February 4, 2018

Dead Cattlemen Tell No Tales; Childress Cattle, LLC v. Estate of Roger F. Cain

Category: Indiana Law Review | Author: | Share:

If any case was a warning to businesses to keep better track of their records, this one is. In this case, the business’s shoddy records-keeping system may have cost it hundreds of thousands of dollars. Also, its counsel’s failure to prepare a proper appellate record didn’t help.

Roger Cain was the sole proprietor of Cain Farms. From time-to-time, he purchased cattle from Childress Cattle, a cattle broker owned by James and Bonnie Childress. Each purchase was separate and distinct and was conducted verbally by telephone. Childress Cattle’s records of these transactions consist of undated handwritten notations on documents from other purchases that Childress Cattle made from other brokers and stockyards.

Roger died in January 2016, and Childress Cattle filed a claim against his estate for almost $300,000 as recovery of payment for certain cattle that Roger had allegedly ordered and that were allegedly delivered to Cain Farms sometime before Roger’s death.

The trial court held an evidentiary hearing at which it did not allow either James or Bonnie to testify, finding that they were incompetent under Indiana’s Dead Man Statute. The trial court also excluded Childress Cattle’s invoices, finding that the testimony of James and Bonnie was necessary to establish a foundation for such evidence and that they would continue to be incompetent witnesses as to the admission of the evidence. The court did allow (1) truck drivers to testify about deliveries they made on behalf of Childress Cattle to Cain Farms, (2) the testimony of an expert on cattle prices, (3) trucking invoices, (4) veterinary records, and 5) some checks that Cain Farm sent to Childress Cattle. The trial court found that this did not prove that Childress Cattle had not been paid in full and disallowed the claim.

On appeal, Childress Cattle argued that Bonnie should have been allowed to testify about her conversations with Cain’s widow, Christie. However, Childress Cattle’s attorney did not file an appellate appendix, and did not put Bonnie’s offer of proof into the record. This created some uncertainty regarding what exactly Bonnie would say if allowed to testify. But the parties’ description of that offer of proof (conversations after Roger’s death about the overdue balance) “would present the trial court with Childress Cattle’s version of its dealings with Roger, who cannot testify to his version of any oral contracts because his lips are closed by death. This proposed testimony, therefore, is precisely what the Dead Man’s Statute aims to preclude.

And Childress Cattle’s failure to include the offers of proof in the appellate record prevented the Court from assessing whether either James or Bonnie had any other testimony which was admissible.

Childress Cattle also argued that the trial court erred when excluding the invoices. And its failure to file an appendix again “frustrates our analysis of this issue.” Childress Cattle described how the evidence it wished to introduce would “‘conclusively establish[]’ that cattle was delivered to Cain Farms at Childress Cattle’s behest and that Cain Farms paid Childress Cattle $380,607.65 as partial payment.” But the Court found that Childress Cattle did not get any of these specific facts in the appellate record or describe those specific facts in its brief.

[A]lthough Childress Cattle argues that its invoices “establish the total amount of the claim,” it also acknowledges that its invoices “will show that some of the payments made by the Estate [to Childress Cattle] match precisely to particular invoices, while other payments made by the Estate are clearly partial payments toward the total account balance with Childress [Cattle].” Without specific facts, the offers of proof, or an appendix to support its claim, Childress Cattle is essentially asking this Court to take it at its word, regardless of any discrepancies that may exist in the evidence it wants to present, that its invoices are records of a regularly conducted activity. As a result, we find that the circumstances indicate a lack of trustworthiness that precludes the invoices from meeting the hearsay exception for records of a regularly conducted activity. The trial court did not err by not admitting Childress Cattle’s invoices as evidence.

Thus, sloppiness may have cost Childress Cattle almost $300,000.

Lessons:

  1. Always prepare an appendix with everything a court may need when litigating an appeal.
  2. The Dead Man’s Statute prohibits all forms of testimony regarding a claim against an estate, if contradicting it requires the dead man’s testimony.