Morgan v. Valley Prop. & Cas. Ins. Co., 410 P.3d 327

Jerry and Debbie Morgan (insureds) claimed nearly 1,300 items of personal property were destroyed in a warehouse fire and sought recovery under their homeowners' policy (policy limit $832,000).
Morgans hired Adjusters International, which engaged independent contractors (Ritchie and Connell) to inventory items and research replacement costs; Gower (independent adjuster) oversaw submission and worked with Morgans on depreciation.
Adjusters International’s spreadsheet listed items, replacement costs (sourced from internet, vendors, and Morgan), and adjusted actual cash values; total exceeded policy limit but claim capped at $832,000.
Valley (insurer) moved to exclude the spreadsheet as hearsay; trial court admitted it under the business-record exception (OEC 803(6)); jury awarded Morgans $832,000.
On appeal, Valley argued the spreadsheet was inadmissible because many values originated from third parties (including Morgan and unidentified vendors) who lacked a duty to report; court reviewed admissibility de novo for legal error and factual findings for record support.

Issue	Morgan's Argument	Valley's Argument	Held
Whether the inventory spreadsheet was admissible under the business-record exception (OEC 803(6))	Spreadsheet is a business record of the adjusters; admissible despite multiple contributors; any hearsay was covered by the exception	Spreadsheet contains multi-level hearsay from sources not under a business duty to report; thus not admissible	Reversed: spreadsheet not admissible under OEC 803(6) because many dollar values derived from outside sources without a duty to report
Whether third-party inputs (internet vendors, telephone quotes) satisfy "duty to report" requirement for business records exception	Connell’s collection of prices is non-hearsay or within exception because she had personal knowledge of prices	Third-party vendors and internet sources were volunteers with no duty to report; so their statements lack requisite reliability	Held: such outside sources lacked a contemporaneous legal/business duty to report; their inputs defeat OEC 803(6) protection
Whether admission was harmless because Morgan testified and "adopted" the spreadsheet values	Error harmless because owner testified about items and values and could testify to market value	Admission had likelihood of affecting jury because spreadsheet provided independent corroboration by experienced adjusters	Held: error was not harmless — spreadsheet likely affected jury’s valuation; reversal and remand required

State v. Cain, 260 Or. App. 626, 320 P.3d 600 (2014) (recognizes traditional "duty to report" requirement for admitting third-party information in business records)
Johnson v. Lutz, 253 N.Y. 124, 170 N.E. 517 (1930) (formative authority holding entries based on voluntary third‑party statements are not admissible as business records)
Snyder v. Portland Traction Co., 182 Or. 344, 185 P.2d 563 (1947) (police report inadmissible as business record where based primarily on statements from interested third parties)