Morris v. Olympiakos

• Decision Date: 30 June 2010
• Docket Number: Civil Action No. H-03-3489.
• Citation: 721 F.Supp.2d 546
• Parties: Christopher MORRIS, Plaintiff, v. B.C. OLYMPIAKOS, SFP, Defendant.
• Court: U.S. District Court — Southern District of Texas

721 F.Supp.2d 546

Christopher MORRIS, Plaintiff,

v.B.C. OLYMPIAKOS, SFP, Defendant.

Civil Action No. H-03-3489.

United States District Court,

S.D. Texas,

Houston Division.

June 30, 2010.

COPYRIGHT MATERIAL OMITTED.

J. Todd Benson, Ayres Warren et al., Shreveport, LA, for Plaintiff.

Stephen W. Lemmon, Brown McCarroll LLP, Austin, TX, for Defendant.

MEMORANDUM OPINION AND ORDER

SIM LAKE, District Judge.

Pending before the court is KAE Olympiakos SFP's Motion to Vacate Default Judgment (Docket Entry No. 18), and Plaintiff's Motion to Strike the Declaration of Christos Stavropoulos (Docket Entry No. 34). Having considered the motions, responses and additional briefing, the parties' submissions, the procedural history of this case, and the applicable law, the court concludes, for the reasons explained below, that the motion to vacate should be granted and the motion to strike should be denied.

I. Procedural Background

This action arises from an agreement between plaintiff, Christopher Morris (Morris), a former NBA basketball player, and Olympiakos, a Greek national basketball club, for Morris to play basketball in Greece.

On August 29, 2003, Morris sued Olympiakos for breach of contract and fraud arising from Olympiakos' alleged failure to pay Morris for his professional basketball services. ¹

On April 21, 2004, Olympiakos was served with a summons and a copy of Plaintiff's Original Complaint pursuant to the Hague Convention. ²

On August 31, 2004, Morris filed Plaintiff's Request for Entry of and Default Judgment (Docket Entry No. 8) because Olympiakos had been served with a summons and a copy of the complaint but had not filed a responsive pleading or otherwise defended the suit.

On September 1, 2004, the court entered an Order (Docket Entry No. 9) granting Morris' request for entry of default judgment, and a Final Default Judgment (Docket Entry No. 10) in which the court adjudged that Morris “recover from defendant ... Olympiakos SFP, the sum of $910,000 together with post-judgment interest thereon at the rate of 2.03% per annum.”

On September 4, 2009, Morris filed an Acknowledgment of Assignment of Judgment (Docket Entry No. 11), stating that “I hereby transfer and assign all title, rights and interest in the within judgment to the following person: Gary W. Ebert ...” In October of 2009 Ebert filed Plaintiff's Application and Memorandum for an Order for Issuance of Writ of Garnishment (Docket Entry No. 13), which the court granted (Docket Entry No. 14).

On November 13, 2009, Olympiakos filed the pending motion to vacate default judgment (Docket Entry No. 18).

II. Motion to Strike

Plaintiff's assignee, Gary W. Ebert, moves to strike the declaration of Christos Stavropoulos on grounds that “it is inadmissable hearsay, and is thus incompetent evidence to support Olympiakos' Rule 60(b)(4) motion.” ³ Ebert argues that

Stavropoulos has not met the required elements of Fed.R.Evid. 803 such that the records on which he states he relied in making his declaration come within any recognized hearsay exception. Stavropoulos states clearly that his declaration is premised solely “upon [his] review of the books and records of Olympiakos.” Stavropoulos also testified during his recent deposition that none of the information contained in his declaration is based on his own personal knowledge. Because the information and testimony contained in Stavropoulos' declaration lacks the required foundation to qualify for any hearsay exception, Plaintiff objects to the admission of the declaration and moves the Court to strike Mr. Stavropoulos' declaration in its entirety. ⁴

Olympiakos argues in response that Ebert's objections to the Stavropoulos declaration impact the weight the court is to give the declaration but not its admissibility. ⁵

A. Applicable Law

The Stavropoulos declaration is not inadmissible hearsay if it comes within an exception to the Hearsay Rule. Federal Rule of Evidence 803(6) provides, in pertinent part, that:

The following are not excluded by the hearsay rule ...

...

(6) A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinions, or diagnoses, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness, ... unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness.

Rule 803(6) “requires that either the custodian of the business records or ‘other qualified witness' lay a foundation before the records are admitted.” United States Commodity Futures Trading Commission v. Dizona, 594 F.3d 408, 415 (5th Cir.2010) (quoting United States v. Brown, 553 F.3d 768, 792 (5th Cir.2008), cert. denied, --- U.S. ----, 130 S.Ct. 246, 175 L.Ed.2d 168 (2009)). Whether evidence is admissible under Rule 803(6) is “chiefly a matter of trustworthiness.” Mississippi River Grain Elevator, Inc. v. Bartlett & Co., Grain, 659 F.2d 1314, 1319 (5th Cir.1981). Since records maintained in the regular conduct of business are generally trustworthy and because such evidence is often necessary, “the business records exception has been construed generously in favor of admissibility.” Conoco Inc. v. Department of Energy, 99 F.3d 387, 391 (Fed.Cir.1997). “[T]here is no requirement that the witness who lays the foundation be the author of the record or be able to personally attest to its accuracy.” Dizona, 594 F.3d at 415. “A qualified witness is one who can explain the record keeping system of the organization and vouch that the requirements of Rule 803(6) are met.” Id. “[T]he witness need not have personal knowledge of the record keeping practice or the circumstances under which the objected to records were kept.” United States v. Box, 50 F.3d 345, 356 (5th Cir.), cert. denied, 516 U.S. 918, 116 S.Ct. 309, 133 L.Ed.2d 213 (1995).

Federal Rule of Evidence 803(7) governs the “absence of entry in records kept in accordance with the provisions of paragraph (6).” It provides:

Evidence that a matter is not included in the memorandum, reports, records, or data compilations, in any form, kept in accordance with the provisions of paragraph (6), to prove the nonoccurrence or nonexistence of the matter, if the matter was of a kind of which a memorandum, report, record, or data compilation was regularly made and preserved, unless the sources of information or other circumstances indicate lack of trustworthiness.

This rule allows evidence of the nonoccurrence of a matter that would normally be recorded under Rule 803(6). It is based on the principal that when a duty to record certain matters exists, the non-existence of a record is evidence for the converse proposition, i.e., that the matter about which there is no report did not occur. The only requirement for the use of evidence to prove the non existence of an act is the laying of a proper foundation. In order to lay a proper foundation it is not essential that the offering witness be the person who actually recorded the events. It is sufficient that the witness is able to testify with respect to the way in which the records were made and the fact that they were retained in the regular course of business. United States v. Jones, 554 F.2d 251, 252 (5th Cir.), cert. denied, 434 U.S. 866, 98 S.Ct. 202, 54 L.Ed.2d 142 (1977). Since Rule 803(7) is based on Rule 803(6), the testimony of the custodian of the records or qualified witness is required before evidence may be received under Rule 803(7). ⁶

B. Application of the Law to the Facts

Stavropoulos states in his declaration that he is “the general manager of KAE Olympiakos SFP,” ⁷ and that he made “this declaration based upon [his] review of the books and records of Olympiakos.” ⁸ Ebert contends that the Stavropoulos declaration lacks an appropriate foundation because during his deposition, Stavropoulos stated that he had no first hand knowledge of Olympiakos' relevant activities, that he does not know if the Olympiakos books and records that he reviewed are complete or accurate, that he has never been the custodian of Olympiakos' books and records, and that there is currently no custodian of Olympiakos' books and records. ⁹

In response, Olympiakos has submitted a second declaration from Christos Stavropoulos stating that his first declaration was based on his “exhaustive and extensive multi-day search through Olympiakos' books and records, including its general leger, and thousands upon thousands of documents located in two warehouses in Greece,” ¹⁰ and that[i]t was Olympiakos' practice to store its business documents in these warehouses. The records in these warehouses were prepared and maintained in the ordinary course of Olympiakos' business. I have no reason to believe that any documents have been removed from the warehouse. ¹¹

Stavropoulos has demonstrated through his second declaration that the records he reviewed were kept in the regular course of Olympiakos' business. Although Ebert contends that Stavropoulos' second declaration is inadmissible because an affidavit cannot be used to contradict prior statements made in a deposition, the statements in Stavropoulos' second declaration do not contradict the statements in his deposition. Ebert does not cite, and the court has not found, any place in Stavropoulos' deposition where counsel asked or Stavropoulos answered questions regarding his knowledge of Olympiakos' record keeping practices.

Stavropoulos' statement in his second declaration that the records he reviewed in Olympiakos' warehouses were prepared and maintained in the ordinary course of Olympiakos' business satisfies the requirements of Rule 803(6) that the witness lay a proper foundation. Although Stavropoulos did not know whether the...