Qmect, Inc. v. Burlingame Capital Partners II et al

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re No. 04-41044 T
Chapter 11
QMECT, INC., etc.,
Debtor-in-Possession.
__________________________________/
In re No. 04-46443 T
Chapter 11
FRED AND LINDA KOELLING,
Debtors-in-Possession.
__________________________________/
QMECT, INC., etc., A.P. No. 04-4190 AT
A.P. No. 04-4365 AT
Plaintiff, A.P. No. 04-4366 AT
vs. (Consolidated)
BURLINGAME CAPITAL PARTNERS II,
L.P., etc. et al.,
Defendants.
___________________________________/
AND RELATED ADVERSARY PROCEEDINGS
__________________________________/
Signed: November 10, 2005
________________________________________
LESLIE TCHAIKOVSKY
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
November 14, 2005
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 04-04190 Doc# 167 Filed: 11/10/05 Entered: 11/14/05 10:24:55 Page 1 of
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MEMORANDUM OF DECISION RE ADMISSIBILITY OF DOCUMENTS
The Court directed the parties to file briefs addressing the
admissibility of two documents: (1) the Comerica Bank Loan
Interest and Principal Statement (the “Comerica Statement”) and
(2) the Qmect Trial Balance as of February 26, 2004 (the “Qmect
Trial Balance”). Both parties filed briefs. Burlingame Capital
Partners II, L.P. and Electrochem Funding, LLC (collectively
“Burlingame”) filed an unauthorized reply brief. The above-
captioned debtors-in-possession (the “Debtors”) filed a motion to
strike the reply brief, to which Burlingame responded. The Court
has reviewed all of the filings and concludes as follows:
1. The motion to strike Burlingame’s reply brief will be
granted. The reply brief was not authorized and was not warranted
by the circumstances without authorization.
2. The testimony of David Ferree was inadequate to establish
a foundation for admissibility of the Comerica Statement as a
business record. His testimony clearly indicated that he had no
personal knowledge of how this document was prepared. The
deficiency does not lie with the fact that he was not responsible
for the account until just prior to the completion of the sale of
the Qmect loans to Burlingame. The deficiency lies with the fact
that the document was prepared and maintained in a different
location and that he has no direct knowledge of the procedures
followed by that office in preparing and maintaining the document.
His designation by Comerica as a custodian of records does not
cure that deficiency. However, the Court will admit the document
Case: 04-04190 Doc# 167 Filed: 11/10/05 Entered: 11/14/05 10:24:55 Page 2 of
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under FRE 807. Credible testimony was presented that this is a
document upon which Comerica relied in connection with its own
business operations. The Court concludes that this is a
sufficient guaranty of its trustworthiness to justify its
admission into evidence. The lack of any direct evidence of how
the document was prepared will be taken into account in the weight
to be accorded it.
3. The Court also concludes that a sufficient foundation has
not been established for admitting the Qmect Trial Balance into
evidence as a business record. However, the Court will admit the
Qmect Trial Balance into evidence as an admission subject to a
motion to strike if later testimony establishes that its admission
was improvident.
Good cause appearing therefor, it is
SO ORDERED.
END OF DOCUMENT
Case: 04-04190 Doc# 167 Filed: 11/10/05 Entered: 11/14/05 10:24:55 Page 3 of
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COURT SERVICE LIST
Paul E. Manasian
Manasian & Rougeau, LLP
400 Montgomery St., Ste. 1000
San Francisco, CA 94104
Robert R. Moore
Allen Matkins Leck Gamble & Mallory LLP
Three Embarcadero Center, 12th Floor
San Francisco, CA 94111
Philip J. Nicholsen
Law Offices of Philip J. Nicholsen
221 Main St., #740
San Francisco, CA 94105
Case: 04-04190 Doc# 167 Filed: 11/10/05 Entered: 11/14/05 10:24:55 Page 4 of
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