M.A.T. Helps Lawyer Get a Reversal

About a year ago, Watsonville attorney Brian Liddicoat called us for help in with an appeal to the 6th District Court of Appeal, in San Jose.

Brian represented a former student who was sued by a collection agency on allegations that she had defaulted on student loans.

We helped Brian draft both the appellant’s opening brief and the reply brief. The issues are described in the Introduction to the opening brief, which appears below.

Then M.A.T.’s Chris Cottle and Myron Moskovitz held a moot court for Brian. Chris had been Presiding Justice of the 6th District Court of Appeal (the same court we were appealing to), and Myron had clerked for a Justice of the California Supreme Court.

It worked. We just received the opinion, reversing the judgment against his clients. The Court of Appeal agreed with all of our five arguments for reversal.
See National Collegiate Student Loan Trusts v. Macias, California Court of Appeal, 6th District, No. H040905 (May 12, 2016), 2016 WL 2864858.


The five Respondents, National Collegiate Student Loan Trusts Nos. 2005-01, 2005-03, 2006-02, 2006-03 and 2007-3 (collectively, NCLST), are a group of private Delaware statutory trusts that sue to collect unpaid student loans as the alleged assignees of said debts. To win judgment in each case, Respondents must prove that a bank made the loan to the defendant, that the loan was not repaid, and that the bank assigned the debt to a Respondent. Respondents must prove all three of these elements with evidence that is admissible under our Evidence Code. Thus, if Respondents rely on hearsay contained in documents, to get these documents into evidence Respondents must prove all the requirements of some recognized exception to the hearsay rule - usually the "business records" exception at Ev. Code §1271.

In the present five consolidated cases on appeal, Respondents relied on documents but ignored the Evidence Code and used a short cut, putting on a single witness (their own employee), who was able to give no testimony satisfying any exception to the hearsay rule. The testimony to lay a foundation under Ev. Code §1271 (or any other hearsay exception) was not conflicting - it was totally absent. In addition, the employee admitted that she had altered some key documents.

Nevertheless, the trial court ruled that the documents were admissible to prove all three elements of Respondent's case. The trial court made no effort ensure that any of the four requirements of the business records exception had been met. Instead, the court based its ruling on its general feeling that Respondents' witness “had no difficulty whatsoever in explaining the documents that she had” and that “The issue really becomes for the Court one of trustworthiness more than anything else” and that “we are dealing with banks. We are dealing with federal agencies."

These general notions are not sufficient. The Legislature's Evidence Code imposes specific requirements. The Legislature adopted that Code for a reason: to establish principles that ensure that our courts receive only evidence that reliably leads to the truth. Collection agencies are not exempted from these requirements.

The judgment should be reversed.