Ries Biologicals, Inc. v. Bank of Sante Fe, 84

Citation780 F.2d 888
Decision Date07 January 1986
Docket NumberNo. 84,84
Parties20 Fed. R. Evid. Serv. 237 RIES BIOLOGICALS, INC., Plaintiff-Appellee, v. The BANK OF SANTA FE, Defendant-Appellant. 1074.
CourtUnited States Courts of Appeals. United States Court of Appeals (10th Circuit)

James G. Whitley, of Jones, Gallegos, Snead & Wertheim, P.A., Santa Fe, N.M. (Francis J. Mathew, of the same firm with him on brief), for defendant-appellant.

W. Anthony Sawtell, of Catron, Catron and Sawtell, P.A., Santa Fe, N.M., for plaintiff-appellee.

Before HOLLOWAY and SETH, Circuit Judges, and CROW, District Judge *.

CROW, District Judge.

This is an appeal by the defendant, the Bank of Santa Fe, from a judgment for the plaintiff, Ries Biologicals, Inc., based upon the bank's alleged oral guarantee of payment for supplies delivered by Ries to Dialysis Management Systems, Inc. The trial court awarded the plaintiff $20,276.69 plus interest in the amount of $6,632.96, and costs including attorneys fees.

Ries Biologicals is distributor of medical supplies. In 1979, Ries began selling supplies to Dialysis Management Systems, Inc. (DMS) a health care provider specializing in kidney dialysis, operating in New Mexico and adjacent states. DMS was experiencing financial problems quickly accumulating a debt to Ries Biologicals in the approximate amount of $42,000. Because of the size of this debt, in January of 1980 Ries refused to make further shipments to DMS except for cash on delivery. Sometime in the first quarter of 1980, Ries resumed shipments to DMS on credit. The trial court found that resumption of credit shipments resulted from Ries' reliance on the Bank's oral agreement to guarantee payment for orders which were approved in advance. From the time of the agreement until July 30, 1980, Ries made regular shipments to DMS based upon prior approval of the senior vice-president of the bank, Philip Levitt. During this time, the invoices were sent directly to Mr. Levitt at the bank.

Despite obtaining advance approval from the bank, Ries was not paid the full amount due for materials shipped under this arrangement. The trial court entered judgment in favor of Ries for the balance due and further found that the debt constituted an open account which, under New Mexico law, entitles Ries to recover attorney's fees.

On appeal, the Bank of Santa Fe contends that the claim of Ries Biologicals is barred by the statute of frauds, that the relationship between Ries Biologicals and the Bank of Santa Fe does not constitute an open account as a matter of law, that any oral guarantee of the debts of DMS by Philip Levitt is void as an ultra vires act, that the oral agreement was established by inadmissible hearsay, and that Ries Biologicals failed to adequately carry its burden of proving delivery and acceptance of the goods. For the reasons stated below, we affirm.

All of the bank's contentions on appeal depend, to some degree, on the trial court's assessment of the evidence presented. For this reason, we first consider whether the disputed evidence was appropriately received. The admission of evidence is largely a matter of discretion and we will not reverse the trial court's decision to admit evidence absent manifest error. Big O Tire Dealer's v. Goodyear Tire & Rubber Co., 561 F.2d 1365 (10th Cir.1977) cert. dismissed 434 U.S. 1052, 98 S.Ct. 905, 54 L.Ed.2d 805 (1978).

The defendants contend that the trial court erroneously admitted testimony concerning Philip Levitt's oral, out-of-court statements guaranteeing payment for approved shipments and documents, primarily correspondence from Philip Levitt, which were offered in support of the existence of the oral guarantees.

The oral statements of Philip Levitt were expressly offered for a nonhearsay purpose. The relevance of Levitt's statements is not their truth or falsity, rather it is the fact the statements were made. The relevance of the statements depends, therefore, not on the credibility of the out-of-court declarant, Philip Levitt, but on that of the testifying witness. See J. Weinstein & M. Berger, Weinstein's Evidence p 801(c). There was no manifest error in the admission of testimony concerning the oral statements of Philip Levitt.

The questioned documents are written statements of Philip Levitt which were offered to establish the existence of guarantee arrangements with Ries Biologicals and other suppliers. There is no dispute that Philip Levitt was a senior vice-president of the defendant nor that he had substantial authority to manage the loans made to DMS. The documents are therefore not hearsay, as defined by the Federal Rules of Evidence and are admissible under Fed.R.Evid. 801(d)(2)(D). See MCI Communications v. American Tel. & Tel. Co., 708 F.2d 1081 (7th Cir.1983) (affirming trial court's admission of an internal study made by senior officers of defendant, manifesting an intent to obstruct competition in violation of antitrust law) cert. denied 464 U.S. 891, 104 S.Ct. 234, 8 L.Ed.2d 226 (1983).

The bank also contends that the evidence submitted to the trial court was insufficient to establish the goods in question were delivered and accepted. Findings of fact by the trial court will not be set aside unless they are clearly erroneous. This standard applies whether the findings are based on the testimony of witnesses or documentary evidence. Fed.R.Civ.P. 52(a); see also Anderson v. City of Bessemer City, --- U.S. ----, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985). Employees of the plaintiff testified extensively of the methods for receiving and shipping orders to their customers including...

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7 cases
  • State v. Perkins
    • United States
    • Supreme Court of Connecticut
    • 28 Septiembre 2004
    ...on the credibility of the out-of-court declarant ... but on that of the testifying witness." Id., p. 102; Ries Biologicals, Inc. v. Bank of Santa Fe, 780 F.2d 888, 890 (10th Cir.1986). 36. The exception to the hearsay rule pursuant to § 8-3(4) of the Connecticut Code of Evidence provides: "......
  • Mares v. Credit Bureau of Raton, 84-1814
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • 8 Septiembre 1986
    ...Cir.1979). Findings on underlying questions of fact are subject to the clearly erroneous standard of review. Ries Biologicals, Inc. v. Bank of Santa Fe, 780 F.2d 888 (10th Cir.1986). "We reemphasize that the district court has discretion in determining the amount of a fee award." Hensley v.......
  • PNC Bank v. United Servs. Auto. Ass'n
    • United States
    • United States Patent and Trademark Office. United States Patent and Trademark Office, Patent Trial and Appeal Board
    • 19 Enero 2023
    ...for our analysis is what was stated in the exhibits during the operative time 75 period. See Ries Biologicals, Inc. v. Bank of Santa Fe, 780 F.2d 888, 890 (10th Cir. 1986) (statements offered not for their truth or falsity, but for the fact that they were made, are for a non-hearsay purpose......
  • Boren v. Sable, 87-2737
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • 10 Octubre 1989
    ...Sable heard and understood the statement, not to prove that what Scott Leekley allegedly said was true. In Ries Biologicals, Inc. v. Bank of Santa Fe, 780 F.2d 888 (10th Cir.1986), we recognized the distinction between offering a statement for the truth of the matter asserted and offering t......
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