The opinion of the court was delivered by: Matthew F. Kennelly, District Judge
MEMORANDUM OPINION AND ORDER
U.S. Bank National Association ("US Bank"), successor in interest to Park National Bank ("Park National"), has sued American Screw & Rivet ("AS&R") and William and Nancy Stein. The Court has jurisdiction based on diversity of citizenship.
The suit concerns two promissory notes that AS&R executed in favor of Park National. AS&R executed the first note, for $500,000 plus interest, in November 2004, and the second note, for $367,400 plus interest, in November 2007. AS&R's obligations under each note were secured by a security interest in certain collateral. Each note required monthly payments in specified amounts and imposed late charges for tardy payments. Each note provided that in the event of default, AS&R had fifteen days from the receipt of written notice of default to cure the default or take sufficient steps to cure. The Steins provided written guaranties of AS&R's indebtedness.
US Bank acquired the assets of Park National, including the notes and guaranties, from the FDIC in late October 2009. US Bank alleges that AS&R defaulted on the first note by failing to make the payment due on October 1, 2009. US Bank received a monthly payment check on that note that it deposited on or about October 28, 2009 but claims this was applied to the payment that was due on September 1, 2009. US Bank alleges that AS&R defaulted on the second note by failing to make the payment due on September 16, 2009. US Bank does not state when it gave AS&R notice of either default; it says only that it demanded payment and defendants failed to pay. See Jordan Affid. ¶ 31.
US Bank asserts claims for breach of contract against AS&R and breach of guaranty against the Steins. US Bank requests an injunction directing AS&R to surrender the collateral that secures the notes. It also seeks money damages of $316,080.11. This figure includes the $20,766.03 in principal claimed to be due on first note, plus $10,342.92 in late charges and $1,484.91 in prejudgment interest, as well as a claimed principal balance of $248,792.94 on the second note, plus $5,889.92 in late charges and $19,629.99 in prejudgment interest. US Bank's damage claim also includes $9,173.40 in attorney's fees.
US Bank has moved for entry of summary judgment on all of its claims. In support, US Bank provides the relevant agreements and the affidavit of Jerry Jordan, a vice president of US Bank and custodian of US Bank's records regarding this matter. Jordan states that US Bank's records show that AS&R missed the payment due on the first note on October 1, 2009 and failed to make any payments that were due after that. Jordan also states that AS&R missed the payment due on September 16, 2009 on the second note. He states that AS&R failed to cure either default. Jordan affirms that the amounts US Bank seeks as damages accurately reflect what is due.
AS&R argues in response that it was not in default on either note and that US Bank's records regarding receipt of payments are unreliable. AS&R offers the affidavit of defendant Nancy Stein, its treasurer. Ms. Stein testifies that on several occasions, Park National misapplied or misplaced payment checks; she sent to the correct address the final two payments that were due on the first note before receiving notice of the alleged default; and AS&R was in the process of renegotiating the terms of the second note loan when it is claimed to have defaulted. Ms. Stein also states that AS&R was not given notice of default until it was served with the complaint in this action, sometime after November 20, 2009. Based on this, AS&R contends the final two payments it made on the first note were timely.
Summary judgment is appropriate if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). As the moving party, US Bank must show the absence of any genuine issues of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 321 (1986). The Court views the facts and draw reasonable inferences in the light most favorable to the nonmoving party. Scott v. Harris, 550 U.S. 372, 378 (2007).
To prevail on a claim of breach of contract suit under Illinois law, US Bank must prove the existence of a contract, its performance of all conditions required by the contract, breach by the defendant, and resulting damages. See Shubert v Federal Express Corp., 306 Ill. App. 3d 1056, 1059, N.E.2d 659, 661 (1999). In this case, the only dispute regrading liability concerns whether AS&R defaulted on the loans.
As the Court has indicated, US Bank has supported its motion with the affidavit of one of its vice presidents, Jerry Jordan. Jordan's affidavit contains a summary of US Bank's records supporting the contention that AS&R is in default on both notes. Jordan's affidavit also details amounts owed to US Bank. Defendants contend that the underlying records summarized in Jordan's affidavit are inadmissible hearsay.
The Court concludes that the records fall within the business records exception to the hearsay rule. See Fed. R. Evid. 803(6). To lay the foundation for this exception, Jordan must be the custodian of the records or the person who compiled them or must "have knowledge of the procedure under which the records were created." United States v. Wables, 731 F.2d 440, 449 (7th Cir. 1998). As long as he can establish the regular practices and procedures surrounding the creation of the records, the foundational witness does not have to be the one who personally gathered the records. See Thanongsinh v. Bd. of Educ., Dist. U-46, 462 F. 3d 762, 777 (7th Cir. 2006); see also, United States v. LeShore, 543 F.3d 935, 942 (7th Cir. 2008). Defendants contend that Jordan, an employee of US Bank, is not a qualified witness to attest to the reliability of the records that US Bank obtained from Park National, in other words, the records predating US Bank's October 2009 purchase of Park National's assets.
Though Jordan was not an employee of Park National, that does not mean he cannot lay the foundation for the records' admissibility. In United States v. Franco, 874 F.2d 1136 (7th Cir. 1989), the court allowed a federal agent to testify regarding the reliability of records of a third-party money exchange because he understood the system used to prepare those records, even though he could not identify the actual preparer of the records. Id. at 1139-40. A similar approach has been followed by other courts of appeal. See, e.g.. Saks Int'l, Inc. v. M/V Export Champion, 817 F.2d 1011, 1013 (2nd Cir. 1987) (foundation for tallies made by third-party dock checkers laid by an employee of the defendant who had witnessed the tallies being made); United States v. Parker, 749 F.2d 628, 633 (11th Cir. 1984) ("Nor is it required that the records be prepared by the business which has custody of them.") (internal quotation marks omitted). In addition, the fact that the testifying witness's business relies on the accuracy of the preparing business' records is a significant factor in deciding admissibility. See Air Land Forwarders, Inc. v. United States, 172 F.3d 1338, 1342 (Fed. Cir. 1999); United States v. Childs, 5 F.3d 1328, 1334 (9th Cir. 1993).
These factors are present here. It is readily apparent that US Bank acquired the records of Park National when it purchased that bank's assets and that US Bank relies on those records in monitoring, performing, and collecting on contracts it acquired from Park National. Jordan attests that he has access to all of US Bank's files and records and is familiar with US Bank's recordkeeping practices. The Court concludes that he is a qualified witness under ...