Deutsche Bank Foreclosure Tossed on Appeal in Favor of Homeowners…But It’s Not a Texas Court Ruling

To obtain a judgment of foreclosure, the Bank was required to prove—among other things—that it had provided Jesse with proper notice of default and right to cure.

See Bank of Am., N.A. v. Greenleaf, 2014 ME 89, ¶ 18, 96 A.3d 700.

Here, Exhibit E was Deutsche Bank’s only evidence that it had sent a proper notice of default to Jesse. Over the Eddinses’ objection, the court admitted that document in evidence as a business record based on Shadle’s foundational testimony.

The Eddinses argue here that the admission of the document was error.

Consequently, when a document is created by one entity and then transmitted to another, and the document is then offered as a business record pursuant to Rule 803(6), the witness must be shown to have “sufficient knowledge of both businesses’ regular practices to demonstrate the reliability and trustworthiness of the information.” Carter, 2011 ME 77, ¶ 13, 25 A.3d 96 (emphasis added); see also Estate of Quint, 2017 ME 237, ¶¶ 16-17, 176 A.3d 717. The incorporation of one entity’s record into the records of the receiving entity is not a sufficient basis, by itself, for the admissibility of that record.

Here, Deutsche Bank presented Shadle as the witness to provide the foundational predicate for admission in evidence of the notice of default. Shadle testified about various positions he held with Ocwen and described some measure of familiarity with Ocwen’s business practices.

The notice of default, however, was not issued by Ocwen. Rather, the notice was issued and at least initially maintained by the law firm representing Ocwen.

Deutsche Bank did not present any evidence that Shadle had any familiarity with the processes used by the law firm to generate documents, such as a notice of default, and to maintain any such documents.

In the absence of any evidence that Shadle had knowledge of the law firm’s practices regarding business records, the court abused its discretion by admitting the document in evidence. See Carter, 2011 ME 77, ¶¶ 12-14, 25 A.3d 96; Murphy, 2011 ME 59, ¶ 10, 19 A.3d 815.

Because Deutsche Bank presented no competent evidence that a notice of default was sent to Jesse or that any such notice met the requirements of either section 6111 or the mortgage instrument itself, the Bank failed as a matter of law to prove a necessary element of its foreclosure claim, see Greenleaf, 2014 ME 89, ¶ 18, 96 A.3d 700, and the Eddinses are therefore entitled to judgment.6 See Lowell, 2017 ME 32, ¶¶ 1, 21, 156 A.3d 727 (stating that when a mortgagee fails at trial to prove a required element of a foreclosure claim, the mortgagor is entitled to judgment); CitiMortgage, Inc. v. Chartier, 2015 ME 17, ¶¶ 1, 10, 111 A.3d 39 (same).

Judgment vacated. Remanded for entry of judgment for Jesse S. Eddins Jr. and Naomi L. Eddins.

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