Judgment for lender in student loan case reversed

A Warrick County man won his appeal in a student loan dispute after the Indiana Court of Appeals determined the alleged holder of his son’s student loan failed to prove it was entitled to an $18,000 summary judgment ruling.

In Alexander Holmes v. National Collegiate Student Loan Trust, 87A05-1711-CC-2517, Alexander Holmes co-signed a loan with Charter One Bank on behalf of his son, Nicholas, who planned to attend the University of Southern Indiana from August 2006 through May 2007. Then in March 2007, Charter One sold a pool of student loans — allegedly including Holmes’ — to National Collegiate Funding LLC, which sold the loans to the National Collegiate Student Loan Trust.

More than 10 years later, the trust filed a complaint alleging Holmes owed $16,578.60 plus interest. Holmes argued NCSLT lacked standing to bring its claim against him, then, in response to a summary judgment motion, alleged the trust failed to prove it owned his account and had presented inadmissible evidence.

The Warrick Superior Court granted the trust’s summary judgment motion and ordered Holmes to pay $18,183.26, plus interest. After the court denied his motion to correct error, Holmes appealed, and the Indiana Court of Appeals reversed on Tuesday.

In support of its summary judgment motion, NCSLT designate the affidavit of Jacqueline Jefferis, an employee of the trust’s “special servicer” who claimed to be the “designated custodian of records,” making her competent to testify about Holmes’ loan and business records attached to her affidavit. The loan contract between Holmes and Charter was among the attached documents, but the affidavit offered no testimony to support the admission of the contract under the business records exception to the hearsay rule, Judge Terry Crone wrote.

“There was no testimony to indicate that Jefferis was familiar with or had personal knowledge of the regular business practices or record keeping of Charter One Bank, the loan originator, or that of NCSLT regarding the transfer of pooled loans, such that she could testify as to the reliability and authenticity of those documents,” Crone wrote. “Indeed, Jefferis offered no evidence to indicate that those records were made at or near the time of the business activities in question by someone with knowledge, that the records were kept in the course of the regularly conducted activities of either Charter One of NCSLT, and that making the records was part of the regularly conducted business activities of those third-party businesses.”

Thus, summary judgment in favor of the trust was reversed, and the case was remanded for further proceedings.