Direct Examination of Witnesses Hearsay Exceptions Business Records

Law

The following are not excluded by the hearsay rule, even though the declarant is available as a witness:... .

(6) Records of regularly conducted activity. 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 or circumstances of preparation indicate lack of trustworthiness. The term "business" as used in this paragraph includes business, institution, association, profession, occupation, and calling of every kind, whether or not conducted for profit.

(7) Absences of entry in records kept in accordance with the provisions of paragraph (6). Evidence that a matter is not included in the memoranda, reports, records, or data compilations, in any form, kept in accordance with the provisions of paragraph (6), to prove the nonoccurrence or nonexistence of the matter, if the matter was of a kind of which a memorandum, report, record, or data compilation was regularly made and preserved, unless the sources of information or other circumstances indicate lack of trustworthiness....

FRE 803(6), usually referred to as the "business record exception," recognizes the reality of business life. When information is furnished and recorded by people acting routinely, under a duty to be accurate, with an employer relying on the result, admissibility of the record should not be defeated by the rule against hearsay. If it is reliable enough for the business, it should be reliable enough for the rules of evidence. All that is needed is someone who can testify to how and for what purpose the particular kind of record is made and kept. Requiring the presence of other participants in the record-making process would be cumbersome and a waste of time.

The business record rule can best be understood when broken into its various components.

1. The record can be a "memorandum, report, record, or data compilation, in any form" that records "acts, events, conditions, opinions, or diagnoses" so long as it was the "regular practice of that business activity" to make the record.

There is no limit to the method of creation. It ranges from handwritten to typed to computer generated. Handwritten office diary entries, preprinted forms filled out by hand or typewritten, and computer printouts are all included in the definition of a record.

While the rule clearly includes computer-generated records, some courts hold that a record is a computer record only if the computer's output is in the same form as the original input. If the computer is asked to search and selectively retrieve information from its data base and the resulting printout is a new document that never was put into the computer in that form, the printout is a summary under FRE 1006, not a business record under FRE 803(6). While the summary will be admissible, the requirements of FRE 1006 must be met.

It is not enough that someone engaged in a business makes a record of something. The thing he records has to have to do with the business, and it has to be the kind of thing that is routinely recorded. Routine recording assures accuracy. The lack of routineness raises a probability that the record-maker is not motivated by a desire to be accurate. For example, a stock brokerage purchase order contains the notation "This customer is a thief." The notation is not part of the business routine and should be excluded, although the purchase order will be admissible to prove an order was placed.

The record can contain acts, events, and conditions as well as opinions and diagnoses. To be admissible, the opinions or diagnoses in the record must be part of a report made at or near the time of the events about which the opinion or diagnosis was made. A record created merely to support or express expert opinions will not qualify under the business record exception. For example, an emergency room doctor's opinion and diagnosis are part of the report of the patient's condition and treatment. But when another doctor later sees the patient solely for the purpose of rendering an opinion, the trier of fact has a right to know that doctor's qualifications before the opinion is admitted, and that doctor's opinion letter is not admissible as a business record.

The activity recorded must be regular and routine, but that does not mean this kind of record has to be made every day. For example, if a business is burglarized, hardly a usual event, a record made by the business to reflect things lost in the burglary should qualify as a business record. Ordinarily, though, casual or isolated records will not qualify unless there are some special circumstances guaranteeing trustworthiness.

The term "business" in the rule covers any kind of business, institution, association, profession, occupation, or calling, whether or not conducted for profit.

2. The record must be "made at or near the time" of the act, event, condition, opinion, or diagnosis recorded.

Courts refuse to announce any arbitrary or artificial time limits for the "made at or near" requirement. The usual standard is that the record must be made a reasonable time after the event, when the acts and events are still fresh in the mind of the person having firsthand knowledge of the facts. Much will depend on the nature of the information and how and when it is recorded. When the record-maker obviously is looking back in time to recreate a record of a past event, he is not making it at or near the time of the event. Such a record is not trustworthy.

3. The record must be made by a person "with knowledge" of the act, event, condition, opinion, or diagnosis or "from information transmitted by a person with knowledge" of the act, event, condition, opinion, or diagnosis.

Admissibility of a business record is not assured simply because an employee made it in the usual course of the business. Inquiry should be made into the source of the information, that is, who the source was, why the source was supplying the information, and whether the source actually had firsthand knowledge of the information. A conscientious judge might assume that the record-maker is on the stand and ask the following: Who is the person who gave you this information? How did he come •to know the information? How often does he get it? When did he transmit the information to you? Who relies on the information and for what reason? While the record-maker's presence in court is excused by the rule, his absence should not give the record more reliability than it deserves.

Frequently the record-maker will not have personal knowledge of the event he records. He will be relying on other sources of information. The source of the information must be speaking from personal knowledge. If the information is being offered for its truth, the source must have had a "business duty" to speak accurately. (The "business duty" concept comes from the leading case, Johnson v. Lutz, 170 N.E. 517 (N.Y. 1930).) If the source had no such business duty, information from that source is "double hearsay," or "hearsay within hearsay." Such information, contained in a business record, is not admissible, even though the record itself is qualified as a business record, unless the information is not hearsay or a separate hearsay exception applies to the information. The admissibility of so-called "double hearsay," or "hearsay within hearsay," is governed by FRE 805, which provides that each level of hearsay must fall within a hearsay exception before it is properly admissible.

For example, Sandra Jones reports the theft of her car to her insurance company. The car is recovered, but Jones is not available to testify against the defendant at his theft trial. The prosecution offers the insurance company report to prove that Jones owned the car and that it was stolen. Jones, not being an employee of the insurance company, did not have a business duty to speak accurately. The report is being offered for the truth of her statement to the insurance company. The report is inadmissible for that purpose.

The purpose for offering the report might change, however. Jones now sues the insurance company for the value of the car, and the company defends on the ground that she failed to report the theft to the insurance company. The report becomes admissible because it is offered not for the truth of what she said, but for the fact that she said it. Her statement to the insurance company is not hearsay at all. The report is admissible for that purpose.

Under FRE 805, each layer of the out-of-court statement must be examined, from the original source of the information who had firsthand information to the actual maker of the report. The source of the information must be (1) someone with a business duty to report accurately, or (2) someone whose statement fits within a hearsay exception, or (3) someone whose statement is not hearsay at all.

For example, when a bystander to an accident tells a police officer "The blue car went through a red light," a police report containing that statement is not admissible for the truth of the statement. The bystander is not under a business duty to report accurately. His statement is no more admissible than it would be if the police officer were on the witness stand testifying to the bystander's statement. Even if the police report itself is admissible as a record, the bystander's statement must first be deleted from the report.

But the bystander might be speaking under the stress of excitement caused by the accident when he blurts out, "Oh my God! The blue car went through the red light!" In that case, each level of hearsay has been satisfied. The report itself qualifies as a record, and the bystander's statement, contained in the report, qualifies as an excited utterance. The entire report, including the bystander's statement, is admissible, since both levels of hearsay meet separate hearsay exceptions.

Another example of qualifying each layer of an out-of-court statement under FRE 805 involves the admission of a party contained in a police report. For example, in a personal injury case, a police report contains the defendant's statement: "I ran the red light." The report itself is hearsay, but qualifies as a record. The defendant's statement, contained in the report, is not hearsay, since it is a party admission under FRE 801 (d) (2) (A) when the report is offered by the plaintiff.

Direct proof of personal knowledge of the record-maker or the source of the information is not always easy to obtain. It usually is inferred circumstantially from the nature of the information and from the fact that business routine required an employee to obtain firsthand information. For example, a company regularly relies on the firsthand knowledge of its shipping agent. An invoice prepared by that agent is based on his firsthand knowledge.

4. The person testifying to the foundation for the business record must be its "custodian or other qualified witness."

The rule does not require that the witness have personal knowledge of the contents of the particular record, nor does he have to have personal knowledge of how the particular record was made. Those are matters of weight for the fact finder.

The witness can be anyone who can explain the way in which records like the one in question are made and kept. There is no requirement that the witness know or identify the actual person who made the record or supplied the information. But the witness does need to know the process by which the information was obtained and the record made.

The qualifying witness does not have to have been an employee of the business at the time the record was made. It has been held that a person outside the business may testify to its records if he has sufficient personal knowledge of how the records are made and kept.

In practice, the foundation for offering business records has become casual. Some judges are satisfied with conclusory questions that mirror the language of FRE 803(6). However, many judges look beyond the mere reciting of the rule's language to determine if the requirements of the rule have actually been met.

The fact that records are created by or stored in a computer should not cause problems, since FRE 803(6) uses the term "data compilation." The rule does not require any special or extra foundation for computer-generated records, but some judges do. Emphasis is on the accuracy of the data compiled for computer entry. The data must have been compiled and entered into the computer at or near the time of the event. The actual printout can be made at any time. When the accuracy of computer printouts is called into question, some judges require testimony that the computer and the program it used were reliable, that the computer was in good working order, and that the computer operator possessed the knowledge and training to correctly operate the computer.

5. The record will be excluded if "the source of information or the method or circumstances of preparation indicate lack of trustworthiness."

The opponent of the record has the burden of raising the question of lack of trustworthiness. The attack usually centers on some motive of the record-maker or the source of the information to misrepresent. Here, the absence of routineness plays a significant role. Records made in anticipation of particular litigation lack trustworthiness. A record created to defeat another person's legal rights is untrustworthy. An employer's written comment about an employee it has discharged may be held untrustworthy because of a motive to defend the company against a claim of wrongful discharge.

The rule does not specifically exclude records made for the purpose of litigation, but the judge may exclude a record where the circumstances "indicate lack of trustworthiness." This "anticipation of litigation" rule comes from Palmer v. Hoffman, 318 U.S. 109 (1943), where the Supreme Court excluded an accident report by a since-deceased train engineer offered by the railroad in a grade-crossing collision case. The Court held that such a report, obviously written with an eye toward an expected lawsuit, was too untrustworthy under the circumstances to be admitted as a business record. The Palmer v. Hoffman rule has not been broadly applied, since any business record can be seen as having been made with a view toward possible future litigation. However, when litigation in a particular situation becomes a distinct possibility, a record made by a party may be too self-serving to be trustworthy, and FRE 806(6) permits its exclusion.

In each instance, the trial judge conducts an FRE 104(a) inquiry into the opponent's claim of lack of trustworthiness. Judges prefer that a claim of untrustworthiness or of other reasons for inadmissibility be raised at the earliest opportunity.

The absence of an entry on a business record can be admissible evidence. FRE 803(7) provides: "Absence of entry in records kept in accordance with the provisions of paragraph (6). Evidence that a matter is not included in the memoranda, reports, records, or data compilations, in any form, kept in accordance with the provisions of paragraph (6), to prove the nonoccurrence or nonexistence of the matter, if the matter was of a kind of which a memorandum, report, record, or data compilation was regularly made and preserved, unless the sources of information or other circumstances indicate lack of trustworthiness."

This exception applies to matters that are routinely recorded in a business record, but were not recorded on a particular occasion. The failure to record the matter becomes evidence of its non-occurrence or nonexistence. For example, a record is kept each time a bus is cleaned. There is no record of a certain bus being cleaned on a particular date. This is evidence the bus was not cleaned on that date.

The foundation for this exception tracks the FRE 803(6) foundation. The custodian or other qualified person testifies that records of the matter routinely are made and kept by the business. In this case, after a diligent search, he could not find such a record, or he did find a record that would ordinarily contain the relevant entry, but it does not contain such an entry.

Some judges simply allow testimony of the absence of an entry without admitting the record in which it should have appeared. Others require introducing the record with the missing entry. The original documents rule in FRE 1002 applies when the record itself is introduced to demonstrate absence of an entry.

Practice

Business record exception is one of the most important, and most frequently used, hearsay exceptions. While basic foundation issues are rare and lawyers often stipulate to the foundations of business records, lawyers frequently overlook other evidentiary objections. The most important objection is to double hearsay contained within the record because statements from sources not having a business duty to report and record accurately are usually hearsay and those statements are not admissible unless the statements are not hearsay or a separate hearsay exception applies.

Example:

This is a personal injury case in which plaintiff was injured in a head-on collision with defendant. Plaintiff seeks to introduce in evidence an accident report prepared by a police officer and lists the report as an exhibit in its pretrial memorandum. The police report includes the following notations: (1) "Defendant said he was going about 45 mph and didn't realize that the roadway was icy"; (2) "Bystander said defendant was going at least 60 mph." Defendant objects to admission of the report. At a pretrial hearing, the following happens:

Defendant:

Your honor, we have no objection to the report as a whole. It's obviously both a business and a public record. However, we object to the statements of the defendant and the bystander. The statements of such persons, recorded in the report, are double hearsay. The business record exception applies only to the report itself, not to the statements of other persons contained in the report. This is inadmissible and must be deleted.

Plaintiff:

The statement of the defendant contained in the report is an admission by a party-opponent and is admissible, since the plaintiff is offering the report. The statement of the bystander-is double hearsay, and we agree that no hearsay exception applies. We will delete the bystander's statement in the copy of the record we will introduce at trial.

Judge:

I agree with the plaintiff that the defendant's statement is a party admission, which will be admissible if a proper foundation for the report is established at trial. The bystander's statement will be deleted from the report.