Natacha Peuguero and Angelo Peuguero v. Bank of America, N.A.

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT

NATACHA PEUGUERO and ANGELO PEUGUERO,
Appellants,

v.

BANK OF AMERICA, N.A., SUCCESSOR BY MERGER TO BAC HOME
LOANS SERVICING, LP, FKA COUNTRYWIDE HOME LOANS
SERVICING, LP,
Appellee.

No. 4D13-3210

[July 15, 2015]

Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Robin L. Rosenberg, Judge; L.T. Case No.
502009CA005550XX.

Thomas Erskine Ice and Amanda L. Lundergan of Ice Appellate, Royal
Palm Beach, and Thomas D. Hall of The Mills Firm, P.A., Tallahassee, for
appellants.

J. Randolph Liebler, Tricia J. Duthiers, Adam M. Topel, and Kristen
Tajak of Liebler Gonzalez & Portuondo, Miami, and Lisa J. Geiger and Matt
Mitchell of Burr & Forman, LLP, Orlando, for appellee.

FORST, J.

Appellants Natacha and Angelo Peuguero appeal the entry of a final
judgment of foreclosure in favor of Appellee Bank of America (“the Bank”).
While we disagree with Appellants’ argument that the foreclosing bank
failed to prove standing, we agree that the Bank failed to provide sufficient
evidence to support the judgment amount. Therefore, we affirm the trial
court’s entry of judgment, but we reverse and remand for a determination
of the correct amounts owed.

Background

Appellants executed a note and mortgage in favor of Diversified
Mortgage in August 2007. By 2009, Appellants were no longer able to
make payments on the loan. Countrywide Bank filed a complaint to
foreclose on the loan in August 2009, alleging that it was the owner and
holder of the note. The complaint included a count to reestablish a lost
note. Attached to the complaint was an unendorsed copy of the note.

In April 2011, Countrywide moved to amend the name of the plaintiff
in the action to the Bank, as Countrywide and the Bank had merged. An
amended complaint was filed by the Bank in December 2011. A copy of
the note, now including an allonge, was attached to the Amended
Complaint. The allonge contained endorsements from Diversified
Mortgage (the original lender) to Countrywide FSB, from Countrywide FSB
to Countrywide Home Loans, then back to Countrywide FSB, and finally a
blank endorsement. None of the endorsements were dated.

At trial, the Bank called one of its employees to testify. This witness
testified that she was familiar with the record-keeping practices of both
the Bank and Countrywide and that the payment history for this loan was
kept in the ordinary course of business. On the strength of this testimony,
the trial court admitted the payment history into evidence.

The witness was also asked to confirm the amount owed by Appellants
to the Bank. Relying on a proposed judgment drafted by the Bank, but
not entered into evidence, the witness testified to both the principal and
interest owed on the loan.

The trial court entered a final judgment of foreclosure in favor of the
Bank in the amount of $697,807.36. Appellants now appeal the judgment
against them, arguing the Bank’s witness was not qualified to testify, that
the original plaintiff in this action, Countrywide, did not have standing
when it filed the complaint, and that the trial court erred by allowing the
witness to testify from the proposed judgment. While we hold that the
Bank adequately proved Countrywide had standing to file the initial
complaint, we agree with Appellants’ challenge to the calculation of the
interest due as part of the judgment award.

Admissibility of Payment History

Appellants initially argue that testimony by the Bank’s witness
concerning Appellants’ loan payment history should have been deemed
inadmissible hearsay and not as an exception to the hearsay rule. The
business records exception, found in section 90.803(6), Florida Statutes
(2013), allows a party to introduce evidence that would normally be
inadmissible hearsay if:

(1) the record was made at or near the time of the event; (2)

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 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.

Yisrael v. State, 993 So. 2d 952, 956 (Fla. 2008). Here, the witness
provided enough testimony to meet these requirements.

We have previously addressed a similar situation in Cayea v.
CitiMortgage, Inc., 138 So. 3d 1214 (Fla. 4th DCA 2014). There, a
foreclosing bank introduced a printout of a loan payment history as a
business record. Id. at 1217. The bank called a witness, who testified
that other bank employees routinely input payments into the bank’s
computer system and that the record presented at trial was simply a
printout of the bank’s records that was printed specifically for trial. Id. at
1216. We affirmed the trial court’s admission of this document, holding
that the records were admissible, even if the printouts were not kept in the
ordinary course of business, “so long as a qualified witness testifies as to
the manner of preparation, reliability, and trustworthiness.” Id. at 1217.
Relying on Weisenberg v. Deutsche Bank National Trust Co., 89 So. 3d
1111, 1113 (Fla. 4th DCA 2012), we held that the witness had sufficient
knowledge where he “demonstrated his familiarity with [the bank]’s record-
keeping system and the process for uploading payment information.”
Cayea, 38 So. 3d at 1218.

Likewise, the witness in this case testified that even though she was
not responsible for maintaining or updating the records, she was familiar
with the Bank’s procedures for inputting payment information into the
proper computer systems. Although she was unable to give the precise
name for each group in the Bank’s structural hierarchy that was
responsible for entering various events into the computerized records, she
knew that events/transactions were processed at the time of their
occurrence and placed into the Bank’s systems, as per the standard
business practice of the Bank. Furthermore, the trial court did not find
any indication that the witness’s testimony was unreliable. Therefore,
based on our precedent in Cayea, we find that the witness was qualified
to lay the foundation for the admission of the business records.

“The law is . . . clear there is no per se rule precluding the admission of
computerized business records acquired from a prior loan servicer.”
Glarum v. LaSalle Bank Nat’l Ass’n, 83 So. 3d 780, 782 n.2 (Fla. 4th DCA
2011). The records from a prior servicer must, of course, have some indicia
of accuracy, either through personal knowledge of a witness, as discussed
in Holt v. Calchas, LLC, 155 So. 3d 499, 504 (Fla. 4th DCA 2015), or a

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showing of some contractual relationship between the current and prior
servicers. Bank of N.Y. v. Calloway, 157 So. 3d 1064, 1072 (Fla. 4th DCA
2015). For example, in WAMCO XXVIII, Ltd. v. Integrated Electronic
Environments, Inc., 903 So. 2d 230, 232-33 (Fla. 2d DCA 2005), the court
held that a document detailing amounts owed was admissible as a
business record even where the witness’s testimony was based on
information from a previous holder of the note. The witness testified that
he knew how the prior holder’s accounting systems worked and that “the
procedures were ‘bank-acceptable accounting systems.’” Id. at 233.
Further, the witness testified that the current holder verified the records
for accuracy when it obtained them. Id. In the instant case, the witness
testified that she was familiar with the record-keeping practices of the prior
holder of the note, Countrywide. She testified that, based on her training,
Countrywide and the Bank had identical procedures and record-keeping
systems in place.

A trial court’s ruling on the admissibility of evidence under the business
records hearsay exception is reviewed for an abuse of discretion. See
Cayea, 138 So. 3d at 1216; LEA Indus., Inc. v. Raelyn Int’l Inc., 363 So. 2d
49, 52 (Fla. 3d DCA 1978) (“[I]t lies within the trial court’s discretion to
determine whether admission of . . . business records is justified.”). In the
instant case, based on the weight afforded by the trial court to the
testimony of the Bank’s witness, the admission of the business records of
the prior note holder to establish the loan payment history was not an
abuse of discretion.

Standing

“A crucial element in any mortgage foreclosure proceeding is that the
party seeking foreclosure must demonstrate that it has standing to
foreclose. Standing may be established by either an assignment or an
equitable transfer of the mortgage prior to the filing of the complaint.”
McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So. 3d 170, 173 (Fla. 4th
DCA 2012) (internal citations omitted). “[A] party’s standing is determined
at the time the lawsuit was filed.” Id.

In this case, the original plaintiff, Countrywide, had standing at the
time it filed suit. At trial, the Bank offered the note, mortgage, allonge,
and notice-of-default letter into evidence. Although the witness was
unable to specify exactly when Countrywide first held the note, the loan
payment history reveals that Countrywide began receiving payments from
Appellants shortly after the closing date for the loan. Additionally, the loan
payment history indicates that Countrywide paid taxes and other fees
associated with the mortgaged property in the time prior to the filing of the

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original complaint. This is a noteworthy factor in determining standing,
as financial institutions are not known to incur expenses on behalf of
properties for which they do not hold an interest.

The undated allonge, in combination with the testimony of the Bank’s
witness, indicates that Countrywide, in various corporate forms, was a
holder of the note prior to the endorsement in blank. Where holder status
is based on an endorsement in blank, the plaintiff must prove that the
endorsement was effectuated before the lawsuit was filed. Feltus v. U.S.
Bank Nat’l Ass’n, 80 So. 3d 375, 377 n.2 (Fla. 2d DCA 2012). A plaintiff
need not prove the exact date of a necessary endorsement to show
standing at the inception of the foreclosure action—testimony that the
endorsement was effectuated before the filing of the complaint will suffice.
See McLean, 79 So. 3d at 173 (concluding an affidavit of ownership is
sufficient to prove standing).

Here, the witness responded in the affirmative to a cross-examination
inquiry as to whether the endorsements on the allonge were “definitely put
on before the filing of the complaint.” She testified that Countrywide
owned and held the note when the complaint was filed and that its policy
and procedure is to have notes endorsed before foreclosure complaints are
filed. “Evidence of the routine practice of an organization, whether
corroborated or not and regardless of the presence of eyewitnesses, is
admissible to prove that the conduct of the organization on a particular
occasion was in conformity with the routine practice.” § 90.406, Fla. Stat.
(2013); People’s Trust Ins. Co. v. Roddy, 134 So. 3d 1071, 1073 (Fla. 4th
DCA 2013); Shands Teaching Hosp. & Clinics, Inc. v. Dunn, 977 So. 2d 594,
599 (Fla. 1st DCA 2007) (“The existence of a routine practice creates an
inference that an agent or employee of the organization acted according to
the practice. In the absence of contrary evidence, jurors may properly
assume that an employee has adhered to established procedures.”
(citation omitted)).

The Bank, successor in interest to Countrywide, furnished sufficient
admissible testimony and evidence from which the trier of fact could
conclude that all endorsements on the allonge were made before the filing
of the complaint and that Countrywide was a holder with standing to
foreclose at the time of filing the original complaint.

Calculation of Interest Owed

Despite our agreement with the trial court that the Bank adequately
proved standing, we are compelled to partially reverse the trial court’s
ruling on the issue of damages. At trial, the only evidence of the amount

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of interest owed by Appellants came from the witness, who merely testified
that the amount written on a proposed final judgment was correct.
However, this proposed judgment was never admitted into evidence. While
the loan payment history, which was submitted into evidence, reflects the
amount of principal owed on the loan, there are no entries that indicate
the accrual of the almost $200,000 in interest the trial court granted to
the Bank.

“A document that was identified but never admitted into evidence as an
exhibit is not competent evidence to support a judgment.” Wolkoff v. Am.
Home Mortg. Servicing, Inc., 153 So. 3d 280, 281-82 (Fla. 2d DCA 2014).
In Wolkoff, the Second District reversed a judgment of foreclosure where
the plaintiff’s witness “merely confirmed that the totals given to him on a
proposed final judgment ‘seemed accurate’” and never actually stated the
total amount owed. Id. at 281. Similarly, in Sas v. Federal National
Mortgage Ass’n, 112 So. 3d 778, 779 (Fla. 2d DCA 2013), the plaintiff
presented witness testimony of the specific amount owed, but failed to
produce the business records upon which the witness relied.

While the court in Wolkoff remanded that case to the trial court with
instructions to enter an involuntary dismissal, 153 So. 3d at 283, the Sas
court remanded the case for further proceedings to establish the amounts
owed. 112 So. 3d at 780. We addressed the Wolkoff/Sas dichotomy in
Beauchamp v. Bank of New York, 150 So. 3d 827 (Fla. 4th DCA 2014). In
choosing remand rather than reversal, we noted

[t]he facts of the instant case are more similar to Sas than Wolkoff
because here, like the plaintiff in Sas, the Bank established the
amount of indebtedness through witness testimony, even though
that testimony concededly was inadmissible hearsay. This is unlike
Wolkoff, where the plaintiff failed to produce any evidence,
admissible or not, supporting the amount of indebtedness.

Id. at 829 n.2.

The instant case, like Beauchamp and Sas, featured a witness who
testified to an exact amount of damages, but relied on evidence not in the
record. Furthermore, unlike Wolkoff, the loan payment history here was
submitted into evidence. Therefore, the proper remedy in this case is to
remand for further proceedings to properly establish the damages owed.
See also Mazine v. M & I Bank, 67 So. 3d 1129, 1131 (Fla. 1st DCA 2011)
(remanding for new damages determination where documentary evidence
necessary to establish damage amount was erroneously admitted without
foundation).

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 Conclusion

The trial court properly admitted the loan payment history under the
business records exception. Likewise, the Bank was able to show the
original plaintiff had standing at the time it filed suit. However, the trial
court erred by basing the amount of the final judgment on a document not
in evidence. Therefore, we reverse and remand for determination of the
amounts owed.

Affirmed in part, reversed in part.

WARNER and GROSS, JJ., concur.

* * *

Not final until disposition of timely filed motion for rehearing.

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