Friday, July 3, 2009
Summary Judgment: Seventh Circuit FInds Audit Report Admissible Under Rule 1006
Federal Rule of Evidence 803(6) provides an exception to the rule against hearsay for
A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinions, or diagnoses, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the memorandum, report, record or data compilation, all as shown by the testimony of the custodian or other qualified witness, or by certification that complies with Rule 902(11), Rule 902(12), or a statute permitting certification, unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness.
But what happens when a party seeks to introduce a report that was not made in the course of regularly conducted business activity, but that report was made from documents that themselves qualify as business records under Federal Rule of Evidence 803(6)? The answer, as the Seventh CIrcuit found in its recent opinion in Trustees of the Chicago Plastering Institute Pension Trust v. Cork Plastering Company, 2009 WL 1873516 (7th Cir. 2009), is that the report is admissible under Federal Rule of Evidence 1006.
Beginning in 1984, G and J Plastering Company ("G & J") operated as a plastering contractor in Cook County, Illinois, and surrounding counties. Its employees were represented by multiple unions, among them the Journeymen Plasterers' Protective and Benevolent Society of Chicago, Local 5 ("Local 5"), until a November 2002 election, when the employees selected a union other than Local 5 as their one and only bargaining representative. As a consequence of that election, G & J "exited" from the collective bargaining agreement with Local 5 and ceased making contributions to the various fringe benefit trust funds serving Local 5 members (the "Local 5 Funds"). When the Local 5 Funds conducted an exit audit of G & J's records to determine whether G & J had any outstanding liability to the Funds, they determined that G & J had not made the appropriate contributions to the Local 5 Funds for work performed within Local 5's jurisdiction. They filed suit against G & J pursuant to section 301 of the Labor Management Relations Act of 1947...and section 502(a)(3) of the Employee Retirement Income Security Act of 1974.
In support of their claims, the Local 5 introduced the audit report mentioned above. After a verdict that satisfied neither side completely, both parties appealed, with G & J claiming, inter alia, that the audit report was inadmissible as a business record under Federal Rule of Evidence 803(6) because it was not made in the course of regularly conducted business activity. The Seventh Circuit agreed on this front, but it also found that the audit report was a summary of records prepared by G & J in the course of regularly conducted business activity, making it admissible under Federal Rule of Evidence 1006, which states that
The contents of voluminous writings, recordings, or photographs which cannot conveniently be examined in court may be presented in the form of a chart, summary, or calculation. The originals, or duplicates, shall be made available for examination or copying, or both, by other parties at reasonable time and place. The court may order that they be produced in court.