Consumer Finance Litigation

In Ensler v. Aurora Loan Servs., LLC, the Fourth District Court of Appeal of Florida was faced with the issue of whether a prior mortgage loan servicer's documents could be introduced into evidence when the current servicer testified the prior servicer's records were "accurate" because "[t]hey're a reputable big company and we trust them and they trust us." At trial, Plaintiff sought to introduce the following documents into evidence (through the testimony of the current servicer): the breach letter, payment history, and power of attorney. All of these documents were authored and created by the prior servicer. During the trial, the witness for the current servicer conceded that she had never visited the prior servicer, never worked for the prior servicer, never spoke to any employee of the prior servicer, and did not have knowledge of how the prior servicer processed payments, kept its payment history, or compiled and stored its records. After Plaintiff rested its case-in-chief, Ensler moved for an involuntary dismissal of the action because she claimed Plaintiff failed to satisfy the requisite elements for the prior servicer documents to be considered admissible under the business records exception in Fla. Stat. § 90.803(6)(a). The trial court denied this motion and ultimately entered judgment in Plaintiff's favor. Ensler then appealed the denial of the motion for involuntary dismissal based on the lack of competent substantial evidence concerning (1) damages and (2) entitlement to foreclose based on Plaintiff's alleged failure to satisfy the business records exception in the Florida evidence code. In order to satisfy the business records exception in Fla. Stat. § 90.803(6)(a), the proponent of the record must establish 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) that it was a regular practice of that business to make such a record.

The Court relied upon the holding in Holt v. Calchas, LLC, 155 So. 3d 499, 505 (Fla. 4th DCA 2015), which provided "a witness's general testimony that a prior note holder follows a standard record-keeping practice, without discussing details to show compliance with section 90.803(6), is not enough to establish a foundation for the business records exception." However, "where the current note holder ha[s] procedures in place to check the accuracy of the information it received from the previous note holder," then "[the] subsequent note holder can [] provide testimony" to satisfy the business records exception. Id. at 506. The Court stated that in the case at bar, Plaintiff failed to satisfy the requirements of the business records exception by failing to lay the appropriate foundation. Plaintiff's sole witness never worked for the prior servicer, never visited the prior servicer, and never spoke to any employee of the prior servicer. Further, the witness lacked any knowledge of how the prior servicer processed, compiled, or retained its business records. Moreover, Plaintiff's sole witness also failed to provide any testimony as to the mechanisms the current servicer utilized to check the accuracy of the prior servicer information. As such, the trial court's entry of judgment was reversed and remanded for further proceedings. Rarely does a residential mortgage foreclosure action get to the trial stage without a plaintiff having to rely on prior servicer records. Recently, Florida courts have consistently required that all of the elements of the business records exception be clearly established at trial. In this action, Plaintiff's sole witness lacked the personal knowledge to lay the necessary foundation to introduce the documents. At the very least, Plaintiff should have determined if the witness could speak with someone or receive training from the prior servicer regarding their record-keeping activities prior to the trial. Further, it also appears that the Plaintiff failed to elicit any testimony regarding the current servicer's boarding process that analyzes the accuracy of prior servicer records.