Ivy Chase Apartment Property, LLC v. Ivy Chase Apartments, Ltd.
The Second District reversed a commercial foreclosure judgment because the lender's sole witness testified to the amount of indebtedness based solely on his review of a predecessor's business records that were never admitted into evidence, making the testimony inadmissible hearsay and leaving no competent substantial evidence of damages. The court also held the trial court could not use 'equity' to rewrite the note's unambiguous default-rate clause (maximum rate allowed by law, i.e., 25% for loans over $500,000) and reduce it to 5%, and that the debtors waived their unpled usury and estoppel defenses.
Key facts
- Ivy Chase Apartment Property, LLC (foreclosure plaintiff/lender) sought to foreclose on a commercial loan against Ivy Chase Apartments, Ltd. (borrower), claiming indebtedness based on a note with a default interest rate set at the maximum rate allowed by law (25% for loans over $500,000).
- The trial court entered judgment for the plaintiff on the foreclosure claim, but the Second District reversed because the plaintiff's sole witness testified about the amount of indebtedness based entirely on review of the predecessor's business records that were never admitted into evidence.
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Why it matters
Useful for both sides of commercial and residential foreclosure damages trials: it reinforces that a servicer/assignee witness cannot bootstrap a predecessor's unadmitted payment histories into evidence, and that… — full analysis with a trial
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