EvidenceProf Blog

Editor: Colin Miller
Univ. of South Carolina School of Law

Saturday, November 12, 2011

Best Of Everything: Bankruptcy Court Finds Best Evidence Rule Doesn't Apply In Bankruptcy Case

Federal Rule of Evidence 1002, the Best Evidence Rule, provides that

To prove the content of a writing, recording, or photograph, the original writing, recording, or photograph is required, except as otherwise provided in these rules or by Act of Congress.

So, let's say that a debtor in a bankruptcy action testifies that she never made a contribution to an IRA and produces account statements for that IRA that cover a certain stretch of time but does not produce statements that cover another stretch of time. Does the testimony violate the Best Evidence Rule? According to the recent opinion of the United States Bankruptcy Court for the District of Massachusetts in In re LeClair, 2011 WL 5282605 (Bkrtcy.D.Mass. 2011), the answer is "no."

In LeClair, David M. Nickless, Chapter 7 trustee, objected to debtor Betty LeClair's claimed exemption in an annuity held for her benefit by the John Hancock Life Insurance Company.

The trustee d[id] not dispute that the funds used to purchase Ms. LeClair's annuity came directly to John Hancock from her IRA at Citi Smith Barney. Rather, he allege[d] that the funds used to purchase the annuity were deposited into the IRA within five years of the debtor's bankruptcy filing and thus, according to the limitations set forth in the statute, Ms. LeClair's exemption [wa]s limited to $1913.66 which is 7% of her earned income for that period.

That five year period ran from from June 25, 2005 through June 24, 2010. LeClair testified that she never made a contribution to the IRA at any time, prompting Nickless' objection that this testimony violated Federal Rule of Evidence 1002. Nickless pointed out that while "LeClair was able to produce account statements showing no contributions to the IRA between November 30, 2005 and July 15, 2008 when the annuity was purchased, she could produce no records for the period from June 25, 2005 through November 29, 2005." Nickless claimed that these statements were the "best evidence" of whether LeClair contributed to the IRA and LeClair's testimony thus violated the Best Evidence Rule.

The United States Bankruptcy Court for the District of Massachusetts correctly disagreed, concluding that

The trustee misperceives the rule. Ms. LeClair's testimony was not elicited to prove the contents of a writing; she was testifying to a particular fact known to her, namely the history of the IRA she inherited from her first husband. "[A]s the advisory committee note makes clear, Rule 1002 applies not when a piece of evidence sought to be introduced has been somewhere recorded in writing but when it is that written record itself that the party seeks to prove."..."No evidentiary rule...prohibits a witness from testifying to a fact simply because the fact can be supported by written documentation."...Despite its nickname, the rule does not require that a writing be deemed better evidence than oral testimony or that when written evidence exists, it must be presented instead of oral testimony....The absence of a paper trail to establish that no contributions to the IRA occurred between June and November 2005 does not render Ms. LeClair's own testimony on this point inadmissible.



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The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) (Pub.L. 109-8, 119 Stat. 23, enacted April 20, 2005), is a legislative act that made several significant changes to the United States Bankruptcy Code. Referred to colloquially as the "New Bankruptcy Law", the Act of Congress attempts to, among other things, make it more difficult for some consumers to file bankruptcy under Chapter 7; some of these consumers may instead utilize Chapter 13. Voting record of S. 256 [1].

It was passed by the 109th United States Congress on April 14, 2005 and signed into law by President George W. Bush on April 20, 2005. Most provisions of the act apply to cases filed on or after October 17, 2005. It was hailed at the time as the banking lobby's greatest all-time victory.

It was widely claimed by advocates of BAPCPA that its passage would reduce losses to creditors such as credit card companies, and that those creditors would then pass on the savings to other borrowers in the form of lower interest rates. These claims turned out to be false. After BAPCPA passed, although credit card company losses decreased, prices charged to customers increased, and credit card company profits soared.

Posted by: Apply for bankruptcy | Nov 14, 2011 4:31:18 AM

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Posted by: Harris | Mar 12, 2012 3:10:24 AM

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