Hawaii Supreme Court

U.S. Bank Trust, N.A. v. Verhagen. ICA s.d.o., filed 07/20/2020, 148 Haw. 44. Motion for Reconsideration, filed…

June 21, 2021149 Haw. 315

Summary

The court held that a promissory note is a contractual document with independent legal significance and therefore is not hearsay, although a duplicate note is not self-authenticating and must be authenticated by extrinsic evidence. It further held that Caliber employees properly authenticated the note copies and established the admissibility of incorporated records through testimony concerning Caliber's incorporation, reliance, and vetting of prior-servicer records. The combined evidence established that U.S. Bank possessed the indorsed-in-blank note when it filed suit, giving it standing and entitling it to summary judgment and foreclosure. No separate opinions were filed.

Holding

  • Whether the promissory note was hearsay.. The promissory note was not hearsay because it was an operative contractual document with independent legal significance; it therefore did not need to qualify under the business-records exception to be admissible.
  • Whether copies of the promissory note were self-authenticating under HRE Rule 902(9).. Original promissory notes are self-authenticating commercial paper under HRE Rule 902(9), but duplicate or copied notes are not self-authenticating and are admissible only when authenticated by extrinsic evidence.
  • Whether U.S. Bank authenticated the copies of the promissory note.. U.S. Bank adequately authenticated the copies of the note through the declarations of Salyers and Patterson, each of whom personally inspected a copy maintained by Caliber and identified the attached copy as true and correct.
  • Whether prior-servicer records incorporated into Caliber's records were admissible under the incorporated-records doctrine.. The incorporated records were admissible under HRE Rule 803(b)(6) because Caliber incorporated and maintained them in the ordinary course of business, relied on their accuracy, and performed due diligence and other review indicating their trustworthiness. A witness need not be familiar with the record-keeping practices of the entity that originally created the records when the receiving business incorporated them into its own records.
  • Whether U.S. Bank established standing at the commencement of the foreclosure action.. U.S. Bank established standing because the admissible evidence, considered collectively, showed that it or its agent possessed the original note, indorsed in blank, when the complaint was filed. The certification shortly before filing, the later bailee letter, and Patterson's testimony supplied sufficient corroboration, and Verhagen offered no evidence creating a genuine issue of fact.
  • Whether Verhagen waived objections to the motion to ratify.. Verhagen waived his objections to U.S. Bank's motion to ratify by failing to oppose it when he had an opportunity to do so.

Docket SCWC-17-0000746

Cited authorities

  • Fed. R. Evid. 802(c)

Cited by

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