Opinion
04 Civ. 2427 (RCC), 05 Civ. 1891 (RCC).
October 31, 2005
MEMORANDUM ORDER
The trial of these consolidated matters — actions by union benefit funds to collect alleged unpaid benefit contributions from an employer, Aurash Construction Corp. ("Aurash"), and its president, Parviz Abrishamchi ("Abrishamchi") — is scheduled to begin on November 7, 2005. Aurash and Abrishamchi ("Defendants") move (1) to preclude Plaintiffs from offering various audit and shop-steward reports (as well as testimony as to the contents of those documents) into evidence, arguing that the documents represent inadmissible hearsay; (2) to preclude any shop steward or expert witness from testifying on the ground that no shop steward or expert witness was designated in the parties' February 2005 Joint Pretrial Statement, which was submitted to chambers and memo endorsed by the Court on October 27, 2005 ("Joint Pretrial Order"); and (3) to preclude Plaintiffs from offering the Mason Tenders District Council Independent Demolition Collective Bargaining Agreement dated 2000-2003 ("2000-2003 Interior Demolition Agreement") into evidence on the ground that the document was not designated as an exhibit in the Joint Pretrial Order. Defendants' motions are DENIED, GRANTED, and RESERVED UPON as set forth herein.
I. BACKGROUND
Mason Tenders District Council et al. ("Plaintiffs") maintain that, by virtue of three collective-bargaining agreements and the findings of certain compliance audits, Aurash is liable for, inter alia, payment of fringe benefits, dues checkoffs, and Political Action Committee ("PAC") contributions owed for the period October 14, 1999 through April 30, 2003. Plaintiffs further allege that Abrishamchi is personally liable for Aurash's alleged deficiencies because he signed two collective-bargaining agreements containing valid personal-liability clauses with the objective intent to be personally bound by the agreements' terms. The crux of this case is the discrepancy between Aurash's payroll records and remittance reports, which do not reflect the alleged deficiencies, and various audit and shop-steward reports, which reflect amounts due based upon individuals who are not accounted for on Aurash's payroll records and remittance reports. Plaintiffs maintain that the audit and shop-steward reports are correct, and Defendants maintain that those documents are flawed for containing information about individuals who were not Aurash employees.
The Joint Pretrial Order indicates that Plaintiffs plan to call two fact witnesses at trial, Mason Tenders field representative Joseph Bianco and Mason Tenders contributions manager Dominick Giammona, and that Defendants plan to call two fact witnesses at trial, Abrishamchi himself and bookkeeper Alla Ivnitskaya. (Joint Pretrial Order at 79-80.) Neither party intends to call expert witnesses. ( Id. at 80.) Both parties have designated portions of Abrishamchi's deposition testimony. ( Id. at 80-81.) Plaintiffs' exhibit list includes, inter alia, two agreements, (1) the "1996-2001 Trade BCA Agreement between the Mason Tenders' District Council of Greater New York and the Building Contractors Association, Inc." ("1996-2001 BCA Agreement") and (2) the "1999-2002 Independent Agreement between the Mason Tenders' District Council of Greater New York, defendant Aurash Construction Corp. and Parviz Abrishamchi" ("1999-2002 Independent Agreement"); six audit reports of Aurash's books and records (including but not limited to payroll records, daily time sheets, cash-disbursement journals, job-location records, tax forms and records, and ledgers) for periods between October 1999 and April 2003 prepared by certified public accountants hired by Plaintiffs to ascertain how much Aurash owed ("Audit Reports"); approximately 123 weekly shop-steward reports submitted to the Mason Tenders District Council of Greater New York between October 1999 and November 2002 ("Shop-Steward Reports"); and various monthly remittance reports submitted by Aurash to Plaintiffs between October 1999 and April 2003 ("Remittance Reports"). ( Id. at 81-86.) Defendants' exhibit list includes their summary of amounts due and amounts paid, copies of checks made in payment to Plaintiffs, and Aurash's payroll records. ( Id. at 86-87.)
II. DISCUSSION
A. Audit Reports Shop Steward Reports
Defendants object to the Audit Reports and Shop-Steward Reports as inadmissible hearsay. Pursuant to Rule 801(c) of the Federal Rules of Evidence, "`[h]earsay' is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted," and pursuant to Rule 802, hearsay is generally not admissible. Fed.R.Evid. 801(c), 802. Plaintiffs seek to offer the Audit Reports and Shop-Steward Reports to show that, when compared to Aurash's payroll records and the Remittance Reports, the hours reflected in the Audit Reports "accurately and correctly reflect the amount of hours worked by Defendants' employees performing Mason Tender Work within the boundaries of New York City." ( See Pls.' Proposed Jury Verdict Form at 4-5; see also Pls.' Proposed Jury Instructions at 6-7.) Thus, the Audit Reports and Shop-Steward Reports contain out-of-court statements and are offered for their truth. As such, they represent hearsay.
Plaintiffs maintain, however, that the Audit Reports and Shop-Steward Reports are admissible hearsay under the business-records exception of Rule 803(6), which permits the admission of records of "regularly conducted business activity" even when those records contain out-of-court statements offered for their truth:
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, or by certification that complies with Rule 902(11), Rule 902(12), or a statute permitting certification, unless the source of the information or the method or circumstances of preparation indicate lack of trustworthiness. . . .
Fed.R.Evid. 803(6); United States v. Freidin, 849 F.2d 716, 719-20 (2d Cir. 1988). The Second Circuit takes "a generous view" of the business-records exception, construing it to favor admission over exclusion of evidence with "any probative value at all," and viewing the "principal precondition" to admission of documents under Rule 803(6) to be that the records have "sufficient indicia of trustworthiness to be considered reliable." Freidin, 849 F.2d at 722 (internal quotations and citations omitted).
Defendants argue that the Audit Reports and Shop-Steward Reports do not qualify as business records (1) because they were not created in the course of Defendants' regularly conducted business activity (and are, in fact, contrary to Aurash's own payroll records) or by union employees in the course of the union's business, and (2) because Plaintiffs have failed to designate any "custodian or other qualified witness" as required by the Rule because no auditor or shop steward has been identified as a witness for Plaintiffs in the Joint Pretrial Order.
Plaintiffs have designated Dominick Giammona, Manager of Contributions and Deficiency Departments of Plaintiffs' funds, to testify that the Audit Reports were created in the course of Plaintiffs' regularly conducted business activity. ( See Pls.' Pretrial Mem. Law at 17-18 (maintaining that Mr. Giammona "regularly utilizes [audit] reports in the calculation of benefits due to the plaintiffs, [and] is qualified to testify as to the function of said audit reports" and will "testify that audit reports are regularly ordered in the ordinary course of business by [Plaintiffs] from outside auditing firms so as to determine if employers are deficient in contributions due under the terms of collective bargaining agreements entered into with the Union").) Although Mr. Giammona is not an employee of the outside auditing firm that prepared the Audit Reports, records introduced under Rule 803(6) can be "the records of a business entity other than one of the parties, and even though the foundation for their receipt is laid by a witness who is not an employee of the entity that owns and prepared them . . . there is no requirement that the person whose first-hand knowledge was the basis of the entry be identified, so long as it was the business entity's regular practice to get information from such a person." Saks Int'l Inc. v. M/V Export Champion, 817 F.2d 1011, 1013 (2d Cir. 1987); see also United States v. Williams, 205 F.3d 23, 34 (2d Cir. 2000) (noting that a testifying custodian "`need not have personal knowledge of the actual creation of the document' to lay a proper foundation for the receipt" (quoting Phoenix Assocs. III v. Stone, 60 F.3d 95, 101 (2d Cir. 1995)). The utilization of the Audit Reports by Plaintiffs to determine whether employers have not paid benefit contributions owed is comparable to the facts of Fernandez v. Chios Shipping Co., 542 F.2d 145 (2d Cir. 1976), a maritime action in which the Second Circuit upheld the admissibility of various marine surveyor's reports under Rule 803(6) on the ground that the time charterer's cargo claims manager, who collected such outside reports as a regular part of determining whether certain claims should be processed, had testified that the reports "were ordered, received, and recorded in the regular and ordinary course of [the time charterer's] business." Id. at 154 n. 16. Because Mr. Giammona's proposed testimony could similarly support introduction of the Audit Reports under the business-records exception, Defendants' application to exclude the Audit Reports before trial is DENIED.
Because neither party has provided the Court with enough information to determine whether the Shop-Steward Reports fall within any exception to the hearsay rule, the Court RESERVES DECISION as to whether the Shop-Steward Reports are admissible or inadmissible hearsay.
B. Shop-Steward and Expert Testimony
Defendants argue that because no shop steward was designated by Plaintiffs as a witness in the Joint Pretrial Order, and because Plaintiffs stated in the Joint Pretrial Order that they did not intend to call any expert witness, that Plaintiffs should not be permitted to call any shop steward or expert witness to testify at trial. Plaintiffs have not moved to amend the Joint Pretrial Order or otherwise revealed an intention to add additional witnesses, expert or otherwise. Because the "purpose of the final pretrial order is to sharpen, and hopefully narrow, the legal and factual issues that will arise at trial. . . . it requires the identification of experts who will actually be called at trial (as opposed to those who may have been previously identified and perhaps deposed) . . . [and] performs the same narrowing function for fact witnesses." Malc v. City of New York, No. CV 94-0465 (JG), 1995 WL 432628, at *1 (E.D.N.Y. July 17, 1995). Further, Rule 26 of the Federal Rules of Civil Procedure, absent other directions from the Court, requires the disclosure of the intention to call any expert witnesses and each witness's written report at least 90 days before trial. Fed.R.Civ.P. 26(a)(2). Because no shop steward or expert witness was disclosed in the Joint Pretrial Order, because no written expert reports have been exchanged, and because Defendants would be prejudiced by allowing Plaintiffs to enlarge their case at this late date by calling such witnesses at trial, see Fed.R.Evid. 403, Defendants' application to preclude shop-steward and expert-witness testimony is GRANTED.
C. The 2000-2003 Interior Demolition Agreement
Defendants allege that on September 15, 2005, Plaintiffs' attorney gave Defendants' attorney, for the first time in this litigation, a portion of the 2000-2003 Interior Demolition Agreement. Defendants allege that because the 2000-2003 Interior Demolition Agreement was not supplied in any Rule 26 disclosures or discovery answers, relied upon in either complaint in these matters, or designated as an exhibit in the Joint Pretrial Order, the 2000-2003 Interior Demolition Agreement should not be admissible at trial. The Court agrees.
The first mention of the 2000-2003 Interior Demolition Agreement to the Court comes in Plaintiffs' Pretrial Memorandum of Law, filed on October 17, 2005. ( See Pls.'s Pretrial Mem. at 3.) Neither complaint in these consolidated matters relies upon the 2000-2003 Interior Demolition Agreement: the complaint in 04 Civ. 2427 (RCC) refers solely to the 1996-2001 BCA Agreement ( see Compl. 04 Civ. 2427 at 5-6) and the complaint in 05 Civ. 1891 (RCC) refers solely to the 1999-2002 Independent Agreement ( see Compl. 05 Civ. 1891 at 6). Likewise, Plaintiffs state in the Joint Pretrial Order — a document meant "to insure the efficient resolution of cases and, most importantly, to minimize judicial surprise," Lamborn v. Dittmer, 873 F.2d 522, 527 (2d Cir. 1989) — that they are relying only on the two earlier agreements, and make no mention of the 2000-2003 Interior Demolition Agreement. There is no indication that Plaintiffs raised the issue of the 2000-2003 Interior Demolition Agreement (or that Defendants were otherwise on notice to possible liability thereunder or to the possible introduction of the agreement) before last month. See Lamborn, 873 F.2d at 527("Rule 16 compels a litigant to . . . articulat[e] its theories and identify the evidence likely to be introduced in support thereof."). Because Defendants would be prejudiced were the Court to allow Plaintiffs to enlarge their case at this late date by introducing this third agreement into evidence, see Fed.R.Evid. 403, Defendants' motion to preclude introduction of the 2000-2003 Interior Demolition Agreement is GRANTED.
III. CONCLUSION
In sum, Defendants' application to exclude the Audit Reports as inadmissible hearsay is DENIED, Defendants' application to exclude the Shop-Steward Reports as inadmissible hearsay is RESERVED UPON, and Defendants' applications to preclude shop-steward and expert testimony and introduction of the 2000-2003 Interior Demolition Agreement are GRANTED. The parties shall be prepared to try this case beginning on Monday, November 7, 2005.
So Ordered.