Justia Lawyer Rating for Evan M. Rosen
AV Preeminent 2020
Florida Legal Elite
AVVO 10.0
Super Lawyers
National Institute for Trial Advocacy
NACA Member

Yet Another Example of Special Laws for the Banks!

The Law Offices of Evan M. Rosen, P.A.

If you’ve watched any courtroom drama movie or TV show, chances are you’ve probably seen a lawyer stand up and say, “Objection, hearsay!” Hearsay is an oral or written statement, as well as some “non-verbal conduct,” made out of the courtroom, being offered to prove the truth of what was expressed. Hearsay is generally not admissible but, like almost everything else in law, there are exceptions. One of those exceptions is for out of court written statements that are “business records.” The generally accepted idea behind the exception is that true business records are “relied upon by a business in the conduct of its daily affairs and the records are customarily checked for correctness during the course of the business activities.” C. Ehrhardt, Florida Evidence §803.6 (2015 Edition).  As is often said, they have the “indicia” of reliability. 

Until recently, the law on this issue was straightforward in Florida, with good guidance from the several cases around the state. The seminal case was from the Supreme Court of Florida, Yisrael v. State, 993 So.2d 952 (Fla. 2008). In Yisrael, our state’s highest court enumerated three ways one can get a business record into evidence. The “traditional route… requires that a records custodian take the stand and testify under oath as to the predicate requirements.” Id. Those requirements are 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.” Id. Prior to the foreclosure crisis, the law has also been very clear that every witness, who is not testifying as an expert, can only testify as to matters on which they have “personal knowledge,” as per Florida Statute §90.604. That is, their “testimony must be based on matters perceived by the senses of the witness.” C. Ehrhardt, Florida Evidence §604.1 (2015 Edition).

Then, on January 7, 2015, the Fourth District Court of Appeal issued Bank of New York v. Calloway, 157 So.3d 1064 (Fla. 4th DCA 2015). In Calloway, the Court held that “[w]here 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.” Id. Citing to United States v. Adefehinti, 510 F.3d 319, 326 (D.C.Cir.2007), as amended (Feb. 13, 2008). Apparently the Fourth District is saying that the four prongs enumerated by the Florida Legislature and restated by the Supreme Court of Florida in Yisrael v. State, 993 So.2d 952 (Fla. 2008), as well as the personal knowledge requirement of Florida Statute §90.604 are no longer needed because the bank “confirmed the trustworthiness” when it ” ‘reviewed’.. the pay histories ‘for accuracy.’ “Calloway, 157 So.3d 1064 (Fla. 4th DCA 2015).

As a by-the-book Judge said to me during a trial following the issuance of Calloway, the Fourth was “legislating from the bench” and “turning the evidence code on its ear.” As if this wasn’t bad enough, the Fourth also wrote that even if there had been no testimony about the current bank relying on the prior bank’s records, “the circumstances of the loan transfer itself would have been sufficient to establish trustworthiness given the business relationships and common practices inherent among lending institutions acquiring and selling loans…” Id. So, there you have it. There is now a special “lending institution” hearsay exception based upon the premise that banks make trustworthy records!?!?

Didn’t the recent events following what was almost a complete collapse of the world’s economy, result from a lack of due diligence in the buying and selling of loans? Wasn’t a big part of that crisis the rush to make loans based on bad business practices, which included poor record keeping? Isn’t the entire reason there is a resulting foreclosure crisis, and “foreclosure defense” attorneys because banks don’t have their act together and can’t prove their cases, due to poor record keeping? As a very well-known Florida appellate Judge wrote, “[i]n this case and numerous other cases, the financial institutions have brought these problems upon themselves by the complex methods of securitization and their own sloppy recordkeeping.” Focht v. Wells Fargo Bank, N.A., 124 So. 3d 308,313 (Fla. 2d DCA 2013) (Altenbernd, J., concurring). Focht was issued before Calloway. But then again, the near collapse of the world’s economy from horrific bank practices pre-dated Calloway too.  

Has the Fourth not been reading the news? There was the foreclosure moratorium in 2010 and, in 2012, a 49 state, $25 billion dollar settlement. Both were because of every major financial institutions’ unconscionable practices and procedures, including how they were making and keeping their records. The Fourth District itself also acknowledged in Pino v Bank of New York Mellon, 57 S0.3d 950 (Fla. 4th DCA 2011),that “many mortgage foreclosures appear tainted with suspect documents.” In the second sentence of the subsequent opinion, Pino v. Bank of New York, 121 So. 3d 23 (Fla. 2013), the Supreme Court of Florida wrote, “… the context of the issue as presented in this case arises out of a widespread problem associated with fraudulent documentation filed by various financial institutions seeking to foreclose on real property throughout the state…”

In fact, the banks records are so untrustworthy that the Supreme Court and the legislature both passed special rules, just for banks in foreclosure cases, via the enactment of Florida Rule of Civil Procedure 1.110(b) and Florida Statute §702.015, respectively. In the history of Florida law, I’m not aware of any other industry, that has been subjected to special rules and laws, because of that industry’s well-documented filings of false documents in courts all over the state! Yet, according the Fourth District Court of Appeal, we can just take the bank’s records as trustworthy.  For banks, we can skip laws that apply to everyone else.

Case in point – on the very same day that Calloway was issued, the Fourth District Court of Appeal issued a polar opposite opinion, Landmark American v Pin-Pon, 155 So.3d 432 (Fla. 4th DCA 2015)In Pin-Pon, the Fourth found that an architect could not admit a general contractor’s records, even though the architect testified that the numbers from the contractor are reliable and that the architect “depends upon them in the normal course of business.” Id.  The architect also testified that this “is normally done in the course of business” and that he maintains those reports in his records. Lastly, the architect stated that the numbers obtained “were reliable within the industry.” Id. It sure sounds like the architect “takes custody of another business’s records and integrates them within its own records,” as stated in Calloway. Also, sounds like the records were “reviewed for accuracy,” as they were in Calloway. Yes, but Calloway is for banks and Pin-Pon is apparently for everyone else. Is it really one set of laws for the banks and another set for everyone else!?!? There’s an old saying, widows and orphans make bad law. In other words, widows and orphans are so sympathetic that courts, are swayed to bend the law in any given case to help a widow or orphan.  Apparently, the saying can now be updated, widows, orphans and banks, make bad law…

Since Calloway came out, we’ve been brainstorming and testing ways to expose “verifying for accuracy,” via voir dire, for what it is, a lie – something that doesn’t actually happen. We know from numerous depositions and cross examinations what is done when one bank takes over a loan from another bank. At best they map the data and check the math. Nothing is done to “verify” or “review” for “accuracy.” This was possibly best illustrated in one of our recent trials, before one of the state’s most preeminent foreclosure judges. This Judge literally wrote “the book” summarizing all foreclosure law for other judges around the state and then re-wrote it a few years later. When it came to “verifying for accuracy,” this Judge knew all too well the witness was full of it and jumped into the middle of my cross examination asking, “So, if [the prior servicer] made a mistake there, your process does not catch that. It can’t. Right? It can’t. I mean, I’m just – because I understand that you do the math, and you add up and try and make sure that what [the prior servicer] is saying, got this payment, got this payment, didn’t get this payment all matches with the numbers. But the accuracy of that initial input, that initial data insertion that’s [the prior servicer’s]; [the current servicer] doesn’t know anything about that.”  Witness’ response: “That is correct, Your Honor.”

So just before the start of the trial a few weeks after Calloway had been released, I found myself chatting with Randy Ackley, who was then Ice Legal’s Senior Trial Lawyer and is now, I am very happy to announce, a member of our team. He and I discussed how we have been handling Calloway. He even told me he recently won a trial using a particular quote within Calloway. I discussed with him how I‘ve been cross examining witnesses, via a detailed, ever evolving battery of leading questions on voir dire to expose that the witness and their company does not do all the things that one would have to do, in order to “verify for accuracy.” For purposes of serving our existing and future clients, I just can’t elaborate on this. 

Most of the judges I’ve been trotting this out with have been skeptical of where I was going in my voir dire on this. But I’ve been honing and honing, like every part of my trial approach, little by little, before and after almost every single trial (I’m up to version 331 of my trial voir dire and cross examination outline), and recently, with one of Broward’s most active foreclosure trial judges, who is a former chief of the 4th District Court of Appeal, our approach worked!

Here’s a summary of how that trial victory unfolded. A few questions into my new line of interrogation, the Judge is intrigued and overrules the almost guaranteed and sure-to-come relevance objection from opposing counsel. The plaintiff moves to admit the payment history into evidence and I then ask the judge to let me voir dire on the pay history and acceleration letter together so I can cover the law for both in one shot. He agrees. Next, the Plaintiff’s attorney goes through their foundation, with my typical objections, to the acceleration letter. I go through the whole megillah of my voir dire, including the latest stuff on “verifying for accuracy.” After the voir dire, I go through most of my usual six step approach to addressing the law on laying a business record foundation. When it comes time to address the law on prior servicer issues, I trot out the portion of Calloway that I had just discussed with Randy Ackley a few hours earlier. The Judge’s jaw drops. I explain how the case created new law in Florida to satisfy how records are “made.” But then I say, the opinion concludes with this…”Our decision in this case, and on this record, should not be construed as a “green light” for lenders to present a “robo” witness to establish the business record exception. As discussed previously, admission of a business record is predicated on the proponent demonstrating [four prongs]. See Yisrael, 993 So. 2d at 956. The requirements of reliance and trustworthiness do not supplant this rule’s provisions; “rather, we view them as necessary in these circumstances to satisfy the rule’s requirement that the records were made in the course of a regularly conducted activity of the incorporating entity.” Calloway, 157 So.3d 1064 (Fla. 4th DCA 2015).

I circle back to Lassonde, Specialty Linings, Florida Statute §90.604 and argue, the court in this opinion is making it clear – a witness still needs to testify, with personal knowledge, as to what they are saying. Here, specifically, that the witness has seen, done, been in charge of, supervised, or is otherwise well enough acquainted with “verifying for accuracy.” I like and use the argument about personal knowledge that a person can be told or can read about what a particular dish tastes like or what it’s like to fight in battle but until they’ve tasted the food or served in war, they have no personal knowledge. I’m peaking the judge’s interest now…

I then go into Pin-Pon. That opens his eyes as he reads my highlighted provisions. Other than it being about a general contractor and an architect as opposed to two servicers, the salient facts are damn near identical! But then the Judge says “Pin-Pon is distinguishable…” I interrupt, loudly, “yea, Pin-Pon is the long established law for the business records exception in Florida and in Calloway, the Fourth DCA gave us a special business records exception that only applies to banks.” The Judge says nothing back which I take to mean he knows I am right. The Judge hems and haws but ultimately says the testimony was marginal at best. Seemingly to do so reluctantly, he lets in the payment history and acceleration letter. Next up, the bailee letter.

I lay the specifics of how one might verify that for accuracy. The witness is battered. After going through all of this on the payment history, then the acceleration letter, and now on the bailee letter, each line of questioning tailored to each document, I feel the witness is beginning to realize that she was really just trained to repeat magic words. She really has no idea how, or even if, those words were true. It is almost as if her eyes are telling me that she is getting upset at her “trainers.” Her face tells me she is thinking, “were the records really being verified for accuracy?” She is broken and gave in. She next admits she does not know what her company did or could do to verify that the bailee letter was accurate. 

After that, I reread the first part of the first sentence of that above paragraph from Calloway and argued that Plaintiff’s witness was simply repeating newly minted magic words but had no personal knowledge of those words. The Judge agrees and sustains our objection to the introduction of the bailee letter, stating “there is no way Plaintiff’s witness or her company verified that for accuracy.” Plaintiff next tries to use the PSA but I used the Murray case to beat that back. Plaintiff’s lawyer later rests and our motion for involuntary dismissal is GRANTED!

That was really a nice win and hopefully we’ve opened the door. Verifying for accuracy is a lie and now the head foreclosure trial judge in Broward is at least open to the idea that robo testifying as to verifying should not be summarily accepted. He told me after the trial that ever since Calloway, witnesses have been repeating those magic words and no one had challenged them on that issue before me. I call this trial lawyer Aikido. My high school team debate partner was a master of this technique. Take the other side’s best argument and don’t just try to deflect it, arguing it does not apply for some reason or another. Instead, take their best argument or case and find something profound about it that you can use against them! Randy too is a master at the art of Aikido trial tactics. I’m sure he and I will look back on this trial win for years to come, as the first of many trials we won together for our clients!


If you are in Florida and are looking for help with debt and foreclosure, call us at (855) 55-ROSEN or fill out our online form for a FREE CONSULTATION. Let the lawyers and staff at The Law Offices of Evan M. Rosen serve you!

Client Reviews

Mr. Rosen was recommended to us by our friends and we highly recommend him for his excellent service. He represented us in the matter of foreclosure defense. His comprehensive and detailed knowledge of Florida law, federal law, and ongoing relevant cases was key to building a robust and winning...

Jadwiga M.

In a few words, Evan Rosen saved my house. He got a final judgment in my favor. The judge gave the bank many opportunities (continuance of the trial even a mistrial) to solve all the issues that Evan Rosen will bring up to the judge (issues that were wrong with my case). In the end, his arguments...

Oscar D.

I am so grateful first to god and for the blessing of putting attorney Evan Rosen and his team of professional, in our lives. If you are going through a foreclosure and don't know what to do, I can honestly tell you that attorney Evan Rosen is the person to talk (855-55-Rosen) he takes his time to...

Julie D.

Contact Us

  1. 1 Treat You Like We’d Want To Be Treated
  2. 2 Treat Your Case As if It Was Our Own
Fill out the contact form or call us at 754-400-5150 to schedule your consultation.

Leave Us a Message