No.

85 February 28, 2018 525

IN THE COURT OF APPEALS OF THE

STATE OF OREGON

U.S. BANK NATIONAL ASSOCIATION,

as Trustee for the Structured Asset
Investment Loan Trust, 2005-10,
its successors in interest and/or assigns,
Plaintiff-Respondent,
v.
Donald E. McCOY, III,
aka Donald Eugene McCoy, III,
Defendant-Appellant,
and
Virginia Lee McCOY,
aka Virginia Lee McLaughlin; et al.,
Defendants.
Jackson County Circuit Court
13CV03561; A159998

Timothy C. Gerking, Judge.

Argued and submitted October 25, 2016.
Jeffrey A. Long argued the cause and filed the briefs for
appellant.
Valerie I. Holder argued the cause for respondent. On the
brief were Molly J. Henry and Keesal, Young & Logan.
Before DeHoog, Presiding Judge, and Egan, Chief Judge,
and Aoyagi, Judge.*
DEHOOG, P. J.
Reversed and remanded.

______________
*  Egan, C. J., vice Flynn, J. pro tempore; Aoyagi, J., vice Sercombe, S. J.
526 U.S. Bank National Assn. v. McCoy

Case Summary: In this judicial foreclosure action, defendant appeals an

award of summary judgment to plaintiff. Defendant assigns error to the trial
court’s ruling denying his motion to strike the assertion, set forth in a declaration
submitted by plaintiff, that plaintiff had possession of defendant’s promissory
note at the time that it commenced its foreclosure action. Held: The trial court
erred in denying the motion to strike because a portion of the declaration con-
sisted of inadmissible hearsay. Without that inadmissible evidence, the record
did not establish that plaintiff was entitled to judgment as a matter of law.
Reversed and remanded.
Cite as 290 Or App 525 (2018) 527

DEHOOG, P. J.
In this judicial foreclosure action, defendant
appeals an award of summary judgment to plaintiff and
raises two assignments of error. In his first assignment,
defendant argues that the trial court erred in denying his
motion to strike the assertion, set forth in a declaration sub-
mitted by plaintiff, that plaintiff had possession of defen-
dant’s promissory note at the time that it commenced its
foreclosure action. Defendant argues that the challenged
assertion was inadmissible, because it was not based on the
declarant’s personal knowledge and because it was hearsay.
Defendant further asserts that, without the inadmissible
portion of its declaration, plaintiff could not establish its
standing to enforce defendant’s promissory note and, there-
fore, was not entitled to judgment as a matter of law. In his
second assignment of error, defendant argues that factual
disputes regarding the validity of the note’s indorsement
and plaintiff’s corresponding entitlement to enforce the note
precluded summary judgment. For the reasons that follow,
we agree with defendant’s contention that a portion of the
declaration consists of inadmissible hearsay and that, with-
out that inadmissible evidence, the record does not establish
that plaintiff was entitled to judgment as a matter of law.
Accordingly, we reverse and remand.1
The facts material to defendant’s appeal are largely
procedural and undisputed. In 2005, defendant borrowed
funds from BNC Mortgage, Inc. (BNC) to finance the pur-
chase of a home. Defendant executed a promissory note
payable to BNC and secured by a trust deed on the home.
Defendant subsequently defaulted on the loan, giving rise to
this foreclosure action. In 2009, following defendant’s default,
BNC assigned the trust deed and promissory note to plain-
tiff, a mortgage-backed trust, and recorded that assignment.
Plaintiff filed the present action in 2013. Shortly
thereafter, plaintiff moved for summary judgment on its
foreclosure claim. See ORCP 47.2
1
  Our disposition of defendant’s first assignment of error renders it unneces-
sary to further consider his second assignment of error.
2
  Summary judgment is proper when “the pleadings, depositions, affidavits,
declarations and admissions on file show that there is no genuine issue as to any
528 U.S. Bank National Assn. v. McCoy

To prevail on its foreclosure claim, plaintiff must

show that the trust deed securing defendant’s promissory
note authorizes the remedy of foreclosure upon default; that
defendant is in default under the terms of the loan; and that
defendant failed to cure the default despite having had an
opportunity to do so. Churchill v. Meade, 88 Or 120, 124,
171 P 565 (1918) (stating those requirements for mortgage
foreclosure); Deutsche Bank Trust Co. Americas v. Walmsley,
277 Or App 690, 695, 374 P3d 937 (2016) (a trust deed secur-
ing the sale of property may be judicially foreclosed in the
same manner as a mortgage). Central to this appeal, plain-
tiff must also show that it is a party entitled to enforce the
note. Deutsche Bank Trust Co. Americas, 277 Or App at
695. In this case, plaintiff sought to establish its author-
ity to enforce the note through proof that it possessed the
note when it filed for foreclosure. See ORS 73.0301 (a per-
son entitled to enforce an instrument includes the “holder
of the instrument”); ORS 71.2010(2)(u)(A) (a “[h]older” is a
“person in possession of a negotiable instrument” (emphasis
added)); Investment Service v. Martin Bros., 255 Or 192, 195,
203-05, 465 P2d 868 (1970) (noting that the plaintiff became
the holder when it “received” the negotiable instrument and
stating that, to have standing to enforce a negotiable instru-
ment, the party must have been a holder when it filed its
complaint).
Plaintiff’s motion for summary judgment asserted
that plaintiff had introduced sufficient evidence as to each
element of its foreclosure claim, that there were no disputed
issues of material fact, and that it was entitled to judgment
as a matter of law. See ORCP 47 C (stating that standard
for summary judgment). In regard to plaintiff’s authority
to enforce the note—the only element at issue on appeal—
plaintiff’s motion stated that the note physically was “cur-
rently with counsel for Plaintiff * * * and [wa]s available for

material fact and that the moving party is entitled to prevail as a matter of law.”
ORCP 47 C; see Outdoor Media Dimensions Inc. v. State of Oregon, 331 Or 634,
638, 20 P3d 180 (2001). As the party with the ultimate burden of establishing
its standing at trial, plaintiff is entitled to judgment as a matter of law only if
it introduces sufficient evidence on that—and every other element of its claim—
such that “no objectively reasonable juror could return a verdict for the adverse
party on the matter.” ORCP 47 C; Robinson v. Lamb’s Wilsonville Thriftway, 332
Or 453, 455, 31 P3d 421 (2001).
Cite as 290 Or App 525 (2018) 529

inspection.” Plaintiff’s motion further asserted that plain-

tiff had established that it was the party entitled to enforce
the note through the declaration of a bank employee, which
plaintiff submitted in support of its motion for summary
judgment.
The declarant, Brown, stated that she was an
employee of Wells Fargo Bank (Wells Fargo), plaintiff’s loan
servicer, and that she was “competent to testify to the [infor-
mation in the declaration] based upon [her] personal knowl-
edge of the facts and [her] review of the business records
herein.” Brown attested that she was familiar with Wells
Fargo’s business records relating to the servicing of defen-
dant’s mortgage and that
“[t]he copies of the Records attached to this Declaration are
copies of the Records described. These Records are main-
tained in the ordinary course of business by Wells Fargo’s
personnel or staff, or persons acting under their control,
and were made at or about the time of the act, condition, or
event recorded.”
Brown further attested that she had “personal knowledge
of the manner in which the Records [were] maintained” and
that she had “reviewed and relied upon the Records in exe-
cuting [her] Declaration.” After providing that basis for her
knowledge, Brown stated additional facts specific to plain-
tiff’s motion for summary judgment, including the following
paragraph:
“7.
“CURRENT STATUS OF NOTE AND DEED OF
TRUST:  [Plaintiff] directly or through an agent, has
possession of the Promissory Note (‘Note’), which was
made, executed, and delivered for valuable consideration.
[Plaintiff] is either the original payee of the Note or the
Note has been duly indorsed. [Plaintiff] was the holder at
the time this foreclosure action was initiated and remains
the holder of the Note and beneficiary of the Deed of Trust,
and is entitled to enforce the Note under ORS 73.0301 and
ORS 86A.175.”
(Capitalization and underscoring in original.) Brown
attached five documents to her declaration: (1) a copy of the
promissory note; (2) a copy of the deed of trust; (3) a copy of
530 U.S. Bank National Assn. v. McCoy

the assignment; (4) a printout of defendant’s loan-payment

history; and (5) a copy of a demand letter sent to defendant.
Defendant opposed the summary judgment motion.
In relevant part, defendant argued that plaintiff had not put
forth admissible evidence that it possessed the note at the
time the complaint was filed and, therefore, had not estab-
lished that it was a holder with standing to enforce the note.
Defendant noted that the entire summary judgment record
consisted of plaintiff’s motion, Brown’s declaration, and the
five records attached to the declaration. In defendant’s view,
the only evidence in the record that purported to establish
plaintiff’s possession of the note at the relevant time was
paragraph 7 of Brown’s declaration. Defendant moved to
strike that paragraph of the declaration, arguing, among
other things, that it was not based on Brown’s personal
knowledge and that it was inadmissible hearsay. Defendant
argued that, because plaintiff had not put forth admissible
evidence establishing an essential element of its foreclosure
claim—that plaintiff had possession of the note at the time
it initiated the foreclosure action and therefore was a party
entitled to enforce the note—plaintiff was not entitled to
summary judgment.
At the hearing on plaintiff’s motion, the parties
disputed whether plaintiff had established possession of
the note at the relevant time. In addition to its summary
judgment filings, plaintiff purported to rely on its counsel’s
“certif[ication] as an officer of the Court that the note is cur-
rently in the possession of my office, [and] it has been made
available, or has been shown to [defendant].”
At the conclusion of the hearing, and without elab-
oration, the trial court granted plaintiff’s motion for sum-
mary judgment and entered a general judgment of foreclo-
sure. Defendant now appeals that ruling.
With that background established, we turn to defen-
dant’s first assignment of error, in which he asserts that the
trial court erred in denying his motion to strike paragraph 7
of the Brown declaration as inadmissible hearsay.3 Defendant
3
 Because we conclude that that portion of the declaration was inadmissi-
ble hearsay, we do not reach defendant’s alternative argument that paragraph 7
Cite as 290 Or App 525 (2018) 531

contends that, because that paragraph was based on out-of-

court statements—the Wells Fargo bank records that Brown
reviewed—her description of their contents was hearsay
to which no exception applied. See OEC 802 (“Hearsay is
not admissible except as provided in [OEC 801 to 806] or
as otherwise provided by law.”); OEC 805 (hearsay within
hearsay is not excluded if each part falls within an excep-
tion); State v. Rodriguez-Castillo, 345 Or 39, 46, 188 P3d 268
(2008) (testimony is admissible under OEC 805 only if each
out-of-court statement satisfies a hearsay exception or exclu-
sion). Defendant acknowledges that the Wells Fargo records
that Brown purports to have relied on may have been admis-
sible under the hearsay exception for business records. See
OEC 803(6) (business records exception to the rule against
hearsay). He argues, however, that Brown’s declaration may
not describe their contents where, as here, the records that
are described are not produced in court. See ORCP 47 D
(requiring parties to attach or concurrently serve copies of
any papers referenced in affidavits or declarations).
From that premise, defendant argues that sum-
mary judgment was improper because, without paragraph 7
of the declaration, the summary judgment record lacked any
evidence that plaintiff was entitled to enforce the note. See
ORCP 47 D (summary judgment must be based on “facts as
would be admissible in evidence”); Deutsche Bank Trust Co.
Americas, 277 Or App at 695 (a plaintiff must establish that
it has standing in order to prevail on a foreclosure claim).
For its part, plaintiff does not dispute that, to pre-
vail on summary judgment, it was required to establish,
through proof of possession, that it had standing to enforce
the note at the time of filing. Plaintiff asserts, however,
that its summary judgment materials satisfied its burden
of proof as to that element because no part of Brown’s decla-
ration is inadmissible. Plaintiff reasons that Brown’s asser-
tion that plaintiff was in possession of the note is admissi-
ble, because Brown “had access to the servicer’s business
records relating to the servicing of [defendant’s] loan” and

of the declaration was inadmissible because it was not based on the declarant’s
personal knowledge. As a practical matter, of course, testimony that is based on
hearsay is not based on personal knowledge.
532 U.S. Bank National Assn. v. McCoy

“personally reviewed [defendant’s] loan file and testified

that those records reflect[ed] that [plaintiff] held the Note
at the time the foreclosure action was initiated.” Plaintiff
further asserts that, even if Brown’s statements are hear-
say, they are not inadmissible, because they fall within the
business records exception, OEC 803(6). In plaintiff’s view,
the business records exception permits testimony based on
a review of business records, without requiring introduction
of the records themselves into evidence.
Plaintiff alternatively asserts that, even if we con-
clude that Brown’s averment regarding plaintiff’s possession
of the note is inadmissible, there is ample other evidence in
the summary judgment record to support the court’s rul-
ing. In support of that argument, plaintiff points to (1) the
complaint, which expressly alleged that plaintiff was the
holder of the note; (2) the summary judgment motion, which
asserted that plaintiff’s counsel had physical possession
of the note; (3) a copy of the original note and its assign-
ment, both of which were attached to the summary judg-
ment motion; and (4) the “certification” by plaintiff’s counsel
at the summary judgment hearing that he had possession
of the note and that plaintiff had possessed the note since
2006. For the reasons that follow, we disagree with each of
plaintiff’s arguments.
We begin our analysis by determining the appropri-
ate standard of review. We review a trial court’s evidentiary
ruling either for an abuse of discretion or for errors of law,
depending on the subject matter. State v. Cunningham, 337
Or 528, 536, 99 P3d 271 (2004), cert den, 544 US 931 (2005);
State v. Rogers, 330 Or 282, 310-11, 4 P3d 1261 (2000).
Whether Brown’s declaration contains inadmissible hear-
say presents a question of law; accordingly, we review that
determination for legal error. See Cunningham, 337 Or at
538. Similarly, we review an order granting summary judg-
ment for legal error. Ellis v. Ferrellgas, L.P., 211 Or App 648,
652, 156 P3d 136 (2007). In conducting that review, we view
the summary judgment record in the light most favorable to
defendant, the nonmoving party. ORCP 47 C.
With those standards in mind, we first consider
whether paragraph 7 of the Brown declaration is hearsay.
Cite as 290 Or App 525 (2018) 533

Hearsay is an out-of-court statement offered to prove the

truth of the matter asserted. OEC 801(3). Such out-of-court
statements are generally inadmissible unless they qualify
under a hearsay exception or are categorically excluded
from hearsay treatment. OEC 802 (hearsay is not admissi-
ble except as provided in OEC 801 to 806); OEC 803 to 804
(setting forth exceptions to the hearsay rule); OEC 801(4)
(listing hearsay exclusions).

The attestations in paragraph 7 of Brown’s declara-

tion are hearsay, including the attestation as to plaintiff’s
possession of the note at the time it initiated the foreclo-
sure action. Brown does not couch her attestations in terms
of what Wells Fargo’s records “said”; that is, she does not
expressly reference an out-of-court statement. Viewing
the declaration as a whole, however, it is apparent—and
plaintiff acknowledges—that the attestations are based on
Brown’s contemporaneous review of the contents of Wells
Fargo’s business records. Cf. West v. Allied Signal, Inc., 200
Or App 182, 190, 113 P3d 983 (2005) (under ORCP 47 D, the
court reviews a supporting affidavit as a whole to determine
whether an objectively reasonable person would understand
its contents to be based on the affiant’s personal knowledge).
The only stated bases for Brown’s knowledge of any facts
are her employment by Wells Fargo and her correspond-
ing familiarity with, and review of, her employer’s records.
Paragraphs 4 through 6, 8, and 9 each reference specific
documents found in those records and attached to the dec-
laration. Brown concludes her attestation with, in relevant
part, “I make the above declaration based on my review
[of the] attached documents * * *.” And, as noted, plaintiff
argues in its own briefing that Brown’s declaration is based
on her review of defendant’s loan file, and that paragraph
7 sets forth her testimony “that those records reflect that
[plaintiff] held the Note at the time the foreclosure action
was initiated and continued to hold the Note.” (Emphasis
added.) Thus, paragraph 7 represents Brown’s account of
what Wells Fargo’s records say—that is hearsay.4 See OEC
801(3).

4
  Plaintiff does not dispute that the contents of paragraph 7 were offered to
prove the truth of the matter that they assert. See OEC 801(3).
534 U.S. Bank National Assn. v. McCoy

Our conclusion that paragraph 7 of the declaration

contains hearsay does not end our inquiry. As noted, plaintiff
argues that, if the assertions of that paragraph are hearsay,
those statements are nonetheless admissible because they
are business records. The business records exception to the
hearsay rule allows the admission of
“[a] memorandum, report, record, or data compilation, in
any form, of acts, events, conditions, opinions, or diagnoses,
made at or near the time by, or from information transmit-
ted by, a person with knowledge, if kept in the course of
a regularly conducted business activity, and if it was the
regular practice of that business activity to make the mem-
orandum, report, record, or data compilation, all as shown
by the testimony of the custodian or other qualified witness,
unless the source of information or the method [or] circum-
stances of preparation indicate lack of trustworthiness.”

OEC 803(6) (emphasis added). Thus, for a business record

to be admissible under that exception, the party proffering
that evidence must show that the record was (1) made at or
near the time of the event or matter being memorialized;
(2) by or from information transmitted by a person with
knowledge and a duty to report; (3) pursuant to a regular
activity of the business; and (4) kept in the course of a regu-
larly conducted business activity. See Laird C. Kirkpatrick,
Oregon Evidence § 803.06[3][a], 809 (6th ed 2013) (summa-
rizing the foundational requirements of the rule).
Plaintiff argues that Brown’s declaration estab-
lishes those predicates for the Wells Fargo records and that
they therefore qualify as business records. Plaintiff further
argues that Brown’s testimony based on her review of those
records similarly qualifies as an admissible business record.
Defendant does not dispute that the Wells Fargo records
themselves satisfy OEC 803(6), but contends that Brown’s
testimony about their contents is not a business record. We
agree with defendant.
In essence, defendant argues that, although plain-
tiff may have laid a sufficient foundation to introduce vari-
ous bank documents as business records under ORS 803(6),
its failure to introduce the records themselves renders that
effort moot, at least insofar as paragraph 7 of Brown’s
Cite as 290 Or App 525 (2018) 535

declaration is concerned.5 Defendant is correct. OEC 803(6)

authorizes the introduction of a qualified “memorandum,
report, record, or data compilation in any form,” but no part
of that rule purports to render testimony about those things
admissible over a hearsay objection. (Emphasis added.)
Moreover, the various considerations justifying a
hearsay exception for business records do not extend to tes-
timony regarding the contents of those records. In adopting
the business records exception, the legislature explained
that, generally, records kept as part of a regularly con-
ducted business activity are admissible, despite being
hearsay, because of their “unusual reliability.” Legislative
Commentary to OEC 803, reprinted in Kirkpatrick, Oregon
Evidence § 803.06[2] at 806. The source of that reliability
is “variously ascribed to the regular entries and system-
atic checking which produce habits of precision, to actual
reliance of the business upon them, and to the duty of the
record keeper to make an accurate record.” Id.; see State v.
Cain, 260 Or App 626, 632, 320 P3d 600 (2014) (discuss-
ing that rationale). Unlike the records actually accompany-
ing Brown’s declaration, none of those indicia of reliability
or trustworthiness extends to the freestanding testimony
found in paragraph 7.
Finally, we note that nothing in our case law sup-
ports plaintiff’s assertion that the business records excep-
tion permits a party to substitute testimony regarding the
contents of records for the records themselves. To the con-
trary, our case law has consistently applied OEC 803(6) to
documents or comparable materials, not to testimony about
those materials. See, e.g., State v. Edmonds, 285 Or App 855,
861-64, 398 P3d 998 (2017) (holding that the transcript of a
victim interview satisfying the foundational requirements
of the exception was not inadmissible hearsay); Cain, 260
Or App at 634-36 (a computer-generated printout created
in the course of a fraud investigation qualified as a business

5
  Brown attached various documents from defendant’s loan file to her decla-
ration. Nothing in those documents “reflect[s] that [plaintiff] held the Note at the
time the foreclosure action was initiated,” as plaintiff contends, because nothing
in them indicates when plaintiff acquired possession. Whatever records Brown
reviewed that led her to conclude that plaintiff possessed the note at the time it
initiated the foreclosure action, those records are not attached to her declaration.
536 U.S. Bank National Assn. v. McCoy

record). Thus, we conclude that paragraph 7 of the Brown

declaration was not admissible under OEC 803(6). And,
because plaintiff, the proponent of that evidence, has not
offered any other theory supporting its admission, we con-
clude that the trial court erred in denying plaintiff’s motion
to strike that portion of plaintiff’s declaration.
As noted above, plaintiff argues, alternatively, that
there was ample other evidence in the record to establish
plaintiff’s standing to bring the foreclosure action. We dis-
agree. Having reviewed the record, we conclude that the
“[a]dditional [i]ndependent [s]upport” that plaintiff points
to either is not evidence (allegations of the complaint; argu-
ments in the summary judgment motion; assertions of
plaintiff’s counsel at the hearing); did not show possession
at the relevant time (the promissory note and its assign-
ment; assertions of counsel that plaintiff possessed the note
at the time of the summary judgment hearing); or both.
Accordingly, we reject plaintiff’s alternative argument along
with its first.
Without any evidence to establish its standing to
bring its foreclosure action, plaintiff was not entitled to
judgment as a matter of law. We therefore conclude that the
trial court erred in granting plaintiff’s motion for summary
judgment.
Reversed and remanded.