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IN THE SUPREME COURT OF THE STATE OF HAWAIʻI

---o0o---

WELLS FARGO BANK, N.A. AS TRUSTEE FOR OPTION ONE MORTGAGE LOAN

TRUST 2006-2 ASSET-BACKED CERTIFICATES, SERIES 2006-2,

Petitioner/Plaintiff-Appellee,

vs.

JONATHAN BEHRENDT,

Respondent/Defendant-Appellant,

and

ASSOCIATION OF APARTMENT OWNERS OF WAIALAE GARDENS; SAND CANYON

CORPORATION; JOHN DOES 1-10; JANE DOES 1-10; DOE PARTNERSHIPS 1-

10; DOE PARTNERSHIPS 1-10; DOE CORPORATIONS 1-10; DOE ENTITIES 

1-10 and DOE GOVERNMENTAL UNITS 1-10,

Respondents/Defendants-Appellees.

SCAP-16-0000645

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT

(CAAP-16-0000645; CIV. NO. 15-1-0407)

MARCH 15, 2018

RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.

OPINION OF THE COURT BY POLLACK, J.

This case involves the question of whether a purchaser 

of property that is subject to a mortgage to which the purchaser 

Electronically Filed

Supreme Court

SCAP-16-0000645

15-MAR-2018

07:52 AM
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2

is not a party may challenge a foreclosing plaintiff’s 

entitlement to enforce the note. Because the requirement--that 

a party seeking to foreclose must be entitled to enforce the 

note at the inception of the foreclosure action--is based on 

principles of standing and statutory construction rather than 

contractual rights, we hold that the purchaser may assert such a 

challenge. In this case, the evidence Wells Fargo presented 

regarding its entitlement to foreclose at the time the complaint 

was filed was not admissible on the grounds asserted, and 

therefore we vacate the order granting summary judgment and 

remand the case for further proceedings.

I. BACKGROUND

A. Factual History

On January 30, 2006, Karen Zakarian executed a 

promissory note (Note) in favor of the Funding Group, Inc. 

(Funding Group) for $408,000. Funding Group then endorsed the 

note to Option One Mortgage Corp. (Option One) via an allonge,

1

and Option One endorsed the Note in blank via another allonge.

2 

 

1 “An ‘allonge’ is defined as ‘[a] slip of paper sometimes attached 

to a negotiable instrument for the purpose of receiving further indorsements 

when the original paper is filled with indorsements.’” Mortgage Elec. 

Registration Sys., Inc. v. Wise, 130 Hawaii 11, 14 n.6, 304 P.3d 1192, 1195 

n.6 (2013) (quoting Allonge, Black’s Law Dictionary (9th ed. 2009)).

2 If an instrument is endorsed in blank, it is payable to the 

bearer. Hawaii Revised Statutes § 490:3-205(b) (2008). For example, a 

holder of an instrument may write “pay to the order of” and not write the 

(continued . . .)
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The Note was secured by a mortgage executed by Zakarian in favor 

of Funding Group (Mortgage) on property located at 1430-4 

Hunakai Street #106 in Honolulu (the “Property”), which is in a 

condominium project called Waialae Gardens. The Mortgage was 

subsequently assigned from Funding Group to Option One on July 

5, 2006, and then from Option One to Wells Fargo on May 10, 

2007.

Following a bankruptcy proceeding, Zakarian entered 

into a security retention agreement on March 14, 2011, with 

American Home Mortgage Servicing, Inc. (AHMS), a loan servicer 

acting on Wells Fargo’s behalf, which required that she continue 

to make payments and comply with the terms of the Note and the 

Mortgage in order to remain in the Property. Subsequently, as a 

result of a separate foreclosure action between the Association 

of Apartment Owners of Waialae Gardens (AOAO) and Zakarian, a 

court-appointed commissioner conveyed the Property via a 

commissioner’s apartment deed to Jonathan Behrendt on November 

23, 2011. An exhibit to the deed noted the Mortgage as an 

encumbrance. AHMS notified Zakarian in a written notice dated 

 

(. . . continued)

name of the endorsee. See Uniform Commercial Code § 3-205 cmt. 2 (Am. Law. 

Inst. & Unif. Law Comm’n 2002). This is a blank endorsement. Id.
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November 29, 2011, that she was in default under the terms of 

the Note and Mortgage. 

B. Circuit Court Proceedings

Wells Fargo filed a complaint in the Circuit Court of 

the First Circuit (circuit court) on March 9, 2015, against 

Behrendt and the AOAO, inter alia, seeking foreclosure of the 

Mortgage and sale of the Property. The complaint asserted that 

Wells Fargo was the holder of the Note and entitled to enforce 

it, that the Note was secured by the Mortgage, and that Wells 

Fargo was the mortgagee of record. Additionally, the complaint 

alleged that Zakarian had defaulted in the performance of the 

terms set forth in the Note and Mortgage. Copies of, inter 

alia, the Note, two allonges--one made out to Option One and one 

endorsed in blank, the Mortgage, and assignments from Funding 

Group to Option One and from Option One to Wells Fargo were

attached to the complaint as exhibits. The complaint also 

stated that the AOAO had previously foreclosed on the Property,

that the Property was conveyed to Behrendt by virtue of a 

commissioner’s deed, and that the interest of Behrendt in the 

Property was subject to the Mortgage. Wells Fargo asserted that 

it was entitled to foreclosure of the Mortgage and the sale of 

the Property. 

Following Behrendt’s answer to the complaint, Wells 

Fargo moved for summary judgment and for a decree of
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foreclosure. Wells Fargo attached as an exhibit to the summary 

judgment motion, inter alia, a declaration of Vanessa Lewis 

(Lewis Declaration). Lewis averred that she was a contract 

management coordinator for Ocwen Loan Servicing, LLC (Ocwen),

the new servicer for Wells Fargo for the Mortgage, and in that 

capacity had access to and was familiar with Wells Fargo’s 

records pertaining to the case, including Ocwen’s records 

related to servicing the loan. Lewis indicated that she had 

personal knowledge of the facts and matters stated, based on her 

review of the business records described in her declaration. 

Lewis stated that Ocwen’s records related to the loan were made 

and are maintained in the regular course of Ocwen’s business. 

According to those records, Lewis represented, Wells Fargo is in 

possession of the original Note between Zakarian and Funding 

Group, a copy of which was attached to the summary judgment 

motion along with copies of the allonges and Mortgage. 

Additionally, Lewis stated that written notice was sent to 

Zakarian regarding her default on payments and Zakarian did not 

timely cure the default. 

In opposition to the motion for summary judgment, 

Behrendt responded that, although Lewis claimed to be an Ocwen 

contract management coordinator and alleged that Ocwen was the 

servicing agent for Wells Fargo, Wells Fargo did not provide the 

court with any such authorization or agency agreement. Behrendt 
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also asserted that neither Lewis nor Wells Fargo explained what 

her role or relationship to Wells Fargo was besides claiming 

that she had access to Ocwen’s business records. Lewis did not 

claim to be the custodian of the records, Behrendt argued, or 

provide any foundation to establish her competency to 

authenticate those records beyond merely being familiar with 

them. Thus, Lewis did not establish that she could authenticate 

the documents, Behrendt concluded, and her statements were 

inadmissible hearsay. Behrendt therefore maintained that Wells 

Fargo did not meet its burden of production to succeed on the 

summary judgment motion because there was a genuine issue of 

material fact as to the authenticity of the Note and as to 

whether Wells Fargo was the holder of the Note. 

In its reply, Wells Fargo asserted that the testimony 

in the Lewis Declaration was admissible because it was subject 

to the hearsay exception for records of regularly conducted 

activity. (Citing Hawaii Rules of Evidence (HRE) Rule 

803(b)(6).) 

On August 30, 2016, the circuit court granted the 

summary judgment motion and issued a foreclosure decree in its 

“Findings of Fact, Conclusions of Law and Order Granting 

Plaintiff’s Motion for Summary Judgment and Decree of 

Foreclosure Against All Defendants on Complaint Filed March 9, 

2015” (Order Granting Summary Judgment). The court concluded 
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that Wells Fargo was entitled to have the Mortgage foreclosed, 

to have the Property sold free and clear of Behrendt’s claim, 

and to judgment in its favor as a matter of law on the 

complaint. The court filed the Judgment the same day. Behrendt 

timely appealed to the Intermediate Court of Appeals (ICA) from 

the Order Granting Summary Judgment and the Judgment.

3

II. STANDARDS OF REVIEW

A trial court’s findings of fact are reviewed under 

the clearly erroneous standard of review. Dan v. State, 76 

Hawaiʻi 423, 428, 879 P.2d 528, 533 (1994). Conclusions of law, 

in contrast, are reviewed de novo under the right/wrong standard 

of review. Marvin v. Pflueger, 127 Hawaiʻi 490, 495, 280 P.3d 

88, 93 (2012). Specifically, this court reviews “the circuit 

court’s grant or denial of summary judgment de novo.” Querubin 

v. Thronas, 107 Hawaiʻi 48, 56, 109 P.3d 689, 697 (2005)

(citation omitted). Similarly, “[o]n appeal, the issue of 

standing is reviewed de novo under the right/wrong standard.” 

Abaya v. Mantell, 112 Hawaiʻi 176, 180, 145 P.3d 719, 723 (2006)

(citation omitted).

 

3 After the parties submitted briefs to the ICA, Wells Fargo’s

application for transfer to this court was granted. 
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III. DISCUSSION

A. Behrendt May Challenge The Foreclosure

Behrendt contends that Wells Fargo did not meet its 

prima facie burden of demonstrating that it was the holder of 

the Note at the time its complaint was filed and did not provide 

any admissible evidence that it possessed the Note at the time 

it filed its motion for summary judgment. Behrendt argues that 

the Lewis Declaration did not demonstrate personal knowledge of 

any such facts, but that it instead offered vague, unfounded 

testimony that amounted to inadmissible hearsay at best. Thus, 

Behrendt contends that genuine issues of material fact remain in 

dispute with respect to Wells Fargo’s standing to sue and 

whether Wells Fargo was the holder of the Note secured by the 

Mortgage. 

Wells Fargo contends that because Behrendt was not a 

party to the Mortgage and because there is no reasonable 

interpretation of the Mortgage that confers contractual rights, 

obligations, and standing on Behrendt or upon any subsequent 

purchaser who does not assume the Mortgage, Behrendt could not 

“seek protection” under the Mortgage. In other words, Wells 

Fargo argues that Behrendt could not attack the foreclosure 

because he was a stranger to the Note and Mortgage transactions. 

Further, even if Behrendt did have standing to challenge the 

foreclosure, Wells Fargo asserts, the circuit court’s Judgment 
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should still be affirmed because the Lewis Declaration 

authenticates4 the original Note and states that Lewis had 

“personal knowledge of the facts and matters stated” based on 

her access to and familiarity with its records and the records 

of Ocwen. 

Under our law, a foreclosing party “must demonstrate 

that all conditions precedent to foreclosure under the note and 

mortgage are satisfied and that all steps required by statute 

have been strictly complied with” to prove entitlement to 

foreclose. Bank of Am., N.A. v. Reyes-Toledo, 139 Hawaiʻi 361, 

367, 390 P.3d 1248, 1254 (2017). Typically, this requires that 

the plaintiff “prove the existence of an agreement, the terms of 

the agreement, a default by the mortgagor under the terms of the 

agreement, and giving of the cancellation notice.” Id. A 

foreclosing plaintiff must also prove that the plaintiff is 

entitled to foreclose the note and mortgage. Id. (citing Hawaii 

Revised Statutes (HRS) §§ 490:3-301, 490:3-308).

The “burden to prove entitlement to enforce the note 

overlaps with the requirements of standing in foreclosure 

actions.” Id. (quoting Mottl v. Miyahira, 95 Hawaiʻi 381, 388, 

23 P.3d 716, 723 (2001)). Under the doctrine of standing, a 

 

4 Wells Fargo uses the term “authenticate” to describe the act of 

confirming through a declaration that a document is a record of regularly 

conducted business activities admissible under HRE Rule 803(b)(6). 
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plaintiff typically must have suffered an injury-in-fact to 

“justify exercise of the court’s remedial powers on his or her 

behalf.” Id. at 368, 390 P.3d at 1255 (citing Mottl, 95 Hawaiʻi 

at 389, 23 P.3d at 724). For a foreclosing plaintiff, the 

injury-in-fact is the mortgagor’s “failure to satisfy its 

obligation to pay the debt obligation to the note holder.” Id. 

Thus, a person seeking to judicially foreclose on a mortgage 

following a promissory note default must establish that it was 

the “person entitled to enforce the note” as defined by HRS § 

490:3-301 at the time the foreclosure complaint was filed to 

satisfy standing and to be entitled to prevail on the merits.

5 

 

5 HRS § 490:3-301 (2008) provides as follows:

“Person entitled to enforce” an instrument means (i) the 

holder of the instrument, (ii) a nonholder in possession of 

the instrument who has the rights of a holder, or (iii) a 

person not in possession of the instrument who is entitled 

to enforce the instrument pursuant to section 490:3-309 or 

490:3-418(d). A person may be a person entitled to enforce 

the instrument even though the person is not the owner of 

the instrument or is in wrongful possession of the 

instrument.

“Holder” as it appears in the statute is a term of art, defined in HRS § 

490:1-201(b) (2008) as 

(1) The person in possession of a negotiable instrument 

that is payable either to bearer or to an identified person 

that is the person in possession;

(2) The person in possession of a negotiable tangible 

document of title if the goods are deliverable either to 

bearer or to the order of the person in possession; or

(3) The person in control of a negotiable electronic 

document of title.

(continued . . .)
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Id. at 368-69, 390 P.3d at 1255-56; see also U.S. Bank N.A. v. 

Mattos, 140 Hawaii 26, 33, 398 P.3d 615, 622 (2017); In re 1250 

Oceanside Partners, 260 F. Supp. 3d 1300, 1312-13 (D. Haw. 

2017). 

Wells Fargo claims that Behrendt’s defense is

contractually-based and thus barred by the fact that Behrendt 

was a stranger to the Note and Mortgage. This court’s reasoning 

in Reyes-Toledo, however, was based on standing and the 

statutory foreclosure requirements and was not tied to the

contractual relationship between the parties. See 139 Hawaii at 

367–68, 390 P.3d at 1254–55 (“[A] foreclosing plaintiff does not 

have standing to foreclose on mortgaged property unless the 

plaintiff was entitled to enforce the note that has been 

defaulted on.” (citing Hanalei, BRC Inc. v. Porter, 7 Haw. App. 

304, 310, 760 P.2d 676, 680 (1988))). Thus, principles 

governing standing and statutory construction--and not 

contracts--apply here.6

 

(. . . continued)

As Wells Fargo claims to be entitled to enforce the Note as the holder of the 

Note and in turn argues that it is the holder of the Note by virtue of its 

possession of the endorsed-in-blank Note, Wells Fargo appears to use the 

terms “hold” and “possess” and their derivatives interchangeably.

6 Additionally, Behrendt’s argument--that Wells Fargo did not hold 

the Note and was thus itself a stranger to the transaction--does not rely on 

Behrendt’s contractual rights. Although it is true that Behrendt cannot 

assert an affirmative defense based on rights derived from a contract that he 

is not a party to, no privity of contract is required for Behrendt to argue 

(continued . . .)
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As we observed in Reyes-Toledo, requiring “that a 

foreclosing plaintiff prove its entitlement to enforce the note 

at the commencement of the proceedings ‘provides strong and 

necessary incentives to help ensure that a note holder will not 

proceed with a foreclosure action before confirming that it has 

a right to do so.’” Reyes-Toledo, 139 Hawaiʻi at 369, 390 P.3d 

at 1256 (quoting Deutsche Bank Nat’l Trust Co. v. Johnston, 369 

P.3d 1046, 1052 (N.M. 2016)).

This procedural safeguard is vital because the 

securitization of mortgages has given rise to a pervasive 

failure among mortgage holders to comply with the technical 

requirements underlying the transfer of promissory notes 

and, more generally the recording of interests in property. 

Indeed, scholars have commented on the widespread 

documentation problems that are associated with modern 

mortgage securitization practices. It appears that under 

these circumstances, not even the plaintiffs may be sure if 

they actually own the notes they seek to enforce.

Id. (brackets, quotations marks, footnotes, and citations 

omitted).

Thus, requiring a foreclosing plaintiff to prove an

entitlement to foreclose serves “essential purpose[s],” such as 

“protect[ing] the maker of an instrument from multiple 

enforcements of the same instrument.” Id. (citing Porter, 7 

 

(. . . continued)

that Wells Fargo has not met the burden of proving its right to foreclose on 

the Property. Indeed, under Wells Fargo’s argued rule, a property owner 

could not defend against an ejectment or replevin action by a plaintiff 

falsely claiming to have purchased the property from a prior owner because 

the current property owner would not have been a party to the fabricated 

transaction. This approach is plainly flawed.
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Haw. App. at 308, 760 P.2d at 679). The requirement also serves

to ensure that a foreclosing party in an action brought against 

a homeowner is actually entitled to bring the action, thus 

protecting the homeowner from an improper foreclosure. Id. 

This prerequisite serves no less an essential purpose when the 

homeowner is a subsequent purchaser of the property as Behrendt 

is here. 

The ICA has concluded that a party who obtains an 

interest in property subsequent to a foreclosing party can 

challenge the foreclosure. In Bank of New York Mellon v. Lemay,

a defendant obtained its interest in the subject property at a 

foreclosure sale, and a party with a senior secured interest 

later brought a foreclosure action. 137 Hawaiʻi 30, 34, 364 P.3d 

928, 932 (App. 2015). The defendant sought discovery regarding 

an employee of the purported loan servicer who submitted a 

declaration in support of the plaintiff’s summary judgment 

motion. See id. at 34-35, 364 P.3d at 932-33. At a motion to 

compel hearing, the defendant argued that the requested 

information was relevant to determine if the foreclosing party 

had standing and was entitled to foreclose. Id. at 33, 364 P.3d 

at 931. The trial court indicated that it was not inclined to 

grant the motion as the defendant was not a party to the note 

and mortgage. Id. at 34, 364 P.3d at 932. The trial court 

later granted summary judgment in favor of the plaintiff, which 
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the ICA concluded was effectively a denial of the motion to 

compel. Id.

On review, the ICA reasoned that the defendant was 

“permitted to seek discovery of information relevant to 

defending its interest in the property.” Id. (citing Hawaiʻi

Rules of Civil Procedure Rule 26(b)(1)(A)). The ICA concluded

that the trial court’s “hesitation” to grant the motion to 

compel because the defendant was not a party to the note or 

mortgage was “unwarranted” and that denying the motion was 

error. Id. at 34–35, 364 P.3d at 932–33. The ICA accordingly 

vacated the order granting summary judgment, ruling that the 

effective denial of the defendant’s motion to compel constituted 

an abuse of discretion that substantially prejudiced the 

defendant. Id. at 35, 364 P.3d at 933. 

Although the defendant was not a party to the note or 

mortgage in Lemay, the ICA recognized that information rebutting 

the plaintiff’s claim that it was entitled to enforce the note 

was relevant to the defense of the junior interest in the 

property. Id. at 34–35, 364 P.3d at 932–33. Thus, the Lemay

decision allowed a subsequent purchaser to challenge whether the 

lender was entitled to foreclose on the mortgage securing the 

note. 

Under facts similar to this case, a court of appeals 

in Florida also concluded that a subsequent purchaser has 
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standing to challenge the plaintiff’s authority to bring the 

foreclosure proceeding. 3709 N. Flagler Drive Prodigy Land 

Trust v. Bank of Am., N.A., 226 So. 3d 1040, 1042-43 (Fla. Dist. 

Ct. App. 2017) (per curiam) [hereinafter Prodigy Land Trust]. 

There, the original property owners transferred title of the 

subject property via quitclaim deed to a trust, after which the 

foreclosing bank filed a foreclosure complaint naming the trust 

as a party. Id. at 1041. At trial, the foreclosing bank argued 

that, because the trust was not a party to the note or mortgage, 

the trust “should not be allowed to contest anything other than 

damages.” Id.

The court of appeals disagreed, reasoning that, 

because “[a]n owner of property must be joined in a foreclosure 

proceeding of that property in order to make a decree of 

foreclosure valid,” there was “no question that [the trust] had 

standing to contest the foreclosure proceeding.” Id. (citations 

omitted). The court explained that a “subsequent purchaser has 

an interest in assuring that the foreclosing plaintiff actually 

has the authority to bring the suit and is entitled to raise 

such a defense.” Id. at 1042. Holding otherwise, the court 

concluded, “would allow a stranger to the note and mortgage to 

foreclose on the property, and a subsequent purchaser would 
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never have the ability to defend against the taking of a bona 

fide interest in the property through a foreclosure sale.” Id.7

B. Wells Fargo Did Not Satisfy Its Burden

Behrendt contends that Wells Fargo has not met its 

burden of proving that it was the holder of the Note at the time 

the complaint was filed because it has not offered admissible 

evidence on this point. Wells Fargo responds that the Lewis 

Declaration was sufficient to authenticate the copy of the Note

attached to its summary judgment motion and that its possession 

of the Note at the time the action was initiated is in turn 

proven by the identical copy of the Note attached to the 

complaint. 

Under Hawaii Rules of Civil Procedure Rule 56(e) 

(2000) and Rules of the Circuit Courts of the State of Hawaii

 

7 The cases Wells Fargo cites in support of its position are 

inapposite, unpersuasive, or lack precedential value. They largely involve 

either challenges by individuals who did not possess an interest in the 

property at the time of the foreclosure action, see, e.g., United States v. 

Palmer, 578 F.2d 144, 145-46 (5th Cir. 1978) (per curiam); Thriving Invs., 

LLC v. Chao, 184 So. 3d 552 (Fla. Dist. Ct. App. 2015), or subsequent 

purchasers who challenged the substantive terms of the mortgage or the manner 

in which the mortgage was administered, see, e.g., Johnson v. Ocwen Loan 

Servicing, 374 F. App’x 868, 871 (11th Cir. 2010) (per curiam); CCM 

Pathfinder Palm Harbor Mgmt., LLC v. Unknown Heirs of Gendron, 198 So. 3d 3, 

6 (Fla. Dist. Ct. App. 2015). Wells Fargo also cites an unpublished 

concurrence that is flatly contradicted by a published majority opinion of a 

court of equal authority within the same jurisdiction, compare Pealer v. 

Wilmington Tr. Nat’l Ass’n, 212 So. 3d 1137, 1137 (Fla. Dist. Ct. App. 2017) 

(Sleet, J., concurring) (per curiam), with Prodigy Land Trust, 226 So. 3d at 

1040-41, and a case that addresses the separate issue of whether a subsequent 

purchaser may affirmatively bring an action based on an allegedly wrongful 

foreclosure after the foreclosure is complete--a matter on which we expressly

reserve judgment. See Garner v. Wells Fargo Home Mortg., Inc., 505 F. App’x 

837 (11th Cir. 2013) (per curiam). 
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Rule 7(g) (1997), “a declaration in support of a summary 

judgment motion must be based on personal knowledge, contain 

facts that would be admissible in evidence, and show that the 

declarant is competent to testify as to the matters contained 

within the declaration.” U.S. Bank N.A. v. Mattos, 140 Hawaiʻi 

26, 30, 398 P.3d 615, 619 (2017). Inadmissible evidence “cannot 

serve as a basis for awarding or denying summary judgment.” 

Haw. Cmty. Fed. Credit Union v. Keka, 94 Hawaii 213, 221, 11 

P.3d 1, 9 (2000) (quoting GE Capital Haw., Inc. v. Miguel, 92 

Hawaii 236, 242, 990 P.2d 134, 140 (App. 1999)). 

Wells Fargo contended before the circuit court that 

the loan documents attached to its summary judgment motion were 

admissible under the hearsay exception for records of regularly 

conducted business activities.8 (Citing HRE Rule 803(b)(6) 

 

8 The circuit court’s conclusions of law did not specify the ground 

on which it determined that the loan documents were admissible. Because the 

court granted the summary judgment motion after considering Wells Fargo’s 

argument regarding HRE Rule 803(b)(6), which was the sole basis contended for 

admissibility, we consider the court’s ruling as having been premised on HRE 

Rule 803(b)(6).

On appeal, Wells Fargo also does not cite an evidentiary rule as 

a basis for the admissibility of the loan documents. However, it identifies 

State v. Fitzwater as controlling precedent on the issue of the documents’ 

admissibility. (Citing 122 Hawaii 354, 367-68, 227 P.3d 520, 533-34 (2010) 

(outlining HRE Rule 803(b)(6)’s application to third-party business records 

that have been incorporated into the receiving company’s business records).) 

Accordingly, this opinion addresses whether the proffered loan documents fall 

within the requirements of the HRE Rule 803(b)(6) exception and does not 

consider whether the instruments would be admissible under any other basis.
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(2002).) HRE Rule 803(b)(6) (Supp. 2002) provides that the 

following are not excluded by the rule against hearsay:

A memorandum, report, record, or data compilation, in any 

form, of acts, events, conditions, opinions, or diagnoses, 

made in the course of a regularly conducted activity, at or 

near the time of the acts, events, conditions, opinions, or 

diagnoses, as shown by the testimony of the custodian or 

other qualified witness, or by certification that complies 

with rule 902(11) or a statute permitting certification, 

unless the sources of information or other circumstances 

indicate lack of trustworthiness.

(Emphasis added.) Wells Fargo argues that the Lewis Declaration 

establishes that the Note met the requirements for admission 

under HRE Rule 803(b)(6). 

The Lewis Declaration reads in pertinent part as 

follows:

1. I am a[] contract Management Coordinator of Ocwen Loan 

Servicing, LLC (“Ocwen”), servicer for WELLS FARGO BANK, 

N.A. AS TRUSTEE FOR OPTION ONE MORTGAGE LOAN TRUST 2006-2 

ASSET-BACKED CERTIFICATES, SERIES 2006-2 (“[Wells Fargo]”) 

of the mortgage loan at issue in this case (the “Loan”). 

As such, I am authorized to make this Declaration.

2. I am over the age of 18 years, and I have personal 

knowledge of the facts and matters stated herein based on 

my review of the business records described below. The 

statements set forth in this Declaration are true and 

correct, to the best of my knowledge and belief. 

3. In the regular performance of my job functions, I have 

access to and am familiar with [Wells Fargo]’s records and 

documents relating to this case (the “Records”), including 

Ocwen’s business records relating to the servicing of the 

Loan (the “Ocwen Records”). In making this Declaration, I 

relied upon the Records. 

4. The Ocwen Records document transactions relating to the 

Loan and were made and are maintained in the regular course 

of Ocwen’s business consistent with Ocwen’s regular 

practices, which require that records documenting 

transactions relating to serviced mortgage loans be made at 

or near the time of the transactions documented by a person 

with knowledge of the transactions or from information 

transmitted by such a person. 
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5. According to the Ocwen Records, [Wells Fargo] is in 

possession of an original promissory note dated January 30, 

2006 in the principal amount of $408,000.00 executed by 

KAREN LYNN ZAKARIAN in favor of THE FUNDING GROUP, INC. 

(the “Note”). A true and correct copy of the Note is 

attached hereto as Exhibit 1. 

6. The Note is endorsed in blank. 

7. According to the Ocwen Records, the Note is secured by 

a mortgage dated January 30, 2006 and recorded on February 

7, 2006 in the Bureau of Conveyances of the State of 

Hawaii, as Document Number 2006-023995 (the “Mortgage”). A 

true and correct copy of the Mortgage is attached hereto as 

Exhibit 2.

8. According to the Ocwen Records, the Mortgage was 

assigned to OPTION ONE MORTGAGE CORPORATION by that 

assignment dated February 3, 2006 and recorded on July 5, 

2006 in the Bureau of Conveyances of the State of Hawaii, 

as Document Number 2006-123207. The Mortgage was then 

assigned to [Wells Fargo] by that assignment dated April 

24, 2007 and recorded on May 10, 2007 in the Bureau of 

Conveyances of the State of Hawaii, as Document Number 

2007-084291 (the “Assignments”). True and correct copies 

of the Assignments are attached hereto as Exhibits 3 and 4.

In Mattos, this court reviewed the sufficiency of a 

nearly identical declaration attesting to a promissory note and 

other documents relating to a foreclosure under the HRE Rule 

803(b)(6) business records exception. 140 Hawaiʻi at 31, 398 

P.3d at 620. The Lewis Declaration, apart from information 

specific to this case, is virtually identical to the declaration 

in Mattos, which was also prepared by an Ocwen employee. 

Compare Lewis Declaration, supra, with Mattos, 140 Hawaiʻi at 30–

31, 398 P.3d at 619–20. This court’s decision in Mattos is 

therefore dispositive as to whether HRE Rule 803(b)(6) may serve 

as a basis to admit into evidence the documents attached to the 

Lewis Declaration.
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Lewis did not aver that she was the custodian of 

records for her employer, Ocwen, or for Wells Fargo. Thus, the 

documents attached to her declaration are admissible under HRE 

Rule 803(b)(6) only if the declaration demonstrates that Lewis 

is a “qualified witness” with respect to those documents. See

Mattos, 140 Hawaiʻi at 32, 398 P.3d at 621. 

The court in Mattos held that a witness may be

qualified to provide the testimony required by HRE Rule 

803(b)(6) even if the witness is not employed by the business 

that created the document or lacks direct, personal knowledge of 

how the document was created. Id. “There is no requirement 

that the records have been prepared by the entity that has 

custody of them, as long as they were created in the regular 

course of some entity’s business.” Id. (quoting State v. 

Fitzwater, 122 Hawaiʻi 354, 366, 227 P.3d 520, 532 (2010)). The 

witness, however, must have enough familiarity with the recordkeeping system of the business that created the record to 

explain how the record was generated in the ordinary course of 

business. Id.

Records received from another business and 

incorporated into the receiving business’ records may in some 

circumstances be regarded as “created” by the receiving 

business. Id. Incorporated records are admissible under HRE 

Rule 803(b)(6) when a custodian or qualified witness testifies 
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that the documents were incorporated and kept in the normal 

course of business, that the incorporating business typically 

relies upon the accuracy of the contents of the documents, and 

the circumstances otherwise indicate the trustworthiness of the 

document. See id.; Fitzwater, 122 Hawaii at 367-68, 227 P.3d at 

533-34.

Here, as in Mattos, the Lewis Declaration does not 

establish that the loan documents were received by Ocwen and 

then incorporated into Ocwen’s records. In addition, although 

Lewis averred that Ocwen’s records relating to the loan were 

made and maintained in the regular course of Ocwen’s business, 

Lewis asserted only that she had “access to and [was] familiar”

with Wells Fargo’s records and documents relating to this case. 

(Emphasis added.) The Lewis Declaration does not establish that 

Lewis was familiar with Wells Fargo’s record-keeping system. It 

also makes no assertions as to Lewis’s familiarity with the 

record-keeping systems of Funding Group or Option One, which 

first created the Note and allonges. Thus, the Lewis 

Declaration satisfies the foundational requirements to make 

Lewis a qualified witness only with respect to Ocwen’s original

records about the loan and not any records of Wells Fargo or the 

loan documents themselves. See Mattos, 140 Hawaiʻi at 32-33, 398 

P.3d at 621-22.
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The Lewis Declaration also refers only to the Note and 

not the allonges that Wells Fargo asserts were used to endorse 

the Note in blank. As noted, the Lewis Declaration does not 

establish that Lewis was a qualified witness, and thus she could 

not have satisfied the requirements of HRE Rule 803(b)(6) with 

respect to the allonges. But, as with the declaration in 

Mattos, the Lewis Declaration did not attempt to admit the 

allonges under the business records exception. See id. Thus, 

even if the Note fell within the bounds of HRE Rule 803(b)(6), 

the allonges endorsing it in blank did not because the 

declaration did not provide the requisite foundation. This is

to say that the documents purporting to allow Wells Fargo to 

enforce the Note were not admissible under the business record 

exception. Since the documents were not admissible as asserted,

Wells Fargo did not meet its burden of establishing facts 

necessary for a grant of summary judgment. See id. 

In sum, Lewis was not a qualified witness with respect 

to the documents attached to her declaration, and thus she could 

not provide the foundation to admit them under HRE Rule 

803(b)(6). The circuit court therefore erred in granting

summary judgment to the extent it relied on the documents’ 

admissibility under the business record exception to the hearsay 

rule.
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IV. CONCLUSION

There is no bar to Behrendt challenging Wells Fargo’s 

standing to foreclose on the Note, and Wells Fargo submitted no 

properly admitted evidence demonstrating that it was entitled to 

enforce the Note at the time the complaint was filed, as 

required by Reyes-Toledo. See Bank of Am., N.A. v. ReyesToledo, 139 Hawaiʻi 361, 368, 390 P.3d 1248, 1255 (2017). The 

circuit court thus erred in its grant of summary judgment in 

favor of Wells Fargo. Accordingly, the circuit court’s Order 

Granting Summary Judgment and the August 30, 2016 Judgment are 

vacated, and the case is remanded to the circuit court for 

further proceedings.

J. Blaine Rogers and

Lori King Stibb

for petitioner

Gary Victory Dubin and

Frederick J. Arensmeyer

for respondent

/s/ Mark E. Recktenwald

/s/ Paula A. Nakayama

/s/ Sabrina S. McKenna

/s/ Richard W. Pollack

/s/ Michael D. Wilson