by Jay Winston

When a witness prepares for trial, certain items should be reviewed to avoid awkward situations at trial. Sometimes these situations occur because their counsel assumes that the witness will bring the necessary documentation to prove the case.

1. Be Prepared and Organized: Image is everything when you are in court. Review the documentation to confirm that you understand all the numbers and references on the documents. For example, if your employer uses a trade-name on the documents which is different from the plaintiff, be prepared to explain the difference.
2. Bring a Payment History: The more complete/itemized a payment history, the better. Statements showing only late charges may be viewed with skepticism by the court. Be able to explain how the balance is calculated. The method by which payments are applied vary in different parts of the country. Be prepared to be cross-examined by the judge as to the process by which the balance was calculated. It is important to be prepared to describe how the payments were applied to principal, interest, etc.
3. Bring Invoices or Copies of Cancelled Checks to Establish Miscellaneous Charges: If you incurred a repossession fee or a lien title search fee, bring supporting documentation.
4. Who Are You Employed By? It should be the plaintiff: If you are not employed by the plaintiff (exact name), bring proof to show that you are authorized to act on their behalf (i.e. power of attorney). In the alternative, if you work for a subsidiary of the plaintiff, then be prepared to explain the relationship. Below is a summary of what can actually happen (true story).

Attorney: Who are you employed by?

Witness: I am employed by ABC Financing

Judge: Why are you here? The plaintiff is BBB Bank? Counsel, do you

have a witness from the plaintiff or I will dismiss this action.

The witness is now frazzled and the attorney is forced to lead the witness through a series of questions to establish that the witness works for the financing arm of the plaintiff, is paid by the plaintiff and that the witness is fully competent. In many cases the judge will be more difficult and hold the witness to a higher standard allegedly in the interests of justice. It is strongly recommended that the witness discuss this issue with the counsel prior to the hearing.

 

5. Claim of Title: (Assignments or Power of Attorney): If you cannot prove you own the loan or are authorized to enforce the loan, you cannot win at trial.

In many cases, such as in retail installment agreements, the originating party, often the seller, assigns the matter to finance company. The assignment is often included in the agreement, but in some cases it is a separate document. In addition, with the wave of mergers and acquisitions by national lenders, the party suing on the loan often is not the originating party. Thus, it is important that the witness is prepared to describe how the loan was acquired (i.e.: by reason of merger, acquisition, assignment). Supporting documentation should also be presented to the court.

Question: What do I do if I am missing a document?

Answer: Bring as much documentation as possible to the court. Original

documentation is preferred.

Originals demonstrate to the court that you are serious. A complete file serves the same purpose: to prove to the court that no one else owns the account. Also, the witness should discuss with counsel a prepared summary of the procedure by which accounts are acquired. Indirect evidence, such as a cancelled check or receipt will help prove ownership. Be prepared to explain what steps are required to occur before the plaintiff ever attempts to collect on the loan. Explain the process, demonstrate to the judge that you did not improperly obtain the papers.

Practice Tip: Try to obtain an admission of plaintiff’s ownership from the debtor.

6. No Originals Available: Some courts require originals. If originals are not available because they were destroyed as part of your business practice, you must be prepared to testify about the procedures to verify the accuracy of the duplicates. You must be prepared to explain why and when the original documents are destroyed and why this practice is justified and a common business practice. When there is an issue of fraud as to the contents of the documents, the court may insist upon originals. Review of the State law is strongly recommended
7. Can You Testify?: If you are required to testify as to procedures and practices of your employer, be certain that you were employed at the time that relevant practices occurred.

Example 1: The Debtor claims fraud

Example 2: The Debtor claims that the sale was not commercially reasonable.

To testify as to the procedural safeguards employed by your employer to prevent fraud, or to establish a commercially reasonable sale, you must be employed at the time the alleged fraud or sale occurred. You must be there to know the practice. It cannot be based on third hand knowledge of what you have been told.

8. Review Your Job Description and Title with Your Counsel: Be careful, Too narrow a job description may cause you to be incompetent to testify. The judge will prevent you from testifying if your duties are not included in the job description. Never say you are a litigation witness or that you are from the litigation department. Judges hate these witnesses and in many cases exclude their testimony. Documents produced during the litigation process or in anticipation of litigation are not business records.
9. Review All Legal Documents Submitted by Your Employer and the Adversary (i.e., affidavits, replies to discovery requests and depositions): You may be cross-examined as to these documents. Review the documents and exhibits for inconsistencies which may be prejudicial to your case.
10. If the contract exists, read the document(s) carefully. The judge or the adversary may cross-examine you as to certain portions of the agreement. If you do not understand the contract, you will appear less credible to the judge, especially if your employer drafted the clause.

The content of this column is not a substitute for consultation with counsel, nor is it intended for use as a specific response to a set of circumstances. Questions concerning the column may be addressed to Jay Winston at 212/532-2700

Copyright © 2003, 2004 Winston & Winston P.C. All rights reserved.
Revised: January 18, 2004