Hearsay; MRE 801(c); Whether the statements at issue were “verbal acts”; Whether a recording should have been admitted under the residual hearsay exception (MRE 807, formerly 803(24)); People v Katt; People v Geno; Circumstantial guarantees of trustworthiness

Holding that the trial court correctly ruled that the statements allegedly made by a nonparty in a recording were hearsay and not admissible under any exception, the court affirmed summary disposition for defendants. The nonparty (G), who was insured by defendant-MemberSelect, submitted a claim for water damage to his home. Defendant-Rowe was assigned as the adjuster. G “contacted plaintiff, a restoration company, for an assessment. He ultimately declined to hire plaintiff, citing unprofessional conduct during the initial visit. Plaintiff’s owner,” nonparty-D, later spoke with G “by phone and secretly recorded the call. During the conversation, [G] stated that, according to Rowe, MemberSelect did not use plaintiff’s services and would not cover repairs if plaintiff were hired.” He later acknowledged at his deposition that “the voice on the recording sounded like his but stated he could not recall the conversation. He testified that Rowe never told him the claim would be denied if plaintiff performed the work and explained that he sometimes lies to avoid confrontation. Both [G] and Rowe submitted affidavits denying that Rowe made the alleged statements. Plaintiff sued defendants for defamation and tortious interference with a business relationship, relying on the recorded call.” Plaintiff argued that the statements on the recorded call did not constitute hearsay because they were “verbal acts.” The court found that the recording contained “two layers of statements that must be analyzed separately.” It concluded plaintiff would be able to offer sworn testimony from G about “Rowe’s out-of-court statement to him if [G] were willing to testify either in court or in a sworn statement. Such a statement would not be hearsay because Rowe’s out-of-court statement would be evidence of the verbal act of publication of an allegedly defamatory statement.” But that was not what plaintiff was trying to do. It sought admission of G’s out-of-court statement “for the truth of the matter that Rowe told [G] the work performed by plaintiff would not be covered.” Because it was offering the statement “for the truth of the matter asserted,” it constituted hearsay. And the court rejected plaintiff’s claim it should have been admitted under former MRE 803(24) (now MRE 807). The record made clear that it was “not supported by circumstantial guarantees of trustworthiness and should not have been admitted.”