Burdeshaw v. Bank of N.Y. Mellon

• Decision Date: 13 October 2014
• Docket Number: No. 1D13–2703.,1D13–2703.
• Parties: Lloyd Steve BURDESHAW and Teresa Burdeshaw, Appellants, v. The BANK OF NEW YORK MELLON (fka The Bank of New York), as Trustee for Mastr Alternative Loan Trust 2006–2, Mortgage Pass–Through Certificates, Series 2006–2, Appellee.
• Court: Florida District Court of Appeals

148 So.3d 819

Lloyd Steve BURDESHAW and Teresa Burdeshaw, Appellants

v.The BANK OF NEW YORK MELLON (fka The Bank of New York), as Trustee for Mastr Alternative Loan Trust 2006–2, Mortgage Pass–Through Certificates, Series 2006–2, Appellee.

No. 1D13–2703.

District Court of Appeal of Florida, First District.

Oct. 13, 2014.

Jeffrey P. Whitton, Panama City, for Appellant.

Tricia Julie Duthiers, Juan A. Gonzalez and Frank P. Cuneo of Liebler, Gonzalez & Portuondo, Miami, for Appellee.

Opinion

CLARK, J.

The Burdeshaws appeal the final judgment of foreclosure in favor of The Bank of New York Mellon (“BNYM”), contending that the evidence to support the amount of indebtedness was inadmissible hearsay and thus, no admissible evidence supported the trial court's determination of the amount due. In addition to reversal of the final judgment, the Burdeshaws seek remand of this case with instructions to dismiss, based on a meritorious motion pursuant to rule 1.420(e), Florida Rules of Civil Procedure, taken under advisement by the trial judge and denied de facto when the court eventually conducted a bench trial and issued a final judgment. We agree on both points, reverse the final judgment of foreclosure, and remand for dismissal of the action.

Appellants executed a note payable to Bay Bank & Trust Co. for $600,000.00 on October 31, 2005. The note was secured by a mortgage which was also signed by Appellants on October 31, 2005. Bay Bank & Trust assigned the mortgage to Mortgage Electronic Registration Systems (“MERS”) on November 10, 2005.

On March 19, 2009, Suntrust Mortgage, Inc. filed a complaint for foreclosure on the mortgage and alleged that Suntrust “owns and holds said note and mortgage.” Suntrust attached to its complaint a copy of the note, with a special endorsement on the last page of the note signed but not dated by an official of Bay Bank & Trust.

See § 673.2051(1), Fla. Stat., (because Suntrust is specifically identified as entity to whom note was payable, indorsement is “special indorsement”). The words “without recourse, pay to the order of Suntrust Mortgage, Inc.” appeared above the signature of the Bay Bank & Trust officer.

The Burdeshaws filed their notice of inactivity, pursuant to rule 1.420(e), on July 20, 2010. After sixty more days with no record activity, on September 20, 2010, the Burdeshaws filed their motion to dismiss. Other than this notice and motion, no paper was filed in the court file by either party or the court between September 16, 2009 and October 4, 2010.

Suntrust did not file a response to the motion to dismiss for lack of prosecution but did file other papers in the record on October 4, 2010, and thereafter. A motion hearing was held on November 8, 2010, and one of the motions considered by the court was the Burdeshaws' motion to dismiss under rule 1.420(e). The record does not contain a transcript of this hearing and Suntrust did not file a written assertion of good cause why the action should have remained pending. In the order entered November 29, 2010, the court stated that it was taking the rule 1.420 motion to dismiss “under advisement.”

BNYM was substituted as party plaintiff on January 25, 2013, and a bench trial took place on May 13, 2013. In support of its documentary evidence, BNYM presented the testimony of Nancy Johnson, twenty-two year Suntrust employee currently in the position of “default proceedings officer.” She testified that Suntrust was servicing the loan and that she had reviewed Suntrust's records in preparation for the trial. Counsel for BNYM inquired about the documents it sought to admit into evidence, including the letter notifying the Burdeshaws of the default, the note and mortgage, and a “computer printout from Fidelity system” purporting to show the transactions on the account and the balance owed. Counsel for the Burdeshaws objected to Ms. Johnson's testimony regarding each document in turn, stating that there was no predicate for Johnson's testimony, that BNYM had not established any of the elements to qualify her as the custodian of the records, and that BNYM had not otherwise qualified Ms. Johnson to authenticate the computer-generated records. The trial court overruled each objection until eventually, counsel requested “a standing objection, so I don't keep making it,” which was granted.

During Ms. Johnson's testimony to authenticate Plaintiff's Composite Exhibit 3, admitted into evidence to prove BNYM's claim for a payoff balance of $822,677.79, she stated that the exhibit was “a printout from the Fidelity system that we use” and that Suntrust had prepared and provided the printout to counsel for BNYM. Over the defense's objection, Ms. Johnson read aloud the principle balance, the past due interest amount, and other fees and charges indicated on the exhibit. On cross examination, Ms. Johnson explained that her knowledge of the amounts owed came from her review of the printout and that the printout was “on our system.” When asked by whom or how fees and expenses were posted to the account, Johnson testified that “everyone” was using the Fidelity system and “they would input any transactions, any adjustments.” Ms. Johnson stated that she had reviewed the numbers on the printout the Thursday of the week prior to trial and that the initial principle balance of the loan “would have been input by someone handling the origination of the loan.” She did not know where any information on payments made prior to Suntrust's first entries for the file might come from. On re-direct, Ms. Johnson clarified that her job duties were to review mortgages, notes, payment histories, and breach letters to prepare for foreclosure hearings, and to testify at trials about records kept by Suntrust. Accordingly, she considered herself a records custodian for Suntrust.

At the close of evidence, counsel for the Burdeshaws renewed the motion to dismiss under rule 1.420(e), which had not yet been ruled on after the court took it under advisement in 2010. Counsel argued that when no record activity took place for the requisite time periods, dismissal was mandatory and that he never abandoned that motion. Counsel also argued that BNYM had not proved their standing or the amount due under the note through documents authenticated by a records custodian, and that Ms. Johnson's testimony was “multiple hearsay” because the documents were based on “what Bay Bank transferred over as the account.” BNYM's counsel responded that any hearsay objection had been waived “because he did not raise it at the time of the presentation of the testimony.” The court found for BNYM and entered the final judgment of foreclosure with an amount due of $822,677.79.

Contrary to BNYM's position in this appeal, the issue of the sufficiency of the evidence to support the final judgment was adequately preserved for review. Appellants challenge the sufficiency of the evidence because the only evidence to support the final judgment was erroneously admitted hearsay not qualified for the business records exception set out in section 90.803(6)(a), Florida Statutes. During the bench trial, defense counsel continually objected to the hearsay evidence and eventually requested and was granted a standing objection. While section 90.104, Florida Statutes, requires “a specific ground of objection if the specific ground was not apparent from the context” to challenge the admission of evidence, the specific ground was apparent from the context of counsel's repeated objections in this trial. Section 90.104 does not require “magic words” to preserve a hearsay objection, so long as the trial court is informed of the perceived error. See Corona v. State, 64 So.3d 1232, 1242 (Fla.2011).

It is true that defense counsel did not use the words “hearsay” or “section 90.803(6), Florida Statutes ” in his objections. However, he did challenge BNYM's failure to establish “the steps to make her a records custodian,” the “complete lack of predicate to establish her bona fides at least to authenticate the document,” and he offered “to provide the court with some law on what a records custodian has to establish.” The context of the objections to the witness' testimony about the records in this case made it clear to the court and to opposing counsel that the objection was directed towards the admission of computer-generated hearsay documents due to the plaintiff's failure to establish any of the grounds required for the business records exception to the hearsay rule under section 90.803(6).

Furthermore, because Ms. Johnson was the only witness to authenticate the only documentary evidence to support the amount owed at a bench trial, rule 1.530(e), Florida Rules of Civil Procedure, allows Appellants to challenge the sufficiency of the evidence on appeal even without the repeated objections made by counsel. Although a failure to object is not a prudent or advisable practice, Appellants' challenge to the sufficiency of the evidence to support the judgment is cognizable on appeal pursuant to rule 1.530(e) regardless of the specificity of defense counsel's numerous objections during the bench trial. The rule provides:

When an action has been tried by the court without a jury, the sufficiency of the evidence to support the judgment may be raised on appeal whether or not the party raising the question has made any objection thereto in the trial court or made a motion for rehearing, for new trial, or to alter or amend the judgment.

See also Wolkoff v. Am. Home Mtg. Servicing, Inc., ––– So.3d ––––, ––––, 39 Fla. L. Weekly D1159, 2014 WL 2378662, at *1 (Fla. 2d DCA May 30, 2014) (“The Wolkoffs were not required to make a contemporaneous objection to the sufficiency of the evidence in order to preserve the issue for appeal.”). Accordingly, Appellants' challenge to the sufficiency of the evidence to support the final judgment of foreclosure, due to the failure of BNYM to establish the business records exception to the hearsay rule for the documents upon which the...