Christ v. Deutsche Bank Nat'l Trust Co. Ams.

• Decision Date: 12 March 2021
• Docket Number: Case No. 2D19-4131
• Citation: 316 So.3d 382
• Parties: Gwen E. CHRIST, Appellant, v. DEUTSCHE BANK NATIONAL TRUST COMPANY AMERICAS, AS TRUSTEE FOR RESIDENTIAL ACCREDIT LOANS INC., MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES, SERIES 2005-QS13, Appellee.
• Court: Florida District Court of Appeals

316 So.3d 382

Gwen E. CHRIST, Appellant,

v.DEUTSCHE BANK NATIONAL TRUST COMPANY AMERICAS, AS TRUSTEE FOR RESIDENTIAL ACCREDIT LOANS INC., MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES, SERIES 2005-QS13, Appellee.

Case No. 2D19-4131

District Court of Appeal of Florida, Second District.

Opinion filed March 12, 2021.

Jeff Barnes of W. J. Barnes, P.A., Boca Raton, for Appellant.

Michael R. Esposito and Nicole R. Topper of Blank Rome LLP, Tampa, for Appellee.

VILLANTI, Judge.

In this mortgage foreclosure action, Gwen E. Christ appeals the final judgment of foreclosure entered in favor of Deutsche Bank National Trust Company Americas, as trustee for Residential Accredit Loans, Inc., Mortgage Asset-Backed Pass-Through Certificates, Series 2005-QS13 (Deutsche Bank) after a bench trial. Because Deutsche Bank failed to offer competent, substantial evidence to prove that it had complied with Paragraph 22 of the mortgage, we must reverse and remand for entry of judgment in favor of Christ. Christ also raises other grounds for reversal, but we find them to be without merit and decline to address them further.

"[A] mortgagee's right to the security for a mortgage is dependent upon its compliance with the terms of the mortgage contract, and it cannot foreclose until it has proven compliance." DiSalvo v. SunTrust Mortg., Inc., 115 So. 3d 438, 439 (Fla. 2d DCA 2013) (emphasis added) (citing F.A. Chastain Constr., Inc., v. Pratt, 146 So. 2d 910, 913 (Fla. 3d DCA 1962) ); see also Gorel v. Bank of N.Y. Mellon, 165 So. 3d 44, 47 (Fla. 5th DCA 2015) (quoting DiSalvo, 115 So. 3d at 439 ). Hence, to be entitled to a foreclosure judgment in its favor, Deutsche Bank was required to offer evidence at the bench trial sufficient to prove that it had complied with all of the terms of the mortgage, including, among other things, the requirements of Paragraph 22.

Paragraph 22 required Deutsche Bank to provide written notice to Christ that the loan was in default and that the debt was being accelerated, how the default could be cured, and what amount was required to be paid in order for the default to be cured. Paragraph 22 also required that Deutsche Bank provide at least thirty days' notice within which Christ could cure the default before further action would be taken. Further, Paragraph 22 required Deutsche Bank to send this letter by first class mail or have it actually delivered to Christ. See generally DiSalvo, 115 So. 3d at 439 (summarizing the notice and cure requirements spelled out in Section 22 of the mortgage contract in that case); see also Figueroa v. Fed. Nat'l Mortg. Ass'n, 180 So. 3d 1110, 1116 (Fla. 5th DCA 2015) (same). If Deutsche Bank did not satisfy these notice prerequisites, any action to foreclose on the security for the note, i.e., Christ's residence, would be premature.

Here, Deutsche Bank offered into evidence at trial the printed images of two "demand" letters from its document system. These letters were dated in October 2008, when GMAC Mortgage Corporation was the servicer of Christ's loan. The letters were not on letterhead and did not include any indication that they had been mailed, such as a certified or registered mail tracking number or other indicia of mailing. Nothing about the letters themselves indicate whether they were mailed by first class mail, as required by Paragraph 22, or otherwise delivered to Christ.

To attempt to prove that the letters were in fact mailed as required by Paragraph 22, Deutsche Bank offered the testimony of an employee of the successor servicer, Mark Feliciano, as follows:

Q. Sir, does this document [the prior servicer's notes] contain any entries that relate to Plaintiff's Number 5?

A. Could you clarify what Number 5 was?

Q. Number 5 was the demand letters.

A. Yes, sir. There is an entry of October 3, 2008. It says "Breach, Jeffrey Burleson". It cuts off the "n" of Mr. Burleson's last name. And there is a second entry that says "Breach, Gwen E. Christ".

Q. Based upon your decade of experience in the mortgage servicing industry and having worked for I believe you testified three or four different servicers over that time, do you know why such an entry would be created?

A. It says "breach." I'm assuming it's referring to the letter. That's what the letter says on it, too, at the top.

Q. Is that consistent with actions taken by all servicers you've worked for over the course of your career?

A. Yes. I've heard it referred to as "breach letter," "demand letter," "Notice of Intent," and abbreviated as "NOI." There's various ways of delineating it in collection notes.

Q. Are you aware of an instance when a note would be made and a breach letter would not have been mailed?

A. No. Q. As far as you're concerned, is it the policy that, any time a breach letter is mailed, there is an accompanying note to indicate such mailing?

A. Every servicer I've worked for. I haven't worked for Chase, Wells Fargo, SLS. I can't speak to all of them.

Q. And the date on this document, is that consistent with—

A. -- It's actually -- the breach letter I'm looking at says October 2, 2008, and the entry is October 3, 2008.

Deutsche Bank contends that this testimony was sufficient to prove that the default letters were mailed in accordance with Paragraph 22. (Emphasis added.)

The problem with this testimony is that it does not, in fact, prove that the default letters found in the prior servicer's records were ever mailed. First, the entries in the prior servicer's records do not mention letters. Feliciano testified that he "assumed" that the October 3, 2008, entries in the prior servicer's notes, which said only "Breach, Jeffrey Burleson" and "Breach, Gwen E. Christ," were notes referring to the default letters, which were dated on October 2, 2008. However, these entries on their face do not reference the creation of any letter. Hence, Feliciano's assumption that these entries document the mailing of the default letters is just that—an assumption. It is not testimony based on either personal knowledge or knowledge of the prior servicer's business practices.

Second, even if these entries were intended to document the creation of the default letters, nothing in the prior servicer's notes indicate whether or how these letters were mailed. Neither the entry in the prior servicer's notes nor the letters themselves identify any form of mailing. Moreover, Feliciano admitted that he did not work for GMAC when the letters were allegedly prepared, nor had he ever worked for GMAC. Hence, he had no personal knowledge as to whether these letters were mailed or even what GMAC's general practices for mailing were. And while Feliciano testified that it was the general practice of the servicers he had worked for to make an entry in the servicer's notes when such letters were mailed, he also testified that he had never worked for GMAC and admitted that he "could not speak to" all servicers.

Several courts have addressed the type of testimony necessary for a successor servicer to establish that a prior servicer actually mailed default letters in compliance with Paragraph 22. For example, in Wells Fargo Bank, N.A. v. Balkissoon, 183 So. 3d 1272, 1277 (Fla. 4th DCA 2016), the trial court found the following testimony sufficient to support admission of a default letter:

Reyes demonstrated that he was sufficiently familiar with Bank of America's practice and procedure for generating and sending the default notice to meet the business records exception. He testified that the notice was made at or near the time of the events reflected therein and made by or from information transmitted by people with knowledge. Each night, Bank of America transmitted the information for loans in default to Waltz over a secure connection. Waltz used a Bank of America template to create the notice within two days of receiving the loan information. Waltz did not generate any of the information in the notice. Mr. Reyes testified that the copy of the notice was kept in the ordinary course of Bank of America's regularly conducted business activity and it was the regular practice of Bank of America to make this record. Once Waltz generated the notice and mailed it, Bank of America kept a copy of the notice in its records and made a note of the mailing date.

Similarly, in CitiMortgage, Inc. v. Hoskinson, 200 So. 3d 191, 192-93 (Fla. 5th DCA 2016), the court held that the following testimony was sufficient to raise a rebuttable presumption that a document was mailed:

A rebuttable presumption of mailing can be shown through evidence of an organization's routine practice. § 90.406, Fla. Stat. (2014) ; see Brown v. Giffen Indus., Inc., 281 So. 2d 897, 899-900 (Fla. 1973). The witness testified to her personal knowledge of Appellant's general practice of delivering breach letters to the mail room, where they are collected by the postal service. Although the witness did not see the postal carrier collect the mail on the date in question, she had seen the carrier collect the mail at other times. This testimony created a rebuttable presumption that the letter was mailed in accordance with Appellant's general practice.

Here, in contrast, Feliciano did not—and could not—testify to GMAC's general practice of preparing and mailing default letters, nor could he testify as to its general practice for notating that a default letter was sent. Instead, Deutsche Bank relied solely on Feliciano's "assumption" about what an ambiguous entry in the prior servicer's records meant and his experience with servicers other than GMAC to establish proof of mailing. Because Feliciano's testimony was not based on either personal knowledge or his knowledge of GMAC's business practices, it was legally insufficient to constitute proof that the default letters in question were mailed. By failing to prove that the default letters were mailed, Deutsche Bank failed to prove that it complied with Paragraph...