Screwed Over Florida Homeowners Score Trial Court Reversals In Three Cases As Appeals Court Rejects Use Of 'Robo-Witnesses' Giving Inadmissible Heresay To Support Bankster Foreclosures; Cases Now Subject To Dismissal, May Create Statute Of Limitations Problem For Banksters Thinking Of Re-Filing Cases
- In three cases over two days, the First District Court of Appeal threw out evidence submitted in foreclosure actions and ruled the lenders' witnesses were unqualified.
In what appears to be a trend, the court said the trial courts in two of the three cases should dismiss the lawsuits altogether in favor of the homeowners.
The Oct. 13 and 14 decisions are believed to be the first to strike down so-called robo-witnesses in a homeowner's case with a lender as plaintiff, said foreclosure defense attorney Thomas Ice of Ice Legal in Royal Palm Beach.
The decisions should become effective statewide if the 30-day deadline for filing a motion for rehearing expires without further action by the lender.(1)
Ice said bank attorneys often come to trial in foreclosure cases with a single witness who lacks first-hand knowledge of the origin and accuracy of the mortgage records they describe.
"It's the same in almost every single bank case because they are always transferring these loans around. The loan servicers change at least once and very often several times between the time of the loan and the trial," Ice said.
In the years following the housing crash, Florida courts were flooded with home foreclosure filings. Defense attorneys protested plaintiffs firms were circumventing evidentiary rules by submitting forged assignments and other documents to prove standing. The so-called robo-signing scandal led to an attorney general's challenge in 2010 that forced lenders and servicers to stop filing new foreclosure cases.
When the banks resumed litigating cases, often under deadline pressures imposed by the chief circuit judges, they often relied on witnesses with limited knowledge of the mortgage documents.
In August 2013, the Fourth District issued a decision in a case involving a condominium owner and her association (see Yang v. Sebastian Lakes Condo. Ass'n Inc., 123 So. 3d 617 (Fla. 4th DCA 2013)). The owner, Connie Yang, got a reversal against Sebastian Lakes Condominium Association because it didn't lay the proper foundation to admit evidence from an accounting ledger.
Ice said foreclosure defense lawyers have used Yang's case to argue against unqualified lender witnesses, but judges have repeatedly told them the Fourth District case applied only to homeowner associations, not banks.
"I didn't realize they had different rules," Ice said facetiously. "That's why I kept waiting for a bank case. We needed a flat-out, on-point bank case."
'Burdeshaw v. BNY Mellon'
First District Judge Nikki Ann Clark in Tallahassee wrote the lengthiest opinion, a 17-page ruling against Bank of New York Mellon. In that case, Lloyd and Teresa Burdeshaw of Lynn Haven in Bay County appealed a final judgment of foreclosure by arguing the evidence to support the amount of indebtedness was inadmissible hearsay.
Clark noted that the bank's witness—loan servicer employee Nancy Johnson of SunTrust Mortgage Inc.—did not know where any information on payments made before SunTrust's acquisition of the account came from. She never testified whether the entries were made at the time of the event; by a person with knowledge; kept in the ordinary course of business; and as a regular business practice—all crucial elements for laying the foundation.
"BNY Mellon failed to establish any foundation qualifying the printout Ms. Johnson read as a business record and failed to establish any foundation qualifying Ms. Johnson as a records custodian or person with knowledge of the four elements required for the business records exception," Clark said. The Burdeshaw v. BNY Mellon panel included Judges William Van Nortwick and L. Clayton Roberts.
The panel also found the trial court should have dismissed the case in Burdeshaw's favor years ago because a 2010 motion to dismiss for inactivity was valid. Under judicial rules, a motion or other plea must be filed within 60 days to keep a case active; otherwise, it is subject to dismissal.
"This case does not present a reason to afford BNY Mellon additional time and another opportunity to prove its case. As the Second District has held, 'appellate courts do not generally provide parties with an opportunity to retry their case upon a failure of proof,' "(2) Clark said.
Clark's opinion was all the more remarkable because it was one of three issued by the First District in two days that reversed foreclosures and sided with homeowners based on hearsay testimony, said Jeffrey Whitton of Panama City, Burdeshaw's attorney.
"What I find interesting here is they didn't just vacate and remand, they vacated with instruction to dismiss. If I'm reading the tea leaves, the message here is that district courts are not in the business of giving second chances," Whitton said.
"I would think the First District was trying to face the problem of some of the quality of evidence involving foreclosure cases. If you just looked at that as a coincidence, three opinions in two days involving a number of different judges, you have to realize there is some trending there," he added.
Two More Rulings
Although Clark's was the lengthiest, all of the opinions were detailed. Kiefert v. Nationstar Mortgage, a six-page opinion by Judge Robert Benton II, reversed because the bank witness was only able to establish that its predecessor, Aurora Loan Services LLC, was in possession of the note when the complaint was filed, "not that the note had been endorsed at the time the complaint was filed."
And in Lacombe v. Deutsche Bank National Trust, an unsigned, the appeals court concluded the bank's witness was "incoherent."
As in Burdeshaw, the Lacombe court refused to remand the case for the presentation of additional evidence, citing the length of time—more than five years—that Deutsche Bank National Trust Co. had to prepare and instead instructed the trial court to dismiss the case.(3)
If the First District opinions stand, Ice said foreclosure courts should at last be treating evidence like other courts do.
Long frustrated with what he sees as a double standard, Ice said judges in medical malpractice and other areas of law would not tolerate the coaching that goes on in foreclosure trials.
"They're just feeding witnesses with hearsay so that they can regurgitate these magic words in court," Ice said. "That's improper. It's one thing to be trained for the job, to be able to say, 'I'm trained to put these records into the computer when I get a check from the customer.' That qualifies you to testify about the record. But to be told how it works for litigation purposes is the very worst kind of hearsay that there is."
He added, "If that's enough to get records in, then why have witnesses at all? Just toss these records up on the bench and tell the judge, 'Here, read them.'"
Austin Brown of Parker & DuFresne in Jacksonville represented the Lacombes.
Thomas Pycraft of Pycraft Legal Services in St. Augustine represented the Kieferts.
Editor's Note: Now that the screwed over homeowners are considered the prevailing parties in these successful appeals, their attorneys are entitled to an award for legal fees, even if the case was taken on a pro bono basis, with the losing banksters being on the hook for picking up the tab to be awarded by the trial judge (go here for earlier posts on prevailing party attorney fees).
Further, to the extent these cases were taken by the attorneys on a contingency fee or pro bono basis, they may also be entitled to apply a contingency fee risk multiplier / enhancement to the amount the trial judge ultimately awards in prevailing party legal fees, serving to increase the total tab to be paid by the losing bankster. See, for example, Bank of New York v. Williams, 979 So.2d 347 (Fla. 1st DCA 2008), where Florida's 1st District Court of Appeal ok'd a multiplier of 2.5 in a successful foreclosure defense. Go here for earlier posts on the contingency fee risk multiplier.
(1) Unless and until the Florida Supreme Court addresses this issue, and to the extent there are no conflicting rulings from sister Florida appeals courts, the rulings by Florida's 1st District Court of Appeal in these cases will, upon the expiration of the 30-day period for requesting a re-hearing, be binding, not only on all trial courts within the 1st District, but on all trial courts throughout the state of Florida. See:
Gross v. State, 765 So. 2d 39 (Fla. 2000):
- A trial court is obligated to follow decisions of the district court of appeal, and where there is no decision on point from the district court for the circuit in question, the trial court is bound to follow precedents of other district courts of appeal. See Pardo v. State, 596 So.2d 665, 666-67 (Fla.1992) ("[I]n the absence of interdistrict conflict, district court decisions bind all Florida trial courts.").
- This Court has stated that "the decisions of the district courts of appeal represent the law of Florida unless and until they are overruled by this Court." Stanfill v. State, 384 So.2d 141, 143 (Fla. 1980).
Thus, in the absence of interdistrict conflict, district court decisions bind all Florida trial courts. Weiman v. McHaffie, 470 So.2d 682, 684 (Fla. 1985).
The purpose of this rule was explained by the Fourth District in State v. Hayes:
"The District Courts of Appeal are required to follow Supreme Court decisions. As an adjunct to this rule it is logical and necessary in order to preserve stability and predictability in the law that, likewise, trial courts be required to follow the holdings of higher courts--District Courts of Appeal.
The proper hierarchy of decisional holdings would demand that in the event the only case on point on a district level is from a district other than the one in which the trial court is located, the trial court be required to follow that decision.
Alternatively, if the district court of the district in which the trial court is located has decided the issue, the trial court is bound to follow it. Contrarily, as between District Courts of Appeal, a sister district's opinion is merely persuasive."
333 So.2d 51, 53 (Fla. 4th DCA 1976) (footnote and citations omitted).[See generally Taylor Mattis, Stare Decisis Among and Within Florida's District Courts of Appeal, 18 Fla.St.U.L.Rev. 143, 155-160 (1990).]
Ansin v. Thurston, 101 So.2d 808 (Fla. 1958), where the Florida Supreme Court made clear that its jurisdiction to hear appeals is extremely narrow, and commented on the finality of the rulings of the lower Florida appellate courts:
- We have heretofore pointed out that under the constitutional plan the powers of this Court to review decisions of the district courts of appeal are limited and strictly prescribed. Diamond Berk Insurance Agency, Inc., v. Goldstein, Fla., 100 So.2d 420; Sinnamon v. Fowlkes, Fla., 101 So.2d 375.
It was never intended that the district courts of appeal should be intermediate courts. The revision and modernization of the Florida judicial system at the appellate level was prompted by the great volume of cases reaching the Supreme Court and the consequent delay in the administration of justice. The new article embodies throughout its terms the idea of a Supreme Court which functions as a supervisory body in the judicial system for the State, exercising appellate power in certain specified areas essential to the settlement of issues of public importance and the preservation of uniformity of principle and practice, with review by the district courts in most instances being final and absolute.
To fail to recognize that these are courts primarily of final appellate jurisdiction and to allow such courts to become intermediate courts of appeal would result in a condition far more detrimental to the general welfare and the speedy and efficient administration of justice than that which the system was designed to remedy.
- The District Courts of Appeal were never intended to be intermediate courts. It was the intention of the framers of the constitutional amendment which created the District Courts that the decision of those courts would, in most cases, be final and absolute.
(2) See Wolkoff v. American Home Mortg. Servicing, Inc., ___ So. 3d ___, 39 Fla. L. Weekly D1159, 2014 WL 2378662 (Fla. 2d DCA May 30, 2014).
(3) Inasmuch as Florida's statute of limitations for commencing foreclosure cases is five years (see Sec. 95.11(2)(c), Florida Statutes), I wonder if this means that the mortgage on this home can no longer be foreclosed (ie. Did the homeowner just win a 'free' house???).