LADANTA D. FOSTER, Appellant
NATIONAL COLLEGIATE STUDENT LOAN TRUST 2007-4, Appellee
Appeal from the 412th District Court Brazoria County, Texas
Trial Court Case No. 84872-CV
consists of Chief Justice Radack and Justices Massengale and
Radack Chief Justice
Ladanta D. Foster, appeals the trial court's judgment,
entered after a bench trial, in favor of appellee, National
Collegiate Student Loan Trust 2007-4 ("the Trust"),
in its suit against Foster for breach of a student loan
agreement. In two issues, Foster challenges the legal and
factual sufficiency of the evidence and contends that the
trial court erred in admitting evidence.
suggest a remittitur of damages. Conditioned on the
suggestion of remittitur, we affirm the trial court's
original petition, the Trust alleged that, in 2007, Foster, a
student at Texas Southern University, obtained a student loan
from JPMorgan Chase Bank, N.A. ("Chase"). Prior to
Foster's first payment date, and at a time while the loan
was still in good standing, the note was assigned to the
Trust. The Trust, as owner and holder of the note, asserted
that Foster had defaulted by not paying as agreed. On
December 9, 2015, the Trust sent Foster a letter demanding
payment in full, however, Foster did not comply.
Subsequently, the Trust brought a breach-of-contract claim
against Foster, seeking damages of $45, 277.02. Foster
answered, generally denying the allegations, filed a verified
denial, and asserted various affirmative defenses.
trial, although no witnesses were called, the Trust moved to
admit into evidence, as "Exhibit 1, " the
"Business Records Affidavit" of Dudley Turner, a
Legal Case Manager for Transworld Systems Inc.
("TSI"), who testified, in pertinent part, as
1. I am employed by [TSI], the subservicer for [the Trust]
pertaining to the educational loan forming the subject matter
of this action.
2. TSI has been contracted to perform the duties of the
Subservicer for [the Trust] by U.S. Bank, National
Association, the Special Servicer of [the Trust]. TSI, as the
Subservicer of the [Trust], is the designated custodian of
records for [Foster's] educational loan. Additionally,
TSI maintains the dedicated system of record for electronic
transactions pertaining to [Foster's] educational loan,
including, but not necessarily limited to, payments, credits,
interest accrual and any other transactions that could impact
[Foster's] educational loan. . . .
3. . . . . As an employee of TSI, I am duly authorized by
[the Trust] and U.S. Bank, National Association to make the
representations contained in this Affidavit.
4. I have access and training on the system of record
utilized by TSI to enter and maintain loan account records
and documentation concerning [Foster's] educational loan
for [the Trust].
5. I am familiar with the process by which TSI receives prior
account records, including origination records from the time
the loan was requested and/or disbursed to [Foster] and/or
the student's school on their behalf.
6. As custodian of records it is TSI's
regularly-conducted business practice to incorporate prior
loan records and/or documentation into TSI's business
7. I am further competent and authorized to testify regarding
this educational loan through personal knowledge of the
business records maintained by TSI as custodian of records,
including electronic data provided to TSI related to
[Foster's] educational loan, and the business records
attached to this Affidavit.
8. This lawsuit concerns an unpaid loan owed by [Foster] to
[the Trust]. Specifically, [Foster] entered into an
educational loan agreement at [Foster's] special instance
and request. A loan was extended for [Foster] to use pursuant
to the terms of the loan agreements. [Foster] has failed,
refused, and/or neglected to pay the balance pursuant to the
9. Educational loan records are created, compiled and
recorded as part of regularly conducted business activity at
or near the time of the event and from information
transmitted from a person with personal knowledge of said
event and a business duty to report it, or from information
transmitted by a person with personal knowledge of the
accounts or events described within the business record. Such
records are created, kept, maintained, and relied upon in the
course of ordinary and regularly conducted business activity.
10. I have reviewed the educational loan records described in
this affidavit regarding account number xxxxx7063-004-PHEA.
No payment has been received on this account. After all
payments, credits and offsets have been applied, [Foster]
owes the principal sum of $45, 277.02, together with accrued
interest in the amount of $6, 179.73, totaling the sum of
$51, 456.75 as of 11/30/2016. Attached hereto and
incorporated within are 31 pages of [the Trust's]
business records further described below.
11. Attached hereto and incorporated herein as Exhibits
"B" through "G" are 31 pages of [the
Trust's] business records. These records are created,
compiled and recorded as part of regularly conducted business
activity at or near the time of the event and from
information transmitted from a person with personal knowledge
or said event and a business duty to report it, or from
information transmitted by a person with personal knowledge
of the account or events described within the business
record. Such records are created, kept, maintained, and
relied upon in the course of ordinary and regularly conducted
business activity . . . .
. . . .
13. [Foster] opened an educational loan with [Chase] and
funds were disbursed on 5/31/2007. [Foster's] educational
loan was then transferred, sold and assigned to National
Collegiate Funding LLC, who in turn transferred, sold and
assigned [Foster's] educational loan to [the Trust] on
9/20/2007 for valuable consideration, in the course of the
securitization process. [Foster's] educational loan was
in good standing and not in default on 9/20/2007.
To his affidavit, Turner attached 31 pages of documents, as
Exhibit A is a November 13, 2014 letter from U.S. Bank, as
special servicer for the Trust, "confirm[ing]" that
TSI is the "dedicated records custodian with respect to
all student loans owned by [the Trust]" and is
"fully authorized to execute affidavits regarding
account documents" and to "provide testimony on
behalf of [the Trust]."
B is a "Credit Agreement" signed by Foster and a
"Note Disclosure Statement." The Credit Agreement,
dated May 23, 2007, states that Foster applied for an
educational loan of $25, 000.00 from Chase. The Note
Disclosure Statement reflects that a loan amount of $25,
000.00 was disbursed to Foster, or on her behalf, and that
she agreed to make 240 monthly payments of $381.45, beginning
on July 12, 2009.
C contains a "Pool Supplement, " "Loan
Transfer Schedule, " and "Deposit & Sale
Agreement, " pertaining to Chase's assignment of
loans through an intermediary to the Trust.
D is a "Loan Financial Activity Report, " which
reflects the monthly balance and interest accrued on
Foster's loan, that she did not make any payments, and a
final "Principal Balance" of $43, 560.51. Exhibit E
Summary, " showing Foster's deferment and
forbearance periods. Exhibit F is a "Repayment
Schedule." Exhibit G is a "Loan Payment History
objected to the admission of the evidence, and the trial
court overruled the objection and admitted the evidence, as
THE COURT: . . . . Any objection to this business records
[Foster]: Well, the only objection I will make, Your
Honor, is that the affiant [Turner] asserts that he is the
custodian of records for [TSI] whereas the Plaintiff is [the
Trust]. So we would like to see how those are interrelated,
if he is representing-if he's custodian of [TSI] what
relationship does that bear to [the Trust]? In looking at the
affidavit I'm not entirely sure if that's clear. If
[the Trust's] counsel wants to point [to] something I may
be missing out or that the Court may not see and present any
evidence to that. Otherwise, we object to the entire
submission of evidence as hearsay.
THE COURT: Well, of course that's what business records
affidavit filed the requisite period of time [sic], it allows
hearsay evidence. It's an exception to the hearsay rule.
. . . .
Now what connection does [TSI] have to this transaction?
[The Trust]: Your Honor, TSI, as you can see from the
affidavit, is both [the Trust's] designated custodian of
records and they also create and maintain the records
pertaining to the loan. Proof and confirmation of TSI's
capacity as sub servicer can actually be found in Exhibit A
which starts on page 7. Actually it just is page 7. As
you'll see, there is a letter from U.S. Bank who is the
indentured trustee for National Collegiate Student Loan Trust
which is a matter of public record and they state that [TSI]
is also the record custodian with respect to all student loan
accounts. . . .
[Foster]: We would like to see that entered as an exhibit if
we could please, just to establish the standing issue. If