Court Opinion

ID: 4166453
Source: CourtListenerOpinion
Date Created: 2017-05-05 14:10:20.354909+00
Date Added: 2024-06-11T09:24:18.670475
License: Public Domain

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
                     MOTION AND, IF FILED, DETERMINED

                                             IN THE DISTRICT COURT OF APPEAL

                                             OF FLORIDA

                                             SECOND DISTRICT

ANDREA S. EVANS,                   )
                                   )
           Appellant,              )
                                   )
v.                                 )                       Case No. 2D15-433
                                   )
HSBC BANK, USA, NATIONAL           )
ASSOCIATION; ASSOCIATION OF        )
POINCIANA VILLAGES                 )
INCORPORATED; POINCIANA            )
VILLAGE SEVEN ASSOCIATION,         )
INCORPORATED; AINSLEY JONES;       )
UNKNOWN TENANT(S) IN               )
POSSESSION OF THE SUBJECT          )
PROPERTY,                          )
                                   )
           Appellees.              )
___________________________________)

Opinion filed May 5, 2017.

Appeal from the Circuit Court for Polk
County; Cecelia M. Wilhite, Senior Judge.

Dineen Pashoukos Wasylik of DPW Legal,
Tampa, for Appellant.

Wm. David Newman, Jr. of Choice Legal
Group, P.A., Fort Lauderdale, for Appellee
HSBC Bank, USA, N.A.

No appearance for remaining Appellees.

LaROSE, Judge.
              Andrea S. Evans appeals the final judgment of foreclosure entered in

favor of HSBC Bank, USA, National Association (HSBC Bank), and the dismissal of her

counterclaim. We have jurisdiction. See Fla. R. App. P. 9.030(b)(1)(A). Ms. Evans

raises five issues on appeal. 1 The parties agree that we should reverse and remand as

to two issues: (1) the trial evidence was legally insufficient to establish the amount owed

by Ms. Evans on her home loan; and, (2) the trial court erred in dismissing with

prejudice Ms. Evans' counterclaim for trespass. We reverse and remand for further

proceedings on these two issues. We affirm the final judgment in all other respects

without further comment.

              As to the first issue noted, above, the parties disagree as to the proper

relief that the trial court should afford on remand. Ms. Evans contends that because

HSBC Bank failed to prove damages, we should direct the trial court to dismiss the

case. HSBC Bank, on the other hand, argues that the trial court should conduct further

proceedings to determine the amount of the debt owed. As explained below, we agree

with HSBC Bank on this point.

                                        Background

              In 2006, Ms. Evans financed the purchase of a home by executing a

promissory note and mortgage in favor of HSBC Mortgage Corporation. HSBC

Mortgage endorsed the note in blank. Following Ms. Evans' 2009 payment default,

HSBC Bank, as the noteholder and mortgage servicer, sued to foreclose. Ms. Evans

              1Ms.   Evans originally raised six issues, but withdrew an issue after
briefing.

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answered the complaint, raising several affirmative defenses, and a trespass

counterclaim. The trial court dismissed the counterclaim, finding that the allegations

lacked particularity. 2

               At a 2014 bench trial, HSBC Bank offered the testimony of Angela

Stubblefield, from PHH Mortgage Corporation, a loan subservicer for HSBC Bank. Her

knowledge of the loan came from reviewing HSBC Bank's records. Through Ms.

Stubblefield's testimony, HSBC Bank sought to admit a payment history into evidence.

The payment history was based on records from three different servicers.

               Ms. Stubblefield confirmed that PHH created little of the twenty-five-page

payment history. In fact, an entity named "The Mortgage Service Center" created a

significant portion. Ms. Stubblefield insisted that the entire payment history was a

business record "because they were transferred over to . . . PHH." Yet, she could only

surmise that the payment history entries were "made by an individual with the

responsibility to enter data accurately and contemporaneously with the events

recorded." Ms. Stubblefield was unable to testify as to the procedures used to "board"

the entries into PHH's records. Over Ms. Evans' objections, the trial court admitted the

payment history into evidence. Ms. Stubblefield then testified that the damages

reflected in the proposed judgment were accurate. HSBC Bank neither offered nor

               2The  order operated as a dismissal with prejudice. See Fla. R. Civ. P.
1.420(b) ("Unless the court in its order for dismissal otherwise specifies . . . any
dismissal . . . other than a dismissal for lack of jurisdiction or for improper venue or for
lack of an indispensable party . . . operates as an adjudication on the merits."); 1.420(c)
(applying the provisions of rule 1.420 to counterclaims).

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admitted the proposed judgment into evidence. The trial court entered a final judgment

in favor of HSBC Bank.

                                           Analysis

I.     The Payment History as Evidence of Damages

                We review a trial court's decision on the admissibility of evidence for an

abuse of discretion; that discretion, however, is limited by the rules of evidence. See

Sottilaro v. Figueroa, 86 So. 3d 505, 507 (Fla. 2d DCA 2012). Thus, we apply a de

novo standard of review to the extent that the trial court's ruling is an interpretation of

the evidence code or case law construing the code. See id.

                " 'Hearsay' is a statement, other than one made by the declarant while

testifying at the trial . . . , offered in evidence to prove the truth of the matter asserted."

§ 90.801(1)(c), Fla. Stat. (2014). Hearsay is inadmissible, unless specifically exempted

under the evidence code. § 90.802. Business records are such an exception. See §

90.803(6)(a).

                To admit the payment history into evidence as a business record, HSBC

Bank had to prove the following:

                (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) [it] was a
                regular practice of that business to make such a record.

Yisrael v. State, 993 So. 2d 952, 956 (Fla. 2008). Although HSBC Bank did not have to

present the testimony of the individual who actually prepared the payment history, "the

witness through whom a document is being offered must be able to show each of the

requirements for establishing a proper foundation." Mazine v. M & I Bank, 67 So. 3d

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1129, 1132 (Fla. 1st DCA 2011) (citing Forester v. Norman Roger Jewell & Brooks, 610

So. 2d 1369, 1373 (Fla. 1st DCA 1992)).

             "Typically a foreclosure plaintiff proves the amount of indebtedness

through the testimony of a competent witness who can authenticate the mortgagee's

business records and confirm that they accurately reflect the amount owed . . . ."

Wolkoff v. Am. Home Mortg. Servicing, Inc., 153 So. 3d 280, 281 (Fla. 2d DCA 2014).

Ms. Stubblefield was not a competent witness. She was unable to testify to any of the

procedures of the prior servicers or to PHH's own procedures to incorporate the prior

servicer's records into its own. Although Ms. Stubblefield testified that the payment

histories maintained by HSBC Mortgage and HSBC Bank were transferred to PHH, and

that PHH used the same servicing system as HSBC Bank, she offered no testimony

concerning the accuracy of the prior servicer's records before they were boarded into

PHH's system. Quite simply, Ms. Stubblefield lacked any knowledge as to the

preparation or maintenance of the payment history or the accuracy of its contents.

             Despite these shortcomings, Ms. Stubblefield testified that the payment

history was a business record, contemporaneously and routinely created and kept in the

regular course of business. Nevertheless, the payment history did not meet the

safeguards of section 90.803(6)(a). See Landmark Am. Ins. Co. v. Pin-Pon Corp., 155

So. 3d 432, 441 (Fla. 4th DCA 2015) ("[T]he fact that a witness employed all the 'magic

words' of the exception does not necessarily mean that the document is admissible as a

business record." (citing Yang v. Sebastian Lakes Condo. Ass'n, 123 So. 3d 617, 621-

22 (Fla. 4th DCA 2013))). Accordingly, the admission of the payment history into

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evidence was erroneous. Consequently, HSBC Bank failed to present sufficient

evidence as to its damages. See Wagner v. Bank of Am., N.A., 143 So. 3d 447, 448

(Fla. 2d DCA 2014) ("A damages award must be supported by competent, substantial

evidence." (citing Shakespeare v. Prince, 129 So. 3d 412, 413-14 (Fla. 2d DCA 2013))).

We must reverse this portion of the final judgment.

              We now address the appropriate remedy on remand. "It is axiomatic that

the party seeking foreclosure must present sufficient evidence to prove the amount

owed on the note." Wolkoff, 153 So. 3d at 281. Generally, "[w]hen a party seeking

monetary damages fails to establish an evidentiary basis for the damages ultimately

awarded at trial, reversal for entry of an order of dismissal is warranted." Id. at 283

(citing Morton's of Chi., Inc. v. Lira, 48 So. 3d 76, 80 (Fla. 1st DCA 2010)).

              Ms. Evans argues that we should direct the trial court to dismiss the

foreclosure case. "[A]ppellate courts do not generally provide parties with an

opportunity to retry their case upon a failure of proof." Correa v. U.S. Bank Nat'l Ass'n,

118 So. 3d 952, 955 (Fla. 2d DCA 2013) (alteration in original) (quoting Morton's, 48 So.

3d at 80)); see also Carlough v. Nationwide Mut. Fire Ins. Co., 609 So. 2d 770, 771–72

(Fla. 2d DCA 1992) ("[U]pon remand, Nationwide should not be given a second bite at

the apple to present evidence which it failed to produce at the scheduled evidentiary

hearing." (citing In re Forfeiture of 1987 Chevrolet Corvette, 571 So. 2d 594 (Fla. 2d

DCA 1990))). Significantly, however, courts have drawn a distinction between cases in

which the plaintiff submitted some evidence of damages and cases where there has

been a complete failure of proof on the issue. See Beauchamp v. Bank of N.Y., 150 So.

                                            -6-
3d 827 (Fla. 4th DCA 2014); Lasala v. Nationstar Mortg., LLC, 197 So. 3d 1228 (Fla. 4th

DCA 2016). For instance, in Sas v. Federal National Mortgage Ass'n, 112 So. 3d 778,

779 (Fla. 2d DCA 2013), the bank offered witness testimony as to the amount of

indebtedness, but offered no business records to support the testimony. Similar to Ms.

Evans' case, the witness "had no personal knowledge of the amount of the debt . . . and

testified about the amount based only on his review of [the servicer]'s business records

related to the loan." Id. The Sas court affirmed the final judgment, but reversed and

remanded for the trial court to determine the amount of damages with nonhearsay

evidence. Id. at 780; see also Peuguero v. Bank of Am., N.A., 169 So. 3d 1198, 1204

(Fla. 4th DCA 2015) (affirming final judgment of foreclosure but reversing and

remanding for determination of the amounts owed where "the Bank established the

amount of indebtedness through witness testimony, even though that testimony

concededly was inadmissible hearsay" (quoting Beauchamp, 150 So. 3d at 829 n.2)).

               In contrast, the plaintiff in Wolkoff sought to prove damages by eliciting

testimony from a witness based solely upon the proposed final judgment. We rejected

the attempt to introduce the contents of the proposed final judgment as substantive

evidence. Wolkoff, 153 So. 3d at 281-82 ("A document that was identified but never

admitted into evidence as an exhibit is not competent evidence to support a judgment.").

The Wolkoff court reasoned that "[u]nlike the lender[] in [Sas] . . . [plaintiff] failed to

submit into evidence either the amount of indebtedness or the business records on

which the amount was based." Id. at 282.

                                              -7-
              In the case before us, HSBC Bank sought to establish the amount owed

through Ms. Stubblefield's testimony concerning the payment history. That record,

although admitted into evidence, was hearsay. Yet, unlike the Wolkoff plaintiff, Ms.

Stubblefield's testimony showed that HSBC Bank did not fail "to offer any evidence at

all—whether admissible or not." Beauchamp, 150 So. 3d at 829 n.2; see also Ottawa

Props. 2 LLC v. Cent. Mortg. Co., 202 So. 3d 102, 103 (Fla. 4th DCA 2016) ("Because

there was some, but insufficient, evidence of the total amount of indebtedness, we

reverse on the issue of damages and remand for further proceedings."). Our case

aligns with Sas. Thus, the "proper remedy . . . is to remand for further proceedings to

properly establish the damages owed." Peuguero, 169 So. 3d at 1204.

II.    Dismissal of Trespass Counterclaim

              Finally, because the trial court erred in dismissing Ms. Evans' counterclaim

for trespass without leave to amend, we reverse the order dismissing the counterclaim

and remand with directions that Ms. Evans be permitted to file an amended

counterclaim. See Strader v. Carpenters Crest Owners Ass'n, Inc., 968 So. 2d 621, 622

(Fla. 2d DCA 2007); Rohlwing v. Myakka River Real Props., Inc., 884 So. 2d 402, 405-

407 (Fla. 2d DCA 2004).

                                      Conclusion

              Affirmed in part; reversed in part; remanded for further proceedings

consistent with this opinion.

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CRENSHAW and MORRIS, JJ., Concur.

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