In insurance dispute, computer-generated summaries reflecting insurance company’s indemnity payments and loss adjustment expense payments for the insurance claims were admissible as a business record, in U-Haul Intern., Inc. v. Lumbermens Mut. Cas. Co., 576 F.3d 1040 (9th Cir. Aug. 12, 2009) (No. 07-16187)
Computer-generated records are increasingly used in business. Is the information on the computer-generated records admissible in court over a hearsay objection? A recent insurance case considered this issue.
The case involved an insurance dispute brought by an insured and primary insurer against excess insurer. At trial, the court admitted computer-generated summaries of “indemnity payments and loss adjustment expense payments for the insurance claims.” U-Haul Intern., Inc., 576 F.3d at 1043. After an adverse judgment, on appeal the excess insurer contended the records were admitted in violation of the rule against hearsay.
The Ninth Circuit had little trouble affirming the admission of the computer records. As the circuit noted:
“We have made clear that ‘[f]or the purposes of Rule 803(6), it is immaterial that the business record is maintained in a computer rather than in company books.’ A logical extension on that principle is that evidence that has been compiled from a computer database is also admissible as a business record, provided it meets the criteria of Rule 803(6). Accord United States v. Fujii, 301 F.3d 535, 539 (7th Cir. 2002) (holding that computer data compiled in the ordinary course of business and presented in computer printouts prepared for trial is admissible under Rule 803(6)); Potamkin Cadillac Corp. v. B.R.I. Coverage Corp., 38 F.3d 627, 632 (2d Cir. 1994) (“A business record may include data stored electronically on computers and later printed out for presentation in court, so long as the original computer data compilation was prepared pursuant to a business duty in accordance with regular business practice.”) (citation and internal quotations omitted); see also B. Weinstein and M.A. Berger, Weinstein’s Federal Evidence § 901.08[1] (2d. ed. 2006) (stating that “printouts prepared specifically for litigation from databases that were compiled in the ordinary course of business are admissible as business records to the same extent as if the printouts were, themselves, prepared in the ordinary course of business. The important issue is whether the database, not the printout from the database, was compiled in the ordinary course of business”).”U-Haul Intern., Inc., 576 F.3d at 1044 (other citations and quotation marks omitted).
The four requirements to admit the computer-generated business records were satisfied:
“As the district court found (1) the underlying data was entered into the database at or near the time of each payment event; (2) the persons who entered the data had knowledge of the payment event; (3) the data was kept in the course of Republic Western’s regularly conducted business activity; and (4) [claims manager] Mr. Matush was qualified and testified as to this information.”U-Haul Intern., Inc., 576 F.3d at 1044.
It was not necessary for the claims manager to input the information into the computer as long as he was familiar with the record keeping practices. At one point during the trial testimony, the claims manager was unable to locate a particular payment on the summary. After the judge questioned the claims manager, he was able to explain “how the summary sheet matched up to backup documentation.” The computer-generated records were authenticated under FRE 901(b)(9), which allows authentication based on a description of “a process or system used to produce a result and showing that the process or system produces an accurate result.” Finally, the summary rule, under FRE 1006, did not apply since the summaries used in the case were the business records.
The case highlights the acceptance of computer-generated records and the analysis considered for their admissibility.
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