is received, usually between 24, 48 hours, 

it’s entered into a system called Loan Manager. 

Q. And do the people at BLC who enter the information, are they 

under an obligation to record the information accurately? 

A. Yes, they are. 

Q. And are they under an obligation to record the information 

timely? 

A. Yes. 

{¶9} We find this testimony sufficient to lay a proper foundation to admit 

the loan history upon which the trial court based its damages determination. Ms. 

Branch worked for BLC’s parent company, served as an officer of BLC, and was 

familiar with the Loan Manager system used to create the loan history, knew which 

department generated it, and relied on its contents in her role as the administrator 

and day-to-day manager of the loan in issue. She established that the employees of 

BLC entering the loan information were under an obligation to do so regularly, 

timely, and accurately. Authentication for purposes of the business-records 
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exception “ ‘does not require the witness whose testimony establishes the foundation 

for a business record to have personal knowledge of the exact circumstances of 

preparation and production of the document.’ ” Jefferson v. CareWorks of Ohio, 

Ltd., 193 Ohio App.3d 615, 2011-Ohio-1940, 953 N.E.2d 353, ¶ 11 (10th Dist.), 

quoting State v. Myers, 153 Ohio App.3d 547, 2003-Ohio-4135, 795 N.E.2d 77, ¶ 60 

(10th Dist.). “[A] court may admit a document as a business record even when the 

proffering party is not the maker of the document, if the other requirements of 

Evid.R. 803(6) are met and the circumstances suggest that the record is trustworthy. 

* * * Trustworthiness of a record is suggested by the profferer’s incorporation into its 

own records and reliance on it.” (Citations omitted.) U.S. Bank, N.A. v. Christmas, 

2d Dist. Montgomery No. 26695, 2016-Ohio-236, ¶ 18, vacated on other grounds, 

146 Ohio St.3d 1468, 2016-Ohio-5108, 54 N.E.3d 1267. And the Gills have done 

nothing to cast doubt on the trustworthiness of this document. Consistent with 

Evid.R. 803(6) and the above authority, we hold that the trial court did not abuse its 

discretion in admitting the loan history in Exhibit 12 (or the related testimony of Ms. 

Branch). 

{¶10} Having determined that the evidence establishing HSBC’s damages 

was properly admitted, it fell to the Gills to present contrary evidence, which they did 

not do. Their effort to poke holes in HSBC’s evidence thus comes up short in the 

absence of any contrary evidence. For instance, while they quibble with the 

calculation of interest (claiming improper compounding), they point to no evidence 

substantiating that assertion. Nor did they cross-examine Ms. Branch on this point 

in an effort to establish an inappropriate rate.1 It is incumbent upon a party to 

 

1 The Gills take issue with the fact that HSBC “charged 11% despite the loan contract rate that 

called for the rate to be prime plus 2.75%.” The note does set the interest rate at prime plus 2.75 

percent. The Gills do not identify the applicable prime rate. HSBC counters that the prime rate 

as of the default was 8.25 percent, which would explain the 11 percent. 
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introduce contrary evidence into the record or risk being saddled with the evidence 

that they do not like. Therefore, we see nothing in the record to disturb the trial 

court’s upholding of HSBC’s calculations. 

C. 

{¶11} The remaining issues raised by the Gills are easily dismissed. They 

cite an outdated version of Civ.R. 54(C) for the proposition that a plaintiff is limited 

to the sum claimed in the complaint (the ad damnum clause) absent amendment 

prior to trial. The current version of the rule dispels this concern: “[E]very final 

judgment shall grant the relief to which the party in whose favor it is rendered is 

entitled, even if the party has not demanded the relief in the pleadings.” 

Civ.R. 54(C). (Emphasis added.) The Gills fail to respond to the current version of 

the rule, for good reason. 

{¶12} The Gills next assert that damages should have been capped at the 

amount awarded against the other guarantors ($461,477.44) less the proceeds 

collected from those other guarantors ($400,002.00), or $61,475.44 plus statutory 

interest of $14,033.66 (calculated at the postjudgment rate of 3 percent for 2015 and 

2016 and 4 percent for 2017). While no one disputes that the Gills should receive 

credit for payments made by other guarantors (which the trial court ensured), we see 

several flaws in their math exercise here. The Gills declined to participate in the 

prior proceeding against the other guarantors, and thus they cannot now try to reap 

the benefits of that. For instance, they invite us to impose the (much lower) Ohio 

postjudgment interest rate rather than the prevailing rate under their guaranty. But 

they cite no authority for the notion that nonparties can benefit from the 

postjudgment interest rate when they were not parties to the underlying judgment. 

The plain language of R.C. 1343.03(B) militates against that interpretation, 
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describing postjudgment interest in terms of it being in effect after a “judgment, 

decree, or order for the payment of money rendered in a civil action based on * * * a 

contract * * *.” There is no reason to conclude that nonparties to a judgment, decree, 

or order would be bound by this statute. The Gills were liable to HSBC on an 

independent guaranty, and we are not persuaded that they are entitled to enjoy the 

reduced rate of interest tied to a separate judgment. 

{¶13} Charging a failure to mitigate damages, the Gills also take issue with 

HSBC accepting a settlement of less than the full amount of the judgment from the 

other guarantors. In addition to being facially untenable (the Gills benefitted from 

payment of any part of the remaining deficiency from another party), this 

proposition also lacks any supporting authority. Moreover, to the extent that it 

would be applicable in this context, “[m]itigation is an affirmative defense in Ohio.” 

Young v. Frank’s Nursey & Crafts, Inc., 58 Ohio St.3d 242, 244, 569 N.E.2d 1034 

(1991). The Gills did not present any evidence demonstrating HSBC’s failure to take 

reasonable affirmative action to mitigate damages. “[S]tatements of counsel are not 

evidence[,]” and the Gills’s counsel’s statements comprise the entirety of this 

argument. Corporate Exchange Bldgs. IV & V, L.P. v. Franklin Cty. Bd. of Revision, 

82 Ohio St.3d 297, 299, 695 N.E.2d 743 (1998). It appears to us that HSBC 

diligently sold the underlying property and pursued collection actions against the 

other guarantors first. The Gills were the final stop in that journey, and they 

benefited from these other efforts. 

{¶14} As a last ditch effort to set aside this judgment, the Gills turn to 

promissory estoppel—in particular, they argue that they dismissed cross-claims 

against the other guarantors on the belief that they had a settlement with HSBC. The 

Gills’ counsel argues that they relied on the settlement, but the record is barren as to 
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any evidence to that effect. See Corporate Exchange Bldgs. IV & V, L.P. The Gills 

characterize Ms. Branch’s testimony as conclusive that SBA approval was not 

actually required to complete the settlement. In fact, however, she testified on crossexamination that she only had authority to resolve a defaulted loan if it is given to 

her by the people that own the loan, and that they needed SBA approval “if [they 

were] not going to get the full principal back.” The principal on this loan was not 

satisfied until August 2017, well after the Gills tentatively settled and released their 

cross-claims in 2015. The record lacks any evidence that the Gills relied on the 

tentative settlement in releasing their cross-claims; even if there were, the evidence 

presently within the four corners of the record suggests that any such reliance may 

not have been reasonable given the tentative nature of the settlement. 

III. 

{¶15} Upon consideration of the issues raised by the Gills, we find that none 

demonstrates a valid reason to reverse the judgment below. Accordingly, their sole 

assignment of error is overruled, and we affirm the trial court’s judgment. 

Judgment affirmed. 

ZAYAS, P. J., and CROUSE, J., concur. 

Please note: 

 The court has recorded its own entry this date.