Opinion
10-P-2193
10-25-2011
BURNS & LEVINSON, LLP v. MDR CONSTRUCTION COMPANY, INC.
NOTICE: Decisions issued by the Appeals Court pursuant to its rule 1:28 are primarily addressed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, rule 1:28 decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28, issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
For several years, the law firm of Perkins, Smith and Cohen (PSC), provided legal services to the defendant, MDR Construction Company, Inc., and sent to it regular invoices summarizing the work PSC had completed and stating the amount owed. In 2006, PSC was acquired by the plaintiff, Burns & Levinson, LLP, with the plaintiff acquiring PSC's accounts receivable. After acquiring PSC's accounts receivable, the plaintiff brought, essentially, a collection action in the Superior Court against the defendant. Following a jury-waived trial, the judge, after offsetting a counterclaim by the defendant, awarded the plaintiff approximately $270,000 in unpaid fees.
On appeal, the defendant argues that the evidence was insufficient to support the judge's finding that the plaintiff had the right to collect funds owed by the defendant to PSC. In addition, it claims that the judge erred by admitting in evidence certain billing records and statements under the business records exception to the hearsay rule. We affirm.
1. Sufficiency of evidence. In considering a challenge to the sufficiency of the evidence in a jury-waived trial, we review the judge's findings of fact to determine whether they are 'clearly erroneous.' Anastos v. Sable, 443 Mass. 146, 149 (2004).
At trial, the plaintiff introduced a signed copy of an agreement indicating PSC's intent to transfer its accounts receivable to the plaintiff. Together with that agreement, it introduced an unsigned copy of the general bill of sale effectuating the transfer contemplated in the agreement. In addition, Robert Friedman, former managing partner at PSC, testified that the transfer of PSC's accounts receivable was, indeed, completed.
The defendant argues that because the general bill of sale purporting to effectuate the transfer of the accounts receivable is an unsigned copy rather than the original, it should have been excluded under the best evidence rule. See Commonwealth v. Ocasio, 434 Mass. 1, 6 (2001). Without the general bill of sale, the defendant contends, the plaintiff only can rely on the agreement to prove the transfer. And the agreement, it notes, evidences only an intent to make a transfer in the future, rather than a completed transfer. The defendant then suggests -- by analogy to U.S. Natl. Bank Assn. v. Ibanez, 458 Mass. 637, 649-651 (2011) -- that this evidence of an intent to transfer the accounts receivable was insufficient to prove the plaintiff's ownership of them.
We are not persuaded. The defendant's argument ignores Friedman's testimony that PSC's accounts receivable were sold to the plaintiff. Friedman, as the former managing partner at PSC, had personal knowledge of the transaction between PSC and the plaintiff. That testimony alone could have provided a sufficient evidentiary basis for the judge to conclude that the plaintiff owned the defendant's account. See Anastos, 443 Mass. at 149. Thus, even if the best evidence rule would have excluded the general bill of sale, there still was sufficient evidence to conclude that the plaintiff owned the account, and the finding is not 'clearly erroneous.' Ibid.
Moreover, the defendant's analogy to Ibanez is inapposite. Ibanez concerned the assignment of mortgages, not accounts. The assignment of mortgages is governed by G. L. c. 183, § 3, which requires a writing signed by the mortgagor. See Ibanez, 458 Mass. at 649 ('the assignment of a mortgage is a conveyance of an interest in land that requires a writing signed by the grantor '), citing Saint Patrick's Religious, Educ. & Charitable Assn. v. Hale, 227 Mass. 175, 177 (1917). No such requirement exists for the transfer of accounts receivable as part of the sale of a business. See G. L. c. 106, § 9-109(d) (4) (Uniform Commercial Code's requirements inapplicable to sale of accounts when part of sale of business). Given the absence of statutory requirements for documenting transfers of accounts receivable, the judge properly could have concluded from the agreement alone that the transfer it contemplated eventually took place, especially in light of Friedman's testimony to that effect. A finding that the transfer took place based on reading the agreement together with Friedman's testimony is not 'clearly erroneous.' Anastos, 443 Mass. at 149.
2. Admissibility of business records. Hearsay is 'generally inadmissable unless it falls within an exception to the hearsay rule.' Commonwealth v. Rice, 441 Mass. 291, 305 (2004). Mass. G. Evid. § 802 (2011). General Laws c. 233, § 78, provides an exception to the hearsay rule for the admission of business records. To qualify for this exception, a document must be: (1) made in good faith; (2) made in the regular course of business; and (3) made before the action began. See Mass. G. Evid. § 803(6)(A); Beal Bank, SSB v. Eurich, 444 Mass. 813, 815 (2005). In addition, it must have been the business's regular practice to make such records at or about the time the particular record was made. See ibid.
Here, the defendant complains that exhibits one through eight, i.e., the billing statements, were not properly entered in evidence because they were created by the plaintiff, not PSC, based on computerized records from PSC, only a few weeks prior to the commencement of the litigation. Because the documents are not PSC's original billing documents, but rather a reproduction printed by the plaintiff shortly before commencing litigation, the defendant contends that the documents should be considered to have been prepared in anticipation of litigation. We disagree.
While it is true that the documents at issue were printed shortly before litigation, the underlying records were not prepared in anticipation of litigation. Cf. id. at 818 ('[B]usiness records of one business are admissible as the business records of another business where such records are integrated into the latter business's records and relied on'). The evidence established that the documents were prepared prior to 2006, and that it was PSC's regular practice to prepare such billing statements for its clients. The fact that the plaintiff printed copies of the documents shortly before commencing litigation does not show that the original, underlying business records were prepared in anticipation of litigation.
In addition, the defendant's argument that Friedman's corroborating testimony about the billing statements was insufficient to establish the admissibility of these documents misconceives the role of such testimony under G. L. c. 233, § 78. Testimony about the accuracy of a business record goes to its weight, not its admissibility. See G. L. c. 233, § 78; Beal Bank, 444 Mass. at 816 (personal knowledge is 'a matter affecting the weight [rather than the admissibility] of the record'), quoting from Wingate v. Emery Air Freight Corp., 385 Mass. 402, 406 (1982). An otherwise properly admissible business record does not become inadmissible simply because a witness who testifies about its contents cannot be absolutely certain of its accuracy. See ibid.
Amended judgment affirmed.
By the Court (Kantrowitz, Graham & Fecteau, JJ.),