## Facts

- Beneficial Maine Inc. filed a residential mortgage foreclosure action against Timothy G. Carter and Kathleen A. Carter, alleging default on a promissory note secured by a mortgage.
- Beneficial used HSBC Consumer Lending (through affiliated servicing entities) as the loan servicer.
- Beneficial’s motion for summary judgment relied primarily on an affidavit from Shana Richmond, an employee of the servicer, with attached loan account documents.
- The affidavit asserted that Beneficial owned the note and mortgage, the Carters were in default, and a stated payoff amount was due.
- Richmond was not a Beneficial employee and did not provide detailed testimony explaining Beneficial’s record-creation, record-maintenance practices, or the reliability controls for the lender’s records.

## Issues

1. Whether a servicer employee’s affidavit provided an adequate foundation under M.R. Evid. 803(6) to admit the lender’s loan records (including ownership, default, and amount due) for use on summary judgment in a foreclosure action.
2. Whether summary judgment may rest on foreclosure evidence that is hearsay and not shown to be admissible at trial.

## Decision

- The Maine Supreme Judicial Court vacated the foreclosure summary judgment and remanded.
- The court held that Beneficial failed to establish the business-records exception foundation because the servicer affiant did not meaningfully describe the lender’s record-keeping practices or demonstrate the records’ trustworthiness.
- Because the affidavit and attached records were inadmissible hearsay, they could not support summary judgment on essential foreclosure elements (ownership, default, and amount due).

## Legal Principles

- Under M.R. Evid. 803(6), business records are admissible only if a custodian or other qualified witness establishes that the records were made near the time of the events, by a person with knowledge (or from such information), kept in the course of regularly conducted business activity, and made as a regular practice.
- A “qualified witness” need not have created the records but must be able to testify meaningfully about the relevant record-keeping system and practices to show reliability and trustworthiness.
- In foreclosure summary judgment practice, the plaintiff must prove required elements through evidence that would be admissible at trial; conclusory, formulaic statements that records are kept “in the ordinary course of business,” without supporting detail, are insufficient.

## Conclusion

The court required a concrete, fact-based business-records foundation for foreclosure affidavits and vacated summary judgment where the lender’s proof depended on a servicer employee’s conclusory affidavit that did not establish the admissibility and reliability of the lender’s records.


Beneficial Me., Inc. v. Carter, 25 A.3d 96 (Me. 2011)