On June 29, 2017, the Second Court of Appeals of Texas in Fort Worth reversed a judgment in favor of NCSLT 2005-3 by a county court at law of Tarrant County (Fort Worth), finding the evidence offered by the Trust to prove the chain of title from the program lender to itself insufficient for the student loan at issue. Based on that holding, the appellate court found it unnecessary to resolve the admissibility-of-evidence issues that were also raised in appellate briefing. The Trust had not offered live witness testimony at trial and had obtained the judgment solely with documents attached to a business records affidavit. The panel, consisting of three justices, reversed the lower court's judgment for the Trust and rendered a take-nothing judgment. Unlike other court's opinions in NCSLT appeals, the reviewing panel also addressed the role of the First Marblehead Corporation within the chain of title, and pointed out that the loan purchase agreement with the program lender (Bank One, N.A.) preceded the origination of the loan at issue in the case under review by several years. See opinion below (with hotlinks to SEC-filed documents added).
No petition for review having been filed to challenge the appellate court's holdings and judgment in the Texas Supreme Court, the appellate panel's opinion and judgment became final and the clerk duly issued the courts mandate on September 8, 2017.
PADRAIC GILLESPIE AND TRACY GILLESPIE, Appellants,
v.
NATIONAL COLLEGIATE STUDENT LOAN TRUST 2005-3,
A DELAWARE STATUTORY TRUST, Appellee.
Court of Appeals of Texas, Second District, Fort Worth.
Appeal from County Court at Law No. 3 of Tarrant County Trial Court No. 2014-006194-3.
PANEL: WALKER, MEIER, and GABRIEL, JJ.
MEMORANDUM OPINION[1]
LEE GABRIEL, Justice.
In this appeal from a bench trial and final judgment, we are asked to determine the admissibility of a business-records affidavit and attendant documents and to determine the sufficiency of the evidence to support several of the trial court's findings of fact.
We conclude that even considering the challenged evidence, the trial court's findings and resulting judgment were not supported by legally sufficient evidence. Accordingly, we reverse and render a take-nothing judgment.
I. BACKGROUND
A. THE LOAN
On May 1, 2002, Bank One, N.A. entered into a loan-purchase agreement with The First Marblehead Corporation (First Marblehead) "for loans that were originated under Bank One's . . . EDUCATION ONE Loan Program." Three years later on July 12, 2005, appellant Padraic Gillespie,[2] as the borrower, and appellant Tracy Gillespie, as a cosigner (collectively, the Gillespies), signed a note[3] with "Bank One (JP Morgan Chase Bank, N.A.)" under which Bank One agreed to lend $12,500 to the Gillespies under its Education One loan program. Under the terms of the note, the Gillespies' repayment obligations would begin on December 20, 2008, but interest on the loan amount accrued as of the date the funds were disbursed to the Gillespies. Bank One's records reflected that it disbursed the principal amount of the loan—$13,368.98[4]—to the Gillespies on July 26, 2005.
On October 12, 2005, First Marblehead, The National Collegiate Funding LLC (National Funding), and Bank One entered into "Pool Supplements" regarding "loans that were originated under Bank One's . . . EDUCATION ONE Loan Program" (the pool supplement). That same day, National Funding entered into a deposit and sale agreement (DAS) with appellee National Collegiate Student Loan Trust 2005-3 (the Trust) under which National Funding sold and assigned to the Trust "the student loans listed on Schedule 2 to each of the Pool Supplements set forth on Schedule A." The Gillespies made no payments on their loan between December 2008 and April 2010, but were granted four deferments of their repayment obligations extending from February 1, 2010, through May 31, 2011. Even so, the Gillespies did not meet their repayment obligations.[5]
B. THE TRUST'S SUIT
On November 14, 2014, the Trust filed suit against the Gillespies seeking repayment of the unpaid balance on the note—$20,824.84—and asserting that it had either originated or acquired the Gillespies' loan through a "qualified financial institution."[6] The Trust raised a claim for breach of contract against Padraic directly and against Tracy based on her personal guarantee of the note. The Gillespies answered by filing a general denial along with a verified denial raising their assertion that the Trust did not have the capacity to sue because it is not a legal entity. They also raised the affirmative defense of limitations.
A nonjury trial was held on March 29, 2016. No witnesses were called, but the Trust offered into evidence the business-records affidavit of Kayla Chandler, who was a legal case manager for the Trust's loan servicer.[7] The affidavit attempted to authenticate thirty-six pages of records ostensibly related to the Gillespies' loan. See Tex. R. Evid. 901(a), 902(10). The Gillespies objected to portions of Chandler's affidavit as inadmissible hearsay. The trial court sustained those objections and struck those statements that went beyond certifying that the attached records were true and correct—beyond the authentication requirements of rules 901 and 902. The remainder of the affidavit was admitted, authenticating the attached business records. See Tex. R. Evid. 901(a), 902(10).
The Gillespies also objected to the admissibility of portions of the attached, authenticated records: (1) the pool supplement, which supplemented the May 1, 2002 note-purchase agreement between First Marblehead and Bank One; (2) a single page following the pool supplement (the orphan page), which the Trust asserted was included as part of the pool supplement's schedule 1 and showed that the Gillespies' note was included in those pooled for sale; (3) the DAS, assigning National Funding's rights and interests under the pool supplement to the Trust; and (4) a February 2016 printout of the financial activity on the Gillespies' loan from its inception to the date the Trust declared it to be in default. The trial court overruled most of the objections but sustained the Gillespies' objection to the pool supplement.[8] The trial court concluded that the pool supplement was not a business record but indicated that it might be admissible as a public record "[i]f [the Trust] wish[es] to introduce it in a different way." The Trust did not re-offer the pool supplement.
At the conclusion of the trial, the trial court found the Gillespies jointly and severally indebted to the Trust for $20,824.84 and awarded that amount in the final judgment. The Gillepsies requested that the trial court enter findings of fact and conclusions of law, which it did. In its findings, the trial court found that the Gillespies entered into a loan agreement with Bank One,[9] that Bank One transferred and assigned the Gillespies' note to National Funding, and that National Funding simultaneously transferred it to the Trust. In its conclusions, the trial court stated that the Trust's "Business Records Affidavit, and the documents and records attached thereto, were properly admitted into the evidentiary record at trial." It also concluded that because the Trust "acquired" the Gillespies' loan through Bank One and National Funding, the Trust had standing to bring suit to recover under the loan, which was a "valid contract" that the Gillespies breached. The Gillespies now appeal and challenge several of the trial court's evidentiary rulings and the sufficiency of the evidence to support some of the trial court's findings and conclusions.
II. SUFFICIENCY OF THE EVIDENCE
In their second issue, the Gillespies assert that the evidence was legally insufficient to show that the Trust was an assignee of Bank One's interest in the Gillespies' note or that the Gillespies breached a contract with the Trust, leading to the Trust's damages. Although the Gillespies claim in passing that the evidence was factually as well as legally insufficient, their briefing regarding sufficiency argues solely that there was no—legally insufficient—evidence of portions of the Trust's case. We will address their argument as they briefed it and will look to whether the evidence was legally sufficient to support the trial court's challenged findings.[10] See Tex. R. App. P. 38.1(i); Gutierrez v. Martinez, No. 01-07-00363-CV, 2008 WL 5392023, at *2 n.4 (Tex. App.-Houston [1st Dist.] Dec. 19, 2008, no pet.) (mem. op.).
A. STANDARD OF REVIEW
A trial court's findings of fact have the same force and dignity as a jury's answers to jury questions and are reviewable for legal and factual sufficiency of the evidence to support them by the same standards. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994). When, as here, the appellate record contains a reporter's record, findings of fact on disputed issues are not conclusive if there is no evidence to support the findings. Sixth RMA Partners, L.P. v. Sibley, 111 S.W.3d 46, 52 (Tex. 2003); Ramsey v. Davis, 261 S.W.3d 811, 815 (Tex. App.-Dallas 2008, pet. denied). We defer to unchallenged findings of fact that are supported by some evidence. Tenaska Energy, Inc. v. Ponderosa Pine Energy, LLC, 437 S.W.3d 518, 523 (Tex. 2014).
We may sustain a legal sufficiency challenge only when (1) the record discloses a complete absence of evidence of a vital fact, (2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact, (3) the evidence offered to prove a vital fact is no more than a mere scintilla, or (4) the evidence establishes conclusively the opposite of a vital fact. Ford Motor Co. v. Castillo, 444 S.W.3d 616, 620 (Tex. 2014) (op. on reh'g). In determining whether there is legally sufficient evidence to support the finding under review, we must consider evidence favorable to the finding if a reasonable factfinder could and disregard evidence contrary to the finding unless a reasonable factfinder could not. Cent. Ready Mix Concrete Co. v. Islas, 228 S.W.3d 649, 651 (Tex. 2007).
B. STANDING TO BRING CLAIM FOR BREACH OF CONTRACT
The trial court found that the Gillespies had entered into an educational loan agreement with Bank One at the Gillespies' request, that the parties had mutually agreed to the note's material terms and conditions, and that the Gillespies failed to make payments as agreed. It further found that the Trust acquired the Gillespies' student loan by assignment though National Funding, conferring standing on the Trust to enforce the terms of the note: "[The Trust] has standing to bring the Suit because, when [the Trust] acquired the Student Loan, [National Funding], as assignor of [Bank One], transferred to [the Trust], without limitation or reservation, all rights and privileges it owned, held, or possessed in, or with regard to, the Student Loan."[11]
The Gillespies attack the lack of evidence to support the existence of a valid and enforceable contract between them and the Trust because there was no evidence that the Trust was a holder in due course of the Gillespies' note with Bank One; therefore, the Gillespies assert the Trust does not have standing to sue to recover under the note.[12]To recover on an assigned cause of action, the Trust was required to prove that a cause of action capable of assignment existed and that the cause of action was in fact assigned to the Trust. See Tex. Farmers Ins. Co. v. Gerdes ex rel. Griffin Chiropractic Clinic, 880 S.W.2d 215, 217 (Tex. App.-Fort Worth 1994, writ denied). Therefore, the Trust had to produce evidence establishing its privity to Bank One, the lender on the note and the entity in direct privity with the Gillespies. See R & R White Family Ltd. P'ship v. Jones, 182 S.W.3d 454, 459 (Tex. App.-Texarkana 2006, no pet.); Ceramic Tile Int'l, Inc. v. Balusek, 137 S.W.3d 722, 724-25 (Tex. App.-San Antonio 2004, no pet.); Skipper v. Chase Manhattan Bank USA, N.A., No. 09-05-00196-CV, 2006 WL 668581, at *1 (Tex. App.-Beaumont Mar. 16, 2006, no pet.) (mem. op.).
The admitted evidence shows that the Gillespies entered into the note with Bank One, and the note provided that Bank One could assign the note "at any time." Three months later, National Funding, as the seller and owner "of certain student loans," sold and assigned to the Trust specified student loans in the DAS: "This [DAS] sets forth the terms under which the Seller is selling and the Purchaser is purchasing the student loans listed on Schedule 2 to each of the Pool Supplements set forth on Schedule A attached [to the DAS] (the `Transferred Student Loans')." Further, the DAS provided that National Funding assigned to the Trust its rights "under each of the Pool Supplements listed on Schedule A attached [to the DAS] and the related Student Loan Purchase Agreements listed on Schedule B attached [to the DAS]." Schedule A to the DAS states that First Marblehead, National Funding, and Bank One entered into pool supplements on October 12, 2005, for loans that were originated under Bank One's Education One program. Schedule B states that Bank One and First Marblehead entered into note-purchase agreements on May 1, 2002, for loans that were originated under Bank One's Education One program.[13]
No document admitted into evidence purports to be the "Schedule 2" referenced in the DAS as specifying which loans were sold by National Funding to the Trust, and the pool supplement was not admitted into evidence. The Trust does not challenge the exclusion of the pool supplement on appeal, but improperly argues that the evidence is sufficient to show its standing based on the DAS as well as the excluded pool supplement.[14]
We conclude the Trust failed to show that it was a holder in due course of the Gillespies' note with Bank One. No evidence shows that the Gillespies' note was indeed included in the loans pooled for sale and assigned to the Trust in the DAS. The Trust asserted that the orphan page was part of schedule 1 to the pool supplement and showed that the Gillespies' loan was part of the pooled loans transferred to National Funding. But the trial court excluded the pool supplement, including its attached schedule 1. Even if the orphan page was not part of the pool supplement document and, thus, was not part of the evidence excluded by the trial court, it proves nothing by itself.[15] The only information on the orphan page is that Padraic, identified by the last four digits of his social-security number, received a $13,368.98 loan from Bank One under its Education One loan program.
Additionally, although the admitted DAS arguably proved the sale and assignment between National Funding and the Trust of certain unspecified loans, no evidence establishes Bank One's assignment to First Marblehead. First Marblehead was National Funding's alleged predecessor in interest to the Gillespies' note; thus, without the link between Bank One and First Marblehead, First Marblehead's assignment to National Funding and National Funding's to the Trust does not establish the Trust's standing to sue on the note. Indeed, the trial court's findings skip the First Marblehead link in the assignment chain: "On or about October 12, 2005, [Bank One] transferred and assigned [the Gillespies'] promissory note . . . to [National Funding]. . . . On that same date, [National Funding] transferred and deposited [the Gillespies'] promissory note . . . to [the Trust]." Although the pool supplement, if read in tandem with the DAS, arguably supplies the assignment links from Bank One to First Marblehead, from First Marblehead to National Funding, and from National Funding to the Trust, the pool supplement was not before the trial court.
In summary, no evidence supports the trial court's finding that the Trust was a holder in due course of the Gillespies' note and had received by assignment Bank One's right to recover under the note. See, e.g., Ramirez, 2017 WL 929527, at *3-4; Frontier Commc'ns Nw., Inc. v. D.R. Horton, Inc., No. 02-13-00037-CV, 2014 WL 7473764, at *8 (Tex. App.-Fort Worth Dec. 31, 2014, no pet.) (mem. op.); Jenkins v. CACH, LLC, No. 14-13-00750-CV, 2014 WL 4202518, at *6-7 (Tex. App.-Houston [14th Dist.] Aug. 26, 2014, no pet.) (mem. op.); Skipper, 2006 WL 668581, at *1. We sustain issue two.
III. ADMISSION OF EVIDENCE
In their first issue, the Gillespies argue that the trial court abused its discretion by overruling their objections to the Trust's records it admitted through a business-records affidavit to prove its claim against the Gillespies. Because their sufficiency point is dispositive of this appeal, we need not address these evidentiary issues. See Tex. R. App. P. 47.1.
However, our consideration of certain portions of the Trust's admitted evidence in our legal-sufficiency review should not be equated to a conclusion that such evidence was, in fact, properly admitted.
IV. CONCLUSION
This appeal is an object lesson in the danger of relying on imprecise or incomplete records to prove a technical issue such as a party's status as a holder in due course on the basis of multiple assignments. The result in this appeal possibly could have been avoided or ameliorated by careful adherence to the rules of evidence and the burden of proof. The mere fact that the subject matter of a suit does not involve a large amount in controversy does not relieve a party of the burden to dot every "i" and cross every "t." Details are important, even where the alleged operative breach seems to be a foregone conclusion. And here, the admitted evidence certainly shows that the Gillespies failed to comply with their repayment obligations under the note. In any event, we cannot turn a blind eye to the absence of any proof that the Trust had standing to assert Bank One's breach-of-contract claim regarding the Gillespies' note even though the result would appear to be inequitable. Accordingly, we reverse the trial court's judgment in the Trust's favor and render a take-nothing judgment in favor of the Gillespies. See Tex. R. App. P. 43.2(c), 43.3.
[1] See Tex. R. App. P. 47.4.
[2] Padraic was a student at the University of North Texas.
[3] The note consisted of a one-page "NOTE DISCLOSURE STATEMENT" and a four-page "Loan Request/Credit Agreement." Our references to "the note" in this opinion will include these two documents.
[4] This amount reflected the $12,500 amount financed plus an $868.98 "Prepaid Finance Charge."
[5] In fact, their only two payments occurred on April 27, 2010 ($25.00), and December 1, 2010 ($300.00).
[6] The Trust also pleaded for prejudgment interest and attorney's fees, but it waived these amounts at trial.
[7] The Trust had served the affidavit and attached records on the Gillespies more than fourteen days before the trial. See Tex. R. Evid. 902(10)(A).
[8] The Trust does not argue on appeal that this ruling was an abuse of discretion but instead mistakenly briefs the appeal as if the pool supplement had been admitted.
[9] The trial court found that the agreement was with JP Morgan, Bank One's successor after a merger. This difference is not material to this appeal; thus, we will refer to the original lender as Bank One.
[10] The Trust addressed only legal sufficiency in its brief as well.
[11] Although the trial court referred to some of its findings as conclusions, we are not bound by the trial court's designations. See Ray v. Farmers' State Bank of Hart, 576 S.W.2d 607, 608 n.1 (Tex. 1979).
[12] Although the Gillespies did not clearly raise this particular standing argument in the trial court, standing is a component of subject-matter jurisdiction that may be raised for the first time on appeal and is reviewed de novo as a question of law. See Rolen v. LVNV Funding, LLC, No. 2-09-304-CV, 2010 WL 1633402, at *1 (Tex. App.-Fort Worth Apr. 22, 2010, no pet.) (mem. op.).
[13] It bears repeating that this agreement occurred three years before the Gillespies' loan with Bank One was originated.
[14] Although "evidence treated by the trial court and the parties as if it had been admitted is, for all practical purposes, admitted," the trial court did not treat the pool supplement as admitted, and the Gillespies do not rely on the pool supplement as if it had been admitted even though the trial court expressly excluded it. Travelers Indem. Co. of R.I. v. Starkey, 157 S.W.3d 899, 904 (Tex. App.-Dallas 2005, pet. denied). Only the Trust references the pool supplement as if it had been admitted and that appears to be a briefing error. The Gillespies argue the effect of the admission of the pool supplement only in the alternative, and the trial court did not specifically rely on the pool supplement in its findings and conclusions.
[15] We note that the form of the pool supplement excluded by the trial court here is substantially similar to a pool supplement addressed by this court and found to be insufficient, in the absence of more specified information, to establish that the purported holder of a student loan was a holder in due course though assignment from the original lender. Nat'l Collegiate Student Loan Trust 2006-2 v. Ramirez, No. 02-16-00059-CV, 2017 WL 929527, at *3-4 & n.8 (Tex. App.-Fort Worth Mar. 9, 2017, no pet.) (mem. op.).
BELOW: SAME TRUST, SAME PROOF ISSUES, DIFFERENT STATE
AND DIFFERENT TYPE OF COURT
BUT A LIVE WITNESS, RATHER THAN JUST A BUSINESS RECORDS AFFIDAVIT
NATIONAL COLLEGIATE STUDENT LOAN TRUST 2007-4, A DELAWARE STATUTORY TRUST(S), Plaintiff,
v.
SAMANTHA WATSON, SOPHIA DETRY, Defendants.
Civil Court of the City of New York, Bronx County.
EDDIE J. McSHAN, J.
After trial, the decision in the above action is as follows:
Plaintiff commenced this action seeking a judgment in the amount of $7,336.00 against the defendants for an alleged breach of a promissory note and on an account stated. Plaintiff called Mr. Jonathan Boyd to testify on its behalf. Mr. Boyd testified that he is employed by Transworld System, Inc. (TSI) as a Legal Case Manager. He stated that TSI is the designated custodian of records for the Plaintiff. He stated that his job responsibilities include reviewing, maintaining, and analyzing the business records. He noted that the Plaintiff's business records are student loan records. He suggested that he is familiar with the Plaintiff's records and is able to identify them.
Plaintiff moved into evidence a document entitled "Loan Request/Credit Agreement-Signature Page" (Agreement) dated April 30, 2007. Mr. Boyd testified that the Agreement was received by fax and that it went to underwriting. He indicated that the loan was approved and the funds were disbursed. Plaintiff moved into evidence the "Note Disclosure Statement" (Disclosure) dated May 14, 2007. He stated that the Disclosure was created once the loan was approved. He insisted that the Disclosure was sent to the defendants. He noted that Charter One Bank, N.A. was the original lender. He also noted that AES was the original servicer of the defendant's loan. Mr. Boyd asserted that the Plaintiff received the loan by assignment.
Plaintiff moved into evidence the "Pool Supplement RBS Citizens, N.A. (Successor to Charter One Bank, N.A.) (RBS Citizens Assignment) dated September 20, 2007. Mr. Boyd stated that the assignment was between the original lender and National Collegiate Funding, LLC. He also stated that First Marblehead Corporation is a servicing company and is the servicing company for National Collegiate Funding, LLC. He suggested that the schedule at the end of the RBS Citizens Assignment identifies the defendants' loan.
Mr. Boyd further testified that the defendants' loan was subsequently assigned by National Collegiate Funding, LLC to the Plaintiff also on September 20, 2007. Plaintiff moved into evidence the Deposit and Sale Agreement between The National Collegiate Funding LLC and Plaintiff. Mr. Boyd suggested that the defendants' loan was transferred to the Plaintiff prior to the time any payments were due from the defendants.
Plaintiff moved into evidence the Loan Financial Activity (Activity) for the subject loan. Mr. Boyd stated that the repayment records are kept electronically. He suggested that this document shows the financial activity from the loan from the date of disbursement through the charge-off. He stated that the transaction code on page three of the Activity indicates that $5760.73 was the transfer The National Collegiate Funding LLC to the Plaintiff.
Mr. Boyd stated that the defendants made a payment on February 11, 2011. He acknowledged that he did not know how the payment was made. He suggested the defendants did not make any other payments and were declared in default. He indicated that the loan was charged-off in the amount of $6,764.68 on August 1, 2011. He indicated that the sum requested in the complaint includes interest that continued to accrue. Mr. Boyd asserted that the Plaintiff has not received any payments since the charge-off and a balance remains due and owing. Plaintiff did not call any other witnesses.
Defendant, Samantha Watson, testified that she does not believe that she owes any money for this loan. She asserted that the Plaintiff was unable to show how the alleged payment was made on the loan. She stated that the Plaintiff is relying on the payment to establish that she owes the money. Ms. Watson insisted that the documents submitted into evidence do no establish that AES was the original servicer of the loan. She also insisted that the Deposit and Sale Agreement does not show that the Plaintiff owns the loan. She stated that she never received any documents that informed her that she was in default on the loan. She also stated that she did not receive any notice that the original lender was changed. She insisted that she never received any notices or statements regarding this loan. She also insisted that her cosigner never received any notices.
Ms. Watson noted that the Disclosure indicates that the loan was made out only to her. She stated that Mr. Boyd testified earlier that the loan is made out to both parties. Ms. Watson insists that the Plaintiff does not own this loan and that it cannot sue her because she never did business with Trust.She noted that the Plaintiff claimed that it is the original owner of the loan which is not supported by the Agreement. She insists that Charter One Bank is the original lender.
Defendant, Sophia Detry, testified that they do not owe the Plaintiff the money. She stated that she does not recall her daughter ever making payments on the loan. She asserted that if her daughter did make any payments on the loan they were not to the Plaintiff. Ms. Detry asserted that the Plaintiff does not have the right to sue them. She stated that the Plaintiff has not provided any proof. She noted that she never received the documents and she is seeing them for the first time. She insisted that the documents were never sent to her address.
Defendants challenge the Plaintiff's standing and capacity to sue in this matter. It is unquestioned on this record that Charter One Bank is the original lender of the loan. Although the defendants challenged Mr. Boyd's authority to testify on behalf of the Plaintiff, the Court admitted into evidence the electronic records relied upon by the Plaintiff pursuant to CPLR § 4518. It is well settled that the relationship between two businesses and the nature of the records in question, including the circumstances of their preparation, may give the recipient sufficient familiarity with the other party's records to justify admissibility through the foundation testimony of the recipient (People v Cratsley, 86 NY2d 81 [1995]). Moreover, where a company routinely relies upon the records of another business in the conduct of its own business, that company will be permitted to admit into evidence through one of its employees the records of the other company (Merrill Lynch Business Financial Services, Inc. v Trataros Constructin, Inc., 30 AD3d 336 [1st Dept. 2006]; People v DiSalvo, 284 AD2d 547 [2nd Dept. 2001]). This Court determined that Mr. Boyd has the necessary familiarity and knowledge of the Plaintiff's records based upon his testimony and the relationship between his employer as the designated custodian of records and the Plaintiff (see for example Merrill Lynch Business Financial Services, Inc., 30 AD3d 336; Portfolio Recovery Associates, LLC, v Lall, 127 AD3d 576 [1st Dept 2015], affg 41 Misc 3d 128[A][App Term 1st Dept 2013]).
Generally, an assignee of a consumer credit agreement must establish its standing at the time the action was commenced (See Portfolio Recovery Assoc. v Lall, 41 Misc 3d 128[A]). The Court finds that Plaintiff failed to establish the chain of title from the original lender to Plaintiff. Mr. Boyd credibly established that the RBS Citizens Assignment dated September 20, 2007, shows that the defendants' loan was transferred to The National Collegiate Funding LLC. The Court finds the Deposit and Sale Agreement also dated September 20, 2007, insufficient to establish that The National Collegiate Funding LLC assigned the defendants' loan to the Plaintiff.
The Agreement indicates that the defendants applied for a loan in the amount of $5000. The Loan Program Information indicates that the loan defendants applied for was part of the "Charter One Continuing Education Loan." This Court's review of the Deposit and Sale Agreement finds that assignment does not specifically identify the Charter One Continuing Education Loan as part of Schedule A relied upon by the Plaintiff. Section 3.02 of the Deposit and Sale Agreement provides that "[t]he Seller hereby assigns to the Purchaser and the Purchaser hereby accepts all of the Seller's rights and interests under each of the Pool Supplements listed on Schedule A attached hereto and the related Student Loan Purchase Agreements listed on Schedule B attached hereto." Schedule A of the Deposit and Sale Agreement list the "Pool Supplements" that were transferred from RBS Citizens, N.A., successor by merger to Charter One Bank, N.A., as well as other original lenders. There are several loan programs sponsored by RBS Citizens, N.A., successor by merger to Charter One Bank, N.A. included in Schedule A of the Deposit and Sale Agreement. The Court finds nothing in Schedule A of the Deposit and Sale Agreement that references the defendant's Charter One Continuing Education Loan that originated from Charter One Bank, N.A. Mr. Boyd's unsupported testimony that the defendants' loan was part of the assignment from The National Collegiate Funding LLC assigned to the Plaintiff is insufficient based upon the pool supplements listed in Schedule A. Mr. Boyd did not provide any testimony that identified defendants' Charter One Continuing Education Loan as part of Schedule A of the Deposit and Sale Agreement.
Based upon the foregoing, the Court is unable to determine whether the defendants' loan disbursed on or about May 14, 2007 in accordance with the Disclosure was included in the assignment between the National Collegiate Funding LLC and the Plaintiff. Accordingly, the Court finds that Plaintiff failed to establish its standing in this proceeding.
In light of the foregoing, it is hereby:
ORDERED AND ADJUDGED that the Clerk shall dismiss this action in its entirety based upon the Plaintiff's failure to establish its standing to bring this action.
This shall constitute the decision and order of the Court.
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