Opinion ID: 2098943
Heading Depth: 1
Heading Rank: 3

Heading: Admission of Hearsay Business Records

Text: RIMEC contends it was owed monthly capitation payments from Blue Cross. Monthly capitation payments were supposed to have been based on the number of Blue Cross members eligible for RIMEC's services. RIMEC's primary evidence of the alleged payment discrepancy were twenty of its membership data reports. Blue Cross alleges that these documents were not business records subject to the business-records exception to the hearsay rule and that circumstantial evidence casts doubt on their authenticity. Moreover, Blue Cross suggests, contrary to Mr. Koch's testimony, that the missing data files and membership data reports may not have been inadvertently lost or destroyed. Rule 803(6) of the Rhode Island Rules of Evidence is colloquially known as the business-records exception to the hearsay rule. The business-records exception    is premised on the unusual reliability of records supplied by systematic checking and on a business's reliance on the precision of records created through regular habits. Fondedile, S.A. v. C.E. Maguire, Inc., 610 A.2d 87, 94 (R.I. 1992). Rule 803(6) provides that to be admissible a business record must be made at or near the time [of the act, event, condition, opinion, or diagnosis at issue] by, or from information transmitted by, another person with knowledge   . Further, the rule requires that the record have been kept in the course of a regularly conducted business activity, which must be shown by the testimony of the custodian or other qualified witness. However, the rule also provides that a business record should not be admitted if the source of information or the method or circumstances of preparation indicate lack of trustworthiness. Id. Over time, [t]he scope of records included within the exception has grown, and in general the rule is interpreted expansively in favor of admitting hearsay records into evidence. Fondedile S.A., 610 A.2d at 94. Thus, [i]n most situations a trial justice should interpret foundation requirements in favor of admitting records and thereafter let the trier of fact determine the evidence's probative value. Id. We have enunciated a four-part test, based on the rule, for the admissibility of a hearsay business record: First, the record must be regularly maintained in the course of a regularly conducted business activity. Second, the source of the information must be a person with knowledge. Third, the information must be recorded contemporaneously with the event or occurrence, and fourth, the party introducing the record must provide adequate foundation testimony. Fondedile S.A., 610 A.2d at 93-94. In order [t]o provide [an] adequate foundation a party must prove the first three requirements and authenticate the document or record. Id. at 94. Rule 901 of the Rhode Island Rules of Evidence addresses the authentication of evidence. In making Rule 901 determinations, trial justices must decide whether there is enough support in the record to conclude that it is `reasonably probable' that the evidence is what the offeror [pro]claims it to be. State v. Oliveira, 774 A.2d 893, 926 (R.I.2001) (quoting State v. Griffin, 691 A.2d 556, 558 (R.I. 1997)). If so, then the evidence's [per]suasive force is for the jury to decide. Id. Under Rule 901, a document's authenticity may be established in any number of different ways. Rule 901(b)(1) provides [b]y way of illustration only, and not by way of limitation, that the rule will be satisfied if a witness with knowledge testifies that a matter is what it is claimed to be. In State v. Calenda, 787 A.2d 1195 (R.I.2002), we addressed the authentication of a computer printout as a business record. In that case we explained that, [e]ssentially, a person who is knowledgeable about the preparation of records and their use in the course of the business is capable of identifying them sufficiently to satisfy the prerequisite for their admission as business records. Id. at 1200. Further, the party who authenticates the document need not be the custodian of the records to lay an adequate foundation, and foundation testimony may be supplied by more than one witness. See id. [3]
Blue Cross does not dispute that the documents reflect a record made at or near the time of the so-called run date or that RIMEC kept such records in the course of its regularly conducted business activities. Thus, Blue Cross's argument that the printouts did not satisfy Rule 803(6) is based solely on its contention that the documents lacked circumstantial guarantees of trustworthiness. Blue Cross contends that no evidence was presented of RIMEC's use of or reliance on the documents and that because it does not appear that the documents were disseminated widely, there could be no assumption that inaccuracies contained in them would have been detected and cured. Further, Blue Cross argues that no evidence was presented to suggest that RIMEC's software ever was calibrated or otherwise coordinated to assure that it was compatible with Blue Cross's data files. Additionally, Blue Cross points to the fact that these printouts comprise an incomplete record; Mr. Koch testified that one such report was created each month over the course of the parties' five-year relationship, yet RIMEC produced only twenty of the more recent reports. Finally, Blue Cross draws attention to some mathematical errors in the documents themselves. Rule 803(6) provides that a business record should not be admitted if the source of information or the method or circumstances of preparation indicate lack of trustworthiness. However, a determination of whether an out-of-court statement meets an exception to the hearsay rule is within the trial justice's discretion. See Ferrell v. Wall, 889 A.2d 177, 188 (R.I.2005). We will not overturn a trial justice's decision in this regard unless it was an abuse of discretion. Id. In the case at bar, we are convinced that there was evidence from which the trial justice could have concluded that the documents carried circumstantial guarantees of trustworthiness, and, thus, he did not abuse his discretion. It should be noted that RIMEC necessarily relied on the accuracy of its computer system in performing the contract at issue. In order to determine who was eligible for the services RIMEC provided, employees of RIMEC regularly consulted the computer system that created the membership data reports, and there is no indication by Blue Cross that RIMEC made services available for individuals who were not Healthcare 2000 subscribers. The business-records exception is partially premised on the unusual reliability of records supplied by    a business's reliance on the precision of records created through regular habits. Fondedile S.A., 610 A.2d at 94. Further, a party does not need to prove that business records are entirely accurate before they are admitted as evidence. See United States v. McGill, 953 F.2d 10, 15 (1st Cir.1992). [4] The mere fact that errors or deviations have occurred from time to time does not destroy the inference of underlying trustworthiness which a judge may choose to draw from proof of a general practice. Id. If this were not so, the rule would be swallowed up by an exception for less-than-perfect business practices. United States v. Patterson, 644 F.2d 890, 901 (1st Cir.1981). Thus, [a]ny question as to the accuracy of the printouts, whether resulting from incorrect data entry or the operation of the computer program, as with inaccuracies in any other type of business record, would have affected only the weight of the printouts, not their admissibility. U.S. v. Catabran, 836 F.2d 453, 458 (9th Cir.1988). Blue Cross was permitted to question the accuracy of the printouts on cross-examination, and it did so. We also note that, in light of Mr. Koch's testimony that some of the membership data reports were accidentally destroyed or lost, the jury was given an instruction concerning spoliation of evidence. The jury nonetheless rendered a verdict in favor of RIMEC, and the trial justice did not disagree with its verdict except in regard to the amount of lost profits awarded. Additionally, contrary to Blue Cross's contention, there was evidence that RIMEC's software was calibrated or otherwise coordinated to assure that it was compatible with Blue Cross's data files. In fact, testimony was provided that Blue Cross employees participated in the process of making RIMEC's system compatible with Blue Cross's data. Specifically, Mr. Koch testified that employees of both RIMEC and Blue Cross had meetings during the first few months of RIMEC's operation to ensure that the companies' systems were compatible. Finally, it should be emphasized that Blue Cross's own former employee, Mr. MacArthur, determined that RIMEC's member counts were being computed accurately. [5] Generally, under the rule, a trial justice should err on the side of admitting records and thereby allow the jury to assess the evidence's probative value. Fondedile S.A., 610 A.2d at 94. We find no abuse of discretion in the trial justice's ruling. Therefore, we affirm the trial justice's decision to admit the printouts under Rule 803(6).
Blue Cross also asserts that the printouts were not properly authenticated under Rule 901. As stated above, Rule 901(a) provides that the authentication requirement is satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims. This may be shown by the testimony of a witness with knowledge, but it need not be; Rule 901(b) provides examples of authentication that conform with the rule [b]y way of illustration only, and not by way of limitation. Blue Cross does not dispute that the documents are membership data reports as RIMEC (the proponent) claims, but rather it urges us to apply a heightened Rule 901 standard because the printouts were generated from proprietary software. Blue Cross cites Rule 901(b)(9) for the proposition that RIMEC was required to demonstrate that its computer program produced accurate results. Rule 901(b)(9), however, provides only that a document may be authenticated through [e]vidence describing a process or system used to produce a result and showing that the process or system produces an accurate result. Thus, under the plain language of the rule, the trial justice was under no obligation to require such a showing. Blue Cross also cites other non-controlling authority suggesting that in some circumstances computer-related business records may require a heightened showing by the proponent to be properly authenticated. Blue Cross contends in its brief that [t]he standard applicable to the ruling below is    whether RIMEC produced any evidence that the exhibits emanated from a process that reliably produced accurate results. Further, Blue Cross argues that RIMEC did not submit any evidence that relat[ed] to the manner in which its computer software operated, or suggest[ed] that its operation produced accurate results[,] and that therefore Rule 901 was not satisfied. Blue Cross contends there must be `testimony by a person with some degree of computer expertise, who has sufficient knowledge to be examined and cross-examined about the functioning of the computer.' As such, Blue Cross maintains that the authentication requirement could have been satisfied only by the testimony of a qualified computer programmer who was familiar with the RIMEC program and could attest, based on personal investigation, that it produced accurate results. Even if we were to accept Blue Cross's contention that a heightened standard for the authentication of documents such as those at issue in the instant case should apply, we are nevertheless satisfied that RIMEC did present evidence from which the trial justice could have concluded that the printouts satisfied their proposed Rule 901 standard. As discussed above, multiple witnesses testified about the manner in which the computer system operated, and there was evidence to suggest that the computer system generally was producing accurate results. Most notably, Blue Cross's former employee, Mr. MacArthur, who was trained in computer analysis and programming, evaluated RIMEC's computer system and concluded that it produced accurate results. Mr. MacArthur was available, as were other witnesses, to be examined and cross-examined about the functioning of the computer program. Thus, we find Blue Cross's argument to be unavailing. The trial justice did not abuse his discretion in admitting the documents into evidence at trial. [6]