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Florida Court Reverses Foreclosure Judgment, But Remands Without Involuntary Dismissal

The District Court of Appeal of Florida, Second District, recently reversed a final judgment of foreclosure, holding that the mortgagee failed to properly establish the amount of its damages.

dca-chart-smallHowever, the Appellate Court further held that because the borrower failed to move for dismissal at the close of evidence, the proper remedy was reversal and remand, rather than involuntary dismissal.

A copy of the opinion is available at: Link to Opinion

A mortgagee filed a foreclosure action against the borrowers in early 2009.  Ultimately, the case was tried in November of 2013.  It was undisputed at trial that the mortgagee had standing as the holder of the note and mortgage, and that the borrowers defaulted under the note.

At trial, the mortgagee’s witness, an employee of its servicer, introduced into evidence the servicer’s power of attorney between it and the mortgagee, its breach and acceleration notices to the borrowers, and the loan payment history. The mortgagee’s witness testified that the servicer’s loan payment history “comported” with the amounts listed on the proposed final judgment of foreclosure.

On cross, however, the mortgagee’s witness admitted that he was not aware of the mortgagee’s actual accounting procedures.  The witness also failed to testify as to the amount of indebtedness, or how to read and understand the loan history evidence in order to calculate the amount due.  At the close of evidence, the borrowers “moved to have [the mortgagee’s witness’s] testimony stricken as unreliable.”  Notably, however, the borrowers did not move for involuntary dismissal or for a directed verdict.

The borrower’s motion was denied and the trial court entered the final judgment of foreclosure that was proposed by the mortgagee.  The borrowers appealed.  On appeal, the borrowers argued that “there was no evidence of the damages included in the final judgment and that [the mortgagee’s] witness merely affirmed that the numbers in the proposed final judgment were correct without elaboration or explanation.”  The Appellate Court agreed, noting that the payment history “consisted of twenty-six pages of coded data entries with no final totals,” and that “[t]here was no testimony explaining these documents or the figures in them, nor was there testimony as to the amount of indebtedness.”

Thus, the Appellate Court concluded that the available evidence did not allow the trial court to properly determine that the figures in the mortgagee’s proposed final judgment were accurate.   The Appellate Court also found that there had been no evidence provided for the amount of attorneys’ fees and court costs also awarded by the trial court.  Notably, the mortgagee’s counsel failed to file its fee and costs affidavit prior to trial as required.  However, the Appellate Court declined to instruct the trial court to involuntarily dismiss the foreclosure action with prejudice.  The borrowers sought such relief, yet the appellate court found that they had failed to move for directed verdict at the close of the evidence.

The Appellate Court rejected the mortgagee’s attempt to introduce the original note and mortgage into evidence, ruling that these documents were to be filed on record with the clerk prior to entry of judgment – rather than admitted into evidence – pursuant to Deutsche Bank Nat’l Trust Co. v. Huber, 137 So. 3d 562, 564 (Fla. 4th DCA 2014).  While not specifically stated by the Appellate Court in its opinion, it does appear that the mortgagee’s counsel did so.

In sum, the Appellate Court determined that the mortgagee failed to properly introduce evidence of the amount of the borrowers’ indebtedness. The Appellate Court also held that the mortgagee’s witness, an employee of its servicer, was not able to reliably testify as to the mortgagee’s accounting practices.

As such, it concluded that the lack of evidence as to damages required reversal.  That said, it specifically instructed the trial court that the foreclosure was not subject to involuntary dismissal because the borrowers’ had failed to move for a directed verdict at the close of evidence at trial.

Accordingly, the Appellate Court reversed the trial court’s final judgment of foreclosure, and remanded the action for further proceedings consistent with its opinion.


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Ralph Wutscher's practice focuses primarily on representing consumer and commercial financial services companies, including depository and non-depository mortgage lenders and servicers, as well as mortgage loan investors, financial asset buyers and sellers, loss mitigation companies, third-party debt collectors, and other financial services providers. He represents the lending and financial services industry as a litigator, and as regulatory compliance counsel. For more information, see