Jackson v. Household Fin. Corp.

• Decision Date: 02 July 2020
• Docket Number: No. SC18-357,SC18-357
• Citation: 298 So.3d 531
• Parties: Cynthia L. JACKSON, et al., Petitioners, v. HOUSEHOLD FINANCE CORPORATION III, et al., Respondents.
• Court: Florida Supreme Court

298 So.3d 531

Cynthia L. JACKSON, et al., Petitioners,

v.HOUSEHOLD FINANCE CORPORATION III, et al., Respondents.

No. SC18-357

Supreme Court of Florida.

July 2, 2020

Nicole M. Ziegler of Emerson Straw, PL, St. Petersburg, Florida, for Petitioner

Matthew A. Ciccio and Spencer Gollahon of Aldridge Pite, LLP, Delray Beach, Florida, for Respondent

Robert R. Edwards of Choice Legal Group, P.A., Fort Lauderdale, Florida; David Rosenberg of Robertson, Anschutz & Schneid, P.L., Boca Raton, Florida; Marissa M. Yaker of Padgett Law Group, Tallahassee, Florida; and Andrea R. Tromberg of Tromberg Law Group, P.A., Boca Raton, Florida, for Amicus Curiae American Legal and Financial Network

LAWSON, J.

This case is before the Court for review of the decision of the Second District Court of Appeal in Jackson v. Household Finance Corp. III , 236 So. 3d 1170 (Fla. 2d DCA 2018). The district court certified that its decision directly conflicts with Maslak v. Wells Fargo Bank, N.A. , 190 So. 3d 656 (Fla. 4th DCA 2016), on the same question of law, giving us jurisdiction. See art. V, § 3(b)(4), Fla. Const. For the reasons explained below, we approve Jackson , disapprove Maslak , and hold that the proper predicate for admission of records into evidence under the business records exception to the hearsay rule can be laid by a qualified witness testifying to the foundational elements of the exception, as held by the Second District. Jackson , 236 So. 3d at 1175.

BACKGROUND

On April 25, 2006, Cynthia Jackson executed a loan agreement to obtain a residential loan in the amount of $146,841.79 from Household Finance Corp III (HFC).¹ Jackson and her husband (Petitioners) also executed a mortgage for the same amount with HFC. The Second District explained:

Household Finance Corp III is the originating lender and the plaintiff below. In 2002, well before the Jacksons executed the mortgage, Household was purchased by HSBC Holdings and became a wholly-owned subsidiary of HSBC.

Id. at 1172.

On June 23, 2014, HFC filed a foreclosure complaint against Petitioners and other defendants, alleging that Petitioners defaulted under the terms of the note and the mortgage. Petitioners did not challenge the default.

At the bench trial, HFC called a twenty-five-year employee of HSBC, Assistant Vice President David Birsh, to establish the foundation for admission of records under the business records exception to the hearsay rule. Counsel for HFC asked Birsh if he has "access to the records maintained by HSBC with respect to the mortgage loan account which is the subject of this instant action," to which he answered, "Yes, I do." Counsel then asked Birsh the following questions:

Q. So are you familiar with the business practice of HSBC?

A. Yes, I am.

Q. And is it the regular business practice of HSBC to record acts, transactions, payments, communications, escrow account activity disbursements, events and analysis with respect to the mortgage loan account?

A. Yes, it is.

Q. And are these business records prepared by persons with knowledge of or from information transmitted by persons with knowledge of the acts, transactions, payments, communications, escrow account activity, disbursements and analyses?

A. Yes.

Q. And are all records made at or near the time the acts, transactions, payments, communications, escrow account activity, disbursements, events and analyses occur?

A. Yes.

....

Q. And are these records maintained by HSBC in the ordinary course of its regular business activity of the mortgage, lending, banking and service activity?

A. Yes, they are[.]

Q. Did HSBC prepare and maintain these records with respect to the subject loan?

A. Yes.

Counsel then moved the documents, including the original note, mortgage, and loan payment history, into evidence. Counsel for Petitioners objected on grounds of "hearsay," explaining that Birsh had not "laid a foundation upon which to testify as to these as business records or to authenticate any of these documents based on personal knowledge." The trial judge overruled the objection and admitted the records into evidence.²

HFC rested its case, and counsel for Petitioners did not introduce any evidence. The trial court entered final judgment of mortgage foreclosure in favor of HFC, and the Second District affirmed the judgment. Jackson , 236 So. 3d at 1171.

ANALYSIS

We review a trial court's decision to admit evidence for an abuse of discretion. Tundidor v. State , 221 So. 3d 587, 598 (Fla. 2017). "However, the question of whether a statement is hearsay is a matter of law and is subject to de novo review on appeal." Id. at 598-99 (quoting Cannon v. State , 180 So. 3d 1023, 1037 (Fla. 2015) ).

Florida's Evidence Code sets forth the general rule that "hearsay" is not admissible except as provided by statute, § 90.802, Fla. Stat. (2014), and defines hearsay as "a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted," § 90.801(1)(c), Fla. Stat. (2014). The Evidence Code defines some categories of evidence as non-hearsay, and therefore generally admissible, see § 90.801(2), Fla. Stat. (2014), and also lists a number of "exceptions," which constitute categories of admissible hearsay, see §§ 90.803(1) - (24), 90.804(1) - (2), Fla. Stat. (2014). The business records exception to the hearsay rule provides for the admission of "records of regularly conducted business activity" as follows:

A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinion, or diagnosis, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity and if it was the regular practice of that business activity to make such memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness, or as shown by a certification or declaration that complies with paragraph (c) and s. 90.902(11), unless the sources of information or other circumstances show lack of trustworthiness. The term "business" as used in this paragraph includes a business, institution, association, profession, occupation, and calling of every kind, whether or not conducted for profit.

§ 90.803(6)(a). As explained by the Second District,

A party can lay a foundation for the [admission of documents pursuant to the] business records exception in three ways: (1) offering testimony of a records custodian, (2) presenting a certification or declaration that each of the elements has been satisfied, or (3) obtaining a stipulation of admissibility. Yisrael v. State , 993 So. 2d 952, 956-57 (Fla. 2008).

Jackson , 236 So. 3d at 1172 (footnote omitted).

This case obviously involves the first method—testimony at trial of a records custodian. With respect to this method, the Second District explained,

If the party offers the testimony of a records custodian to lay the foundation, it is not necessary that the testifying witness be the person who created the business records.

Channell [v. Deutsche Bank Nat'l Tr. Co .], 173 So. 3d [1017,] 1019 [ (Fla. 2d DCA 2015) ] ; Specialty Linings, Inc. v. B.F. Goodrich Co ., 532 So. 2d 1121, 1121 (Fla. 2d DCA 1988). The witness may be any qualified person with knowledge of each of the elements. Channell , 173 So. 3d at 1019 ; Specialty Linings , 532 So. 2d at 1121.

Id . ; see also Charles W. Ehrhardt, Florida Evidence § 803.6, at 1109-10 (2019 ed.) (A witness must be able to "show that each of the foundation requirements is present," but "[i]t is not necessary to call the person who observed the matter recorded or actually made the entry."). A qualified witness, therefore, is anyone with personal knowledge of the organization's regular business practices relating to creating and retaining the record(s) at issue. Id. § 803.6, at 1111. This knowledge will necessarily come from the witness's training or experience, or, most likely, a combination of both.³ The foundation requirements are:

(1) that the record was made at or near the time of the event, (2) that it was made by or from information transmitted by a person with knowledge, (3) that it was kept in the ordinary course of a regularly conducted business activity, and (4) that it was a regular practice of that business to make such a record.

Jackson , 236 So. 3d at 1172 (quoting Channell , 173 So. 3d at 1019 ).

Here, the proponent presented the testimony of a twenty-five-year employee and executive vice president who testified that he was "familiar with the business practices of the company" and that it was the company's "regular business practice" to "record acts, transactions, payments, communications, escrow account activity, disbursements, events and analysis with respect to the mortgage loan account." He further testified that the documents met each of the other foundational requirements set forth in section 90.803(6), using the language of the statute or a close approximation of it, as detailed above. No additional foundation is required by the statute or by any case from this Court, and we reject the notion that the witness must also detail the basis for his or her familiarity with the relevant business practices of the company or give additional details about those practices as part of the initial foundation because this would be inconsistent with the plain language of the statute. See Greenfield v. Daniels , 51 So. 3d 421, 425 (Fla. 2010) ("[W]hen the language of the statute is clear and unambiguous and conveys a clear and definite meaning, there is no occasion for resorting to the rules of statutory interpretation and construction; the statute must be given its plain and obvious meaning." (quoting Holly v. Auld , 450 So. 2d 217, 219 (Fla. 1984) )).

Rather, once the proponent lays the predicate for admission of documents set forth in the statute and reflected in our case law, "the burden shifts to the opposing party to prove that the records are...