Banks No Longer Above the Law: Inadmissible Hearsay Stays Out of Court As part of the 10 year retrospective, Roy Oppenheim will be republishing blogs from South Florida Law Blog. (Originally posted Mon Sep 19, 2011, on South Florida Law Blog)
Friend and fellow , Thomas Ice, took his argument to the Fourth District on behalf of two homeowners. In their case, the bank employee who signed the affidavit against them admitted in his deposition that his only knowledge of the amount due to the bank was based on the bank’s computer system, and more incredibly, the computer system of another bank who had been the previous servicer of the loan. The Court noted in its opinion that the affidavit used by the bank “constituted inadmissible hearsay, and as such, could not support [the bank’s] motion for summary judgment.” And hearsay is exactly that: not actual firsthand knowledge of evidence. Ironically, such affidavits would have been laughed out of any court in the county except for new “lore” instead of “law” that has been taking shape in foreclosure courts in Florida and elsewhere.
In order to bring a motion for summary judgment, a bank must show that there is no “issue of material fact and the movement is entitled to judgment as a matter.” If the bank cannot establish down to the penny how much is owed on the loan, then by default there is a question of material fact and the bank would have to go to trial and prove the amount that is due, putting on witnesses from their own bank as well as from any other servicer of the loan who collected and applied payments before them.
To get around this, for years banks have been filing an “affidavit of indebtedness” in each foreclosure action, signed by a low-level employee who reviews a computer system and reports what it says as “personal knowledge” of the amount owed. Yet, as admitted by the bank employee in this case, the employee has no idea whether what the system reports is correct, or even how it computes that number. And, the employee knows even less about the system of previous servicers, yet still claims “personal knowledge” of those amounts as well.
The Court finally accepted the argument that defense attorneys have been making for years, potentially invalidating the affidavits in thousands of foreclosures. In fact, I have repeatedly written about the violations of Civil Procedure that are swept under the rug in foreclosures, violations that have been helping the courts act as private collection agencies for the banks. Now, it seems at least some judges are finally listening to the little guy. The purpose of our court system is to ensure a fair playing field for both sides of litigation, and until now in foreclosures the banks have had the home field advantage. I have said it before and I will say it again, affidavits without knowledge are simply inadmissible. To win the game in a foreclosure suit, the bank must simply prove through decided rules of evidence how much the homeowner owes. And now, thanks to the Fourth District Court, the playing field has finally been leveled. I hope judges take heed.
From the Trenches,
Roy Oppenheim is a sought-after legal expert on issues relating to real estate. In 2009, he started the South Florida Law Blog to address the real estate market and foreclosure crisis. The Blog has been voted the best business and technology blog by the South Florida Sun-Sentinel. Mr. Oppenheim has been a contributor to Yahoo! Homes, featured on HuffPost Live, FOX News, and Lifetime TV, and quoted in prominent national publications, including USA Today, The New York Times and Huffington Post. Most recently, Mr. Oppenheim hosted an Ask Me Anything on Real Estate on Reddit. Mr. Oppenheim has also co-authored two law review articles: Deconstructing The Black Magic of Securitized Trusts, and The Emperor’s New Clothes.
Mr. Oppenheim founded Oppenheim Law, one of South Florida’s leading boutique law firms in Fort Lauderdale, Florida in 1989 with his wife Ellen Pilelsky, and, in 1994, he co-founded Weston Title & Escrow, a trusted South Florida real estate title company whose multilingual staff provides personal, concierge style service in the areas of real estate closings, title insurance, title searches and escrow services.
Weston Title: https://westontitle.com/