MEMORANDUM OPINION AND ORDER
Pending before the court is KAE Olympiakos SFP’s Motion to Vacate Default
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 Plaintiffs Original Complaint pursuant to the Hague Convention. 2
On August 31, 2004, Morris filed Plaintiffs 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 Plaintiffs 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
Plaintiffs 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 ofthe 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,
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, unlessthe 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,
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 records were complete, the fact that records might be inaccurate and/or incomplete does not make them untrustworthy and, therefore, inadmissible.
See Crompton-Richmond Co., Inc. Factors v. Briggs,
Alternatively, the court concludes that Stavropoulos’ declaration is admissible under Rule 807’s residual hearsay exception. The residual hearsay exception permits the admission of an out-of-court statement not covered by Rule 803
if the court determines that (A) the statement is offered as evidence of a material fact; (B) the statement is more probative on the point for which it is offered than any other evidence which the proponent can procure through reasonable efforts; and (C) the general purposes of these rules and the interests of justice will best be served by admission of the statement into evidence.
Fed.R.Evid. 807. The residual exception applies only to statements “not specifically covered by Rule 803.”
Id.
The Fifth Circuit interprets this phrase to mean that, if a statement is admissible under one of the hearsay exceptions, that exception should be relied on instead of the residual exception.
See United States v. Ismoila,
The court is of course mindful that merely fulfilling the requirements of the hearsay exceptions outlined in either Rules 803(6) or 803(7) does not establish a dis-positive or conclusive fact; instead, clearing these evidentiary hurdles only permits introduction of certain testimony in evidence. In weighing all the evidence on the issue of Olympiakos’ contacts with Texas, Stavropoulos’ testimony will be accorded little weight. Stavropoulos was not the custodian of Olympiakos’ books and records, and at least prior to the time that this action was filed was not involved in Olympiakos’ efforts to recruit players. Moreover, Stavropoulos admits that the books and records he reviewed are not well organized. 12
C. Conclusions
For the reasons explained above, plaintiffs motion to strike the declaration of Christos Stavropoulos will be denied.
III. Motion to Vacate
Citing Federal Rule of Civil Procedure 60(b)(4), Olympiakos asserts that it is entitled to relief from the default judgment because the judgment is void. 13 Olympiakos argues that
[t]he judgment in this case is void because the Court did not have personal jurisdiction over Olympiakos. As explained fully in its memorandum in support of this motion, Olympiakos had no contacts whatsoever with the State of Texas in connection with its dealings with Morris, and the services contracted for were all to be performed in Greece. 14
A. Standard of Review
A Rule 60(b)(4) motion allows a party to receive relief from a final judgment, order, or proceeding if the underlying judgment is void. The Fifth Circuit has recognized two circumstances in which a judgment may be set aside under Rule 60(b)(4): (1) if the court lacked subject matter or personal jurisdiction; and (2) if the court acted in a manner inconsistent with due process of law.
Carter v. Fenner,
Citing
Jackson,
Olympiakos, like [the Jackson defendant], knowingly suffered a default judgment to be rendered against it. Like [the Jackson defendant], Olympiakos never challenged the Court’s jurisdiction by appealing the judgment of the original action. Accordingly, under the Fifth Circuit’s reasoning in [Jackson], the Court should require Olympiakos to prove that it was not properly subject to the Court’s jurisdiction before vacating the judgment pursuant to Rule 60(b)(4). 16
Ebert’s argument is misplaced because the procedural posture in Jackson differed from the procedural posture here.
In Jackson, the defendant filed a Rule 60(b)(4) motion to vacate. The district court,
[n]oting that the question who bears the burden of proof in a Rule 60(b)(4) challenge to personal jurisdiction is one that has not been answered for this circuit,
... adopted the view of the Seventh Circuit that once a defendant with notice chooses to suffer a default judgment, he is the party who thereafter must shoulder the burden of proving the absence of personal jurisdiction.
Id. at 520-21. The defendant appealed the district court’s denial of its Rule 60(b)(4) motion to vacate, but did not challenge the district court’s holding “that the burden of proof shifts to the defaulting defendant and Rule 60(b)(4) movant.” Id. at 521 n. 6. The Fifth Circuit explained that because the defendant “has not challenged this ruling on appeal, it is now the law of the case. It is not yet, however, the law of this circuit, as we do not reach the issue and need not choose a side in the split of authority on this question, leaving that for another day.” Id. Since the issue of which party bears the burden of proof on Olympiakos’ Rule 60(b)(4) motion to vácate has not previously been considered in this case, the “law of the case” on this issue has yet to be established.
The parties and the courts differ over who bears the burden of showing personal jurisdiction or lack thereof in the context of a Rule 60(b)(4) motion. Normally, the plaintiff bears the burden of demonstrating the court’s ability to exercise jurisdiction over the defendant.
See Luv N’ Care, Ltd. v. Insta-Mix, Inc.,
placing the burden on the defendant reflects “the concerns of comity among the district courts of the United States, the interest in resolving disputes in a single judicial proceeding, the interest of the plaintiff in the choice of forum, and the fear of prejudice against a plaintiff who, owing to delay, might in subsequent collateral proceedings no longer have evidence of personal jurisdiction that existed at the time of the underlying suit.”
Burda,
In
Rockwell International Corp. v. END Corp.,
McNutt,
must allege in .his pleading the facts essential to show jurisdiction. If he fails to make the necessary allegations he has no standing. If he does make them, an inquiry into the existence of jurisdiction is obviously for the purpose of determining whether the facts support his allegations. In the nature of things, the authorized inquiry is primarily directed to the one who claims that the power of the court should be exerted in his behalf. As he is seeking relief subject to this supervision, it follows that he must carry throughout the litigation the burden of showing that he is properly in the court. The authority which the statute vests in the court to enforce the limitations of its jurisdiction precludes the idea that jurisdiction may be maintained by mere averment or that the party asserting jurisdiction may be relieved of his burden by any formal procedure. If his allegations of jurisdictional facts are challenged by his adversary in any appropriate manner, he must support them by competent proof. And where they are not so challenged the court may still insist that the jurisdictional facts be established or the case be dismissed, andfor that purpose the court may demand that the party alleging jurisdiction justify his allegations by a preponderance of the evidence ...
Here, the allegation in the bill of complaint as to jurisdictional amount was traversed by the answer. The court made no adequate finding upon that issue of fact, and the record contains no evidence to support the allegation of the bill. There was thus no showing that the District court had jurisdiction and the bill should have been dismissed upon that ground.
Plaintiffs Original Complaint alleged that “[tjhis Court has personal jurisdiction over Olympiakos because, among other things, Olympiakos does business in Texas and because the facts giving rise to the Complaint, including the formation of the contract at issue, occurred in Texas.” 17 Plaintiff also alleged:
6. Olympiakos is a basketball team that competes in one of the Greek leagues.
7. In 1999, through Morris’ agent, Olympiakos contacted and solicited Morris in Texas about playing for the team in the Greek league.
8. Olympiakos, through Morris’ agent, made representations to Morris while he was in Texas about playing basketball in Greece.
9. Olympiakos forwarded a draft written basketball agreement to Morris while he was in Texas.
10.A written agreement (“Agreement”) between Olympiakos and Morris was subsequently executed on August 31, 1999. A true and accurate copy of the Agreement is attached hereto as Exhibit “A”.
11. Pursuant to the Agreement, Olympiakos agreed to pay Morris for playing basketball for it in the Greek league.
12. Based upon Olympiakos’ statements and representations, Morris expended significant time and money, and did not pursue other basketball opportunities, in order to travel to Greece to play basketball.
13. Under the Agreement, Olympiakos also was required to provide Morris with qualified medical assistance for any injuries suffered playing basketball.
14. Olympiakos breached that provision of the Agreement by not providing such qualified help after Morris suffered an injury.
15. Olympiakos further breached that Agreement by unilaterally and unlawfully terminating that Agreement without good cause.
16. Olympiakos has refused to pay Morris the monies he is owed under this Agreement, and has also refused to address the aggravation of Morris’ injury which was caused by the failure to provide qualified medical assistance. 18
Because Rule 60(b)(4) “embodies the principle that in federal court, a ‘defendant is always free to ignore the judicial proceedings, risk a default judgment, and then challenge that judgment on jurisdictional grounds,’ ”
Jackson,
B. Applicable Law
Plaintiffs Original Complaint (Docket Entry No. 1) alleges state law claims for breach of contract and fraud, and alleges that the court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332 as there is complete diversity of citizenship and the amount in controversy exceeds $75,000. For claims arising under state law federal courts “ ‘sitting in diversity may assert [personal] jurisdiction if: (1) the state’s long-arm statute applies, as interpreted by the state’s courts; and (2) if due process is satisfied under the [Fourteenth [A]mendment to the United States Constitution.’ ”
Johnston v. Multidata Systems International Corp.,
C. Undisputed Facts
Citing the declaration of its General Manager, Christos Stavropoulos, Olympiakos argues that the default judgment is void for lack of personal jurisdiction because Olympiakos had no contacts with the State of Texas in connection with Morris. Ebert has not submitted any evidence that contradicts the relevant aspects of Stavropoulos’ declaration regarding Olympiakos’ general business practices, i.e. that Olympiakos is a corporate entity formed under Greek law, that Olympiakos is one of Greece’s national basketball clubs with a principal place of business in Piraeus, Greece, that Olympiakos does not maintain a presence in Texas, and that on June 24, 2009, Olympiakos was acquired by new owners. Nor has Ebert submitted any evidence that contradicts the relevant aspects of Stavropoulos’ declaration regarding Olympiakos’ contacts with Morris, i.e., that the contract at issue was entered by the parties on August 31, 1999, in Greece, that the contract was negotiated through Morris’ agents, Tom McLaughlin and Andy Boutogiannis in Boston, Massachusetts, and Anastassios Delibaltadakis, an associate of McLaughlin’s in Greece, and that the contract was for services to be performed in Greece.
19
Stavropoulos’
D. Analysis
Ebert argues that
all of the credible evidence establishes that Olympiakos did have the necessary requisite contacts with Texas. Not only did Olympiakos solicit Christopher Morris ..., a Texas resident, for employment, but Olympiakos also solicited other Texas residents for employment during the same relevant time period. Under Section 17.042(3), such solicitations of Texas residents for employment, whether accomplished inside or outside the state, are acts that constitute “doing business,” sufficient to confer personal jurisdiction over the soliciting person or entity. 22
In support of his argument that Olympiakos’ business contacts with Texas were sufficient for the court to exercise personal jurisdiction, Ebert submits Morris’ declaration and the declaration of Shawn Res-pert, another former basketball player.
In his declaration Morris states:
3. I am a resident and citizen of Texas. I have been a resident of Texas continuously since 1988. I have had a Texas driver’s license since 1988.
4. Prior to signing the contract with Olympiakos, I had at least one telephone conversation with Olympiakos’ general manager at the time, Takis Liveratos, in July of 1999.
5. During that telephone conversation, Liveratos urged me to come play for Olympiakos.
6. Prior to that telephone conversation, I was undecided about whether I would go play for Olympiakos, but Liveratos convinced me during that telephone call.
7. During that telephone call, I told Liveratos that he had made up my mind and that I would come play for Olympiakos.
8. Liveratos expressed delight. He requested that I provide him my
9.Within a day or two, a Federal Express package arrived at my Texas residence, from Olympiakos. That package contained a travel itinerary and airline tickets for me to fly to Italy to play for Olympiakos.
10. Prior to signing the Olympiakos contract on August 31, 1999, I flew from Texas to Italy, using the airline tickets sent directly to me from Olympiakos.
11. I arrived in Italy on August 10, 1999, and participated in a two-week long training camp with Olympiakos prior to signing the Olympiakos contract.
12. Had it not been for the August 1999 telephone call from Liveratos, I may not have signed the contract to play for Olympiakos. 23
In his declaration Respert states:
1. I am a retired professional basketball player.
2. During the 1999-2000 basketball season, I played professional basketball for B.C. Olympiakos SFP’s (“Olympiakos”) basketball team in Greece.
3. Prior to the 1999-2000 basketball season, I was a resident of Texas, with a home in Houston, Texas.
4. During 1999, my agent was Carl Poston, of the firm of Poston & Poston. Carl Poston’s office was in Houston, Texas.
5. During the summer of 1999, Olympiakos began recruiting me to play basketball through my agent in Houston, Texas.
6. As a result of Olympiakos’ recruitment of me, through Carl Poston in Houston, Texas, I agreed to play professional basketball for Olympiakos.
7. Following Olympiakos’ negotiations with Carl Poston, Olympiakos forwarded a player contract to Carl Poston for me to sign. After consulting with Carl Poston, I signed the Olympiakos player contract.
8. During the entire time that Olympiakos recruited me to play basketball for it during the summer of 1999, both Carl Poston and I were residents of the State of Texas. 24
1. Texas Long Arm Statute
Citing § 17.042(3) of the Texas Civil Practice and Remedies Code, plaintiff contends that Olympiakos is subject to personal jurisdiction because Olympiakos was doing business in Texas when it directly recruited him for employment because he was a Texas resident at the time. Section 17.042 of the Texas Civil Practice and Remedies Code provides that
[i]n addition to other acts that may constitute doing business, a nonresident does business in this state if the nonresident
(3) recruits Texas residents, directly or through an intermediary located in this state, for employment inside -or outside this state.
at least one July 1999 telephone conversation with Olympiakos’ general manager (at that time), Takis Liveratos. During this telephone conversation, Liveratos urged Morris to come play basketball for Olympiakos. Prior to the telephone conversation with Liveratos, Morris was undecided about whether he would go play for Olympiakos, but Liveratos convinced Morris to join Olympiakos during the course of that telephone conversation. 25
Ebert also contends that while in Texas Morris received from Olympiakos a travel itinerary and airline tickets to Italy which Morris used to participate in a two-week training camp with Olympiakos prior to signing the Olympiakos contract. 26
The evidence that plaintiff contends establishes Olympiakos recruited him to play basketball in Greece does not satisfy the requirements of § 17.042(3) of the Texas Civil Practice and Remedies Code for doing business in Texas. Morris states that he spoke with Liveratos on the telephone but does not state that either he or Liveratos were in Texas when they spoke on the telephone. Ebert has not cited and the court has not found any case in which a single telephone conversation between a foreign employer and a Texas resident has been held to constitute doing business in Texas or recruiting a Texas resident for purposes of § 17.042(3) of the Texas Civil Practices and Remedies Code.
Morris states that after he told Liveratos he would play for Olympiakos, Liveratos asked Morris for his address so that Olympiakos could send him something, and that within a day or two, a package arrived at Morris’ Texas residence containing a travel itinerary and airline tickets to Europe. Although Morris does not state that he provided Olympiakos his Texas address, Morris does state that he “flew to Italy using the airline tickets sent directly to me from Olympiakos.”
27
Inferring from this statement that Olympiakos sent the travel itinerary and airline tickets directly to Morris in Texas, the court cannot conclude that Olympiakos’ act of sending these items to Morris in Texas constitutes recruiting a Texas resident for purposes of § 17.042(3) of the Texas Civil Practice and Remedies Code. Morris’ statement that Liveratos asked him for his address so that Olympiakos could send him something shows that Olympiakos did not know where Morris lived, that Olympiakos was prepared to send the travel itinerary and airline tickets to whatever address Morris provided, and, therefore, that Olympiakos did not purposely or knowingly recruit a Texas resident. Ebert has not cited and the court has not found any case in which sending a package to Texas at the direction of a Texas resident has been held to constitute doing business or recruiting a Texas resident under § 17.042(3) of the Texas Civil Practices and Remedies Code.
28
Thus, the court concludes that Ebert has failed to carry his burden of establishing that Olympiakos’ contacts with Morris constitute doing business or
2. Due Process Requirements of the Fourteenth Amendment
Exercise of personal jurisdiction over a nonresident defendant comports with federal due process guarantees when the nonresident defendant has established minimum contacts with the forum state, and the exercise of jurisdiction “does not offend ‘traditional notions of fair play and substantial justice.’ ”
International Shoe Co.,
(a) Minimum Contacts
In deciding whether sufficient minimum contacts exist to exercise personal jurisdiction the court is directed to determine whether “the defendant’s conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there.”
World-Wide Volkswagen Corp. v. Woodson,
[Wjhere the defendant “deliberately” has engaged in significant activities within a State ... or has created “continuous obligations” between himself and residents of the forum ... he manifestly has availed himself of the privilege of conducting business there, and because his activities are shielded by “the benefits and protections” of the forum’s laws it is presumptively not unreasonable to require him to submit to the burdens of litigation in that forum as well.
Id.
at 2184. “There are two types of ‘minimum contacts’: those that give rise to specific personal jurisdiction and those that give rise to general personal jurisdiction.”
Lewis v. Fresne,
(1) General Jurisdiction
A court may exercise general jurisdiction over a non-resident when the non-resident’s “contacts with the forum state are substantial, continuous, and systematic.”
Johnston,
The seminal general jurisdiction case is
Perkins v. Benguet Consolidated Mining Co.,
By contrast, in
Helicópteros
the Supreme Court held that the defendant’s general business contacts with Texas were insufficient to support an exercise of general jurisdiction despite the fact that the defendant had purchased equipment from a company in the forum state.
The Fifth Circuit has consistently imposed the high standard set by the Supreme Court in
Helicópteros
when ruling on general jurisdiction issues.
See, e.g., Central Freight Lines Inc. v. APA Transport Corp.,
Up until 1990, Telmex leased telephone circuits between Arizona and Texas. Telmex’s current lines interconnect with Texas at the border in McAllen and El Paso. Telmex leased real property in Texas in 1995 and paid taxes to Texas that same year. Telmex contracted to a warehouse 75,000 telephone poles in Laredo around 1990-1991. Telmex had correspondent agreements with a number of U.S. carriers. Settlement revenues from these agreements totaled approximately $1 billion a year in 1994-1995. The total revenues derived from Texas residents totaled millions of dollars a month. Telmex also solicited ads for yellow page ads in border cities of U.S., although it is unclear exactly where. Additionally, SBC is alleged to be a Texas contact of Telmex, since SBC owns a portion of a controlling interest in Telmex and thus exerts some control over Telmex.
Id. In a footnote the Fifth Circuit elaborated that “[a] number of other contacts are also put forward, mostly involving Telmex paying for services that were provided by corporations in Texas or the U.S. Such services included consulting and finance services.” Id. & n. 6. The Fifth Circuit rejected the plaintiffs claim that Telmex’s contacts were sufficient to confer general jurisdiction because “Telmex ha[d] virtually no contacts which constitute doing business in Texas.” Id. The Fifth Circuit explained that
Primarily, Telmex interconnects its Mexican lines with American lines, enabling long distance communication. The money U.S. companies pay Telmex is for service on the Mexican leg of the call; the money the U.S. carriers receive is for the U.S. leg of a call. As such, Mexican and U.S. telecommunications companies do business with each other in these situations, but neither is doing business in the other country for jurisdictional purposes.
The one contact that could constitute doing business in Texas would be the yellow page ads. However, the evidence on the yellow page ads consists of nothing more than a comment that Telmex solicited yellow page ads in border cities in the U.S. without naming which cities, when this occurred, whether such ads were actually placed, or for how long. Without more, such evidence does not help establish continuous and systematic contacts.
In sum, the totality of the contacts suggests that Telmex conducted a great deal of business with Texas, but virtuallynone in Texas, as such general jurisdiction cannot be shown, even on a prima facie basis.
Id. at 717-18.
Olympiakos argues that its contacts with Texas are not sufficient to establish general jurisdiction because it “does not (1) reside in Texas, (2) maintain offices in Texas, (3) own, rent or lease real property in Texas, (4) pay taxes in Texas, or (5) maintain any bank accounts in Texas.” 30 Although plaintiff contends that by recruiting him, Respert, and perhaps other Texas residents to play basketball in Greece, Olympiakos was doing business in Texas, plaintiff has not cited any evidence that Olympiakos has ever had a business presence in Texas.
The facts as stated by Morris and Res-pert in their declarations show that in 1999 Olympiakos recruited them both to play basketball in Greece by contacting Morris once by telephone, and by contacting Morris’ Massachusetts-based agents and Res-pert’s Texas-based agent more than once. Plaintiff has not cited and the court has not found any case in which a court has recognized the recruitment of state residents for out-of-state employment to constitute substantial, systematic, and continuous contacts with a forum state needed to subject a foreign defendant to the court’s general jurisdiction.
See Clark v. Moran Towing & Transportation Co., Inc.,
(2) Specific Jurisdiction
A court may exercise specific jurisdiction over a nonresident defendant if “the defendant’s contacts with Texas ‘arise from, or are directly related to, the cause of action.’ ”
Lewis,
a three-step analysis for specific jurisdiction: “(1) whether the defendant has minimum contacts with the forum state, i.e., whether it purposely directed its activities toward the forum state or purposefully availed itself of the privileges of conducting activities there; (2) whether the plaintiffs cause of action arises out of or results from the defendant’s forum-related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable.”
McFadin v. Gerber,
(i) Purposeful Availment
Asserting that Morris is a resident of Texas, Ebert argues that because Olympiakos recruited Morris for employment, Olympiakos is subject to personal jurisdiction in Texas under the Texas Long Arm statute because Olympiakos was doing business in Texas. Ebert cites
Garcia v. Vasquez,
In
Garcia,
[d]ue process requirements are ... fulfilled. Defendant ... purposefully issued the job information in North Carolina. The T.E.C. officials merely acted on his behalf in processing the information. The privilege of conducting activities in Texas was intentionally invoked by [defendant]. This cause of action plainly arises from and is connected with the alleged Texas transaction.
Id.
at 42.
Garcia
stands for the principle that a nonresident farmer who recruits Texas laborers to work in another state, either directly or through an agent located in Texas, is subject to the jurisdiction of Texas courts for claims arising from that recruitment.
See Neizil v. Williams,
Garcia,
The facts of this case are also distinguishable from other recruitment cases in which courts have found that the exercise of specific jurisdiction comports with the requirements of due process. For example, in
Runnels v. TMSI Contractors, Inc.,
Because TMSI Arabia solicited Louisiana residents through local advertising and through its agent, because its contacts with Louisiana were deliberate rather than fortuitous, and because it could reasonably foresee that contract disputes would likely arise as a result of its solicitation of United States citizens, it is not unfair to require that TMSI Arabia defend this suit in Louisiana.
For the reasons explained above, the court concludes that there is no evidence from which the court can reasonably conclude or even infer that when Olympiakos recruited Morris to play basketball in Greece, Olympiakos knew or had reason to know that Morris was a Texas resident such that Olympiakos purposefully availed itself of the privilege of doing business in Texas could reasonably anticipate being haled into court there. Moreover, even if the evidence were sufficient to establish that by recruiting Morris to play basket
(ii) Claims Arising from Forum Contacts
Even if Olympiakos directly recruited Morris in Texas, the court may not exercise personal jurisdiction over Olympiakos unless the claims in this action arise out of or result from that act of recruitment.
Van Pelt,
(A) Breach of Contract
Plaintiff alleges:
18. On August 31, 1999, Morris and Olympiakos entered into a written Agreement.
19. Pursuant to the Agreement, Olympiakos was to provide qualified medical assistance for Morris as well as to pay Morris for his basketball services.
20. Olympiakos has breached the Agreement by failing to pay Morris and by failing to provid[e] qualified medical assistance to Morris.
21. As a direct and proximate result of Olympiakos’ breach of the written Agreement as described above, Morris has been damaged in an amount in excess of $1,000,000.00, exclusive of interest, costs, and attorney’s fees. 32
Olympiakos contends, and Ebert does not dispute, that the written contract the parties entered on August 31, 1999, was executed by the parties in Greece. 33 While Morris states in his declaration that “[h]ad it not been for the [July] 1999 telephone call from Liveratos, I may not have signed the contract to play for Olympiakos,” 34 Morris neither alleges nor argues that his breach of contract claim is for breach of an employment contract made during his telephone conversation with Liveratos. Instead, the factual allegations contained in Plaintiffs Original Complaint show that the contacts that Olympiakos had with Morris in Texas were merely negotiations leading up to contract formation and that the breaches alleged in this action did not arise from and were not connected to Olympiakos’ contacts with Morris in Texas but, instead, from Olympiakos’ alleged failure to provide medical assistance for injuries that Morris suffered while playing basketball in Greece and from Olympiakos’ unilateral termination of the contract without good cause in Greece. 35
Morris’ allegations establish that the breaches for which he sought relief are
The breach of contract claims at issue in this case are distinguishable from the claims at issue in
Garcia,
Merely contracting with a resident of the forum state does not sufficiently support the exercise of jurisdiction over a defendant.
ICEE Distributors, Inc. v. J & J Snack Foods Corp.,
Undisputed facts now before the court establish that even if Morris was in Texas during the telephone conversation with Liveratos, both parties always intended for Morris to play basketball in Greece, Morris moved to Greece to play basketball for Olympiakos, the contract at issue was formed in Greece, the breaches alleged in this action all occurred in Greece, and none of the acts for which Morris seeks compensation occurred in Texas. These undisputed facts establish that the breach of contract claims alleged in this action do not
(B) Fraud
Plaintiff alleges:
22. Morris maintains that Olympiakos intentionally made false representations of material fact regarding its obligations and promises under the written Agreement between the parties.
23. Morris maintains that Olympiakos intentionally made false representations of material fact to him regarding its obligations and promises under the written Agreement between the parties.
24. Morris maintains that he reasonably relied on these misrepresentations, to his detriment. In particular, Morris states that, based on the misrepresentations of Olympiakos, he entered into a written Agreement and fully performed his obligations under the Agreement, including the expenditure of time and money in providing his professional services to Olympiakos.
25. Morris maintains that the false representations made by Olympiakos were:
a) made as to facts susceptible of actual knowledge, with knowledge of their untruth or with reckless disregard of same;
b) promissory in nature, but made with a present intent not to comply therewith; and/or
c) made in breach of Olympiakos’ duty to exercise due care to reasonably determine that the representations made were true and accurate at the time made and that true and accurate statements were made to Morris.
26. Morris further maintains that Olympiakos made false, fraudulent, and/or malicious representations to him to induce him to execute the Agreement, and to perform his professional services.
27.As a direct and proximate result of Olympiakos’ intentional misrepresentations, Morris ha[s] been damage[d] in an amount in excess of $1,000,000.00, exclusive of interest, costs, and reasonable attorney’s fees. 36 ’
The Fifth Circuit has held that “[w]hen the actual content of communications with a forum gives rise to intentional tort causes of action, this alone constitutes purposeful availment. The defendant is purposefully availing himself of ‘the privilege of causing a consequence’ in Texas.’ ”
Wien Air Alaska, Inc. v. Brandt,
Morris did not allege and Ebert does not argue that the misrepresentations on which the fraud claims asserted in this action are based were made during the single telephone conversation that Morris had with Liveratos. Instead, the factual allegations contained in Plaintiffs Original Complaint show that the misrepresentations at issue were made in the written agreement that the parties undisputedly entered in Greece in August of 1999 over a month after Morris spoke to Liveratos on the telephone. The undisputed facts of
(b) Fair Play and Substantial Justice
Because the court has already concluded that there is no evidence from which to conclude or even to infer that when Olympiakos recruited Morris to play basketball in Greece, Olympiakos purposefully availed itself of the privilege of doing business in Texas such that Olympiakos could reasonably anticipate being haled into court there, or, that the claims for breach of contract and fraud that Morris alleged arise out of or result from Olympiakos’ contacts with Texas, the court need not determine whether the exercise of jurisdiction would offend traditional notions of fair play and substantial justice.
See Felch v. Transportes Lar-Mex SA DE CV,
The primary goal of the due process clause as it relates to personal jurisdiction is fairness to foreign defendants.
See Schlobohm v. Schapiro,
E. Conclusions
For the reasons explained above, the court concludes that Olympiakos lacks minimum contacts with Texas needed to support the court’s assertion of either specific or general personal jurisdiction, and that requiring Olympiakos, a Greek corporation, to defend this suit in Texas would not comport with traditional notions of fair play and substantial justice.
IV. Conclusions and Order
For the reasons explained in § II, above, Plaintiffs Motion to Strike the Declaration of Christos Stavropoulos (Docket Entry No. 34) is DENIED. After careful consideration of the totality of the circum
Notes
. See Plaintiffs Original Complaint, Docket Entry No. 1.
. See Exhibit A attached to Plaintiffs Request for Entry Of and Default Judgment, Docket Entry No. 8.
.Plaintiff's Motion to Strike the Declaration of Christos Stavropoulos, Docket Entry No. 34, p. 1.
. Memorandum in Support of Plaintiff's Motion to Strike the Declaration of Christos Stavropoulos, Docket Entry No. 35, p. 2.
. Reply Memorandum of Law of KAE Olympiakos SFP in Further Support of Its Motion to Vacate Default Judgment and in Opposition to Motion to Strike Declaration, Docket Entry No. 39, p. 13.
. The Advisory Committee Note to ¶ 7 leaves open the possibility that the absence of evidence from a record is not hearsay at all: “While probably not hearsay as defined in Rule 801, decisions may be found which class the evidence not only as hearsay but also as not within any exception. In order to set the question at rest in favor of admissibility, it is specifically treated here.” At least one court recently has noted the possibility that “evidence that a record does not exist arguably is not hearsay at all.”
United States
v.
Cervantes-Flores,
. Declaration of Christos Stavropoulos in Support of Defendant's Motion to Vacate Judgment Under Rule 60(b) of the Federal Rules of Civil Procedure (Stavropoulos Declaration), Exhibit A attached to Memorandum of Law of KAE Olympiakos SFP in Support of Its Motion to Vacate Default Judgment, Docket Entry No. 19, p. 1 ¶ 1.
. Id. at ¶ 2.
. Memorandum in Support of Plaintiff's Motion to Strike the Declaration of Christos Stavropoulos, Docket Entry No. 35, p. 6 (citing excerpts from the Deposition of Christos Stavropoulos, Exhibit B attached thereto).
. Declaration of Christos Stavropoulos in Further Support of Defendant's Motion to Vacate Judgment Under Rule 60(b) of the Federal Rules of Civil Procedure and in Opposition to Plaintiff's Motion to Strike the Declaration of Christos Stavropoulos (Stavropoulos Supplemental Declaration) attached to Reply Memorandum of Law of KAE Olympiakos
. Id. at ¶ 5.
. Deposition of Christos Stavropoulos, Exhibit B attached to Memorandum in Support of Plaintiff’s Motion to Strike the Declaration of Christos Stavropoulos, Docket Entry No. 35. dd. 8-10. 13-15. and 23-25.
. KAE Olympiakos SFP's Motion to Vacate Default Judgment (Motion to Vacate), Docket Entry No. 18, pp. 1-2 ¶ 4.
. Id.
. Plaintiff’s Sur-Reply to Olympiakos' Memorandum of Law in Further Support of Its Motion to Vacate Default Judgment, Docket Entry No. 43, p. 4 ¶ 8.
. Id. See also Plaintiffs Memorandum in Opposition to Defendant’s Motion to Vacate Judgment, Docket Entry No. 36, p. 3 (arguing that "Olympiakos carries the burden of proving that the Court lacks personal jurisdiction over it”).
. Plaintiffs Original Complaint, Docket Entry No. 1, p. 2 ¶ 4.
. Id. at 2-3 ¶¶ 6-16.
. Memorandum of Law of KAE Olympiakos SFP in Support of Its Motion to Vacate De
. Contract, attached to Plaintiff’s Original Complaint, Docket Entry No. 1 (opening lines show that the contract was executed in Piraeus, Greece, on August 1, 1999, by Morris and Olympiakos SFP, a Basketball Company located in Piraeus, Greece; Article 15 shows that Morris designated Tassios Delibaltadakis, a resident of Athens, Greece, as his "attorney in fact”).
. Agreement, attached to Stavropoulos’ Declaration attached to Memorandum of Law of KAE Olympiakos SFP in Support of Its Motion to Vacate Default, Docket Entry No. 19 (showing that Olympiakos agreed to negotiate an agreement for Morris to play basketball in Greece through McLaughlin and Boutogiannis whose company, Best in Sports, had an account at the Bank of Boston). See also Affidavit of Tom McLaughlin attached to Reply Memorandum of Law of KAE Olympiakos SFP in Further Support of Its Motion to Vacate Default Judgment and in Opposition to Motion to Strike Declaration, Docket Entry No. 39, at ¶¶ 2-3 stating that he has at all times been a resident of Boston, Massachusetts, and that his company, Best in Sports, has been located in Andover, Massachusetts since 1995.
. Plaintiff’s Memorandum in Opposition to Defendant’s Motion to Vacate Judgment, Docket Entry No. 36, p. 2 ¶ 4.
. Declaration of Christopher Morris, Exhibit F attached to Plaintiff's Memorandum in Opposition to Defendant’s Motion to Vacate Judgment, Docket Entry No. 36, 113-12 (emphasis added).
. Declaration of Shawn Respert, Exhibit G attached to Plaintiff’s Memorandum in Opposition to Defendant’s Motion to Vacate Judgment, Docket Entry No. 36, ¶¶ 1-8.
. Plaintiff's Memorandum in Opposition to Defendant's Motion to Vacate Judgment, Docket Entry No. 36, 10 ¶ 23.
. Id. at 11 ¶ 24.
. Declaration of Christopher Morris, Exhibit F attached to Plaintiff’s Memorandum in Opposition to Defendant’s Motion to Vacate Judgment, Docket Entry No. 36, ¶ 10 (emphasis added).
. Plaintiff's Original Complaint alleges that "Olympiakos forwarded a draft written basketball agreement to Morris while he was in Texas,” Docket Entry No. 1, p. 2 ¶ 9, but no evidence has been submitted in support of this allegation.
. Memorandum of Law of KAE Olympiakos SFP in Support of Its Motion to Vacate Default Judgment, Docket Entry No. 19, pp. 9-13 (specific jurisdiction) & p. 13 n. 5 (general jurisdiction).
. Id. at 13 n. 5.
. Plaintiffs Memorandum in Opposition to Defendant’s Motion to Vacate Judgment, Docket Entry No. 36, 12.
. Plaintiff’s Original Complaint, Docket Entry No. 1, p. 3 ¶¶ 18-21.
. See Contract, Exhibit A attached to Plaintiff’s Original Complaint, Docket Entry No. 1, (stating “In Piraeus, August 31, 1999 the undersigned: ... ”).
. Declaration of Christopher Morris, Exhibit F attached to Plaintiff's Memorandum in Opposition to Defendant’s Motion to Vacate Judgment, Docket Entry No. 36, p. 2 ¶ 12.
. Plaintiff's Original Complaint, Docket Entry No. 1, pp. 2-3 ¶¶ 13-16.
. Id. at 3-4 ¶¶ 22-27.
