BAEC Bulletin | Fall 2021 | 25
NY Legislature Expands Speaking Agent Exception to the Hearsay Rule
INTRODUCTION: In late May of this year, both houses of the New York State Legislature passed bills to expand the long-standing and oft-criticized “speaking agent” exception to the rule against hearsay. (S6335, A6599). Not only will statements of agents/employees who are authorized to speak on a matter by their principal/employers be admissible against the latter as party admissions, so too will be statements of employees if they concern a matter within the scope of their agency/employment and were made within the scope of the relationship. Until recently, New York was one of only four states to hold on to the speaking agent rule which, in the Legislature’s estimation, unfairly denied admission of otherwise relevant and reliable evidence (e.g., a store owner’s knowledge of a hazardous condition in a slip-and fall case). Having passed the Legislature, the new rule will require the new governor’s signature to officially become the law in this state. NEWYORK RULEWILLMIRROR FEDERAL RULE: The new rule, (CPLR 4549), will bring New York Evidence Law into near harmony with the Federal Rules of Evidence (FRE) 801(d)(2)(D) which admits (as non-hearsay) an opposing party’s statement that was made by “the party’s agent or employee on a matter within the scope of that relationship and while it existed.” Unlike the federal rule, the agent/employee’s statement would be admitted in state court as an EXCEPTION to the hearsay rule and, as such, could be considered for the truth of what it asserts (e.g., that the floor in the beverage aisle was wet, and the defendant/store owner -- by virtue of its clerk’s admission [“I told maintenance to mop that up an hour ago”] -- was aware of the potentially dangerous condition). SLOWROLL: Though New York courts have long been dubious of the rule limiting admissibility of employee statements to those authorized by their employer to speak (see Loschiavo v Port Authority of New York, 58 NY2d 1040 [1983]) they have been reluctant to expand the rule without legislative action, which has been glacial in its arrival. In Loschiavo, the Court of Appeals held that the trial court properly excluded the employee’s statement because the making of the statement was not an activity within the employee’s authority (citing Kelly v Diesel Construction Division of Carl A. Morse, Inc., 35 NY2d 1 [1974]). The Court also declined the plaintiff ’s invitation to change the “well- settled albeit widely criticized” rule of evidence, noting that a proposal to modify the rule was then pending before the legislature. PRESCIENT DISSENTER: The dissenting justice, J. Fuchsberg, who seemed concerned about judicial reticence and legislative inertia, found it troubling that the Court would “ignore[e] the chorus of condemnation (and) defer reform of a judge-created… rule of evidence to the Legislature, whenever and however that body may choose to act, in the interim dooming an incalculable number of cases to an unjust result” His dissent cited a concurring opinion in Fleury v Edwards, 14 NY2d 334, 341[1964]:
“Absent some strong public policy or clear act of pre- emption by the Legislature, rules of evidence should be fashioned to further, not frustrate, the truth-finding function of the courts…” See also Michael J. Hutter, “‘Speaking Agent’ Hearsay Exception: Time to Clarify, If Not Abandon”, NYLJ, June 6, 2013, pg. 3, col. 3, No. 108. TERRELL VWAL-MART
Hon. Tim Franczyk (ret.)
In the supermarket slip-and-fall case of Terrell v Wal-Mart, 95 NY2d 650 (2001), the Court of Appeals held that the trial court erred in admitting the hearsay statement of an unknown employee (described by the mentally disabled plaintiff as a woman in a blue coat with a name tag), who said, “I told somebody to clean this mess up.”The trial court concluded that the woman described by the plaintiff and her husband was clearly an employee, and the statement concerned a spill which all employees are required to clean up. The court also deemed the statement admissible as an EXCITED UTTERANCE (i.e., a statement about a startling/exciting event made while the declarant is still under the stress of nervous excitement resulting from the event. See NY Evidence Advisory Committee Rule 8.17 citing, inter alia, People v Nieves 67 NY2d 125 [1986]). On appeal, the Third Department held that the statement was properly received as an excited utterance but not as an admission because there was no indication that the employee, whoever she was, had any authority to comment on such a matter so as to impute liability to her employer. See 278 AD2d 770 (3d Dep’t 2000.) The Court of Appeals reversed, holding that the statement did not qualify as either an admission of a speaking agent nor an excited utterance, because there was an insufficient foundation that the declarant, regardless of her employee status, was operating under the stress and excitement of encountering the injured plaintiff. See also Hyde v Transcontinental Record Sales Inc, 111 AD3d 1139 (4th Dep’t 2013): Employee’s statement that he “shoveled but didn’t salt” the area where the plaintiff fell was inadmissible against the defendant on motion for summary judgment for lack of proof of authority to speak on the matter.The same conclusion was reached in Gordzica v NYC Transit Authority, 103 AD3d 598 (1st Dep’t 2013) where a ticket booth clerk’s statement that she reported the defective condition a half dozen times was deemed inadmissible. OTHER POTENTIAL AVENUES OF ADMISSIBILITY: Before the expansion of the rule, clever lawyers had to resort to alternative theories of admissibility such as the NON-HEARSAY purpose of showing circumstantially by the agent/employee’s statements that the principal/employer had NOTICE of a hazardous condition (e.g., spilled garlic oil on the store floor as in Gelpi v 37th Ave Realty Corp., 281 AD2d 392 [2d Dep’t 2001]).
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