This action arose from a pedestrian knockdown that occurred while the plaintiff was vacationing in Florida. A motor vehicle driven and owned by an uninsured motorist struck the plaintiff while she was crossing a street in a crosswalk. As a result of the accident, the plaintiff sustained fractures of her left leg.

The plaintiffs son, Bernard Hochhauser (the insured), submitted a claim to Electric Insurance Company for uninsured motorist benefits under his automobile insurance policy. The insured claimed that the plaintiff was a resident of his household, thus entitling her to such benefits.

After completing an investigation, which included an interview with the insured, the insurer disclaimed coverage. The disclaimer noted that, in August of 2003, the insured advised the insurers investigator that the plaintiff resided at an address different than the insured, and had for over 30 years. Further, the disclaimer indicated that the insured reported that the plaintiff visits his home, occasionally, spending weekends. The disclaimer notice concluded: As such, Rachel Hochhauser is not a resident relative and is not entitled to Personal Injury Protection coverage under this policy. Therefore, any and all claims are hereby denied.

The plaintiff then commenced this action against Electric to recover uninsured motorist benefits. Plaintiff moved for summary judgment. The insurer cross-moved for summary judgment. The Supreme Court held the motion and cross motion in abeyance and referred the matter to a Judicial Hearing Officer to hold a hearing on the issue of whether the plaintiff was a resident of the insureds household.

At a hearing, the plaintiff testified that she owns two homes and resides in both of them. The plaintiff further testified that her son, the insured, and his family live in one of the two homes and, prior to the accident, she resided with her son and his family an average of three weekends per month, plus holidays.

The insurer presented insurance investigator Edward Quinn, Jr., as its sole witness. Quinn prepared the insurance investigation report, which concluded that the plaintiff was not a resident of the insureds residence based on his interview with the insured. At the outset of Quinns testimony, the plaintiff objected, and the Judicial Hearing Officer overruled the objection. Following foundational testimony, the insurer sought to introduce the insurance investigation report into evidence as a business record. The plaintiff again objected, explaining that anything that is contained in this record which is a recitation of what [the insured] allegedly told to Quinn is hearsay. The Judicial Hearing Officer overruled the objection and, without further objection, Quinn testified that the insured informed him that the plaintiff stayed with the insured and his family for a weekend every other month, now since the accident more frequently.

The Judicial Hearing Officer issued a report concluding that, for insurance purposes, the plaintiff was not a resident of the insureds household. The Supreme Court granted the insurers motion to confirm the Judicial Hearing Officers report, denied the plaintiffs motion for summary judgment, and granted the insurers cross motion for summary judgment.

The Appellate Division reversed. We reject the insurers contention that the plaintiff failed to object to Quinns testimony on hearsay grounds.

As often defined, hearsay is a statement made out of courtoffered for the truth of the fact asserted in the statement. Such a statement may be received in evidence only if it falls within one of the recognized exceptions to the hearsay rule, and then only if the proponent demonstrates that the evidence is reliable. Further, in assessing reliability, a court must decide whether the declaration was spoken under circumstances which render it highly probable that it is truthful.

The basis of the business records exception to the hearsay rule is the trustworthiness of the document. The essence of the business records exception to the hearsay rule is that records systematically made for the conduct of a business as a business are inherently trustworthy because they are routine reflections of day-to-day operations and because the entrants obligation is to have them truthful and accurate for the purposes of the conduct of the enterprise.

Further, the concern relating to trustworthiness extends to each participant in the chain producing the business record, from the initial declarant to the final entrant.

Thusnot only must the entrant be under a business duty to record the event, but the informant must be under a contemporaneous business duty to report the occurrence to the entrant as well. The reason underlying the business records exception fails and, hence, the statement is inadmissible hearsay if any of the participants in the chain is acting outside the scope of a business duty.

Here, undisputedly, the insured was outside the insurers enterprise. Thusthe insureds statement regarding the plaintiffs residence and Quinns testimony regarding that statement are inadmissible hearsay. The insurer, however, argues that the insured had a duty to speak with the insurance investigator based on the underlying contractual duty, which requires all insureds to cooperate with their insurer during an insurance investigation.

The insurer, however, fails to support this argument with any case law holding that the duty to cooperate with an insurer equates to a business duty to report information during an insurance investigation, thereby affording a statement given by an insured during the course of such an investigation the requisite reliability or trustworthiness to fall within the business records exception to the hearsay rule.

With regard to the specific issue of the plaintiffs residence, we note that a person may have more than one residence for the purposes of insurance coverage. Whether a person is a resident of an insureds household requires something more than temporary or physical presence and requires at least some degree of permanence and intention to remain.

Without either Quinns testimony or the insurance investigation report, the insurer failed to rebut the plaintiffs testimony that she maintained a residence at both her own household and at the household of the insured. The plaintiffs testimony established that she is the sole owner of the home in which the insured resides, spends weekends and holidays in the home, has a key to the home, maintains her own bedroom in the home, in which she keeps clothing and necessities, and pays the heating, water costs, and real estate taxes for the home.

The Supreme Court should have granted the plaintiffs motion for summary judgment as the plaintiff demonstrated her prima facie entitlement to such relief whichthe insurer failed to rebut.

Comment: While I take issue with the courts determination that the insureds statements to the investigator do not constitute an admission against interest (and therefore an exception to the hearsay rule), the lesson to be learned here is that when investigators take statements from insureds, they should reduce them to the form of a statement to be signed by the insured, because a mere written record of what the insured tells the investigator will be kept out as inadmissible hearsay.

As to the substance of the claim, people can have more than one household, and those snowbirds who go back and forth between New York and Florida can be considered members of both households, along with whichever children and other relatives live in both locations.

Hochhauser v. Electric Ins. Co., 2007 NY Slip Op 08037, Appellate Division, Second Department, (McCarthy, J., J.)