Ground v. State

• Decision Date: 19 November 1998
• Docket Number: No. 49A02-9803-CR-271,49A02-9803-CR-271
• Citation: 702 N.E.2d 728
• Parties: Paula GROUND, Appellant-Defendant, v. STATE of Indiana, Appellee-Plaintiff.
• Court: Indiana Appellate Court

Page 728

702 N.E.2d 728

Paula GROUND, Appellant-Defendant, v. STATE of Indiana, Appellee-Plaintiff.

No. 49A02-9803-CR-271.

Court of Appeals of Indiana.

Nov. 19, 1998.

Robert V. Clutter, Indianapolis, for Appellant-Defendant.

Jeffrey A. Modisett, Attorney General, James D. Dimitri, Deputy Attorney General, Indianapolis, for Appellee-Plaintiff.

OPINION

NAJAM, Judge.

STATEMENT OF THE CASE

Paula Ground appeals her convictions, following a bench trial, for Forgery, a Class C felony, and Theft, a Class D felony.

We reverse and remand.

ISSUE

The dispositive issue presented for our review is whether the court erred when it admitted certain evidence under the business records exception to the hearsay rule.

FACTS

In August of 1995, Ground began working part-time for Employability Services. Ground's responsibilities included opening the mail, bookkeeping and receptionist duties. As part of her job, Ground frequently wrote checks and presented them to the owner of the company, Judith Woods, for her signature. In August of 1996, Woods noticed that the bookkeeping was not current and that checks were missing from the company's check book. Woods subsequently received a bank statement which indicated that a number of unauthorized and unrecorded checks had been written on the company's account. Woods then conducted an audit and obtained microfilm copies of the checks from the bank. Twenty-two unauthorized checks had been written between May and October of 1996.

In particular, check number 4396 had been written to Paula Ground in the amount of $975.00. Woods recognized the handwriting on the payee and amount lines as Ground's, although she did not recognize the handwriting on the signature line as either Ground's or her own. Later, Detective Barbara Elmore interviewed Ground, who admitted the handwriting on the payee and amount lines on check number 4396 appeared to be her own. Detective Elmore also observed that Ground's signature and bank account number appeared on the back of the check.

DISCUSSION AND DECISION

Over objection, ¹ the trial court admitted State's Exhibit 1, which contained certain bank records from Ground's account at National City Bank. The records consisted of a copy of Ground's signature card from her savings account and microfilm copies of a deposit slip from Ground's checking account, a "cashout" slip in the amount of $400.00, the $975.00 unauthorized check paid by Employability Services to Ground, and three checks paid to Ground from other payors. Ground argues on appeal that the records are inadmissible hearsay. The State counters that the records are admissible under Indiana Evidence Rule 803(6), the business records exception to the hearsay rule. We agree with Ground.

Our standard of review of a trial court's findings as to the essential elements of admissibility is sometimes described as an abuse of discretion. Mullins v. State, 646 N.E.2d 40, 51 (Ind.1995). Because the predicates or foundational requirements to admissibility often require factual determinations by the trial court, these findings are entitled to the same deference on appeal as any other factual finding, whether that is described as a clearly erroneous or abuse of discretion standard. However, the ultimate question in this case is the interpretation of the language of a rule of evidence which presents a question of law for this court. See Stahl v. State, 686 N.E.2d 89, 91 (Ind.1997).

Hearsay is a statement, other than one made by the declarant while testifying at trial, offered to prove the truth of the matter asserted. Ind. Evidence Rule 801(b). Hearsay is inadmissible unless admitted pursuant to a recognized exception. Ind. Evidence Rule 802. The business records exception to the hearsay rule, Evidence Rule 803(6), permits admission of records of regularly conducted business activity provided that certain requirements are met. The rule specifically provides:

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 regularly conducted business activity, and if it was the regular practice of that business activity to make to make the memorandum, report, record, or data compilation, all as shown by the testimony or affidavit of the custodian or other qualified witness, unless the source of information or the method or circumstances of preparation indicate a lack of trustworthiness. The term "business" as used in this Rule includes business, institution, association, profession, occupation, and calling of every kind, whether or not conducted for profit.

Ind. Evidence Rule 803(6) (emphasis added). In support of Exhibit 1, the State presented an affidavit by Michael Guio, fraud investigation manager of National City Bank, which provided:

I hereby certify that the attachments herein, namely an original carbon copy of Paula Ground's signature card and four (4) pages of microfilm copies of a deposit to the account of Paula J. Ground and attachments, are true and accurate documents kept in the ordinary course of business of National City Bank. I further swear or affirm that said signature card was signed by customer Paula Ground to open a savings account on or about April 1995 and as placed in files of National City Bank at or near the time of making until obtained by me.

I further swear or affirm that said deposit record copies and attachments were obtained by me from records kept in the ordinary course of business of National City Bank and made at or near the time of the deposit transaction on October 16, 1996.

These records have been obtained by me, Michael Guio, as Fraud Investigation Manager for National City Bank, from original and microfilmed documents and records kept in the ordinary course of business and that I am qualified to attest to the matters herein.

Ground contends, and the State concedes, that Guio's affidavit is insufficient in two respects: First, it fails to aver that the records were transmitted by a person with personal knowledge and, second, it fails to aver that it is National City Bank's "regular practice to make" the records. Nevertheless, the State insists that the "deficiencies" are merely "technical."

Prior to the adoption of the Rules of Evidence, Indiana permitted a rebuttable presumption that entries in business records were made by a person who had a duty to make the record and who had personal knowledge of the event represented by the entry. Lyons v. State, 506 N.E.2d 813, 817 (Ind.1987). Nothing in Rule 803(6) is inconsistent with that presumption. ROBERT L. MILLER, JR., 13 INDIANA PRACTICE § 803.106B (2d ed. 1995). Absent rebuttal evidence to the contrary, it may be presumed that someone with personal knowledge prepared the challenged bank documents. Because Ground has failed to rebut that presumption, the affidavit's first deficiency does not render Exhibit 1 inadmissible.

No such presumption exists as to the affidavit's second deficiency. However, the State contends that "it is of no moment that the affidavit fails to state that it was the regular practice of National City Bank to make records such as Ground's records. Indeed, common sense dictates that banks regularly keep records of their customers' transactions." We cannot agree with the State's contention.

Rule 803(6) says nothing about "common sense." Typically, the records admitted under the exception are of the type one would expect to be regularly maintained by a business. Nevertheless, the rule unequivocally requires the proponent of business records to establish, by the testimony of the custodian or other qualified witness, that the records are regularly made. As we stated in Cardin v. State, 540 N.E.2d 51, 55 (Ind.Ct.App.1989), trans. denied:

To our knowledge, this state had not adopted the approach taken by the federal courts which would permit the admission of business records based upon circumstantial evidence derived from the document itself, without the testimony of the custodian or another qualified witness.... Neither are we aware of any catch-all exception in Indiana, similar to the Federal Rules of Evidence, Rule 803(24) [now Rule 807] which would allow a trial judge in the exercise of discretion to consider the inherent trustworthiness of the entry and the nature of the business which produced it.

(emphasis added) (internal citations omitted). ² Without proof that the records are regularly made, the proponent of the business records has not laid a proper foundation for the records under the plain meaning of Rule 803(6), and they are inadmissible under the hearsay rule.

The requirements of the hearsay exceptions, including Rule 803(6), are not mere technicalities as the State would contend. The State's "common sense" argument would effectively rewrite Rule 803(6) and would create a broader exception than intended by the plain meaning of the rule. The hearsay exceptions reflect the concern that hearsay evidence be admitted only when the proponent can demonstrate that the evidence bears the necessary indicia of reliability. ³ Absent such a demonstration, the hearsay rule and its underlying principles demand that the evidence be excluded....