Defective Debt Buyer Affidavits and the Lack of Data Integrity: Other People’s Records (“OPR”) are Not “Business Records” of Midland Funding

Barry Stimpson, like so many other Americans, was sued by Midland Funding, LLC. Midland  claimed that it had bought a debt Stimpson owed to Capital One. Midland tried to prove that Stimpson owned it money with three affidavits. The District Court of Canyon County, Idaho, found that these affidavits were insufficient. The court’s decision merits reading for its clear and full analysis of the law of evidence as applied to debt buyer affidavits.

The District Court is the highest tier of trial court in Idaho, similar to Maryland Circuit Courts. Like Maryland Circuit Courts, Idaho District Courts hear appeals from lower courts, such as Magistrates Courts and Small Claims Departments. Midland won a motion for summary judgment in a Magistrates Court, and Stimpson appealed. The evidence submitted by Midland was typical of debt buyer cases in recent years:

The entirety of Midland’s case . . . was contained in three affidavits submitted with its summary judgment briefing, together with certain documents attached to the affidavits. . . .

Exhibit 1 was the affidavit of Stephanie Urbani, introduced as “an employee” of Capital One Services. No documents were attached to the Urbani affidavit.

Exhibit 2 was the affidavit of Lily Haas, introduced as “an officer” of Midland Funding. Documents attached to the Haas affidavit consisted of a one page document purporting to be a summary of the Capital one credit card account standing in Stimpson’s name, approximately one year’s worth of copies of the monthly statements that plaintiff claimed would have been sent to defendant ‘s address and a copy of the cardholder agreement. Haas represented in her affidavit that these documents were all prepared from the records of Capital One Bank that Midland received when it purchased the accounts.

Exhibit 3 was the affidavit of Jonathan Stalls, introduced as ‘a managing vice president” of Capital One Bank. One document was attached to the affidavit of Jonathan Stalls: a copy of the bill of sale of accounts, presumably from the documentation of the sale of accounts from the bank to Midland.

The Court summarized the problem with this evidence thus:

The problem with these three affidavits and the documents attached to them is that essential evidentiary underpinnings are completely lacking.

In each case, says the court, the affidavits lacked the necessary foundation to show that the affiants were competent to testify.

The Stalls Affidavit

The Stalls affidavit says that . . . [Stalls] is a custodian of the books and records that were transferred to Midland. Presumably this was an attempt to start a foundation for these records under the business records exception to the hearsay rule . . . Even so, it is obvious from the nature of the transaction in question that the electronic transfer was not a transaction occurring in the ordinary course of business. . . . this was a transaction out of the ordinary course of business where files and accounts were culled separated, reorganized and restructured into the separate electronic file, and then sold in bulk to the new entity. Nothing about this transaction could be said to be part of the routine business of either the bank or of Midland.

The Court criticized the lack of explanation about how the electronic file was prepared and concluded that Stalls could only testify that a sale of accounts had happened, and Stalls could authenticate the bill of sale (which he signed) but no more. In particular “he is not competent . . . to testify that this file was accurate, or complete, or reliable for later use by Midland in managing collection efforts.”

The Haas Affidavit

Midland Funding does not maintain its own records – that work is done by Midland Credit Management, LLC. Midland’s complicated record keeping arrangements were criticized – the court suggested that “in effect, Haas, as an officer of Midland is testifying that Midland by Haas has authorized [Midland Credit Management], acting through Haas as its legal specialist . . . a better practice would be require at least two people to establish the qualifications of one to act for the other.”

However, the real problem with the Haas affidavit was more substantial. The court noted that the electronic file identify by Stalls was (presumably) the “business records” referred to by Haas. However “these were not routine business records of Capital One, maintained in the ordinary course of business.” Rather:

None of [the relevant data] was created or sourced into the computer records while they were maintained by MCM or Midland; all of it would have been created or sourced by the bank.

Haas may be qualified to explained what MCM did, or Midland . . . but she cannot establish a foundation for the bank data – she has not personal knowledge, she was not a custodian of the bank’s records . . . and the records in Midland’s hands do not qualify as business records. . . . Without a witness from the bank with knowledge and probably an expert to walk the court through the steps of culling the necessary data pertaining to the accounts to be transferred from the regular business records of the bank, then getting the data into particular computer files for transfer . . . and finally in actually getting them transferred and up and running with Midland – the files on the individual accounts, and therefore the documents extracted from them are not admissible.

In short, the records MCM received were not business records, because they were part of an out-of-the-ordinary transaction by Capital One, therefore they could not be admitted through the business records exception to the rule against hearsay.

The Urbani Affidavit

The court stated that “the affidavit of Urbani is worthless.” As an employee of Capital One Services, there was no reason to think that she had any knowledge of the relevant records: “there is no explanation of what her job is or was, who she reports to, what her duties are or were, or how she obtained any of the knowledge to which she testified.”


This is an important decision from because it addresses the lack of data integrity head on, and in a clear analysis it reaches what seems to be the only logical result.  In sum, the documents attached to the exhibits were inadmissible hearsay. Nobody showed that they had actual knowledge of the source of the data or how the data were routinely maintained by the Bank. The business records exception did not apply to the electronic data transferred from Capital One to Midland because the file transferred was prepared out of the ordinary course of business, especially for the sale. Without the data and documents attached to the various exhibits, Midland was not entitled to summary judgment, so the case must return to the Magistrates’ Court.