Hearsay question

I think yes. First, the memo is relevant even if not offered for the truth of the matter asserted (i.e. that patsy was not properly trained) but just to show notice to the studio of a possible danger.  Second, the statement was not made by a non-party to the suit.  Rather it was made, and at every level repeated by, a representative of the defendant.  It is being offered in evidence by the plaintiff.  Under Federal law, a statement by a party opponent is not hearsay; under NY law, it is hearsay, but is an exception to the rule excluding hearsay. The regular course of busines stuff relates to the business records exception to the hearsay rule, an issue which should never be reached.  However, although I don't think it matters, I don't think the memo should be admitted as a business record because the affidavit attesting to the memo being written in the regular course of business is hearsay itself; someone would need to testify, under oath and facing cross-examination, as to those facts (e.g. regular course of business, etc.)  Moreover, even if the memo is a business record, Bill's alleged statement is not.  In other words, the business record exception only takes care of the hearsay problem with Z's out of court statement; it doesn't address the hearsay problem with Bill Donovan's alleged out of court statement.  There are multiple levels of hearsay here.  A finder of fact first has to conclude that Z said what the memo says Z said.  Then, even if Z wrote the memo, it also has to conclude that Bill said what Z said he did - that's another level of hearsay which is not addressed by the business record exception.