### IN THE COURT OF APPEALS OF TENNESSEE AT KNOXVILLE June 2000 Session EVELYN CAMPBELL, a/k/a E LVIN CAMPBELL, ERMA DOR TON and EDRIA HUMP

HREY, v. U

NION PLANTE

RS BANK, fo

rmerly COMMERCE FEDERAL SAVINGS BANK Direct Appeal from the Circuit Court for Hamblen County No. 97-CV-423 Hon. Kendall Lawson, Circuit Judge

FILED AUGUST 2, 2000 No. E1999-01910-COA-R3-CV

In this action to recover on two certificates of deposit against the ba nk, the Trial Judge directed a verdict in favor of the plaintiffs after sustaining an o bjectio n to the bank’s atte mpt to offer its business records

in evidence. The

bank has appeale

d, and we rever

se and remand fo

r a new trial.
Tenn. R. App. P.3 Appeal as of Right; Judgmen

t of the Circuit C

ourt Reversed.
H ERSCHEL P ICKENS F RANKS , J., delivered the op inion of the court, in which H OUSTON M. G ODDARD , P.J., and C HARLES D. S USANO , J R
. J., joined. H. Scott Reams, Morristown, Tennessee, for appellant, Union Planters Bank. Floyd W. Rhea, Snee

dville, Tennesse

e, for appellee

s.

OPINION Plaintiffs are children of Ellis Johnson, who died on May 3 1, 1997. After Johnso n’s death, certa

in Certificates of

Deposit issued in the names of Johnson and plaintiffs, were found among Johnson’s papers. The bank refused to pay two Certificates of Deposit pre sented by plaintiffs for collection. The CD’s had been issued by Commerce Federal Savings B ank (a predecessor of Union Planters). One had a maturity date of March 10, 1987, having been issued on March 10, 1986, and the other had been issued on August 22, 1988, with a maturity date of February 20, 1989. Uni on Planters defended on the grounds that these CD’s had been paid by the issuance of interest checks and new CD’s.
At

trial, plaintiffs presented the CD’s and testified that the defendant had r

efused to1 The Advisory Commission comments to Tenn. R. Evid. 803(6) state that it is essentially the sameas the Uniform

Business Records as Evidence Act, once codified at Tenn. Code Ann. §24-7- 111, which has been repealed.

-2- pay. Defendant offered as a witness, Susan Monkhouse, an employee of def end ant and defendant’s predecessor in i nterest, Securit

y Trust Fed

eral Savings &

Loan, but not Commer ce Federal, which had been a cquired by

Security Trust Federal Savings & Loan. She testified that she had been with this chain

of banks since 1991, and had been in the banking industry for 16 y ears. She testified on the procedure for cashing CD’s, and that she had been asked by

her employer to research the history of the two CD’s in question, and that the paperwork showed the progression of the CD’s being paid interest, and then co nverted to two new CD’s that were included in the ones that were honored by the bank. She further testified that she was familiar with the method and procedures used in r ecord- keepi ng for Union Plan ters and its prede

cessors in intere

st, and testified a

t length regarding what those procedures were. The Trial Court, upon objection however, refused to admit this evidence before the jury, on the basis that Ms. Monkho

use did not work for Commerce Federal when the original CD’s were issued.

The defendant a

lso called Patrici

a Smithson, records custodian for Union Planters. The Court refused

to allow the docume

nts to be introduced through Ms. Smithson, because she had never worked for Commerce Federal. After disallowing this evidence, the Trial Court then directe d a verdict for the plaintiffs and entered a judgment for plaintiffs in the amount of $34,760.0 2 , representing principal and interest on the two Certificates of Deposit.

The bank has appealed. Essentially, the dispositive issue on this appeal is whether the Trial Judge prope

rly sustaine

d the objection to th

e offer of evide

nce of the bank’ s business records. Tenn. R. Evid. 803( 6) creates a

hearsay e xception for cert

ain business

records, as foll

ows: (6) Records of Regularl y Conduc ted Activity . A memorandum, re port, record, or data compi lation in a ny form of acts, events, conditions, opinions, or diagnoses made at or near the time by or from information transmitted by

a person withknowledge and a business duty to record or tran smitif kept in the course of a regularly conducted busine

ss activit y a nd if it was the regular practice of that business activity

to make the memora

ndum, report, rec

ord, or data comp

ilation, all as shown by the testimony of the custodian o r other qualified witness, unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness. T

he term "busines s" as used in this paragraph includes every kind of business, institution, association, profession, occupation, and calling, whether or not conducted for

profit. 1 This Court has held that business records regularly kept in the normal course of-3-

business are inherently trustworthy and re liable, and that the Rule’s purpose is to facilitate the use of business records “by eliminating the expense and inconvenience of calling numerous witnesses involved in the preparation and maintenance of the records.” Alexander v. Inman , 903 S.W.2d 686, 700 (Tenn. Ct. App. 1995). We have also said that in order to qualify as a hearsay exception under Tenn. R. Evid. 803(6), the documents must meet five criteria:

1. The document must be made at or near the time of the event recorded;
2. The person providing the information in the document must have firsthand knowledge of th

e recorded eve

nts or facts; 3. The person providing the information in the document must be under a business duty to record or transmit the information;
4. The business involved must have a regular practice of making such documents; and 5. The manner in which the information was provided or the document was prepared must not

indicate that the d

ocument lacks tru

stworthiness. Alexander . In addition, the person offering to introduce the records in evidence must be a custodian or other qualified witness. Id.

The issue thus bec

omes whether Ms. M

onkhouse, introduc

ed the records a

s a “qualified witness” pursuant to the Rule.

The term “qualified witness” is to be given a broad interpretation, and has generally been defined as a witness who has personal knowledge of the business’s recordkeeping methods and can explain the same to the court. Alexander . The witness is not, however, required to have personal knowledge of the facts recorded, nor to have been personally involved in preparing the documents or even know who did. Id; see also Bowlin v. Bowlin , 1999 WL 419703 (Tenn. Ct. App. June 24, 1999), perm. app. granted Dec. 6, 1999.

The records whic

h were excluded in

this case were g

enerated by

Security Tr

ust and consisted of h

istory docum

ents related to the

Certificates of D

eposit in question. M

s. Monkhouse was clearly knowledgeable about the proce dures utilized by Security Trust before she was employed and testified that the procedures were e xplained to her during her training and utilized by her during her employment there , and that they were the same before her employ ment and throughout her employment with Security Tr ust. She testified at great length out of the presence of the jury regarding the way these records were gene rated and kept, and that the documents sought

to be introduced w

ere made and ke

pt in the regular

course of busine

ss. There was no indicia of lack of trustworthiness in the records sought to be introduced, such as lack of duty to record, or signs that the documents were obviously prepared for litigation. See Tenn. R.2 Decided under the Unifor

m Business Records as Evidence Act, once codified at Tenn. Code Ann. §24-7-111.

-4- Evid. 803(6); State v. Kennedy , 7 S.W.3d 58 (Tenn. Crim. App. 1999).

Ms. Monkhouse should not have been precluded from testifying about and introducing the bank’s business records simply because they were generated before she was hired, when she was familiar with the method of generating and keeping the r ecords, and otherwise met all of the qualifications of Tenn. R. Evid. 803(6). Patty v. State , 556 S.W.2d 776 (Tenn. Crim. App. 1977). 2 Taking into consideration Ms. Monkhouse’s testimony along with the custodian’s (Smithson) testimony, the Trial Court should have allowed the records to be introduced. In this connection, see Martin v. Martin , 755 S.W.2d 793 (Tenn. Ct. App. 1988).

Upon finding that the excluded evidence should have been admitted, it is clear that the issues presented were for the jury, and we reve rse the Trial Court’s directing a verdict, as well as excluding

from the jury ’s consideration the business reco

rds of defendan

t. We remand for a new trial in accordance with this Opinion and assess the cost of appeal to plaintif

fs.

_________________________ H ERSCHEL P ICKENS F RANKS , J.