Condo Association Failed to Lay Proper Foundation for Admitting Ledgers into Evidence

Yang v. Sebastian Lakes Condominium Ass’n, 4D12-3363 and 4D12-3364 (Fla. 4th DCA 2013):

This appeal focused on the business record exception to the hearsay rule. Two condo owners appealed a final judgment of foreclosure on the condo association’s liens for assessed maintenance fees. The association’s attorney sent letters to condo owners notifying them of overdue assessments and collection fees. The letters informed the owners that a lien would be placed on their units if assessments were not paid. Another letter was then sent to the owners informing them that the association had recorded a Claim of Lien on their units and that it might foreclose if the past-due amounts were not paid.

The condo owners filed affidavits attesting that the association’s records were incorrect and that a large advance payment for both units was made in August 2008. They attested that the error occurred when the association hired a new management company. That company informed the owners that payments may have been misapplied and credited to the wrong account. The owners requested the previous accountant’s records from the association. The owner’s claimed that the issue with their accounts was retaliatory because they were part of a group investigating $100,000 in missing condo funds and refused to accept a bribe.

The association sought to admit an account ledger by laying a foundation through an employee of the association’s management company. The owner’s attorney objected based on the lack of foundation for admission as a business record. The court admitted the ledger into evidence under the business records exception. The owners moved for a directed verdict on the ground that the management company’s employee could not testify to account balances that existed prior to her employer’s takeover in 2008. The owners clarified that the issue was not whether there were past-due amounts prior to take over, but rather whether a credit should have carried over after takeover. The trial court entered a Final Judgment of Foreclosure in favor of the association.

The Fourth District found the association failed to establish a proper foundation for admission of the account ledgers as business records. On cross-examination, the management company’s employee indicated that she never worked with the prior accountant and was unfamiliar with how the records were kept. She could not testify to the accuracy of the starting balances. The Fourth District agreed that the court erred in admitting testimony concerning the amount of fees owed because the condo association could not verify the amounts due before the new management company took over.