Opinion
NOT FOR PUBLICATION
Argued and Submitted at Los Angeles, California: February 23, 2005
Appeal from the United States Bankruptcy Court for the Central District of California. Honorable Vincent P. Zurzolo, Bankruptcy Judge, Presiding. Bk. No. LA 03-10365 VZ.
Before: MARLAR, BRANDT and KLEIN, Bankruptcy Judges.
MEMORANDUM
INTRODUCTION
In a contested claim objection proceeding, the bankruptcy court disallowed a presumptively valid proof of claim for unpaid compensation based on affidavit testimony presented by the objecting trustee. Such testimony was inadmissible hearsay and, thus, could not deprive the claim of its evidentiary presumption.
Even though there were disputed material facts, the bankruptcy court did not conduct an evidentiary hearing as mandated by Rules 3007 and 9014(d). Instead, it improperly shifted the burden of proof back to the claimant, found that his compensation claim was not supported by sufficient accounting evidence, and summarily ruled in the trustee's favor.
Unless otherwise indicated, all rule references are to the Federal Rules of Bankruptcy Procedure (" Fed. R. Bankr. P."), Rules 1001-9036, which make applicable certain Federal Rules of Civil Procedure (" Fed. R. Civ. P."), and all chapter and section references are to the Bankruptcy Code, 11 U.S.C. § § 101-1330.
We hold that, in the absence of waiver, the bankruptcy court was required to resolve all material factual issues in the same manner as in an adversary proceeding. Here, the bankruptcy court erred in ruling without holding an evidentiary hearing, and its order sustaining the objection is therefore REVERSED AND REMANDED.
FACTS
Debtor law firm Lyon & Lyon, LLP (" Debtor") dissolved and ceased operations in September, 2002. Appellant Michael Bolan (" Bolan") was a former associate of Debtor. His employment terminated on August 31, 2002, because of the firm's dissolution.
On December 5, 2002, Bolan filed, in Orange County Superior Court, a first amended complaint (" Complaint") against Debtor, seeking damages of $72,055. The Complaint asserted counts for violation of the California Labor Code for wages owed, breach of express and implied contract, and unfair business practices.
The action was stayed when Debtor filed this voluntary chapter 11 petition, and the action was not removed to bankruptcy court. In its bankruptcy case, Debtor's liquidation plan was confirmed and a post-confirmation trustee (" Trustee") was appointed.
Bolan filed a proof of an unsecured priority claim against the estate in the amount of $72,055 for wages, salaries and compensation. The proof of claim indicated that the priority claim would be capped at $4,650 pursuant to § 507(a)(3) , and that the balance would therefore be an unsecured claim.
In 2004, this amount was adjusted up to $4,925. See 11 U.S.C.A. § 507(a)(3).
In support of the proof of claim, Bolan attached selected pages of the " Lyon & Lyon Attorney Manual" (" Manual"), dated January 7, 1992.
Trustee filed an objection to Bolan's proof of claim, attached a copy of the Complaint and disputed its allegations. Trustee maintained that he could not " evaluate the accuracy of [Bolan's] claim nor the merits of his damages calculations" unless Bolan produced additional evidence, such as the following: (1) the amounts Bolan was paid by Debtor between March 2001 through August of 2002, (2) his collected monthly receipts, and (3) any system of compensation that was in place other than the one under which he had been compensated. See Claim Objection (Jan. 29, 2004), at 6. Trustee requested the court to set the matter for an evidentiary hearing, pursuant to Rule 7001. Trustee also objected to any priority treatment for Bolan's claim.
Trustee stated:
Trustee attached the declaration of Trish Lopez (" Lopez"), who was Debtor's Controller from March 2002 through September 1, 2002. Lopez stated that her declaration was based upon " personal knowledge, " that her job " included financial statement review, approving invoices, managing the budget and reforecasting the budget and payroll" and " responding to accounts receivable inquiries." Decl. of Lopez (Jan. 30, 2004), ¶ ¶ 1, 2. In paragraph 6, Lopez stated:
6. Based upon my position as Controller of the Debtor and based upon my review of the Debtor's books and records, I have determined that Michael Bolan is a former employee of the Debtor. His services were terminated as of August 31, 2002. The Debtor's books and records reflect that all compensation earned by Michael Bolan was paid.
Id.
Bolan filed his opposition and attached his declaration, in which he calculated the amounts owed to him, and additional documentation, including: (1) the Complaint; (2) Debtor's " Commission System" guidelines, dated July 3, 2001; and (3) various in-house e-mails concerning the commission system, compensation for associates, and Bolan's vacation pay. For the first time, Bolan presented the basis for his claimed compensation. His work and compensation evidence is paraphrased below:
o Bolan was first hired by Debtor in 1996 and voluntarily separated in August of 2000. At that time Bolan was given the Manual as his employment contract. He was a salaried employee, but later became eligible for, and was compensated pursuant to, a collection-based commission system. Under that system, commissioned associates received 35% of their collected receipts monthly. Manual, § 3.2.
o Commissioned associates received vacation pay at the rate of 1/26th of the prior year's commissions. Manual, § 3.8.
o Commissioned associates who left the firm received " run-off" commissions, consisting of 35% of the collected receipts, for three months. Manual, § 3.2.
o When Bolan voluntarily left employment, in August, 2000, he was paid all the amounts owed to him, including wages, vacation pay and run-off commissions.
o Bolan was rehired in March, 2001. At that time, Debtor was compensating its commissioned associates under a billed-based commission system.
o In July, 2001, Debtor changed its compensation system from a billed-based system to a collection-based system. Because Bolan had not built up enough receivables to be compensated under the new collection-based system, Bolan was " forced" to accept compensation under a " salary system." Id., ¶ 9.
Later, the bankruptcy court found that Debtor had the discretion, under the Manual terms, to modify its compensation scheme without prior written or oral notice. Bolan has not challenged this finding on appeal and has therefore waived the issue. See Laboa v. Calderon, 224 F.3d 972, 981 n.6 (9th Cir. 2000).
o In December, 2001, Debtor paid Bolan $40,000, which it maintained was a bonus, but which Debtor alleged was partial payment of compensation.
Bolan stated that he had received a total of $178,944 in wages, but calculated that he was still owed an additional $72,055 for the time period March, 2001 through August, 2002.
The alleged deficits were in three categories: wages ($36,516), vacation pay ($15,539) and run-offs (three months--September, October and November, 2002--estimated to be $6,800 per month or a total of $20,400). Essentially, his argument was that Debtor failed to pay him the required amounts for his legal services because it paid him under a salary system instead of the billed-based commission system under which he had been rehired in March, 2001, and failed to pay vacation and run-off commissions according to the Manual, which he believed was still in effect.
Bolan also argued that Trustee had failed to meet his burden of producing sufficient admissible evidence in support of his objection, because California's labor laws required the employer to maintain employment records and Lopez's declaration contained only a conclusory statement that Bolan had been paid in full.
Trustee then filed a reply and the declaration of Mary Feliton (" Feliton"), who was the acting administrator of Debtor from the fall of 2001 through September 1, 2002. Feliton stated that her declaration was based upon " personal knowledge, " and that her job included the " administration of all non-legal activities." Decl. of Feliton (April 13, 2004), Trustee's Reply, p. 8-9. Among the pertinent paragraphs of Feliton's declaration were the following:
5. Based on my review of the Debtor's records, the Debtor changed its compensation system on or about July 1, 2001 from a billed-based system to a collections based system. This change affected the compensation of all billed-based commissioned employees, including Michael Bolan.
6. Based upon my review of the Debtor's books and records, I have determined that Michael Bolan received a discretionary bonus from the Debtor in December of 2001 in the amount of $40,000.
Based upon my review of the Debtor's books and records, I have determined that the debtor collected, based upon Mr. Bolan's hours in 2002:
September
$27,313.66
October
$ 2, 047.50
November
$ 3, 878.20
Id.
Bolan then objected to both the Lopez and Feliton declarations (the portions cited above) as hearsay.
The bankruptcy court allowed Bolan to make an oral objection to the Feliton declaration at the April 20, 2004 hearing, because he complained that he had not received Trustee's reply until one day before the hearing.
At the April 20, 2004 hearing on the objection, the court noted that Bolan had an opportunity to conduct discovery and examine Debtor, but failed to do so. Nor did Bolan's attorney request a continuance of the hearing in order to conduct discovery.
The bankruptcy court then made its findings and conclusions on the record. First it overruled Bolan's hearsay objections to the Lopez and Feliton declarations, and determined that Trustee met his burden of providing sufficient rebuttal evidence. It found that the burden of proof shifted back to Bolan, but that he had not produced the required records to support his claim that he had not been fully compensated. The court stated:
[I]t was up to claimant to show me during what term or what, what time during this employment the billing based compensation was in effect, how many hours were billed, and what was due, and the same thing with regards to collections. . . . [T]he claimant has failed to establish to me on purely an accounting basis, how much of that compensation would fall under which system and why.
Tr. of Proceedings (April 20, 2004), p. 13-14.
Thus, the bankruptcy court found that Bolan had not produced an accounting to establish that he was owed any additional compensation for wages. Regarding vacation pay, the bankruptcy court found that Bolan's claim was without merit because it was based on a different work schedule than the one set for him by Debtor. Regarding run-off commissions, the bankruptcy court concluded that Bolan presented no evidentiary basis for such payments under a salary system.
The bankruptcy court's order disallowing Bolan's proof of claim was entered on April 27, 2004. Bolan timely appealed.
ISSUES
1) Whether Bolan and Trustee met their relative burdens of production and/or proof under Rule 3001(f).
2) Whether the bankruptcy court erred in shifting the burden of proof back to Bolan without first conducting an evidentiary hearing.
STANDARDS OF REVIEW
The bankruptcy court's findings of fact are reviewed for clear error, and its conclusions of law are reviewed de novo. Neilson v. United States (In re Olshan), 356 F.3d 1078, 1083 (9th Cir. 2004). The interpretation and application of the Bankruptcy Rules is a pure issue of law, which we review de novo. Temecula v. LPM Corp. (In re LPM Corp.), 269 B.R. 217, 220 (9th Cir. BAP 2001), aff'd, 300 F.3d 1134 (9th Cir. 2002).
Whether the bankruptcy court correctly allocated the burdens of proof is a question of law, which we review de novo. W. Wire Works, Inc. v. Lawler (In re Lawler), 141 B.R. 425, 428 (9th Cir. BAP 1992).
Whether a proof of claim is executed and filed in accordance with the Bankruptcy Rules, and whether an objecting party has produced sufficient evidence to rebut an evidentiary presumption are both factual questions that we review for clear error. Garner v. Shier (In re Garner), 246 B.R. 617, 619 (9th Cir. BAP 2000).
We review the bankruptcy court's evidentiary rulings for an abuse of discretion. Latman v. Burdette, 366 F.3d 774, 786 (9th Cir. 2004); Cal. State Bd. of Equalization v. Renovizor's Inc. (In re Renovizor's, Inc.), 282 F.3d 1233, 1237 n.1 (9th Cir. 2002). To reverse on the basis of an erroneous evidentiary ruling, we must conclude that the bankruptcy court abused its discretion and that the error was prejudicial. Latman, 366 F.3d at 786. A bankruptcy court necessarily abuses its discretion if it bases its decision on an erroneous view of the law or on clearly erroneous factual findings. Warrick v. Birdsell (In re Warrick), 278 B.R. 182, 184 (9th Cir. BAP 2002).
DISCUSSION
A. Burden of Proof and Evidentiary Issues
(1) Rule 3001
Each party disputes that the other carried its relative burden of proof under the Bankruptcy Rules. The Bankruptcy Rules and our case law have put in place a general procedure to allocate the burdens of proof and persuasion in determining whether a claim is allowable.
The starting place is Rule 3001(f), which provides that " [a] proof of claim executed and filed in accordance with these rules shall constitute prima facie evidence of the validity and amount of the claim." Fed.R.Bankr.P. 3001(f). This rule creates an evidentiary presumption of validity for a properly filed proof of claim. Garner, 246 B.R. at 620.
The rules further provide that when a proof of claim is based on a writing, the writing must be attached, or else an explanation must be attached as to why or how such writing has been lost or destroyed. Fed.R.Bankr.P. 3001(c).
Bolan's proof of claim demanded $72,055 in unpaid wages, vacation pay and collection run-offs. The only writing which he attached was a selected portion of the Manual. However, the Manual provisions did not purport to explain what payments Bolan had already received, or how his claim was calculated according to the system utilized by Debtor. Although the $72,055 was the amount of damages sought in his Complaint, one would not have known how he calculated his economic harm, since Bolan attached neither a copy of the Complaint nor a calculation to his proof of claim. Moreover, Bolan's proof of claim contained absolutely no explanation as to why he was entitled to an unsecured priority claim. See 11 U.S.C. § 507(a)(3)(A) (providing for wages, salaries or commission, including vacation, earned within 90 days before the petition date, to the extent of $4,925).
Trustee contends that Bolan failed to file a presumptively valid proof of claim. The bankruptcy court seemingly agreed when it stated:
It is important to note that for the proof of claim to attain the status of deemed allowance, it has to be properly filed. To be properly filed, it has to be supported by any and all admissible documents. In a case such as this, where the employee did receive some compensation, but claims he's entitled to more; the burden on the respondent is to show some kind of documentation or some other form of testamentary evidence, which shows the -- an accounting essentially, of time spent, which compensation system applied and which did not.
Tr. of Proceedings (April 20, 2004), P. 12-13.
The rules do not require, however, that a claimant file evidence along with the proof of claim in order to attain prima facie effect. Garner, 246 B.R. at 621.
Rule 3001 is the definitive authority concerning the contents of a proof of claim. See 8 Collier on Bankruptcy ¶ 3001.03 (Henry J. Sommer and Alan N. Resnick, eds., 15th ed. rev. 2004). When a claim is based on a writing, this rule provides that such writing should be filed with the proof of claim. Fed.R.Bankr.P. 3001(c). Bolan attached Manual excerpts in sufficient compliance with this rule.
Nevertheless, Trustee challenges the legal sufficiency of Bolan's compensation claim because he did not attach payroll accounting records in support of his allegations.
Rule 3001 does not require that the claim allege facts sufficient to support a legal liability. Nonetheless, this common-sense requirement has been grafted onto the rule by case law. See Lundell v. Anchor Constr. Specialists, Inc. (In re Lundell), 223 F.3d 1035, 1039 (9th Cir. 2000) (objector must produce evidence to refute at least one of the allegations essential to the claim's legal sufficiency) (citing In re Allegheny Int'l, 954 F.2d 167, 173-74 (3d Cir. 1992)); Ashford v. Consol. Pioneer Mortgage (In re Consol. Pioneer Mortgage), 178 B.R. 222, 226 (9th Cir. BAP 1995), aff'd, 91 F.3d 151 (9th Cir. 1996) (" In other words, a claim that alleges facts sufficient to support a legal liability to the claimant satisfies the claimant's initial obligation to go forward.") (quoting Allegheny Int'l, 954 F.2d at 173). Furthermore, the court noted that Bolan had the opportunity to conduct discovery to obtain such records but did not do so.
For Bolan's compensation claim, payroll accounting records would constitute additional evidence, but were not the requisite writing to show Debtor's legal liability. Rather, Bolan's allegations that he was owed additional compensation under the Manual were legally sufficient when supported by his interpretation of his attached Manual excerpts. Therefore, we reject Trustee's suggestion that payroll records are a per se required writing for any compensation claim, under Rule 3001(c), and hold that Bolan's proof of claim was presumptively valid.
Appropriately, the bankruptcy court did not readily reject Bolan's proof of claim, but instead placed the burden on Trustee to come forward with some counter-evidence.
(2) § 502(a) and Rule 3007
Under § 502(a), a proof of claim is deemed allowed, unless a party in interest objects. 11 U.S.C. § 502(a); see also Fed.R.Bankr.P. 3007. The filing of an objection to a proof of claim " creates a dispute which is a contested matter" within the meaning of Bankruptcy Rule 9014 and must be resolved after notice and opportunity for hearing. See Adv. Comm. Notes to Fed.R.Bankr.P. 9014; Jorgenson v. State Line Hotel, Inc. (In re State Line Hotel, Inc.), 323 B.R. 703, 710 (9th Cir. BAP 2005).
Trustee objected to the proof of claim and had to produce sufficient evidence to " show facts tending to defeat the claim by probative force equal to that of [its] allegations." Lundell, 223 F.3d at 1039 (alteration added) (quoting Wright v. Holm (In re Holm), 931 F.2d 620, 623 (9th Cir. 1991)).
Local Bankruptcy Rule 3007-1(c)(1) provides that objections to claims must be supported by admissible evidence filed with the objection. See Local Bankr. R. 3007-1(c)(1), C.D. Cal. With his response and reply, Trustee filed the declarations of Lopez, which concluded--without specifics--that Debtor had been paid all of the compensation to which he was entitled, and Feliton, which recited a similar conclusion.
(3) Hearsay Objection
Bolan contends that the bankruptcy court erred in admitting both declarations because the challenged portions were hearsay. Federal Rule of Evidence (" Fed. R. Evid.") 801 (made applicable in contested matters by Rule 9017) defines hearsay as " a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted." Moreover, Bolan contends that the declarations did not meet the business records exception to hearsay because the declarations failed to attach the actual documentary evidence being attested to, i.e., Bolan's payroll records.
An exception for hearsay exists where the custodian or witness testifies that such record was (1) made in the regular practice of that business; (2) and kept in the regular course of that business; (3) by a person with knowledge; and (4) at or near the time of the recorded event. Spear v. Global Forest Prods. (In re Heddings Lumber & Bldg. Supply, Inc.), 228 B.R. 727, 730 (9th Cir. BAP 1998).
Lopez's declaration was made " upon personal knowledge"; she stated that her job " included financial statement review, approving invoices, managing the budget and reforecasting the budget and payroll" and " responding to accounts receivable inquiries." Decl. of Lopez (January 30, 2004), ¶ 1, 2. She stated that she had reviewed " Debtor's books and records" and concluded that " Debtor's books and records reflect that all compensation earned by Michael Bolan was paid." Id., ¶ 6.
It is axiomatic that testimony concerning business records must refer to records being proffered into evidence. Here, the " books and records" attested to were not presented for admission into evidence. As a result, Lopez's testimony as to the content of the books and records was merely based on her personal knowledge and conclusions as to the contents of such unauthenticated records, and, therefore, did not fall under the business records exception. Her statements were inadmissible hearsay.
In a contested proceeding, declaration evidence based on personal knowledge is not considered to be hearsay; however, the evidentiary restrictions on hearsay within hearsay still apply. Garner, 246 B.R. at 625. Federal Rule of Evidence 805 states that " [h]earsay included within hearsay is not excluded under the hearsay rule if each part of the combined statements conforms with an exception to the hearsay rule provided in these rules." Fed.R.Evid. 805.
An illustration is the business record coming within the hearsay exception provided in Rule 803(6), which includes within it information supplied by an informant not himself under a duty to provide such information. If the informant's statement itself qualifies as a hearsay exception, for example, an excited utterance, Rule 803(2), the record containing it is admissible provided among others that the person recording the excited utterance was under a business duty to do so. Of course, if either the original statement or the statement within which the second level statement appears is admissible as not hearsay as defined in Rule 801(d), provided that the remaining statement is so exempted or qualifies as a hearsay exception, the two statements are admissible.
Hon. Barry Russell, Bankr. Evid. Manual, § 805.1, p. 1154 (2004).
Here, even though Lopez's statement based on personal knowledge was an exception to the hearsay rule for purposes of the contested matter, the underlying records to which she attested were unavailable and therefore, still hearsay. Feliton's declaration was no different.
These hearsay statements were then relied upon by the court in shifting the burden of proof back to Bolan and in ruling as it did against him. Thus, the evidentiary admission prejudiced Bolan. Latman, 366 F.3d at 787 (improper shifting of burden of proof was prejudicial).
We hold therefore that the bankruptcy court abused its discretion to the extent it relied on the offending portions of the Lopez and Feliton declarations in disallowing Bolan's claim, and erred in shifting the burden of proof back to Bolan.
B. Requirement for Evidentiary Hearing
Admitting unreliable declaration evidence to rebut the evidentiary presumption of the validity of Bolan's claim was just one problem with the outcome of this contested matter.
According to the rules, only if the objector produces sufficient evidence to negate the claim's validity does the burden of persuasion shift back to the claimant, who then has the ultimate burden to demonstrate that the claim deserves to share in the distribution of Debtor's assets. See Spencer v. Pugh (In re Pugh), 157 B.R. 898, 901 (9th Cir. BAP 1993).
Trustee's declaration evidence was inadmissible. The remainder of Trustee's objection was a denial of the factual allegations of Bolan's Complaint, which Trustee authenticated and attached to his objection. Trustee's pleading was in the nature of an answer, rather than in the form of an affidavit. Indeed, Trustee requested that the contested matter be set for hearing as an adversary proceeding and that time be allowed for discovery.
Undisputedly, there were material factual issues concerning the allegations of Bolan's Complaint. Trustee therefore requested Rule 7001 relief, in accordance with Rule 3007, which provides, in pertinent part:
If an objection to a claim is joined with a demand for relief of the kind specified in Rule 7001, it becomes an adversary proceeding.
Trustee's arguments created issues concerning the validity and extent of Bolan's interest in Debtor's property (Rule 7001(2) or for declaratory relief (Rule 7001(9)).
Even if an adversary proceeding were not required here, Rule 9014 grants some of the same adjudicative protections for contested matters. Specifically, Rule 9014(a) provides that a motion in a contested matter shall be served in the same manner as a summons and complaint in Rule 7004.
Also, where there are disputed facts, Rule 9014(d) provides: " Testimony of witnesses with respect to disputed material factual issues shall be taken in the same manner as testimony in an adversary proceeding." Fed.R.Bankr.P. 9014(d). Subsection(d) was added to the Bankruptcy Rules in 2002
to clarify that if the motion cannot be decided without resolving a disputed material issue of fact, an evidentiary hearing must be held at which testimony of witnesses is taken in the same manner as testimony is taken in an adversary proceeding or at a trial in a district court civil case. Rule 43(a), rather than Rule 43(e), F.R.Civ.P. would govern the evidentiary hearing on the factual dispute. Under Rule 9017, the Federal Rules of Evidence also apply in a contested matter. Nothing in the rule prohibits a court from resolving any matter that is submitted on affidavits by agreement of the parties.
Advisory Committee Note, Fed.R.Bankr.P. 9014 (2002).
Rule 9014(d) means that the evidentiary hearing must be an adversary proceeding in which opposing parties are present, may be represented by counsel, and are allowed to call, examine, cross-examine, and subpoena witnesses, whose testimony is submitted under oath or affirmation and officially transcribed or recorded. See Fed.R.Civ.P. 43(a) (requiring that " [i]n all trials the testimony of witnesses shall be taken orally in open court, unless otherwise provided by these rules . . .").
This rule does not preclude a direct-examination-bydeclaration or " alternate direct testimony" procedure used in some districts under Rule 43(a), which requires the witness to be on the stand subjected to cross-examination. See Adair v. Sunwest Bank (In re Adair), 965 F.2d 777, 780 (9th Cir. 1992) (" The primary purposes of Rule 43(a) are to ensure that the accuracy of witness statements may be tested by cross-examination and to allow the trier of fact to observe the appearance and demeanor of the witnesses.").
Rule 9014(d) requires an adversarial hearing in which it was undisputed that Bolan neither stipulated to resolution by motion and affidavit testimony, nor waived his right to an evidentiary hearing. Despite the myriad factual issues raised in the Complaint concerning the payroll systems and records, the bankruptcy court did not treat the contested matter as an adversary proceeding in order to produce the material evidence in accordance with Rule 9014(d). Instead, it relied on declarations and told Bolan that he should have taken depositions or otherwise conducted discovery. This was a clear violation of Rule 9014(d).
Therefore, we hold that the bankruptcy court erred in summarily disallowing Bolan's presumptively valid proof of claim.
CONCLUSION
Bolan's proof of claim met the minimum requirements to establish a prima facie presumption of validity. A compensation claim is not per se legally insufficient if it does not contain accounting record evidence.
Trustee's evidence did not rebut the presumption because the declarations of Lopez and Feliton were inadmissible hearsay, and no books or records were proffered.
Additionally, Trustee's objection was coupled with a request for relief as to the allegations of the Complaint, and such request initiated an adversary proceeding under Rule 7001. Also, Rule 9014(d) required that the court conduct a hearing in order to elicit evidence on the disputed material factual issues. Without such evidence, Trustee's objection was insufficient to overcome the presumptive validity of Bolan's proof of claim, and the bankruptcy court erred in disallowing it without first conducting an evidentiary hearing on the claim objection. Therefore, we REVERSE AND REMAND for proceedings consistent with this memorandum decision.
The Trustee requests that the Court continue the hearing on this objection and declare this matter to be a contested matter pursuant to Bankruptcy Rule 7001. The Trustee further requests that the court set a status conference 90 days out in order to provide the parties to [sic] conduct discovery, with the intention that the ultimate disposition of the matter, if not otherwise resolved, will be determined by an evidentiary hearing.
Claim Objection (Jan. 29, 2004), at 13.
Federal Rule of Evidence 803(6) provides:
Records of Regularly Conducted Activity. A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinions, or diagnoses, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness, or by certification that complies with Rule 902(11), Rule 902(12), or a statute permitting certification, unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness. The term " business" as used in this paragraph includes business, institution, association, profession, occupation, and calling of every kind, whether or not conducted for profit.