Hearsay Objections in Foreclosure Trials

Do you understand when it is appropriate to interpose a hearsay objection in a foreclosure trial?  I watched numerous foreclosure trials in Sarasota today, and I’m convinced most of the foreclosure industry doesn’t know when/how to make a hearsay objection.  Heck, most homeowners don’t even defend their own foreclosure case at trial, much less retain counsel who understands the evidentiary issues at trial.

Explaining all of the circumstances where hearsay applies, as well as its exceptions, is beyond the scope of this blog.  After all, “hearsay” could be an entire class in law school.  That said, there are a few examples worth mentioning, particularly in the context of foreclosure trials.

When you think of a “trial,” you probably think of testimony.  What does “testimony” mean to you?  If you’re like me, when you think of testimony, you probably think of something tangible … something a witness saw with his eyes or heard with his ears.  Perhaps it’s an eyewitness to a car accident explaining “I saw the traffic light; it was red.”  Or perhaps it’s a jailhouse informant in a criminal case testifying “I spoke to the defendant in prison.  He told me he stabbed the victim in the chest.”

This is the classic way testimony is presented at trial – when the witness explains something he saw with his eyes or heard with his ears.  That’s what makes one a “witness” – when he hears something or sees something.

I lay that backdrop because that’s virtually never how it happens at foreclosure trials.  Foreclosure plaintiffs almost always brings one witness to trial, and that witness is almost never a “witness” to anything.  That person didn’t see anything, and that person didn’t hear anything.  Rather, that person typically does little more than act as a records custodian, introducing business records of the plaintiff into evidence.  The plaintiff tries to use these “business records” to prove their entitlement to foreclose.

For example, do you think the witness who comes to trial ever has any personal knowledge of the homeowner being in default?  Or of the amounts allegedly owed?  Of course not.  That witness’s knowledge is based solely on his/her review of the plaintiff’s business records.  Hence, the plaintiff’s ability to prove these issues is predicated on its ability to introduce those business records into evidence.

The Second District explained this concept quite clearly in its May 17, 2013 decision in Sas v. Fannie Mae, Case No. 2D11-6327 (Fla. 2d DCA 2013).  There, the lower court allowed the bank’s witness to testify about the amounts allegedly owed where the witness was testifying not from business records that were admitted into evidence, but from “notes.”  In Sas, the Second District reversed the Final Judgment, explaining ”the trial court abused its discretion in allowing Greenlee to testify over objection about the contents of Fannie Mae’s business records to prove the amount of the debt without having first admitted those business records.”

What is required for a foreclosure plaintiff to establish that documents are “business records” and are admissible into evidence?  Florida Statute 90.803(6)(a) sets forth the requirements:

A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinion, or diagnosis, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity and if it was the regular practice of that business activity to make such memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness, unless the sources of information or other circumstances show lack of trustworthiness.

If the plaintiff can’t satisfy all of these elements of the statute, the documents should not be admitted into evidence.  And as Sas explains, if the documents aren’t admitted, the witness can’t testify from them.  If that happens, guess what that means?  The plaintiff can’t prove its case at trial, and the homeowner prevails.

If you want a specific example, think about the paragraph 22 letters about which I’ve so frequently blogged.  At trial, do you think the witness ever testifies that he/she sent that letter to the homeowner?  Pfft.  Virtually never.  The witness relies on business records.

Typically, the plaintiff tries to establish the Paragraph 22 letter is a business record.  As I see it, though, establishing the letter is a business record under Fla. Stat. 90.803(6)(a) may prove that the letter exists in the plaintiff’s file, but it doesn’t prove the letter was sent.  Unless that witness actually sent the letter (very unlikely), then the witness should have to point to a business record, already admitted into evidence, establishing the letter was sent.   Otherwise, any testimony the letter was sent is inadmissible hearsay.

I realize this isn’t the most sexy or exciting topic.  Let’s be honest.  It’s boring, legal jargon.  But these are the types of arguments that need to be made at foreclosure trials.  Trust me – if we prevail on these arguments, and your foreclosure case is dismissed, they won’t appear quite so boring any more.

Mark Stopa

Posted in Main | No Comments »

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Anti-Spam Quiz: