Wells Fargo Bank, N.A. v. Balkissoon

• Citation: 183 So.3d 1272
• Decision Date: 03 February 2016
• Docket Number: No. 4D14–669.,4D14–669.
• Parties: WELLS FARGO BANK, N.A., as Trustee, on Behalf of the Holders of the Harborview Mortgage Loan Trust Mortgage Loan Pass–Through Certificates, Series 2007–1, Appellant, v. Toni BALKISSOON, Devi Balkissoon, Toni R. Balkissoon, Jr., any and all Unknown Parties Claiming by, through, under, and Against the Herein Named Individual Defendant(s) Who are not Known to be Dead or Alive, Whether said Unknown Parties May Claim an Interest as Spouses, Heirs, Devisees, Grantees, or Other Claimants, Citibank, N.A., as Successor by Merger to Citibank (South Dakota, N.A.), and tenant, Appellees.
• Court: Florida District Court of Appeals

183 So.3d 1272

WELLS FARGO BANK, N.A., as Trustee, on Behalf of the Holders of the Harborview Mortgage Loan Trust Mortgage Loan Pass–Through Certificates, Series 2007–1, Appellant,

v.Toni BALKISSOON, Devi Balkissoon, Toni R. Balkissoon, Jr., any and all Unknown Parties Claiming by, through, under, and Against the Herein Named Individual Defendant(s) Who are not Known to be Dead or Alive, Whether said Unknown Parties May Claim an Interest as Spouses, Heirs, Devisees, Grantees, or Other Claimants, Citibank, N.A., as Successor by Merger to Citibank (South Dakota, N.A.), and tenant, Appellees.

No. 4D14–669.

District Court of Appeal of Florida, Fourth District.

Feb. 3, 2016.

G. Bart Billbrough and Caroline Milewski of Billbrough & Marks, P.A., Coral Gables, for appellant.

Peter Ticktin, Kendrick Almaguer and Juliane A. Murphy of The Ticktin Law Group, P.A., Deerfield Beach, for appellees.

TAYLOR, J.

Wells Fargo Bank, N.A. ("Wells Fargo") appeals the final judgment entered in favor of appellees Toni and Devi Balkissoon after its mortgage foreclosure case was involuntary dismissed at trial. Wells Fargo argues that the trial court erred in excluding evidence of the Balkissoons' loan payment history and the notice of default and acceleration. Because Wells Fargo laid the necessary foundation for admission of this evidence, we reverse and remand for further proceedings.

At trial, appellant presented the testimony of Luis Reyes, an assistant vice-president with Bank of America. Reyes testified that Bank of America was the servicer on the loan at the time of default. He testified that he was trained and familiar with the business practices of Bank of America regarding the receipt and posting of payments on loans and the payment histories generated. He described how, when Bank of America receives payments on the loans, the payments are posted on a servicing system called AS400. The AS400 system contains basic loan information, including the payment history, escrow information, and property address. After receiving a payment, Bank of America makes disbursements for property taxes and insurance. Those disbursements are documented on the AS400 system and reflected in the payment history.

Reyes identified the Bank of America payment history for the subject loan and testified that it reflected the payments received from the borrowers, as well as expenditures made by Bank of America on their behalf. He testified that the payment history record was made at or near the time of the events reflected and by or from information transmitted by persons with knowledge, that it was a record kept in the course of regularly conducted business activity, and that it was the regular practice of Bank of America to make a record of that activity.

When defense counsel objected to admission of the payment history on grounds of lack of foundation, the court allowed him to conduct a voir dire examination. On voir dire, defense counsel elicited testimony that Reyes had never actually worked in the payment posting department and was unable to describe the specific manual act of posting the payment in the computer system because it was not part of his job duties. Defense counsel renewed his objection to admission of the payment history on the ground that Reyes was not familiar with how the payments are posted to the AS400 system. The trial court sustained the objection and excluded the payment history record, based on Yang v. Sebastian Lakes Condominium Ass'n, 123 So.3d 617 (Fla. 4th DCA 2013), and Glarum v. LaSalle Bank National Ass'n, 83 So.3d 780 (Fla. 4th DCA 2011). Wells Fargo's counsel advised that he would not be able to prove default without the payment history and thus proffered the remainder of his evidence for appellate purposes.

Reyes identified the notice of default and acceleration. He explained that every night the AS400 system scans every loan for default. If a loan is in default, then the loan information is transmitted to a vendor over a secure connection. The vendor, Waltz, creates a notice letter, using the transmitted information and a Bank of America template. Waltz sends the notice to the borrower and a copy to Bank of America. This process takes one to two days.

On cross-examination, Reyes admitted that he was not familiar with Waltz's corporate structure and did not know which department created the notice. Defense counsel objected to the notice of default and acceleration, arguing that Reyes was not sufficiently familiar with Waltz's practices and procedures. After the trial court sustained the objection, defense counsel moved for an involuntary dismissal because Wells Fargo failed to establish default damages or to prove that it fulfilled the conditions precedent to filing suit. The trial court granted the motion, prompting this appeal.

The standard of review for a motion for involuntary dismissal is de novo. Brundage v. Bank of Am., 996 So.2d 877, 881 (Fla. 4th DCA 2008). An involuntary dismissal is proper "only when the evidence considered in the light most favorable to the non-moving party fails to establish a prima facie case on the non-moving party's claim." McCabe v. Hanley, 886 So.2d 1053, 1055 (Fla. 4th DCA 2004) (quoting Hack v. Estate of Helling, 811 So.2d 822, 825 (Fla. 5th DCA 2002) ).

In this case, the involuntary dismissal resulted from two evidentiary rulings regarding business records. A trial court's ruling on the admissibility of evidence is reviewed for abuse of discretion. Yang, 123 So.3d at 620. That discretion is limited by the rules of evidence.Id.

Pursuant to section 90.803(6)(a), Florida Statutes (2013), for business records to be admitted into evidence "the proponent must show 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).

The foundation necessary for admission of a business record may be established by a records custodian or other qualified witness. § 90.803(6)(a), Fla. Stat. The witness authenticating the records "need not be the person who actually prepared the business records." Cayea v. CitiMortgage, Inc., 138 So.3d 1214, 1217 (Fla. 4th DCA 2014) (citation and internal quotation marks omitted). Instead, "the witness just need be well enough acquainted with the activity to provide testimony." Id.

Exclusion of the Payment History

Relying on Glarum and Yang, the trial court found that Wells Fargo did not lay the requisite foundation for admission of the payment history because Reyes could not explain the mechanics of the posting process. Glarum and Yang can be distinguished from this case, however, because the witnesses in those cases had little or no knowledge of the practices and procedures of the prior servicer or accountant who produced the records. In Glarum, we held that a loan servicer's affidavit was insufficient to prove the amount of indebtedness, because the affiant had no knowledge of how his own company's payment history data was produced. 83 So.3d at 782. He also admitted that he relied partly on data retrieved from a prior servicer of the loan, with whose procedures he was even less familiar. Id. at 783. Because the specialist could not authenticate the data, we held that the affidavit of indebtedness constituted inadmissible hearsay. Id.

In Yang, we held that the condominium association failed to lay the proper foundation for admission of payment ledgers under the business records exception, because the association's witness could not attest to the accuracy of the starting balances in the records and she was unfamiliar with the practices and procedures of the previous management company's accountant. 123 So.3d at 621. In contrast, the testimony in this case was being offered by a Bank of America witness about Bank of America's records. No prior entity issue was involved. Reyes worked for Bank of America and testified in detail about Bank of America's practices and procedures for creating the...