In US National Bank v. Avdic, 2014 IL App (1st) 121759-U, the First District provides a detailed analysis of both the evidentiary foundation requirements for computer-generated business records and the requirements of a valid summary judgment affidavit.
The plaintiff lender filed a foreclosure suit against the borrower defendant and moved for summary judgment. The lender supported its motion with the affidavit of a bank officer who attached sworn copies of key loan documents, the promissory note and a computer-generated payment history for the defendant borrower’s account.
The defendant moved to strike the bank’s affidavit on the basis that it failed to lay a sufficient foundation for the attached loan and payment records and didn’t establish that the bank employee who signed the affidavit had first-hand knowledge of the defendant’s payment history. The trial court entered summary judgment for the lender and denied the borrower’s motion to strike the affidavit. The borrower appealed.
Result: Trial court affirmed. Plaintiff-lender wins.
Q: How Come?
A: The lender’s summary judgment affidavit complied with Illinois Supreme Court Rule 191 – the rule that governs summary judgment affidavits. Rule 191 requires affidavit to state specific facts and to be based on personal knowledge instead of conclusions or guess-work. Affidavits are substitutes for live trial testimony and because of that, must pass a stringent test for admission in evidence. US Bank, ¶¶ 22-25.
To lay a foundation for admitting business records as a hearsay exception, the party must show that the records were (1) made in the regular course of business; and (2) at or near the time of the event or occurrence. Rule 803(6) and Supreme Court Rule 236 work in tandem to codify the business records exception to the hearsay rule. US Bank, ¶¶ 24-26.
Where computer-generated records are involved, the proponent must demonstrate (1) that the computer equipment is standard equipment, (2) the computerized entries were made in the regular course of business (3) at or reasonably near in time to the events recorded and (4) that the sources of information, the method of data entry and preparation are all trustworthy. US Bank, ¶26.
The Court found that the lender’s affidavit met the relevant Rule 191 criteria. The bank officer testified that she was familiar with the lender’s business practices, records and its manner of inputting, tracking and generating payment information. She also testified in detail what steps the bank takes when creating, storing and printing loan and payment records. The officer also said she reviewed the loan file, promissory note and related documents. She also attached the key loan documents to the affidavit. ¶¶ 30-31.
The affidavit also met the admissibility standards for computer-generated payment records. The bank officer described the computer software used by the bank to create and print out loan payment histories and testified that the software program used was standard and customary in the banking industry. The officer even said that the computer equipment was periodically checked for accuracy. ¶¶ 29-30.
The court also found there was no requirement that the officer have first-hand knowledge of the borrower’s account or that she (the officer) personally made the payment entries into the bank’s computer for the affidavit to conform to Rule 191’s requirements. Under Rule 236 and Illinois Evidence Rule 803(6), a lack of personal knowledge can affect the weight given to testimony; but it won’t bar that testimony outright.
Take-aways: To get computer business records into evidence on summary judgment, the mo any should itemize each foundational requirement for those records. A business entity plaintiff especially should establish that the person signing a summary judgment affidavit is familiar with the business’s record-keeping and billing processes and can testify to any unique billing and payment software used by the business.