The Smart Board & Property Manager Legal Guide Key Rules of Evidence Preparing for Court

Alan Tannenbaum, Esq.:

My name is Alan Tannenbaum, I'm here with my partner Salvatore Scro and Jon Lemole. Tannenbaum Scro Lemole & Kleinberg. We are construction lawyers who primarily service the Community Association field and our market is from Daytona Beach across to the Tampa Bay area and down to Naples, that's where we have the bulk of our client load and what we do when HOAs and condos turnover, we assist the new boards and management in analyzing potential deficiencies both from a financial standpoint and a construction standpoint.

We negotiate resolutions with developers and contractors, sometimes in court, sometimes out of court. We also act as construction counsel when an association is undertaking a major repair project and offer consulting services and drafting contracts and in helping administer major repair projects, the bulk of where our practice lies. The setup for this particular course and Michelle Colburn will handle the CEU, if you have any questions about getting your CEU's credits Michelle, you can handle those offline.

The setup for this course is the following. So right now, all of your properties, and either your board members or managers, things are happening. There's people who are maybe tripping and falling at your property. There's owners who may be fighting with each other. Somebody this month didn't pay their assessment. There's a multitude of things that can happen at your property that-

Everybody, please mute. We're hearing some backdrop there. So all kinds of things can be happening, and what you don't know as a manager, or as a board member is which of those incidents are going to turn into a claim. Well, you might find yourself a year and a half from now, a city with a lawyer, lawyers asking you to present evidence and testimony and you say, "Gee, that happened a year and a half ago, my recollection is problematic." Or, "Which issue is that?" And, "I don't have the records and so forth."

And what this course will help do is set up procedures and set up a knowledge base so that you could do the right things today and when something happens in your property, in order to prepare for the possibility that that could be the one incident that is going to end up in court where you're going to have to present testimony and evidence. So we're going to show you some basics or teach you some basics about the Florida Evidence Code. Some of the things will surprise you and we're going to talk about business records.

We're going to talk about incident reports, things that you should be doing on an ongoing basis in the end to prepare an appropriate record for court if one of these issues ever gets there. So I'm going to ask my partner Salvatore Scro to talk first about the attorney-client privilege. Who it applies to, who could waive it so that you have a basic understanding of that.

Salvatore Scro, Esq.:

Morning everyone, good to see you again. So let's start with the lawyer-client privilege and this is important because when we deal with our clients a lot of times, the question is who can know certain things, what can be disclosed, what cannot be disclosed and who can it be disclosed? So the first thing you have to know of when dealing with a lawyer-client privilege, the attorney client privileges, who is the client?

So the client can be ... The way the statute reads if it's under the evidence code which is section 90.502. The client can be any person, it can be a public officer, a corporation, it can be the association or any other organization whether it's public or private who consults with a lawyer, and this is the key part, with the purpose of obtaining legal services, or who has rendered legal services by a lawyer.

So that part means if you're discussing the possibility of engaging a lawyer, that would be an attorney-client privilege. So what can be disclosed? And one would be is what makes the communication confidential? The key is that if it's not intended to be disclosed to a third person other than the disclosure is in further in surrendering the legal services, and also to who can it be disclosed would be those people reasonably necessary for the transmission of the communication and that a lot of times means the association managers, it could mean possibly some of the employees of the association, a lot of times we will have ... We will be asked to give a presentation to owners at an owner's meeting.

Sometimes it could be all of the owners, but it's key that that privilege ends once you insert somebody who is not entitled to that privilege, who is not necessary for the transmission of the communication or who is not there that you're servicing and rendering the legal services. So one of the other things that section 90.502 speaks about is that there's no lawyer-client privilege under this section when, and this is key, the services of the lawyer were sought or obtained to enable or aid anyone to commit or plan to commit what the client knew was a crime or fraud.

So do not speak to the attorneys about how to get away with something if you know that it's a crime or a fraud because you're not going to have that privilege if something turns up later on. So that's the key to the attorney-client privilege is, first, that it's for the purposes of rendering Legal Services, it's not just a discussion out at a restaurant or something like that, it has to be something that is for the exact purpose of either retaining the attorney or already under the retention by the attorney for legal services, that the disclosure is in furtherance of the rendition of those services and that only to those people who are reasonably necessary for the transmission of the communication.

Sometimes that could be also the engineers. We sometimes ask that engineers be retained through our firm so that it's more of a work product. And I'm not going to get too deep with that. But there are differences between state and federal as to what is privileged and not privileged with regard to those communications. But for the most part, that's the essence of the attorney-client privilege.

Alan Tannenbaum, Esq.:

And be careful about inadvertent waivers. We've seen some groups where we give attorney-client privilege advice, and they reproduce our opinion within the body of the minutes. We get it to litigation, the other side sticks to those minutes, and we have a battle as to whether that advice or the privilege over that advice has been waived because you've incorporated your minutes. So we generally recommend that you don't put our legal opinions or anybody's legal opinion right in your minutes where they could end up being discoverable. So Jon Lemole, talk about the account-client privilege.

Jon Lemole, Esq.:

Good morning everybody, well, that ... This is pretty easy, except in one regard because it pretty much tracks exactly what Sal just told you about the attorney-client privilege. So any conversations or communications between the client and the accountant. So in your case, it would be the association, and particularly the board of the association and its accountants would be similarly privileged. And that would extend to people who also like managers who are necessary to the communications between the client and the accountant as long as there's an intent to keep that conversation or that communication privilege.

Here's the interesting thing about the accountant-client privilege. An accountant is defined in the statute, and this is for anybody who wants to geek out on, look at the statute, Florida statute 90.5055. An accountant is defined as a certified public accountant or a public accountant. Now, we've talked about that in the office many, many times. In fact, yesterday, we were talking about it again, and none of us really understand what's the difference between a certified public accountant and a public accountant, here's the best that I can come up with.

It's not a bookkeeper. I don't think it would extend to somebody who's doing bookkeeping functions. It may not extend to somebody doing bookkeeping functions, say at the management company. A public accountant at the very least is somebody who has an accounting degree and holds themselves out with themselves out as an accountant to the public. As far as I can tell, the difference between a certified public accountant and a public accountant is that a Certified Public Accountant obviously has gone through some certification process and only a Certified Public Accountant can file reports with the Securities and Exchange Commission or can do audits of publicly traded companies.

So that normally wouldn't apply to nonprofit community associations. If you're in doubt as to whether the person who is doing your financial auditing, record keeping is somebody that would be covered by this privilege, then by all means, speak to your general counsel, and ask them and get an opinion on there. And like the attorney-client privilege, it's the clients, only the client can waive it, it has to be preserved. If the client says to the accountant, "Don't disclose that." The client and the accountant can't and the accountant always has to presumptively believe that that information can't be disclosed unless somehow waived by the client.

And also like the attorney-client privilege, it doesn't extend to communications in furtherance of a crime or, wire fraud or bank fraud or something like that. So it's not any of those communications, but the regular communications back and forth between the association and its account for audit purposes, for annual audits, for tax filings, all of that stuff is generally going to be privileged against disclosure. The association should guard that privilege zealously in minutes that are going to be available to the public.

If you have decisions that are made with regard to advice provided by your accountants, you should be very careful about how you disclose that in minutes and to the extent that you disclose those communications in minutes. And again, that's something that you can run by general counsel. Easy, right? Okay. Thank you.

Alan Tannenbaum, Esq.:

Well, again, on the criminal side, it's interesting that if you robbed a bank yesterday, you can go seek the advice of your lawyer, your accountant about what you did, that conversation is privileged. If you walk into your lawyer and accountant and say, "I'm planning on robbing a bank tomorrow." That is not a privileged communication. So the aftermath is protected, the planning is not, not that anybody in this audience is planning on that, but keep that in mind. 

I'm going to talk about the husband-wife privilege in Florida. This is not directly pertinent to a lot of management issues, except sometimes you have these husband and wife pairs who let's say manage a beachfront community, it could be a little bit chauvinistic. The pattern is usually for the wife to handle the front office and the husband would be the maintenance guy, but sometimes that's reversed.

So during the marital relationship, you can't force a husband to testify against your wife or the wife to testify against the husband. So any pillow talk, there is a privilege for that. If you get divorced, the privilege still applies to the time that you were married. So if you get divorced, and you're particularly angry at your spouse, and you want to spill the beans about something, your spouse said during the marriage, they will be able to assert a privilege to stop you from doing that.

If you're in a divorce, it's no holds barred, you're able to present any testimony in the divorce and the privilege without apply in that proceeding itself. And to use the example of the breach fund manager if the wife embezzled funds from the association, the husband didn't know anything about that. And they're both charged with a crime of embezzlement and the husband needs to testify about what the wife may have said in order to be exonerated and the charge against the husband, in that circumstance, you can bring up a privileged information. Important, it doesn't apply to common law marriage, only applies to the traditional marriage, and it has not been modernized to cover husband, husband, or wife, wife. And maybe someday the legislature will get around to it.

Right now it's called ... Well, interestingly, it probably could be interpreted to cover illegal gay marriage too, but that has not been ... I have not seen the court opinion on that one yet. So Salvador, tell us about compromise and offers to settle and subsequent remedial measures. Pertinent to the Community Association field.

Salvatore Scro, Esq.:

Okay. So we see this a lot in matters we handle in the breach of contract cases, construction defect cases, things like that where there's claims against the developers or the general counsel or the subcontractors, and there's problems with the construction. The client sometimes will say, "Well, once we start, if they offer to settle, that would not be admissible." And we hear, but they know they were wrong because they were offering to pay us money.

Well, that's really not the case, they're trying to buy their way out of it. So the statute, the applicable statute if you want to look it up is and the evidence code is 90.408 and the way the statute reads is that evidence of an offer to compromise a claim which was disputed as to validity, or amount, as well as any relevant conduct or statements made in negotiations concerning a compromise is inadmissible to prove liability or absence of liability for the claim or its value.

So the key there is that there's a disputed amount. If there is an offer to compromise, that would be something that would not be admissible to show liability, it would not be admissible to show that they owed at least a certain amount of money, or the amount of money they've proposed. You will find that this happens in personal injury cases all the time and insurance company may offer to pay, that would not be admissible.

If an insurance company offers to pay in association for some claim, that's not admissible to show liability. The facts of the situation are what are admissible to show whether or not there's liability. Along with that is Section 90.407 which is subsequent remedial measures. So if somebody slips and trips and falls, say slips and falls, I'm from New York, so we're used to ice, but down here, you're not going to find that. So if somebody trips and falls on the sidewalk, and there's some impediment to walking and the association managers send somebody out there to make some adjustment or change to the sidewalk, that is not admissible into evidence to show liability.

So somebody tripped on the sidewalk, you can see to the jury or to the judge, "Hey look, they slipped and fell on the sidewalk. They knew it was a problem because they went right out there and fixed it." That is not admissible as towards liability. What there is an exception to the rule is that subsequent remedial measures, some action they have taken would be admissible if it's offered to show evidence of something else.

So if they say, "Well, this wasn't ... I didn't own this part of the property, this wasn't mine." Well, you can offer into evidence the fact that they were out there doing some repair or some sort of remedial measure as possibly evidence of ownership, or that they had control if they were leasing that area. Something to show other than the liability of the impediment or whatever the cause was that you're attributing the negligence to.

So you do not need to be afraid to go out there if something happens on the property, you do not need to be afraid to go out there and take some sort of remedial measure. You should not be out there discussing things. You shouldn't be out there saying anything like, "Oh, I knew this was going to happen." But go out there, do your job, take care of the situation, clean it up if you need to, and you can be assured that that would not be offered into evidence has something to show liability.

Alan Tannenbaum, Esq.:

And the concept behind what Sal has just described. That society needs cases to settle, the very ... If every case made it into court, the court system would be totally overwhelmed. So there's a public benefit to people being able to make settlement offers and resolve cases. And if your settlement offers were admissible in court, people would be reticent about trying to settle. And the same thing about the remedial measures, if those were admissible, manufactured items or site deficiencies, nobody would ever get them corrected because they'd be afraid that, "Well, it's going to be an admission in court of liability."

So those really are further in some cases getting resolved, and problems being corrected. The other part of it is if somebody is injured on your property, and there's a defect in that property, you can defend that first case to say, "Well, we didn't know there was a problem, and we weren't really negligent." But if you don't get it corrected, and the second person gets hurt, they now have a record it's going to make their case a lot better. So the issue is you should get items corrected that create some potential exposure.

So let's talk about what you can say or what you should say or what you should do. And let's use a trip and fall, somebody's near your dock, and they fall through a plank that was rotted, they're in pain, they're hurt, we get there, you're the manager, you're a board member. You can ask them how they feel. You can give them ... Make them more comfortable, you can call the ambulance, you can take them to the hospital. You can sympathize or empathize with their situation and it's best to do so because it's far less likely that somebody is going to sue the association if they are treated well at the time that they have a problem or an injury.

So you can write down a note that says, "I'm sorry for what had occurred, I'm sorry for your trouble, I'm sorry for your pain." That's never going to find its way into a court of law, a judge is never going to allow that in to try to prove that, "Well, they were empathetic or sympathetic. That means they must have felt guilty, that means they must have done it." That evidence will never get before a jury because again, from a public interest point of view, we want people to be sympathetic, empathetic, help them if they're injured.

But there's a very important distinction and it says right in the statute 90.4026. The statement or writing or the gesture expressing sympathy is not admissible. But a statement of fault which is part of or in addition to any of the above shall be admissible. So you've got to be very careful. You get out there and you're a manager and you say, "Oh man, it's terrible what happened to you. Are you okay? Let me make you more comfortable." And I told that board six times that they needed to get these planks fixed or the dock worked on.

Well, all the expressions of sympathy can I help you, so on and so forth are not going to get into evidence. But your statement about what the board should have done is readily admissible as an admission. So one of the things we greatly believe in is having a very discreet incident report form that you keep. For every incident, it my occur out of property. It should not talk about anything else, but the facts that were observed the statements that were made, at the time by people who were involved, time of day, photographs, but it really shouldn't get into any board policy or politics or talk about what the association should have done or should do in response to that.

It's all about what occurred to having a record of it and as you'll see later, you'll see why that type of of recommendation is important. And Sal, I'll cover the payment of medical and similar expenses because I think that's related. 

Michelle Colburn:

Okay. And, then hold on one second, then you have another question about a pool. So is it relevant if you have a pool function to have a lifeguard there? That was from Laurie.

Alan Tannenbaum, Esq.:

Okay. Let me get to those in a second. As far as a payment of medical and similar expenses. The association could pay the deductible for somebody's health insurance if they're injured. Again, any of the any of the promises to do that or the actual doing of it is not going to be invisible. So send them flowers, go to see them at the hospital, bring them a gift. If they're struggling to pay their health insurance deductible, it's certainly something the board to consider because it mitigates against the possibility that that party is really going to come against the association. So let me address a couple of the questions that Michelle has pointed out. All right, so [crosstalk 00:27:05]

Salvatore Scro, Esq.:

Alan, with regard to that pay medical expenses, what you said is important there. And this happens a lot, everybody goes to the doctor. Bedside manner is key. If you have a good bedside manner, it's less likely somebody is going to want to come after you for their piece of flesh. So it's always good to be nice. Like Alan said, you don't have to worry about certain things. As far as if you're paying medical expenses, or you offer to pay those medical expenses, that is something that ... The bedside manner is key. So keep that in mind.

Alan Tannenbaum, Esq.:

All right, let me answer Stan's question. That there's a legal opinion that the association wants to share with the owners. The reason the attorney-client privilege you want to make use of it is to protect the association from by a third party outside the community generally who would make use of that legal opinion and further a case against the association. If you get a legal opinion for instance from your lawyer about a covenant enforcement issue where it clearly expresses what the association's rights are, in enforcing the covenants, and you want to send that letter to the owners so that you can assure that your rules are going to be properly enforced.

There's really no impediment to releasing that letter. There's no downside to it. So in that case, what you're really talking about is are there instances where it's appropriate to waive the attorney-client privilege because that particular legal opinion is really helpful for the association to make that disclosure. So in that instance Stan ... Now, if the legal opinion was, let's say you had a construction defect case, and the lawyer wrote a lengthy letter talking about the strengths and weaknesses of the case.

You would not want to release that to the membership. You would not want to release that to or append that to the minutes. So the difference is can a third party who the association has got a legal dispute with make use of that opinion to their benefit? You want to protect the privilege. If it's an internal issue when there's really no downside to the large opinion being released to the community, there's less reason to protect it.

Yes and Laurie, yes, paying a medical bill does not assume any liability. So you can do that. There's a question about the condo is more liable if it holds a social event like a kid's pool party. Should they have guards there? It's a little bit outside the context of today's issue, and it would greatly depend on who's sponsoring the party. Is the association sponsoring it? Is it an individual owner who's bringing guests to the ... Put up your signage, you could probably request that they have a lifeguard on duty in order to approve a kid's pool party, that really gets a little bit outside of our field. That's a great general counsel question. So I'll leave it at that. Jon, you're going to talk to us about hearsay.

Jon Lemole, Esq.:

Yes, thank you. Folks, we probably spent ... Each of the three lawyers here probably spent weeks in law school going over hearsay rules, I'm going to try and distill what we learned in a couple of minutes here. So I hope I hit the points that are important to you all. And after 30 years of being a trial lawyer, and I'm sure other lawyers would agree with me when asked what hearsay is or is in most of us go, "Oh, I know it when I hear it." But here we go.

Let me see if I can share something here. Okay. So hearsay is one of those things that we deal with all the time, all the time in court because so much of what we know or so much of what we learn, and by we, I mean clients, people who may be testifying for the community on a certain issue, the source of that is maybe something that they heard from somebody else, or they saw written somewhere else. And so this is a very common thing that we deal with and that you all would deal with if you're in the position of having to litigate an issue before in court.

So let's talk about real quickly, what is hearsay. Hearsay in the statute is defined as a statement other than one made by the person who's testifying. So there's a person who's testifying in court about something and then there's the statement that's made by someone else who's called the declarant. But don't worry about that term, I'm in court saying that I heard or heard somebody say something, or read something that that somebody else authored or a statement in a document that I didn't see firsthand, or that I didn't experience firsthand.

So it's a statement other than the one made by the person testifying at trial. And here's the most important thing about hearsay is that it's got to be offered to prove the truth of the thing that you're saying. So let me give you a really basic example. And hopefully, this will clear it up for you. Somebody asks you, "When were you born?" You say, "In my case, I was born August 3rd 1966."

I don't know that firsthand. I certainly don't remember it. And if you do, I guess maybe you'd be a special person. But I know that because people have told me that's when I was born. Now, there's exceptions to this, certain family history is an exception to the hearsay rule, vital records. I learned this by looking at my birth certificate, that's all. That's all an exception to the hearsay rule. But that in a nutshell should give you a good idea of what hearsay is.

So anytime you're in court saying, "Well, I heard so and so say something." Or I read such and such in a report. You're going to get from the other side of hearsay objection, and then your lawyer is going to have to stand up and say, "Well, why can I ... Why is there an exception to this that I can prove here?" Let's talk about what a statement is. Okay. So talking about testifying as to a statement that's made by somebody else.

So it's repeating on the witness stand something someone else said or it's a document. I may be offering a document into evidence that contains statements of another person. So an incident report or a memorandum or a security law, gate logs, any of those things are potentially going to receive a hearsay reaction. Here's a new one, we'll have a little fun here. So here's Santa Claus and on the witness stand.

The other lawyer is saying, "So you admit that labeling my client is naughty is based on hearsay from other children, not from any actual facts?" That's just a funny way of encapsulating what the hearsay rule is. Okay, let me stop sharing this. Let's talk about exceptions. What kinds of things and I want to talk about this in the sense of what are some of the things that routinely happened with the Community Association and how you can anticipate these issues when they come up.

Okay, so the Florida Evidence Code defines divides exceptions into two instances. One where the person who said the thing is unavailable, can't find them, they're dead and therefore, you can admit certain statements that they made out of court. There are certain other exceptions that doesn't matter whether they're available now or not. So let's talk about the ones where the person whose statement you're trying to offer an evidence is unavailable.

You can always offer former testimony. So if that person is unavailable, and they've testified ... So let's suppose you have a member of your community, and you're in there, you've got an action against them for payment of assessments and this is the second case that you've had and in a previous case, you took a deposition of that person, and they said, "You know what? I'm never paying the assessments of this community, they're not going to get a red cent out of me." Then they die. You're suing their estate perhaps, to get these assessments and you want to admit that evidence that that prior sworn testimony. Well, you can do that as long as the person is not available or dead.

Here's another one that's interesting and important. Statement under the belief of impending death. So if a person is no longer available because they passed away, let's suppose you had somebody's walking on your property, they fall into a big, open, a hole in the sidewalk and after they fall into this hole and have this horrific head injury, they're lying there on the sidewalk, and they say, "I just fell into the hole. Oh my gosh, my head just went over, I'm going to die."

That statement if that person does pass away and somebody else goes into court say, "That's what he said. He said Billy tripped into the hole. That's what caused the injury, that's what caused him to die." That statement is admissible because it's a statement of a person who's commenting on the reason for their and the circumstances around their belief that they're about to die. Why is that important to a community if you have an incident? Right?

Anytime you have any kind of incident, accident at your community, it shouldn't be some ... There should be a procedure for getting out there. And having somebody get out there and record what's going on in the aftermath. What are people saying? So that you know and you can anticipate these things, and you can tell your lawyer, "Hey, be ready. This is what the guy said, somebody said, a passerby said that the person who fell in the hole said this is what they thought was this was the cause of the accident." That's all important stuff, your lawyer is going to want to know that to give you good advice on how to handle those things.

So the statement under a belief of impending death. The third one where you don't have to have ... Where the person is if they're not available, you can still admit a hearsay statement as if they make a statement against their financial or property interests. Okay, so any kind of statement which would be against detrimental to an interest that they have whether it's financial, or about their property. If they're unavailable, that stuff is deemed so important by the courts and the legislature that we don't take those statements lightly and people don't generally make them unless there's some ring of truth to them.

Okay, so those are the three areas of hearsay where you'd have to show if you want to admit those things that the person is no longer available. Now there's a whole another class of exceptions to the hearsay rule where it doesn't matter whether the person who said the thing. They may be alive and well, you don't need to bring them into court because certain types of statements ring true, they have an element ... And that's what underpins all this, they ring true there.

There's reasons to believe that people don't make these statements unless they're accurate or true or reliable. Okay, so I'm going to run through these real quick because I'm looking at the clock here. Spontaneous statements. Let's go back to the accident. Let's suppose somebody is watching this person fall into this big hole in the sidewalk, get horrifically injured, and they start yelling, "Oh my gosh, that guy just fell into the hole. He's bleeding, his skull is cracked open."

That person's statement about that spontaneous utterance of a condition or a thing that's happening, that is admissible. That person doesn't have to come to court. Somebody else can say, "I heard that person say that thing." Excited utterance, very similar to that. Spontaneous statements, excited utterances is they go hand in hand. There's statements about where somebody is excitedly, they're under the influence of this event or this condition and they're there spontaneously and excitedly utter, saying things about the thing about the condition that they're experiencing.

So again, from the association standpoint, anytime you have an incident, it's good practice to get out there and record what people are saying so that you can anticipate some of these things or it may be the opposite. Somebody may say, "Oh my gosh, that guy saw the hole, walked around it and faked it." You'd want to know that. Maybe that witness doesn't want to come to court, they don't want to be bothered, but you heard him say that. Well, that would be important to know.

So again, good or bad, know what you're dealing with, know what people are saying in incidents. A recorded recollection notes, not memorandums, incident reports. If you make an incident report while your security guard makes an incident report, it's fresh in their mind. It's got to be made in circumstances where it's fresh, it's at or near the time that the incident occurred, it doesn't have to be right then and there, but while it was fresh in their mind, they went back and recorded an incident report. Incident reports are going to be admissible, business records [crosstalk 00:42:56]

Alan Tannenbaum, Esq.:

Jon, before you move on from the incident report. So every manager and board member needs to hear this because in the introduction that I gave at the beginning of the session, we talked about being in court a year and a half after an issue occurred. And there's been a thousand things that have happened since then. And you can't remember precisely what occurred, but at the time that it did occur, you did a good memorandum or an incident report that was very factual, you could pull that report out.

It actually substitutes for your memory that, "I don't really remember it, but here's a report that I did at the time that it occurred." And that incident report or you're reading it, and then refreshing your memory. That's an exception to the hearsay rule. So that's why it's so important that the bias of the court system is recordations or recollections that are made at or near the time of the incident or the issue or there's a bias towards that evidence being admissible, versus eight months later deciding, "Well, I better write a report about that item I was involved in." That's less likely to be an admissible document for recollection eight months later. 

Jon Lemole, Esq.:

No, that's a great point. Yeah, absolutely. And when you think about the turnover that sometimes occurs in let's say with security personnel or guards, maintenance people, you may not have that person available, not that their availability matters under these exceptions, but those reports and the absence of a person a lot, that live person saying what they remember, that report is crucial. And even if you do have the person, they may say, "Well, it was a year ago, I don't really remember what happened, but I made a report about it."

Okay, here's the baby. This is one that lawyers deal with all the time and it's the business records rule or the business records exception. So anytime a company, an organization, a community association, a management company, any records that they regularly keep in the ordinary course of their business, it's a little bit more complex than that, but I'm going to distill it to those core elements. It's the regular records ordinarily kept in the course of the business of this organization and these are the types of records that this organization typically maintains or keeps.

All of those are going to come in under this exception to the hearsay rule. So the importance of this or for an association or management company is to have policies and practices around record keeping, and documentation of things. Okay, so architectural control issues. Let's say you deny somebody's request to paint their home a different color, the architectural review board denies an application. If you don't have a regular process for how you handled those requests, and the records relating to them, then you might not get certain information that's contained, or that was considered that that was discussed about that issue into evidence.

Similar thing would be security, security logs. You're logging, your security guard is logging all the cars that come in, you want to have ... That would qualify as a business record as to who came and went into the community. And so if somebody came into the community and committed a crime in the community, you could rely on that log to show, "Well, this car with this license plate which is registered to this person came into the community." I don't have to prove that ... I don't have to have the security guard come in and say, "Well, I saw it." I could put the records in and they would qualify under the business exception rule.

The key to that though is that you have to be ... The association has to be really careful and meticulous about keeping those records all the time and having policies about those, keeping those records, retaining those records. What are some of the others?

Alan Tannenbaum, Esq.:

Let's talk about assessment collection in particular because the corollary section is the absence of entry and records can also be admissible. So the reason management companies have a particular system for recording assessment payments where when a payment comes in, the software records, the receipt of that paper, or the non-receipt of that payment, you're a year and a half later trying to prove that the owner failed to pay their assessment and the person who for the management company who oversees that accounting system would be able to go in and say, "This is the practice, this is how the software works. Every payment that comes in gets recorded, gets data entry and here's a report for February of last year, and there's no showing of a payment for that particular unit."

That business record is going to get into evidence if it's properly authenticated to prove that that assessment payment is not paid, that particular employee of the management company is not going to remember for the number of associations that they're overseeing that that particular association one payment did not come in last February. But the authentication and the entry into evidence of the technology, the software and the report will get in. I'm sorry Jon, go ahead.

Jon Lemole, Esq.:

No, that's absolutely correct. And where we run into it frequently in our practice would be in how the community handles homeowners complaints or unit owner complaints. If you have strong protocols and procedures about handling complaints, that makes our job easier if we want to put evidence, a homeowner says, "I've got these huge cracks in the stucco on the outside of my building." Maybe we don't need to bring that owner in to testify about that if you've got a written complaint, and it's maintained in the regular course of the community association business and so on and so forth. So that's all really important stuff.

Admissions are always ... You hear somebody make an admission about something, then that's going to always be admissible even if the person is not there to make the admission in court. Former testimony goes without saying anybody gives testimony under oath, that would be admissible too even though it's hearsay. So those are the big exceptions, there's 20 more exceptions, but for our purposes, they're not going to be really relevant to what you all do. And we're getting near the end. So I'm going to pass it back to Alan, thank you.

Alan Tannenbaum, Esq.:

Okay, we're ask Sal, there's a few minutes we have left to talk about self-authentication in public records.

Salvatore Scro, Esq.:

Make this quick. Basically, what would concern the associations and the managers of this particular section goes along with what John said. For the most part, the public records which runs along with this, but self-authentication would be if there's something under seal or you can get a certification from the public officer that where the document is kept, it states that this is kept, and it was properly recorded. So if it's an official record, it was authorized by law to be recorded and actually was recorded, then the custodian of that can give a certification that this is a true document.

You would not need to bring in the maker of the document to testify as to the authenticity of the document. What's a concern for the management companies is just what Alan and Jon talked about, those particular documents. So an original or duplicate of evidence, this is what's coming from the statute that would be admissible under the hearsay exceptions which is maintained in a foreign or domestic location and is accompanied by a certification or declaration from the custodian of the records or other qualified person certifying or declaring that the record was made at or near the time of the occurrence of the matters set forth.

By or from information transmitted by a person having knowledge of those matters. For example, if you take an incident report, and it was kept in the course of a regularly conducted activity of the business, or entity, so you have to say, "For example, we always make these reports at times, events and incidents like this." And was made at a regular practice in the course of the regularly conducted business activity. Now, along with that, and I'll touch on this very briefly as public records.

Again, official records or documents to be recorded or file that actually were if they're authenticated as stated by the custodian of those records. So why would you need a copy of the records for example, if you have a dispute as to who has ownership of a particular condominium and you want to bring in a recorded deed or something like that? That may be an issue where you need to go to get a public record and get a certification of that public record, but for the most part, that's about where we're at on that.

Alan Tannenbaum, Esq.:

Yes, Sal, let me mention the assessment situation. If you're in an assessment collection, action, you are about to go to court, you have maybe one of the younger lawyers from the law firm showing up, please ask them if they have a certified copy of that assessment lien because a shrewd lawyer defending that unit owner with the lawyer presenting a copy of the assessment lien trying to get that into evidence can object to it on the basis that it's not a certified copy and I defended a unit or a very large assessment claim early in my career where the lawyer for the association did not have a certified copy of the lien.

We objected to it, the judge would not allow a recess and the lien count, and the ability to get attorneys fees fell with the fact that they couldn't get the lien into evidence because it was not a certified copy. So a little tip.

Salvatore Scro, Esq.:

Okay. Well, we have a few minutes and I'm sure we have some questions that we needed to address.

Alan Tannenbaum, Esq.:

There were some questions set in advance, which is better, arbitration or mediation? They actually are not ... Mediation as a settlement process. Arbitration is a situation where a private party determines a dispute and it's binding upon you, somebody who's not a judge. So we like circuit court, if you're going to take a matter to dispute to go to state court with it if the association's generally the plaintiff, but we believe and most cases end up getting mediated. So they're not really in opposition to each other. Let me see what else we had.

Salvatore Scro, Esq.:

One of the questions that came as I was speaking was, how do private emails apply to all of this? I believe that had to deal with either ... I don't know if that dealt with hearsay, or public records, or whatever, but private emails, again, if you're the one testifying in court, and the email was sent to you, then you would be able to testify as to the receipt of the email and who it was from. If you just want to introduce somebody else's email, that won't fly unless you or somebody copied on it.

You can't say somebody gave me this email, there would have to be some authentication to that. But again, as board members, you need to be careful about what you discuss through each other as a board between emails because those can be considered association records which would be discoverable. So I think [crosstalk 00:57:34]

Alan Tannenbaum, Esq.:

Yeah, we're going to answer a number of questions offline because we got a lot of good ones and we don't want to hold anybody up here. Really, the takeaways from today, get your procedures in order so that you can authenticate appropriately the business records that you might need to get it to evidence. Don't be afraid to be sympathetic to somebody injured on your property, that's not invisible. Definitely repair items that have the ability of causing further damage.

And don't combine your incident reports with opinions and policy and so forth. They should basically be a discreet document that as Jack Webb used to say, "Just the facts." Definitely recording what people said at the time, photographs appropriately marked, and so forth. So those are some of the takeaways. You could fill out the poll if you like. I see the Michelle put that up. Michelle will deal with CEU credits for all the managers, so contact her offline if you have any questions about that.

We'll try to answer as many questions as we can offline. Like I said, there were some very good ones, but this was a packed presentation. And anybody has any questions and follow up, we're happy to respond as long as again, it's within our areas of trial practice and it's construction, we're happy to respond to those. Other than that, we've hit noon.

Salvatore Scro, Esq.:

Thank you very much, good seeing everybody.

Michelle Colburn:

And Sal and Jon and Alan are available at anytime, so please feel free to reach out to them via email or me and we will answer your questions and thank you all for joining us, and we will see you at our next Smart Board and Property Manager Guide, Legal Guide in July.


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