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.
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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.
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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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