BANK OF AMERICA, N. A., its successors and/or assigns, Plaintiff-Respondent,
Martin D. CARLSON and Janet L. Carlson, Defendants-Appellants.
and submitted August 29, 2017
Clackamas County Circuit Court CV13070941 Michael C. Wetzel,
Ridgway K. Foley, Jr., argued the cause for appellants. Also
on the briefs were Charles R. Markley and Williams Kastner
Greene & Markley.
Rezvani argued the cause for respondent. Also on the brief
was Warren Allen, LLP.
DeHoog, Presiding Judge, and Egan, Chief Judge, and Aoyagi,
Summary: In this judicial foreclosure action, defendants
appeal from the trial court's grant of summary judgment
to plaintiff, Bank of America. Defendants argue that
plaintiff was not entitled to judgment as a matter of law,
because plaintiff failed to produce admissible evidence to
establish that it is entitled to enforce defendants'
The trial court erred in granting summary judgment to
plaintiff, because plaintiff relied on inadmissible hearsay
to establish its standing to enforce the note.
Plaintiff's employees' declarations are not business
records under OEC 803(6), and the summary judgment record
therefore does not contain any admissible evidence that
plaintiff was entitled to enforce the note.
Or.App. 506] DEHOOG, P. J.
U.S. Bank National Assn. v. McCoy, 290 Or.App. 525,
527, 415 P.3d 1116 (2018), a judicial foreclosure action like
this one, we held that a statement in a bank employee's
declaration, attesting that the bank's business records
showed that the defendant's promissory note had been in
the plaintiffs possession at the time it commenced
foreclosure proceedings, was inadmissible to establish the
plaintiffs standing to enforce the note. We concluded that,
even though the bank records themselves were admissible under
the hearsay exception for business records, the statement as
to what those records reflected was inadmissible hearsay.
Id. at 534-35. Although we did not issue
McCoy until after this case had been taken under
advisement, defendants' opening brief squarely raises the
same issue as the one decided in that case. Further, we
conclude that, as in McCoy, plaintiff improperly
relied on inadmissible hearsay in its declarations to
establish its standing to enforce defendants' promissory
note. Accordingly, the trial court erred in granting
plaintiff summary judgment on the basis of those
declarations, and we therefore reverse and
relevant facts are procedural and undisputed. Defendants'
appeal arises out of summary judgment proceedings in which
the trial court determined that there were no disputed issues
of material fact and that plaintiff, Bank of America, was
entitled to prevail as a matter of law. In response to
plaintiffs motion for summary judgment, defendants had
argued, among other things, that plaintiffs declarations in
support of summary judgment contained inadmissible hearsay.
The trial court rejected that argument, which defendants
reprise on appeal. Plaintiff does not directly respond,
choosing instead to focus on defendants' other arguments,
including their contention that plaintiffs witnesses were not
competent to testify regarding plaintiffs business records.
Because it is dispositive, we limit our discussion to
defendants' hearsay argument.
Or.App. 507] We begin by briefly summarizing the relevant law
governing judicial foreclosure and the applicable legal
standards. To prevail in a judicial foreclosure action, a
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."
McCoy, 290 Or.App. at 528 (citing Churchill v.
Meade, 88 Or. 120, 124, 171 P 565 (1918)). The plaintiff
"must also show that it is a party entitled to enforce
the note," which, as relevant here, the plaintiff can
establish "through proof that it possessed the note when
it filed for foreclosure." Id.; see ORS 73.0301
(the "holder of the instrument" may enforce it);
ORS 71.2010 (2)(u)(A) (a "[h]older" is a
"person in possession of a negotiable instrument").
turn, summary judgment is warranted when "the pleadings,
depositions, affidavits, declarations and admissions on file
show that there is no genuine issue as to any material fact
and that the moving party is entitled to prevail as a matter
of law." ORCP 47 C. As the party with the burden of
proof at trial, the plaintiff "bears the burden of
producing evidence to establish [its claim] as a matter of
law at the summary judgment stage." U.S. Bank
National Assn. v. Vettrus, 285 Or.App. 629, 636, 379
P.3d 68 (2017) (internal quotation marks omitted). In
determining whether there is a material factual dispute,
we-like the trial court-view the summary judgment record in
the light most favorable to defendants, the nonmoving
parties. As noted, however, in this case there are no factual
disputes relevant to our disposition; accordingly, we review
for legal error the trial court's ultimate determination
that plaintiff was entitled to judgment as a matter of law.
alleged error here concerns plaintiffs status as a party
entitled to enforce defendants' promissory note. As
evidence that it was entitled to enforce the note, plaintiff
submitted two declarations purporting to be from
"Assistant Vice President[s]" of Bank of America,
N.A. ("BANA"). Each declaration asserts that
plaintiff was in possession of defendants' note when it
filed this foreclosure action and that [298 Or.App. 508]
plaintiff has remained in possession since that
time. Each declarant attached a certified true
copy of the note to her declaration; neither copy, however,
indicates when the note came into plaintiffs possession or
when plaintiff might otherwise have acquired grounds to
enforce the note. Rather, the note is "indorsed in
blank" (rendering it payable to the party possessing
it), without showing a transaction date or any other date or
event potentially relevant to plaintiffs status as a party
entitled to enforce the note. Nor do the declarations
themselves provide admissible evidence as to any such date or
event. Rather, in support of its factual assertions, each
declaration merely states that the "information in this
declaration is taken from BANA's business records."
That is, neither declarant claimed to have had personal
knowledge regarding plaintiffs possessory or other interest
in the note, but only to have had sufficient knowledge of
plaintiffs records to satisfy the requirements of the hearsay
exception for business records, OEC 803(6).
addressed that hearsay exception under substantially the same
circumstances in McCoy, 290 Or.App. at 533-34. In
that case, the plaintiff attempted to establish its standing
to enforce a promissory note by submitting the declaration of
an employee of the loan servicer, Wells Fargo Bank. In her
declaration, the employee stated that she was "competent
to testify to the [information in the declaration] based upon
[her] personal knowledge of the facts and [her] review of the
business records herein." Id. at 529
(alterations in McCo ...