John L.A. Lyddane

An effort to modify the New York State approach to the "speaking agent" exception to the exclusion of hearsay at trial is currently before the Legislature in the form of Senate Bill S6335. The change would affect the adjudication of medical malpractice claims and is of particular concern to any health care organization whose employees render medical care in the course of their employment.

History

The traditional approach to the exclusion of hearsay is based upon the inability of the trier of fact to evaluate the truthfulness of the evidence offered. The exception made for "admissions" is based upon the presumption that no person would falsely admit liability. Where a party is an entity represented by a number of employees, the statement of an employee is admissible against the entity under New York law only if the declarant was authorized to speak on behalf of the entity. Kelly v. Diesel Construction Division, 35 N.Y.2d 1, 8 (1974).

A year after the Court of Appeals reaffirmed New York's approach to speaking agents in Kelly, Federal Rules of Evidence, Rule 801 was enacted. The federal approach to the hearsay exclusion has since been adopted by many other states. The issue was revisited by the Court of Appeals in Loschiavo v. Port Authority, 58 N.Y.2d 1040 (1983), and despite a dissent by Judge Jacob Fuchsberg, the court adhered to the "well settled, albeit widely criticized" New York rule. Since that time, this has become a matter for the Legislature rather than the courts, but the intervening 37 years have seen no legislative change to New York's approach.

Assuming for the sake of discussion the good faith and truthfulness of every witness who quotes the employee of an adverse party, the rule change would not improve the court system's ability to achieve justice. It is the simple fact that the statement of an employee of a corporate litigant, even one with some nexus to the event, is not imbued with the presumption of truthfulness which is found in a true admission. Likewise, the ability of a lay witness to correctly recall in court the statement of a declarant who is a medical professional long after the fact is notoriously inaccurate.

Practical Issues

The traditional New York rule requires that the declarant of an admission chargeable to her employer be authorized by the employer to speak on its behalf. This rule derives from the peculiar nature of an admission as distinguished from any other statement by an employee. Unless the declarant's statement is in fact an admission of the individual or of the employer, it remains excludable hearsay. The Federal Rule disregards the concern for the truthfulness merely requiring that the declarant's statement be related to a matter within the scope of the agency or employment, and be made during the term of that relationship. New York law continues to focus upon admissions made in the employee's individual and representative capacities. Nordhauser v. NYCHHC, 176 A.D.2d 787 (2d Dept. 1991).

There are several practical issues which are obviated by the New York rule. First is the concern that the statement of the declarant often contains conclusions, the basis of which is unknown. A hearsay statement based on an incomplete understanding of the facts, some other person's hearsay statement, or any other infirm evidentiary footing, will not be identifiable as unreliable by the jury in determining the relative weight of available evidence. The decision in Reed v. McCord, 160 N.Y. 330 (1899) discusses the distinction between what the declarant heard about the accident, which would not have been admissible, and statements based upon his personal knowledge of the facts.

Only the latter would carry some assurance of truthfulness because the declarant's ability to determine the veracity of the hearsay statement is unknown. The witness who recounts the statement of the declarant is thus never in a position to help the jury assess the veracity of the underlying statement. The presumption of truthfulness is unwarranted.

A second problem is that not every employee has the same interest as that of her employer. In Tyrrell v. Wal-Mart Store, 97 N.Y.2d 650 (2001), the Appellate Division had upheld the trial court's admission of testimony from the husband of Ms. Tyrrell, after she had slipped on a liquid in a Wal-Mart store. In the aftermath of the fall, the husband testified that an unidentified employee of Wal-Mart was heard to say "I told somebody to clean this mess up." The Court of Appeals applied the New York rule to order a new trial because plaintiff had failed to establish that the unidentified declarant was authorized to make the statement.

Under the Federal Rule the statement would have been admissible if it was made during and within the scope of the employment relationship. The problem is that the statement carries no assurance of truthfulness because it is not an admission. Assuming the declarant's statement was correctly heard and relayed by the witness, it was an exculpatory statement which sought to deflect any responsibility away from the declarant toward "somebody" who may have been an employee but could not speak for themselves. Again, the presumption of truthfulness is unwarranted.

The third problem with allowing testimony on hearsay statements of employees is that even a statement by a witness who has personal knowledge is often based upon incomplete or misunderstood facts, and not supportive of conclusions attached to them by attorneys. Virtually every personal injury case involves factual issues among the parties and their witnesses, but there are opportunities to explore those issues in discovery. The admissible firsthand accounts of witnesses are then presented and cross-examined before the finder of fact which has insight gained through discovery to assess the validity of the testimony.

On the contrary, the testimony regarding the hearsay statement of an employee is often heard for the first time at trial, when it is known that the declarant is not identifiable or available to explain or controvert the testimony. A hospitalized patient will have come into contact with scores of hospital employees over the course of an admission, all of whom acted and spoke in the course of their employment.

By the time a malpractice case reaches trial it is virtually guaranteed that the declarant to whom a statement is attributed will not be available to fill the gaps in information, place whatever was said in the appropriate context, or deny the statement altogether. Using such testimony seems inconsistent with the smooth operation of a system which relies on the ability to confront and cross examine the accuser and exclude infirm evidence from consideration.

In jurisdictions which have adopted the Federal Rule on speaking agents, the results have been less than encouraging. In Torrence v. Kusminsky, 185 W.Va. 734 (1991) the Supreme Court of West Virginia was faced with a case in which the trial court had permitted the patient's mother to testify to statements by an unidentified "nurse." How the declarant was identified as a nurse in the employ of the defendant hospital is not clear, but only one side of the story was presented. The declarant was quoted as saying that she could be fired for what she was about to say but she was tired of covering up other peoples' mistakes, and that the mother should obtain another doctor. The verdict in favor of the plaintiff was upheld.

Without the identity of the declarant, it is not known whether she even existed, let alone whether she was a nurse or an employee of the hospital. Ordinarily the mother of a patient does not have the qualifications or knowledge to determine who is or is not a hospital employee. Further, the statement is not an admission on the part of the declarant. Self-important employees who criticize their coworkers may be correct, but their statements which elevate themselves by criticizing others are hardly admissions by any definition of the word.

Finally, it is unclear what if any relationship the conclusory statements had with the claims made against the hospital. The probative value of the non-factual material was negligible and the prejudicial effect clearly predominated.

In Armand v. Dartmouth Hitchcock Med. Ctr., 611 F. Supp. 2d 78 (USDC NH, 2009), the hospital moved in limine to exclude statements attributed by the patient's family to an unidentified "man" encountered in the hospital. The only physical description as to the appearance or clothing of the declarant that the patient's son could offer was that the declarant was his height. The witness thought the declarant was "a nurse, or a physician's assistant, or something" Id. At 93.

The witness was permitted to testify that the declarant told him that there had been an injection into the patient's hand, that someone had made a mistake, and that he had never seen anything like it. Although the court properly recognized that the burden of showing the existence and type of relationship between the declarant and the hospital was on the plaintiff, it found that unstated circumstantial evidence supported the contention that the declarant was an employee of the hospital, speaking within the scope of his employment. The nexus between the conclusory statements and any factual basis for a claim against the hospital is absent from the court's opinion.

Conclusion

Aside from the obvious invitation to litigants to fabricate statements of declarants known to be unavailable, the Federal Rule invites incomplete, misunderstood and layered hearsay statements to be submitted in a proceeding which is supposed to involve a search for the truth. The declarants are not deposed during discovery, under oath, observed by the fact finder, cross examined, subject to sanction or perjury prosecution, or even shown to be real people in the employ of the defendant entity. A select portion of a declarant's purported statement is offered as evidence with no way for the finder of fact to determine its veracity. The New York Rule may not be convenient for all, but if the objective is truth-based justice this could be a change for the worse.

John L.A. Lyddane is a partner at Dorf & Nelson who has extensive experience in jury trials of technically complicated liability matters, including professional liability cases and construction-related lawsuits.