In the recent opinion of McNair v. Nationstar Mortgage, LLC, 2016 WL 672032 (Fla. 5th DCA February 19, 2016), issued by the Fifth District Court of Appeal of Florida, the court held that an affidavit filed in support of Nationstar Mortgage, LLC's (“Nationstar”) motion for summary final judgment was insufficient in proving no material fact existed. More specifically, the affidavit (1) failed to authenticate the loan payment history, (2) failed to lay the foundation for admission of Nationstar's business records and those of Nationstar's predecessor servicer, Aurora Loan Services (“Aurora”), and (3) lacked competent, substantial evidence regarding the amount of interest that the Borrower owed on the loan. The court's holding sets a high standard for the sufficiency of the testimony provided as foundation in an affidavit for admitting business records of a servicer and prior servicer.
Nationstar supported its motion for summary judgment by attaching an affidavit of a Vice President of Nationstar, a copy of the note, the mortgage, the pooling and servicing agreement, the assumption agreement, the asset purchase agreement between Aurora and Nationstar, a default letter, a loan payment history, and the notice of assignment of servicers from Aurora to Nationstar. The court found the affidavit “flirted” with laying the foundation for admission of many of Nationstar's documents under the business records hearsay exception, but came up “short in several respects.” For example, the affidavit testified that the affiant had personal knowledge, but failed to discuss the affiant's job responsibilities as a vice president making it unclear whether his position “required a familiarity and understanding of the business records attached to the motion as he only vaguely described his familiarity with Nationstar's recording system and did not indicate whether he personally reviewed the business records.” Per the court, this created doubt as to whether the affiant had the requisite personal knowledge to lay a foundation for Nationstar's business records despite the affidavit reciting the requirements of the business records exception.
The court further found the affidavit to be insufficient to authenticate Aurora's records as the affiant failed to explain that he had familiarity with Aurora's documents. In an attempt to meet this burden, the affiant testified that Nationstar retained numerous former Aurora employees familiar with Aurora's record keeping system to “review” Aurora's records. This testimony failed to authenticate Aurora's records as it did not show that Nationstar's employees reviewed Aurora's records for accuracy, and the affiant completely failed to describe the policies and procedures Aurora had in place regarding how information was entered into their system. Lastly, the affidavit failed to meet the standards set forth in the opinion of Bank of New York City [sic] v. Calloway, 157 So.3d 1064 (Fla. 4th DCA 2015), which requires the successor business to rely “upon those records and the circumstances indicate that the records are trustworthy.” The court found that this hurdle can be overcome by “providing evidence of a business relationship or contractual obligation between the parties that ensures a substantial incentive for accuracy.”
Lastly, the court found the affidavit to be insufficient under Florida Rule of Civil Procedure 1.510(e) as it did not properly swear to the authenticity of the loan payment history. In lieu of stating that a “true and correct” copy of the loan payment history was attached as the affiant did for all other supporting documents, the affiant only stated the loan payment history was made in “accordance with the business records maintained by Nationstar.” Consequently, per the court, Rule 1.510(e) excluded the loan payment history as it is not a “sworn or certified” document attached to the affidavit as required.
In light of this opinion, the question now for servicers is what can a plaintiff in a contested mortgage foreclosure action do to adequately meet the burden of proof in order to admit business records of the servicer and prior servicers via affidavit? The simple, but cumbersome, answer is to provide more detail in the affidavit that mirrors trial testimony from a witness. From this opinion, it is obvious that the Fifth District Court of Appeal will require additional background information regarding the affiant including their job description, responsibilities and familiarity with the business records. Also, the court will need to confirm that all business records are not just reviewed, but reviewed for accuracy and the policies and procedures associated with that review. A business connection between the prior servicer and current servicer must be laid out to properly show the trustworthiness of the records. Finally, all supporting documentation needs to be properly affixed to the affidavit and sworn to as being a true and correct copy.
Nationstar filed a Motion for Clarification, which was granted in part and denied in part. The February 19, 2016 opinion was withdrawn and the Fifth District Court of Appeal substituted its March 18, 2106 opinion in its place. The March 18, 2016 opinion omits the detailed findings in the February 19, 2016 opinion, however, comes to the same conclusion on the same grounds.
The opinion will not be final until the disposition by the Fifth District Court of Appeal on any timely filed motion for rehearing. We will continue to monitor this case to determine if the opinion becomes final.