Peuguero v. Bank of Am., N.A.

• Decision Date: 15 July 2015
• Docket Number: No. 4D13–3210.,4D13–3210.
• Parties: Natacha PEUGUERO and Angelo Peuguero, Appellants, v. BANK OF AMERICA, N.A., Successor by Merger to Bac Home Loans Servicing, LP, fka Countrywide Home Loans Servicing, LP, Appellee.
• Court: Florida District Court of Appeals

169 So.3d 1198

Natacha PEUGUERO and Angelo Peuguero, Appellants

v.BANK OF AMERICA, N.A., Successor by Merger to Bac Home Loans Servicing, LP, fka Countrywide Home Loans Servicing, LP, Appellee.

No. 4D13–3210.

District Court of Appeal of Florida, Fourth District.

July 15, 2015.

Thomas Erskine Ice and Amanda L. Lundergan of Ice Appellate, Royal Palm Beach, and Thomas D. Hall of The Mills Firm, P.A., Tallahassee, for appellants.

J. Randolph Liebler, Tricia J. Duthiers, Adam M. Topel, and Kristen Tajak of Liebler Gonzalez & Portuondo, Miami, and Lisa J. Geiger and Matt Mitchell of Burr & Forman, LLP, Orlando, for appellee.

Opinion

FORST, J.

Appellants Natacha and Angelo Peuguero appeal the entry of a final judgment of foreclosure in favor of Appellee Bank of America (“the Bank”). While we disagree with Appellants' argument that the foreclosing bank failed to prove standing, we agree that the Bank failed to provide sufficient evidence to support the judgment amount. Therefore, we affirm the trial court's entry of judgment, but we reverse and remand for a determination of the correct amounts owed.

Background

Appellants executed a note and mortgage in favor of Diversified Mortgage in August 2007. By 2009, Appellants were no longer able to make payments on the loan. Countrywide Bank filed a complaint to foreclose on the loan in August 2009, alleging that it was the owner and holder of the note. The complaint included a count to reestablish a lost note. Attached to the complaint was an unendorsed copy of the note.

In April 2011, Countrywide moved to amend the name of the plaintiff in the action to the Bank, as Countrywide and the Bank had merged. An amended complaint was filed by the Bank in December 2011. A copy of the note, now including an allonge, was attached to the Amended Complaint. The allonge contained endorsements from Diversified Mortgage (the original lender) to Countrywide FSB, from Countrywide FSB to Countrywide Home Loans, then back to Countrywide FSB, and finally a blank endorsement. None of the endorsements were dated.

At trial, the Bank called one of its employees to testify. This witness testified that she was familiar with the record-keeping practices of both the Bank and Countrywide and that the payment history for this loan was kept in the ordinary course of business. On the strength of this testimony, the trial court admitted the payment history into evidence.

The witness was also asked to confirm the amount owed by Appellants to the Bank. Relying on a proposed judgment drafted by the Bank, but not entered into evidence, the witness testified to both the principal and interest owed on the loan.

The trial court entered a final judgment of foreclosure in favor of the Bank in the amount of $697,807.36. Appellants now appeal the judgment against them, arguing the Bank's witness was not qualified to testify, that the original plaintiff in this action, Countrywide, did not have standing when it filed the complaint, and that the trial court erred by allowing the witness to testify from the proposed judgment. While we hold that the Bank adequately proved Countrywide had standing to file the initial complaint, we agree with Appellants' challenge to the calculation of the interest due as part of the judgment award.

Admissibility of Payment History

Appellants initially argue that testimony by the Bank's witness concerning Appellants' loan payment history should have been deemed inadmissible hearsay and not as an exception to the hearsay rule. The business records exception, found in section 90.803(6), Florida Statutes (2013), allows a party to introduce evidence that would normally be inadmissible hearsay if:

(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). Here, the witness provided enough testimony to meet these requirements.

We have previously addressed a similar situation in Cayea v. CitiMortgage, Inc., 138 So.3d 1214 (Fla. 4th DCA 2014). There, a foreclosing bank introduced a printout of a loan payment history as a business record. Id. at 1217. The bank called a witness, who testified that other bank employees routinely input payments into the bank's computer system and that the record presented at trial was simply a printout of the bank's records that was printed specifically for trial. Id. at 1216. We affirmed the trial court's admission of this document, holding that the records were admissible, even if the printouts were not kept in the ordinary course of business, “so long as a qualified witness testifies as to the manner of preparation, reliability, and trustworthiness.” Id. at 1217. Relying on Weisenberg v. Deutsche Bank National Trust Co., 89 So.3d 1111, 1113 (Fla. 4th DCA 2012), we held that the witness had sufficient knowledge where he “demonstrated his familiarity with [the bank]'s record-keeping system and the process for uploading payment information.” Cayea, 138 So.3d at 1218.

Likewise, the witness in this case testified that even though she was not responsible for maintaining or updating the records, she was familiar with the Bank's procedures for inputting payment information into the proper computer systems. Although she was unable to give the precise name for each group in the Bank's structural hierarchy that was responsible for entering various events into the computerized records, she knew that events/transactions were processed at the time of their occurrence and placed into the Bank's systems, as per the standard business practice of the Bank. Furthermore, the trial court did not find any indication that the witness's testimony was unreliable. Therefore, based on our precedent in Cayea, we find that the witness was qualified to lay the foundation for the admission of the business records.

“The law is ... clear there is no per se rule precluding the admission of computerized business records acquired from a prior loan servicer.” Glarum v. LaSalle Bank Nat'l Ass'n, 83 So.3d 780, 782 n. 2 (Fla. 4th DCA 2011). The records from a prior servicer must, of course, have some indicia of accuracy, either through personal knowledge of a witness, as discussed in Holt v. Calchas, LLC, 155 So.3d 499, 504 (Fla. 4th DCA 2015), or a showing of some contractual relationship between the current and prior servicers. Bank of N.Y. v. Calloway, 157 So.3d 1064, 1072 (Fla. 4th DCA 2015). For example, in WAMCO XXVIII, Ltd. v. Integrated Electronic Environments, Inc., 903 So.2d 230, 232–33 (Fla. 2d DCA 2005), the court held that a document detailing amounts owed was admissible as a business record even where the witness's testimony was based on information from a previous holder of the note. The witness testified that he knew how the prior holder's accounting systems worked and that “the procedures were ‘bank-acceptable accounting systems.’ ” Id. at 233. Further, the witness testified that the current holder verified the records for accuracy when it obtained them. Id. In the instant case, the witness testified that she was familiar with the record-keeping practices of the prior holder of the note, Countrywide. She testified that, based on her training, Countrywide and the Bank had identical procedures and record-keeping systems in place.

A trial court's ruling on the admissibility of evidence under the business records hearsay exception is reviewed for an abuse of discretion.See Cayea, 138 So.3d at 1216 ; LEA Indus., Inc. v. Raelyn Int'l Inc., 363 So.2d 49, 52 (Fla. 3d DCA 1978) (“[I]t lies within the trial court's discretion to determine whether admission of ... business records is justified.”). In the instant case, based on the weight afforded by the trial court to the testimony of the Bank's witness, the admission of the business records of the prior note holder to establish the loan payment history was not an abuse of discretion.

Standing

“A crucial element in any mortgage foreclosure proceeding is that the party seeking foreclosure must demonstrate that it has standing to foreclose. Standing may be established by either an assignment or an equitable transfer of the mortgage prior to the filing of the complaint.” McLean v. JP Morgan Chase Bank Nat'l Ass'n, 79 So.3d 170, 173 (Fla. 4th DCA 2012) (internal citations omitted). “[A] party's standing is determined at the time the lawsuit was filed.” Id.

In this case, the original plaintiff, Countrywide, had standing at the time it filed suit. At trial, the Bank offered the note, mortgage, allonge, and notice-of-default letter into evidence. Although the witness was unable to specify exactly when Countrywide first held the note, the loan payment history reveals that Countrywide began receiving payments from Appellants shortly after the closing date for the loan. Additionally, the loan payment history indicates that Countrywide paid taxes and other fees associated with the mortgaged property in the time prior to the filing of the original complaint. This is a noteworthy factor in determining standing, as financial institutions are not known to incur expenses on behalf of properties for which they do not hold an interest.

The undated allonge, in combination with the testimony of the Bank's witness, indicates that Countrywide, in various corporate forms, was a holder of the note prior to the endorsement in blank. Where holder status is based on an endorsement...