Hello everybody.  A huge amount of knowledge that each of us possess was acquired in reliance on hearsay.  For example, when we learned from our history books that Columbus discovered Americain 1492, or when our science teacher taught us that there are seven principal colors in the rainbow, that was hearsay.

When your unlawful detainer lawyer told you that you could not evict your tenant without first serving a 3-Day Notice to Pay or Quit, or you read in one of my prior articles that an on-site manager is required to reside in an apartment building having more than 15 units, that was also hearsay.

Most frequently, hearsay is a term that we hear used in the judicial system in the context of a verbal statement a person makes.  Ordinarily, hearsay statements are not admissible evidence at trial.

While the word “hearsay” is often used in court, it is also adopted in common parlance among the general public. To non-legal professionals, the expression typically connotes a statement made by one person to a second person who then retells it.  Repeating rumors and gossip are examples of hearsay.  So too are broadcasts of a television anchor who reports what he/she was told such and such by a “reliable source.”

For purposes of my discussion this month, I will limit our focus of hearsay to just judicial proceedings, as “hearsay” is a legal word of art. 

Definition of Hearsay

In law, “hearsay” denotes a statement that was made by someone other than the witness who, while testifying at a hearing, repeats the statement, provided that the statement is repeated by the witness as proof of the truth of what was said.  In other words, it is something said or written by a third person which is then retold in court by the person who heard or read it in order to establish that what was said was in fact true.  More specifically, hearsay is an out-of-court statement latter repeated in court to prove the truth of what was said.

As an example, consider the following:  On February 3, the manager of an apartment complex serves a 3-Day Notice to Pay Rent or Quit on the tenant.  The manager then tells the owner the date of service.  On the day trial is scheduled for the unlawful detainer, the manager is ill, so only the owner comes to court.  The owner is prepared to testify that the manager told the owner that he (the manager) served the notice of the tenant on the 3rd day of the month.  The court will exclude that statement because it is hearsay.

Hearsay statements are excluded from evidence at trial for three reasons:

1.      The statement usually was not made under oath:  Although there are exceptions, most statements not made under oath are inadmissible at trial.  In other words, if your best friend tells you that your neighbor’s dog bit him, you could not repeat that statement at trial to prove that the canine bit your friend.  When your friend made the statement, he was not under oath.  Of course, your friend could take the witness stand and testify under oath about the dog bite.

2.      The adverse party has no opportunity to cross-examine the party who made out-of-court statement:  Fundamental fairness under our system of jurisprudence generally allows the opposing party to cross-examine statements offered against him/her at trial.  Our judicial system is founded on the belief and principle that truth is better ascertained when a third party can be cross-examined about what he said.

3.      The judge and jury cannot observe the demeanor of the person who made the statement:  In court, a person’s demeanor is observed and used as a factor to evaluate whether he/she is telling the truth.  Judges and juries prefer to personally observe a declarant’s non-verbal conduct when assessing the credibility of his/her statements.  In other words, a person who fidgets and has “shifty eyes” when speaking may be less credible than one who calmly relates a story while looking the jury square in the eye.  Thus, judges and juries like to be able to physically see the person making the statement in order to assess credibility.  When a witness in court merely repeats what he was told by someone else, that “someone else” needs to be personally present to testify in court in order that the judge or jury may assess his demeanor and credibility.  The presence of a witness who merely repeats what he heard is not sufficient.

For those three reasons, hearsay is inadmissible at trial unless an exception applies. 

Exceptions to the Hearsay Rule

There are several exceptions to the rule excluding hearsay evidence at trial. Chief among them are the following:

1.  Admissions or confessions of a person who is a party to the litigation:  If a plaintiff or defendant makes a statement to a witness, that witness can testify at trial as to what the individual said.  The reason for this exception is that a party to the case can then testify in his own defense or behalf as to whether or not he made the statement and what he meant if, in fact, he said it.

2.  Statements made to prove the declarant’s state of mind:  Where the relevancy of a statement is to establish the person’s state of mind rather than to prove the truth of what he said, then the statement is admissible as an exception to the hearsay rule.  (Technically, it would not even be hearsay.)  For example, in a trial to have a conservator appointed for an elderly person who repeatedly professes that he is the King of England, the claims to royalty may be used in court to prove the individual is incompetent (and therefore needs a conservator).  That is because what is said is not offered to prove that the person actually is the King of England.  Rather, it introduced at trial to prove the person’s state of mind, not the truth of the belief.

3.  Dying declarations:  A statement made by a dying person respecting the cause and circumstances of his death is admissible to prove the truth of what he said if the statement was made upon his personal knowledge and under a sense of impending death.  For example, if someone had heard Lana Clarkson exclaim immediately before she died that Phil Spector had shot her (remember that tragedy a few years ago?), her statement would be admissible at trial even though (a) it was not under oath, (b) she could not be cross-examined, and (c) the jury could not observe her demeanor.  (Of course, since courtroom evidence established that a gun was placed in her mouth, we know that Ms. Clarkson could not have muttered anything, and certainly, even if she did speak, the only witness was Mr. Spector, who wasn’t about to repeat anything.)

4.  Spontaneous Declarations:  A statement which a person spontaneously utters to narrate, describe or explain an event is admissible if it was concurrently made under the stress caused by that perception.

5.  Written business records:  Information contained in business documents, while not audible speech, are generally the written word of a person.  For example, if a resident manager writes down in his journal that when he inspected the tenant’s unit there were no visible defects, then that business record could be used to prove at trial that the unit was in a good state of repair.  Four conditions are necessary in order for a business record to be admitted as an exception to the hearsay rule:

  • The record was made in the regular course of business;
  • The record was made about the same time as the person witnessed the event;
  • The person who created the document or other qualified witness testifies as to how it was prepared; and
  • The record would have to be prepared under conditions to render it trustworthy.  For example, if the business establishment needs to rely upon the document to conduct its business, then the writing is likely to be trustworthy.

6.  Declarations against interest:  A statement made by a person who is unavailable to testify at trial is admissible to prove the truth of what he said to a witness if the statement was so strong  against his pecuniary or proprietary interest as to subject him to the risk of civil or criminal liability or social disgrace.  If a reasonable person would not have made the statement that the speaker made had such a statement not been true, then the witness who heard the statement may testify at trial as to what was said.  For example, if a person professes to have robbed a bank and then flees the county, his statement can later be used in court to prove he was the bank robber. 

Summary

In a legal context, the best way to think of hearsay is a statement which, when first said or written, did not occur in the courtroom, but is then later repeated in court by someone who heard or read the statement.  In other words, just about everything said or written before the lawsuit started is hearsay.  Unless an exception applies, hearsay can not be offered in trial to prove what was said was, in fact, true at the time it was said.

Resident Manager Reminder

Please bear in mind that starting July 1, 2014, the minimum which must be paid to a resident manager raises from $8.00 to $9.00 per hour.  That means for each hour your managers works, he/she is entitled to be paid $9.00 an hour beginning in July.

Please also keep in mind that the maximum or offset against that hourly wage that the owner or management company may apply increases as of July 1 from $451.89 per month to approximately $508.37 per month for a single manager and from $668.46 to approximately $751.79 where a couple is employed.  (These two new amounts are my best estimates as to what the exact amounts will be as they have not been formally announced at press time.)

In addition, it is important to know that commencing July 1, the maximum rent which may be charged to a manager who is required to live at the property will be approximately $508.37 if a single manager is employed, and $751.79 per month if a couple is employed.  Once again, those are my best estimates.  I hope to be able to inform AOA members of the exact amount in the March 2014 issue of this magazine.

One resident manager regulation which does not change in mid-2014 is that the reduced rent for manager’s unit cannot be applied as an offset against wages otherwise owed to the manager unless the owner or management company signs a written agreement with the manager(s) authorizing that rental reduction credit to be applied against the minimum wages otherwise due.

Finally, one further law that does not change in 2014: A resident manager is almost always an employee, not an independent contractor of the management company who hires him.

Compliance with these laws is absolutely essential as resident managers are becoming more and more knowledgeable about their wage and hour rights.  So too are their lawyers who now routinely file lawsuits on behalf of managers to recover hundreds of thousands of dollars of unpaid back wages. While you may have good defenses to the manager’s claims, you definitely do not want to find yourself defending such litigation.

Dale Alberstone is a prominent litigation and transactional real estate attorney who has specialized in real property law for the past 37 years.  He has been appointed to periodically serve as a judge pro tem of the Los Angeles Superior Court and is a former arbitrator for the American Arbitration Association.  He also testifies as an expert witness for and against other attorneys who have been accused of legal malpractice.

Mr. Alberstone has been awarded an AV rating from Martindale-Hubbell.  An AV rating reflects an attorney who has reached the heights of professional excellence and is recognized for the highest levels of skill and integrity. You may Google “Dale S. Alberstone” for further background.

The foregoing article was authored on December 31, 2013.  It is intended as a general overview of the law and may not apply to the reader’s particular case.  Readers are cautioned to consult an advisor of their own selection with respect to any particular situation.

Address correspondence to Dale S. Alberstone, Esq., ALBERSTONE & ALBERSTONE, 1900 Avenue of the Stars, Suite 650, Los Angeles, California 90067.  Phone:  (310) 277-7300.

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