Appeal

Trial Court’s Responsibility is NOT to Rewrite a Contract

Posted by David Adelstein on November 25, 2016
Appeal / Comments Off on Trial Court’s Responsibility is NOT to Rewrite a Contract

unknown

Many business disputes involve the interpretation and the application of a contract. This is because business transactions typically involve a contractual relationship governing the rights, liabilities, risks, and recourse relating to the transaction.   When there is a dispute regarding the transaction, this gives rise to a breach of contract claim.  

It is important to understand that a trial court’s responsibility is NOT to rewrite the terms of a contract so that the risks are allocated differently.  As explained:

[C]ourts are ‘powerless to rewrite [a] contract to make it more reasonable or advantageous to one of the parties…or to substitute [their] judgments for that of the parties to the contract in order to relieve one of the parties from the apparent hardships of an improvident bargain.  

Underwater Engineering Services, Inc. v. Utility Board of the City of Key West, 194 So.3d 437, 444 (Fla. 3d DCA 2016) quoting Fernandez v. Homestar at Miller Cove, Inc., 935 So.2d 547, 551 (Fla. 3d DCA 2006).

For this reason, a trial court’s interpretation of a contract is reviewed on appeal with a de novo standard of appellate review – the appellate court will refer to the record in the trial court anew (de novo) without giving deference to the trial court’s findings.

For example, in Underwater Engineering Services (a case I discussed here), the trial court found that a contractor defectively constructed a portion of its work and awarded damages to the owner for replacing the defective work. On appeal, however, the appellate court looked at the underlying contract between the owner and the contractor that required the owner to give the contractor notice before replacing defective work. (The trial court’s final judgment did not reference this contractual provision or provide any application of the provision). The trial court’s record established that such notice was never given to the contractor so the contractor was never in a position to replace the defective work. Based on this contractual provision–remember, courts are not there to rewrite parties’ contracts–the appellate court reversed the trial court’s findings / judgment in favor of the owner because the owner never provided the contractor the required notice per the unambiguous language in the contract.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

Tags: , , , ,

What Constitutes an Enforceable Contract?

Posted by David Adelstein on November 17, 2016
Appeal / Comments Off on What Constitutes an Enforceable Contract?

unknown

An enforceable or valid contract requires an offer, acceptance of that offer, consideration, and sufficient specification of material terms. Jericho All-Weather Opportunity Fund, LP v. Pier Seventeen Marina, 41 Fla. L. Weekly D2565a (Fla. 4th DCA 2016). Whether a contract actually constitutes an enforceable contract is subject to a de novo standard of appellate review; this is the same appellate standard of review pertaining to an appeal of a trial court’s interpretation of a contract. See id.

The case in Jericho All-Weather Opportunity Fund exemplifies a party suing on the wrong contract and, thus, an appellate court reversing a judgment in favor of a plaintiff and remanding for the trial court to enter judgment in favor of the defendants. As you can imagine, this is a harsh outcome in an appeal – winning a trial only for the appellate court to reverse and mandate judgment for the party that lost during the trial.

In this case, the plaintiff (borrower) was seeking a construction loan. It entered into a second loan commitment with the defendant (lender) whereby the defendant agreed to loan the plaintiff money for the refinancing of property and constructing the project. The court explained that a loan commitment is “a lender’s binding promise to a borrower to lend a specified amount of money at a certain interest rate, usually within a specified period and for a specific purpose (such as buying real estate).” Jericho All-Weather Opportunity Fund, supra, quoting Armstrong Bus. Servs., Inc. v. AmSouth Bank, 817 So.2d 665, 673-74 (Ala. 2001).

The plaintiff and defendant then entered into a construction loan. The loan agreement was contingent on the actual closing of the loan—the closing of the loan was the consideration for the loan agreement. The loan agreement did not require the defendant to fund the loan as the agreement was predicated on the funding having occurred. However, the loan never closed and the plaintiff sued the defendant for breach of the loan agreement. The plaintiff prevailed at trial. The defendant appealed arguing that the loan agreement was not an enforceable contract as it never became a valid contract because the funding never occurred. The appellate court agreed stating that the plaintiff should have sued for breach of the second loan commitment and not the loan agreement. (Notably, the plaintiff had strategic reasons for not suing on the second loan commitment since it precluded the plaintiff from pursuing certain damages based on a waiver of consequential damages provision.  Unfortunately, by not suing under the second loan commitment, the plaintiff did not sue on an enforceable contract.)

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

Tags: , , , , , ,

Moving to Enforce the Appellate Court’s Mandate

Posted by David Adelstein on September 16, 2016
Appeal / Comments Off on Moving to Enforce the Appellate Court’s Mandate

 

images

 

When an appellate opinion is issued (and after any post-opinion motions have been resolved or the timing to file same has expired), oftentimes the matter is remanded back to the trial court to implement the appellate court’s opinion or mandate.   This mandate is the “official mode of communicating the judgment of the appellate court to the lower court, directing the action to be taken or the disposition to be made of the cause by the trial court.” Tierney v. Tierney, 290 So.2d 136, 137 (Fla. 2d DCA 1974).  In other words, once that mandate is issued, the trial court is obligated to comply.

What happens if the trial court does not comply with the appellate court’s mandate in the appellate opinion?   A party can move to enforce the mandate in the appellate court.

In Florida Digestive Health Specialists, LLP v. Ramon E. Colina, M.D., LLC, 41 Fla. L. Weekly D2078a (Fla. 2d DCA 2016), the appellate court issued an opinion that remanded the matter back to the trial court to implement the mandate in the opinion.   In this matter, the mandate explained how the trial court was to implement a temporary injunction to enforce a restrictive covenant / non-compete agreement.   On remand, however, the trial court issued an order that did not fully comply with the appellate court’s mandate. This prompted a party to file a motion to enforce the mandate with the appellate court (as well as a notice of appeal of the trial court’s order that did not comply with the appellate mandate).

The appellate court granted the motion to enforce its mandate instructing the trial court to enter an order pursuant to its mandate:

This [appellate] court “is vested with all the power and authority necessary for carrying into complete execution all of its judgments, decrees, orders, and determinations in the matters before it.” § 35.08, Fla. Stat. (2015). “No principle of appellate jurisdiction is more firmly established than the one which provides that a trial court utterly lacks the power to deviate from the terms of an appellate mandate.” Mendelson v. Mendelson, 341 So. 2d 811, 813-14 (Fla. 2d DCA 1977). That is, “upon the issuance of our mandate, the trial court is without authority to take any action other than to compose an order carrying out the terms of the mandate.” City of Miami Beach v. Arthree, Inc., 300 So. 2d 65, 67 (Fla. 3d DCA 1973). The trial court must execute the mandate without variance or examination; it may not review the mandate — “even for apparent error” — or grant any additional or further relief. Rinker Materials Corp. v. Holloway Materials Corp., 175 So. 2d 564, 565 (Fla. 2d DCA 1965) (quoting In re Sanford Fork & Tool Co., 160 U.S. 247, 255 (1895)). Further, “any motion or petition to vary the judgment of this court may not be entertained without the express permission of this court to do so.Arthree, 300 So. 2d at 67.

Florida Digestive Health Specialists, supra. 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

Tags: , , , ,

Appealing Trial Court’s Interpretation of Contract

Posted by David Adelstein on July 24, 2016
Appeal, Standard of Review / Comments Off on Appealing Trial Court’s Interpretation of Contract

images-1

Many disputes turn on the interpretation of a contract, contractual term, or written document. When the trial court rules on the interpretation, there will typically be a party that disagrees with the court’s interpretation. In these instances, this party will appeal the trial court’s interpretation. There is a value to appeal because the appellate standard of review is de novo meaning the appellate court will review the trial court’s record anew without giving deference to the trial court’s interpretation.

The interpretation of a written contract is a question of law and the appellate court construes the contract under a de novo standard of review. Notably, construction of contractual terms is a question of law, which we review de novo, provided that the language is clear and unambiguous and free of conflicting inferences.

Ciklin Lubetz Martens & O’Connell v. Patrick J. Casey, P.A., 41 Fla.L.Weekly D1678b (Fla. 4th DCA 2016 (internal quotations and citations omitted).

For example, in a dispute concerning a law firm’s partnership agreement as it pertains to the withdrawal of a partner, the trial court made an interpretation of the partnership agreement that resulted in certain amounts being awarded to the withdrawing partner. The law firm appealed the trial court’s interpretation and the appellate court, examining the partnership agreement under a de novo standard of appellate review, reversed certain interpretations by the trial court. This is because the appellate court was able to examine the partnership agreement anew without providing any deference to how the trial court interpreted the partnership agreement.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

Tags: , , ,

Asserting Punitive Damages (or Appealing the Decision to Allow for Punitive Damages)

Posted by David Adelstein on July 09, 2016
Appeal, Standard of Review, Trial Perspectives / Comments Off on Asserting Punitive Damages (or Appealing the Decision to Allow for Punitive Damages)

images

So, you are interested in pursuing punitive damages. Then you MUST comply with the requirements of Florida Statute s. 768.72. This statute provides in relevant part:

(1) In any civil action, no claim for punitive damages shall be permitted unless there is a reasonable showing by evidence in the record or proffered by the claimant which would provide a reasonable basis for recovery of such damages. The claimant may move to amend her or his complaint to assert a claim for punitive damages as allowed by the rules of civil procedure. The rules of civil procedure shall be liberally construed so as to allow the claimant discovery of evidence which appears reasonably calculated to lead to admissible evidence on the issue of punitive damages. No discovery of financial worth shall proceed until after the pleading concerning punitive damages is permitted.

(2) A defendant may be held liable for punitive damages only if the trier of fact, based on clear and convincing evidence, finds that the defendant was personally guilty of intentional misconduct or gross negligence. As used in this section, the term:

(a) “Intentional misconduct” means that the defendant had actual knowledge of the wrongfulness of the conduct and the high probability that injury or damage to the claimant would result and, despite that knowledge, intentionally pursued that course of conduct, resulting in injury or damage.

(b) “Gross negligence” means that the defendant’s conduct was so reckless or wanting in care that it constituted a conscious disregard or indifference to the life, safety, or rights of persons exposed to such conduct.

It is NOT appropriate to merely plead punitive damages in your initial lawsuit and think by virtue of this allegation that you will be able to argue punitive damages to the jury. That would not be fair, would it? This would simply allow a party in every civil lawsuit to argue punitive damages to the jury. 

Rather, and as you can see from the statute, you must reasonably show by proffering evidence to the trial court that you have a reasonable basis to the recovery of such damages. But, you are able to take discovery relating to evidence you want to proffer associated with punitive damages (assuming the discovery is reasonable).   And, presuming the trial court allows you to argue punitive damages to the jury, a defendant should only be liable for punitive damages based on clear and convincing evidence that the defendant was guilty of intentional misconduct or gross negligence, as defined in the statute.  The statute provides standards in order for a party to pursue and argue punitive damages to the jury.

What do you do if you are a defendant and the trial court grants the plaintiff’s motion for leave to include a punitive damages component? Punitive damages are a damages-component you do NOT want argued to the jury.

Certiorari review is available to determine whether a trial court has complied with the procedural requirements of section 768.72, but not to review the sufficiency of the [proffered] evidence.” HCA Health Services of Florida, Inc. d/b/a St. Lucie Medical Center v. Byers-McPheeters, 2016 WL 3549595, *1 (Fla. 4th DCA 2016).  Stated differently, you can seek a writ of certiorari arguing the trial court failed to properly comply with s. 768.72, but not to review the evidence proffered to the trial court relating to the trial court’s decision to allow a punitive damages component.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

Tags: , ,

Appeals Regarding Personal Jurisdiction

Posted by David Adelstein on June 18, 2016
Appeal / Comments Off on Appeals Regarding Personal Jurisdiction

Unknown

In a matter where a commercial landlord sued its tenant’s personal guarantors as the result of the tenant’s breach of the lease, the guarantors moved to dismiss the lawsuit based on personal jurisdiction. Check here for more on this matter.

A trial court’s ruling on personal jurisdiction is an immediately appealable ruling–a trial court’s determination relating to personal jurisdiction is an immediately appealable non-final order (non-final order meaning the order does not finally dispose of the lawsuit). See Fla.R.App.P. 9.130(a)(3)(C)(i).

A determination on personal jurisdiction is an important issue. If a court grants a motion to dismiss based on lack of personal jurisdiction, this means you cannot sue that entity in that state, e.g., Florida. And, if a court denies a motion to dismiss based on lack of personal jurisdiction, this means the moving party is subject to a lawsuit in that state, e.g., Florida. For this reason, the determination is appealable. The moving party will want to appeal if the court denies its motion to dismiss for lack of personal jurisdiction and it is now subject to being sued in Florida. Conversely, the plaintiff (suing party) will want to appeal if the court grants the motion to dismiss for lack of personal jurisdiction and the plaintiff can no longer sue that party in Florida.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

Tags: , , ,

“Other Products” Evidence to Support Alternate Causation Theory

Posted by David Adelstein on May 30, 2016
Appeal, Evidence, Standard of Review / Comments Off on “Other Products” Evidence to Support Alternate Causation Theory

images

The recent case of Arizona Chemical Company, LLC v. Mohawk Industries, Inc., 41 Fla. L. Weekly D1213a (Fla. 1st DCA 2016) is a case I discussed regarding lost profit damages. Check out that article here. But, this case also raised an interesting trial and appellate issue involving “other products” evidence to support an alternate causation argument, such as when a specific product or manufactured component fails.

This case involved a manufacturer of a specific brand of carpet suing the manufacturer of resin that was used in manufacturing the failed carpet brand. The carpet manufacturer claimed that the resin failure caused an increase in warranty claims and consumer complaints.

Applicable here is the carpet manufacturer’s pre-trial motion in limine to prevent the resin manufacturer from introducing evidence about other brands manufactured by the carpet manufacturer (that did not use the resin) that contemporaneously failed and also resulted in spikes in consumer claims. In particular, the resin manufacturer intended to introduce evidence at trial of consumer claim spikes related to three other brands of carpet manufactured by the carpet manufacturer, although none of the other brands used the resin. The resin manufacturer claimed that such contemporaneous failures indicate that something other than the resin caused the failure in all of the brands. An alternate causation argument. Makes sense, right? The trial court, however, granted the carpet manufacturer’s motion in limine since the other products were dissimilar to the failed carpet brand at-issue (as none of the other brands used the resin) precluding this “other products” evidence from being introduced during trial.

Post-trial, the resin manufacturer appealed, among other issues, the trial court’s granting of the motion in limine. The First District held that the relevance of “other products” evidence is reviewed under an abuse of discretion standard of appellate review. In reviewing this issue under this abuse of discretion standard of review, the First District affirmed the trial court’s preclusion of this “other products” evidence finding that such evidence was NOT relevant:

 

Generally, evidence of “possible explanations” for the plaintiff’s harm other than the defendant’s negligence is relevant and must be admitted. To establish the relevance of particular alternative-causation evidence, however, the defendant must provide a competent evidentiary link between the plaintiff’s harm and the defendant’s theory. This threshold requirement exists as a function of the relevance rule, even though the defendant does not carry a quantifiable burden of proof as to the alternative explanation.

Here, Arizona’s [resin manufactuer] basic argument is that the excluded evidence was relevant to rebut Mohawk’s [carpet manufacturer] point that the timing of Unibond’s [specific failed carpet brand at-issue] claims spike indicates that Arizona’s resin was the cause of the Unibond defects. The excluded evidence established that other products manufactured in the same Mohawk facility without Arizona’s resin experienced claims spikes at approximately the same time as Unibond. When these two points are considered outside the context of the remaining evidence, they make a compelling case for an abuse of the trial court’s discretion. Of course, context is key. When the trial court’s decision is viewed in the context in which Mohawk used the evidence of Unibond’s claims spike and the limitations of the evidence concerning other products’ claims spikes, the basis for the manner in which the trial court exercised its discretion in this case is understandable.

***

Arizona argues that the evidence of other products’ claims spikes rebuts Mohawk’s causation theory because this evidence bears on the likelihood that other factors caused the Unibond claims spike. The specific factors Arizona suggests are poor quality control and lack of adherence to manufacturing protocol. However, there is no evidentiary basis in the record for supplying the connection between contemporaneous claims spikes of the four product lines and these factors. The record supports a theory that there may have been some general quality-control failings at the facility, but Arizona has not identified any evidence to substantiate its conclusion that problems with quality control explained the defects in the non-Unibond products. In fact, evidence Arizona submitted in opposition to Mohawk’s motion indicates that Mohawk traced the causes of the defects in the other products to design flaws and choices of raw materials, not quality-control or procedural failures.

Without a more direct connection between the other products’ failures and Unibond’s failures, the evidence of the other products’ failures showed causation, or rebutted Mohawk’s causation theory, only to the extent that it showed Mohawk has a propensity to produce bad carpet. Introducing evidence for this purpose is improper. In light of these considerations, we find no abuse of discretion in the trial court’s decision to exclude the other-product evidence as legally irrelevant to the issue of liability.

Arizona Chemical Company, LLC, supra (internal quotations omitted).

When relying on “other products” evidence to support an alternate causation theory, it is important to connect the dots and create the evidentiary link between the other products’ failures and the failure at-issue. In other words, you need to create the evidentiary link supporting an alternative theory of causation by relying on the “other products” evidence.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

Tags: , , , ,

Trial Court’s Error is Harmless when there is No Reasonable Possibility Error Contributed to Verdict

Posted by David Adelstein on May 04, 2016
Appeal, Trial Perspectives / Comments Off on Trial Court’s Error is Harmless when there is No Reasonable Possibility Error Contributed to Verdict

images

Just because the trial court committed an error does NOT mean the error constitutes reversible error warranting a new trial. The trial court’s error could very well be harmless error.

When it comes to a trial court’s error, the recipient of the error should prove that “there is no reasonable possibility that the error contributed to the verdict.” Maines v. Fox, 41 Fla.L.Weekly D1062a (Fla. 1st DCA 2016) quoting Special v. W. Boca Med. Ctr., 160 So.3d 1251, 1256-57 (Fla. 2014). The trial court’s error is harmless if the recipient of the error proves there is no reasonable possibility that the trial court’s error contributed to the jury’s verdict.

In Maines, the trial court abused its discretion by preventing a defense expert from testifying that in his opinion the plaintiff did not suffer a traumatic injury as the result of the car accident. However, the defense expert was able to testify that only a very fragile person could have sustained a traumatic injury like plaintiff’s injury from the car accident. Hence, while the expert could not specifically testify that the plaintiff did not suffer the injury from the car accident, his other opinions clearly portrayed his causation opinion to the jury. For this reason, the First District held that while the trial court did commit an error, the error was nothing more than a harmless error–there was no reasonable possibility that this error contributed to the jury’s verdict in favor of the plaintiff.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

Tags: , , ,

Difference Between Lay Opinion Testimony and Expert Opinion Testimony

Posted by David Adelstein on April 07, 2016
Appeal, Evidence, Standard of Review / Comments Off on Difference Between Lay Opinion Testimony and Expert Opinion Testimony

images

Although I have numerous blog articles regarding the appellate standard of review when it comes to the admissibility of evidence, it is important to remember that “[a] trial court’s ruling on the admissibility of evidence is reviewed for an abuse of discretion; however, the trial court’s interpretation of the evidence code is reviewed de novo.” L.L. v. The State of Florida, 41 Fla.L.Weekly D854a (Fla. 3d DCA 2016).

In L.L., a criminal case, a police officer testified that he smelled the strong odor of marijuana from the defendant and that a plastic bag in defendant’s possession contained marijuana. The defendant objected that the officer’s opinions about the smell being marijuana and the substance in the bag being marijuana was an improper lay opinion and constituted expert opinion testimony (governed by the Daubert standard). The trial court allowed this testimony and the issue on appeal was whether such testimony was expert opinion testimony or proper lay opinion (fact witness) testimony.

The appellate court held that the officer’s testimony or opinions about the smell and substance being marijuana was proper lay witness opinion testimony governed under Florida Evidence Code 90.701:

If a witness is not testifying as an expert, the [lay] witness’s testimony about what he or she perceived may be in the form of inference and opinion when:

(1) The witness cannot readily, and with equal accuracy and adequacy, communicate what he or she has perceived to the trier of fact without testifying in terms of inferences or opinions and the witness’s use of inferences or opinions will not mislead the trier of fact to the prejudice of the objecting party; and

(2) The opinions and inferences do not require a special knowledge, skill, experience, or training.

The appellate court’s holding included a very good discussion explaining in detail why the officer’s opinion was proper lay opinion testimony as opposed to expert opinion testimony governed by the Daubert standard:

In addition to the requirement that lay opinion testimony be based on the personal knowledge and perception of the witness, the Advisory Committee Notes explain that courts should consider the witness’s method of reasoning: “the distinction between lay and expert witness testimony is that lay testimony ‘results from a process of reasoning familiar in everyday life,’ while expert testimony ‘results from a process of reasoning which can be mastered only by specialists in the field.‘ ” …As one scholar has explained:

[T]he distinction lies in whether the witness’s reasoning process entails a reliable methodology beyond everyday reasoning. A lay witness, however experienced, offers no methodology beyond ordinary reasoning. An expert is equipped to draw more sophisticated, yet still reliable, inferences. The crux of expert testimony is that it presents inferences that are supported through the application of a reliable methodology. Thus, the witness who relies on experience to support an expert opinion cannot simply claim insights arrived at by applying everyday reasoning to that experience base, but must explain the methodology employed to reach that opinion. An experienced witness who does not bring such methodology to bear should be subject to the restrictions of the lay opinion rule.

***

One important reason the Daubert standard [governing the admissibility of expert witness opinions] imposes a more demanding reliability inquiry upon expert opinion testimony is that the opinion results from a methodology or reasoning process that might be foreign to the trier of fact….But in cases such as the one now before us, even if the trier of fact does not have the personal experience necessary to identify the substance in question, the reasoning process is not “foreign in kind.” Many people who have seen and smelled marijuana would be able to recognize it in the same way they recognize anything else they have seen or smelled before.

***

Here, Officer Munecas’s reasoning process is nothing that requires a specialist in the field of drug identification; it is reasoning familiar in everyday life.

***

Finally, we hasten to add that although the more demanding Daubert admissibility standard does not apply to lay opinion testimony, there is nevertheless a reliability inquiry. Not only must lay opinion testimony be based on the witness’s personal knowledge, section 90.604, Florida Statutes, and perceptions, section 90.701, Florida Statutes, but the witness must have sufficient personal knowledge to support the opinion.

L.L., supra (internal citations omitted).

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

Tags: , , , , , ,

Witness Laying Foundation for Business Records Exception Need Not be the Person that Prepared the Business Records

Posted by David Adelstein on February 16, 2016
Appeal, Evidence / Comments Off on Witness Laying Foundation for Business Records Exception Need Not be the Person that Prepared the Business Records

images

If you have visited this blog before, then you know the importance I place on the business records exception to the hearsay rule in civil business disputes. (Check out this article too.) Lately, the business records exception to the hearsay rule is a hot topic in mortgage foreclosure cases.

In yet another foreclosure case, Wells Fargo Bank, N.A., as Trustee, on Behalf of the Harborview Mortgage Loan Trust Mortgage Loan Pass-Through Certificates, Series 2007-1 v. Balkisson, 41 Fla.L.Weekly D308a (Fla. 4th DCA 2016), the trial court entered an involuntary dismissal in favor of the borrower and against the lender after sustaining the borrower’s objection to hearsay based on the lender not properly laying the foundation for the business records exception to the hearsay rule. (An involuntary dismissal is essentially the same thing as a directed verdict in a non-jury bench trial. Similar to a directed verdict, the standard of appellate review for a motion for involuntary dismissal is de novo. See Wells Fargo Bank, supra.) The trial court sustained the hearsay objection because the loan servicer’s records custodian witness was unable to describe the specialized computer programs utilized to generate the payment history and default notice. The trial court’s ruling in sustaining the objection precluded the lender from presenting the payment history and the default notice into evidence meaning the lender could not prove its case at trial. The Fourth District Court of Appeal reversed.

The Fourth District explained that a testifying witness establishing the business records exception to the hearsay rule “need not be the person who actually prepared the business records. Instead, the witness just need be well enough acquainted with the [record keeping] activity to provide testimony.” Wells Fargo Bank, supra (internal quotations and citation omitted).

While the witness was not familiar with how data was entered into the computer system, there is no requirement that the witness have such knowledge to satisfy the business records exception to the hearsay rule. The witness was sufficiently familiar with the loan servicer’s practices and procedures in generating the payment history and notice of default to lay the foundation for the business records exception.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

Tags: , , , , , ,

Contact Me Now

Prove YOUR Case!

Contact:

David Adelstein ♦

(954) 361-4720 ♦

dadelstein@gmail.com