Written by Evan D. Winet, Esq.* and John D. Rueppel, Esq.**
I. INTRODUCTION
Trust and estate litigation can involve extensive use of expert witnesses, ranging from medical experts opining on cognitive capacity to forensic accountants opining on the propriety of accountings. There is a fundamental tension between the hearsay rule and how such expert witnesses use or introduce evidence outside of their own personal knowledge. As every law student learns, hearsay is inadmissible unless governed by an exception to the hearsay rule.01 However, it is the custom and practice of experts in forming their opinions to make use of evidence that would otherwise qualify as hearsay. When they are examined in court, experts may (inadvertently or tactically) act as conduits for such evidence to reach the trier of fact. Until recently, courts allowed experts to discuss otherwise inadmissible hearsay evidence but then instructed triers of fact to consider such evidence only in evaluating the expert's credibility.
The landmark 2016 California Supreme Court case, People v. Sanchez,02 set out strict guidelines for the court to evaluate the admissibility of expert testimony based on such hearsay. Under Sanchez, an expert may present hearsay evidence that is merely "background"—the kind of authorities and source information on which experts customarily base their opinions.03 However, an expert may not introduce hearsay evidence that is "case-specific" unless such evidence is either established independently by competent testimony (i.e., percipient witnesses with personal knowledge of those facts) or demonstrated to fall within an exception to the hearsay rule.04
Although the Sanchez case arose within the context of a criminal case that involved procedural issues that do not arise in a civil context,05 the Sanchez rule nonetheless applies in civil litigation, including trust and estate litigation.06 Increasingly, trust and estate litigators must be prepared for significant evidentiary battles that may circumscribe their use of expert witnesses and, thus, may impact or even determine outcomes. A prudent litigator should lay the groundwork for raising or defending against these Sanchez issues early in litigation and be prepared to resolve them expediently at trial.
II. EXPERT TESTIMONY AND HEARSAY
A. Expert Rules Appear to Circumvent the Hearsay Rule
The problem addressed in Sanchez arises from the inherent nature of expert testimony. Experts may be examined on the basis of their opinions. If their opinions are based on inadmissible evidence, it would seem inevitable that experts may be examined on such evidence. However, courts have been appropriately wary of allowing such inadmissible evidence to be bootstrapped with expert opinion. When introduced in 1965, Evidence Code sections 801 and 802 grappled directly with this issue. Nonetheless, courts struggled with awkward formulations in which hearsay was admitted for the purpose of grounding the expert opinion while being deemed inadmissible as to the truth of the matters asserted.07
Under section 801 of the Evidence Code, expert witness testimony is limited to such an opinion as is "[r]elated to a subject that is sufficiently beyond common experience that the opinion of an expert would assist the trier of fact."08Furthermore, such opinion must be:
[b]ased on matter (including his special knowledge, skill, experience, training, and education) perceived by or personally known to the witness or made known to him at or before the hearing, whether or not
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admissible, that is of a type that reasonably may be relied upon by an expert in forming an opinion upon the subject to which his testimony relates, unless an expert is precluded by law from using such matter as a basis for his opinion.09
In its original 1965 comments to section 801, the Law Revision Commission noted that what "types" of evidence "reasonably may be relied upon" can vary enormously based on custom and practice within different fields:
The California courts have made it clear that the nature of the matter upon which an expert may base his opinion varies from case to case. In some fields of expert knowledge, an expert may rely on statements made by and information received from other persons; in some other fields of expert knowledge, an expert may not do so. For example, a physician may rely on statements made to him by the patient concerning the history of his condition. A physician may also rely on reports and opinions of other physicians. An expert on the valuation of real or personal property, too, may rely on inquiries made of others, commercial reports, market quotations, and relevant sales known to the witness. On the other hand, an expert on automobile accidents may not rely on extrajudicial statements of others as a partial basis for an opinion as to the point of impact, whether or not the statements would be admissible evidence.10
Thus, section 801 establishes that experts may base their opinions on hearsay to the extent customary and perhaps necessary depending on their fields. Section 802 of the Evidence Code then sets out how this potential hearsay testimony is to be regulated at trial:
A witness testifying in the form of an opinion may state on direct examination the reasons for his opinion and the matter (including, in the case of an expert, his special knowledge, skill, experience, training, and education) upon which it is based, unless he is precluded by law from using such reasons or matter as a basis for his opinion. The court in its discretion may require that a witness before testifying in the form of an opinion be first examined concerning the matter upon which his opinion is based.11
Section 802 addresses the need to give the trier of fact sufficient information to evaluate how experts reached their opinions. The Law Revision Commission noted in 1965 that where expert opinion is not based on the expert's personal observation, "the assumed facts upon which his opinion is based must be stated in order to show that the witness has some basis for forming an intelligent opinion and to permit the trier of fact to determine the applicability of the opinion in light of the existence or nonexistence of such facts."12
Sections 801 and 802 of the Evidence Code sit uneasily with the hearsay rule codified in section 1200. Section 801 provides that expert witnesses may rely all or in part on sources that are hearsay when giving testimony in the form of an opinion.13 Section 802 provides that experts may explain in direct examination the matters on which they relied in forming an opinion and indeed may be required to do so when the expert's opinion is based in matters the expert did not observe personally.14 However, section 1200 deems any such hearsay inadmissible unless it falls within a hearsay exception.15 The Legislature has created no statutory hearsay exception that permits experts to skirt the hearsay rule merely by virtue of explaining their opinions. It appears that if a court is to admit hearsay evidence from an expert, it must either find some other existing exception or else exercise its discretion to privilege section 802 over the hearsay rule.
This problem is not merely pedantic; it involves a clash of significant legal principles. Prejudice may arise if "under the guise of reasons," an expert's detailed explanation of the basis of their opinion puts incompetent hearsay evidence into the trial record.16 This potential prejudice is especially worrisome in the context of criminal jury trials.
Because an expert's need to consider extrajudicial matters, and a jury's need for information sufficient to evaluate an expert opinion, may conflict with an accused's interest in avoiding substantive use of unreliable hearsay, disputes in this area must generally be left to the trial court's sound judgment.17
However, even in civil matters and bench trials, the potential for prejudice from unregulated expert introduction of hearsay is not trivial. The hearsay rule serves a fundamental purpose in the American legal system to safeguard the reliability of evidence presented at trial.
B. Before Sanchez: Expert Use of Hearsay with Limiting Instructions to Juries
Prior to Sanchez, courts worked within the loose guidelines articulated in sections 801 and 802. Experts would frequently testify on hearsay statements as the basis for their opinions, and courts would allow them to do so on the rationale that such statements were being offered for a non-hearsay purpose. However, courts grappled with how much detail on such hearsay matters the expert could relate to the fact-finder and how the fact-finder should be limited in considering such evidence when evaluating the expert's opinion.
In the pre-Sanchez era, potential hearsay problems were mitigated with a two-prong approach: 1) a limiting instruction to the jury that matters admitted through an expert go only
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to the basis of the opinion and should not be considered for their truth;18 and 2) exercise of the court's discretion under section 352 of the Evidence Code to exclude any hearsay matter whose irrelevance, unreliability, or potential for prejudice outweighs its probative value.19 In general, experts were given wide latitude to discuss "background" facts in the context of explaining the basis for their opinions, even if such information was technically hearsay. It was often reasoned that experts must be given latitude to assist the fact-finder in understanding subjects sufficiently beyond common experience. In theory, experts were precluded from relating "case-specific" facts to the jury, assuming the experts lacked independent or personal knowledge of those facts.20
In theory, pre-Sanchez courts would distinguish between "background facts" necessary to understand the basis of expert opinions and "case-specific facts" that should be excluded.21...
