Plaintiff, the National Collegiate Student Loan Trust 2006-2, appeals a general judgment in favor of defendant after the trial court granted defendants cross-motion for summary judgment on plaintiffs claims for breach of contract and quantum meruit. Plaintiff assigns four errors. We affirm without discussion plaintiffs third assignment. We write only to address plaintiffs second assignment, in which plaintiff contends that the trial court erred in excluding two pieces of evidence that plaintiff asserts should have been admitted as business records under OEC 803(6). We conclude that the trial court did not err as to plaintiffs second assignment. Given that resolution, plaintiffs first and fourth assignments also fail. Accordingly, we affirm.
Generally, when reviewing the trial courts ruling on cross-motions for summary judgment, “we examine whether there are any disputed issues of material fact and whether either party was entitled to judgment as a matter of law.” Providence Health Plan v. Allen, 299 Or. App. 128, 135, 449 P.3d 504 (2019), rev. den., 366 Or. 257, 458 P.3d 1125 (2020). Here, that determination turns on the admissibility of certain hearsay statements. “We review the courts legal conclusions regarding the admissibility of a hearsay statement under an exception to the hearsay rule for legal error.” Morgan v. Valley Property and Casualty Ins. Co., 289 Or. App. 454, 455, 410 P.3d 327 (2017), adhd to on recons., 290 Or. App. 595, 415 P.3d 1165 (2018).
In 2006, defendant applied for and obtained a loan from JPMorgan Chase Bank, N.A. Bank One (Bank One). In November 2007, defendant filed a Chapter 7 bankruptcy petition in the United States Bankruptcy Court. Defendants debt was discharged in March 2018. The parties contest whether the loan at issue here was discharged as a part of defendants bankruptcy.
Approximately 10 years after defendant filed for bankruptcy—in February 2018—plaintiff filed a complaint against defendant in Clackamas County Circuit Court for breach of contract and quantum meruit. Plaintiff claimed that, pursuant to “an assignment agreement,” it owned defendants Bank One loan and that defendant had failed to make monthly payments under the terms of the loan agreement. Defendant responded to plaintiffs complaint with several affirmative defenses. As relevant here, defendant claimed that plaintiff had “failed to allege facts” sufficient “to show [that plaintiff was the] party in interest entitled to enforce the contract.”
Subsequently, after the parties sought admissions and both parties responded to those admissions, plaintiff filed a motion for summary judgment arguing that there was no genuine issue as to any material facts, because defendant “admitted to borrowing, without timely repaying, the funds in question.” However, in making that motion, plaintiff acknowledged that defendant had not “admitted * * * that Plaintiff is the correct party to whom she owes repayment of the loan.” In support of its motion, plaintiff submitted an affidavit of Jacqueline Jefferis, who explained in her affidavit that she was an employee of Transworld Systems Inc., the Subservicer for plaintiff regarding the educational loan at issue. There were several exhibits attached to the affidavit. To establish that plaintiff was the party that owned defendants loan, plaintiff attached Exhibit B—the “loan request/credit agreement”—and Exhibit C—the “deposit and sale agreement.”
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Exhibit B stated that the original lender was Bank One and that defendant “promise[d] to pay to [the lenders] order, upon the terms and conditions of [the] credit agreement.”
Exhibit C put forth the terms of the sale between Bank One and plaintiff. As a part of that exhibit, plaintiff attached a document titled “Pool Supplement.” That supplement, which described the transaction between Bank One and plaintiff stated:
“In consideration of the Minimum Purchase Price, [Bank One] hereby transfers, sells, sets over and assigns to The National Collegiate Funding, LLC * * * each student loan set forth on the attached [transferred Bank One loans]. * * * [The National Collegiate Funding, LLC] in turn will sell the Transferred Bank One loans to The National Collegiate Student Loan Trust 2006-4.”
Defendant then filed a cross-motion for summary judgment pursuant to ORCP 47 B. Defendant maintained that plaintiff failed to allege facts sufficient to prove that it was the party in interest entitled to enforce the contract. In doing so, defendant asserted that the documents that might support that plaintiff is the party in interest, specifically Exhibit B and Exhibit C, were “inadmissible hearsay not qualifying as business records” because they were “without competent foundation.” The court held a hearing on those motions.
Plaintiff, in response to defendants evidentiary argument, asserted that Exhibit B and Exhibit C were business records, admissible as exceptions to the rule against hearsay under OEC 803(6). To establish those exhibits as business records, plaintiff attached a personal affidavit from an employee—Jacqueline Jefferis—of Transworld Systems Incorporated (TSI). In the affidavit, Jefferis stated that TSI is the subservicer for plaintiffs loan. As the subservicer, TSI was the “designated custodian of records for Defendants education loan. Additionally, TSI maintains the dedicated system of record for electronic transactions pertaining to the Defendants educational loan, including, but not necessarily limited to, payments, credits, interest accrual and any other transactions that could impact the Defendants educational loan.” Jefferiss affidavit additionally stated:
“5. I am familiar with the process by which TSI receives prior account records, including origination records from the time the loan was requested and/or disbursed to the Defendant and/or the students school on their behalf.
“6. As custodian of records[,] it is TSIs regularly-conducted business practice to incorporate prior loan records and/or documentation into TSIs business records.
“7. I am further competent and authorized to testify regarding this educational loan through personal knowledge of the business records maintained by TSI as custodian of records, including electronic data provided to TSI related to the Defendants educational loan, and the business records attached to this Affidavit.
“8. This lawsuit concerns an unpaid loan owed by Defendant * * * to Plaintiff. Specifically, Defendant entered into an educational loan agreement at Defendants special instance and request. A loan was extended for Defendant to use pursuant to the terms of the loan agreements. Defendant has failed, refused, and/or neglected to pay the balance pursuant to the agreed terms.
“9. Educational loan records are created, compiled and recorded as part of regularly conducted business activity at or near the time of the event and from information transmitted from a person with personal knowledge of said event and a business duty to report it, or from information transmitted by a person with personal knowledge of the accounts or events described within the business record. Such records are created, kept, maintained, and relied upon in the course of ordinary and regularly conducted business activity.
“10. I have reviewed the educational loan records * * *. No payment has been received on this account. * * *. Attached hereto and incorporated as Exhibit ‘B’ is a true copy of the underlying Credit Agreement/Promissory Note and Note Disclosure Statement. In the event the Defendant(s) faxed the executed Credit Agreement/Promissory Note, per its terms they agreed their facsimile/electronic signature is deemed to be an original.
“11. The Defendant opened an educational loan with [Bank One] * * *. The Defendants educational loan was then transferred, sold and assigned to National Collegiate Funding LLC, who in turn transferred, sold and assigned the Defendants educational loan to Plaintiff, * * * for valuable consideration, in the course of the securitization process. The Defendants educational loan was in good standing and not in default * * *. Attached hereto and incorporated as Exhibit “C” is a true and correct copy of the Agreement(s) described herein. Said Exhibit contains a redacted copy of the Schedule of transferred loans referenced within the Pool Supplement.”
After the court considered the parties’ arguments about the affidavit and exhibits, the trial court admitted the affidavit of Jefferis, but rejected plaintiffs argument that Exhibit B and Exhibit C were admissible. The court reasoned that Jefferis was able to “attest to what shes able to attest to.” In essence, the court reasoned that, because Jefferis worked for TSI “to perform the duties of subservices,” she has knowledge of how TSI “maintains the dedicated system of record for [its] electronic transactions.” Specifically, the court explained, she can attest to her “firsthand knowledge” of “[p]ayments, credits, [and] interest accruals.” The court stated that what Jefferis did not have firsthand knowledge of was whether the “loan was extended for defendant to use pursuant to the terms of the loan agreements.” Thus, her affidavit could not be used to “introduce the contract, because she has no firsthand knowledge of the contract.” In sum, the court concluded that Jefferis could not “authenticate” the exhibits, because TSI was not a “party or signor” to the original contract, nor did TSI have firsthand knowledge of the contract.
With those exhibits excluded, the trial court concluded that plaintiff did not provide sufficient facts to support its claim that plaintiff owned the loan. Accordingly, the court granted defendants cross-motion for summary judgment and denied plaintiffs motion for summary judgment. This timely appeal followed.
On appeal, plaintiff argues that the trial court erred in concluding that Exhibit B and Exhibit C were not admissible as business records under OEC 803(6). Defendant responds that the court properly concluded that Exhibit B and Exhibit C were inadmissible hearsay, because Jefferis could not authenticate the records as required by OEC 803(6).
Hearsay is an out-of-court statement offered to prove the truth of the matter asserted and is generally inadmissible unless it qualifies under a hearsay exception or is excluded from the category of hearsay. See OEC 801(3) (defining hearsay); OEC 802 (stating that hearsay is not admissible except as provided in OEC 801 to 806); OEC 803 and OEC 804 (setting forth exceptions to the hearsay rule); OEC 801(4) (setting forth exclusions to category of hearsay). The party seeking the admission of hearsay bears the burden of proving that the statements satisfy the requirements of a hearsay exception. Arrowood Indemnity Co. v. Fasching, 369 Or. 214, 224, 503 P.3d 1233 (2022) (Arrowood).
As relevant in this case, the “business records exception” to the hearsay rule allows 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 transmitted 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 memorandum, 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 of circumstances of preparation indicate lack of trustworthiness.”
OEC 803(6). Such records are admissible, despite being hearsay, because of their “ ‘unusual reliability,’ that has been ascribed to the ‘duty of the record keeper to make an accurate record,’ the ‘actual reliance of the business’ on the records, and ‘the regular entries and systematic checking which produce habits of precision.’ ” Arrowood, 369 Or. at 224-25, 503 P.3d 1233 (quoting Legislative Commentary to OEC 803(6), reprinted in Laird C. Kirkpatrick, Oregon Evidence § 803.06[2], 820 (7th ed. 2020)).
Recently, the Supreme Court in Arrowood discussed the requirements that must be met for a business record to be admissible under OEC 803(6). In Arrowood, the plaintiff relied on an affidavit by one of its employees to create the necessary foundation to establish records of a loan made to the defendant as business records. That affidavit averred that
“[a]ll documents attached hereto are either produced and maintained directly by Plaintiff or are documents from [Discovers] proof of claim which are adopted by the Plaintiff and relied upon in the ordinary course of Plaintiff[’s] business. These records were made at or near the time of the occurrence or transaction, recorded by a person with knowledge, and as the Plaintiffs qualified custodian of records I affirm that the attachments are true and correct copies of documents maintained by and relied upon by Plaintiff in the ordinary course of its regular business functions.”
369 Or. at 218, 503 P.3d 1233. The Supreme Court noted that the employee “did not aver that she had knowledge of the record-making or record-keeping practices” of any of the companies that provided the defendant with the loan. Id. Further, “nothing in the affidavit addresse[d] whether the documents were made and kept in the regular course of [the loaning companies’] business or whether it was the regular practice of either [of the loaning companies] to make and keep such documents.” Id.
The Supreme Court, interpreting OEC 803(6) in compliance with the analytical framework of PGE Co. v. Bureau of Labor and Industries, 317 Or. 606, 610, 859 P.2d 1143 (1993), and State v. Gaines, 346 Or. 160, 171-73, 206 P.3d 1042 (2009), concluded that a party seeking admission of records as a business record under OEC 803(6) must meet the following requirements:
“The record must (1) describe ‘acts, events, conditions, opinions, or diagnoses,’ (2) have been ‘made at or near the time’ of those acts, events, conditions, opinions, or diagnoses, (3) have been made ‘by, or from information transmitted by, a person with knowledge,’ (4) have been ‘kept in the course of a regularly conducted business activity,’ and (5) have been made because it ‘was the regular practice of that business activity to make’ such records.”
Arrowood, 369 Or. at 223-24, 503 P.3d 1233 (quoting OEC 803(6)). To use the exception as stated in OEC 803(6), the party seeking admission must “prove that the record it is proffering has each of those characteristics, and the party must do so through ‘the testimony of the custodian or other qualified witness.’ ” Id. at 224, 503 P.3d 1233 (quoting OEC 803(6)). Additionally, “even if the party does that, the record will not qualify for the exception if ‘the source of information or the method [or] circumstances of preparation indicate lack of trustworthiness.’ ” Id. (quoting OEC 803(6)).
With the context of Arrowood in mind, we address the parties’ arguments. Defendant argues that Jefferiss affidavit “does not * * * attest to any contemporaneous business duty to record and report to TSI by any actual party” to the transactions documented in the exhibits. Thus, defendant asserts that no “person with knowledge” had attested to whether Exhibit B and Exhibit C were “recorded and reported to TSI in the regular course of business.” Plaintiff does not dispute that Jefferis lacks firsthand knowledge of Bank Ones record making process. Rather, plaintiffs argument focuses on the role that Jefferis played as the custodian of records for TSI, the subservicer for plaintiff. As we under-stand the parties’ arguments, the sole issue we must address is whether Jefferis was “a person with knowledge” to establish a foundation to admit Exhibit B and Exhibit C under OEC 803(6).
For a record to be admissible under OEC 803(6), a person with knowledge “regarding the record-making practices of the business that created the record” must supply testimony that “necessarily must include information about the practices of the business that initially made and kept the record.” Arrowood, 369 Or. at 221, 241, 503 P.3d 1233. As the commentary to OEC 803(6) explains, the proponent of evidence is not required
“ ‘to produce, or even identify, the specific individual upon whose firsthand knowledge the record is based. A sufficient foundation is laid if the proponent shows that it was the regular practice of the activity to base such a record upon a transmission from a person with knowledge. Thus, in the case of contents of a shipment of goods, it is sufficient to produce a report from the companys computer programmer or a person having knowledge of the particular record system.’ ”
Id. (quoting Legislative Commentary to OEC 803(6), reprinted in Laird C. Kirkpatrick, Oregon Evidence § 803.06[2] at 822).
Here, as previously noted, plaintiff does not contest the trial courts conclusion that Jefferis had no personal knowledge of Bank Ones record making process. Rather, plaintiff argues that Jefferiss role as the custodian of records for TSI is sufficient to establish that Exhibits B and C are admissible as business records under OEC 803(6).
Plaintiffs argument is foreclosed by the rule set forth by Arrowood, which requires that the testimony “include information about the practices of the business that initially made and kept the record.” 369 Or. at 241, 503 P.3d 1233. Jefferiss affidavit provided evidence that Jefferis had personal knowledge of how “TSI receives prior account records, including origination records from the time the loan was requested and/ or disbursed to the Defendant and/or the students school on their behalf” and that Jefferis had “personal knowledge of the business records maintained by TSI as custodian of records, including electronic data provided to TSI related to the Defendants educational loan, and the business records attached to this Affidavit.” Nothing in those statements, or any other statements in the record, purport that Jefferis had knowledge of the record making process of Bank One. As Arrowood emphasizes, “[t]he requirement that the record be made by, or from information transmitted by, a person with knowledge, ensures that the record is based on first-hand observations.” 369 Or. at 224, 503 P.3d 1233. Given the insufficient record to show personal knowledge, plaintiff failed to demonstrate the requirements of the business record exception. Accordingly, the trial court did not err in excluding the evidence.
In plaintiffs first and fourth assignments of error, plaintiff argues, respectively, that the trial court erred in granting defendants cross-motion for summary judgment on the basis that defendants loan had been discharged in bankruptcy, 11 USC § 523(a)(8)(A), and in denying plaintiffs motion for summary judgment on the ground that plaintiff failed to establish ownership and entitlement to enforce defendants loan. Both of those arguments rely on plaintiff establishing a right to enforce defendants loan. See Key West Retaining Systems, Inc. v. Holm II, Inc., 185 Or. App. 182, 188, 59 P.3d 1280 (2002), rev. den., 335 Or. 402, 68 P.3d 231 (2003) (concluding that whether a contract exists is a question of law); see also Enes v. Pomeroy, 104 Or. 169, 176-77, 206 P. 860 (1922) (concluding that a party lacks standing to enforce a contract in which it has no established interest). Given our resolution of plaintiffs second assignment, the trial court did not err in determining that plaintiff had failed to prove a loan agreement between plaintiff and defendant, so we reject plaintiffs first and fourth assignments. The trial court properly granted summary judgment to defendant.
Affirmed.
FOOTNOTES
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. For purposes of readability, and because it does not affect our analysis, we omit unnecessary capitalization.
EGAN, J.