Fourth District Rules on Evidentiary Issues in Foreclosure Cases
Two recent decisions in foreclosure cases from Florida’s Fourth District Court of Appeal underscore the importance of offering substantial and competent evidence at the trial court level with respect to attorneys’ fees and interest calculations.
In Freiman v. National City Mortgage Co. (Case No. 4D13-2935, July 15, 2015), a homeowner appealed an attorneys’ fee award in favor of the foreclosing bank contained in a final judgment of foreclosure. At trial, the bank’s sole witness was a default litigation coordinator and mortgage officer who testified as to the homeowner’s loan and payment history and the bank’s business and loan practices. No testimony was given, and no evidence was introduced, concerning the bank’s attorneys’ fees. At the end of the trial, the parties submitted competing proposed final judgments. After taking the matter under advisement, the trial court entered the bank’s proposed judgment, which contained a line item for 176.40 hours of attorney work totaling $43,530.50.
On appeal, the bank conceded it did not submit sufficient evidence to support the fee award. However, relying upon an affidavit filed years earlier which listed $3,400.00 in fees for eleven hours of attorney work, the bank argued that there was already “some” evidence in the record concerning its fees, and that the case should therefore be remanded to the trial court for additional proceedings to determine the fees. The Fourth District rejected the bank’s argument and reversed the fee award “without an opportunity for reconsideration on remand.”
In rejecting the request for remand, the Fourth District distinguished Diwakar v. Montecito Palm Beach Condo Ass’n, Inc., 143 So. 3d 958, 960 (Fla. 4th DCA 2014), where there had been affidavits filed before trial that matched the amount of fees ultimately awarded. In Diwakar, unlike Freiman, remand was held to be appropriate because there was “some competent substantial evidence supporting the fee” award in the record. See Rodriguez v. Campbell, 720 So. 2d 266, 268 (Fla. 4th DCA 1998) (“[W]hen the record contains some competent substantial evidence supporting the fee or cost order, yet fails to include some essential evidentiary support such as testimony from the attorney performing the services, or testimony from additional expert witnesses, the appellate court will reverse and remand the order for additional findings or an additional hearing, if necessary.”). Thus, because the bank failed to ensure there was some competent substantial evidence supporting the fee award before or during the trial, entitlement to prevailing party attorneys’ fees was ultimately lost as a result of the Fourth District’s denial of remand.
On the same day that the Freiman decision was issued, the Fourth District also released its opinion in Peuguero v. Bank of America, N.A. (Case No. 4D13-3210, July 15, 2015). In that foreclosure case, a bank employee was asked at trial to confirm the amount owed by the homeowners. The employee testified to the interest owed on the loan by attesting to the accuracy of a proposed judgment drafted by the bank’s counsel. The trial court entered a final judgment of foreclosure in the amount of $697,807.36.
On appeal, the Fourth District affirmed entry of the judgment, but reversed as to the calculation of interest because “the only evidence of the amount of interest owed” came from the bank’s employee, “who merely testified that the amount written on a proposed final judgment was correct. However, this proposed judgment was never admitted into evidence.” The loan payment history, which was admitted into evidence, reflected the principal amount owed on the loan, but contained no entries to support the accrual of nearly $200,000.00 in interest that the trial court granted to the bank.
Nevertheless, because the bank offered a witness who testified to an exact amount of damages, but relied upon evidence not in the record, and because the loan payment history was submitted into evidence, the Fourth District held that the “proper remedy in this case is to remand for further proceedings to properly establish the damages owed.” See Sas v. Federal National Mortgage Ass’n, 112 So. 3d 778, 779 (Fla. 2d DCA 2013); see also Beauchamp v. Bank of New York, 150 So. 3d 827 (Fla. 4th DCA 2014); c.f., Wolkoff v. Am. Home Mortg. Servicing, Inc., 153 So. 3d 280, 281-82 (Fla. 3d DCA 2014).
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