PEGGY A. THORLTON v. NATIONSTAR MORTGAGE, L L C

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
PEGGY A. THORLTON and WILLIAM D. )
THORLTON, )
)
Appellants, )
)
v. ) Case No. 2D17-2328
)
NATIONSTAR MORTGAGE, LLC, )
)
Appellee. )
)
Opinion filed October 17, 2018.
Appeal from the Circuit Court for Highlands
County; Michael R. Raiden, Judge.
Randall O. Reder of Randall O. Reder, P.A.,
Tampa, for Appellants.
Nancy M. Wallace and Ryan D. O'Connor
of Akerman LLP, Tallahassee; William P.
Keller of Akerman LLP, Fort Lauderdale;
and David A. Karp of Akerman LLP, Tampa,
for Appellee.
MORRIS, Judge.
Peggy A. and William D. Thorlton appeal the final judgment of foreclosure
entered against them and in favor of Nationstar Mortgage, LLC, following a bench trial.
For the reasons we explain, we conclude that Nationstar adequately established that its
predecessor in interest, Chase Home Finance a/k/a JPMorgan Chase Bank National
Association satisfied a condition precedent to filing suit: providing written notice of
default as required by paragraph 22 of the mortgage. Thus we affirm on that issue. We
affirm on all other issues without further comment.
BACKGROUND
On May 13, 2003, the Thorltons executed a promissory note and
mortgage in favor of Wachovia Mortgage Corporation. Paragraph 22 of the mortgage
provided that prior to acceleration, the lender must give the borrower notice and an
opportunity to cure the default. Paragraph 15 provided that any such notice must be
written and that it "shall be deemed to have been given to Borrower when mailed by first
class mail or when actually delivered to Borrower's notice address if sent by other
means."
In 2008, Chase Home Finance filed a foreclosure complaint against the
Thorltons. Chase alleged that it was the servicer of the loan and acting on behalf of the
owner. That complaint alleged generally that all conditions precedent to the
acceleration of the note and mortgage had been performed.
Chase subsequently filed two motions for substitution of party plaintiff,
alleging first that it had merged with JPMorgan Chase Bank N.A. and, at a later time,
that it had become organized under a new charter and had changed its name to
JPMorgan Chase Bank, National Association. In July 2016, prior to trial, a motion to
substitute Nationstar as the party plaintiff was filed and ultimately granted.
At trial, Nationstar admitted a copy of the default letter purportedly mailed
to the Thorltons on October 2, 2008, in compliance with paragraph 22. The letter
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contained a header proclaiming "CERTIFICATE OF MAILING." As part of the same
exhibit, Nationstar included a screenshot from Chase's electronic records indicating that
the default letter was scanned into Chase's system on October 3, 2008. The exhibit
was admitted through the testimony of Jason George, a default case specialist
employed by Nationstar. Mr. George testified that he had previously worked for
JPMorgan Chase and, prior to that, worked for Chase Home Finance before the two
entities merged. Mr. George testified he worked for Chase from July 2011 until March
2015. He testified generally about his familiarity with Chase's practices and procedures
for creating and maintaining records as well as his familiarity with the boarding process
that occurs when one lender takes over the servicing of a loan from another lender.
Prior to the admission of the default letter, the Thorltons' counsel objected
based on "hearsay, lack of foundation, and lack of personal knowledge." Specifically,
the Thorltons' counsel argued that Mr. George did not have personal knowledge of
whether the letter was actually mailed out, regardless of whether it was mailed by
Chase or by a third-party vendor.1 The Thorltons' counsel also argued that Mr. George
was not qualified to lay a business records predicate for the admission of the document
when the letter was mailed "by yet another department of the company that he
apparently spoke to someone about." The trial court overruled the objection and
admitted the letter.
During questioning about the letter, Mr. George testified that the letter was
part of Nationstar's business records that had previously been part of Chase's business
records. He testified that the records were made by employees with personal
1The Thorlton's counsel explained to the court that the use of a third-party
vendor to mail out default letters was common in the mortgage industry.
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knowledge of the information being entered at the time it was entered, that the records
were kept in the course of Chase's regularly-conducted business activities, and that it
was Chase's regular business practice to make and maintain such records. When
asked how he knew that the letter was mailed to the Thorltons, Mr. George responded:
"That was the routine practice back then for Chase Home Finance."
On cross-examination, Mr. George testified that he worked in multiple
departments with Chase and Nationstar, including two days in Chase's breach letter
department. Mr. George acknowledged that Chase used a third-party vendor to mail
the breach letters and that he knew this because he worked with the third-party vendor
during his training. Mr. George explained that the third-party vendor obtains a PDF
copy of the breach letter from the lender, prints and mails it first class, and then sends a
CD back to the lender informing the lender that the letter was mailed. Mr. George
explained that the lender also receives proof of mailing via a copy of each letter with a
"proof of mailing stamp from the post office." Mr. George subsequently admitted that he
did not work for the third-party vendor at the time that the Thorltons' breach letter was
mailed and that he never actually worked for the third-party vendor. He explained that
his knowledge about the third-party vendor's mailing process came through his two-day
assignment in Chase's breach letter department. He also explained that his knowledge
about the third-party vendor's mailing process came entirely from other Chase
employees who told him about the third-party vendor.
On appeal, the Thorltons challenged the sufficiency of the evidence
regarding the mailing of the default letter. Specifically, the Thorltons argued that
because Mr. George did not work for Chase at the time the letter was mailed, he could
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not have personal knowledge of that issue and, as a result, Nationstar failed to prove it
complied with the condition precedent set forth in paragraph 22 of the mortgage.
In response, Nationstar argued that Mr. George's testimony regarding
Chase's routine business practices was sufficient to establish that the letter was mailed.
Nationstar asserted that Mr. George was not required to have worked for Chase at the
time the letter was mailed in order to establish his knowledge of Chase's routine
business practices.
After all briefs had been filed in this case, this court issued Spencer v.
Ditech Financial, LLC, 242 So. 3d 1189 (Fla. 2d DCA 2018). In Spencer, this court
addressed the issue of what constitutes sufficient evidence to establish the mailing of a
default letter when the testifying witness was not a current employee of and had never
worked for the entity which drafted and mailed the letter. Id. At oral argument, the
Thorltons noted the Spencer opinion and argued that it also served as a basis to
reverse in this case because like the employee in Spencer, Mr. George did not work for
the entity which mailed the letter. The Thorltons filed a notice of supplemental authority
citing Spencer on the same day that oral argument occurred.
This court then issued an order directing the parties to address Spencer
and its application to this case. The Thorltons' supplemental brief noted that their
counsel had raised an objection to the sufficiency of Mr. George's knowledge of the
mailing issue at trial, and the Thorltons argued that Spencer was directly on point and
required a reversal here because Mr. George testified that his knowledge of the mailing
of the letter was based merely on his training and the routine business practices of
Chase. Thus, the Thorltons argued that because Mr. George had never worked for the
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third-party vendor which actually mailed the letter and because his knowledge of the
third-party vendor's mailing process had been obtained from other Chase employees,
the evidence was insufficient to establish that the letter had been mailed.
In its supplemental brief, Nationstar argued that the Thorltons waived any
challenge to Mr. George's testimony regarding routine business practices, arguing that
the Thorltons only objected to the admission of the default letter as a business record.
Nationstar also argued that this issue was not one related to the sufficiency of the
evidence. Instead, Nationstar maintained that the issue was an evidentiary issue
related to routine business practices under section 90.406, Florida Statutes (2016), or
lack of personal knowledge under section 90.604. Nationstar distinguished Spencer by
arguing that there, the testifying witness had never worked for the entity (prior servicer)
which drafted the default letter, whereas, in this case, Mr. George had worked for
Chase, the entity which drafted the default letter. Nationstar pointed to parts of Mr.
George's testimony wherein he described working "at three different stations" in the
breach letter department and observing how breach letters were submitted to the third-
party vendor for mailing and then how Chase received proof of mailing from the third-
party vendor. Thus Nationstar argued that Mr. George's testimony was sufficient under
Spencer. Citing other cases, Nationstar also argued that testimony regarding routine
business practices related to the drafting and mailing of default letters was sufficient to
prove the letter was actually mailed.
ANALYSIS
Addressing first the issue of preservation, we reject Nationstar's attempt to
frame this issue as one involving only evidentiary considerations related to the
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admissibility of a business record. In its answer brief, Nationstar relied on Bank of
America, N.A. v. Delgado, 166 So. 3d 857 (Fla. 3d DCA 2015), to argue that Mr. George
was not required to be employed by Chase at the time the default letter was mailed in
order to provide a foundation for the admission of Nationstar's business records. And in
its supplemental answer brief, Nationstar argued that the issue in this case was not one
related to the sufficiency of the evidence regarding the Thorltons' receipt of the default
letter. However, Spencer holds otherwise. Indeed, in Spencer, we specifically rejected
the appellants' reliance on Delgado, noting that it addressed the sufficiency of the
evidence of an entity's boarding process to establish the admissibility of documents like
default letters under the business records exception to the hearsay rule, whereas in
Spencer, the issue was the sufficiency of the evidence demonstrating an entity's routine
business practices to establish that a default letter was mailed. See Spencer, 242 So.
3d at 1191. We do not disagree with Nationstar's argument that "basic familiarity with
[another entity's] practices for generating, storing, and sending a default [letter] in the
normal course of business is all that is required to establish the admissibility of a default
[letter] under the business records exception," but as in Spencer, the admissibility of the
default letter is not at issue here. See id.
Further, the fact that the Thorltons did not raise the precise issue raised in
Spencer below does not preclude them from raising the issue on appeal. As we noted
in Wolkoff v. American Home Mortgage Servicing, Inc., 153 So. 3d 280, 282 (Fla. 2d
DCA 2014), Florida Rule of Civil Procedure 1.530(e) permits parties to raise the issue of
the sufficiency of the evidence on appeal even where they did not make such an
objection below. While it is true that "[b]asic principles of due process suggest that
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courts should not consider issues raised for the first time at oral argument," courts also
acknowledge that there are "[r]are or unusual instances" where an appellate court may
consider arguments raised for the first time on appeal. Powell v. State, 120 So. 3d 577,
591, 593 (Fla. 1st DCA 2013); see also Wolkoff, 153 So. 3d at 282 (recognizing that
courts have ability to consider arguments raised for the first time at oral arguments in
limited circumstances). This case presents one such circumstance, where a case which
addresses an issue presented in this case was decided after all briefing had been
completed in this case. Furthermore, we provided both parties with the opportunity to
address the proof of mailing issue in supplemental briefs. Thus no due process
violation has occurred and we may dispose of this issue on the merits.
Having analyzed the facts and holdings of both Spencer and a
subsequently decided case, Soule v. U.S. Bank National Ass'n, 43 Fla. L. Weekly
D1590 (Fla. 2d DCA July 13, 2018), we conclude that they do not require a reversal in
this case. Rather, we hold that Mr. George's testimony was sufficient to establish that
the default letter was mailed.
Spencer requires not only that a testifying witness "be employed by the
entity drafting the letter," but also that the witness "have firsthand knowledge of the
company's routine practice for mailing letters." Spencer, 242 So. 3d at 1191 (emphasis
added). Prior to his employment with Nationstar, Mr. George was employed by Chase,
which was the entity that drafted the default letter. Mr. George also had knowledge of
Chase's routine practice of submitting the letters for mailing to a third-party vendor. He
explained what those practices were at the time the subject default letter was mailed out
even though he was not in Chase's employ at that time.
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That point is where this case factually differs from Spencer. The issue in
Spencer was that the testifying witness worked for a successor in interest to the
mortgage company that initiated the foreclosure proceedings. The witness had never
worked for the mortgage company which was the entity that had both drafted and
mailed the letters. Id. at 1190-91. And while the witness testified about the mortgage
company's policy and procedure for both drafting and mailing default letters, she had no
personal knowledge of those issues. Id. at 1191.
Similarly, in Soule, the testifying witness worked for the successor in
interest to the mortgage servicing company that had prepared and allegedly mailed the
default letter. Soule, 43 Fla. L. Weekly D1590. The witness testified she had never
worked for the original servicing company, and she admitted that she had never been
trained in any of the prior servicing company's procedures. Id. Thus we concluded that
the witness had no personal knowledge of whether the default letter was mailed or of
the prior servicing company's policies and procedures for mailing. Id.
Here, in contrast, not only did Mr. George work for Chase, the entity which
drafted the letter, but he also established his familiarity with Chase's routine practices
relating to the mailing of the default letters at the time the subject default letter was
mailed. We have previously held that "[t]he fact that a document is drafted is insufficient
in itself to establish that it was mailed" and that additional evidence is required to
establish proof of mailing. Allen v. Wilmington Tr., N.A., 216 So. 3d 685, 687-88 (Fla.
2d DCA 2017). However, such evidence may be in the form of proof of regular
business practices. See id. at 688. And we have concluded that such evidence "may
be sufficient to establish a rebuttable presumption of mailing," where the witness has
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"personal knowledge of the company's general practice in mailing letters." Id. (citing
CitiMortgage, Inc. v. Hoskinson, 200 So. 3d 191, 192 (Fla. 5th DCA 2016)).
While we acknowledge that Chase was not the entity that ultimately
mailed the letter, it had a routine practice for submitting default letters to a third-party
vendor which then mailed the letter. As Mr. George explained, Chase would then
receive proof of mailing back from the third-party vendor. We are persuaded by PNC
Bank National Association v. Roberts, 246 So. 3d 482 (Fla. 5th DCA 2018), that Mr.
George's testimony was sufficient then to create a rebuttable presumption of the mailing
of the letter.
Roberts contains many factual similarities to this case. There, a bank
employee testified about the routine business practices of the foreclosing bank which
included testimony about the creation of default letters. Id. at 485-86. Specifically, the
witness testified that the bank "creates the letter by ordering it from an outsourcing
vendor . . . which prints the [default] letters, folds them, places them in a window
envelope, seals the envelopes, affixes postage, and mails them by first-class mail." Id.
at 486. She also testified that the third-party vendor then provided the bank with a
report showing which letters were mailed. Id. The Fifth District Court of Appeal
acknowledged that the dates on the default letters only established the date that they
were drafted and not whether or when they were sent. Id. However, the court
ultimately held that the witness's "personal knowledge" of the bank's and the third-party
vendor's routine business practices and policies for default letters during the time period
when the pertinent default letters were mailed, in conjunction with the admission of the
default letters themselves, was sufficient to establish that the letters were mailed. Id.
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As in Roberts, the foreclosing bank here, Chase, was not the entity that
actually mailed the letter. Additionally, like the foreclosing bank in Roberts, Chase had
routine practices for drafting the default letters, submitting them to a third-party vendor
for mailing, and then receiving confirmation of mailing back from the vendor. The fact
that Mr. George was not employed by Chase at the time the subject default letter was
mailed is not dispositive because Mr. George was able to testify not only about his own
training and experience with Chase regarding default letters, but also about Chase's
policies and procedures relating to the mailing of default letters at the time the subject
default letter was mailed. Just as the Fifth District concluded in Roberts, we likewise
conclude that where a testifying witness establishes his or her personal knowledge of a
foreclosing entity's and third-party vendor's routine business practices and policies for
drafting and mailing a default letter, coupled with the admission of the default letter
itself, there is competent, substantial evidence that the subject default letter was mailed.
Id.
Because Nationstar sufficiently established that its predecessor in interest
(Chase) satisfied the condition precedent of providing the paragraph 22 notice, we
affirm.
Affirmed.
NORTHCUTT, J., Concurs.
LUCAS, JJ., Concurs in result only.
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