Two Milwaukee classics, Kohn Law Firm and Harley Davidson, came together Saturday evening to celebrate and recognize 50 years of practice by firm founder, Robert W. Kohn. Bob returned to Milwaukee, along with his sons from Los Angeles and Boston, for a firmwide recognition dinner. Current employees and their guest, some special past employees from each of the decades, and some of the firm's service providers were on hand in the Rumble Room of the Harley Davidson Museum as we strolled through 50 years of memories and firm growth. Bob commented that it was a "phenomal and humbling evening."
By: Joel Tilleson, Associate Attorney
According to Wis. Stat. §908.01(3), hearsay is defined 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." Generally, hearsay testimony is not admissible (See Wis. Stat. §908.02). Recognizing the informal nature of many small claims matters, during its 1987 session the Wisconsin state legislature established in Wis. Stat. §799.209 that hearsay can be considered before a small claims court.
In an effort to make small claims courts more accessible to pro se litigants, §799.209 allows for relaxed admissibility of hearsay testimony in those courts. However, as this statute has been more closely examined and applied, Wisconsin courts have further interpreted when and how hearsay may be used.
The first noteworthy court case to address hearsay in small claims was Scholten Pattern Works, Inc. v. Roadway Express, Inc., 152 Wis.2d 253, 448 N.W.2d. 670 (Ct. App. 1989). This case clarified that while hearsay can certainly be incorporated into testimony before a small claims court, essential findings of fact must be based on more than the hearsay testimony alone. While the Scholten case limits the use of hearsay testimony, it doesn’t hinder a creditor’s testimony regarding the current balance due and owing, or an assignee’s ability to testify regarding the purchase and assignment of a debt. These fact issues are often all that is needed for a creditor to meet their burden of proof and prevail under a preponderance of the evidence standard.
Judges and court commissioners are also continuously revisiting the admissibility of hearsay in matters involving creditors who are assignees of the original creditor. In the case of Palisades Collection v. Kalal, 324 Wis.2d 180, 781 N.W.2d. 503 (Ct. App. 2010), a Wisconsin appellate court held that an assignee alone may not have the first-hand knowledge required to adequately attest to certain material issues of fact. Therefore, purchased debt cases being heard by a large claims court may require the involvement of the original creditor. However, this holding doesn’t change an assignee’s ability to provide hearsay testimony in a small claims action.
While §799.209 allows hearsay testimony at a small claims motion hearing or court trial, hearsay testimony generally cannot be admissible at a jury trial, even in the context of a small claims action. According to Wis. Stat. §911.01(4)(d), all jury trials must adhere to the general rules of evidence and hearsay is largely inadmissible outside certain exceptions. Still, as the language of that statute makes clear, this only applies to the actual trial, and a creditor’s ability to include hearsay testimony in evidentiary proceedings prior to the trial is not affected. For example, a creditor in a small claims action may file a motion for summary judgment and include hearsay testimony in that motion, despite a pending jury trial.
In summary, despite several cases and statutory law clarifying and limiting the use of hearsay testimony, the informal nature of small claims court still allows a creditor to provide hearsay evidence in most instances. Such testimony continues to be a useful tool in assisting the creditor with meeting their burden of proof and ultimately obtaining a judgment against the debtor.
(Editorial note: KLF wishes Joel good luck as he leaves the firm December 23rd for a different position.)