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Superior Court Declines to Apply Business Records Exception to Electronic Records Created by Third-party Assignor of a Debt.

Posted By Cliff Tuttle | August 11, 2011

No. 678

In a case of first impression, a panel of the Superior Court declined to find that electronic records of a credit card account generated by a third party , who had assigned the debt to the plaintiff, were entitled to be admitted into evidence under the business records exception to the hearsay rule of evidence without authentication under the requirements of Pennsylvania Rule of Evidence 803(6) and Section 6108 of the Uniform Business Records as Evidence Act. The Plaintiff in this case could not fulfill the requirements of the rule and statute.

Commonwealth Financial Systems, Inc. (CFS) is in the business of purchasing delinquent credit card accounts in bulk, frequently from assignees of the original issuer.  In this case, it took assignment of an account originated by Citibank and initially assigned to another company.  This account was reassigned to CFS, which brought suit to collect the debt, including interest, attorneys fees and costs.

Although she did not appear at the arbitration hearing, the cardholder, Ms. Smith, prevailed.

On appeal to the Common Pleas Court, CFS offered various records into evidence.  These included, inter alia, bills of sale for the assignments and a computerized spread sheet which had, according to testimony of CSF’s witness, Mr. Venditti, been authored by Citibank and passed along to CSF through the intermediary assignee, NCOP. However, the Superior Court noted the following:

Mr. Venditti acknowledged that he was not familiar with how Citibank or NCOP created or maintained their business records, employed or protected their computers, and electronically transmitted the spreadsheets. N.T., 7/16/09, at 51-54. Moreover, he did not have personal knowledge that the entries on the spreadsheets were made at or near the time of the events or that the data was transmitted by someone with knowledge. Id. at 55. As 495*495 for the credit card agreement revision dates, Mr. Venditti explained that the last revision before Ms. Smith’s default was made in 1999, and a final revision was made in 2004. Id. at 61. He could not confirm whether the 1996/1997 Citibank credit card agreement applied to Ms. Smith’s account, but he admitted that version did not mention a 23.99% interest rate or 20% counsel fees. Id. at 61-63, 65-67.

In other words, key elements of proof needed to establish that these documents were entitled to admission into evidence under the business records exception were missing. This witness could not provide this critical information because he was not in a position to know it from personal knowledge.

Pa. R. E. 803(6) states:

Records of regularly conducted activity. 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 the memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness, or by certification that complies with Rule 902(11), Rule 902(12), or a statute permitting certification, unless the sources of information or other circumstances indicate lack of trustworthiness. The term “business” as used in this paragraph includes business, institution, association, profession, occupation, and calling of every kind, whether or not conducted for profit.

The Uniform Business Records as Evidence Act, 42 Pa. C. S. A. Section 6108 states:

A record of an act, condition or event shall, insofar as relevant, be competent evidence if the custodian or other qualified witness testifies to its identity and the mode of its preparation, and if it was made in the regular course of business at or near the time of the act, condition or event and if, in the opinion of the tribunal, the sources of information, method and time of preparation were such to justify its admission.


Ms. Smith did not appear to testify.  It was trial counsel’s strategy not to produce her and the trial court ruled that the request was made too late.  Plaintiffs in such cases often rely upon calling the defendant to elicit an admission of the debt, since this evidence is difficult to obtain otherwise.  CFS’s case was also hurt by the fact that it produced a contract form that was generated some years after the issuance of the card and was not signed and did not contain any information linking it to the transaction.

The trial court had held that CFS had failed to lay a proper foundation for the purported business records and refused to admit them at trial. CFS argued on appeal that similar records had been admitted in federal courts and various other states under the doctrine of “incorporation” and that this was a growing trend. By incorporation, it is meant that the assignee relies upon the accuracy of the transmitted data and incorporates it into its business records.

After a careful review of the detailed arguments presented, the Superior Court concluded:

Regardless of a “nationwide trend” and “clear federal precedent” for allowing the introduction of business records consisting of documents generated by third parties, the Pennsylvania Supreme Court has not seen fit to adopt the rule of incorporation. We decline CFS’ invitation to do so. Given the current law of this Commonwealth regarding business records and our narrow standard of review, we discern no abuse of discretion by the trial court in denying admission of CFS’ exhibits.


Commonwealth Financial Systems, Inc. v. Smith, 15 A.3d 492 (2011).


CLIFF TUTTLE has been a Pennsylvania lawyer for over 45 years and (inter alia) is a real estate litigator and legal writer. The posts in this blog are intended to provide general information about legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus. However, this information does not constitute legal advice and there is no lawyer-client relationship created when you read this blog. You are encouraged to leave comments but be aware that posted comments can be read by others. If you wish to contact me in privacy, please use the Contact Form located immediately below this message. I will reply promptly and in strict confidence.

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