Foreclosure ruling for homeowner reversed after ‘near-blanket exclusion’ of evidence

A Lake Superior judge who threw out a bank’s mortgage foreclosure lawsuit against a homeowner and entered judgment in her favor was reversed by the Indiana Court of Appeals, which found the court abused its discretion in ordering a “near-blanket exclusion” of the bank’s evidence.

Judge Calvin Hawkins awarded judgment on the evidence for the defendant in Wells Fargo Bank, N.A. v. Judith A. Hallie, 19A-MF-2183. Hallie had purchased property in Schererville in 2004 from Washington Mutual, which later was acquired by Wells Fargo. The bank sued in 2013, alleging that as of July 2013, Hallie owed about $55,600 on the note plus costs and fees. But Hallie’s counsel at trial argued Wells Fargo was not the true client and countersued.

At a hearing last year, Wells Fargo produced an employee — a business initiatives consultant who previously had worked at Washington Mutual. She testified Wells Fargo owned the mortgage and she had reviewed Hallie’s file and payment history and the bank’s demand letter and collection notes, among other documents that the bank proffered as evidence.

But the court excluded all exhibits except a payoff statement from evidence because the witness “was not present at the loan closing, lacked first-hand knowledge of transactions, had not personally made data entries, and was simply reading from documents,” Judge L. Mark Bailey wrote for the panel in reversing the trial court. The panel found the trial court abused its discretion in permitting “the near-blanket exclusion of exhibits.

“Wells Fargo has shown prima facie reversible error in the trial court’s purported entry of a ‘judgment on the evidence.’ On remand, Wells Fargo should be permitted to proffer exhibits consistent with the Indiana Rules of Evidence, without a heightened personal knowledge requirement,” the court held.