U.S. Bank National Association as Trustee for Csmc Mortgage Loan Trust 2006-7 v. Compton (Hawaii 2021)

Summary

The Hawaii Supreme Court held that a promissory note is not hearsay and need not satisfy the business‑records exception, that the incorporated‑records doctrine may be satisfied by testimony about the record‑keeping of the incorporating business, and that U.S. Bank possessed the note and therefore had standing to obtain summary judgment on the foreclosure. The court affirmed the circuit court’s grant of summary judgment and vacated the intermediate appellate court’s reversal.

Holding

Whether a promissory note must satisfy the business‑records exception to be admitted into evidence.. A promissory note is not hearsay because it has independent legal significance and therefore need not fall within the business‑records exception.

Whether a party that incorporates a third party’s records must present testimony about the third party’s record‑keeping to satisfy the business‑records exception.. Under the incorporated‑records doctrine, foundation can be established by testimony from a custodian or other witness qualified to testify about the record‑keeping practices of the incorporating business, not necessarily the creator’s practices.

Whether U.S. Bank possessed the note at the time it filed suit and therefore had standing to foreclose.. U.S. Bank possessed the original note, indorsed in blank, at the time it sued, establishing standing to foreclose and entitlement to summary judgment.