What is a business records affidavit?
A business records affidavit is a document that lays out the foundation for admitting business records as evidence in a court case. Due to the hearsay rule, most out of court statements cannot be used as evidence. This means that words or other people’s actions cannot be used to prove what the person on the "stand" wants to prove, such as that the person is being accused of liability in a lawsuit by a company based upon statements taken by that company.
The purpose of a business records affidavit is to provide an exception to this rule. The law under which this comes is Missouri Revised Statute §490.660. This means that when we are using the business records affidavit, it is the law that allows us to use the out of court statements.
In Missouri, the business records affidavit has to be in a prescribed form. It’s contained within §490.660, and in my experience, they are basically identical across all Circuit Court systems in Missouri. A few of the more notable Circuit Courts note that a failure to follow the form of the statute does not result in a failure of the business records affidavit .
The business records affidavit is important because in order to get the business records into evidence, you cannot just call the custodian of records forward to testify. The law says that they must be the custodian of records, and that in doing so, he or she must have personal knowledge of how records are kept in the ordinary course of business.
That is hard to do in federal court where each of the circuit courts that we deal with in Missouri, it’s an extremely large undertaking to come forward and testify. You can imagine that the district and appellate courts have dockets that probably have a number of different types of cases, so to allow the custodian of records to come forward. That is extremely difficult and would be tremendously expensive for the businesses to be able to send their people forward to testify.
With that, Missouri law provides the business records affidavit, which we still have to lay the foundation for the admission of the business records, but we can bring that into evidence through the business records affidavit.
Law in Missouri
The State of Missouri has adopted the Uniform Business Records as Evidence Act, which can be found at Section 490.680, RSMo 2016. The Missouri Act defines "business records" as "any writing or record created, in the regular course of any business, which is the usual and regular practice of such business to make, supported by proof that each component of the writing or record was made at or near the time of the act or event, by, or from information transmitted by, a person with knowledge."
One will usually need at least two types of affidavit, depending on what type of document is being used, for proper authentication of documents under Missouri law. In addition to a business records affidavit, there are also personal knowledge affidavits. Where a person other than the custodian of records or the records center manager at the relevant business is offering testimony under oath about the authenticity of business records, they generally must testify that they have personal knowledge of the matter, and their testimony is based on that personal knowledge. (See Moore v. St. Louis Board of Police Commissioners c/o St. Louis Metropolitan Police Department, 456 S.W.3d 216, 226 (Mo. Ct. App. 2015), citing In re Estate of McKinney, 112 S.W.3d 917, 921 (Mo. Ct. App. 2003).)
If documents are being obtained from another party – either through a court order or voluntarily – the sending party will also usually prepare an affidavit that certifies that the documents are true and accurate copies. This is sometimes referred to as a "certificate of business records."
As part of the affidavit, the affiant "shall state:
- (1) The affiant’s name;
- (2) The affiant’s position or job title and the name, address, and telephone number of the business entity where the affiant works;
- (3) The type of records involved in the request for admission; and
- (4) That the records were obtained from the business entity identified in paragraph (2)." (Section 490.686, RSMo 2016.)
When to use a business records affidavit
The primary reason to file a business records affidavit is to authenticate business records, without the cost of having a corporate representative testify to the content of the business records. This can be particularly important in cases where many documents and corporate records need to be established as prima facie evidence, but where witness testimony for each business record would be prohibitively expensive.
Missouri courts also occasionally require a business records affidavit to authenticate reports and analyses performed by an accountant or other expert. In such cases, the accountant or expert must both certify (on his or her own behalf) that he or she is an expert, and that the report was prepared as part of the expert’s business.
In a small number of cases, the Missouri courts have permitted a business records affidavit to authenticate publically recorded documents. This practice is generally not favored, as it circumvents the public record and goes against the purpose of a public record.
Preparing a business records affidavit
The first step in preparing a legitimate business records affidavit is ensuring that the business has a written policy for naming retained documents. If the policy fails to address a specific type of document, an affidavit limiting itself to the business’s established headings will be insufficient as to documents that do not match up with the policy. So, for example, a policy that clearly addresses both "policies and procedures" and "personal property" documents will be sufficient as to documents that are identified under those headings. But if the policy does not reference "inventory forms," an affidavit claiming that the form is titled that way will not suffice where the document is not addressed in the business’s writing. Moreover, a preprinted set of headings on a word processing program is not sufficient to evidence a policy despite the headings appearing reasonable.
Second, the person preparing the affidavit must be familiar with the business’s policies and experiences with the particular records at issue. This usually comes from daily contact with the document itself, which permits the affiant to attest to the process that leads to its preparation. However, familiarity alone is not always enough to justify admissibility. A report will generally not be admissible when prepared by an individual with second-hand knowledge of the business and the document preparation process. In other words, a business associate who works with a document on a regular basis but lacks firsthand knowledge that the document was prepared according to prescribed procedures will not be able to introduce the document into evidence. Indeed, when the creator of a document is conveniently unavailable, the court has refused to permit an affiant to testify where the prepared the documents was "a secretary or lesser office employee… unfamiliar as to the use these instruments were to have in the office." Such an individual only has "second-hand knowledge of the usage of the documents" so his testimony is inadmissible.
Third, the affidavit itself must include various other elements. And, among other things, the witness must establish that the records were made under the "regularly conducted business activities" of the business where the records are stored. It must also appear that:
Substantiation of this basis is generally complete with the inclusion of a statement specifying "Such records were generated created, maintained or stored in the course of regularly conducted business activities of [Company name]. The business maintains the practice of receiving, generating, creating, maintaining and/or storing business records through its employees and/or files in the regular course of its business."
Fourth, the witness must demonstrate that the records were "made at or near the time of the act, transaction or event" that they describe. What does "at or near the time" mean? It means that the records were created no more than 30 days after the event occurred. The rationale behind this requirement is that such documents are deemed to be more reliable when prepared within a short time of the event. For this reason, there are times when a gap of just a few days following the trial date raises questions as to whether the "near" requirement is met.
Fifth, the witness must show that the business records were recorded by "a person with knowledge of the matter" and were "kept in the course of regularly conducted activities of a business." These requirements often coincide with the above-mentioned requirements. Even where they do not, it is best to assume that the business records are inadmissible until these facts are demonstrated by the witness. A witness is not automatically found to be a "qualified witness" simply by demonstrating that he had "a cursory familiarity with the business and its documents." Nevertheless, the absence of personal knowledge by the witness in question does not "logically bar such a person from having sufficient knowledge otherwise" to qualify as a witness.
Challenges and Considerations
Despite their advantages, business records affidavits are not without their potential challenges, pitfalls, and critical considerations. Missouri courts have recognized a number of them:
The purpose of the rule is to unclog the trial process by allowing business records, records made in the course of ordinary business, to be admissible without the records custodian testifying, unless a party challenges its authenticity or accuracy. In re Frankel, 370 S.W.3d 110, 113 (Mo. App. W.D. 2012) (emphasis added).
The trial court is required to make an initial determination of whether that foundational requirement of the business records exception has been established. This is a legal issue subject to de novo review. But once the trial court properly admits the evidence under that exception, the trial court’s decision can only be reversed for abuse of discretion. . . . The abuse of discretion standard is generally applicable, including the presumption that the circuit court properly admitted the evidence. Id. at 113-114 (emphasis in original).
The affidavit should be from a "person who has knowledge of the acts . . . [and] the manner and time of preparation of the record." In re Belcher, 197 S.W.3d 501, 503 (Mo. App. S.D. 2006).
And they must describe the record with means of identification such as (1) the type of business; (2) the person or persons involved in the routinely made act, event, condition, or thing; (3) the mode of its preparation; and (4) the time of such act, event, condition or thing. In re Frankel, 370 S.W.3d at 114.
Before the court may admit evidence under the business records exception to the hearsay rule, the proffered evidence must bear adequate assurances of trustworthiness. Giant Enters., Inc. v. First Nat’l Bank, 848 S.W.2d 102, 109 (Mo. App. E.D. 1993).
[Section (b)(4)] essentially mandates that the record have circumstantial guarantees of trustworthiness. Circumstantial guarantee of trustworthiness includes: knowledge of circumstances of preparation of the records; mode of preparation of records; ability to recall preparation of records; and relationship of the witness to the business. These facts establish the record’s trustworthiness. State v. Garrison, 870 S.W.2d 698, 702 (Mo. App. W.D. 1994).
Examples and Precedents
Missouri courts have faced numerous opportunities to consider the admissibility and impact of business records affidavits. Although these cases do not contain a detailed analysis of the business records affidavit, they do provide helpful insights into how Missouri courts have applied the business records exception in a variety of contexts, and how courts have arrived at evidentiary rulings bearing on business records affidavits.
Eighty-Four Lumber Co. v. Mississippi Lumber Co., 157 S.W.2d 513 (Mo. App. 1941). In this case, plaintiff-eighty-four Lumber Co. sought to recover under the theory of quantum meruit for materials furnished defendant Mississippi Lumber Co. because the defendant’s contractor failed to pay for the materials.
The trial court found that the defendant’s contractor was a necessary party under Fed. R. Civ. P., Rule 19 and entered summary judgment in favor of the defendant.
On appeal to the Southern District, the court reversed and remanded, holding that the contractor was not a necessary party under Rule 19 because the contractor would not be prejudiced if the action proceeded without him, and the contractor’s nonjoinder would not impede the ability of the plaintiff and defendant to fully litigate the action. The court also held that a transcript of judgment, regular on its face, was sufficient evidence to support a judgment for either party.
Southwestern Bell Tel. Co. v. Crawford, 451 S.W.2d 16 (Mo. 1970). In this case, plaintiff Southwestern Bell Telephone Co. ("Bell") sought to recover for telephone services it rendered to defendant Ernest Lee Crawford ("Crawford"). At trial, Bell offered the affidavit of its bookkeeping and cashier department head, which stated that the director of cash balance was a part of its regular course of business, kept in the line of duty, for the purpose of making a record of the telephone service rendered to the defendant. The affidavit was admitted into evidence without objection from Crawford.
The trial court found that Bell was entitled to recover the amount claimed in its petition, and entered judgment in favor of Bell. On appeal, the Missouri Supreme Court found sufficient the additional affidavit of the records custodian who had signed Crawford’s previous bill and who lacked any specific recollection of making such a payment. This affidavit detailed that the custodian had complied with the proper formats and procedures in preparing the records and had received no information or suggestions from Crawford that he had made an error of payment.
The court held that Bell’s offer of the records custodian’s affidavit was sufficient to establish the admissibility of its records, and because Crawford failed to offer any affirmative evidence or introduce his own affidavit to contradict Bell’s evidence, Crawford could not complain of any prejudicial error.
Nodaway County State Bank v. Arkansas-Missouri Power Co., 465 S.W.2d 454 (Mo. App. 1971). In a similar case, plaintiff Nodaway County State Bank of Marysville ("the Bank") sought to recover for electric power delivered by defendant Arkansas-Missouri Power Co. ("Company"). The Bank had opened an account for the Company and attached a copy of a resolution authorizing said account.
The Bank introduced the affidavit of its bank manager concerning the book records made and kept by the Bank in the usual course of its business. The trial court sustained the Company’s objection to the affidavit on the ground that the Bank’s manager was not the custodian of the accounts of the Bank’s customers.
On the Bank’s appeal, the Missouri Court of Appeals found that the manager should have been permitted to testify as a witness to the books of original entries under his supervision in the usual course of business, and that the manager should have been allowed to introduce the records in the usual course of business.
The court found that the trial court erred in excluding the affidavits and remanded the case for further proceedings.
Getting Help
When it comes to navigating the complexities of a business records affidavit in Missouri, it is important to consult with an attorney who is experienced in this area of law. A qualified legal professional can guide you on the requirements of this evidentiary document and help you prepare the information needed to present it effectively at a trial or hearing. By utilizing their knowledge, you can better understand the methods of authenticating documents and be made aware of the potential challenges that may arise against the business records affidavit. Having this kind of insight will allow you to strategically plan for how the business records affidavit is presented , whether it be by filing a copy of the business records affidavit with the court or having it introduced as an exhibit to a witness’s testimony.
Experience is key to successfully preparing a business records affidavit. Missouri law often requires more than merely collecting documents generated during the normal course of business. An experienced attorney can make sure that a business records affidavit is both relevant and admissible. In other words, an attorney can ensure that the business records affidavit has sufficient evidentiary value under Missouri law.
Consulting an experienced Missouri trial attorney is a strategic decision that can clarify the process of using a business records affidavit in litigation.