Opinion ID: 442931
Heading Depth: 3
Heading Rank: 1

Heading: Admissibility of the Underlying Documents

Text: 19 The Touche Ross accountant who supervised the audits testified that his employees relied on three sources of information to prepare the audit reports. These were: (1) the Employer's remittance reports of contributions submitted to the Trust Funds; (2) the rates of pay as evidenced by the payroll records, personnel files, and notations on the earnings records; and (3) information from union sources that indicate [an] employee [had] worked for the employer but was not reported [on the Employer's records]. Transcript at 54-55. Because each of these sources is considered hearsay when introduced to support the existence of a contribution deficiency, the Trust Funds must establish an exception to the hearsay rule for each source in order for the audits to be admissible. See Fed.R.Evid. 802. 20 This presents no problem with respect to the first two sources relied upon by Touche Ross. Each are entries from the Employer's business records and admissible as such. See Fed.R.Evid. 803(6). Therefore, summaries of such entries are also admissible under Rule 1006. The third source of evidence, however, is not admissible under any exception to the hearsay rule. Union sources, who were not subject to cross-examination, fall within no exception to the hearsay rule. The use of the union sources to establish the existence of deficiencies, the truth of that which was asserted, implicates the traditional hearsay dangers. See Wellborn, The Definition of Hearsay in the Federal Rules of Evidence, 61 Texas L.Rev. 49, 52-53 (1983). 21 It follows that the audit reports are based in part on inadmissible hearsay. 9 And it is clear that a summary of both inadmissible and admissible hearsay should not be admitted under Rule 1006. See Soden v. Freightliner Corp., 714 F.2d 498, 506 (5th Cir.1983) (summary charts based on statistics that were based on letters and conversations found inadmissible); 5 D. Louisell & C. Mueller, Federal Evidence Sec. 599, at 36 (1983 Supp.) (Where summary proof is offered, ordinarily it amounts to 'evidence,' particularly where the underlying material was not itself admitted or was not as a practical matter examinable by the jury. In such cases, it is especially important to insure that the summary rests entirely upon admissible evidence. (footnote omitted) (emphasis added)). The proponent of the summary of both admissible and inadmissible hearsay is entitled to admission of only those portions that he can demonstrate are entirely admissible. See United States v. Johnson, 594 F.2d at 1255. Cf. Wilkes v. United States, 80 F.2d 285, 291 (9th Cir.1935) (applying common law predecessor of Rule 1006 to exclude accountants' summaries because proponent could not segregate admissible from inadmissible); McCormick on Evidence Sec. 51, at 125 (E. Cleary 3d ed. 1984) (If part of the evidence offered ... is admissible and a part is not, it is incumbent on the offeror, not the judge, to select the admissible part. If counsel offers both good and bad together and the judge rejects the entire offer, the offeror may not complain on appeal. (footnote omitted)). 22 The Touche Ross accountant, Thomas J. Godish, was unable to separate the admissible from the inadmissible and was largely unfamiliar with the actual procedures followed by his staff. During cross-examination, he could not indicate what sources were relied upon to determine the deficiency for each individual employee listed in the audit report. 10 He could do no more than recount the general procedures outlined in an audit program for compliance audits. Thus, neither the district court nor we know precisely what portions of the audit reports rest in part on the inadmissible hearsay. All is, therefore, inadmissible under Rule 1006.