Evidence rulings in mortgage fraud case The world needs more Second Circuit decisions on the rules of evidence. Here's one that talks about "habit evidence," admissibility and the "best evidence" rule.
The case is Crawford v. Tribeca lending Corp., decided on March 8. Plaintiff sues over a fraudulent mortgage loan. She met with defendant's representative at Idlewild Airport to give signature samples on a blank sheet of paper. But she never agreed to the loan and that the company used the signature samples to forge mortgage documents. Defendants say this is all untrue and that plaintiff signed actual loan documents. The jury ruled against plaintiff, and the Court of Appeals (Cabranes, Parker and Lynch) affirms. The appeal raises a series of evidentiary issues that do not get much attention in the Second Circuit.
First, the company had a witness testify that he was the one who met with plaintiff at the airport, that she signed actual loan documents and that he had handled more than a thousand similar loan signings in his career, sometimes 10 per week during the 2004-05 mortgage refinancing craze. This was permissible habit evidence under Rule 406, which says, "Evidence of a person’s habit or an organization’s routine practice may be admitted to prove that on a particular occasion the person or organization acted in accordance with the habit or routine practice. The court may admit this evidence regardless of whether it is corroborated or whether there was an eyewitness." We never see habit cases in the Court of Appeals, maybe because the district courts have discretion in ruling on evidentiary issues and nobody bothers to appeal those rulings. As habit under Rule 406 "describes one's regular response to a repeated specific situation," the jury was allowed to hear how Decarolis went about his business.
Second, the trial court allowed the jury to see 34 loan documents. Only three were originals, the rest photocopies. These records were not hearsay but proof that plaintiff entered into the loan agreement. The copies were also authentic under Rule 901, as the company put on witnesses who said the copies were true copies and not fakes. As Rule 901 "does not erect a particularly high hurdle" and is "satisfied if sufficient proof has been introduced so that a reasonable juror could find in favor of authenticity or identification," the trial court properly allowed the jury to see the copies.
Third, the best evidence rule arises on appeal. Under Rule 1002, you have to use originals to prove the content of a writing. But that rule has exceptions. A copy is OK if "all the originals are lost or destroyed, and not by the proponent acting in bad faith." As the trial court did not abuse its discretion in finding the originals had been lost and there was no bad faith, it was permissible for the jury to see the copies.
Stephen Bergstein is a civil rights lawyer in Orange County, N.Y. He has briefed or argued more than 200 appeals in the state and federal courts.