In previous posts , we have set forth explanations of the business records exception to the hearsay rule of evidence, and how that exception applies when a successor note holder seeks to introduce the loan records of the prior note holder at trial or in support of a motion for summary judgment . A recent decision from Florida’s Fifth District Court of Appeal demonstrates the importance of complying with all the requirements to meet the business records exception, particularly when relying on loan records that originated with a prior lender.
In McNair v. Nationstar Mortgage, LLC , Nationstar sought to foreclose a mortgage securing a loan it serviced, a loan which had been previously transferred multiple times. In support of a motion for summary judgment, Nationstar filed an affidavit of one of its vice presidents, along with a copy of the loan documents, the pooling and servicing agreement, assignment documents, and a payment history. The borrower challenged the affidavit, however, arguing that it failed to meet the business records exception to the hearsay rule. Although the trial court disagreed and entered summary judgment in favor of Nationstar, the Fifth DCA determined that the affidavit was deficient in several respects:
- The affidavit failed to set forth the job responsibilities of the vice president; therefore, it did not show whether his position at Nationstar necessarily required that he have the familiarity and understanding of the predecessor’s business records necessary to lay the foundation for admissibility of the predecessor’s records.
- The affidavit failed to state that the vice president or any other employee of Nationstar had personally reviewed the predecessor’s business records for accuracy; therefore, the affidavit did not establish the personal knowledge required to lay the evidentiary foundation for admissibility under the business records exception.
- The court noted that Nationstar’s affidavit failed to establish the trustworthiness of its predecessor’s records by presenting evidence of a business relationship between the predecessor and Nationstar which ensures a substantial incentive for accuracy.
- Finally, the affidavit did not assert that the loan payment history attached to the affidavit was a “true and correct copy” but instead merely attached the history as an exhibit to the affidavit without so verifying as to its authenticity. Accordingly, the Fifth DCA stated that the trial court was not permitted to consider the loan payment history, and Nationstar had therefore failed to prove the amounts due and owing.
Consequently, the Fifth DCA reversed the entry of summary judgment, and remanded the matter back to the trial court.
The McNair opinion does not suggest that Nationstar will not ultimately prevail in its foreclosure action, but it does demonstrate the importance of ensuring that summary judgment affidavits comply with the business records exception if lenders wish to avoid costly and time-consuming further proceedings which may be required when the exception is not met.