South Florida Foreclosure Defense and Consumer Protection Lawyer Blog

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).

Had another trial win recently – thankfully, we have been on a roll, winning multiple trials back to back to back! In this particular case, the original lender and the Plaintiff are Flagstar.  Attached to the Complaint is an unendorsed note, payable to Flagstar.  As is common in foreclosure cases, the Plaintiff substitutes in Green Tree a few months back and shows up at trial with note, endorsed, in blank.  I object to note as being outside the scope of the pleadings, citing to Holub v. Holub – parties are bound by their pleadings, and 1.130 – attachments to pleadings are considered a part of the pleading for all purposes.  Judge listens and goes back and forth but lets the note into evidence, with a smile to me. I think she’s hinting she knows this might later be a problem if the Plaintiff doesn’t move to amend their complaint and, more importantly, it could be a standing at inception issue.

After direct examination of the bank’s witness, Christopher Ly, a rigorous cross examination ensues resulting from him trying to be cute and not answer my questions.  I keep hammering him and the Judge never stops me.  Eventually, he capitulates and gives in, just in time for my cross on no evidence to show possession at inception, condition of note at inception and when the endorsements were placed on the note.  He wasn’t there when the note was endorsed, he didn’t see the endorsement placed on the note, he didn’t place the indorsement on the note, he didn’t possess the note at anytime, etc., and more….  that was fun.

After much argument, the Judge agrees the Plaintiff has not met their burden.  She agrees pleadings are not evidence, period, and will not make a “leap of faith,” as per Deutsche Bank v. Huber. (“However, this court does not make “logical and equitable” leaps of faith, as it cannot (and should not) make any such determination unsupported by the record before it.“) Beautiful!  The Plaintiff never proved who had possession at inception.  The only thing we know is there is now a note endorsed in blank and no one knows where the note was at any time prior to today.

We had a great win just before trial started recently. This was a very special case, referred by a friend. The client had a lot going on in her life, including a foreclosure judgment and the pending sale of her home.  She was successful in getting the sale reset three times but there was likely no judge in the world that would have reset it a fourth time.  The first thing we had to do was get that judgment vacated!  Based on a unique factual scenario, we found an angle and moved to vacate the judgment on the 363rd day after it was entered. We were really threading the needle on this but ultimately, we were on solid legal ground.  The judge agreed with us and we were successful in unwinding the clock. The judgment was vacated and the sale was cancelled.  We next amended our answer, fired off some discovery and then before long, the case got set for trial.

On the day before trial, the Plaintiff files a Motion for Continuance. They allege that the “servicing” was recently transferred. However, “Seterus has not received all the documents it needs from the prior servicer…” So, Plaintiff, now former servicer, is requesting a short continuance “to allow the current servicer additional time to complete the boarding process for the loan…” Plaintiff argues its position at the pre-trial docket sounding. I start my opposition to their Motion for Continuance stating that “this is a 2013 case. This is the second trial. Plaintiff noticed the Court that it was ready for trial and requested a trial date over a year ago. This second trial was set a few months ago. Even though the servicing transfer was effective a few months prior to the date of their motion, I’m sure this was in the works for some period of time prior to that. Yet, now, the day before trial, they move for continuance. What I find most disturbing is the basis, “boarding the loan.” “Judge, we’ve been in trial with the very witness Plaintiff will be calling in this case and in fact, every bank witness I’ve ever heard swears that boarding and verifying for accuracy is completed well before the servicing transfer is ever finalized. They often say something like, ‘the loan would not be transferred if everything is not checked and verified. Just the fact that I am here testifying indicates that the boarding was completed properly.’ Yet here we see, over two and a half months after the transfer of servicing has been completed, the Plaintiff is telling us that not only is boarding not complete, they still haven’t even gotten the documents! Something doesn’t sound right here…” The judge cuts me off, “I agree. Motion DENIED.”

We get called to start trial about an hour later only now, the Plaintiff’s sole witness is upstairs in a trial with Judge Tuter. Our trial judge asks opposing counsel(OC), “how many trials was your witness set for today?” OC says, “I don’t know.” The judge then immediately says, “I’m granting a very short continuance. I want you back here next week.” I ask for the following day and the judge says that’s fine by her. OC fills out the trial date request form for the clerk. I fill in my bar number and ask the clerk to confer with me before finalizing the date. I sit down, dejected, trying to accept that I am about to wait for my continuance date even though I almost had a very easy win. (I have a written admission via Plaintiff’s Motion for Continuance that there was no boarding or verification of the prior servicer’s data. There are no prior servicer records. The acceleration letter is addressed to the wrong address and there are two “original” allonges, with no staples attaching them to the note, all in the court file, filed 6 months ago.) I watch the judge call up the next pair to start their trial but then, within about 10 seconds, I feel as if something just picks me up by the seat of my pants. I rush back over to the clerk and say, “don’t reschedule our trial just yet. I’m going up to Judge Tuter’s courtroom.”

Just before trial starts, the Judge asks to see the file. She wants to review the Complaint and Answer. She takes a few minutes and then trial starts. Both sides waive opening statement – this is fairly common in foreclosure cases. After some brief preliminary questions, the Plaintiff seeks to move in the original note, indorsed in blank. I object – “it’s outside the scope of the pleadings. Plaintiff’s complaint, which was filed back in 2010, had no note attached and this was raised by the defense in the first answer, back in 2010 and TWO subsequent amended answers.” The Plaintiff’s attorney argued “as long as note is pled, they need not attach it to the complaint!” I remind the Judge of Florida Rule of Civil Procedure 1.130(a), titled “Instruments Attached.” It states, “[a]ll bonds, notes, bills of exchange, contracts, accounts, or documents upon which action may be brought or defense made, or a copy thereof or a copy of the portions thereof material to the pleadings, shall be incorporated in or attached to the pleading).” The Judge knew exactly what 1.130(a) stated and immediate said to the Plaintiff’s attorney, “I reviewed the pleadings just a few minutes ago and in 30 seconds I saw what you and your firm should have seen 4 years ago, and yet, you have done nothing to fix!”

The Plaintiff also never responded to or sought relief from our Request for Admissions(RFA) filed in 2010. I read out loud the key RFA’s into the record – “Plaintiff was not in possession of the note at inception of the lawsuit; Plaintiff did not have standing at inception; Plaintiff did not have the right to enforce the note.” There were a few others dealing with the Plaintiff’s failure to satisfy all conditions precedent to filing suit. I then approach and hand the Judge Professor Ehrhardt’s evidence book, turned to the pages addressing what he refers to as “judicial admissions.” No single author is more authoritative and accepted on the subject of evidence then Professor Ehrhardt. Every appellate court, including the Supreme Court of Florida has cited to him numerous times. I say, “judicial admissions are different from evidentiary admissions in that the former are uncontrovertible.” I also hand the Judge Florida Rule of Civil Procedure, 1.370(b) which states that matters which are not timely responded to are deemed admitted and are “conclusively established.” Plaintiff’s attorney stammers and admits she had no idea of this and disputes that RFAs were ever filed! I show her the docket entry which reflects that the RFAs were filing in 2010. Then, the Plaintiff’s attorney as part of her incoherent response says, “well the Defendant didn’t respond to the Plaintiff’s RFA’s either!” The only time I will interrupt opposing counsel in argument is when they state something as fact, which is just flat out not true. I don’t want them to taint the well and have me wind up in a mud fight. (In mud fights, both people have mud on their faces and no one knows who started it.) So, I cut her off immediate and say, “Judge, we got in this case in October of 2014. We saw that Defendant’s prior counsel had not responded some RFAs propounded to the Defendant. We immediately filed a motion seeking relief from those admissions, attaching proposed responses and we then quickly obtained an order granting such relief and deeming our responses timely filed. Plaintiff should have done the same!” Judge cuts me off, “I’m sustaining their objection! You had all this time to fix these issues and did nothing. The note is not coming in to evidence.”

At this point, I offer to the Plaintiff’s attorney, quietly, to take a Voluntary Dismissal and I’ll gladly agree it can be w/o prejudice, as this might help on some statute of limitations issues. She emphatically says no.

Plaintiff starts off wanting leave to amend to add a lost note count at the beginning of trial. Despite pleading that the Plaintiff is the owner and holder of the note in a “verified” complaint, they now know the note was lost all along. First, opposing counsel attempts to place blame on the clerk of court but the clerk whom he calls to testify, proffers during their motion that the original was never filed. What they show was that a Notice of Filing of original note was filed in a prior 2009 case but when the bank was ordered to transfer the original note via an order from the Judge in the current 2013 case, they found that only a copy of the note was attached to Plaintiff’s notice of filing the “original note.” This is not the first time we’ve seen or heard this…

Without me saying a word, the Judge denies their motion. We wait around to be called up for trial. During which time, I watch the Judge, with a little unsolicited input from the “peanut gallery” (me), refuse to apply a recent Calloway case – a case which turns the evidence code on its ear. I informed the Defendant’s counsel during his argument that motions for rehearing and for certification were filed, therefore, the Calloway case is not final law. I hated to do it but the Judge was very seriously considering Calloway and I wanted to do all I could to prevent the well from being tainted! So, I was talking out loud a few times but ultimately whispered to Defendant’s counsel a few times and passed him some notes. The Judge asked Defendant’s counsel how he knew and he said a “little birdie told me.” The Judge looked right at me so I offered to show her the motions on my ipad but she said it’s was okay. Then she said, even if it the law was final, “the 4th is now legislating from the bench” and are trying to change the evidence code! Calloway conflicts with the 3rd. She asks what the case from the 3rd on this. I yell out Holt v Grimes. She says, right.  So, there is a conflict with the 3rd and I’m bound to follow the 3rd. She excludes the payment history. Plaintiff’s lawyer asks for continuance. Judge denies and then the bank takes a voluntary dismissal. Beautiful.

We go to lunch…

Despite this being a case we would have won on the merits, it ended up being another, come-from-behind win, based on evidentiary issues.  Despite the Judge initially overruling my numerous objections to evidence coming in through testimony of a non-qualified bank robo-witness, eventually, during my Motion for Involuntary Dismissal, the Judge announced she was reversing all her prior rulings during the trial on certain key pieces of evidence. She ruled that she was instead sustaining my objections, excluding the pay history, acceleration letter and account information statement as the witness, Kevin Gavigan, was not qualified and as a result, my motion was GRANTED – CASE DISMISSED!

This was after the Plaintiff put on their case in chief.  I never got a chance to put on our case, which would have proved that this particular client NEVER MISSED A PAYMENT. Yes, that’s right, this client NEVER MISSED A PAYMENT and was sued by Bank of America for a completely manufactured foreclosure.  

Going back to 2009, Bank of America started claiming our client did not have the requisite insurance in place. But, he did.  In fact, he had more insurance than was required, at all times. BOA wrote our client, numerous times over the years, with these false claims.  Each time, our client, an attorney and former state legislator, who was chairman of the banking and finance committee, would respond, sending in proof of coverage.  Most times, within a few weeks, BOA would write back saying something to the effect of, ‘whoops, you’re right and you don’t owe us anything.’  However, like Doree in “Finding Nemo,” BOA would exhibit an almost eerily powerful case of amnesia.  Within a few months of writing they were wrong, they’d again ask for more money based on the same shenanigans.  This went on and on for years.  The last time they did this, instead of it ending with BOA sending a “whoops, I’m sorry letter,” they stopped accepting our client’s timely, full payments and filed suit. Because our client continued paying as agreed and because of Bank of America’s complete and utter disregard for the rule of law and justice, the amount ‘in default,” as per their acceleration/pre-suit demand letter, was less than $150!  Which, because of subsequent timely, full payments made by our client, was cured numerous times over.  

Working long hours, nights and weekends throughout the year to serve as many clients as best as we possibly can, can take its toll – even with our seemingly endless energy, fueled by a bottomless well of passion for serving our clients while fighting the financial industry. We LOVE what we do but to best serve our clients we need balance.  Taking a little time off to relax, not as co-workers but as friends, is a big part of that.  Today, as we do at least once a year, we took the afternoon off to unwind a bit.  We ate lunch out and then went bowling.  At each holiday luncheon since the firm was started, I’ve drafted a poem and read it as we toast another year of providing outstanding service to our clients.  Here is this year’s poem:

Another year in the books;

The future is looking bright;

The deposition of Lona Hunt took place on October 17, 2014, during which time Ms. Hunt was questioned about her knowledge of the truth and accuracy of the facts in the foreclosure complaint, which she allegedly verified. During the deposition, Ms. Hunt admitted twice that she did not read the complaint, even though she swore, in the complaint, under penalty of perjury, that she had.  Further, with her limited knowledge, it was impossible for her to truthfully and accurately verify all the facts alleged in the complaint.  Our blog post on this with more detail is here.

After the deposition, we quickly prepared, filed and set down for hearing a Motion to Strike Verification of the Complaint as a Sham.  The hearing was set for next week and we were looking forward to seeing the look on the judge’s face when she heard about the blatant perjury in this case.  However, late yesterday, the Plaintiff filed and served the below Notice of Voluntary Dismissal.   This means, CASE DISMISSED!

While we would have preferred to see some more drastic impact from this deposition, causing ripples of concern among the servicing industry, leading them to change their perjerous practices, we know that is wishful, if not delusional, thinking.  Some members of our team have devoted years of their lives to seeing change enacted and were instrumental in exposing robo-signing and other illegal activities since the very beginning of the crisis.  Based on those experiences, we’ve known for years that changing the banking industry’s practices, which have been whitewashed and enabled by the powers that be, would be extremely unlikely.  Change may come at some point but it’s apparently not coming from exposing the endless criminal activities of the banking class.  What we can do, however, is win cases and best serve our clients, one case, deposition, argument, motion, hearing and trial at a time!  We can also see to it that the bank refunds our clients all their attorney’s fees paid to us when we do win, like we have in this case.