Wachovia Bank held a promissory note from Dianne Matthews for money she had borrowed.  Wells Fargo Bank acquired Wachovia and later filed suit against Matthews for breach of the promissory note.

Matthews failed to answer the complaint and a default judgment was entered against her in the Forsyth County Superior Court.  A bench trial was then held solely on the issue of damages.

Wells Fargo called Jill Freel as a witness to authenticate Wachovia’s records for Matthews’ loan.  Ms. Freel testified that she was an operations analyst for Wells Fargo, that she was familiar with Wells Fargo’s record keeping practices,  that a “transaction statement” of Matthews’ account had been put together from bank records reflecting all payments Matthews had made, and that Wells Fargo had all records supporting the “transaction statement.”

Matthews objected to the admission of the “transaction statement” into evidence at trial on the grounds that Jill Freel, as an employee of Wells Fargo, had no personal knowledge of Wachovia’s record keeping practices.

The Superior Court overruled her objection and admitted the “transaction statement” into evidence.  Judgment was entered against Matthews and in favor of Wells Fargo in the amount of $261,475.21.

Matthews appealed, arguing that the “transaction statement” should not have been admitted into evidence because the testimony of Jill Freel was insufficient to establish a proper foundation for its admission.

In its decision, Matthews v. Wells Fargo Bank, N.A., 335 Ga. App. 526, 782 S.E.2d 312 (2016), the Georgia Court of Appeals began by looking at Georgia’s rules of evidence.

Georgia Code section 24-8-803 provides in relevant part:

  • The following [evidence] shall not be excluded by the hearsay rule . . . :
    • (6) Records of regularly conducted activity. . . .  a memorandum, report, record, or data compilation, in any form, of acts, [or] events, . . . if (A) made at or near the time of the described acts, [or] events; (B) made by, or from information transmitted by, a person with personal knowledge and a business duty to report; (C) kept in the course of a regularly conducted business activity; and (D) it was the regular practice of that business activity to make the memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness . . . .

Quoting one of its own earlier decisions, the court of appeals then provided its perception of the meaning of this rule of evidence:

[A] business record is admissible as an exception to the hearsay rule if: the record was made at or near the time of the described act; the record was made by a person with personal knowledge and a business duty to report; the record is admitted through the testimony of a qualified witness; the record was kept in the course of a regularly conducted business activity; the record was made as part of the [business’s] regular business activity; and the source of information or the method or circumstances of preparation do not indicate a lack of trustworthiness.

On appeal, Dianne Matthews argued that the testimony of Jill Freel was insufficient to justify admission of the “transaction statement” into evidence.  Ms. Freel admitted she had no knowledge about how Wachovia kept its loan history, payment records, or the records set forth in the “transaction statement.”

The court of appeals responded to Matthews’ argument by stating it had always followed the rule that employees of successor entities can authenticate business records of their predecessor entities that are acquired by a merger.

Appellant Matthews maintained that her case was distinguishable from other precedent.  What made the difference, she argued, was that Ms. Freel affirmatively testified that she had no understanding of how Wachovia kept its loan transaction records or how those records were integrated into the Wells Fargo system.

The Georgia Court of Appeals stated, however, that this did not mean Ms. Freel was incapable of authenticating Wachovia’s business records.  She testified that she knew how the “transaction statement” was prepared, that it was prepared and kept in the regular course of Wells Fargo’s business activity, and that it was Wells Fargo’s regular business practice to prepare and maintain such records.  She also testified that, based upon her experience working with the transfer of files from Wachovia to Wells Fargo, she had no reason to believe that Wachovia’s records were inaccurate.  Finally she testified that she was familiar with the transfer of transaction histories from Wachovia to Wells Fargo.

Based upon this testimony, according to the court of appeals, the trial court’s determination that Wells Fargo had established a sufficient foundation for admission of the “transaction statement” into evidence was proper.  The trial court’s decision was affirmed in this appeal.