South Florida Foreclosure Defense and Consumer Protection Lawyer Blog

Another amazing trial win, based entirely on our own appellate precedent! G-d bless the 4th DCA for getting it right in Rattigan, http://www.4dca.org/opin…/June%202016/06-01-16/4D15-1087.pdf

We lost a trial in January of 2015 even though I thought we had a very clear winnable issue based on the “best evidence rule.” This rule is a fairly small body of law but it seems many lawyers and judges struggle to fully comprehend what it means and how it gets applied. In this case, the trial judge gave us ample time and consideration to make our argument. However, he ultimately did not agree with our position and entered final judgment against our clients. We appealed and the Fourth District Court of Appeal of Florida agreed with us. JUDGMENT REVERSED! CASE DISMISSED!

4th DCA Opinion Reversing Final Judgment & Remanding for Entry of Involuntary Dismissal

Trial Transcript

This was one of our more complex cases.  Suit was filed in mid-May, 2009. There were ten trial orders setting the case for trial. Ultimately, trial started in February of 2015 and was spread out over three days, months apart. Finally, in June of 2015, trial was concluded – with a dismissal in favor of our client!

Here are the highlights of this great win for our war hero client:

When suit was filed, the Plaintiff didn’t attach even a copy of the note to Complaint, as is required by Florida Rule of Civil Procedure 1.130. Subsequent to filing suit, they filed a copy of a note with an allonge. We often “joke” in the industry that an allonge is a French word for fraud but it is legally defined as an indorsement to the note made on a separate piece of paper, which must be firmly affixed to the note. The Plaintiff later filed an “original” note but the “original” didn’t have that allonge. At trial, they suddenly claimed the allonge was lost.  After all this time, the Plaintiff never moved to amend their complaint to plead lost note and attach the note with a copy of the lost allonge.  There is an abundance of law which holds that the parties are bound to their pleadings.  The pleadings frame the issues for trial and, generally, what the Plaintiff pleads in their complaint, limits what they can raise and attempt to prove at trial.  Without a court order, agreement between the parties or implied consent, a party cannot suddenly switch their theory of recovery at trial for the first time.  Regardless, the Plaintiff never proved up any of the elements required to enforce a lost note.

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.