Wells Fargo Bank, N.A. v. Eisenberg, 4D16–2646

• Decision Date: 31 May 2017
• Docket Number: No. 4D16–2646,4D16–2646
• Citation: 220 So.3d 517
• Parties: WELLS FARGO BANK, N.A., Appellant, v. Mara Elizabeth EISENBERG a/k/a Mara E. Eisenberg, et. al., Appellees.
• Court: Florida District Court of Appeals

220 So.3d 517

WELLS FARGO BANK, N.A., Appellant,

v.Mara Elizabeth EISENBERG a/k/a Mara E. Eisenberg, et. al., Appellees.

No. 4D16–2646

District Court of Appeal of Florida, Fourth District.

May 31, 2017

Dean A. Morande and Michael K. Winston of Carlton Fields Jorden Burt, P.A., West Palm Beach, for appellant.

Anthony E. Saurini of The Ticktin Law Group, PLLC, Deerfield Beach, for appellee Mara Elizabeth Eisenberg.

Klingensmith, J.

Appellant Wells Fargo Bank, N.A. ("Bank") appeals the involuntary dismissal of its foreclosure case against appellee Mara Elizabeth Eisenberg ("Borrower"). The trial court based the dismissal on Bank's failure to adequately prove damages. Bank alleges two grounds for reversal: 1) that the trial court erred by preventing Bank from admitting into evidence the portion of the loan payment history initially generated by the first servicer, which Bank incorporated into its own business records; and 2) that the court's involuntary dismissal was improper since Bank prima facie established the amounts due and owing, even though the portion of the payment history showing the date on which Borrower was alleged to have initially defaulted was not admitted into evidence. We agree on both issues, and reverse and remand for further proceedings.

Bank filed a mortgage foreclosure complaint against Borrower, alleging that "the payment due for December 1, 2008 and all subsequent payments have not been made." The complaint claimed that the "principal sum of $101,098.78" along with other expenses were due and owing.

Borrower's loan was initially serviced by First Union Mortgage Corporation, which later merged into Wachovia; subsequently, Wachovia merged into Bank. At trial, Bank called a loan verification analyst to testify that Bank was the servicer of Borrower's loan, and that she had become familiar with Bank's "policies and procedures related to the preparation and maintenance of business records" during her career with Bank. Although she had not worked for Wachovia, she was familiar with its recordkeeping procedures; however, she was not familiar with First Union's procedures.

When Bank attempted to admit Borrower's complete payment history into evidence, Borrower's counsel objected due to the witness's insufficient knowledge of the policies and procedures of First Union and Wachovia. The court sustained the objection, but allowed further questioning to elucidate the witness's knowledge of Bank's boarding process. After the witness did so, Borrower stood by her prior objection, contending that the payment history should be excluded because the witness could not attest to the policies and procedures of the initial servicer. The court agreed and sustained Borrower's objection for failing to lay a proper foundation in terms of the witness's knowledge of how First Union created its records while it was the servicer of the loan.

Once Bank's merger document with Wachovia was admitted as evidence, Bank entered into evidence without objection the payment history starting from Wachovia's servicing of the loan (beginning in March 2010) onward. Bank also entered into evidence without objection a payoff screenshot from its records showing all the amounts due and owing, including the principal balance that Bank alleged Borrower owed in the foreclosure complaint ($101,098.78), the escrow advance, accrued interest, and per diem interest. The screenshot also specified that this principal amount was originally due on December 1, 2008.

Borrower moved for involuntary dismissal, arguing that Bank failed to prove standing and did not present competent evidence of the amount owed on the note. Borrower argued that the accuracy of the payment history could not be ensured because the first default date alleged in the complaint was for December 2008, but the admitted payment history began in March 2010. Bank countered that that there was sufficient evidence of the amounts due and owing, but alternatively suggested that, to the extent the court believed it was necessary to have the payment history reach the initial default date, it was willing to reduce the amount it was seeking to only those sums reflected in the payment history in evidence (i.e., from March 2010).

The trial court denied involuntary dismissal on the standing issue, but granted it for failure to prove the amounts due and owing. It ruled that Bank "failed to demonstrate by substantial competent evidence the amount due and owing" because of an "an incomplete payment history." The court further stated that there was "no definitive date that was testified to in terms of when the actual default occurred." After Bank's motion for rehearing was denied, this appeal followed.

The Prior Loan History

"The standard of review for admissibility of evidence is abuse of discretion, limited by the rules of evidence." Ocwen Loan Servicing , LLC v. Gundersen , 204 So.3d 530, 533 (Fla. 4th DCA 2016) (quoting Tengbergen v. State , 9 So.3d 729, 736 (Fla. 4th DCA 2009) ). "[T]he question of whether evidence falls within the statutory definition of hearsay is a matter of law, subject to de novo review." Id. (quoting Burkey v. State , 922 So.2d 1033, 1035 (Fla. 4th DCA 2006) ).

Bank asserts that it laid the proper foundation for admission of Borrower's complete payment history by way of the analyst's testimony about Bank's boarding procedures and verification process. In sustaining Borrower's objection, the trial court reasoned that it was interpreting this court's holding in Bank of New York v. Calloway , 157 So.3d 1064 (Fla. 4th DCA 2015), to mean "that it's not just the boarding process and that whole reliability, accuracy, auditing, verification process but we're still dealing with the part of the evidence rule concerning laying a foundation in terms of how these records are created." On that point, it appears that the court took an exceedingly narrow view of our holding in Calloway , and should have admitted the precluded portion of the payment history.

In Calloway , the bank attempted to introduce the payment history and transaction dates from the current servicer's computer system, but since the payment history derived from documents transferred from a prior servicer and the testifying employee of the current servicer lacked familiarity with the prior servicer's practices and procedures, the trial court excluded those documents. Id. at 1067–69. We reversed, holding that the witness's testimony regarding how the current servicer reviewed the payment histories for accuracy before integrating them into its own records established sufficient trustworthiness of the prior servicer's documents. Id. at 1072 ; see also Deutsche Bank Tr. Co. Ams. v. Frias , 178 So.3d 505, 508 (Fla. 4th DCA 2015) (reversing trial court's preclusion of records originating from prior servicers because although current servicer's testifying employee had not worked for any prior servicers, employee adequately established that the prior servicers' records met the business records exception and were checked for accuracy by current servicer).

As we clarified in Gundersen :

"Where a business takes custody of another business's records and integrates them within its own records, the acquired records are treated as having been ‘made’ by the successor business, such that both records constitute the successor business's singular ‘business record.’ " Bank of N.Y. v. Calloway , 157 So.3d 1064, 1071 (Fla. 4th DCA 2015). "[T]he 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) ). As such, it is not necessary to present a witness who was employed by the prior servicer or who participated in the boarding process. See Nationstar Mortg., LLC v. Berdecia , 169 So.3d 209, 213–14 (Fla. 5th DCA 2015) ; Le v. U.S. Bank , 165 So.3d 776, 778 (Fla. 5th DCA 2015). Rather, the records of a prior servicer are admissible where the current note holder presents testimony that it "had procedures in place to check the accuracy of the information it received from the previous note holder." Holt v. Calchas, LLC , 155 So.3d 499, 506 (Fla. 4th DCA 2015). The testifying witness "just need[s][to] be well enough acquainted with the activity to provide testimony." Cayea , 138 So.3d at 1217. "Once this predicate is laid, the burden is on the party opposing the introduction to prove the untrustworthiness of the records." Love v. Garcia , 634 So.2d 158, 160 (Fla.1994).

204 So.3d at 533–34 (alterations in original).

Here, the trial court abused its discretion by excluding the payment records Bank sought to introduce into evidence. The analyst testified in considerable detail how Bank utilized a two-step process to board a loan. The first step, after a purchase, acquisition, or merger, was for Bank to take the electronic information from the transferring entity and match it up with other corresponding information received from them. Upon confirmation that the information matched, Bank uploaded the information into its servicing system. Within that system there were "additional checks and balances" to ensure the information would "service correctly," including accuracy checks...