Home Outlet, LLC v. U.S. Bank National Ass'n
194 So. 3d 1075
| Fla. Dist. Ct. App. | 2016Background
- Borrowers executed a $317,400 note and defaulted in 2007; Home Outlet bought the property at an HOA foreclosure sale and later defended against a bank foreclosure.
- Original lender (First Horizon) filed suit in 2012 to reestablish a lost note and foreclose; complaint attached photocopies of the note/mortgage and a lost-note affidavit but those exhibits were not entered at trial.
- The note was unindorsed; First Horizon later assigned the mortgage and note to U.S. Bank, which prosecuted the foreclosure at trial.
- U.S. Bank’s sole trial witness was a servicer employee (Vonterro White) who testified the original note was missing when Fay Servicing boarded the file and that the prior servicer (NationStar) provided a lost-note affidavit and indicated the note was not transferred.
- The lost-note affidavit and data-transfer documents were not offered into evidence or judicially noticed; White lacked personal knowledge that (1) the prior servicer was entitled to enforce the note when it was lost and (2) the loss was not due to a lawful seizure or transfer.
- The trial court found the lost note reestablished and entered final judgment for U.S. Bank; the district court reversed for failure to meet statutory reestablishment requirements and ordered involuntary dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether U.S. Bank reestablished a lost promissory note under § 673.3091 | Bank contended servicer testimony and attached affidavit in the complaint proved the note was lost and a diligent search occurred | Home Outlet argued testimony alone was insufficient because the lost-note affidavit and transfer records were not entered into evidence and witness lacked personal knowledge about entitlement and lawful seizure | Reversed: bank failed to reestablish the lost note because required proof (affidavit or competent testimony) was not admitted and witness lacked personal knowledge |
| Whether testimony referencing business records not entered into evidence can establish standing/entitlement to enforce | Bank relied on witness relato of prior servicer records and transfer data to prove standing | Home Outlet argued such testimony is insufficient absent admission of the records or affidavit | Held: testimony about documents not admitted is insufficient to prove standing or reestablish a lost note |
| Whether a verified complaint attached to but not offered at trial can substitute for evidence at trial | Bank suggested attachments to the complaint supported its case | Home Outlet argued attachments must be introduced or judicially noticed to be evidence | Held: attachments to a verified complaint are not trial evidence unless offered or judicially noticed; verification without personal-knowledge basis is inadequate |
| Appropriate remedy when lost-note reestablishment fails at trial | Bank sought foreclosure judgment based on reestablishment | Home Outlet sought dismissal and retention of title from HOA sale | Held: reversal and entry of involuntary dismissal; foreclosure judgment vacated |
Key Cases Cited
- Figueroa v. Fed. Nat’l Mortg. Ass’n, 180 So. 3d 1110 (Fla. 5th DCA 2015) (lost-note affidavit must be offered into evidence or testimony with personal knowledge must establish statutory elements)
- Gonzalez v. BAC Home Loans Servicing, L.P., 180 So. 3d 1106 (Fla. 5th DCA 2015) (testimony about business records not entered at trial is insufficient to prove standing)
- Correa v. U.S. Bank N.A., 118 So. 3d 952 (Fla. 2d DCA 2013) (standard of review: sufficiency of the evidence for reestablishment of a lost note)
- Seidler v. Wells Fargo Bank, N.A., 179 So. 3d 416 (Fla. 1st DCA 2015) (appellate reversal appropriate where proof of lost note is insufficient)
- Toyos v. Helm Bank, USA, 187 So. 3d 1287 (Fla. 4th DCA 2016) (verified complaint insufficient to establish facts not based on personal knowledge)
- Bowmar v. Sun Trust Mortg., Inc., 188 So. 3d 986 (Fla. 5th DCA 2016) (discussion of documents without admission is insufficient to establish entitlement to foreclose)