Oberman v. Dun & Bradstreet, Inc.
Decision Date | 16 January 1975 |
Docket Number | No. 73-1845,73-1845 |
Citation | 507 F.2d 349 |
Parties | Morris K. OBERMAN, Plaintiff-Appellant, v. DUN & BRADSTREET, INC., Defendant-Appellee. |
Court | U.S. Court of Appeals — Seventh Circuit |
Elmer Gertz and Wayne B. Giampietro, Chicago, Ill., for plaintiff-appellant.
Don H. Reuben and Lawrence Gunnels, Chicago, Ill., for defendant-appellee.
Before HASTIE * and CASTLE, Senior Circuit Judges, and FAIRCHILD, Circuit Judge.
Plaintiff Morris D. Oberman appeals from the entry of a judgment notwithstanding the verdict in favor of defendant Dun & Bradstreet, Inc. Oberman contends on appeal that the district court improperly concluded that certain testimony should have been excluded as inadmissible hearsay evidence, and that the district court erroneously granted the defendant's motion for judgment n. We reverse the judgment of the district court and remand with directions to reinstate the jury's verdict for the plaintiff and to proceed to trial on the remaining issues.
The single issue before the jury in this diversity action was whether an allegedly libelous credit report issued by defendant Dun & Bradstreet was the reason for Prudential Realty Company's refusal to sell or lease a desired business property, the Hamlin Avenue building, to the plaintiff. 1 At trial, Oberman testified, over objection, to an August 25, 1967 telephone conversation with Mr. Hubert Rance, President of Prudential Realty Company, concerning the sale or lease of the Hamlin Avenue property. The essence of Oberman's account of the telephone conversation was that Rance stated that he could not lease the building to him because the Dun & Bradstreet credit report was unfavorable. Oberman testified:
I says, 'Well, if you are buying the building you will need a lessee, so I will lease the building . . ..
He (Rance) said, 'Well, you can't do that either.'
I said, 'Why?'
He said,
. . . .ell
I asked him, 'What does that report say to prevent me from leasing the building?' . . ..
He said,
. . . .ou I says, 'I am really shocked at such a kind of report, . . ..'
I says, 'I am going to look into this right now.' I says, 'I can get that corrected.'
He says,
The defendant contended that the Dun & Bradstreet report, which was mailed on August 14, 1967, could not have been the cause of Prudential's refusal to lease the Hamlin Avenue property to the plaintiff because the building had been removed from the lease market on August 10, 1967. To support this contention, Mr. Dan Unger testified that he had committed to buy the building on August 10, and he also stated that his decision to purchase was made on the strength of a concurrent commitment to lease the building by Interstate Photo Supply Company, and that he was therefore advised to remove the building from the lease market. Rance similarly testified that at the time of the commitment to sell on August 10, the Hamlin Avenue building had simultaneously been removed from the lease market.
However, in a letter to Unger dated August 11, 1967, Rance wrote with regard to the property that 'inasmuch as we have pretty good potential lessees in the building, I think we will wait on final mortgage commitment.' Rance testified that by 'potential lessees' he had meant the actual lessee, Interstate Photo. Unger stated that he could not recall whether 'potential lessees' referred to other prospective tenants, and neither Unger nor Rance knew when the lease with Interstate Photo, who eventually did rent the building, was actually signed.
At the close of all the evidence, the defendant's motion for a directed verdict was denied, and the jury returned a verdict for the plaintiff. The court initially denied defendant's motions for judgment notwithstanding the verdict, or in the alternative for a new trial, but upon reconsideration granted the motion for judgment n.o.v., and entered judgment for the defendant.
It is conceded that unless the telephone conversation between Oberman and Rance was properly before the jury, there would be no evidence that the Dun & Bradstreet report caused Prudential's refusal to lease the Hamlin Avenue building. The plaintiff claims that the conversation was correctly admitted under the state of mind exception to the hearsay rule. The defendant argues that Rance was not expressing a state of mind, but that he was remembering a past decision, and defendant points to Rance's statement at the end of the conversation with Oberman to as evidence of that fact. The defendant asserts that under Shepard v. United States, 290 U.S. 96, 54 S.Ct. 22, 78 L.Ed. 196 (1933), statements of memory or belief are not includible within the state of mind exception. 2
Oberman's account of the telephone conversation with Rance is hearsay, but under the state of mind exception to the hearsay rule, an out of court declaration of a present existing motive or reason for acting is admissible, even though the declarant is available to testify. Lawlor v. Loewe, 235 U.S. 522, 536, 35 S.Ct. 170, 59 L.Ed. 341 (1915); American Cooperative SerumAss'n v. Anchor Serum Co., 153 F.2d 907, 912 (7th Cir.), cert. denied, 329 U.S. 721, 67 S.Ct. 57, 91 L.Ed. 625 (1946); VI Wigmore on Evidence 1729(2)(3d ed. 1940). This exception rests on the rationale that the declarant's memory of his state of mind, at a time when there is ample opportunity for misrepresentation, is no more likely to be correct than another's recollection of the declaration. Since evidence of the declarant's state of mind can only be indicated by the declarant's conduct or statements, the exception to the hearsay rule provides for their admission. Mutual Life Ins. Co. v. Hillmon, 145 U.S. 285, 12 S.Ct. 909, 36 L.Ed. 706 (1892); VI Wigmore, supra, at 1714.
The leading case of Shepard v. United States, supra, has helped to define the boundaries of the state of mind exception. In Shepard, the defendant was accused of murdering his wife, and the prosecution introduced the testimony of the nurse that the wife, after her collapse, had told her that 'Dr. Shepard has poisoned me.' In holding the testimony inadmissible to show the wife's state of mind, the court stated that:
Declarations of intention casting light upon the future, have been sharply distinguished from declarations of memory, pointing backwards to the past . . ..
The testimony now questioned faced backward and not forward . . ..
It spoke to a past act . . ..
Shepard, supra, 290 U.S. at 105-106, 54 S.Ct. at 26.
The statement in Shepard was excluded because the declaration was the result of the memory of past events, and the declaration therefore carried the inference that these events actually occurred. The wife's recollection of these events which gave rise to the declaration could be plagued by problems of perception and memory, and the inability to test these factors, as is the case with a classic hearsay statement, called for the statement's exclusion. See Greater N.Y. Live Poultry Chamber of Commerce v. United States, 47 F.2d 156 (2d Cir.), cert. denied, 283 U.S. 837, 51 S.Ct. 486, 75 L.Ed. 1448 (1931); Tribe, Triangulating Hearsay, 87 Harv.L.Rev. 957, 970-71 (1974).
Rance's statements, however, do not face backward. For present purposes, it is of no moment whether the facts which gave rise to Rance's declaration were true or actually occurred, because the concern here is only with the reason for Rance's refusal to lease the Hamlin Avenue property. Thus, there are no problems of memory and perception of the declarant to be tested, and therefore, as in the usual state of mind situation, Oberman's recollection of the statement is as likely to be correct as Rance's recollection.
Furthermore, we do not find Rance's comments to to indicate that Rance was relying on memory to recall only the result of a distant past decision. At the time of the telephone conversation, Rance was expressing present existing reasons for his refusal to lease the Hamlin Avenue property to Oberman. We conclude, therefore, that Oberman's testimony falls within the state of mind exception to the hearsay rule, and was properly considered by the jury. Lawlor v. Loewe, supra; American Cooperative Serum Ass'n v. Anchor Serum Co., supra.
The district...
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