Opinion ID: 764967
Heading Depth: 2
Heading Rank: 2

Heading: Did the court abuse its discretion in excluding the Rutherford report?

Text: 20 The Rutherford report involves several layers of hearsay: (1) it is an unsworn, out-of-court statement by Rutherford; (2) it contains unsworn, out-of-court statements by Sana's co-workers; (3) which recall unsworn, out-of-court statements by Sana. For the document to be admissible, each layer of hearsay must satisfy an exception to the hearsay rule. See Fed. R. Evid. 805. 21 Sana argues that his statements to his co-workers are admissible under Fed. R. Evid. 803(3), which excepts from the hearsay rule statements of the declarant's then existing... physical condition (such as... pain... and bodily health). Hawaiian Cruises simply denies, without explanation, that this section applies. It is mistaken. The statements are admissible under Rule 803(3). 22 Sana argues that his co-workers' statements to Rutherford are admissions by a party-opponent under Fed. R. Evid. 801(d)(2)(D). Rule 801(d)(2)(D) provides that [a] statement is not hearsay if [it] is offered against a party and is... a statement by the party's agent or servant concerning a matter within the scope of the agency or employment. The question is whether the statements of Kauhi, Ruben, and Hudson concerned a matter within the scope of [their] employment. 4 23 Sana notes that his co-workers spoke to Rutherford while they were at work. He also points out that Hawaiian Cruises had a duty to investigate his injuries. See Vaughan v. Atkinson, 369 U.S. 527, 530-31, 8 L. Ed. 2d 88, 82 S. Ct. 997 (1962) (shipowner liable for attorney's fees for callous failure to investigate a claim for maintenance and cure); see also Harper v. Zapata Off-Shore Co., 563 F. Supp. 576, 581, rev'd on other grounds, 741 F.2d 87 (5th Cir. 1984) (instructing jury that employer has a duty to investigate maintenance and cure claim in good faith). Sana contends that because Hawaiian Cruises had to investigate his claim, the cooperation of its employees was within the scope of their employment. 24 Hawaiian Cruises argues that Sana failed to prove that Kauhi, Ruben, and Hudson spoke to Rutherford in the scope of their employment. See Oki Am., Inc. v. Microtech Intern., Inc., 872 F.2d 312, 314 (9th Cir. 1989) (proponent of evidence has the burden of proof and must lay appropriate foundation). We conclude from the record that Sana's co-workers were acting within the scope of their employment. Vaughan and its progeny require shipowners to investigate a seaman's claims for maintenance and cure. Also, Hudson had an independent duty to monitor and report any injuries or illness among his staff. In all likelihood, Sana's co-workers would have been disciplined had they refused to share information with their employer's insurance investigator. The fact that the interviews were conducted on company time supports this view. 25 Sana argues that Rutherford's recorded version of the employee statements is an admissible business record under Fed. R. Evid. 803(6), which excepts from the hearsay rule 26 [a]... report... of acts, events, [or] conditions... made at or near the time by... a person with knowledge, if kept in the ordinary course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the... report... unless the source of the information or the method or circumstances of preparation indicate lack of trustworthiness. 27 He claims that Rutherford's information gathering was a regularly conducted business activity on behalf of Beaudry Insurance. He also notes that the report was compiled on March 17, at or near the time of the recorded events. Finally, Sana argues that the report is trustworthy, since Hawaiian Cruises had no incentive to generate evidence that he became ill at work. 28 Hawaiian Cruises argues that the Rutherford report is an accident report prepared in anticipation of litigation, and therefore it is not admissible as a business record. See Palmer v. Hoffman, 318 U.S. 109, 113, 87 L. Ed. 645, 63 S. Ct. 477 (1943) (court properly barred defendant railroad from introducing engineer's internal accident report). It also claims that since Rutherford was investigating whether Sana had suffered a head injury aboard the Navatek I, his report is not trustworthy to show that he manifested signs of encephalitis there. Finally, Hawaiian Cruises points out that for a business record to be admissible, each contributor must act in the regular course of business. See United States v. Pazsint, 703 F.2d 420, 425 (9th Cir. 1983) (court improperly admitted routinely recorded 911 tapes because callers had no duty to report information); see also Clark v. City of Los Angeles, 650 F.2d 1033, 1037 (9th Cir. 1981) (purported business records are admissible only if the observer or participant in furnishing the information to be recorded was acting routinely, under a duty of accuracy, with employer reliance on the result, or... in the regular course of business.) (citations omitted). Hawaiian Cruises argues that Kauhi, Ruben, and Hudson were not acting within the regular course of the vessel's business when they spoke to Rutherford. 29 At oral argument, it became clear that this issue was not well presented to the district court. We are obligated, however, to make an independent analysis of the record and relevant authority. We conclude that the Rutherford report qualifies as a business record under Rule 803(6). Although Rutherford may have interviewed Sana's co-workers in anticipation of a potential claim, the rationale for excluding such reports is not present here. Courts are rightfully wary when parties create self-serving documents and seek to offer them as business records. See Paddack v. Dave Christensen, Inc., 745 F.2d 1254, 1258-59 (9th Cir. 1984). Sana, however, sought to introduce a document created by Hawaiian Cruises' insurer, which had no incentive to gather evidence of Sana's illness. 30 Moreover, the report had other circumstantial guarantees of trustworthiness. See United States v. Scholl, 166 F.3d 964, 978 (9th Cir. 1999) (citation and internal quotation marks omitted). Rutherford had a duty to prepare an accurate report for Beaudry Insurance, which presumably relied on that report to adjust Sana's claim. See id. Likewise, in light of Hawaiian Cruises' obligation to investigate claims for maintenance and cure, Kauhi, Ruben, and Hudson had a duty to report accurately any information relevant to such claims. Cf. Pazsint, 703 F.2d at 424. 31 Although it is unlikely that Sana's co-workers dealt frequently with an insurance investigator, frequency need not be the only consideration when analyzing the meaning of routinely and in the regular course of business. Webster's defines routine as a regular course of procedure. Webster's New Collegiate Dictionary 1000 (1979). Although regular can mean recurring... at fixed or uniform intervals, it can also mean usual or ordinary. Id. at 966. Here, the shipowner's duty to investigate a seaman's injuries - and the employees' corresponding duty to cooperate in the investigation - drive the analysis of what is regular. Fulfilling these obligations is a usual or ordinary fact of life for the maritime industry, which has the unique responsibility of providing maintenance and cure to injured workers. Thus, the contributions of Kauhi, Ruben, and Hudson to the Rutherford report were routine and in the regular course of business. This conclusion is bolstered by the fact that the interviews were conducted on company time. 32