'Hearsay' is insufficient objection

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Admission of an attorney’s statement as a party admission by an agent was not error, the Seventh Circuit held on May 8. The court also held that merely objecting on hearsay grounds is insufficient to preserve the objection for appeal.

Shelia Swan and her husband, who owned A-1 Home Health Care, were investigated by the FBI for Medicare fraud.

In 1996, A-1 had received reimbursement from Medicare for $42,600 in wages paid to Veronica Alexander, Swan’s sister-in-law. A-1 described Alexander as the “Quality Management Coordinator” for A-1.

FBI agent Mike Miller sent a subpoena to A-1’s lawyer, seeking documents relating to that position.

According to the government, in response to the subpoena, A-1’s attorney stated that the Swans used the quality management coordinator description, so that they could be reimbursed at a higher rate, and that there were no documents relevant to the position.

Swan was charged in federal court with mail fraud, and at the trial, testimony was presented that Alexander only worked for the company for one week.

When FBI Agent Miller was called, he testified as to the statements purportedly made by A-1’s attorney.

The Swans’ attorneys objected on hearsay grounds, but the court allowed the testimony as an admission of a party opponent pursuant to FRE 801(d)(2)(D).

Swan was convicted, and filed a post-trial motion for a new trial based on the admission of Miller’s testimony. In an affidavit, Swan’s attorney denied making he statement attributed to him, and denied that he represented Swan in connection with the federal criminal investigation.

He stated that he was only involved for the limited purpose of responding to the subpoena, and that he had no authority to act for Swan in any other capacity.

The court denied the motion, and Swan appealed. The court of appeals affirmed in a decision by Judge Richard D. Cudahy.

The court first held that Swan failed to properly make an objection at trial.

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When Miller was being questioned during his testimony, Swan’s only objection was on hearsay grounds.

At the motion for a new trial, and on appeal, the issue was whether the attorney was an agent of Swan and the scope of his authority. The court found the general hearsay objection not specific enough to put the district court on notice and preserve the issue for appeal. Accordingly, the court reviewed the district court’s overruling the objection for plain error only.

The court concluded that there was no plain error in the district court’s admission of the statement as an admission of a party by an agent.

The court noted that Miller testified that the attorney called him in response to the subpoena, identified himself as an associate of the law firm representing A-1 in the investigation, and that Miller regarded him as representing the Swans.

The court then rejected a separate argument by Swan — that the statements were protected by the attorney-client privilege — because Swan made no objection on that ground at trial.

Accordingly, the court affirmed.

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David Ziemer can be reached by email.