Initial Brief - Fourth District Court of Appeal

E-Copy Received May 5, 2014 5:03 PM
IN THE DISTRICT COURT OF APPEAL
FOURTH DISTRICT OF FLORIDA
CASE NO.: 4D13-3514
TAOUFIQ SEFFAR,
Appellant,
vs.
BAYVIEW LOAN SERVICING, LLC,
Appellee.
On appeal from the Seventeenth Judicial
Circuit Court in and for Broward County, Florida
L.T. Case No.: 10 25802
INITIAL BRIEF OF APPELLANT
TAOUFIQ SEFFAR
DAVID H. CHARLIP, B.C.S.
CHARLIP LAW GROUP, LC
17501 Biscayne Blvd.
Suite 510
Aventura, Florida 33160
Telephone: (305) 354-9313
Facsimile: (305) 354-9314
Counsel for Appellant
TABLE OF CONTENTS
PAGE NO.
ui-vu
TABLE OF AUTHORITIES
STATEMENT OF THE CASE
1
STATEMENT OF THE FACTS
1
STANDARD OF REVIEW
10
SUMMARY OF ARGUMENT
10-11
ARGUMENT
12
I.
THE TRIAL COURT ABUSED ITS DISCRETION BY
PERMITTING SUBSTITUTION OF THE PLAINTIFF OVER
DEFENSE OBJECTION TWO (2) DAYS PRIOR TO TRIAL
12
II.
THE
TRIAL
COURT
ERRED
IN
OVERRULING
APPELLANT’S LACK OF FOUNDATION, AUTHENTICATION
AND
HEARSAY
OBJECTIONS
TO
APPELLEE’S
DOCUMENTARY
EVIDENCE
AND
TESTIMONY
14
III.
THE TRIAL COURT ERRED
APPELLANT’S
MOTION
DISMISSAL
BY FAILING TO GRANT
FOR
INVOLUNTARY
21
a. Appellee failed to prove that its predecessor held the note at the time
the Complaint was filed, or was otherwise authorized to bring suit on
behalf of the true holder.
b. The alleged Notice of Default was defective because it failed to
conform to the language required by paragraph 22 of the Moigage.
c. Appellee failed to prove that the Notice of Default was sent to
Appellant.
1.
CONCLUSION
.24
CERTIFICATE OF SERVICE
25
CERTIFICATE OF COMPLIANCE
25
11.
TABLE OF AUTHORITIES
Cases
Page No.
A.ID. v. State, 842 So.2d 297 (Fla. 3d DCA 2003)
22
Amos v. Gartner, Inc., 17 So.3d 829, 833 (Fla. 1st DCA, 2009
19
BAC Home Loan Servicing, L.P. v. Tomorelli, Case No. 2011-CA-09010 (Tenth
Judicial Circuit in and for Hilisborough County, Florida, March 13, 2012)
40
Baker v. Florida Unemployment Appeals Commission, 35 Fla. L. Weekly D1188
(Fla. 3d DCA May 26, 2010)
30
Bank ofNew York Mellon v. Leslie, Case No. CACE09032841 (Seventeenth Judicial
Circuit in and for Broward County, Florida, June 28, 2012)
37,38,41
Carapezza v. Pate, 143 So.2d 346, 347 (Fla. 3d DCA 1962)
32
Corcoran v. Brody, 347 So. 2d 689, 690 (Fla. 4th DCA 1977)
34
Countrywide Home Loans, Inc. v. Wehnes, Case No.: 5 1-2008-CA-7 190-ES (Sixth
Judicial Circuit in and for Pasco County, Florida, Aug. 22, 2011)
38
CWCapital Asset Mgmt., 610 F.3d at 497
34
CWCapital Asset Mgmt., LLC v. Chicago Properties, LLC, 610 F3d 497 (7th Cir.
2010)
17,18,23,34,40
Damico v. Lundberg, 379 So.2d 964, 965 (Fla. 2d DCA 1979)
30
DiGuilio, 491 So.2d at 1139
30
Ederer v. Fisher, 183 So.2d 39, 41 (Fla. 2d DCA 1965)
26
ElstonLeetsdaleLLCv. CWCapital Asset, 87 So. 3d 14 (Fla. 4th DC2012..17,18,34
Elston Leetsdale, LLC, 87 So.3d at 14
34
FCD Dev., LLC v. S. Fla. Sports Comm., Inc., 37 So.3d 905, 909 (Fla. 4th DCA
2010)
15,31, 32
Feltus v. US. BankNat’lAss’n, 80 So.3d 375, 377 n. 2 (Fla. 2d DCA 2012)....27,33
111.
Fla Stat. §671.201(44) (2011)
.26
Florida Reci’cling Services. Inc. v. Greater Orlando Auto Auction, Inc., 898 So.2d
129 (Fla. 5th DCA 2005)
43
Forester v. Norman Roger Jewell & Brooks Intern., Inc., 610 So,2d 1369, 1373 (Fla.
IstDCA1992)
21
Frost v. Regions Bank, 15 So. 3d 905, 906-07 (Fla. 4th DCA 2009)
36, 39
Goncharuk v, HSBC Mortgage Services, Inc., 62 So.3d 680 (Fla. 2d DCA 201 1)...39
Gordon v. State, 787 So.2d 892, 894 (Fla. 4th DCA 2001)
24
Hack v. Estate of Helling, 811 So. 2d 822, 825 (Fla. 5th DCA 2002)
31
Haies v. Wa/-Mart Stores, Inc., 933 So. 2d 124 (Fla. 4th DCA 2006)
16
HSBC Bank USA v. Co/lw, Case No. 51-2008-CA-10374 (Sixth Judicial Circuit in
and for Pasco County, Florida, Apr. 20, 2012)
40
In reRosenberg, 414 B.R. 826, 842 (Bankr. S.D. Fla. 2009
34
Jackson v. State. 738 So.2d 382, 386 (Fla. 4th DCA 1999)
24
Johnson v. Dep’t of Health & Rehab. Servs., 546 So.2d 741, 743 (Fla. 1st DCA
1989)
24
Juega v. Davidson, 8 So. 3d 488 (Fla. 3d DCA 2009)
18
Kelly v. State Farm Mut. Auto. Ins., 720 So.2d 1145, 1146 (Fla. 5th DCA 1998)....24
Kelsevv. SunTrust Mortgage, Inc., No. 3D12-2994 (Fla. 3rd DCA2O14)
22
Kingv. State, 590 So.2d 1032 (Fla. 1sIDCA 1991)
23
Konszilian v. Busey Bank, 61 So.3d 1283 (Fla. 2nd DCA 2011)
37
Konsulian v. Busey Bank, NA, 61 So. 3d 1283 (Fla. 2d DCA 2011)
39
Kurian v. We//s Fargo Bank, Nat’lAss
2013)
39
‘ii,
114 So.3d 1052, 1055 (Fla. 4th DCA
Lazuran v. Citimortgage, Inc., 35 So. 3d 189 (Fla. 4th DCA 2010)
40
Lowe’s of Tallahassee v. Giaimo, 552 So.2d 304, 305 (Fla. 1st DCA 1989)
20
Mazinev. M&IBank, 67 So. 3d 1129, 1129 (Fla. 1st DCA 201 1)
.20
McCabe v. Hanley, 886 So. 2d 1053, 1055 (Fla. 4th DCA 2004)
31
McKenzie Tank Lines, Inc. v. Roman, 645 So.2d 547 (Fla. 1st DCA 1994)
23
Mortgage Elec. Registration Sys., Inc. v. Azize, 965 So.2d 151, 153 (Fla. 2d DCA
2007)
32
Nationwide Mut. Fire Ins. Co. v. Bruscarino, 982 So.2d 753 (Fla.
th
4
DCA 2008).. 16
PHH Mortgage Corp. v. Wink, Case No. 11-005659-Cl-i 9 (Sixth Judicial Circuit in
and for Pinellas County, Florida, Apr. 9, 2012)
40
Philipon v. Shreffler, No. 4D07-4104 (Fla.
th
4
DCA 2010)
16
Phillips v. State, 621 So.2d 734 (Fla. 3d DCA 1993)
23
Philogene v. ABNAmro Mortgage Group Inc., 948 So.2d 45, 46 (Fla. 4th DCA
2006)
32
Reynolds v. State, 934 So.2d 1128 (Fla. 2006)
16
Sandoro v. HSBC Bank, USA National Association, 55 So.3d 730 (Fla. 2d DCA
2011)
39
Saporito v. Madras, 576 So.2d 1342 (Fla. 5th DCA 1991)
31
Servedio v. US. Bank Nat. Ass ‘n, 46 So. 3d 1105 (Fla. 4th DCA 2010)
32
Snelling & Snelling, Inc. v. Kaplan, 614 So.2d 665 (Fla. 2d DCA 1993)
23
State, Department of Health and Rehabilitative Services v. Thibodeaux, 547 So.2d
1243 (Fla. 2dDCA 1989)
31
Stone v. Bank, 115 So. 3d 411 (Fla. 2nd DCA 2010)
35
Sunshine Chevrolet Oldsmobile v. Unemployment Appeals Commission, 910 So.2d
948 (Fla. 2d DCA 2005)
22
Sykes v. Eastern Metal Supply, Inc., 659 So.2d 475, 477 (Fla. 4th DCA 1995)
26
The Bank ofNew York Mellon v. Wong, Case No. 51 -2009-2009-CA-3 026-ES (Sixth
Judicial Circuit in and for Pasco County, Florida, Dec. 20, 2012)
38
Thompson v. State, 705 So.2d 1046, 1048 (Fla. 4th DCA 1998)
29
Tiliman v. Baskin, 260 So.2d 509 (Fla.1972)
31
U.C.C. §1-201(44)
26
U.C.C. §3-403
26
United States v. Kim, 595 F.2d 755, 760-64 (D.C.Cir.1979)
29
United States v. Marshall, 762 F.2d 419, 423-28 (5th Cir.1985)
29
Verizzo v. Bank ofl\LY, 28 So.3d 976, 978 (Fla. 2d DCA 2010
32
Warner-Lambert Co. v. Patrick, 428 So. 2d 718 (Fla. 4th DCA 1983)
33
Williams v. State, 666 So.2d 187 (Fla. 2d DCA 1995)
23
Wilson v. Tanner, 346 So.2d 1077 (Fla. 1st DCA 1977)
16
Yang v. Sebastian Lakes Condominium Association, Inc., No’s. 4D12-3363 and
4D12-3364 (Fla. 4th DCA 2013)
16
Yisrael at 993 So. 2d 957
29
Yisrael v. State, 993 So. 2d 952, 95 6-57 (Fla., 2008)
23,29
Zervas v. Wells Fargo Bank, 1’LA., Case NO. 2D 11-750 (Fla. 2d DCA July 18,
2013)
26,27
Statutes
§
90.802, Fla. Stat. (2008)
20
§
90.802, Fla. Stat. (2013)
23
§
90.803(6)(a), Fla. Stat. (2004)
24
§
90.90 1, Fla. Stat. (2008)
20
§
90.902(1)-(1 1), Fla. Stat. (2008)
20
vi,
§
90.902(11)(a)-(c), Fla. Stat. (2004)
.24
§
673.4021(1) Fla. Stat
28
§
90.803(6)
20,30
§
90.902(11) Fla. Stat. (2013
25,30
§
90.803(6)(c) and 90.902(11), Florida Statutes (2004)
24
Rules
Florida Rule of Civil Procedure 1.190(a)
33
Florida Rule of Civil Procedure 1.2 10(a)
17, 18, 34
Treatises
Charles W. Ehrhardt, Florida Evidence
§
803.6, at 876 n. 3, 877 (2007 ed.)
29
PREFACE
Defendant—Appellant, Taoufiq Seffar will be referred to, throughout this
brief, as “Seffar” or “Appellant”. Plaintiff—Appellee, Bayview Loan Servicing,
LLC, will be referred to as “Bayview” or “Appellee”. The original plaintiff in this
case, Residential Credit Solutions Inc., will be referred to as “Original Plaintiff’ or
“RCS”.
As used throughout this Brief, the following symbols will be used:
“(R.
—
“(A.
“(T.
—
)“
—
Record, followed by page number;
Appendix, followed by page number; and
Transcript of hearing before the Honorable Dale Ross, Judge of
the 17th Judicial Circuit, in and for Broward County, Florida, on September 12,
2013, followed by page number.
STATEMENT OF THE CASE
On June 28, 2010, the Original Plaintiff, RCS, filed its Complaint for
mortgage foreclosure against Seffar [R. 01—20]. Thereafter, on March 17, 2011,
Seffar filed his Answer and Affirmative Defenses [R. 59—67]. Among his defenses,
Seffar challenged RCS’ ability to bring the action. [R. 60]. The primary basis of
Seffar’s challenge was that RCS made no allegations concerning the chain of title.
[R. 60]. The note and mortgage attached to RCS’ complaint named the lender as
1
ABN Amro Mortgage Group, Inc. and purported to have been executed on October
16, 2006. [R. 06, 60]. While RCS attached an assignment from the FDIC as
receiver for FRANKLIN BANK, S.S.B. (“FRANKLIN BANK”) to MERS as
nominee for RESIDENTIAL CREDIT SOLUTIONS, INC. (“RCS”),’ it did not
attach any documents to the Complaint that would allege the circumstances of the
Note’s alleged transfer from ABN Amro Mortgage Group, Inc. to Franklin Bank.
[R. 01—20, 60]. As such, the chain of assignments and/or endorsements of the Note
and Mortgage was broker because the transfer from ABN to FRANKLIN BANK
was not alleged. [R. 60]. Moreover, the Complaint neither asserted that RCS
owned nor held the note and mortgage. [R. 01—20, 60]. Instead, it asserted that
RCS had “the right to enforce the mortgage”, without alleging or disclosing from
whence that right emanated. [R. 4].
On March 11, 2011, RCS filed what purported to be the original note and for
the first time
2 the note was coupled with an alleged allonge [R.55—58]. The allonge
was undated and appeared to have been endorsed “in blank” by Helene Dimitroff,
1
The facts surrounding the supposed assignment of the mortgage from the
FDIC to RCS reflect that the “Attorney in Fact” lacked authority to execute that
assignment because the Limited Power of Attorney was not conferred upon her
until after her execution of the Assignment of the Mortgage. In any event, the
Appellee never sought to introduce that Assignment as a trial exhibit.
2
The allonge was neither an exhibit to the Complaint nor was it attached to
the Note when documents were produced to Seffar as he requested in a debt
validation letter or in discovery.
2
who was listed as the First Vice President of ABN AMRO MORTGAGE GROUP,
INC. (“ABN”) [R. 55—58, 77, at ¶4 (h)]. Review of the Notice of Filing Original
Note disclosed that the allonge did not appear to bear an original signature but
instead appeared to be stamped with a signature stamp. [R. 55—58]. Additionally,
the allonge did not appear to be “permanently affixed” to the Note, particularly
because it did not “materialize” until months after the action was filed.
3 [R. 55—58].
On October 19, 2011, RCS moved for summary judgment. [R. 127—160]. On
December 1, 2011, Seffar filed his Response and Opposition to RCS’ Motion for
Summary Judgment. {R. 162—172]. On April 17, 2013, the trial court ordered that
the Motion for Summary Judgment be deferred and the matter set for trial [R. 161].
On August 30, 2013, RCS filed its Motion to Substitute Party Plaintiff, allegedly
based upon an unsworn service transfer from RCS to Bayview [R. 228—233]. That
Motion was heard on September 10, 2014, two (2) days before trial was to
commence. [R. 24 1—242]. Despite Seffar’s objections on the grounds of prejudice,
the trial court granted the motion and denied an ore ten us motion for trial
3 In a line of questioning regarding how RCS came to be the holder of the Note
and Mortgage at issue in this case, RCS’ corporate representative, Melissa A.
Sequete, answered that she did not know how the Note was transferred from ABN
to Franklin Bank and had not seen any documents reflecting such a transfer. [R.
164, 365—366]. She also responded that she did not know how much RCS paid for
the Note and that such information was not listed on RCS’ computer system. [R.
164]. She further testified that she was not involved in the assignment of the
mortgage. [R. 164].
3
continuance [R. 238—240] [Fr. 404-14]. The trial was held on September 12, 2013
[R. 280].
Bayview’s sole trial witness, Mr. Ilosh Azarsepandan, was an employee of
Bayview, who was asked to testify from his review of the business records of all of
the servicers that had allegedly serviced this loan
—
Citi, RCS and Bayview. [Tr. 8].
It was established through Mr. Azarsepandan’s testimony that he was neither the
records custodian for Bayview nor did he have personal knowledge as to the
records in the case [Tr. 11—14]. As a result of his lack of competency in this regard,
Seffar made numerous objections on the grounds of foundation, hearsay and
authenticity, which are more fully set out in the “Statement of Facts” portion of
this brief [Tr. 16, 17, 19,32].
On the day of trial, Seffar filed his Trial Brief and Motion for Involuntary
Dismissal [R. 253—263], which argued to the trial court that there was no
documentation or testimony reflecting transfer from ABN to FRANKLIN BANK;
that the Complaint was filed with a note as an exhibit but with no allonge; that the
corporate representative of Bayview would not be the appropriate person to testify
as to the business records of RCS, the previous servicer; and that the notice of
default letter in this case was insufficient to satisfy the conditions precedent
required by the acceleration clause of the mortgage.
4
At the close of Bayview’s case, Seffar argued his Motion for Involuntary
Dismissal on the grounds that Bayview could not prove the requisite standing on
the basis that (a) it did not put forth a competent witness; (b) the documents
presented lacked a proper foundation, were not authenticated, and constituted
hearsay, (c) the proof of indebtedness was inadmissible; and (d) the Notice of
Default was defective [Tr. 63]. Seffar’s motion was denied [Tr. 73].
The case proceeded and Seffar offered testimony from two witnesses. Mr.
Seffar himself testified. [T. 74-81]. The other testimony heard was certain portions
of the deposition testimony of RCS’ corporate representative, which was read into
the record [Tr. 81—94]. After the witnesses testified and closings were heard, the
trial court granted judgment in favor of Plaintiff[Tr. 105].
5
STATEMENT OF THE FACTS
During the trial, the parties each put on one witness and Seffar also read into
the transcript portions of the testimony of the Original Plaintiffs (RCS’)
testimony. Each of the witnesses’ testimonies will be addressed in turn.
a. Trial Testimony of Appellee’s Witness, Ilosh Azarsepandan
During its case-in-chief, Bayview put on Mr. Ilosh Azarsepandan to testify
as to the bank’s business records [Tr. 8—9]. Mr. Azarsepandan’s job description
included reviewing and managing the portfolio of litigated loans and mediations,
hearings and trials [Tr. 9]. He testified that Bayview was the servicer and holder of
the subject note [Tr. 9]. Before any business records were presented to the court,
Mr. Azarsepandan was asked about the individuals that entered the data that were
the subject of the business records [Tr. 9]. Seffar’s counsel immediately objected
on the grounds that there were no business records before the court at that
particular point in time [Tr. 10]. Seffar’s objections were overruled twice, at which
point counsel requested to voir dire the witness [Tr. 10].
During voir dire, Mr. Azarsepandan admitted that he had come onto the case
approximately two months prior and that Bayview would not have had any
business records about this case [Tr. 10—11]. The mortgage had previously been
serviced by two prior servicers, Citi and RCS [Tr. 14—15]. When asked who would
have generated business records about this case prior to that time, he admitted that
6
it would have been the prior servicer, RCS [Tr. 11]. The witness thereafter agreed
that he had not worked for RCS, was not the records custodian for RCS, nor was
he present at the time that RCS generated its business records {Tr. 1 1—12]. He
further admitted that he was not familiar with the policies of RCS as to how the
records were generated, did not know the people who created the records for RCS,
nor was he familiar with the computer system that RCS used to generate the
records [Tr. 12]. The witness agreed that to the extent that Bayview received
RCS’ business records, he took all of those records as being true; having no
knowledge as to whether the information was input correctly or not [Tr. 13]. He
testified that he was not the record custodian for Bayview and admitted that he
could not vouch for the accuracy of those records; only that he received them from
the prior servicers [Tr. 14—15]. His testimony would be, in part, based on Citi’s
records even though he was not the records custodian for Citi [Tr. 15].
After Seffar’s voir dire of Bayview’s witness, Bayview proceeded with
direct examination and began by asking questions pertaining to the business
records and the individuals who were responsible for entering the data at the time
when the events occurred [Tr. 16]. Seffar’s counsel objected twice on the basis that
the witness lacked the requisite knowledge and therefore a foundation had not been
4 Mr. Azarsepandan’s responses were the same as they related to servicing by Citi
[Tr. 15—16].
5 Mr. Azarsepandan’s responses were the same as they related to servicing by Citi
7
properly layed [Tr. 16—17]. The court overruled counsel’s objections [Tr. 16—17].
The witness was then asked whether it was the regular practice of the bank to make
and keep such records [Tr. 17]. Seffar’s counsel objected on the basis of
foundation and again his objection was overruled [Tr. 17]. The witness was asked
if the business records were made in the ordinary course of the servicer’s business
—
an important question for purposes of establishing a predicate for admitting
records under the business records exception [Tr. 17]. Seffar’s counsel objected as
to foundation of that question and while the objection was overruled, the question
went unanswered [Tr. 17]. During direct examination, the witness was asked to
describe the procedure by which Bayview received the business records from the
prior servicer, RCS [Tr. 18]. The witness responded that the prior servicer,
including RCS, would send archives of their books and records to Bayview and
that the information contained within the archives would then be uploaded into
Bayview’s systems [Tr. 18].
Thereafter, the witness was presented with a copy of the note and the allonge
[Tr. 19]. At that point, Seffar’s counsel objected to the introduction of the
instrument on the grounds that it would need to be admitted into evidence before
the witness would be able to testify from it {Tr. 19]. Counsel indicated that because
objections had previously been made with regards to admitting the allonge into
[Tr. 15—16].
8
evidence, he wanted to voir dire the witness to determine whether a predicate
could be established to admit the allonge [Tr. 19]. Nevertheless, over Seffar’s
counsel’s objection, the court permitted the witness to answer questions pertaining
to the allonge [Tr. 22—24]. Specifically, he was asked whether he knew when the
allonge was dated, whether the signature was a stamp signature, whether the
allonge was ever affixed on the note itself prior to the time it was filed with the
Coufl, whether it was attached to the Complaint as an exhibit in this case, whether
it was attached as part ofthe original note [Tr. 21—23]. The witness answered all of
these questions in the negative [Tr. 2 1-22]. He testified that he first saw the
original note immediately prior to trial [Tr. 22]. He did not know when the allonge
was executed [Tr. 22]. He did not know if the signature on the allonge was a stamp
or a wet ink signature [Tr. 23]. He did not know if the aflonge was ever affixed to
the note itself prior to it being filed with the court [Tr. 23]. He indicated that the
allonge was not attached to the note as part of the complaint and that he did not
know why [Tr. 23].
The witness was then asked about whether there was a purchase agreement
between Bayview and RCS rr. 25]. He responded that while he believed that such
an agreement was present, he had never actually seen it [Tr. 26]. Seffar’s counsel
objected to the admission of the note and allonge on the basis of foundation,
9
authenticity, and hearsay, but the court admitted the exhibit, overruling such
objections [Tr. 29].
Thereafier, the witness was presented with an alleged servicing transfer
notice from Citi Mortgage to RCS (the “Goodbye Letter”) and he was asked to
read the highlighted portion of the notice [Tr. 31]. Seffar’s counsel objected on the
basis that the document was not in evidence, to which the court directed the
witness to answer anyway [Tr. 31]. Bayview’s counsel then requested that the
letter be entered into evidence under the business record exception [Tr. 32].
Seffar’s counsel objected on the basis of hearsay, authenticity, and foundation, but
the document was nonetheless accepted [Tr. 32]. Seffar’s counsel indicated to the
judge that, but for one letter from Bayview, he would have the same objections to
all of RCS’ records [Tr. 32]. Bayview then sought to introduce a letter from RCS,
which essentially informed Seffar that effective November 17, 2009, RCS would
be providing the loan servicing on the subject account [Tr. 32]. Another servicing
letter was introduced, which informed the addressee that the loan had been
assigned, sold and transferred from RCS to Bayview effective July 9, 2013, and
which also included the right to collect payments [Tr. 32]. The next document that
was introduced was a letter from Bayview which stated commencing July 9, 2013,
Bayview would become the new loan servicer (the “hello letter”) [Tr. 32].6
6 The “goodbye letter” and the “hello letter” shall be collectively referred to as the
10
The witness was then asked some questions by Bayview’s counsel
pertaining to a “Notice of Intent to Take Legal Action” letter (“breach” or
“default” letter) that was sent by RCS to Seffar. The witness indicated that he had
not seen the original copy of the breach letter, and that he did not have the return
receipt for the certified letter [Tr. 36]. The witness acknowledged that the loan
number in the letter did not match the loan number on the mortgage [Tr. 36—37].
The witness testified that he was not familiar with how RCS sent out its default
letters nor did he have personal knowledge of whether the breach letter had
actually been sent out [Tr. 37]. There was nothing in his records that would
confirm that Seffar received the default letter [Tr. 37—38]. Based on the witnesses’
responses, Seffar’s counsel objected to the breach letter on grounds of authenticity,
foundation and hearsay [Tr. 38]. Bayview’s counsel requested that the letter be
admitted into evidence pursuant to the business record exception [Tr. 38]. The
Court admitted the exhibit [Tr. 38].
The “Notice of Intent to Take Legal Action” letter [Tr. 38, Plaintiffs Exhibit
8] states, in part, “If your loan is accelerated, you may have additional rights to
cure the default under your loan and may have the legal right to assert the non
existence of a default or any other defense you may have to the acceleration and
foreclosure...”. The language of this letter differs from the acceleration
“hello/goodbye letters”.
11
requirements contained in paragraph 22 of the mortgage, which states that the
borrower had “the right to reinstate after acceleration and the right to assert in the
foreclosure proceeding the non-existence of a default or any other defense of
Borrower to acceleration and foreclosure.” [R. 13].
On cross-examination, the witness was asked about information from the
computer system that RCS used to generate account statuses [Tr. 40]. With regards
to a particular part of the account status titled “corporate advances”, the witness
indicated that he had no specific information as to what the corporate advances
were for [Tr. 41—42]. Also, as it related to items called “expense advances”, he
could not explain what these were for [Tr. 42]. Seffar’s counsel thereafter objected
to all of the documents on the basis of foundation, hearsay and authenticity [Tr.
45].
The witness was then asked about where certain advance figures comprising
the amount on the draft final judgment came from, that is, what documentation
were those figures derived from [Tr. 47]. The witness did not know what they were
[Tr. 48].
With regards to the assignment of the mortgage, the witness testified that the
mortgage was assigned on March 22, 2010 [Tr. 51]. He indicated that he had no
reason to believe that RCS was transferred the note prior to that date [Tr. 51] and
that because the default letter predated the assignment, RCS would not have been
12
the owner or holder of the note and mortgage by virtue of that assignment [Tr. 52].
Understandably so, he did not know who was the holder of the note at the time the
notice of default was sent out [Tr. 53] and stated that RCS brought the action as
servicer and not as owner and holder of the note and mortgage [Tr. 56]. He also
could not explain why RCS’ response to Seffar’s Request for Validation letter did
not contain a copy of the allonge [Tr. 57—58], and further confirmed that no
allonge had been produced in response to Seffar’s letter [Yr. 74—76].
b. Trial Testimony of Party Witness, Taoufiq Seffar
M. Seffar took the stand during his case-in-chief [Yr. 73]. Seffar testified
that he had conducted some research into the Vice President of ABN AMRO
Mortgage Group, Inc. (“ABN”), Helene Dimitroff, and discovered that she left
ABN in 2007 [Tr. 76—77]. During his research, he began to question the
authenticity of the allonge because he believed that the signature on it was
fraudulent [Tr. 79]. He said that the signature on the allonge was a stamp [Tr. 79].
Seffar also questioned the amounts claimed because he determined that he was
being double billed for insurance [Tr. 80]. He was never able to determine what the
advances charged were for [Tr. 80].
c. Deposition Testimony of Melissa Alexis Seguet
7 After Seffar received the hello/goodbye letters from Bayview and RCS, he sent a
Request for Validation letter attempting to verify the servicing of the subject loan
[Tr.. 58].
13
As part of its defense, Seffar’s counsel read portions of the deposition
transcript of RCS’ corporate representative, Ms. Sequet [Tr. 82]. As the corporate
representative, she did not know how Franklin Bank came into possession of the
note and mortgage nor had she seen any document that would reflect such a
transfer [Tr. 86]. She testified that she did not know if the allonge was stapled to
the original note, but agreed, “it should have been” [Tr. 88]. She also did not know
if the signature on the allonge was an original signature {Tr. 88] and could not
explain what the corporate advances were for [Tr. 90]. She testified that she did not
know whether she had received the return receipt on the default letter, but
indicated that it was RCS’ practice to retain them if they had [Tr. 93]. With regards
to the note itself, given that the last page of the note had plenty of room on it for an
endorsement, Ms. Sequet did not know why an allonge was used at all [Tr. 94].
SUMMARY OF ARGUMENT
The trial court abused its discretion and erred in granting Bayview’s Motion
for Substitution two (2) days before trial without continuing the trial. The trial
court further erred by admitting Bayview’s evidence over Seffar’s objections after
Appellant’s voir dire of Bayview’s sole witness demonstrated that he lacked the
requisite foundational knowledge, capacity or familiarity to properly authenticate
or admit Bayview’s documentary evidence, nor was he properly a “records
custodian” such that he could overcome Seffar’s hearsay objections through the
14
business records exception. Such evidentiary rulings constituted harmful error
because were the trial court to have granted Seffar’s objections, Bayview would
have had no evidence in support of its allegations.
The trial court further erred by admitting, over Seffar’s objections, the
documentary evidence establishing the contested facts as to the mortgage and note,
notice of default and amount claimed to be due and owing. Such documentary
evidence was classic inadmissible hearsay not properly admitted pursuant to the
business records exception.
Finally, the trial court erred in denying Seffar’s Motion for Involuntary
Dismissal of the Complaint for Mortgage Foreclosure because even if the Court
were to credit all of the evidence adduced by Bayview, it still never proved
essential allegations necessary to sustain its burden of obtaining a foreclosure
judgment on its Complaint
-
that it owns and holds the mortgage and that it
complied with all conditions precedent to the relief it was seeking.
STANDARD OF REVIEW ON APPEAL
This appeal involves review of the Trial Court’s decision to grant final
judgment in favor of Bayview. To the extent that certain rulings were made
pertaining to determinations of law, the standard of review is de novo. FCD Dev.,
LLC v. S. Fla. Sports Comm., Inc., 37 So.3d 905, 909 (Fla. 4th DCA 2010).
Review of a trial court’s ruling on the admissibility of evidence is based upon the
15
abuse of discretion standard. Reynolds v. State, 934 So.2d 1128 (Fla. 2006). That
discretion, however, is limited by the rules of evidence. Yang v. Sebastian Lakes
Condominium Association, Inc., No’s. 4Dl2-3363 and 4D12-3364 (Fla. 4th DCA
2013); Phihpon v. Shreffler, No. 4D074104 (Fla.
th
4
Mitt. Fire Ins. Co. v. Bruscarino, 982 So.2d 753 (Fla.
DCA 2010); Nationwide
th
4
DCA 2008); Hayes v.
Wal-Mart Stores, Inc., 933 So. 2d 124 (Fla. 4th DCA 2006). The standard of
review on appeal of the trial court’s ruling on a motion for directed verdict is de
novo; it is the same test used by the trial court in ruling on the motion. Wilson v.
Tanner, 346 So.2d 1077 (Fla. 1st DCA 1977).
ARGUMENT
I.
THE TRIAL COURT ABUSES ITS DISCRETION
BY PERMITTING SUBSTITUTION OF THE
PLAINTIFF OVER DEFENSE OBJECTION TWO
(2) DAYS PRIOR TO TRIAL.
On August 30, 2013, Original Plaintiff RCS filed a Motion to Substitute
Party Plaintiff {R. 228—233], to which Seffar objected. [R. 23 8—240]. RCS’ motion
was based on the contention that because Bayview had allegedly been servicing the
subject loan as of July 9, 2013, it should be substituted for RCS as party plaintiff.
At the hearing on RCS’ Motion to Substitute Party Plaintiff held on September 10,
2013, Seffar raised various issues pertaining to the motion, including prejudice to
him from the filing of the motion at the last minute as to his defenses relating to
standing pertaining to the previous servicer. RCS’s counsel contended that under
16
Elston Leetsdale LLC v. CW Capital Asset, 87 So. 3d 14 (Fla. 4th DCA 2012), the
servicer was permitted to bring an action on behalf of the owner of the note. [R.
407-40 8].
Florida Rule of Civil Procedure 1.210(a) permits an action to be prosecuted
in the name of someone other than, but acting for, the real property in interest. A
servicer may be considered a party in interest to commence legal action as long as
the real party in interest joins or ratifies its action. Elston Leetsdaie LLC, 87 So. 3d
at 16. To support a finding of standing by a servicer on behalf of the real party in
interest, this Court in Elston Leetsdale indicated that there would have to be
substantial evidence, affidavits or other documents supporting an allegation that a
servicer was authorized to prosecute an action on behalf of the real party in
interest. Id. at 17. Where a servicer relies on nothing more than its own allegations
and affidavit to support its argument that it has standing to sue on behalf of
another, that in and of itself is insufficient evidence. Id. at 17—18. In reaching its
decision, this Court relied on analysis by the Seventh Circuit in a case captioned
CWCapital Asset Mgmt., LLC v. Chicago Properties, LLC, 610 F3d 497 (7th Cir.
2010).
In CWCapital Asset Mgmt., LLC, the court found that a special servicer of a
loan had standing to bring an action in its own name against a mortgagor and
landlord. In that particular case, the special servicer filed an affidavit of the trustee,
17
which was not contradicted, thereby ratifying the servicer’s commencement of the
lawsuit. Id. at 502. Additionally, the pertinent pooling and servicing agreement was
placed in evidence as additional evidence that the servicer’s principal granted it
authority to enforce the debt instruments that the servicer neither owned nor held.
Id. at 501.
Similarly, in Juega v. Davidson, 8 So. 3d 488 (Fla. 3d DCA 2009), a case
also relied upon by this Court in Elston Leetsdale LLC, the Third District reversed
an order of dismissal for lack of standing where the plaintiff in that case was
deemed to have been the agent who had been granted full authority to act for the
real party in interest. Juega, 8 So. 3d at 489. The court concluded that there was no
violation of rule 1.210(a) because there was ample evidence that the agent/plaintiff
had been granted full authority to act on the real party in interest’s behalf. Id.
Like Elston Leetsdale, but unlike CWCapital Asset Mgmt., LLC and Juega,
the original plaintiff here (RCS) did not provide any substantial or compelling
evidence to support the contention that it had the requisite standing to bring a claim
against Seffar. While in paragraph 3 of its Complaint herein RCS alleged that it
had the right to enforce the note and mortgage, there was no allegation as to the
identity of the owner and holder of the note and mortgage from whom that right to
enforce allegedly derived. RCS’ standing was allegedly based upon its being
authorized by an undisclosed principal to act as its agent to enforce the note and
18
mortgage. The only “evidence” that RCS attached to its Motion was a letter it
allegedly sent to Seffar on June 13, 2013, informing him that the servicing was
being transferred to Bayview. However, that is just more of the same
—
that is, not
actual evidence but merely its own allegations. Lastly, RCS’ motion for
substitution was unswom and only indicated that servicing of the note and
mortgage had been transferred, again, presumably by the unnamed and undisclosed
principal that owned and held the note and mortgage.
The requested substitution should have been denied because it was nothing
more than an attempt to cure the original plaintiffs standing deficiencies. The trial
court erred in granting RCS’ Motion to Substitute Party Plaintiff because it caused
prejudice to Seffar because it was heard on the eve of trial and because the ruling
presupposed that the original plaintiff had standing to bring the action against
Seffar in the first place.
II.
THE TRIAL COURT ERRED IN OVERRULING
APPELLANT’S
LACK
OF
FOUNDATION,
AUTHENTICATION
AND
HEARSAY
OBJECTIONS
TO
APPELLEE’S
DOCUMENTARY EVIDENCE AND TESTIMONY.
The Mortgage and Note
As the Court instructed in Amos v. Gartner, Inc., 17 So.3d 829, 833 (Fla.
DCA, 2009):
19
st
1
Authentication of evidence is required as a condition precedent to its
admissibility. See § 90.901, Fla. Stat. (2008). Evidence sufficient to
support a finding that the matter in question is what its proponent
claims satisfies the authenticity requirement. See id. Extrinsic
evidence of authenticity is required except for those documents
which are self-authenticating. See § 90.902(1)-(1 1), Fla. Stat. (2008).
Except as provided by statute, hearsay evidence is inadmissible. See
§ 90.802, Fla. Stat. (2008). Where no proper foundation is laid, a
record cannot be admitted under an exception to the hearsay rule.
See Lowe’s of Tallahassee v. Giaimo, 552 So.2d 304, 305 (Fla. 1st
DCA 1989) (reversing JCC’s admission of records into evidence
where foundation satisfying rules of admissibility not established).
Mr. Azarsepandan, who testified about the purported business records in the
present case, lacked the necessary foundation to identify the records and also
lacked the requisite knowledge for being considered a records custodian. Before a
document may be admitted as a business record, a foundation for such admission
must be laid. Mazine v. M&I Bank, 67 So. 3d 1129, 1129 (Fla. 1st DCA 2011). To
lay a proper foundation for the admission of a business record, it is necessary to
call a witness who can show that each of the foundational requirements set out in
the statute is present. Charles W. Ehrhardt, Florida Evidence Sec. 803.6, at 585 (2d
ed. 1991). Although it is not necessary to call the person who actually prepared the
document, the witness must have the necessary knowledge to testify as to how the
record was made. If the offering party does not lay the necessary foundation, the
evidence is not admissible under section 90.803(6). Id.; see also Lowe’s of
Tallahassee v. Giaimo, 552 So.2d 304, 305 (Fla. 1st DCA 1989) (affidavit failed to
make requisite showing to provide proper predicate for admission of doctor’s
20
records under section 90.803(6)). Forester v. Norman Roger Jewell & Brooks
Intern., Inc., 610 So.2d 1369, 1373 (Fla. 1st DCA 1992) (being able to generally
identify records as the type of forms that a business or entity utilizes or completes
is insufficient to lay a proper foundation for the introduction of business records).
To illustrate, in Mazine, the bank had a regional security officer testify by
looking at files in the bank’s system and testifying as to the business records. The
officer’s duties were related to fraud and internal investigations. It was evident
from the circumstances that the officer had not been involved with the documents
personally. In that case, the witness admitted he had no knowledge as to the
preparation or maintenance of the documents offered by the bank. He further
indicated that he did not have any idea whether the information was input into the
bank’s system correctly nor could he vouch for the authenticity of any of the
information. He could not testify that the amounts owed were actually kept in the
regular course of business. He also did not know if the source of the information
contained in the affidavit was correct or whether the purported amounts were
accurate. Despite such testimony, the trial court admitted the records into evidence
as business records. The borrower appealed the trial court’s decision on the
grounds that the officer did not have the requisite knowledge to have been
considered the records custodian. That, coupled with the fact that there had been no
attempt to admit the records by certification and declaration pursuant to Section
21
90.8036(c) of the Florida Statutes, resulted in the First District reversing the case
and entering judgment in favor of the borrower.
Another recent factually similar case is Kelsey v. Sun Trust Mortgage, Inc.
No. 3D12-2994 (Fla. 3rd DCA, Feb. 12, 2014). In Kelsey, the trial court had
allowed the appellee bank’s purported corporate representative to authenticate
documents without showing that she was a records custodian or that she had
personal knowledge of the documents. The bank subsequently filed a partial
concession of error with the appellate court, admitting that the trial court erred in
allowing certain documents into evidence given that they were hearsay without the
proper authentication. Id. The Third DCA agreed and remanded the case for
rehearing. Id.
Here, as in Mazine and in Kelsey, the mortgagee’s witness was not a proper
trial witness whose testimony would have been admissible. As is stated in The
Florida Bar, Evidence in Florida §9.67
th
7
(
ed. 2008):
The attorney should be careful to select the proper witness to qualify a document
under F.S. 90.803(6). The witness should know how the business generally
operates and the usual procedure for preparing the type of document involved.
Failure to select a properly qualified witness could result in the document being
rejected as a business record. See Sunshine Chevrolet Oldsmobile v.
Unemployment Appeals Commission, 910 So.2d 948 (Fla. 2d DCA 2005)
(although sole witness for employer at unemployment compensation hearing
claimed to be custodian of records, failure to produce any testimony satisfying
three foundational requirements for admission under F.S. 90.803(6) meant that
hearing referee properly rejected records as inadmissible hearsay); A.ID. v. State,
842 So.2d 297 (Fla. 3d DCA 2003) (probation officer was not custodian or
otherwise qualified person to testify about preparation of school attendance
22
records); Williams v. State, 666 So.2d 187 (Fla. 2d DCA 1995) (accused’s current
probation officer, who had no personal knowledge of events alleged in violations
report by former officer, did not know if report was kept in usual course of
business; thus, admission of report was error); McKenzie Tank Lines, Inc. v.
Roman, 645 So.2d 547 (Fla. 1st DCA 1994) (lab report showing that employee
tested positive for cocaine properly excluded in unemployment compensation
hearing, because employer did not make report in regular course of business and
no one from outside testing lab had testified to lay proper foundation to qualify
report under business record exception); Phillips v. State, 621 So.2d 734 (Fla. 3d
DCA 1993) (hospital nurse who admittedly was not custodian of proffered hospital
records was not proper witness to lay foundation for them as business records);
Snelling & Snelling, Inc. v. Kaplan, 614 So.2d 665 (Fla. 2d DCA 1993) (property
manager of party wishing to withdraw funds from escrow account was not proper
witness to lay foundation for party’s ledger books, because manager was neither
custodian of nor familiar with transactions recorded in ledgers); King v. State, 590
So.2d 1032 (Fla. 1st DCA 1991) (probation officer was not custodian of
Department of Corrections computer printout showing defendant’s release date for
previous offense and did not know how record was prepared).
Out-of-court statements offered to prove the truth of the matter asserted are
inadmissible unless the statements fall under a recognized exception to the rule
against hearsay. See
§
90.802, Fla. Stat. (2013). All of the documentary evidence
introduced by Bayview
8 was proffered to be admissible under the business records
exception to the hearsay rule [R. 307, 309, 311, 312, 313, 317]. The Florida
Supreme Court in dealing with the business records exception to the hearsay rule
stated in Yisrael v. State, 993 So. 2d 952, 956-57 (Fla., 2008):
To secure admissibility under this exception, 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
8 Exhibits “1- 9” [R. 224—227].
23
that business to make such a record. See, e.g., Jackson v. State, 738
So.2d 382, 386 (Fla. 4th DCA 1999). Additionally, the proponent is
required to present this information in one of three formats. First, the
proponent may take the traditional route, which requires that a
records custodian take the stand and testify under oath to the
predicate requirements. See § 90.803(6)(a), Fla. Stat. (2004).
Second, the parties may stipulate to the admissibility of a document
as a business record. See, e.g., Kelly v. State Farm Mitt. Auto. Ins.,
720 So.2d 1145, 1146 (Fla. 5th DCA 1998) (holding that the parties
stipulated to the admissibility of [993 So.2d 957] medical records
under the business-records exception); but see Gordon v. State, 787
So.2d 892, 894 (Fla. 4th DCA 2001) (holding that the State and
defense counsel’s stipulation regarding the defendant’s release date
was not sufficient to relieve the State of its burden to prove the
defendant’s release date by a preponderance of the evidence). Third
and finally, since July 1, 2003, the proponent has been able to
establish the business-records predicate through a certification or
declaration that complies with sections 90.803(6)(c) and 90.902(11),
Florida Statutes (2004). The certification—under penalty of
perjury— must state that the record:
(a) Was made at or near the time of the occurrence of the matters set
forth by, or from information transmitted by, a person having
knowledge of those matters;
(b) Was kept in the course of the regularly conducted activity; and
(c) Was made as a regular practice in the course of the regularly
conducted activity[.]
§
90.902(1 1)(a)-(c), Fla. Stat. (2004).
“If evidence is to be admitted under one of the exceptions to the hearsay rule, it
must be offered in strict compliance with the requirements of the particular
exception.” Johnson v. Dep’t of Health & Reliab. Servs., 546 So.2d 741, 743 (Fla.
1st DCA 1989). Here, a records custodian did not appear as a witness, the parties
24
did not stipulate to admissibility, and Bayview did not provide a certification under
Section 90.902(11) Fla. Stat. (2013).
In this case, Bayview’s sole witness lacked knowledge as to the preparation
or maintenance of the documents offered. He testified that he did not work for
RCS, was never the records custodian for RCS, nor was he present at the time that
RCS generated its business records [Tr. 11—12]. He further testified that he was not
familiar with the policies of RCS as to how the records were generated, did not
know the people who created the records for RCS, nor was he familiar with the
computer system that RCS used to generate the records [Tr. 12]. The witness
agreed that to the extent that Bayview received RCS’ business records, he took all
of those records as being true; having no knowledge as to whether the information
was input correctly or not [Tr. 13].
With respect to whether the witness knew if the business records were made
in the ordinary course of the servicer’s business
—
an important question for
purposes of establishing a predicate for admitting records under the business
records exception, that question was never answered [Tr. 17].
The Note & Allonge
Of particular importance are the facts concerning the mysterious and
unexplained appearance of an allonge purporting to convert the note to a bearer
instrument. Such facts raise numerous factual issues concerning when, where, how,
25
and why such an allonge was created, how, when, whether and why it was affixed
to the Note, whether it was an original or not and whether the signature was real.
Fla.
Stat.
§673.4021(i)(201 1) provides, in pertinent part, that “an
unauthorized signature is ineffective.” An unauthorized endorsement includes a
forgery. Moreover, “[am
unauthorized signature also includes any endorsement
made without actual, implied or apparent authority.” Sykes v. Eastern Metal
Supply, Inc., 659 So.2d 475, 477 (Fla. 4th DCA 1995); Fla Stat. §671.201(44)
(2011); see also U.C.C. §1-201(44); Official Comment ito U.C.C. §3-403. Indeed,
“[tjhere is no presumption that the endorsements of a prior holder are genuine, and
when properly put in issue by the pleadings, the party seeking to establish the
status of holder of order paper must prove the validity of those endorsements on
which his status depends.” Ederer
i’.
Fisher, 183 So.2d 39, 41 (Fla. 2d DCA 1965).
Seffar consistently maintained and defended against the underlying
foreclosure action based on RCS’ failure to demonstrate negotiability of the
instruments at issue, including the allonge. Instead of attempting to refute that
affirmative defense, RCS filed in the court file what was labeled, without any
proper testimony authenticating same, “the original note and allonge”. That allonge
was never attached to the complaint nor was leave of court ever sought to amend
the complaint to allege the existence of an allonge. Introduction of this document
into the court file was patently improper. Zervas v. Wells Fargo Bank, MA., Case
26
NO. 2D1 1-750 (Fla. 2d DCA July 18, 20l3).
During the trial, Seffar’s counsel challenged the admission of the allonge on
the basis of authenticity. Given that Seffar had put at issue the blank endorsement
on the supposed allonge and pointed out certain discrepancies to Bayview (e.g., the
dates surrounding the purported execution of the allonge, the fact that it was not
attached to the complaint, the fact that it appeared to be a signature stamp of
someone who was not even employed with ABN at the time the purported transfer
took place), Bayview was required to prove that the allonge was, in fact, duly
executed, when it was executed, and when it was transferred. Bayview did not
offer such proof and without adequate admissible proof of those facts, Seffar’s
9 In Zervas, the Court stated:
We also note that the mortgage and note attached to the complaint
show the lender to be Fremont Investment and Loan. On April 1,
2010, approximately six months after the complaint was filed, Wells
Fargo filed a lost note affidavit, which alleged that the note was lost
by its attorney some time after the attorney received it on November
2, 2009. In their motion to dismiss, the Zervases alleged, among other
grounds, that Wells Fargo did not have standing to bring the
foreclosure complaint because it did not have a written assignment of
the loan. Then on July 26, 2010, seven days before the hearing on the
motion for summary judgment, Wells Fargo filed the note as a
supplemental exhibit to its complaint. The note contains an
endorsement in blank, but there is no evidence in the record
establishing that the endorsement in blank was made to Wells Fargo
prior to the filing of the foreclosure complaint. See Feltus v. US. Bank
Nat’! Ass’n, 80 So.3d 375, 377 n. 2 (Fla. 2d DCA 2012) (holding that
bank was required “to prove the endorsement in blank was effectuated
before the lawsuit was filed”).
27
Motion for Involuntary Dismissal should have been granted [Tr. 100].
As grounds for his Motion for Involuntary Dismissal and during closing
arguments, Seffar emphasized that since he put at issue the blank endorsement on
the supposed allonge and pointed out the discrepancies regarding the dates and the
fact that the ilonge was not attached to the Note, pursuant to §673.4021(1) Fla.
Stat., Bayview had the burden to prove the allonge was duly executed as well as
the date of the execution and the purported transfer. [R. 253—263; Tr. 4—8, 99—
102].
The Evidence ofIndebtedness
Even if Bayview were to argue that Mr. Azarsepandan was indeed a proper
“records custodian” for the documents, a fact which Mr. Azarsepandan himself
denied [Tr. 11—15], his testimony as to the amounts allegedly due under the Note
and Mortgage was based upon a proposed Final Judgment, apparently prepared by
his counsel [Tr. 45—47] which proposed Final Judgment fails to meet any of the
predicate requirements for a business record.
First, the proposed Final Judgment was not made at or near the time of the
events that it describes and is based upon other records which predate it. Second,
the proposed Final Judgment was clearly made at the request of Bayview’s counsel
for submission to the Court at trial [Tr. 45]. Yisrael again counsels that:
“When a document is made for something other than a regular
business purpose, it does not fall within the business record
28
exception,” and “[w]henever a record is made for the purpose of
preparing for litigation, its trustworthiness is suspect and should be
closely scrutinized.” Charles W. Ehrhardt, Florida Evidence § 803.6,
at 876 n. 3, 877 (2007 ed.) (citing, e.g., United States v. Kim, 595
F.2d 755, 760-64 (D.C.Cir.1979) (rejecting an argument that a
document created solely for litigation purposes was admissible as a
business-records summary of otherwise admissible records, which
were not produced)).
Yisrael at 993 So. 2d 957. Similar to the telefax at issue in Kim, the proposed Final
Judgment at issue herein cannot be admitted as a summary of otherwise admissible
records, which were not produced. Yisrael at 993 So. 2d 957. Moreover, such a
document cannot form the basis for testimonial evidence of its contents,
notwithstanding the fact that it was not, itself, offered for admission. See also
Thompson v. State, 705 So.2d 1046, 1048 (Fla. 4th DCA 1998) (“[T]he businessrecords exception to the hearsay rule
...
does not authorize hearsay testimony
concerning the contents of business records which have not been admitted into
evidence.”); United States v. Marshall, 762 F.2d 419, 423-28 (5th Cir.l985).
The Default Notice
One of the four (4) exhibits Bayview introduced into evidence is a purported
form letter allegedly providing notice of default to Seffar
. The letter is
10
inadmissible hearsay unless it is admissible under the business records exception to
the hearsay rule. Mr. Azarsepandan testified that he was not the records custodian
29
of the letter [Tr. 11—15]. Seffar did not stipulate to the letter’s admissibility nor did
Bayview provide a certification or declaration that complies with Sections
90.803(6)(c) and 90.902(11), Florida Statutes (2013). Accordingly, the letter is
inadmissible hearsay which was admitted improperly”.
Prejudicial Not Harmless Error
—
The admission of Bayview’s exhibits
—
the Note, Mortgage, Affidavit and
Default letter was prejudicial to Seffar and was not harmless error because
Bayview’s entire prima facie case depended upon those documents. In a civil case,
an error is reversible—that is, harmful error—where “it is reasonably probable that
a result more favorable to Seffar would have been reached if the error had not been
committed.” Damico v. Lundberg, 379 So.2d 964, 965 (Fla. 2d DCA 1979).
Harmless error is not a device for the appellate court to substitute itself for the
trier-of-fact by simply weighing the evidence. The focus is on the effect of the
error on the trier-of-fact. The question is whether there is a reasonable possibility
that the
error affected
the verdict.” State v. DiGuilio, 491 So.2d 1129, 1139 (Fla.
1986). Here, but for the erroneously admitted exhibits, Bayview would have no
10 Exhibit “8” [Tr. 62].
11 The Third DCA has held an unsigned computer generated letter is not evidence
of date of mailing. Baker v. Florida Unemployment Appeals Commission, 35 Fla.
L. Weekly Dl 188 (Fla. 3d DCA May 26, 2010).
30
evidence upon which to satisfy its burden of proof. As such, such error cannot, by
definition, be considered “harmless”.
III.
THE TRIAL COURT ERRED BY FAILING TO
GRANT
APPELLANT’S
MOTION
FOR
INVOLUNTARY DISMISSAL.
“An involuntary dismissal or directed verdict is properly entered only when
the evidence considered in the light most favorable to the nonmoving party fails to
establish aprimafacie case on the nonmoving 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)). On a motion for involuntary dismissal,
made at the close of the plaintiffs case in a nonjury trial, a trial court is limited to
determining whether or not the plaintiff has made a prima facie case. Tiliman v.
Baskin, 260 So.2d 509 (Fla.1972) and State, Department of Health and
Rehabilitative Services v. Thibodeaux, 547 So.2d 1243 (Fla. 2d DCA 1989). The
court in making such a determination can neither weigh the evidence nor consider
the credibility of witnesses. Saporito v. Madras, 576 So.2d 1342 (Fla. 5th DCA
1991).
a. Appellee failed to prove that its predecessor held the note at the time the
Complaint was filed, or was otherwise authorized to bring suit on behalf
of the true holder.
“Whether a party is the proper party with standing to bring an action is a
question of law to be reviewed de novo.” FCD Dev., LLC v. S. Fla. Sports Comm.,
31
Inc., 37 So.3d 905, 909 (Fla. 4th DCA 2010) (quoting Westport Recovery Corp. v.
Midas, 954 So.2d 750, 752 (Fla. 4th DCA 2007)). The party seeking foreclosure
must present evidence that it owns and holds the note and mortgage at issue in
order to establish standing to proceed with a foreclosure action. Servedio v. US.
BankNat. Ass’n, 46 So. 3d 1105 (Fla. 4th DCA 2010); Verizzo v. Bank ofl\LY, 28
So.3d 976, 978 (Fla. 2d DCA 2010); Philogene v. ABNAmro Mortgage Group
Inc., 948 So.2d 45, 46 (Fla. 4th DCA 2006). Where the defendant denies that the
party seeking foreclosure has an ownership interest in the mortgage, the issue of
ownership becomes an issue the plaintiff must prove. Carapezza v. Pate, 143 So.2d
346, 347 (Fla. 3d DCA 1962). The proper party with standing to foreclose a note
and/or mortgage is the holder of the note and mortgage or the holder’s
representative. See Mortgage Elec. Registration Sys., Inc. v. Azize, 965 So.2d 151,
153 (Fla. 2d DCA 2007); Troupe v. Redner, 652 So.2d 394, 395—96 (Fla. 2d DCA
1995); see also Philogene, 948 So.2d at 46 (Fla. 4th DCA 2006) (“[W]e conclude
that ABN had standing to bring and maintain a mortgage foreclosure action since it
demonstrated that it held the note and mortgage in question.”).
In regards to Bayview’s ownership and holding of the note and mortgage,
the Original Plaintiff alleged in its Complaint only that it “it has the right to
enforce the note and mortgage.” (emphasis added) [R. 4, at ¶3]. The Note and
Mortgage attached as an exhibit to the Complaint names the payee and lender as
32
ABN AMRO MORTGAGE GROUP, INC [R. 6]. Significantly, the Note attached
as an exhibit to the Complaint contained no allonge, nor was the Complaint ever
amended to allege the execution of an allonge or of the chain of title or
assignments of the Note and Mortgage {R. 01—20].
As the Second District stated in Feltus v. US. Bank Nat? Ass’n, 37 Fla. L.
Weekly D253a (Fla. 2d DCA Jan. 27, 2012): “[w]e view U.S. Bank’s filing of a
copy of the note that it later asserted was the original note as a supplemental
exhibit to its complaint to reestablish a lost note as an attempt to amend its
complaint in violation of Florida Rule of Civil Procedure 1.190(a). U.S. Bank did
not seek leave of court or the consent of Feltus to amend its complaint. A pleading
filed in violation of rule 1.190(a) is a nullity, and the controversy should be
determined based on the properly filed pleadings. Warner-Lambert Co. v. Patrick,
428 So. 2d 718 (Fla. 4th DCA 1983).” Here, the alleged original Note and Allonge
were not even filed as or alleged to be a supplemental exhibit to RCS’ Complaint
[R. 53-54].
Curiously, the exhibits reflect an assignment from the FDIC as receiver for
Franklin Bank, but no exhibit reflects any assignment of the mortgage from the
payee and lender ABN AMRO MORTGAGE GROUP, INC to Franklin Bank. It
was never alleged that Bayview’s predecessor RCS ever owned the mortgage.
Likewise, the record contains no competent testimony that Bayview owns the
33
mortgage nor was that fact ever even alleged. Moreover, there also is no
competent testimony that Bayview holds the mortgage.
An action may be prosecuted in the name of someone other than, but acting
for, the real property in interest so long as the requirements of Florida Rule of Civil
Procedure 1.210(a) and applicable Florida law are met. See Corcoran v. Brody,
347 So. 2d 689, 690 (Fla. 4th DCA 1977). A servicer of a note would have to
prove that the owner and holder of the note and mortgage granted the plaintiff
filing the action the authority to do so once the action was commenced. Elston
Leetsdale, LLC, 87 So.3d at 14 (citing In re Rosenberg, 414 B.R. 826, 842 (Bankr.
S.D. Fla. 2009)).
In considering what would be sufficient to support a finding of standing by a
servicer on behalf of the real party in interest, the Court in Elston Leetsdale, relied
on the considerations taken into account by the Seventh Circuit in a case captioned
CWCapital Asset Mgmt., 610 F.3d at 497. In that case, the court found that a
special servicer to a loan had standing to bring an action in its own name against a
mortgagor and landlord. In that particular case, the special servicer filed an
affidavit of the trustee, which was not contradicted, thereby ratifying the servicer’s
commencement of the lawsuit. Id. at 502. Additionally, the pertinent pooling and
servicing agreement was placed in evidence as additional evidence that the
34
servicer’s principal granted it authority to enforce the debt instruments that the
servicer neither owned nor held. Id. at 501.
At the trial in this case, Bayview relied on Stone v. Bank, 115 So. 3d 411
(Fla. 2nd DCA 2010), for the proposition that a party may establish standing in the
presence of a blank endorsed note assignment of a mortgage or evidence of
equitable transfer. Bayview argued that the evidence of equitable transfer were
certain letters purportedly showing that RCS was the receiver on November 17,
2009. Bayview also argued that because Seffar sent a letter to RCS on April 9,
2010, that fact constituted an admission that RCS was in fact the servicer.
However, the purpose of Seffar’s letter was to challenge the authenticity of the
service transfer and to request additional information concerning said transfer [Tr.
98]. Even taking Bayview’s purported evidence as true, such a transfer of servicing
letter is insufficient to satisfy the requirement for Bayview to provide competent,
substantial evidence pursuant to Stone.
In Stone, the court held that the transferee bank had standing to bring suit
because it had presented competent, substantial evidence that it owned the note and
mortgage. The evidence presented included testimony from one of its employees,
who worked for the original lender at the time that the property was seized and
placed into receivership and had remained an employee of the new bank, and
evidence of the receivership and a purchase assumption agreement. The
35
employee’s testimony was so compelling, given her personal knowledge of the
particular loan in question, that the court concluded that the argument that the
allonge was indorsed in blank and not affixed to the original note carried no weight
in light of the testimony demonstrating that the new bank acquired ownership of
the note and mortgage through the purchase assumption agreement.
The evidence provided by Bayview in this case does not nearly amount to
the evidence provided by the plaintiff in Stone. In this case, there was no evidence
presented to demonstrate that RCS was authorized to file suit as servicer of the
loan
-
no purchase and assumption agreement or pooling and servicing agreement
was ever presented. Despite the lack of evidence that Bayview’s predecessor held
the note at the time the Complaint was filed, the trial court improperly denied
Seffar’s Motion for Involuntary Dismissal [Tr. 73].
b.. The alleged Notice of Default was defective because it failed to conform
to the language required by paragraph 22 of the Mortgage.
Additionally, where a defendant raises the affirmative defense that the lender
failed to provide him with notice of the acceleration pursuant to the procedures
specified in mortgage, the lender must tender such proof. See Frost v. Regions
Bank, 15 So. 3d 905, 906—07 (Fla. 4th DCA 2009) (“Because the bank did not
meet its burden to refute the Frosts’ lack of notice and opportunity to cure defense,
the bank is not entitled to final summary judgment of foreclosure.”). Here, RCS’
allegations that it complied with conditions precedent were controverted by Seffar
36
in his answer and he also asserted an affirmative defense directed to that issue [R.
59—67]. Bayview therefore was obligated to prove that the condition precedent to
foreclosure imposed by paragraph 22 of the Mortgage was satisfied.
Bayview failed to satisfy that condition precedent because the language of
the letter did not track the language required to be placed in the Notice by
paragraph 22 of the Mortgage because the letter qualified the foregoing statements
with the word “may” by saying: “If your loan is accelerated, you
additional rights to cure the default under your loan and
have
have the legal right to
assert the non-existence of a default or any other defense you may have to the
acceleration and foreclosure.
.
.“
(emphasis added). Circuit and appellate courts in
Florida have uniformly emphasized that compliance with paragraph 22 of a
mortgage is a condition precedent to acceleration of the debt and foreclosure of the
mortgage. In construing the notice of acceleration requirements, Florida courts
have stated that acceleration letters must satisfy the “clear and unambiguous”
conditions precedent to foreclosure by giving the required notice. See Konsulian v.
Busy Bank, 61 So.3d 1283 (Fla. 2nd DCA 2011) (The language in the mortgage is
clear and unambiguous. The word “shall” in the mortgage created conditions
precedent to foreclosure, which were not satisfied). In fact, Judge Haury, Jr. of the
Seventeenth Judicial Circuit Court in Bank ofNew York Mellon v. Leslie, Case No.
CACE09032841 (Seventeenth Judicial Circuit in and for Broward County, Florida,
37
June 28, 2012) entered Summary Judgment for the Defendant by stating that the
language in an acceleration letter stating “you may have the right to bring a court
action.
.
.“
does not comply with the mortgage. (App.
).
Similarly, in Countrywide Home Loans, Inc. v. Wehnes, Case No.: 5 1-2008CA-7190-ES (Sixth Judicial Circuit in and for Pasco County, Florida, Aug. 22,
2011), the language in the mortgage contract required Countrywide to notify the
borrower of the right to raise defenses “in the foreclosure proceeding”. By contrast,
the notice letter that Countrywide sent to the borrowers advised them of the right to
file a separate court action in order to raise any defenses.’
2 The court found that
because of the distinction between the mortgage language and the language used in
the notice letter, Countrywide had failed to perform the conditions precedent to
filing the foreclosure action. (App.
).
See also The Bank of New York Mellon v.
Wong, Case No. 51-2009-2009-CA-3026-ES (Sixth Judicial Circuit in and for
Pasco County, Florida, Dec. 20, 2012) (stating that in the State of Florida where
foreclosure is an equitable remedy that must be sought by a judicial proceeding,
there is a vastly different meaning between a defendant’s ability to assert defenses
in the foreclosure proceeding as unambiguously required in paragraph 22 of a
mortgage and the ambiguous language of a demand letter; any ambiguity as
12
The letter specifically stated, “Further, you may have a right to bring a court
action to assert the non-existence of a default or any other defense you may have to
acceleration and foreclosure.”
38
contained in the mortgage must be construed against the drafter) (App.
_)..
A
sampling of additional cases on point is as follows:
• ..Frost v. Regions Bank, 15 So. 3d 905, 906-07 (Fla. 4th DCA 2009)
(summary judgment of foreclosure reversed when bank did not factually
refute Frost’s lack of notice and opportunity to cure defense);
• . . Sandoro
v. HSBC Bank, USA National Association, 55 So.3d 730 (Fla. 2d
DCA 2011) (final judgment of foreclosure reversed where record reflected
genuine issues of material fact regarding whether Mr. Sandoro had been
provided with a notice of acceleration);
• ..
Goncharuk v. HSBC Mortgage Services, Inc., 62 So.3d 680 (Fla. 2d DCA
2011) (summary judgment of foreclosure reversed when issue of
acceleration notice remained even though nonmoving party did not file an
affidavit in opposition);
• ..Konsulian v. Busey Bank, NA, 61 So. 3d 1283 (Fla. 2d DCA 2011)
(summary judgment of foreclosure reversed when bank did not defeat
affirmative defense relating to failure to provide the acceleration notice);
• ..Kurian v. Wells Fargo Bank, Nat’l Ass’n, 114 So.3d 1052, 1055 (Fla. 4th
DCA 2013) (“[The letter attached to the Complaint] did not advise of the
default, provide an opportunity to cure, or provide thirty days in which to do
39
so. The letter attached to the Complaint did not satisfy section 22’s
requirements.”);
• ..Lazuran v. Citimortgage, Inc., 35 So. 3d 189 (Fla. 4th DCA 2010) (summary
judgment of foreclosure reversed when affirmative defense of improper
acceleration was not sufficiently addressed);
•
.
.PHH Mortgage Corp. v. Wink, Case No. 1 1-005659-CI-19 (Sixth Judicial
Circuit in and for Pinellas County, Florida, Apr. 9, 2012) (finding that
because the notice of intention to foreclose sent by the plaintiff to the
defendant did not comport with the notice language specified in paragraph
22 of the mortgage, plaintiff failed to perform the condition precedent to
acceleration and the filing of the foreclosure action; complaint dismissed
without leave to amend) (App.);
•
.
.BAC Home Loan Servicing, L.P. v. Tomorelli, Case No. 2011CA-09010
(Tenth Judicial Circuit in and for Hillsborough County, Florida, March 13,
2012) (case dismissed without leave to amend) (App.);
• ..HSBC Bank USA v. Colby, Case No. 51-2008-CA-10374 (Sixth Judicial
Circuit in and for Pasco County, Florida, Apr. 20, 2012) (“plaintiff.. .takes
nothing by this action and that defendants. shall go hence without day”)
.
(App.J;
40
.
•
..
Onewest Bank, FSB v. Feretz, Case No. 09-CA-16909 (Twelfth Judicial
Circuit in and for Sarasota County, Florida, June 2012) (granting defendant
borrowers’ motion for summary judgment and dismissing plaintiffs case
without prejudice) (App.J;
•
. .
Deutsche Bank Trust Company Americas as Trustee v. Fapadakis, Case No.
l0-CA-004743-C (Thirteenth Judicial Circuit in and for Hilisborough
County, Florida, June 26, 2012) (granting defendant’s motion for summary
judgment and dismissing plaintiffs complaint without leave to amend)
(App.J;
•
.
.Bank of New York Mellon v. Leslie, Case No. CACE09032841 (Seventeenth
Judicial Circuit in and for Broward County, Florida, June 28, 2012) (“It is
the opinion of the court that the Plaintiff has failed to comply with the
requirement of notifying the Borrower of the right to “assert in the
foreclosure proceeding” the non-existence of a default or other defense.”)
(App .J;
• ..Bank of America, NA. v. Bradshaw, Case No. 2012-008 119 (Thirteenth
Judicial Circuit in and for Hillsborough County, Florida, January 2013)
(App.J;
•
.
.Deutsche Bank National Trust Company v. Mischenko, Case No. 08-CA016042) (Thirteenth Judicial Circuit in and for Hilisborough County,
41
Florida, July 17, 2012) (granting defendants’ motion for involuntary
dismissal without prejudice and ordering that plaintiff bank take nothing by
the action) (App.;
•
..
Valencia v. Deutsche Bank National Trust Co., 67 So.3d 325 (Fla. 4th DCA
2011) (foreclosure summary judgment reversed when there was a
discrepancy between the date of default alleged in the foreclosure complaint
and the dates referred to in the notice to cure letters that were allegedly sent
to mortgagors);
•
.
.Laurencio v. Deutsche Bank National Trust Co., 65 So.3d 1190 (Fla. 2d
DCA 2011) (plaintiff not entitled to summary judgment where it had not
established that it had met the conditions precedent to filing suit, i.e., it had
not established that it gave defendant a notice which the mortgage required);
•
..
.Samaroo v. Wells Fargo Bank, Case No. 5D13-1585 (Fla. 5th DCA March
28, 2014) (disagreeing with Wells Fargo’s contention that it “substantially”
complied with the contractual notice requirements and stating that “Its own
mortgage specified the important information that it was bound to give its
borrower in default, and it simply failed to do so.”)
Much like in the preceding cases on point, Appellee herein failed to comply with
the conditions precedent as delineated in paragraph 22 of the mortgage.
42
Moreover, it is black letter law that if the provisions of a contract are
unambiguous, a court may not violate the clear meaning of the words in order to
create an ambiguity nor shall a court be able to rewrite a contract. Florida
Recycling Services, Inc. v. Greater Orlando Auto Auction, Inc., 898 So.2d 129
(Fla. 5th DCA 2005). Basic rules of construction require that contract documents
be construed against the drafter of the documents. Seffar clearly did not draft these
loan documents.
Given that Bayview failed to comply with the condition precedent
established by paragraph 22 of the mortgage prior to filing suit and because the
language in the mortgage should have been strictly construed against Bayview, the
trial court effed in failing to grant Seffar’s Motion for Involuntary Dismissal.
c. Appellee failed to prove that the Notice of Default was sent to Appellant.
Bayview’s witness indicated that he had not seen the original copy of the
breach letter, and that he did not have the return receipt for the certified letter [Tr.
36). The witness acknowledged that the loan number in the letter did not match the
loan number on the mortgage [Tr. 36—37]. The witness testified that he was not
familiar with how RCS sent out its default letters nor did he have personal
knowledge of whether the breach letter had actually been sent out [Tr. 37]. There
was nothing in his records that would confirm that Seffar received the default letter
[Tr. 37—38]. Based upon such testimony, Bayview’s proof of compliance with the
43
condition precedent of sending out a default letter was deficient. Where, as here, a
plaintiff fails to meet its burden of proof, the proper remedy is for the court to grant
a non-suit and dismiss the action with prejudice. It was error here for the trial
court to fail to do so.
CONCLUSION
Based on the foregoing facts and legal authorities, Seffar requests this Court
to reverse the entry of the Final Judgment of Mortgage Foreclosure and direct that
the trial court enter judgment on his motion for involuntary dismissal. Alternatively,
Seffar requests this Court to reverse the entry of the Final Judgment of Mortgage
Foreclosure and remand this matter for a new trial.
H. Charlip, B.C.S.
Florida Bar No. 329932
Charlip Law Group, LC
Counsel for Appellant
Aventura Bayview Bldg.
17501 Biscayne Blvd.
Suite 510
Aventura, Florida 33160
305-354.9313
305.354-.9314
[email protected]
44
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a copy of the foregoing document was sent via
email to Raymond Hora, Esq., [email protected] at McCalla
Raymer, LLC, 110 S.E. 6th Street, Suite 2400, Fort Lauderdale, Florida 33301
on this
4>
day of May, 2014.
CERTIFICATE OF COMPLIANCE
In compliance with Florida Rule of Appellate Procedure 9.210(2), counsel for
Appellants certifies that the size and style of type used in this Brief is 14 point type,
Times New Roman.
/
45