In Ct102 Llc v. Nextgear Capital, No. 20A-CC-1909, 2021 Ind. App. Unpub. LEXIS 223, at *3-5 (Ct. App. Mar. 19, 2021), the Court of Appeals affirmed the trial court’s finding of damages sustained by a floorplan lender. The facts and procedure were as follows:

On remand, the trial court held an evidentiary hearing on damages on October 6, 2020. Tr. Vol. 2 at 2, 4. At the beginning of the hearing, the trial court confirmed its understanding that the hearing was solely “on the damage aspect of this case.” Id. at 4. Two witnesses testified during the damages hearing; Eric Brown (“Brown”), the senior manager of risk and recovery at NextGear, was NextGear’s only witness, and Baker was the only witness called by Defendants.  Id. at 4, 7, 28, 43. During Brown’s direct testimony, NextGear moved to admit certain of NextGear’s business records into evidence. Id. at 15-16, 22. These business records included: an Affidavit of Debt; a Payment Received Report; a Disbursement Detail Report; a Payment Receipt; and a Rate, Fee and Term Schedule. Pl.’s Exs. 1-5. Defendants objected to the admission of the business records on hearsay grounds. Tr. Vol. 2 at 13, 15-16, 22. The trial court overruled all of Defendants’ objections and admitted NextGear’s proffered evidence pursuant to the business records exception to Indiana’s rule against hearsay. Id. at 16, 22. According to NextGear’s records, the amount due and owing to NextGear under the Agreement as of September 30, 2020 totaled $205,494.11. Id. at 15-16; Appellee’s App. Vol. II at 41.  At the conclusion of the damages hearing, the trial court stated that, based on the evidence presented and on Baker’s concession, “there is money owed” from Defendants to NextGear. Tr. Vol. 2 at 44. The trial court then asked the parties to submit proposed orders on damages owed to NextGear. Id. at 44-46. On October 15, 2020, the trial court entered its order on damages and awarded NextGear “actual damages for breach of contract” against Defendants, jointly and severally, in the principal amount of $205,494.11. Appellants’ App. Vol. 2 at 9-15. The order also stated that (1) NextGear was entitled to a further judgment for its attorneys’ fees and expenses in an amount to be determined upon further application to the trial court, and (2) judgment was entered against the Defendants on their counterclaims. Id. at 14-15. Defendants now appeal.

The Court of Appeals found that the floorplan lender properly established the foundational requirements to prove up damages under the business records exception to the hearsay rule.

Defendants argue that the trial court abused its discretion when it admitted the busines records proffered by NextGear at the damages hearing. They contend that that the trial court erred because NextGear did not lay a proper foundation to show that the evidence qualified under the business records exception to the prohibition against hearsay. Defendants maintain that Brown was not a proper authenticating witness because he did not meet the criteria under Indiana Evidence Rule 803(6). Specifically, Defendants assert that Brown was not the business records custodian for NextGear; he could not testify whether the record was made at or near the time, by or from information transmitted by someone with knowledge; he was not in his current position at the time the documents were made; he could not testify whether the record was kept in the course of a regularly conducted activity of the business; and he could not testify that making the record was a regular practice of that activity. . .Brown’s testimony at the damages hearing showed that he had adequate knowledge to lay a proper foundation for the admission of NextGear’s business records regarding damages in this case. On direct examination, Brown testified that: (1) his duties as senior manager of risk and recovery included managing a team of loan collectors tasked with recovering on defaulted accounts and managing loan workout scenarios; (2) he had personal knowledge of NextGear’s processes and procedures as it pertained to floor plan loans like the one involved in this case; (3) he was familiar with NextGear’s business practices, processes, and procedures as they pertained to the creation, maintenance, and storage of documents relating to the origination and servicing of floor plan loans; (4) he had personally used NextGear’s records system as part of his job duties; (5) NextGear’s records and entries were created and entered into NextGear’s system at or near the time when the transaction occurred, by a person that was involved in the transaction; (6) he was personally familiar with and had reviewed the documents and financial records relating to Defendants and the loan at issue; (7) his testimony was based on his personal knowledge of the business records he had reviewed; and (8) he personally had reviewed the business records NextGear sought to admit into evidence “for accuracy” against the records maintained on NextGear’s record keeping system. Tr. Vol. 2 at 7, 8, 13, 14, 15. Therefore, all of the requisite elements of Evidence Rule 803(6) were satisfied by Brown’s testimony.  Further, Brown’s testimony demonstrated more than just a “functional understanding of the business’s record-keeping process,” which is all that is required under the rule. See Hussain, 143 N.E.2d at 332. Brown explained in detail how the business records at issue established the amount of damages NextGear [*13]  Capital sought to recover. Tr. Vol. 2 at 16-21. Defendants additionally assert that Brown did not have the necessary knowledge of the business records and could not properly testify regarding the damages suffered by NextGear in this case, citing to testimony that he made on cross-examination about his inability to testify how much any of the cars at issue in this case had depreciated over time, whether any of the cars at issue sold at wholesale would bring in more money than if sold at auction, and to state with certainty if Baker received an ACH refund. Appellants’ Br. at 8. However, none of the testimony that Defendants highlight diminishes the fact that NextGear laid a proper foundation on direct examination to support the admission of the records under the business records exception. We, therefore, conclude that the trial court did not abuse its discretion when it found that NextGear properly laid the foundation to admit its evidence under the business records exception and when it admitted NextGear’s business records at the damages hearing.