By Hon. Gary NadlerIn both civil and criminal trials, business records can often make or break a case. Business records, including computer printouts, are hearsay and can be admitted into evidence only if a proper foundation is presented for the business records exception. A good working knowledge of the business records exception is essential to attorneys' effective advocacy as well as bench officers' accurate adjudication of cases.
The objective of this article and self-study test is to provide bench officers and attorneys with an overview of the business records exception to the hearsay rule. Readers will learn about the foundational requirements of the exception, with a special emphasis on satisfying the exception through a subpoena duces tecum, and special issues presented by records generated by computers.
Business records are the paper trail that often proves critical in convincing a judge or jury to rule in a party's favor. For example, records can establish when events occurred, prove knowledge critical to showing a duty of care, and provide corroboration to an alibi defense.
Business records are hearsay documents. Hearsay documents are out-of-court statements offered for the truth of the matter asserted. They are inadmissible unless an exception applies. Evidence Code Section1200. For example, some records may qualify under the official records exception to the hearsay rule. See Evidence Code Section 1280. But more typically, records are offered under the business records exception to the hearsay rule in Evidence Code Section 1271.
The justification for the business records exception to the hearsay rule is that the manner in which businesses operate increases the reliability of the records. Businesses treat their records as accurate, employees are trained to make the entries correctly and accurately, and if entries are incorrect, the employees may be fired. See generally Evidence Code Section 1271, Law Revision Comment.
The purpose of Evidence Code Section 1271 is to make it easier to admit business records into evidence by enlarging the scope of this exception to the hearsay rule. Arques v. National Superior Co., 67 Cal.App.2d 763 (1945). The goal of this section is to liberalize many of the strict foundational requirements of the common law that hindered the admission of records into evidence. Richmond v. Frederick, 116 Cal.App.2d 541 (1953). Given this purpose and goal, when there is a doubt regarding the admissibility of a record, it should be resolved in favor of its admission.
A court has wide discretion in determining whether a sufficient foundation has been laid to qualify evidence as a business record. County of Sonoma v. Grant W., 187 Cal.App.3d 1439 (1986). Nonetheless, the proponent of admitting the evidence bears the burden of satisfying each element of the exception. Evidence Code Section 403.
Evidence Code Section 1271 provides that "[e]vidence of a writing made as a record of an act, condition, or event is not made inadmissible by the hearsay rule when offered to prove the act, condition, or event if all the following are satisfied:
(a) The writing was made in the regular course of a business;
(b) The writing was made at or near the time of the act, condition, or event;
(c) The custodian or other qualified witness testifies to its identity and the mode of its preparation;
(d) The sources of information and method and time of preparation were such as to indicate its trustworthiness."
A threshold question is what is a "business"? Evidence Code Section 1270 defines this term broadly to include, "every kind of business, governmental activity, profession, occupation, calling, or operation of institutions, whether carried on for profit or not." As stated by the Law Revision Commission Comment to Evidence Code Section 1270, "the definition is sufficiently broad to encompass institutions not customarily thought of as businesses," citing, as an example, a church that keeps baptismal and wedding records.
To be clear, the requirement is not that the entry or writing is regularly made. Rather, the writing must be made as a regular part of the business. Thus, a single entry made as part of typical business activity may qualify. On the other hand, an accident report prepared for litigation may not qualify because it is used for court purposes, and not as a regular aspect of the business operation. The ultimate issue is whether the document is trustworthy. In the case of the litigation-related report, it may be less so even if it is argued that such reports are a regular duty of an employee.
The writing must concern, and have been generated at or near, an act, condition, or event. If a notation of an event is recorded promptly, it is more likely to be trustworthy.
Issues arise concerning whether something is an "act, condition or event." In People v. Campos, 32 Cal.App.4th 304 (1995), a testifying psychiatrist relied on a report prepared by another psychiatrist. The admission of the psychiatric report as a business record was found to be in error, since the conclusion contained in that report was not an "act, condition, or event." See also People v. Reyes, 12 Cal.3d 486 (1974). Likewise, when a hospital nurse wrote in a patient's chart that the patient was too ill to be moved, this entry was determined to be an opinion, and not a record of an "act, condition, or event." Hutton v. Brookside Hosp., 213 Cal.App.2d 350 (1963).
Someone with knowledge of the documents must testify as to their identity and the mode of preparation of the identified documents. Then, the trial judge must consider all circumstances, including sources of information, method, and time of preparation, to determine whether the documents are trustworthy. If the trial judge determines that they are trustworthy, the business records hearsay exception applies, and the documents may be admitted. The basis for the determination need not be stated; admitting the record constitutes an implied finding that the Evidence Code Section 1271 conditions have been met. Levy-Zentner Co. v. Southern Pac. Transp. Co., 74 Cal.App.3d 762 (1977).
Note that the application of the business records exception does not prevent the assertion of any other objections, including that the records are cumulative or more prejudicial than probative under Evidence Code Section 352.
It can be burdensome for a business who is not a party or the place where a cause of action arose to send a representative to court to establish the foundation required for Evidence Code Section 1271. To lessen this burden, a procedure is provided for producing the records in response to a subpoena duces tecum that can comply with Evidence Code Section 1271 without the custodian having to come to court.
Under Evidence Code Sections 1560-1561, a business can satisfy a subpoena duces tecum by mailing or otherwise delivering to court a copy of the records requested accompanied by an affidavit. The affidavit must be signed under penalty of perjury by the records' custodian or any other qualified witness with the authority to certify the records. Evidence Code Section 1561(a)(1). The affidavit must also state that "[t]he records were prepared by the personnel of the business in the ordinary course of business at or near the time of the act, condition, or event," and must provide "[t]he identity of the records," and "[a] description of the mode of preparation of the records." Evidence Code Section 1561(a)(3)-(5). The affidavit is presumed to be true. Evidence Code Section 1562.
The contents of the affidavit mirror the requirements of the business records exception to the hearsay rule. The present version of Evidence Code Section 1561 was drafted to ensure that once the affidavit meets all the requirements set forth therein, the records will be admissible over a hearsay objection. See Cooley v. Superior Court, 140 Cal.App.4th 1039 (2006).
Using the subpoena duces tecum option for a nonparty business is generally better than a request to compel the production of documents both for the party and the business because it eliminates the need for witness testimony in the future to admit the documents into evidence under the business records exception.
Most businesses presently rely on computers to store their records. In many businesses, information originally taken down on paper is later input into computers, and the paperwork is discarded to save storage space. It is conceivable that in the near future very little actual paperwork will be created or retained by businesses, with almost all information being stored in computers.
The fact that information is found in computers does not render it immune from discovery. However, special rules apply when businesses provide requested data by printing it out from their computers and delivering it to court.
A computer printout must first be determined whether it is hearsay before it can be admitted into evidence. As held by People v. Hawkins, 98 Cal.App.4th 1428 (2002), when the computer printout consists of the computer reporting its own internal functions, such as indicating when the computer was last used, the resulting printout is not hearsay. Hawkins explained that hearsay consists only of human out-of-court statements offered for the truth of the matter, not "statements" made by a machine. Under Hawkins, the only foundation that must be presented to admit a computer printout relating the computer's own internal workings is that the computer was operating properly.
If the printout from the computer consists of information originally input by people, then the printout is hearsay and is inadmissible if offered for the truth of the matter related. The proponent must satisfy the business records exception to the hearsay rule.
The business records exception applies to any "writing" generated by a business. See Evidence Code Section 1271. A computer printout qualifies as a "writing" because this term includes all forms of tangible expression "regardless of the manner in which the record has been stored." Evidence Code Section 250.
The Court of Appeal has rejected an argument that would have restricted the types of computer records admissible under Evidence Code Section 1271. In Aquimatang v. California State Lottery, 234 Cal.App.3d 769 (1991), the court admitted into evidence a computer printout dated October 1988, showing the results of a January 1987 drawing of the California State Lottery. The plaintiff argued that the evidence failed to satisfy the element in Evidence Code Section 1271 that "[t]he writing was made at or near the time of the act, condition, or event," because the retrieval of the information from the computer was not made at or near the time of the drawing.
Aquimatang held that Evidence Code Section 1271 is satisfied so long as the original entry of the computer data is made at or near the time of the event, regardless of when the information is retrieved and printed out from the computer. Aquimatang reasoned that because the original data entries were made contemporaneously with the lottery drawing, the printout was admissible.
Establishing the elements of Evidence Code Section 1271 for computer data was made easier by the Court of Appeal's opinion in People v. Lugashi, 205 Cal.App.3d 632 (1988). In that case, the defendant in a criminal case argued that the court erred in admitting computer data, arguing that to satisfy Evidence Code Section 1271, the proponent must introduce testimony on the acceptability and reliability of the particular hardware and software used, along with internal maintenance and accuracy checks.
Lugashi rejected the defendant's argument, holding that a computer expert was not required to establish the Evidence Code Section 1271 exception. Instead, the proponent of the computer records need only present evidence from a person who generally understands the computer system's operation and has enough knowledge and skill to properly use the system and explain the computer data.
Lugashi reasoned that requiring more would be unduly burdensome because the defendant's "proposal could require production of a horde of witnesses representing each department of a company's data processing system, not to rebut an actual attack on the reliability of their data, but merely to meet the minimal requirement for admissibility."
Gary Nadler is a judge with the Superior Court of Sonoma County.