Consumer Finance Litigation

In Hunter v. Aurora Loan Services, LLC, Case No. 1D12-6071 (Fla. 1st DCA March 4, 2014), the First District Court of Appeals found that a lender must lay the necessary foundation under the business records exception to admit documentation from a prior servicer into evidence. Florida Statutes, § 90.803(6) states that the party seeking admission of hearsay under the business records exception must establish four things. First, that the record was made at or near the time of the event; second, that the record was made by or from information transmitted by a person with knowledge; third, that the record was kept in the ordinary course of a regularly conducted business activity; and finally, that it was a regular practice of that business to make such a record. See Yisrael v. State, 993 So. 2d 952, 956 (Fla. 2008); King v. Auto Supply of Jupiter, Inc., 917 So. 2d 1015, 1018 (Fla. 1st DCA 2006). In this case, Aurora Loan Services, LLC ("Aurora") sought to introduce two computer generated documents. The first, entitled "Account Balance Report," indicated that the borrower's (Hunter's) loan was sold to Lehman brothers, of which Aurora is a subsidiary, prior to the commencement of the foreclosure action. The second, entitled "consolidated notes log," indicated that the physical note and mortgage were sent via two-day UPS prior to the commencement of the foreclosure action. Neither document specifically indicated who generated it, although Aurora asserted these documents originally came from MortgageIT. Aurora's witness, Mr. Martin, testified to MortgageIT's business practice which he claimed to be standard across the mortgage industry although he never worked for MortgageIT. He further had no knowledge about who generated the notations in the above referenced "consolidated notes log" or "Account Balance Report" or where that individual obtained that information. However, he was able to state that a records custodian typically input notes into the "consolidated notes log" and the account's payable department typically creates the "Account Balance Report." The Court found that Mr. Martin's knowledge regarding these documents was insufficient to lay the necessary foundation to admit them as evidence of Aurora's standing under the business records exception. The Court seemed to focus on the fact that Mr. Martin was neither a current or former employee of MortgageIT and was unable to testify with particular knowledge of MortgageIT's record-keeping procedures. The Court stated that without this knowledge, Mr. Martin "was unable to substantiate when the records were made, whether the information they contain derived from a person with knowledge, whether MortgageIT regularly made such records, or, indeed, whether the records belong to MortgageIT in the first place." In other words, the Court found that Mr. Martin was unable to satisfy all four of the necessary requirements to establish either the "consolidated notes log" or the "Account Balance Report" as a business record.