Hart v. Keenan Props., Inc.

• Decision Date: 21 May 2020
• Docket Number: S253295
• Court: California Supreme Court
• Parties: Frank C. HART et al., Plaintiffs and Respondents, v. KEENAN PROPERTIES, INC., Defendant and Appellant.

9 Cal.5th 442

463 P.3d 824

262 Cal.Rptr.3d 629

Frank C. HART et al., Plaintiffs and Respondents,

v.KEENAN PROPERTIES, INC., Defendant and Appellant.

S253295

Supreme Court of California.

May 21, 2020

CMBG3 Law, W. Joseph Gunter and Gilliam F. Stewart for Defendant and Appellant.

Maune Raichle Hartley French & Mudd, David L. Amell, Berkeley, Marissa Y. Uchimura, Oakland; Kazan, McClain, Satterly & Greenwood, Denyse F. Clancy and Ted W. Pelletier, Oakland, for Plaintiffs and Respondents.

The Arkin Law Firm and Sharon J. Arkin for Consumer Attorneys of California as Amicus Curiae on behalf of Plaintiffs and Respondents.

Opinion of the Court by Corrigan, J.

We granted review to determine whether a company's name and logo appearing on an invoice can constitute hearsay. Under the facts presented, a witness's observation of the name and logo was circumstantial evidence of identity, not proof of the truth of matters asserted in the document. Because the observation was not offered for a hearsay purpose, defendant's hearsay objection was properly rejected.

I. FACTS

After Frank Hart developed mesothelioma

, he and his wife, Cynthia, sued Keenan Properties, Inc. (Keenan) and other entities involved in the distribution and use of pipes containing asbestos. Only Keenan's liability is at issue, and turns on whether sufficient evidence shows it was the source of the pipes.

From September 1976 to March 1977, Hart installed pipes for Christeve Corporation (Christeve) in McKinleyville. His job involved cutting and beveling asbestos-cement pipe manufactured by the Johns-Manville Corporation (Johns-Manville). Although the process released dust, Hart worked without respiratory protection.

Keenan Pipe and Supply, a wholesale distributor, sold asbestos-cement pipe between 1965 and 1983. In 1977, it changed its name to Keenan Supply. The logo for both Keenan Pipe and Supply and Keenan Supply was the letter "K" drawn to resemble a straight pipe and an angled pipe, enclosed in a circle.¹ Successor Keenan retained no sales records or invoices from the relevant period. Its representative testified the company logo was originally rendered in green and white, then changed in the 1970s to red and white. The witness also acknowledged what appeared to be a copy of a Keenan invoice, which bore Keenan's name and logo. He agreed that Keenan would have sent a sales invoice to its customers.

Christeve's bookkeeper, Olga Mitrovich, testified that when Christeve closed in 2001, she retained no documents related to the McKinleyville project. She remembered the logo of Keenan Pipe and Supply as "the K with a circle around it." Asked why, she replied: "Because I know that we dealt with them, and [the logo] was unique, and I like it."

Foreman John Glamuzina was Hart's supervisor from January to March 1977.² He was familiar with asbestos-cement pipe, and recalled that it was used on the McKinleyville project. Glamuzina explained: "[T]here would be different invoices to sign when the truckers would come up with a load." When he received materials delivered to the worksite, he "would just check the load for my eight-inch pipe, shorts or whatever came on the pipe, that's all I would check on that." He would also check the invoices to make sure the supplies listed matched what was being delivered. If the information was correct, he signed the invoice and retained a copy, which he turned in to the site office. He did remember seeing the name "Keenan" on invoices but could not "recall exactly" how Keenan's name was printed or how many times he saw the name on invoices. He testified he did not see names of any other suppliers and explained that "[w]hen you're working out in the field, you're in a hurry ...." When asked why "Keenan sticks out in your mind," he replied: "Just the way the — their K and stuff is all — I don't know."

Keenan moved to exclude any reference by Glamuzina to Keenan invoices. It argued, inter alia, that any reference to "Keenan" on the invoices constituted inadmissible hearsay.³ The court rejected Keenan's hearsay argument, giving two reasons. First it held the evidence was not hearsay but merely circumstantial evidence of identity. Second, even if hearsay, the evidence fell under an exception as the statement of a party opponent. It admitted Glamuzina's testimony as to the name and logo he saw printed on the invoices given to him when pipes were delivered. Keenan did not request a limiting instruction on the permissible consideration of Glamuzina's testimony.

The jury returned a plaintiff's verdict, with a special finding that Hart was exposed to asbestos from pipe supplied by Keenan. Following apportionment of fault and settlements by other defendants, a judgment of $1,626,517.82 was entered against Keenan.

The Court of Appeal reversed, concluding Glamuzina's descriptions of the invoices were hearsay. ( Hart v. Keenan Properties, Inc . (2018) 29 Cal.App.5th 203, 213, 239 Cal.Rptr.3d 896.) We apply a different analysis to that question and reverse the judgment of the Court of Appeal.

II. DISCUSSION

Hearsay is an out-of-court statement offered to prove the truth of its content.⁴ ( People v. Sanchez (2016) 63 Cal.4th 665, 674, 204 Cal.Rptr.3d 102, 374 P.3d 320.) Section 225 defines the term "statement" as either "oral or written verbal expression" or "nonverbal conduct of a person intended by him as a substitute for oral or written verbal expression." Verbal expression means "relating to, or expressed in words." (Garner, Dict. of Modern American Usage (1998) p. 676; see also Black's Law Dict. (11th ed. 2019) p. 1870.) Non-verbal expression refers to "conduct intended as a substitute for the actual use of words." ( People v. Gonzalez (2017) 2 Cal.5th 1138, 1143, 218 Cal.Rptr.3d 150, 394 P.3d 1074, fn. omitted.) A document is generally a form of written verbal expression. If it is prepared before trial and offered to prove the truth of the words it contains, it is hearsay.

As noted, the trial court relied on alternate theories to admit Glamuzina's testimony about the content of the invoices. First, it concluded that Glamuzina did not convey hearsay, because the name and logo were not offered to prove the truth of any statement contained in the invoice. Instead, his observations were circumstantial evidence of Keenan's identity as the source of the pipes. Based on the facts here, the court was correct. As a result, we do not further consider the alternative basis for its ruling.

A. Relevance When Not Offered for Truth of Content

"When evidence that certain words were spoken or written is admitted to prove that the words were uttered [or written] and not to prove their truth, the evidence is not hearsay. ( People v. Smith [ (2002 [2010]) ] 179 Cal.App.4th 986, 1003 ....) (Text cited with approval in People v. Armstrong [ (2019) ] 6 Cal.5th 735, 786 [243 Cal.Rptr.3d 105, 433 P.3d 987] ....) ‘The first and most basic requirement for applying the not-for-the-truth limitation ... is that the out-of-court statement must be offered for some purpose independent of the truth of the matters it asserts. That means that the statement must be capable of serving its nonhearsay purpose regardless of whether the jury believes the matters asserted to be true. [Citations.]’ ( People v. Hopson [ (2017) ] 3 Cal.5th 424, 432 [219 Cal.Rptr.3d 717, 396 P.3d 1054] ....)" (Simons, Cal. Evid. Manual (2020) Hearsay Evidence, § 2:5, p. 84.) For example, suppose A hit B after B said, "You're stupid." B's out-of-court statement asserts that A is stupid. If those words are offered to prove that A is, indeed, stupid, they constitute hearsay and would be inadmissible unless they fell under a hearsay exception. However, those same words might be admissible for a non-hearsay purpose: to prove that A had a motive to assault B. The distinction turns not on the words themselves, but what they are offered to prove. The concept can prove analytically elusive when the words themselves also make an assertion. (See 1 Witkin, Cal. Evidence (5th ed. 2018) Hearsay, § 37, p. 832 ["The distinction between these two uses of the evidence is not always readily apparent"].) If the words are admitted for a nonhearsay purpose the jury is not allowed to consider the truth of any substantive assertion, and is often instructed to that effect.

Otherwise competent evidence must also be relevant. So, the non-truth purpose for which a statement is offered must be relevant. Evidence is relevant if it has a "tendency in reason to prove or disprove any disputed fact that is of consequence to the determination of the action." (§ 210.) Documents and other items found at a location may be relevant to show a person has a connection with that place. People v. Goodall (1982) 131 Cal.App.3d 129, 182 Cal.Rptr. 243 held that various items, including documents, were admissible to show Goodall was linked to a home where drugs were manufactured. Evidence recovered at the site included a summons, various receipts, and Goodall's driver's license, as well as photographs of her at the residence. The court held that the documents were relevant regardless of the truth of their content. "Without considering the documents for the truth of the matter stated therein, it is relevant that documents bearing appellant's name or other items reasonably identifiable as appellant's were found at the residence. ... The jury could infer that these items would not have been so located unless [Goodall]" had sufficient connection with the site to exercise control or was aware of the illicit activity there. ( Id . at p. 143, 182 Cal.Rptr. 243.)

The Harts rely principally on the similar case of People v. Williams (1992) 3 Cal.App.4th 1535, 5 Cal.Rptr.2d 372 ( Williams ). Williams sought to establish standing to challenge an apartment search by offering proof he lived there. He called the searching officer who had recovered a fishing license and a paycheck made out to him. Both documents, bearing the defendant's name and the apartment address, were...