Admitting Third Party Business Records Maintained By Another Company

Eighth Circuit joins other circuits holding “that a record created by a third party and integrated into another entity’s records is admissible as the record of the custodian entity, so long as the custodian entity relied upon the accuracy of the record and the other requirements of Rule 803(6) are satisfied”, in Brawner v. Allstate Indem. Co., 591 F.3d 984 (8th Cir. Jan. 8, 2010)

The business records of a company may be admitted where the requirements of FRE 803 are met. What about the business records of a third party, or another entity, that are maintained by another company? Under what circumstances can business records of a third party be admitted? Must the proponent of the business records call a custodian from the third party to introduce the business records? The Eighth Circuit recently addresses this issue and noted an emerging circuit consensus.

In the case, the plaintiff’s residence was burned in a fire. They brought an action against their insurance company which claimed the coverage was voided by material misrepresentations of the plaintiff made during the fire investigation. At trial, the insurance company introduced documents prepared by the Veterans Administration which had been sent to the bank covering the mortgage under foreclosure. One document acknowledged the bank’s intent to foreclose, and the other was a form letter noting the foreclosure deadline. The documents were introduced through a bank foreclosure supervisor as business records. The jury ruled in favor of the insurance company based on the defense of misrepresentation.

In affirming the admission of the business records, the circuit noted an open issue:

“Although this court has not addressed the precise argument raised here by the Brawners, we have established that the ‘custodian or other qualified witness need not have personal knowledge regarding the creation of the document offered, or personally participate in its creation, or even know who actually recorded the information.’ Resolution Trust Corp. v. Eason, 17 F.3d 1126, 1132 (8th Cir. 1994) (internal quotation omitted); see also United States v. Franks, 939 F.2d 600, 602-03 (8th Cir. 1991). Several other courts have held that a record created by a third party and integrated into another entity’s records is admissible as the record of the custodian entity, so long as the custodian entity relied upon the accuracy of the record and the other requirements of Rule 803(6) are satisfied.” Brawner, 591 F.3d at 987. The Eighth Circuit cited to the following cases in support:

  • United States v. Childs, 5 F.3d 1328, 1333-34 (9th Cir. 1993) (admitting certificates of title and odometer statements maintained by an automobile dealership in the regular course of business though not originated by the dealership; “[i]n reaching that decision we emphasized the fact that [the company integrating the document into its records] did not rely on the portion of the record at issue and `had no interest in the accuracy of that portion of the [record]”) (citation omitted)
  • United States v. Duncan, 919 F.2d 981, 986-87 (5th Cir. 1990) (concluding there was “no requirement that the [business] records be created by the business having custody of them”; insurance company custodians could provide foundation to admit records compiled by those companies from the business records of hospitals))

On the facts, the records satisfied the requirements of FRE 803(6) after testimony that the bank relied on the accuracy of the records. There was no dispute in the case that the records were met kept in the ordinary course of the bank’s regularly conducted business.

Federal Rules of Evidence
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