Tag: hearsay

LinkedIn Page Doesn’t Get Into Evidence As a Rule 803(17) “Directory” or “Compilation” in Podcast Dispute

imagesA key issue in Personal Audio, LLC v. CBS Corporation, 2014 WL 1202698 (E.D. Tex. 2014) was whether a LinkedIn page, printed off the ‘Net by a testifying witness, was admissible at a motion to transfer venue hearing as a “compilation” or “directory” under Federal Evidence Rule 803(17).

A broadcast behemoth defendant (CBS) tried to transfer a podcast patent infringement case from Texas to New York on the basis that material witnesses to the dispute lived closer to New York than Texas (where plaintiff was based).  The plaintiff wanted to keep the case in Texas.  In support of its motion to transfer, CBS tried to offer into evidence a LinkedIn page of a third-party witness who apparently lived in New York.  CBS wanted the page into evidence to support its argument that New York was the more convenient forum for the case.

Held: The LinkedIn page was inadmissible hearsay since CBS failed to lay a foundation for the page’s authenticity. CBS’s motion to transfer venue is denied.

Federal Rule of Evidence 803(17)

The basis for the court’s ruling was Evidence Rule 803(17).  This rule provides for potential admission of “market quotations, lists, directories, or other compilations” generally relied on by the public or persons in particular occupations.

The twin purposes for streamlined admissibility under this rule are reliability and necessity.  Necessity exists because most commercial publications have multiple authors so it’s not logistically feasible to have all of them testify to a document’s contents.  Reliability lies in the fact that the documents are regularly consulted by third parties and that if the documents weren’t accurate, the public or a given industry would stop consulting them. (*5).

To support its argument that key third-party witnesses lived closer to New York than Texas, CBS offered a third-party witness’s LinkedIn page through a CBS employee.  CBS labelled the LinkedIn page as “compilation” evidence under Rule 803(17).  Testifying about the page, the CBS employee stated he was a journalist and that he regularly used online resources to locate individuals – including the witness whose LinkedIn page was involved in this case.

Rejecting CBS’ argument, the court found that the LinkedIn page failed both prongs of the 803(17) admissibility test: “This is clearly not the type of evidence contemplated by FRE 803(17)”, it said.  The LinkedIn page wasn’t reliable because CBS offered no evidence to show LinkedIn (the “compiler” under the Rule) makes any effort to verify the accuracy of its member’s profile pages.  The court also found that the page wasn’t necessary since CBS could have provided testimony or an affidavit of someone who had actual knowledge of the witness’s/LinkedIn member’s location.

Because the page failed both the necessity and reliability prongs of the 803(17) test, the court discredited CBS’ evidence and found that CBS failed to carry its burden of showing it was more convenient to have the case litigated in New York instead of Texas. (*5).

Take-away:

A LinkedIn page or other social media member page can likely be authenticated and admitted into evidence but not as a Rule 803(17) compilation or directory (at least in this District).  If documentary evidence that supposedly shows a witness’s location isn’t reliable or necessary, the proponent of the evidence will need to do more than simply offer hearsay evidence through a third-party.  Instead, the proponent should try to get the evidence in through live testimony or an affidavit of someone who has first-hand knowledge of a witness’s whereabouts.

Post-script: In September 2014, the Federal jury awarded the plaintiff over $1.3M in damages against CBS for infringing the plaintiff’s podcast distribution patent.

 

Paper Lace In The House: Court Invalidates $5M Plus Contract to (Sort Of) Use Someone’s Last Name

hello-my-name-isI promise there will be no ‘What’s In a Name?’ (the Bard), “What’s My Name?” (Snoop Dogg) or “I’ve Got a Name” (the late great Jim Croce) references.  And while I’m on the subject – is there anything MORE 1970s AM-JAM or K-Tel then Jim Croce?  I don’t think so.  Well maybe that weird “Billy Don’t Be A Hero” song Ms. Sauer made us sing in third grade music class. (The video is even weirder!  the band members are clad in Civil War garb.  I S thee not!)  Maybe I’m projecting but there always seemed something vaguely dark and unnerving about that song.

No idea where I’m going with this. But consider: would you pay someone $5.5M at your death just because that someone promised to use your last name as a tack-on middle name for his sons?

The First District definitely would not in Dohrmann v. Swaney, 2014 IL App (1st) 131524 (1st Dist. 2014), where the Court entered summary judgment against a plaintiff who sued a former neighbor’s estate to recover about $5.5M in money and assets under a written contract.

In the 1980s, the plaintiff – then a 40-year-old surgeon with a wife and two kids – befriended his elderly neighbor – Mrs. Rogers – a widow who was in her early seventies.  In 2000, when Mrs. Rogers was 89 and the plaintiff was in his mid-fifties, Mrs. Rogers signed a contract drafted by the plaintiff’s estate planning attorney where Mrs. Rogers agreed to transfer at her death, her million-plus dollar apartment, its furnishings and a cool $4M in cash to the plaintiff all for – get this – the plaintiff’s promise to use the widow’s last name (Rogers) by adding it to plaintiff’s son’s middle names and for “past and future services.” That’s It. 

Mrs. Rogers’ stated reason for the transfer (according to plaintiff) was to perpetuate her family name which would provide her with psychological Comfort.

After Mrs. Rogers signed the contract, the plaintiff legally changed his sons middle names to include the Rogers reference.

Over the course of the next several years, Mrs. Rogers transferred the home into a trust and slid further into dementia and a guardian was eventually appointed to manage her affairs.

The plaintiff sued in the Circuit Court to enforce the agreement.  Mrs. Rogers’ (who died while lawsuit was pending) executor defended on the basis that the contractual consideration was grossly inadequate and shocked the conscience.  The trial court agreed and entered summary judgment for the estate.

Held: Affirmed

Reasoning:

The Court found that contractual consideration was lacking and the evidence showed a disparity in bargaining power and over-reaching by the plaintiff.

The black letter contract elements are (1) offer, (2) acceptance and (3) consideration.

Consideration consists of some right, interest or benefit flowing to one party and some corresponding forbearance, detriment or loss from the other.  Any act that benefits one side and disadvantages the other is generally considered sufficient consideration to form a binding contract.  But, where the consideration is so grossly inadequate as to “shock the conscience”, the contract fails.  (¶ 23).

A conscience-shocking failure of consideration is usually found in situations involving fraud and  blatantly one-sided (unconscionable) or oppressive contracts.  If there is a gross disparity in bargaining power or a blatant inequality of value exchanged, the Court will closely scrutinize the agreement and delve into the sufficiency of its consideration.  (¶ 23).  Where there is a complete failure of consideration, the Court can invalidate the entire transaction.  (¶ 24).

Here, the Court found that the contractual consideration was shockingly absent on its face.  For assets totaling $5.5M, all plaintiff had to do was file name change proceedings for his two adult (now) sons who promised to use the Rogers name as part of their name.  But in their depositions, the sons testified that their use of the Rogers name was sporadic at best: they only used it on certain applications and documents through the years.

The First District found that only staggered and unverified name use can hardly qualify for valid consideration: it was an illusory promise. (¶¶33-34).

The other plus-factor cited by the court was the glaring disparity in bargaining power between the parties.  Illinois courts will consider a contracting parties age, education and commercial experience when deciding whether to set aside a contract.

The plaintiff here was the stronger party in every way – physically, mentally and financially.  (¶¶ 37-39).  This obvious disparity  added support for the court’s finding of unfairness.

 

Computer-Generated Business Records and Summary Judgment Affidavits – IL Law

bizrecordsIn US National Bank v. Avdic, 2014 IL App (1st) 121759-U, the First District provides a detailed analysis of both the evidentiary foundation requirements for computer-generated business records and the requirements of a valid summary judgment affidavit.

The plaintiff lender filed a foreclosure suit against the borrower defendant and moved for summary judgment.  The lender supported its motion with the affidavit of a bank officer who attached sworn copies of key loan documents, the promissory note and a computer-generated payment history for the defendant borrower’s account.

The defendant moved to strike the bank’s affidavit on the basis that it failed to lay a sufficient foundation for the attached loan and payment records and didn’t establish that the bank employee who signed the affidavit had first-hand knowledge of the defendant’s payment history.  The trial court entered summary judgment for the lender and denied the borrower’s motion to strike the affidavit.  The borrower appealed.

Result: Trial court affirmed. Plaintiff-lender wins.

Q: How Come?

A: The lender’s summary judgment affidavit complied with Illinois Supreme Court Rule 191 – the rule that governs summary judgment affidavits.  Rule 191 requires affidavit to state specific facts and to be based on personal knowledge instead of conclusions or guess-work.  Affidavits are substitutes for live trial testimony and because of that, must pass a stringent test for admission in evidence.  US Bank, ¶¶ 22-25.

To lay a foundation for admitting business records as a hearsay exception, the party must show that the records were (1) made in the regular course of business; and (2) at or near the time of the event or occurrence.  Rule 803(6) and Supreme Court Rule 236 work in tandem to codify the business records exception to the hearsay rule.  US Bank, ¶¶ 24-26.

Where computer-generated records are involved, the proponent must demonstrate (1) that the computer equipment is standard equipment, (2) the computerized entries were made in the regular course of business (3) at or reasonably near in time to the events recorded and (4) that the sources of information, the method of data entry and preparation are all trustworthy.  US Bank, ¶26.

The Court found that the lender’s affidavit met the relevant Rule 191 criteria.  The bank officer testified that she was familiar with the lender’s business practices, records and its manner of inputting, tracking and generating payment information.  She also testified in detail what steps the bank takes when creating, storing and printing loan and payment records.  The officer also said she reviewed the loan file, promissory note and related documents.  She also attached the key loan documents to the affidavit. ¶¶ 30-31.

The affidavit also met the admissibility standards for computer-generated payment records.  The bank officer described the computer software used by the bank to create and print out loan payment histories and testified that the software program used was standard and customary in the banking industry.  The officer even said that the computer equipment was periodically checked for accuracy. ¶¶ 29-30.

The court also found there was no requirement that the officer have first-hand knowledge of the borrower’s account or that she (the officer) personally made the payment entries into the bank’s computer for the affidavit to conform to Rule 191’s requirements.  Under Rule 236 and Illinois Evidence Rule 803(6), a lack of personal knowledge can affect the weight given to testimony; but it won’t bar that testimony outright.

Take-aways:  To get computer business records into evidence on summary judgment, the mo any should itemize each foundational requirement for those records.  A business entity plaintiff especially should establish that the person signing a summary judgment affidavit is familiar with the business’s record-keeping and billing processes and can testify to any unique billing and payment software used by the business.