§ 10.05 BUSINESS ENTRIES

• Jurisdiction: North Carolina

§ 10.05 BUSINESS ENTRIES

[1] THE DOCTRINE

At common law, business entries are exceptionally admissible. Federal Rule of Evidence 803(6) restates the modern doctrine:

The following [is] not excluded by the rule against hearsay . . .: A record of an act, event, condition, opinion, or diagnosis if:

(A) the record was made at or near the time by—or from information transmitted by—someone with knowledge;
(B) the record was kept in the course of a regularly conducted activity of a business, organization, occupation, or calling, whether or not for profit;
(C) making the record was a regular practice of that activity;
(D) all these conditions are shown by the testimony of the custodian or another qualified person, or by a certification that complies with Rule 902(11) or (12) or with a statute permitting certification; and
(E) the opponent does not show that the source of information or the method or circumstances of preparation indicate a lack of trustworthiness.

In the case of business entries, the circumstantial guarantee of trustworthiness is that since the entry is routine, the business' employees have developed habits of precision in gathering and reporting the data. The employees' habits help to ensure the reliability of the report. There is also necessity for resorting to the hearsay report. If a business conducts hundreds or thousands of similar transactions during a year, it is doubtful whether any employee will remember the particular transaction recorded in the entry. Even when an employee remembers, the employee's memory is likely to be incomplete or hazy. Thus, the business entry is probably the most reliable evidence available.

[2] ELEMENTS OF THE FOUNDATION

Some commentators have suggested that the Federal Rules of Evidence "collapse" the traditional, common-law elements of the business entry foundation into a single requirement for a general showing of reliability. However, most commentators and courts still assume that the proponent must establish the following foundational elements:

1. The report was prepared by a person with a business relationship with the company. It is ideal if the person is an employee of the company. However, the person might also work for a parent, subsidiary, or affiliated company.
2. The informant (the ultimate source of the report) had a business duty to report the information. This requirement is traceable to the leading case of Johnson v. Lutz, 253 N.Y. 124, 170 N.E. 517 (1930). There the court held that a report

...