415 P.3d 1116
Or. Ct. App.2018Background
- In 2005 defendant executed a promissory note secured by a deed of trust; BNC later assigned the note and deed to plaintiff (a mortgage-backed trust) and recorded the assignment. Plaintiff sued for judicial foreclosure in 2013.
- Plaintiff moved for summary judgment, asserting it was entitled to enforce the note because it possessed the physical note when it filed suit.
- The summary judgment record consisted of plaintiff's motion, a declaration by Wells Fargo employee Brown (plaintiff's servicer) with five attached loan-file documents (including a copy of the note and assignment), and counsel’s courtroom certification that the note was in counsel’s possession.
- Paragraph 7 of Brown’s declaration asserted that plaintiff (directly or through an agent) had possession of the promissory note when the foreclosure action was initiated; Brown’s statement was premised on her review of Wells Fargo business records, but those particular records (showing timing of acquisition) were not attached.
- Defendant moved to strike paragraph 7 as hearsay/lacking personal knowledge and argued plaintiff therefore lacked admissible evidence of standing; the trial court denied the motion and granted summary judgment. The court of appeals reversed and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether paragraph 7 of Brown’s declaration (stating plaintiff possessed the note when suit was filed) is admissible or hearsay | Brown had personal knowledge from reviewing servicer business records; business-records exception makes the statement admissible | Paragraph 7 reports out-of-court record contents and is hearsay; Brown’s testimony about the records is inadmissible because the records themselves weren’t produced | Paragraph 7 is hearsay and not admissible under OEC 803(6); testimony about record contents cannot substitute for the records themselves |
| Whether other materials in the summary-judgment record established plaintiff’s standing despite striking paragraph 7 | Complaint allegations, counsel’s courtroom certification, copies of the note and assignment, and counsel’s possession at hearing suffice | Those items are either inadmissible, not evidence of possession at the time the complaint was filed, or mere counsel assertions | Other materials did not supply admissible proof that plaintiff possessed the note at filing; summary judgment reversed because plaintiff failed to prove standing |
Key Cases Cited
- Churchill v. Meade, 88 Or. 120 (stating elements required to foreclose)
- Investment Servs. v. Martin Bros., 255 Or. 192 (holder status requires possession to sue on negotiable instrument)
- Deutsche Bank Tr. Co. Americas v. Walmsley, 277 Or. App. 690 (plaintiff must show entitlement to enforce note to foreclose)
- West v. Allied Signal, Inc., 200 Or. App. 182 (review supporting affidavits/declarations as a whole under ORCP 47 D)
- State v. Rodriguez-Castillo, 345 Or. 39 (OEC 805 analysis for hearsay within hearsay)
- State v. Cunningham, 337 Or. 528 (standard of review for evidentiary rulings)
- State v. Rogers, 330 Or. 282 (standards for review of evidentiary matters)
- Ellis v. Ferrellgas, L.P., 211 Or. App. 648 (review of summary judgment rulings)
- State v. Edmonds, 285 Or. App. 855 (application of business-records exception to documents)
- State v. Cain, 260 Or. App. 626 (business-records exception applied to computer-generated printout)
- Outdoor Media Dimensions Inc. v. State of Oregon, 331 Or. 634 (ORCP 47 summary judgment standard)
- Robinson v. Lamb's Wilsonville Thriftway, 332 Or. 453 (plaintiff with ultimate burden must produce evidence warranting judgment as a matter of law)