Evans v. HSBC Bank, USA, Nat'l Ass'n
| Citation | 223 So.3d 1059 |
| Decision Date | 05 May 2017 |
| Docket Number | Case No. 2D15–433 |
| Parties | Andrea S. EVANS, Appellant, v. HSBC BANK, USA, NATIONAL ASSOCIATION; Association of Poinciana Villages Incorporated; Poinciana Village Seven Association, Incorporated; Ainsley Jones; unknown Tenant(s) in Possession of the Subject Property, Appellees. |
| Court | Court of Appeal of Florida (US) |
Dineen Pashoukos Wasylik of DPW Legal, Tampa, for Appellant.
Wm. David Newman, Jr. of Choice Legal Group, P.A., Fort Lauderdale, for Appellee HSBC Bank, USA, N.A.
No appearance for remaining Appellees.
Andrea S. Evans appeals the final judgment of foreclosure entered in favor of HSBC Bank, USA, National Association (HSBC Bank), and the dismissal of her counterclaim. We have jurisdiction. See Fla. R. App. P. 9.030(b)(1)(A). Ms. Evans raises five issues on appeal.1 The parties agree that we should reverse and remand as to two issues: (1) the trial evidence was legally insufficient to establish the amount owed by Ms. Evans on her home loan; and, (2) the trial court erred in dismissing with prejudice Ms. Evans' counterclaim for trespass. We reverse and remand for further proceedings on these two issues. We affirm the final judgment in all other respects without further comment.
As to the first issue noted, above, the parties disagree as to the proper relief that the trial court should afford on remand. Ms. Evans contends that because HSBC Bank failed to prove damages, we should direct the trial court to dismiss the case. HSBC Bank, on the other hand, argues that the trial court should conduct further proceedings to determine the amount of the debt owed. As explained below, we agree with HSBC Bank on this point.
In 2006, Ms. Evans financed the purchase of a home by executing a promissory note and mortgage in favor of HSBC Mortgage Corporation. HSBC Mortgage endorsed the note in blank. Following Ms. Evans' 2009 payment default, HSBC Bank, as the noteholder and mortgage servicer, sued to foreclose. Ms. Evans answered the complaint, raising several affirmative defenses, and a trespass counterclaim. The trial court dismissed the counterclaim, finding that the allegations lacked particularity.2
At a 2014 bench trial, HSBC Bank offered the testimony of Angela Stubblefield, from PHH Mortgage Corporation, a loan subservicer for HSBC Bank. Her knowledge of the loan came from reviewing HSBC Bank's records. Through Ms. Stubblefield's testimony, HSBC Bank sought to admit a payment history into evidence. The payment history was based on records from three different servicers.
Ms. Stubblefield confirmed that PHH created little of the twenty-five-page payment history. In fact, an entity named "The Mortgage Service Center" created a significant portion. Ms. Stubblefield insisted that the entire payment history was a business record "because they were transferred over to ... PHH." Yet, she could only surmise that the payment history entries were "made by an individual with the responsibility to enter data accurately and contemporaneously with the events recorded." Ms. Stubblefield was unable to testify as to the procedures used to "board" the entries into PHH's records. Over Ms. Evans' objections, the trial court admitted the payment history into evidence. Ms. Stubblefield then testified that the damages reflected in the proposed judgment were accurate. HSBC Bank neither offered nor admitted the proposed judgment into evidence. The trial court entered a final judgment in favor of HSBC Bank.
We review a trial court's decision on the admissibility of evidence for an abuse of discretion; that discretion, however, is limited by the rules of evidence. See Sottilaro v. Figueroa , 86 So.3d 505, 507 (Fla. 2d DCA 2012). Thus, we apply a de novo standard of review to the extent that the trial court's ruling is an interpretation of the evidence code or case law construing the code. See id.
" ‘Hearsay’ is a statement, other than one made by the declarant while testifying at the trial ..., offered in evidence to prove the truth of the matter asserted." § 90.801(1)(c), Fla. Stat. (2014). Hearsay is inadmissible, unless specifically exempted under the evidence code. § 90.802. Business records are such an exception. See § 90.803(6)(a).
To admit the payment history into evidence as a business record, HSBC Bank had to prove the following:
(1) the record was made at or near the time of the event; (2) was made by or from information transmitted by a person with knowledge; (3) was kept in the ordinary course of a regularly conducted business activity; and (4) [it] was a regular practice of that business to make such a record.
Yisrael v. State , 993 So.2d 952, 956 (Fla. 2008). Although HSBC Bank did not have to present the testimony of the individual who actually prepared the payment history, "the witness through whom a document is being offered must be able to show each of the requirements for establishing a proper foundation." Mazine v. M & I Bank , 67 So.3d 1129, 1132 (Fla. 1st DCA 2011) (citing Forester v. Norman Roger Jewell & Brooks , 610 So.2d 1369, 1373 (Fla. 1st DCA 1992) ).
"Typically a foreclosure plaintiff proves the amount of indebtedness through the testimony of a competent witness who can authenticate the mortgagee's business records and confirm that they accurately reflect the amount owed ...." Wolkoff v. Am. Home Mortg. Servicing, Inc. , 153 So.3d 280, 281 (Fla. 2d DCA 2014). Ms. Stubblefield was not a competent witness. She was unable to testify to any of the procedures of the prior servicers or to PHH's own procedures to incorporate the prior servicer's records into its own. Although Ms. Stubblefield testified that the payment histories maintained by HSBC Mortgage and HSBC Bank were transferred to PHH, and that PHH used the same servicing system as HSBC Bank, she offered no testimony concerning the accuracy of the prior servicer's records before they were boarded into PHH's system. Quite simply, Ms. Stubblefield lacked any knowledge as to the preparation or maintenance of the payment history or the accuracy of its contents.
Despite these shortcomings, Ms. Stubblefield testified that the payment history was a business record, contemporaneously and routinely created and kept in the regular course of business. Nevertheless, the payment history did not meet the safeguards of section 90.803(6)(a). See Landmark Am. Ins. Co. v. Pin–Pon Corp. , 155 So.3d 432, 441 (Fla. 4th DCA 2015) . Accordingly, the admission of the payment history into evidence was erroneous. Consequently, HSBC Bank failed to present sufficient evidence as to its damages. See Wagner v. Bank of Am., N.A. , 143 So.3d 447, 448 (Fla. 2d DCA 2014) . We must reverse this portion of the final judgment.
We now address the appropriate remedy on remand. "It is axiomatic that the party seeking foreclosure must present sufficient evidence to prove the amount owed on the note." Wolkoff , 153 So.3d at 281. Generally, "[w]hen a party seeking monetary damages fails to establish an evidentiary basis for the damages ultimately awarded at trial, reversal for entry of an order of dismissal is warranted." Id. at 283 (citing Morton's of Chi., Inc. v. Lira , 48 So.3d 76, 80 (Fla. 1st DCA 2010) ).
Ms. Evans argues that we should direct the trial court to dismiss the foreclosure case. "[A]ppellate courts do not generally provide parties with an opportunity to retry their case upon a failure of proof." Correa v. U.S. Bank Nat'l Ass'n , 118 So.3d 952, 955 (Fla. 2d DCA 2013) (alteration in original) (quoting Morton's , 48 So.3d at 80 )); see also Carlough v. Nationwide Mut. Fire Ins. Co. , 609 So.2d 770, 771–72 (Fla. 2d DCA 1992) . Significantly, however, courts have drawn a distinction between cases in which the plaintiff submitted some evidence of damages and cases where there has been a complete failure of proof on the issue. See Beauchamp v. Bank of N.Y. , 150 So.3d 827 (Fla. 4th DCA 2014) ; Lasala v. Nationstar Mortg., LLC , 197 So.3d 1228 (Fla. 4th DCA 2016). For instance, in Sas v. Federal National Mortgage Ass'n , 112 So.3d 778, 779 (Fla. 2d DCA 2013), the bank offered witness testimony as to the amount of indebtedness, but offered no business records to support the testimony. Similar to Ms. Evans' case, the witness "had no personal knowledge of the amount of the debt ... and testified about the amount based only on his review of [the servicer]'s business records related to the loan." Id. The Sas court affirmed the final judgment, but reversed and remanded for the trial court to determine the amount of damages with nonhearsay evidence. Id. at 780 ; see also Peuguero v. Bank of Am., N.A. , 169 So.3d 1198, 1204 (Fla. 4th DCA 2015) (...
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