Nationstar Mortg., LLC v. Berdecia

• Decision Date: 26 June 2015
• Docket Number: No. 5D14–569.,5D14–569.
• Citation: 169 So.3d 209
• Parties: NATIONSTAR MORTGAGE, LLC, Appellant, v. Jose J. BERDECIA and Carmen Berdecia, Appellees.
• Court: Florida District Court of Appeals

169 So.3d 209

NATIONSTAR MORTGAGE, LLC, Appellant

v.Jose J. BERDECIA and Carmen Berdecia, Appellees.

No. 5D14–569.

District Court of Appeal of Florida, Fifth District.

June 26, 2015.

Kimberly N. Hopkins and Ronald M. Gache, of Shapiro, Fishman & Gache, LLP, Tampa, for Appellant.

Debi V. Rumph, of The Law Offices of Debi V. Rumph, Orlando, for Appellees.

Opinion

BERGER, J.

Nationstar Mortgage LLC (Nationstar) appeals a final judgment, entered after a nonjury trial, in favor of Jose J. Berdecia and Carmen Berdecia (Borrowers). Nationstar argues the trial court erred by excluding from evidence certain mortgage records¹ originally prepared by a prior servicer, CitiMortgage, Inc. (CitiMortgage), that were necessary to prove its foreclosure action. We agree and reverse.

The underlying facts are not in dispute. In July of 2009, CitiMortgage filed a foreclosure action against Borrowers arising out of a 2006 loan agreement. In response, Borrowers sent a letter to CitiMortgage acknowledging that they were behind on their mortgage payments and requesting mitigation. Sometime later, CitiMortgage filed an amended complaint, to which Borrowers answered and asserted, among other things, an affirmative defense alleging that they had paid CitiMortgage the amounts due and owing under the note. While the case was pending, Nationstar became the servicer of the subject loan and was substituted as the plaintiff.

The case proceeded to trial, at which Nationstar introduced the testimony of Ruth Willoughby (Willoughby), a default case specialist for Nationstar, whose job duties included reviewing various business records associated with the mortgages that Nationstar services in preparation for trials and mediations.² Willoughby was called to lay a predicate for admitting into evidence mortgage documents pertinent to the case. As to those documents, Willoughby testified that, in the ordinary course of business, Nationstar makes and maintains mortgage servicing records; that it is the regular practice, when making and maintaining these records, to make data entries at or near the time the event took place; that the entries are made by a person with knowledge; and that the records are kept pursuant to procedures relied upon by her at a later date. She also testified that CitiMortgage had transferred Borrowers' records to Nationstar. Thereafter, CitiMortgage's payment history was reviewed for accuracy and integrated into Nationstar's system. She stated there was a consistency between Nationstar's payment history and CitiMortgage's payment history, and that she had reviewed both. Willoughby further explained the boarding process, which is the process designed to check the accuracy of documents acquired by Nationstar from prior servicers, as follows:

During the boarding process we have a group of individuals who work for Nationstar that review all documents that come over to us from any servicer that we purchase loans from, whether it be CitiMortgage or anybody else. And they review those documents to ensure that the dates are correct, the amounts owed are correct, that everything is in the file that needs to be there, the mortgage note, the mortgage itself, any—anything really that pertains to the mortgage, the originals from when the loan was originated.

And they do review those documents. They ensure that our dates match up with the dates from the previous servicer. They ensure that if a loan comes over to us in review for any type of modification, the homeowner stays in that modification review or continues making payments on any type of trial payment. They also review the homeowner's current—they—all of that goes into the system. It's entered into the system and boarded.

We will not board a loan if it comes over to us and we find inaccuracies. If we receive a payment history that says the last payment made was 2009 and now it's 2012 and there's nothing in between, we will go back to the previous servicer or mortgage holder and ask for those additional documents or the reason why there is a gap in that payment history.

Despite Willoughby's testimony, the trial court sustained Borrowers' hearsay objection and excluded the documents on the basis that Nationstar had not laid the proper predicate for introducing them through the business records exception. See § 90.803(6), Fla. Stat. (2013). Though not altogether clear, apparently the trial court's decision was prompted by Willoughby's acknowledgment that she had not personally boarded Borrowers' loan, and not because the documents were prepared by CitiMortgage. Regardless, it was error to exclude the documents.

Section 90.803(6) provides a hearsay exception for records of regularly conducted business activity. “The rationale behind the business records exception is that such documents have a high degree of reliability because businesses have incentives to keep accurate records.” See Bank of New York v. Calloway, 157 So.3d 1064, 1070 (Fla. 4th DCA 2015) (quoting Timberlake Constr. Co. v. U.S. Fid. & Guar. Co., 71 F.3d 335, 341 (10th Cir.1995) ). Stated otherwise, “[t]he evidence is reliable because it is of a type that is relied upon by a business in the conduct of its daily affairs and the records are customarily checked for correctness during the course of the business activities.” Charles W. Ehrhardt, Ehrhardt's Florida Evidence § 803.6 (2014 ed.); see also Calloway, 157 So.3d at 1071.

In order to be admissible under the business records exception, the movant must establish that “(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) that it was a regular practice of that business to make such a record.” Yisrael v. State, 993 So.2d 952, 956 (Fla.2008) (citing Jackson v. State, 738 So.2d 382, 386 (Fla. 4th DCA 1999) ). The movant must present this predicate in one of three formats: (1) testimony of the records custodian or other qualified witness, pursuant to section 90.803(6)(a), Florida Statutes ; (2) stipulation; or (3) certification or declaration that complies with section 90.803(6)(c) and 90.902(11), Florida Statutes. Id. at 956–57. Here, Nationstar chose the “traditional route” by placing Willoughby on the stand to testify under oath as to the predicate requirements. See Id. at 956.

As a general rule, “the authenticating witness need not be ‘the person who actually prepared the business records.’ ” Cayea v. CitiMortgage, Inc., 138 So.3d 1214, 1217 (Fla. 4th DCA 2014) (quoting Cooper v. State, 45 So.3d 490, 492 (Fla. 4th DCA 2010) ). “The records custodian or any qualified witness who has the necessary knowledge to testify as to how the record was made can lay the necessary foundation.” Twilegar v. State, 42 So.3d 177, 199 (Fla.2010) (quoting Forester v. Norman Roger Jewell & Brooks Int'l, Inc., 610 So.2d 1369, 1373 (Fla. 1st DCA 1992) ). Still, “[w]hile it is not necessary to call the individual who prepared the document, 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, 610 So.2d at 1373 ). In other words, the witness must be “well enough acquainted with the activity to give the testimony.” Alexander v. Allstate Ins. Co., 388 So.2d 592, 593 (Fla. 5th DCA 1980) (citing Holt v. Grimes, 261 So.2d 528 (Fla. 3d DCA 1972) ).

In the mortgage foreclosure context, proper authentication by a witness for the purposes of the business records exception “requires that the witness demonstrate familiarity with the record-keeping system of [the] business that prepared the document and knowledge of how the data was uploaded into the system.” Burdeshaw v. Bank of New York Mellon, 148 So.3d 819, 823 (Fla. 1st DCA 2014) (citing Weisenberg v. Deutsche Bank Nat'l Trust Co., 89 So.3d 1111 (Fla. 4th DCA 2012) ). However, “[t]he law does not require an affiant who relies on computerized bank records to be the records custodian who entered or created the data, nor must the affiant identify who entered the data into the computer.”Glarum v. LaSalle Bank Nat'l Ass'n, 83 So.3d 780, 782 n. 2 (Fla. 4th DCA 2011) ; see also Lindsey v. Cadence Bank, N.A., 135 So.3d 1164, 1168 (Fla. 1st DCA 2014) (holding that an assistant vice president of the plaintiff bank “demonstrated a sufficient understanding of the bank's computerized loan processing system to establish the foundation necessary to admit the printouts attached to her amended affidavit under the business records exception” despite the fact that the witness did not personally oversee the operation of the computer system, post payments to the system, or know the identity of the person who entered the transactions reflected on the printouts attached to her affidavit). Indeed, oftentimes the plaintiff in a foreclosure suit is not the original party to the loan. As a result, the plaintiff must prove its foreclosure case with documents that were originally prepared by the previous note owner. Under these circumstances, an employee of the current note holder may be unfamiliar with the previous owner's system for preparing its business records.

In a perfect world, the foreclosure plaintiff would call an employee of the previous note owner to testify as to the documents. However, this is neither practical nor necessary in every situation, despite Borrowers' argument to the contrary. See Le v. U.S. Bank, 165 So.3d 776 (Fla. 5th DCA May 22, 2015) (finding it was not error to allow a witness employed by bank's current loan servicer to testify about payment history information contained in records obtained from a prior servicer, where the witness's testimony met all the necessary foundational requirements for admission under section 90.803(6) ); Calloway, 157 So.3d at 1072 (finding a successor business may establish trustworthiness of another business's...