Foreclosure Judgment Reversed Due To Challenge To Amount Owed

In Glarum v. LaSalle Bank National Association (4D10-1372), the Fourth District withdrew the opinion previously discussed HERE and issued a new opinion on rehearing. The revised opinion began "LaSalle moves for rehearing and clarification, or rehearing en banc. We deny the motions for rehearing, noting that LaSalle does not challenge this court’s reversal of summary judgment. We grant the motion for clarification. For ease of reference, we withdraw our previously issued opinion and substitute the following in its place.....We reverse the trial court’s entry of summary judgment in favor of LaSalle in part, as LaSalle’s summary judgment evidence was insufficient to establish the amount due to LaSalle under the note and mortgage. We likewise reverse the entry of sanctions against appellants’ counsel as improper. However, we find no merit in appellants’ contention that LaSalle lacked standing to seek foreclosure." [emphasis is mine].

Factually, the court stated:

Appellants admitted in their answer that they had not made payments according to the terms of the note, and as such, they were in default. Appellants, however, denied LaSalle’s allegations regarding the amount of the default. To establish the amount of appellants’ indebtedness for summary judgment, LaSalle filed the affidavit of Ralph Orsini, a “specialist” at the loan servicer, Home Loan Services, Inc. Orsini claimed in the affidavit that appellants were in default of their payment obligations and owed in excess of $340,000 on the note. In opposition to the motion for summary judgment, appellants filed Orsini’s deposition, wherein Orsini explained that he derived the $340,000 figure from his company’s computer system. However, Orsini did not know who entered the data into the computer, and he could not verify that the entries were correct at the time they were made. To calculate appellants’ payment history, Orsini relied in part on data retrieved from Litton Loan Servicing, a prior servicer of appellants’ loan.

The court continued that "We find that Orsini’s affidavit constituted inadmissible hearsay and, as such, could not support LaSalle’s motion for summary judgment. Pursuant to section 90.803(6)(a), Florida Statutes, documentary evidence may be admitted into evidence as business records if the proponent of the evidence demonstrates the following through a records custodian or other qualified person...."

Orsini did not know who, how, or when the data entries were made into Home Loan Services’s computer system. He could not state if the records were made in the regular course of business. For instance, Orsini testified:

Q. And who would make those entries as payments were made or as the account needed to be updated?
A. No idea. Q. Would it be someone at Home Loans? A. Again, no idea.
. . . .
Q. And is there a department that typically puts in each – any account activity on these databases at your company?
A. I’m not sure.
Q. You don’t know what department that would be?
A. No.

He relied on data supplied by Litton Loan Servicing, with whose procedures he was even less familiar. Orsini could state that the data in the affidavit was accurate only insofar as it replicated the numbers derived from the company’s computer system. Orsini had no knowledge of how his own company’s data was produced, and he was not competent to authenticate that data. Accordingly, Orsini’s statements could not be admitted under section 90.803(6)(a), and the affidavit of indebtedness constituted inadmissible hearsay.

On a separate issue,

The trial court also entered sanctions against appellants’ counsel for filing a “form affidavit” from an expert, Rita Lord, who opined on the ability of lay persons to distinguish between original and high-quality copies of promissory notes. Lord did not represent in the affidavit that she reviewed the papers at issue in this case....We note that LaSalle moved for sanctions under section 57.105, Florida Statutes. That statute permits a trial court to award a “reasonable attorney’s fee” to the “prevailing party” where the plaintiff’s claim was frivolous or to a party to compensate for the opposing party’s dilatory conduct. § 57.105(1)-(2), Fla. Stat. The trial court did not find that appellants’ claims were frivolous, and the trial court did not conclude that Lord’s affidavit was filed to cause unreasonable delay. Thus, section 57.105 could not serve as a basis for the award of attorney’s fees to LaSalle.....To the extent that the trial court may have been exercising its inherent authority to sanction parties or their attorneys, we also find error. “[A] trial court possesses the inherent authority to impose attorneys’ fees against an attorney for bad faith conduct.” Moakley v. Smallwood, 826 So. 2d 221, 226 (Fla. 2002).

The trial court did not make any specific findings of bad faith on the record, and the sanctions order must be reversed without prejudice.....“Upon remand, should the court be asked to reconsider the issue, any future hearing and order must comply with the requirements of Moakley.” Id.