                                                                    FILED
                                                                      JUL 9 2019

                      ORDERED PUBLISHED                          SUSAN M. SPRAUL, CLERK
                                                                   U.S. BKCY. APP. PANEL
                                                                   OF THE NINTH CIRCUIT


         UNITED STATES BANKRUPTCY APPELLATE PANEL
                   OF THE NINTH CIRCUIT

In re:                                        BAP No. NC-18-1284-STaB

DALE NORMAN HARMS,                            Bk. No. 18-40758

                Debtor.

DALE NORMAN HARMS,

                Appellant,

v.                                            OPINION

BANK OF NEW YORK MELLON,

                Appellee.

                 Argued and Submitted on June 20, 2019
                       at Sacramento, California

                             Filed – July 9, 2019

            Appeal from the United States Bankruptcy Court
                for the Northern District of California

     Honorable Charles D. Novack, Chief Bankruptcy Judge, Presiding

Appearances:    James T. Imperiale argued for appellant; Erin M.
                McCartney of Zieve, Brodnax & Steele, LLP argued for
                appellee.



Before: SPRAKER, TAYLOR, and BRAND, Bankruptcy Judges.
SPRAKER, Bankruptcy Judge:

                                 INTRODUCTION

      Chapter 131 debtor Dale Norman Harms appeals from an order

granting the motion of the Bank of New York Mellon (“BONYM”) for relief

from the automatic stay and permitting BONYM to proceed with a

nonjudicial foreclosure proceeding. BONYM completed its foreclosure and

argues that the appeal is now moot. Even though BONYM is correct that

reversal of the bankruptcy court’s order would not affect the completed

nonjudicial foreclosure, the relief from stay order also permitted BONYM

to pursue unlawful detainer proceedings to recover possession of the

property from Harms and his spouse. Because there is nothing in the

record to establish that BONYM already has exercised its unlawful detainer

remedy, we may afford some relief to Harms if we were to reverse the

relief from stay order and reinstate the automatic stay. Accordingly, this

appeal is not moot.

      On appeal, Harms disputes BONYM’s standing. But BONYM

sufficiently proved its standing in the bankruptcy court. Its agents

presented the bankruptcy court with a copy of the subject promissory note

indorsed in blank. The agents also presented evidence that the original of

the note was within their custody and control and specified the address


      1
       Unless specified otherwise, all chapter and section references are to the
Bankruptcy Code, 11 U.S.C. §§ 101-1532.

                                            2
where the original note is kept. Harms presented no contrary evidence

regarding possession of the original note. Nor was there any evidence

indicating that anyone else has asserted a competing right to enforce the

note. Under these circumstances, we AFFIRM.

                                   FACTS

A.    The Underlying Dispute Between The Parties.

      The dispute between the parties arose from a promissory note in the

principal amount of $392,000.00 and a deed of trust, both dated April 14,

2005. The note and the deed of trust identify Harms and his wife Laurie as

the borrowers and Ampro Mortgage Corporation as the lender. The deed

of trust further identifies Ampro as the trustee under the deed of trust.

Mortgage Electronic Registration Systems, or MERS, is identified as the

beneficiary under the deed of trust “solely as nominee” for Ampro, its

successors and assigns.

      The deed of trust states that it secures repayment of the loan

memorialized in the note. The collateral for the loan is a single-family

residence on West Cypress Road in Oakley, California. The deed of trust

was recorded on April 22, 2005, in the Contra Costa County Recorder’s

Office. In April 2010, MERS assigned to BONYM its beneficial interest

under the deed of trust.

      As for the note, the copy presented to the bankruptcy court has three

indorsements affixed on the reverse side of the last page: (1) an

                                      3
indorsement by Ampro in favor of Countrywide Document Custody

Services; (2) an indorsement by Countrywide Document Custody Services

in favor of Countywide Home Loans, Inc.; and (3) an indorsement in blank

by Countywide Home Loans, Inc.

B.    Harms’ History Of Bankruptcy Filings And His Transfer Of The
      Property.

      The underlying bankruptcy was the fourth involving Harms, his

spouse, and the property within an eight-year time span. In July 2010,

Harms and his spouse commenced a chapter 13 bankruptcy case. That case

was dismissed in October 2010. In October 2015, Harms commenced a

chapter 7 bankruptcy case. Harms received a discharge in that case in

January 2016. That case was closed the day after the court entered its

discharge order. In September 2016, Harms’ spouse commenced a chapter 7

bankruptcy case. Harms’ spouse received a discharge in that case in

December 2016. That case also was closed the day after the court entered its

discharge order. Harms and his spouse commenced their current chapter

13 bankruptcy case in April 2018.

      Meanwhile, in September 2013, Harms and his spouse transferred the

property to an entity known as “The Resting Place Eleemosynary Trust.” In

their current bankruptcy schedules, Harms and his spouse identified

themselves as co-trustees of this trust and claimed that they only hold legal

title to the property for the trust’s benefit.


                                         4
C.    BONYM’s Motion For Relief From Stay.

      In August 2018, BONYM moved for relief from the automatic stay.

BONYM sought modification of the stay to permit it to exercise its

remedies under state law to foreclose on and recover possession of the

property.

      Along with its relief from stay motion, BONYM presented the court

with copies of the note, the deed of trust, the assignment of the deed of

trust, and the deed the Harms executed to transfer title to the property

from themselves to the Resting Place trust. BONYM also presented the

court with a relief from stay cover sheet, which provided basic information

regarding the property and the loan. The cover sheet indicated that the

loan was 104 months in arrears prepetition and 4 months in arrears

postpetition. The cover sheet further indicated that the aggregate balance of

the loan was $548,848.47, whereas the value of the property securing the

loan was only $435,128.00.

      BONYM’s moving papers also included the declaration of Katisha

Gill. Gill identified herself as a bankruptcy case manager for Shellpoint

Mortgage Servicing. According to Gill, Shellpoint subserviced the loan on

behalf of BONYM. Gill stated she had personal knowledge of the types of

business records Shellpoint maintained in the ordinary course of business

and the procedures Shellpoint followed in creating those records, including

those records maintained for the subject loan. Gill explained that the

                                      5
information set forth in her declaration was derived from Shellpoint’s

business records. As Gill put it, the records were made by persons with

personal knowledge of the information contained in the records or from

information transmitted by persons with personal knowledge.

      In relevant part, Gill stated that BONYM had confirmed that it was in

possession of the original promissory note. A copy of the note was attached

to the declaration as Exhibit 1. Gill further stated that BONYM confirmed

that the original note was housed at Bank of New York Fullerton on

Burning Tree Road in Fullerton, California. But Gill did not specify how

BONYM confirmed this information, other than her general reference to

her knowledge derived from Shellpoint’s business records.

      Harms opposed the relief from stay motion. Harms disputed every

aspect of the alleged loan transaction. Among other things, he claimed that

Ampro never loaned him any money. He also denied he signed the note

and the deed of trust. Alternately, Harms claims that the alleged loan

transaction actually was an “investment contract” and that he is entitled to

a share of the proceeds from the investment vehicle in which his note was

invested. As a result, Harms maintains that BONYM is indebted to him,

“not the other way around.”

      Harms further contended that BONYM has not and cannot establish

that it has any rights, interests or entitlements under the note or the deed of

trust. Specifically, he argued that BONYM had not presented admissible or

                                       6
sufficient evidence to support its claim that it possessed the original note or

otherwise was entitled to enforce the note. In particular, Harms contended

that Gill’s declaration testimony regarding possession of the original note

did not qualify for the business records exception to the hearsay rule and

hence was inadmissible.

      On September 21, 2018, the bankruptcy court held a hearing on the

relief from stay motion. Neither of the parties to this appeal have provided

us with a transcript from this hearing. However, the bankruptcy court’s

hearing minutes entered on the bankruptcy docket indicate that the court

directed BONYM to file a supplemental declaration “satisfying the federal

rules of evidence” to support its relief from stay motion. The court also

provided Harms with an opportunity to submit evidentiary objections, if

any, to BONYM’s supplemental declaration.

      On September 28, 2018, BONYM filed the required supplemental

declaration. The declarant, Nichole Renee Williams, identified herself as an

Assistant Vice President for Bank of America, N.A. Williams identified

Bank of America as the servicing agent for BONYM with respect to the

subject note and deed of trust. She further identified Shellpoint as the

subservicer for the loan.

      Williams provided testimony similar to Gill’s regarding her general

knowledge of her employer’s business records and the manner in which

those records are created and maintained. But she also stated more

                                       7
specifically as follows:

      5.     I reviewed the collateral file maintained by Bank of
      America, N.A. with regards to this loan. This collateral file is
      kept in the ordinary course of business of Bank of America,
      N.A. One of the purposes of maintaining this collateral file is to
      track the location of the Original Promissory Note. It is the
      regular practice of Bank of America, N.A. to maintain the
      location of the Original Promissory Note within the collateral
      file for a loan.

      6.     The records contained in this collateral file were made at
      or near the time of the occurrence of the matters recorded by
      persons with personal knowledge of the information in the
      business record, or from information transmitted by persons
      with personal knowledge; kept in the course of Bank of
      America, N.A.’s regularly conducted business activities; and it
      is the regular practice Bank of America, N.A. to make and
      maintain these records. These records are regularly relied upon
      within the regular practice of Bank of America, N.A. as servicer
      for the Debtor’s loan.

      7.    As part of my job responsibilities with Bank of America,
      N.A., I have personal knowledge of and am familiar with the
      types of records contained in the collateral file in connection
      with Debtor’s Loan and the procedures for creating those types
      of records. I have access to and have personally reviewed the
      collateral file maintained for Debtor’s Loan. I have reviewed
      those records, have access to those records, and have personal
      knowledge of how they are maintained. Based upon those
      records, I have gained personal knowledge of the facts set forth
      herein and if called upon as a witness to testify , I could and
      would competently testify as to those facts under the penalty of
      perjury.

                                      8
      8.    On August 13, 2018, upon reviewing the collateral file
      maintained for Debtor’s Loan, I was able to confirm that Bank
      of America, N .A. was and is in possession of the Original
      Promissory Note. The collateral file confirmed possession as
      well as the current location of the Promissory Note. The
      Promissory Note, is held directly or through an agent, and that
      the Note is currently being housed with the Bank of New York
      Fullerton, 700 Burning Tree Rd., Fullerton, CA 92833.

Williams Decl. (Sept. 28, 2018) at ¶¶ 5-8.

      On October 5, 2018, Harms objected to BONYM’s supplemental

declaration. In essence, Harms’ objection to the Williams declaration was

twofold. First, Harms objected that Williams did not claim to have

personally seen the original note or personally to have verified BONYM’s

possession of the note. According to Harms, without such personal

knowledge, Williams could not competently testify regarding possession of

the original note. And second, Harms objected that Williams’ knowledge

was based on inadmissible hearsay. According to Harms, the information

on which Williams admitted she relied in providing her declaration

testimony did not qualify for the business records exception to the rule

against hearsay. As Harms reasoned, Williams did not qualify as a

custodian of the relevant records and was not otherwise qualified to lay the

foundation for the business records exception.

      The bankruptcy court overruled Harms’ evidentiary objection to the

Williams declaration. The court acknowledged that Williams did not claim

                                       9
personally to have seen the original note. But the court held that Williams’

statements regarding her knowledge and review of Bank of America’s

business records established her personal knowledge concerning their

contents and significance. The court further held that the Williams’

statements established her status as a person qualified to testify regarding

Bank of America’s record-keeping practices and concerning the

prerequisites for application of the business records exception to the rule

against hearsay. Consequently, the court found that BONYM had

established its standing to seek relief from the automatic stay. The court

also found that BONYM had established cause for relief from the automatic

stay.2

         On October 11, 2018, the bankruptcy court entered an order granting

BONYM relief from the automatic stay to pursue its state court remedies to

foreclose on and obtain possession of the property. Harms timely


         2
         We do not know the specifics of the bankruptcy court’s findings. The court’s
order merely states that the relief from stay motion was granted “for the reasons stated
on the record.” Order granting in part and denying in part creditor’s motion for relief
from stay (Oct. 11, 2018) at p. 1. Neither of the parties provided us with the transcript
from the hearing at which the court apparently rendered its findings. Still, we may infer
that the court made these findings at the relief from stay hearing, or else the court
presumably would not have granted BONYM’s relief from stay motion. In any event,
Harms has rendered it impossible for us to review these findings and has forfeited any
argument he might have made challenging the sufficiency and accuracy of these
findings. See generally McCarthy v. Prince (In re McCarthy), 230 B.R. 414, 417 (9th Cir. BAP
1999) (if an inadequate record is provided, “we look for any plausible basis upon which
the bankruptcy court might have exercised its discretion to do what it did. If we find
any such basis, then we must affirm.”).

                                            10
appealed.3

                               JURISDICTION

      The bankruptcy court had jurisdiction pursuant to 28 U.S.C. §§ 1334

and 157(b)(2)(G). Subject to the mootness discussion set forth below, we

have jurisdiction under 28 U.S.C. § 158.

                                    ISSUES

1.    Is this appeal moot?

2.    Did the bankruptcy court abuse its discretion when it granted

      BONYM’s relief from stay motion?

                         STANDARDS OF REVIEW

      We review mootness issues de novo. McCormack v. Herzog, 788 F.3d

1017, 1024 (9th Cir. 2015); Suter v. Goedert, 504 F.3d 982, 985 (9th Cir. 2007).

      We review the bankruptcy court’s order on a motion for relief from

stay for an abuse of discretion. Benedor Corp. v. Conejo Enters., Inc. (In re

Conejo Enters., Inc.), 96 F.3d 346, 351 (9th Cir. 1996). We also review for an

abuse of discretion the bankruptcy court’s evidentiary rulings. See Tritchler

v. Cnty. of Lake, 358 F.3d 1150, 1155 (9th Cir. 2004).

      A bankruptcy court abuses its discretion if it applies an incorrect

legal standard or if its factual findings are illogical, implausible or not

supported by the record. United States v. Hinkson, 585 F.3d 1247, 1261-62

(9th Cir. 2009) (en banc).


      3
        The bankruptcy court denied BONYM’s request for in rem relief. BONYM did
not cross-appeal from this denial.

                                        11
                                 DISCUSSION

A.    Mootness Issue.

      Under Article III of the Constitution, federal courts only can hear and

decide actual cases and controversies. Motor Vehicle Cas. Co. v. Thorpe

Insulation Co. (In re Thorpe Insulation Co.), 677 F.3d 869, 880 (9th Cir. 2012).

A case is constitutionally moot when there is no effective relief we can

grant to the appellant even if he or she were to prevail. Id.; Giesbrecht v.

Fitzgerald (In re Giesbrecht), 429 B.R. 682, 689 (9th Cir. BAP 2010). Parties

advocating in favor of mootness bear a heavy burden: they must

demonstrate that it is impossible to grant any meaningful relief. Suter, 504

F.3d at 986.

      BONYM primarily sought relief from stay in order to complete a

nonjudicial foreclosure against the property. BONYM has presented us

with a copy of a recorded trustee’s deed upon sale, which indicates that

BONYM completed the foreclosure sale in November 2018. We can take

judicial notice of the contents and recordation of the trustee’s deed. See

Rosenfeld v. JPMorgan Chase Bank, N.A., 732 F. Supp. 2d 952, 959 (N.D. Cal.

2010) (holding that documents recorded in the county recorder’s office are

matters of public record and are properly subject to judicial notice).

      Once a nonjudicial foreclosure has occurred, appeals from relief from

stay orders typically are considered moot. See Onouli–Kona Land Co. v.

Estate of Richards (In re Onouli–Kona Land Co.), 846 F.2d 1170, 1172–73 (9th

                                        12
Cir. 1988); see also Vista Del Mar Assocs., Inc. v. W. Coast Land Fund (In re

Vista Del Mar Assocs., Inc.), 181 B.R. 422, 424-26 (9th Cir. BAP 1995) (holding

that Onouli–Kona’s bankruptcy sale mootness rule applies even when the

foreclosing creditor purchases the property, unless “the debtor has a

statutory right of redemption,” or “other state law would permit the sale to

be set aside”). In other words, even if we were to reverse the relief from

stay order, such reversal would not unwind or otherwise affect the

foreclosure. Id.4

       Even so, all relief is not completely beyond Harms’ grasp. The relief

from stay order also permitted BONYM to exercise its state law unlawful

detainer rights in order to obtain possession of the property. BONYM has

not submitted any evidence indicating whether it already has obtained

possession of the property from Harms. Absent such evidence, we cannot

find that no meaningful relief is available to Harms in the event he

prevails. See generally Suter, 504 F.3d at 986 (holding that party asserting

mootness has burden of establishing that there is no meaningful relief for



       4
          Outside of the bankruptcy sale context, the Ninth Circuit Court of Appeals
repeatedly has held that, when an action sought to be enjoined already has occurred,
appeals from the denial or discontinuation of the injunction are constitutionally moot.
See, e.g., Vegas Diamond Props., LLC v. FDIC, 669 F.3d 933, 936 (9th Cir. 2012); In Defense
of Animals v. Dep't of Interior, 648 F.3d 1012, 1013 (9th Cir. 2011); Ctr. for Biological
Diversity v. Lohn, 511 F.3d 960, 963–64 (9th Cir. 2007); Seven Words LLC v. Netw. Solutions,
260 F.3d 1089, 1095 (9th Cir. 2001); Friends of the Earth, Inc. v. Bergland, 576 F.2d 1377,
1379 (9th Cir. 1978).

                                            13
the court to provide).

      Accordingly, we hold that BONYM has not met its burden to

establish that this appeal is moot.

B.    BONYM’s Motion For Relief From Stay.

      Relief from stay proceedings are primarily procedural. Veal v. Am.

Home Mortgage Serv., Inc. (In re Veal), 450 B.R. 897, 914 (9th Cir. BAP 2011).

They typically determine whether the equities justify releasing the moving

creditor from the legal effect of the automatic stay. Id. Because of the

limited scope of inquiry, neither the movant’s claim nor its security should

be litigated in the relief from stay proceeding. Id. (citing Johnson v. Righetti

(In re Johnson), 756 F.2d 738, 740–41 (9th Cir. 1985)); see also Grella v. Salem

Five Cent Sav. Bank, 42 F.3d 26, 33 (1st Cir. 1994) (“We find that a hearing on

a motion for relief from stay is merely a summary proceeding of limited

effect. . . .”). “Given the limited nature of the relief, . . . the expedited

hearing schedule § 362(e) provides, and because final adjudication of the

parties’ rights and liabilities is yet to occur, . . . a party seeking stay relief

need only establish that it has a colorable claim . . . . .” In re Veal, 450 B.R. at

914-15 (emphasis added) (citing United States v. Gould (In re Gould), 401 B.R.

415, 425 n.14 (9th Cir. BAP 2009)).

      Even so, to show both a colorable claim to the subject property and to

establish its standing to seek relief from the stay, the moving creditor must

present at least some evidence indicating that it has a right to foreclose,

                                         14
either as a person entitled to enforce the underlying note or based on some

other right under state law permitting it to commence foreclosure

proceedings. Id. at 915-18 & n.34.5

      As stated in Veal, the moving creditor may establish both its colorable

claim and its standing by showing that it, or its agent, has possession of the

original promissory note indorsed in blank. Id. at 917-18.6 Harms has not

challenged this legal principle. Nor does he deny that the bankruptcy court

based its standing determination on its finding that BONYM’s agent, Bank

of America, held the original note indorsed in blank. Rather, Harms’

arguments on appeal focus on the admissibility and sufficiency of the

evidence demonstrating that Bank of America is BONYM’s agent and

      5
        Indeed, in California, a beneficiary under a deed of trust, or its agents, may
conduct a nonjudicial foreclosure sale without establishing that they possess the
original promissory note or that they have any interest in the note. See Debrunner v.
Deutsche Bank Nat'l Tr. Co., 204 Cal. App. 4th 433, 440 (2012) (citing Cal. Civ. Code
§ 2924(a)(1)). Here, it is uncontroverted that BONYM was the successor beneficiary
under the subject deed of trust. Therefore, BONYM had standing to pursue foreclosure
under California law and would have been entitled to relief from stay even if it had not
established that it possessed the original note. In this appeal, we focus on BONYM’s
noteholder status and its evidence establishing its possession of the original note
because that is what the parties and the bankruptcy court focused on. But we also could
affirm on the separate and independent ground of Cal. Civ. Code § 2924(a)(1) and
BONYM’s status as the successor beneficiary under the deed of trust.
      6
        See also Cal. Commercial Code §§ 3301(a) (a holder of the note is entitled to
enforce the note); 3201 (an entity can become a holder of the note by negotiation – the
transfer of possession of an instrument payable to the bearer); and 3205(b) (“[w]hen
indorsed in blank, an instrument becomes payable to bearer and may be negotiated by
transfer of possession alone . . . .”).

                                           15
possesses the original note.

      According to Harms, there was no evidence that Bank of America is

BONYM’s servicing agent. This contention is not accurate. In support of its

motion, BONYM submitted the supplemental declaration of Bank of

America’s Assistant Vice President Nichole Williams. In her declaration,

Williams stated that Bank of America is the servicing agent for BONYM

with respect to the mortgage loan that is the subject of BONYM’s relief

from stay motion and that Shellpoint was subservicing the loan for Bank of

America. She further stated that she knows this based on her review and

knowledge of Bank of America’s business records, which are kept in the

course of Bank of America’s regularly conducted business activities, in

accordance with Bank of America’s regular practices, contain information

transmitted by persons with personal knowledge of that information, and

were made at or near the time of the occurrence of the matters referenced

in the records.

      This evidence regarding Bank of America’s status as BONYM’s

servicing agent was both admissible and sufficient. The bankruptcy court

did not err in relying upon it to find that Bank of America was servicing the

loan for BONYM, and using Shellpoint as a subservicer.

      Alternately, Harms contends that Bank of America’s records on this

point were untrustworthy. To support this contention, Harms points to a

letter he received in November 2018, after completion of the relief from

                                     16
stay proceedings. He attached a copy of this letter as “attachment 2“ to his

opening appeal brief. In the letter, the author holds himself out to be an

attorney for Bank of America and states that Bank of America transferred

responsibility for servicing the loan to another entity in 2012 and thus Bank

of America was not the foreclosing servicer. This comment is unremarkable

as it generally is consistent with William’s statements, as well as those

made by Gill, that a subservicer acted on behalf of Bank of America as the

servicing agent in the foreclosure proceedings. The author further identifies

BONYM as the beneficiary under the deed of trust. From this, the author

concludes that Bank of America “has no demonstrable interest in the loan –

neither servicing nor ownership – and further lacks information regarding

the current beneficiary sufficient to address your dispute . . . .”

      We decline to consider this letter because the bankruptcy court had

no opportunity to consider it. See Oyama v. Sheehan (In re Sheehan), 253 F.3d

507, 512 n.5 (9th Cir. 2001) (“[e]vidence that was not before the lower court

will not generally be considered on appeal”); Kirschner v. Uniden Corp. of

Am., 842 F.2d 1074, 1077–78 (9th Cir. 1988) (holding that papers not

presented to the trial court before entry of the order on appeal are not

properly part of the record and should not be considered in resolving the

appeal).7


      7
       If Harms had afforded the bankruptcy court with an opportunity to consider
the November 2018 letter, we strongly suspect that the letter would not have
                                                                           (continued...)

                                           17
      The only other comprehensible argument Harms makes on appeal

concerns the admissibility and sufficiency of the evidence BONYM

submitted to establish that Bank of America possesses the original note.

Harms argues that Williams’ declaration was inadmissible and insufficient

to establish that BONYM, or its agents, possessed the original note. Harms

insists that Williams relied on BONYM’s business records rather than on

Bank of America’s. Harms therefore reasons that Williams was not a

“qualifying witness” because she was speaking about BONYM’s records

and not Bank of America’s records. But none of the evidence presented

supports this claim. Rather, Williams’ declaration is clear that she reviewed

Bank of America’s collateral file to gather the information presented. On

this record, there was nothing to suggest that Williams was talking about

BONYM’s records as opposed to Bank of America’s records.



      7
        (...continued)
undermined the bankruptcy court’s confidence in the trustworthiness of Bank of
America’s business records indicating that Bank of America was the master servicing
agent for Harms’ loan. The November 2018 letter’s statement regarding Bank of
America’s servicing and ownership interest in Harms’ loan strikes us as nothing more
than an advocate’s statement of a legal position. More importantly, it seems significant
to us that BONYM, who is the moving party and the successor beneficiary under the
deed of trust, submitted the Williams declaration in support of its motion for relief from
stay. Quite obviously, BONYM thereby is representing and holding out Bank of
America to be its agent for Harms’ loan. Under these circumstances, there would be no
logical basis for the court to second guess BONYM’s and Bank of America’s dual
representations that Bank of America was serving as BONYM’s master servicing agent
for Harms’ loan.

                                           18
      To the extent that Harms challenges Williams’ ability to qualify as

witness for Bank of America’s business records, such challenge also fails.

The business records exception is set forth in Fed. R. Evid. 803(6) and

provides that a document is excepted from the rule against hearsay if it is a

“record of an act, event, condition, opinion, or diagnosis” and if:

      (A) the record was made at or near the time by – or from
      information transmitted by – someone with knowledge;

      (B) the record was kept in the course of a regularly conducted
      activity of a business, organization, occupation, or calling,
      whether or not for profit;

      (C) making the record was a regular practice of that activity;

      (D) all these conditions are shown by the testimony of the
      custodian or another qualified witness, or by a certification that
      complies with Rule 902(11) or (12) or with a statute permitting
      certification; and

      (E) the opponent does not show that the source of information
      or the method or circumstances of preparation indicate a lack of
      trustworthiness.

Harms’ argument focuses on subdivision (D) of Fed. R. Evid. 803(6), which

required Williams, as the declarant, to demonstrate that she is the

custodian of the subject business records or otherwise is qualified as a

witness to demonstrate the exceptions’ prerequisites, as set forth in

subdivisions (A) through (C) of Fed. R. Evid. 803(6).


                                      19
      The Ninth Circuit liberally construes what it means to be a qualified

witness for purposes of the business records exception. United States v. Ray,

930 F.2d 1368, 1370 (9th Cir. 1990), as amended on denial of reh'g (Apr. 23,

1991). The testifying witness need not be the custodian of the record, but

only needs to demonstrate that she is familiar with, and understands, the

record keeping system. Id. Thus, in Ray, a welfare fraud investigator was a

qualified witness that could lay the foundation necessary to admit

documents in a criminal defendant’s welfare file under the business

records exception after stating that she was “familiar with the filing and

reporting requirements for public assistance benefits and the forms used in

connection with those requirements.” Id.

      Moreover, because this evidence is foundational in nature, the

personal knowledge standard does not need to be followed when the

declarant is establishing his or her competency to testify regarding the

business records. See Fed. R. Ev. 104(a); 4 Christopher B. Mueller & Laird C.

Kirkpatrick, FEDERAL EVIDENCE § 8:78(5)(4th ed.). In other words, the

declarant’s statements regarding her familiarity with and understanding of

the records in question are not subject to the ordinary personal knowledge

requirement. See id. at n. 37. One leading treatise explains how this works

in practice:

      Only a knowledgeable witness can satisfy the exception, but it
      seems reasonable to make do with circumstantial knowledge


                                       20
      that would not suffice for witnesses giving evidence on the
      merits. The foundation witness needs to know enough to say
      that the record was prepared in the ordinary course of business
      in the manner contemplated by the exception (being regularly
      kept, all participants acting in ordinary course, source with
      knowledge, timeliness). Thus he needs firsthand knowledge
      about the normal processes of the business, but he need not be
      someone who observed any step in creating the record, and he
      need not even know exactly who participated in the various
      steps. He may rely largely on a kind of circumstantial
      knowledge, and he even [may] rely partly on what amounts to
      hearsay—on what he has learned by talking to others about
      record-keeping processes.

Id.

      As indicated above, the Ninth Circuit’s decision in Ray is consistent

with this practice. See 930 F.2d at 1370. Accordingly, Williams did not need

to personally know when and by whom the records actually were

prepared. Id. (“There is no requirement that the government establish

when and by whom the documents were prepared.”). So long as she was

able to competently testify that these types of records generally are made at

or near the time of the occurrences recorded – by persons with personal

knowledge or from information transmitted by persons with personal

knowledge – she has established herself as a qualified witness under the

business records exception to the hearsay rule. Id. Williams’ declaration

established that she was qualified to lay the foundation for Bank of

America’s business records.

                                     21
      Even if we were to assume that Williams was relying on what

originally were BONYM’s records – Harms’ argument still fails. In the

Ninth Circuit, Fed. R. Evid. 803(6) applies to records received by a business

from third parties, so long as the following conditions are met: (1) the

“records are kept in the regular course of that business;” (2) the business

relies upon those records; and, (3) the “business has a substantial interest in

the accuracy of those records.” See MRT Const. Inc. v. Hardrives, Inc., 158

F.3d 478, 483 (9th Cir. 1998) (citing United States v. Childs, 5 F.3d 1328,

1333–34, 1334 n. 3 (9th Cir. 1993)).

      Here, Williams’ declaration testimony established each of these three

conditions. She spoke about how Bank of America routinely kept in its

collateral file records regarding the location of the original promissory

note. She also stated that it was Bank of America’s regular practice to rely

upon such records. Finally, under the circumstances, Bank of America’s

interest in the accuracy of these records is obvious. At any time, the

principal on whose behalf Bank of America is acting as servicing agent may

ask Bank of America to transfer possession of the original note to someone

else. Bank of America hardly can do so without keeping track of the

location of the original promissory note. That is why Williams stated: “One

of the purposes of maintaining [the] collateral file is to track the location of




                                        22
the Original Promissory Note.”8

       In short, the bankruptcy court did not abuse its discretion when it

concluded that Williams was qualified to lay the foundation for Bank of

America’s business records, or that she established the applicability of the

business records exception to the hearsay rule. The record before us

demonstrates that the bankruptcy court properly admitted Williams’

testimony, which was properly based on her review of Bank of America’s

business records. Those records established that BONYM, through its

agents, held the original promissory note, which in turn established

BONYM’s standing to seek relief from the stay.

                                    CONCLUSION

       For the reasons set forth above, we AFFIRM the bankruptcy court’s

relief from stay order.




       8
         At bottom, Bank of America’s reliance on its records to keep track of the
original note’s location demonstrates their inherent trustworthiness. Trustworthiness is
the cornerstone underlying the business records exception. See Childs, 5 F.3d at 1333-34
& n.3. In situations like this, where the businesses’ interest in the accuracy of the records
is apparent, the businesses’ reliance typically demonstrates the trustworthiness of such
records. See Chu v. Lara (In re Chu), BAP No. NV-07-1243-McMoPa, 2008 WL 8444805, at
*7 ( 9th Cir. BAP Mar. 18, 2008) (citing Childs, 5 F.3d at 1334).

                                             23
