         IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                              FIFTH DISTRICT

                                                 NOT FINAL UNTIL TIME EXPIRES TO
                                                 FILE MOTION FOR REHEARING AND
                                                 DISPOSITION THEREOF IF FILED


JAIRO DIAZ AND DELSY DIAZ,

              Appellants,

v.                                                       Case No. 5D15-1612

WELLS FARGO BANK, N.A.,

              Appellee.

________________________________/

Opinion filed April 8, 2016

Appeal from the Circuit Court
for Volusia County,
Raul A. Zambrano, Judge.

Tanner Andrews, of Tanner Andrews,
P.A., Deland, for Appellants.

Sara F. Holladay-Tobias, Emily Y.
Rottmann, and Gabriel M. Hartsell,
of McGuireWoods LLP, Jacksonville,
for Appellee.


LAMBERT, J.

       Jairo Diaz and Delsy Diaz (“Appellants”) appeal the final judgment of foreclosure

rendered against them and in favor of Appellee, Wells Fargo Bank, N.A. (“Bank”),

following a bench trial. Appellants raise two arguments. First, they contend that the trial

court erred in admitting into evidence the loan payment history through Bank’s sole

witness at trial because the witness was not competent to testify. Second, Appellants
assert that the trial court erred in denying their motion for involuntary dismissal because

Bank failed to comply with certain conditions precedent to bringing suit. Specifically,

Appellants argue that the thirty-day notice of default letter sent by Bank pursuant to

paragraph twenty-two of the mortgage was insufficient, as it did not “specify the default”

or how to cure the default, and that Bank failed to comply with Title 24, sections 203.602

and 203.604, Code of Federal Regulations. Section 203.602 requires a mortgagee,

prior to filing suit to foreclose, to give notice of default to each mortgagor on a form

supplied by the Secretary of the Department of Housing and Urban Development

(“HUD”) or on a form approved by the Secretary.           Section 203.604 requires the

mortgagee to have a face-to-face interview with the mortgagor or to make a reasonable

effort to arrange such a meeting before three monthly installments due on the loan are

unpaid. For the following reasons, we affirm.

       On April 18, 2008, Wachovia Mortgage, FSB (“Wachovia”), loaned Appellants

$167,200, as evidenced by a promissory note and secured by a mortgage on real

property owned by Appellants. Wachovia merged with Bank, and, as a result, Bank

acquired the note and mortgage on October 1, 2009.

       Appellants failed to pay the October 1, 2011, payment due on the note. On

November 13, 2011, Bank sent Appellants a default notice letter pursuant to paragraph

twenty-two of the mortgage, advising them that: (1) the loan was in default for the

failure to make past due payments in the amount of $2261.82; (2) a late charge of

$51.37 had been assessed; (3) a payment in the total amount of $2313.19 must be

made in certified funds on or before December 13, 2011, plus any payments or other

charges that become due under the note and mortgage between the date of the letter




                                            2
and the date of the satisfying payment, to bring the loan current and avoid the possibility

of acceleration; (4) if payment was not received by December 13, 2011, Bank would

proceed with acceleration and may file a foreclosure proceeding; and (5) Appellants had

the right to reinstate the loan after acceleration and to present any defenses to the

foreclosure action.1 Appellants did not reinstate the loan, and, on January 2, 2013,

Bank filed the instant foreclosure action.

       At trial, Bank presented one witness, a nineteen-year employee of Bank who, at

the time of trial, was a loan administration manager and managed a team of six

individuals who “review and authorize business records for trials and depositions.” The

witness testified as to her familiarity with the manner in which Bank creates, stores, and

maintains its business records. The witness also testified about her familiarity with

Bank’s boarding process when it receives loan history data from a prior servicer of the

loan and how that data is then converted and entered into Bank’s system.

       Bank sought to move the complete loan history into evidence through its

witness’s testimony, but Appellants objected to the admission of any information based

upon records created by Wachovia before its merger with Bank. Appellants argued that

Bank’s witness lacked sufficient personal knowledge to lay the foundation for admission

of those records. The trial court admitted the complete loan history into evidence over

Appellants’ objection.




       1
        This letter also advised Appellants of the availability of government approved
home ownership counseling agencies designed to help homeowners to avoid losing
their home and provided Appellants with a phone number to obtain a list of these
agencies in the State of Florida.



                                             3
       “A trial court has wide discretion in determining the admissibility of evidence, and,

absent an abuse of discretion, the trial court’s ruling on evidentiary matters will not be

overturned.” LaMarr v. Lang, 796 So. 2d 1208, 1209 (Fla. 5th DCA 2001) (citation

omitted). In Nationstar Mortgage, LLC v. Berdecia, 169 So. 3d 209 (Fla. 5th DCA

2015), this court discussed the evidentiary foundation necessary for the admissibility of

mortgage documents under the business records hearsay exception,2 including records

of a prior holder or servicer of the note. We held that “the authenticating witness need

not be ‘the person who actually prepared the business records[,]’” Berdecia, 169 So. 3d

at 213 (quoting Cayea v. CitiMortgage, Inc., 138 So. 3d 1214, 1217 (Fla. 4th DCA

2014)), but that “the witness must be ‘well enough acquainted with the activity to give

the testimony.’” Id. (quoting Alexander v. Allstate Ins. Co., 388 So. 2d 592, 593 (Fla. 5th

DCA 1980)). We also noted that the testifying witness need not personally participate in

the process of incorporating the records of a prior servicer into the successor servicer’s

business records, provided that the witness demonstrates sufficient familiarity with this

“boarding” process to testify about it. Id.

       Based on our review of the record in the instant case, we conclude that the trial

court did not abuse its discretion in determining that Bank’s witness was competent to

testify and in admitting the loan history records into evidence.3 Moreover, the note in

this case has a fixed interest rate, and Appellants did not contest at trial the date that

they defaulted on payment of the note, which occurred approximately two years after

Bank acquired ownership of the note. Under these circumstances, the brief loan history


       2
           § 90.803(6), Fla. Stat. (2014).
       3
         The original note, the original mortgage, and the default letter were admitted
into evidence without objection.


                                              4
records from Wachovia were not critical to Bank establishing Appellants’ default and the

monies owed under the note.

       As to Appellants’ argument that Bank’s default letter was defective, we first

observe that Appellants did not preserve for review their argument that Bank’s default

letter failed to “specify the default” because Appellants did not make this argument to

the trial court. To preserve an issue for appellate review, “the specific legal ground

upon which a claim is based must be raised at trial . . . .” Aills v. Boemi, 29 So. 3d

1105, 1109 (Fla. 2010) (quoting Chamberlain v. State, 881 So. 2d 1087, 1100 (Fla.

2004)). Regardless, we conclude that, even if preserved, this argument and Appellants’

other argument, that Bank’s letter did not sufficiently advise them how to cure the

default, are without merit.

       While Appellants are correct that the notice requirements in paragraph twenty-

two of the mortgage are conditions precedent to Bank filing the present foreclosure suit,

substantial compliance, not strict compliance, with this condition precedent is all that is

required. See Bank of New York Mellon v. Nunez, 180 So. 3d 160, 161 n.1, 162 (Fla.

3d DCA 2015); see also Alvarez v. Rendon, 953 So. 2d 702, 708 (Fla. 5th DCA 2007)

(“[T]here must be at least a substantial performance of conditions precedent in order to

authorize a recovery as for performance of a contract.” (alteration in original) (quoting

Cohen v. Rothman, 127 So. 2d 143, 147 (Fla. 3d DCA 1961))). Here, Bank’s letter

explained to Appellants that their loan was in default for failure to make payments due

and advised them that, to avoid acceleration and foreclosure, they had thirty days to pay

the specified amount due, which included a late fee. Moreover, Appellants were notified

that they also had to pay the additional monthly payment on the note if that payment




                                            5
came due before Appellants exercised their right to reinstate the loan. We find nothing

confusing or misleading in this letter, nor do we think it inappropriate for Bank to remind

Appellants that, to avoid acceleration, they must also pay their upcoming payment if it

became due, as Appellants had contractually obligated themselves to timely make

these payments by signing the promissory note. Finally, even if this default letter could

have been better worded, we agree with the following recent observation of our sister

court in Green Tree Servicing, LLC v. Milam, 177 So. 3d 7 (Fla. 2d DCA 2015), that:

                Paragraph twenty-two is designed to ensure that a borrower
                receives essential information concerning his or her default,
                how to cure it, and his or her rights with respect to it. It is not
                a technical trap designed to forestall a lender from
                prosecuting an otherwise proper foreclosure action because
                a borrower, after the fact, decides that the letter might have
                been better worded.

177 So. 3d at 19.

       Turning to Appellants’ argument regarding non-compliance with certain federal

regulations, Bank made a general allegation in its complaint, as it is permitted to do, that

it had complied with all conditions precedent prior to bringing suit.4                Appellants

answered with a specific denial, alleging, inter alia, that Bank had not “furnished notice

of acceleration pursuant to 24 C.F.R. § 203.602” nor had Bank “had the face-to-face

meeting with [Appellants] required by 24 C.F.R. § 203.604 prior to bringing [the] action.”

       Title 24 of the Code of Federal Regulations is titled “Housing and Urban

Development.”       The particular sections upon which Appellants rely are located in

Subpart C of Part 203, which addresses the mortgage servicing responsibilities of




       4
           See Fla. R. Civ. P. 1.120(c).


                                                6
lending institutions with regard to mortgages insured by HUD.         See 24 C.F.R. §

203.500.

       Section 203.602 is titled “Delinquency Notice to Mortgagor” and provides in

pertinent part:

              The mortgagee shall give notice to each mortgagor in default
              on a form supplied by the Secretary [of HUD] or, if the
              mortgagee wishes to use its own form, on a form approved
              by the Secretary, no later than the end of the second month
              of any delinquency in payments under the mortgage.

Section 203.604 is titled “Contact with the Mortgagor,” and this regulation provides, in

pertinent part:

                  (b) The mortgagee must have a face-to-face interview
              with the mortgagor, or make a reasonable effort to arrange
              such a meeting, before three full monthly installments due on
              the mortgage are unpaid. If default occurs in a repayment
              plan arranged other than during a personal interview, the
              mortgagee must have a face-to-face meeting with the
              mortgagor, or make a reasonable attempt to arrange such a
              meeting within 30 days after such default and at least 30
              days before foreclosure is commenced . . . .

                  (c) A face-to-face meeting is not required if:

                  (1) The mortgagor does not reside in the mortgaged
              property,

                  (2) The mortgaged property is not within 200 miles of
              the mortgagee, its servicer, or a branch office of either,

                  (3) The mortgagor has clearly indicated that he will not
              cooperate in the interview,

                   (4) A repayment plan consistent with the mortgagor’s
              circumstances is entered into to bring the mortgagor’s
              account current thus making a meeting unnecessary, and
              payments thereunder are current, or

                  (5) A reasonable effort to arrange a meeting is
              unsuccessful.



                                            7
       Appellants argued below and argue here that because the bottom of each page

of the note and mortgage contain the legend “FNMA/FHLMC Uniform Instrument”5 that

this specific loan, owned and held by Bank, is subject to these two federal regulations.

At trial, Bank’s witness did not address whether Bank had complied with either of these

federal regulations. Appellant, Jairo Diaz, testified that Appellants never had a face-to-

face meeting with Bank’s representative before the suit was filed, and Appellants never

received “a letter on a form from the Secretary of Housing and Urban Development

about this case or about this loan.”6 Bank does not contend that it complied with these

regulations, but rather, it asserts that Appellants have failed to present competent

evidence that the loan was subject to HUD regulations. The precise issue that we

address is which party has the burden of proving that these federal regulations apply in

this case, which, in turn, depends on whether we interpret these conditions precedent to

be elements of Bank’s claim or affirmative defenses.

       “[A] defending party’s assertion that a plaintiff has failed to satisfy conditions

precedent necessary to trigger contractual duties under an existing agreement is

generally viewed as an affirmative defense, for which the defensive pleader has the

burden of pleading and persuasion.” Custer Med. Ctr. v. United Auto. Ins. Co., 62 So.

3d 1086, 1096 (Fla. 2010) (citing Fla. R. Civ. P. 1.120(c)) (additional citations omitted).

“An affirmative defense is an assertion of facts or law by the defendant that, if true,

would avoid the action and the plaintiff is not bound to prove that the affirmative defense


       5
         FNMA is commonly referred to as “Fannie Mae.” FHLMC is commonly referred
to as “Freddie Mac.”
       6
       Diaz also testified that the mortgaged property is their homestead and that
Bank has an office located near their home. Cf. 24 C.F.R. § 203.604(c)(1)–(2).


                                            8
does not exist.” Id. (citations omitted). Rather, “the burden of proving each element of

an affirmative defense rests on the party that asserts the defense.” Id. at 1097 (citing

Dorse v. Armstrong World Indus., Inc., 513 So. 2d 1265, 1269 n.5 (Fla. 1987))

(additional citations omitted).

       Unlike scenarios where conditions precedent are ascertainable on the face of a

written contract, such as compliance with paragraph twenty-two of the mortgage or

where a promissory note specifically incorporates the HUD regulations into its terms, it

is by no means clear that the HUD regulations applicable to federally insured loans

apply to the instant loan and litigation. We disagree with Appellants’ argument that,

simply because the note and mortgage were created utilizing Fannie Mae/Freddie Mac

uniform instruments, these regulations summarily apply to this loan. See McMenamin v.

Phelan Hallinan, LLP, No. Civ. A. 14-4814, 2015 WL 5515347, at *10 (E.D. Pa. Aug. 20,

2015) (finding that, despite the fact that the mortgage agreement was a “Fannie

Mae/Freddie Mac Uniform Instrument,” the mortgage lender was not required to

“engage in loss mitigation efforts to avoid foreclosure of [HUD] single family residential

mortgages pursuant to, inter alia, 24 C.F.R. § 203.500, et. seq.,” as the mortgage in that

case was not an FHA-insured mortgage).          One commentator has noted that these

uniform instruments were created, intended, and recommended for use with all

mortgage loans, whether or not they are federally insured or ever will be purchased by

Fannie Mae or Freddie Mac. See Julia Patterson Forrester, Fannie Mae/Freddie Mac

Uniform Mortgage Instruments: The Forgotten Benefit to Homeowners, 72 Mo. L. Rev.

1077, 1079–87 (2007) (noting estimates that more than ninety percent of all residential




                                            9
mortgage loans are documented on Fannie Mae/Freddie Mac uniform instruments, even

with lenders who do not contemplate selling their loans to Fannie Mae or Freddie Mac).

       Accordingly, we hold that where, as here, it is unclear whether alleged conditions

precedent apply, the burden is on the party asserting the existence of the conditions

precedent to establish their applicability. Thus, Appellants had the evidentiary burden of

proof to establish that sections 203.602 and 203.604 of Title 24 provided conditions

precedent that Bank had to satisfy prior to filing suit to foreclose the instant note and

mortgage, and we find that Appellants failed to present competent evidence at trial to

meet this burden.

       Because Appellants failed to establish reversible error as to any of the issues

raised, we affirm the final judgment of foreclosure in its entirety.

       AFFIRMED.

ORFINGER and EDWARDS, JJ., concur.




                                             10
