Court of Appeals of Texas,

El Paso.

ZINC NACIONAL, S.A., Appellant,

v.

BOUCHÉ TRUCKING, INC., Appellee,

v.

Jorge Arrellano, Party In Interest/Plaintiff.

No. 08-07-00314-CV.

 

Dec. 15, 2010.

 

Before CHEW, C.J., McCLURE, and RIVERA, JJ.

 

OPINION ON REMAND

 

ANN CRAWFORD McCLURE, Justice.

 

Zinc Nacional, S.A. brings this interlocutory appeal from the denial of a special appearance. At issue is whether a Mexican company that trucks its product into the United States at Laredo, Texas for transport to New Mexico may be sued in Texas for negligence in loading the trailer at its facility in Monterrey, Mexico which allegedly caused an accident that injured a Texas driver. In our original opinion issued July 31, 2009, we concluded that the trial court could exercise personal jurisdiction on the basis of specific jurisdiction. On April 9, 2010, the Texas Supreme Court determined that Zinc did not have minimum contacts with Texas for purposes of establishing specific jurisdiction by using a third-party trucking service to transport its goods through Texas to an out of state customer. Zinc Nacional, S.A. v. Bouché Trucking, Inc., 308 S.W.3d 395, 396 (Tex.2010). It remanded the case to us for consideration of Bouché’s alternative jurisdictional argument.

 

FACTUAL SUMMARY

 

For the benefit of the reader, we will reiterate the precise factual background. Zinc Nacional is a Mexican corporation with its principal place of business in Monterrey, Mexico. The company manufactures paper and paper-related products for worldwide distribution. It does not maintain an office in Texas, employ anyone in Texas, advertise in Texas, or market its products in Texas. Zinc has some 260 customers worldwide, thirty of which are located in the United States, and three or four of which are located in Texas. It also receives raw materials from suppliers in Texas. Zinc contracts with C.H. Robinson de Mexico, a Mexican entity, for the transportation of its products throughout Mexico.

 

Zinc focuses on selling its products to drywall manufacturing plants located in New Mexico, Nevada, and Florida. American Gypsum, located in Albuquerque, New Mexico, has been a customer of Zinc’s grey-back paper products for the past seven years. Zinc ships American Gypsum approximately 300 metric tons of product per month. On average, it ships two to three loads a week. On December 13, 1999, Zinc loaded eight rolls of grey-back paper onto a trailer in Monterrey, Mexico, pursuant to a purchase order from American Gypsum . The trailer was provided by C.H. Robinson. C.H. Robinson trucked the load from Monterrey, Mexico, to the international bridge at Laredo, Texas. At that point, the customary procedure was to deliver the load to a customs agent in order to cross the shipment into the United States. In this case, the customs agent was Juan Alvarado Brokerage. The purchase order specified that the shipping terms were “F.O.B. Mid-Bridge Laredo.” This ensures, in effect, that the transfer of title took place in Nuevo Laredo, Tamaulipas, Mexico. The shipment was then picked up in Laredo by Bouché Trucking, Inc.-a Texas corporation-which had been subcontracted by C.H. Robinson to transport the products to New Mexico.

 

Because of the size and weight of the rolls, Zinc loads them onto a trailer using a specialized forklift loader. The rolls are then secured using specialized supports and inflatable pillows purchased and provided by Zinc to ensure that the rolls do not shift during transport. This particular load weighed between 2.5 and 3 metric tons. Because the paper is delicate and fragile, the rolls are to remain on the same trailer from the time of loading in Monterrey until they are unloaded in New Mexico by the same specialized forklift owned by American Gypsum.

 

Jorge Arrellano is a long haul truck driver for Bouché. On December 14, 1999, Arrellano was instructed to pick up a load containing numerous rolls of grey-back paper for transport to American Gypsum in Albuquerque. During transport, the rolls shifted causing the trailer rig to overturn in Texas on U.S. 55 North. Arrellano sued Bouché, alleging it was negligent in: (1) failing to properly load the rolls of paper onto the trailer, (2) failing to properly secure the rolls of paper onto the trailer, and (3) failing to properly hire and/or train its personnel and/or its agents on the proper manner of loading. Bouché then filed a third party petition against Zinc Nacional seeking indemnity and contribution since Zinc employees actually loaded the paper rolls onto the trailer. Zinc filed a special appearance which the trial court denied.

 

During oral argument, we were advised that Zinc created a new product line specifically for American Gypsum and that every roll of paper is unique pursuant to specifications. The round rolls of paper are contained in square boxes and each load is sealed in Monterrey before transport.

 

STANDARD OF REVIEW

 

The plaintiff bears the initial burden of pleading sufficient allegations to bring a non-resident defendant within the personal jurisdiction of a Texas court. Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333 (Tex.2009); BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 793 (Tex.2002). The non-resident defendant then assumes the burden of negating all bases of jurisdiction in those allegations. Id.

 

Whether a trial court has personal jurisdiction over a defendant is a question of law, which we review de novo. Retamco, 278 S.W .3d at 337. However, the trial court frequently must resolve questions of fact before deciding the question of jurisdiction. BMC Software, 83 S.W.3d 794. If a trial court enters an order denying a special appearance, and the trial court issues findings of fact and conclusions of law, the appellant may challenge the fact findings on legal and factual sufficiency grounds. Id. Where, as here, the trial court does not issue findings, all fact findings necessary to support the judgment and supported by the evidence are implied. Id. at 795.

 

LONG-ARM JURISDICTION

 

Texas courts may assert in personam jurisdiction over a non-resident if (1) the Texas long-arm statute  authorizes the jurisdiction, and (2) the exercise of jurisdiction is consistent with federal and state constitutional due process guarantees. Retamco, 278 S.W.3d at 337, citing Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex.2007); Schlobohm v. Schapiro, 784 S.W.2d 355, 356 (Tex.1990). The long-arm statute permits Texas courts to exercise jurisdiction over non-resident defendants that do business in Texas, and the statute contains a non-exclusive list of activities that constitute “doing business”. TEX.CIV.PRAC. & REM.CODE ANN. § 17.042 (Vernon 2008). A non-resident does business in Texas if it commits a tort in whole or in part in the state. TEX.CIV.PRAC. & REM.CODE ANN. § 17.042(2). A tort is committed where the resulting injury occurs. Hupp v. Siroflex of America, Inc., 848 F.Supp. 744 (S.D.Tex.1994), citing Union Carbide Corp. v. UGI Corp., 731 F.2d 1186, 1189-90 (5th Cir.1984).

 

TEX. CIV. PRAC. & REM.CODE ANN. §§ 17.041-.045 (Vernon 2008).

 

Section 17.042’s broad language extends personal jurisdiction “as far as the federal constitutional requirements of due process will permit.” BMC Software, 83 S.W.3d at 795, quoting U-Anchor Adver., Inc. v. Burt, 553 S.W.2d 760, 762 (Tex.1977). Consequently, we consider whether it is consistent with federal constitutional requirements of due process for Texas courts to assert in personam jurisdiction. See Guardian Royal Exchange Assurance, Ltd. v. English China Clays, 815 S.W.2d 223, 226 (Tex.1991). We rely on both federal and Texas decisions in determining whether a non-resident defendant has met its burden to negate all bases of jurisdiction. BMC Software, 83 S.W.3d at 795.

 

MINIMUM CONTACTS

 

The United States Supreme Court divides the due process requirement into two parts: (1) whether the non-resident defendant has purposefully established minimum contacts with the forum state, and if so, (2) whether the exercise of jurisdiction comports with traditional notions of fair play and substantial justice. BMC Software, 83 S.W.3d at 795, citing International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed 95 (1945). We focus on the defendant’s activities and expectations when deciding whether it is proper to bring the defendant before a Texas court. Retamco, 278 S.W.3d at 338. A defendant establishes minimum contacts when it “purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.” Id. Personal jurisdiction exists if the non-resident’s minimum contacts give rise to either specific jurisdiction or general jurisdiction. Id.; BMC Software, 83 S.W.3d at 795-96, citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 413-14, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). Inasmuch as the Supreme Court has already determined that the trial court erred by exercising specific jurisdiction over Zinc, we limit our analysis to general jurisdiction. General jurisdiction exists when a defendant’s contacts in a forum are continuous and systematic so that the forum may exercise personal jurisdiction over the defendant even if the cause of action did not arise from or relate to activities conducted within the forum state. BMC Software, 83 S.W.3d at 796.

 

The Issue on Remand

 

Here, there is no evidence that Zinc has attempted to serve the market in Texas. It has no offices, employees, agents, or representatives in Texas, nor does it advertise or market its paper products here. As such, Zinc lacks the minimum contacts with Texas necessary to establish specific jurisdiction. Although Zinc does have three or four customers for its other products in Texas, and does receive some raw materials from Texas, these facts are unrelated to the accident in this case and are thus irrelevant to the question of specific jurisdiction. However, they may have some bearing on the existence of general jurisdiction, an issue the court of appeals did not consider.

Zinc, 308 S.W.3d at 398.

 

The Record

 

At the special appearance hearing in the trial court, the parties stipulated that the only evidence to be considered was the affidavit and deposition of Eduardo Alverde Villareal, Zinc’s general manager, and the exhibits thereto. The following specifics appear in the affidavit.

 

3. ZINC is not a Texas resident, does not maintain an office in the State of Texas, nor does it employ any person in the State of Texas. ZINC does not advertise or market its products in the State of Texas.

 

4. ZINC is a manufacturer of paper and ZINC related products with its manufacturing plant located in Monterrey, Mexico. ZINC sells its products to distributors worldwide. ZINC’s customer base totals approximately 260 customers worldwide. Of those 260 customers, approximately 30 are located in the United States. ZINC does sell to three or four customers located in Texas. However, Zinc’s practice is to transfer title in Mexico. Moreover, neither I, nor anyone who works for Zinc has personal knowledge that any of the customers are Texas residents as defined by Texas law. Zinc does receive some raw materials from suppliers in Texas. However, the practice of Zinc is to accept title to the materials in Mexico. Zinc only receives a small amount of its raw materials from suppliers in Texas. Neither I, nor anyone who works for Zinc has any personal knowledge as to whether any of the suppliers are Texas residents as defined by Texas law.

 

5. … To my knowledge, ZINC does not enter into any contracts with Texas trucking companies. In short, ZINC does not maintain continuous and systematic contacts with the State of Texas.

 

During his deposition, Alverde testified that:

• Zinc is not licensed to do business anywhere in the United States.

 

• Zinc has never filed a claim or action against any company or entity in the United States.

 

• Zinc has never owned any real estate, personal property, or tangible property in the United States.

 

• Zinc only pays for shipments to be delivered to Nuevo Laredo, Mexico or mid-bridge.

 

• Zinc only does business in Mexico.

 

• The customer pays for the shipment from Nuevo Laredo to “their final destiny” [sic]; hires the trucking services, and negotiates the price.

 

In its response to the special appearance, in its arguments at the hearing, and in its briefing on appeal, Bouché has consistently based its general jurisdiction argument on these limited facts:

• Zinc Nacional (‘Zinc’) has been doing business with customers in the United States for nine to ten years. Mr. Villareal  and his managers and staff visit a customer in the United States one to two times per month and stay two to three days during each visit.

 

The general manager’s name is Eduardo Alverde Villareal. In keeping with Mexican custom, he goes by Alverde.

 

• Zinc has been selling products in the United States since the 1970’s.

 

• Zinc’s markets in the United States are New Mexico, primarily, Nevada and Florida.

 

• Zinc takes orders and receives all orders from the United States in Monterey [sic], Mexico.

 

• Zinc has customers around the United States and representatives of Zinc visit their Customers, they deliver product specifications [sic].

 

• Zinc has a website and its customers or prospective customers can log onto their website to look at product specifications. The Zinc website is available in the United States.

 

• However orders are not taken through the website. Orders must be placed by faxing purchase orders to Zinc’s headquarters in Monterey [sic], Mexico.

 

• One of the products produced by Zinc Nacional is gray back paper and it has been producing this product for approximately seven years.

 

• Zinc has only three customers for the gray back paper, one in New Mexico (two different sites in New Mexico), two cites [sic] in Mexico.

 

• American Gypsum (‘AG’) is a New Mexico company and has been a customer of Zinc since Zinc was started. AG is Zinc’s second biggest customer.

 

• The monthly average shipment for AG for the seven years that AG has been doing business with Zinc is fifty (50) tons per month. However, the quantity of Zinc gray paper product ordered by AG is closer to three hundred (300) tons per month and the price per ton is around $300 per ton.

 

• Zinc sells both types of its gray back paper to AG.

 

• Zinc agents communicate regularly, one or two times per week, with AG representatives in New Mexico with the communications involving payments and shipments of products from Monterey [sic], Mexico to New Mexico, one of AG’s two sites in New Mexico.

 

• Mr. Villareal confirmed that the documents attached hereto as Exhibit B are true and accurate depictions of the Zinc website. The documents attached hereto as Exhibit B are incorporated herein by reference for all purposes as if recited verbatim herein.

 

 

• Zinc formed ‘Promax’ with other Mexican companies and Promax sells its products to foreign markets.

 

• Zinc is a member of the American Zinc Association. The American Zinc Association has its headquarters in Washington, D.C. Zinc has been a member of the American Zinc Association for at least three years.

 

• Zinc has had the referenced website available since the year 2000.

 

• The documents attached as Exhibit B accurately reflect the Zinc website as it was previously and as confirmed by Mr. Villareal.

 

• Zinc ships all of its paper products in rolls and the size and dimensions of the rolls of paper are based upon the specifications provided to Zinc by its customers.

 

• The approximate weight for each roll of paper ordered and shipped from Zinc’s Monterey [sic], Mexico plant is three metric tons and have always been between 2.5 and 3 metric tons.

 

• Specialized forklifts are used to load the paper rolls onto trailers at the Zinc plant in Monterey [sic], Mexico.

 

• Zinc typically exchanges with AG purchase orders, invoices and packing lists. Zinc also receives wire transfers directly from AG.

 

• A representative of Zinc travels to New Mexico to meet with AG every three to six months.

 

• Zinc built the plant in Monterey [sic], Mexico due substantially to and dependent upon the gray back paper needs of AG in New Mexico.

 

Not a single one of these fact-specific recitations mentions contact with the State of Texas.

 

Do These Facts Demonstrate Continuous and Systematic Contact?

 

The Texas Supreme Court has recognized that general jurisdiction requires a more demanding minimum contacts analysis. Spir Star AG v. Kimich, 310 S.W.3d 868 (Tex.2010), 53 Tex.Sup.Ct.J. 423. Indeed, the contacts must be “substantial”. CSR, Ltd. v. Link, 925 S.W.2d 591, 595 (Tex.1996). We have considerable detailed evidence about the accident at issue and Zinc’s purported negligence in loading the rolls of grey back paper at its manufacturing facility in Monterrey. We know that Zinc contracted with C.H. Robinson de Mexico, a Mexican company, to truck the paper to the border. Alverde testified that the purchaser, American Gypsum, was responsible for arranging transportation from the border to its facilities in New Mexico. And Bouché Trucking, a Texas company, was employed for that purpose.

 

As we noted above, the Supreme Court recognized that Zinc does have three or four customers for its other products in Texas, and receives some raw materials from Texas. While irrelevant to the question of specific jurisdiction, the court opined that it might be relevant to a general jurisdiction argument. We would agree had we been presented with evidence concerning these contacts. Alverde averred in his affidavit only that Zinc’s practice with both customers and suppliers is to transfer title in Mexico, and Zinc only receives a small amount of its raw materials from suppliers in Texas. We have not been advised of the identity or location of the customers, the products which are sold to those customers, the identity or location of the suppliers of raw materials, the nature of the raw materials, the type of interaction Zinc has with the Texas entities, or the frequency of those contacts. Are these contacts sufficient? We think not.

 

General jurisdiction is often described as “dispute blind”, an exercise of jurisdiction made without regard to the nature of the claim presented. Moki Mac River Expeditions v. Drugg, 270 S.W.3d 799, 802 (Tex.App.-Dallas 2008, no pet.)(on remand). Only the defendant’s contacts with the forum are relevant, not the unilateral activity of another party or third person. Retamco, 278 S.W.3d at 339. It is the quality and nature of the defendant’s contacts with the forum state rather than their number. Id. All of the contacts must be carefully investigated and analyzed for proof of a pattern of continuing and systematic activity and we are to apply these factors to all of the nonresident defendant’s contacts with Texas. Schlobohn, 784 S.W.2d at 359. Usually, the nonresident defendant must be engaged in longstanding business in the forum state, such as marketing, shipping products, performing services, or maintaining offices. Assurances Générales Banque Nationale v. Dhalla, 282 S.W.3d 688, 697 (Tex.App.-Dallas 2009, no pet.), citing PHC-Minden, L.P. v. Kimberly-Clark Corp., 235 S.W.3d 163, 168 (Tex.2007). But placing a product into the stream of commerce with an awareness that the property may end up on Texas is insufficient to support general jurisdiction. Spir Star AG, 310 S.W.3d at 874.

 

Because the primary focus of the parties in the trial court was specific jurisdiction, the circumstances of other business relationships have not been fleshed out in the record. Who contacted whom? Merely contracting with a Texas resident does not satisfy the minimum contacts requirement. Internet Advertising Group, Inc. v. Accudata, Inc., 301 S.W.3d 383, 389 (Tex.App.-Dallas 2009, no pet.), citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). The facts must indicate the Zinc intended to serve the Texas market. Assurances Générales Banque Nationale, 282 S.W.3d at 700. Bouché also had the burden to demonstrate that Zinc sought some benefit, advantage, or profit by availing itself of the state’s jurisdiction. Id. While we do not know the circumstances of these other business arrangements, we can ascertain that there has been no litigation in Texas involving these relationships. Zinc has no assets, property, or bank accounts in Texas. Moki Mac, 270 S.W.3d at 803.

 

We must thus conclude that Zinc had contacts with Texas but none sufficient to support general jurisdiction. Id., citing PHC-Minden Inc., 235 S.W.3d at 171. Having found no general jurisdiction, we need not consider whether the exercise of jurisdiction comports with traditional notions of fair play and substantial justice. We reverse the trial court’s order denying Zinc’s special appearance and render judgment dismissing the case against Zinc for want of personal jurisdiction.

 

RIVERA, J., not participating.

Supreme Court of North Dakota.

PIZZA CORNER, INC., Plaintiff and Appellee

v.

C.F.L. TRANSPORT, INC., Defendant and Appellant.

No. 20100084.

 

Dec. 21, 2010.

 

CROTHERS, Justice.

 

,[¶ 1] C.F.L. Transport, Inc. appeals the district court’s judgment granting Pizza Corner, Inc. damages of $12,903.17, interest of $2,434.36, and costs and disbursements. We affirm.

 

I

 

[¶ 2] A.A. Pizza Corner in Anchorage, Alaska, ordered frozen pizzas, meat, and pizza ovens from Pizza Corner, Inc. C.F.L. was hired to transport the goods from Valley City, North Dakota, to Tacoma, Washington. C.F.L.’s driver, Theodore Bruesch, arrived on July 14, 2006 to pick up the products, and the temperature in the truck’s refrigeration unit was 39 degrees Fahrenheit. Bruesch told Pizza Corner, Inc. owner David Zubrod he would adjust the refrigeration unit’s temperature to ship the pizzas, and the pizzas were loaded at approximately eleven p.m. when the temperature of the refrigeration unit was 4 degrees Fahrenheit.

 

[¶ 3] The truck arrived at American Fast Freight’s dock in Tacoma on July 18, 2006. Bruesch was instructed to back up to the dock and to open the door on the refrigeration unit. Bruesch turned off the refrigeration unit because the door was open, and he waited forty-five minutes before a forklift arrived to unload the pallets. After the truck was unloaded, Bruesch was handed a bill of lading with “Temp  41.0” written on it. Bruesch asked if there was a problem and was told there was not. The pizzas were transported to Anchorage, Alaska, and arrived on July 28, 2006. A.A. Pizza Corner owner Daniel Aasmundstad rejected the pizzas on July 30, 2006 because the pizzas were gelled and did not look right. The pizzas were shipped back to Pizza Corner, Inc. in Valley City.

 

[¶ 4] On June 10, 2009, Pizza Corner, Inc. filed a complaint against C.F.L., alleging the frozen pizzas arrived in Tacoma at a temperature of 41 degrees Fahrenheit and were damaged. C.F.L. answered the complaint, and a bench trial was held on October 26, 2009. At trial, the district court admitted the entire bill of lading into evidence over C.F.L.’s foundation and hearsay objections. The district court ruled the entire bill of lading was admissible under N.D.R.Ev. 803(6) as a record of regularly conducted business activity.

 

[¶ 5] The district court found the pizzas were damaged while under the dominion and control of C.F.L. and concluded Pizza Corner, Inc. was entitled to “$12,903.17 plus interest at the rate of 6% from September 1, 2006, to October 26, 2009, in the amount of $2,434 .36, plus costs and disbursements.” C.F.L. timely filed this appeal.

 

II

 

[¶ 6] C.F.L. argues the district court erred by admitting the handwritten notation on the bill of lading because it is inadmissible hearsay. Pizza Corner, Inc. responds the entire document was admissible under N.D.R.Ev. 803(6) as a record of regularly conducted business activity.

 

[¶ 7] The district court has broad discretion over evidentiary matters, and this Court “will not reverse a [district] court’s decision to admit evidence absent an abuse of discretion.” State v. Grant, 2009 ND 210, ¶ 10, 776 N.W.2d 209. The district court abuses its discretion “when it acts arbitrarily, unconscionably, or unreasonably, or when its decision is not the product of a rational mental process.” Davis v. Killu, 2006 ND 32, ¶ 6, 710 N.W.2d 118. “A [district] court acts in an arbitrary, unreasonable, or unconscionable manner when its decision is not the product of a rational mental process by which the facts and law relied upon are stated and considered together for the purpose of achieving a reasoned and reasonable determination.” State v. Gibbs, 2009 ND 44, ¶ 32, 763 N.W.2d 430 (quotations omitted).

 

[¶ 8] “ ‘Hearsay’ 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.” N.D.R.Ev. 801(c). A statement can be a written assertion. N.D.R.Ev. 801(a). Here, the handwritten notation on the bill of lading was offered to show the pizzas were damaged by C.F.L.; thus, the handwriting is hearsay. Hearsay generally is not admissible unless the statement falls under an exception to the hearsay rule. See N.D.R.Ev. 802.

 

[¶ 9] Both N.D.C.C. § 31-08-01 and N.D.R.Ev. 803(6) provide an exception to the hearsay rule for records of regularly conducted business activity. See Farmers Union Oil Co. of Dickinson v. Wood, 301 N.W.2d 129, 135 (N.D.1980). The bill of lading with the handwritten notation was admitted under Rule 803(6) of the North Dakota Rules of Evidence, which provides a hearsay exception for:

 

“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.”

 

N.D.R.Ev. 803(6). North Dakota adopted N.D.R.Ev. 803 from Fed.R.Evid. 803; therefore, this Court looks to federal court interpretation of the rule to help construe North Dakota’s rule. See Grant, 2009 ND 210, ¶ 12, 776 N.W.2d 209.

 

[¶ 10] A bill of lading is “a document of title evidencing the receipt of goods for shipment issued by a person engaged in the business of directly or indirectly transporting or forwarding goods.” N.D.C.C. § 41-01-09(2)(f). The bill of lading travels with the goods “evidencing that the person in possession or control of the [bill of lading] is entitled to receive, control, hold, and dispose of … the goods the [bill of lading] covers.” N.D.C.C. § 41-01-09(2)(p). People make notations on a bill of lading “so it will continue to be an accurate description of the shipment.” United States v. Carranco, 551 F.2d 1197, 1200 (10th Cir.1977). “The importance of the bill of lading as a commercial document is evident.” Morrison Grain Co. v. Utica Mut. Ins. Co., 632 F.2d 424, 432 (5th Cir.1980).

 

[¶ 11] An employee from American Fast Freight handed Bruesch a copy of the bill of lading with the handwritten notation on it before Bruesch left the loading dock in Tacoma as proof they received the frozen pizzas and as evidence of the condition of the pizzas. The bill of lading with the notation was shipped with the pizzas to Anchorage. When Aasmundstad rejected the pizzas in Anchorage, he noted the rejection on the same bill of lading that had the handwritten temperature notation on it and sent the bill of lading to Pizza Corner, Inc. The handwritten notation meets the initial requirements of N.D.R.Ev. 803(6) because it was created in the regular course of business by people with knowledge about the shipment who timely made the notation to maintain the accuracy of the information on the bill of lading.

 

[¶ 12] C.F.L. argues the handwritten temperature notation was not admissible as a business record because no one from American Fast Freight testified about its creation. The foundational elements for a business record must be “shown by the testimony of the custodian or other qualified witness.” N.D.R.Ev. 803(6). Rule 803(6) does not require that an employee from the company that created the record provide the foundation for a business record. See Brawner v. Allstate Indem. Co., 591 F.3d 984, 987 (8th Cir.2010) ( “[company] was not required to produce an individual from the entity that prepared the record to establish a foundation”); Dyno Const. Co. v. McWane, Inc., 198 F.3d 567, 575-76 (6th Cir.1999) (witness does not need to be an employee of the business that created the record).

 

[¶ 13] Pizza Corner, Inc. asserts Zubrod’s testimony provided the foundation for admission of the bill of lading, including the temperature notation. Under Rule 803(6), a records custodian is someone who has custody or control of a business’s records. See Black’s Law Dictionary 412 (8th ed.2004) (“custodian” is someone who “has charge or custody … [of] property, papers, or other valuables”). Zubrod’s testimony does not show he is a records custodian.

 

[¶ 14] The foundation for admission of a business record can also be established using a qualified witness. N.D.R.Ev. 803(6). A qualified witness is someone who can explain the record keeping system of the business. See Farmers Union Oil Co. of Dickinson, 301 N.W.2d at 136. The term qualified witness “is generally given a very broad interpretation. The witness need only have enough familiarity with the record-keeping system of the business in question to explain how the record came into existence in the ordinary course of business.” United States v. Lauersen, 348 F .3d 329, 342 (2nd Cir.2003) (quoting 5 Jack B. Weinstein & Margaret A. Berger, Weinstein’s Federal Evidence § 803.08[a] (2d ed.2003)); see also United States v. Jenkins, 345 F.3d 928, 936 (6th Cir.2003) (witness must be “familiar with the record keeping procedures of the organization”).

 

[¶ 15] Zubrod testified he is familiar with record keeping in the shipping and freight industry because he also owns a trucking company. He explained the use of bills of lading in the shipping industry and stated that a person receiving a shipment usually writes the temperature of the shipment on the bill of lading. Zubrod’s testimony shows that he is familiar with the shipping and freight industry, but it does not show that he is familiar with American Fast Freight’s procedures for checking and recording the temperature of products. See United States Commodity Futures Trading Com’n v. Dizona, 594 F.3d 408, 416 (5th Cir.2010) (holding witness was not a qualified witness when she did not have knowledge regarding the actual record keeping procedures of the company). Zubrod’s testimony does not show he is a qualified witness to provide the foundation for the handwritten notation under Rule 803(6).

 

[¶ 16] Several courts have held a witness from one company can provide the foundation for a record created by a third party if that company integrated the record into its own records and relied on it, and if the record meets the other requirements of Rule 803(6). See Brawner, 591 F.3d at 987 (“[A] record created by a third party and integrated into another entity’s records is admissible as the record of the custodian entity, so long as the custodian entity relied upon the accuracy of the record and the other requirements of Rule 803(6) are satisfied.”); United States v. Adefehinti, 510 F.3d 319, 326 (D.C.Cir.2007) (“[A] record of which a firm takes custody is thereby ‘made’ by the firm within the meaning of [Rule 803(6) ] (and thus is admissible if all the other requirements are satisfied).”); Air Land Forwarders, Inc. v. United States, 172 F.3d 1338, 1342 (Fed.Cir.1999) (“[D]ocuments may be admitted into evidence as the business records … as long as the entity is able to produce testimony that it was the entity’s regular practice to obtain information from such a third party, or that the records were integrated into the office’s records and relied upon in its day to day operations.”); United States v. Childs, 5 F.3d 1328, 1333 (9th Cir.1993) (holding witness from automobile dealership could provide foundation for department of motor vehicle record that it relied on and integrated into its business records); Carranco, 551 F.2d at 1200 (allowing witness from another company to provide foundation for freight bill where the record was adopted and relied on by the business introducing it). We adopt the position of these courts.

 

[¶ 17] Zubrod testified Pizza Corner, Inc. received the bill of lading with the handwritten notations on it in the ordinary course of business from A.A. Pizza Corner after Aasmundstad rejected the pizzas in Alaska. Zubrod also testified that the entire document is a record of Pizza Corner, Inc. and that Pizza Corner, Inc. relied on the bill of lading for reimbursing A.A. Pizza Corner for the cost of shipping the rejected pizzas. Although the district court did not articulate the basis for concluding the bill of lading and the handwritten notations were collectively admissible as a business record, Zubrod’s testimony could provide the foundation for its admission because Pizza Corner, Inc. adopted the whole document as its business record and relied on it and because the document meets the other requirements of Rule 803(6). We therefore conclude the district court did not abuse its discretion by admitting the handwritten notation on the bill of lading under Rule 803(6) as a record of regularly conducted business activity.

 

[¶ 18] Pizza Corner, Inc. argues C.F.L. waived its objection by introducing a different copy of the bill of lading with the handwritten notation on it after the bill of lading was already admitted into evidence. In light of our holding, this issue need not be addressed.

 

IV

 

[¶ 19] The district court’s judgment awarding Pizza Corner, Inc. damages, interests, costs and disbursements is affirmed.

 

[¶ 20] DANIEL J. CROTHERS, MARY MUEHLEN MARING, CAROL RONNING KAPSNER, and DALE V. SANDSTROM, JJ., concur.

VANDEWALLE, Chief Justice, dissenting.

[¶ 21] I would not extend N.D.R.Ev. 803(6) to the admission of that part of a business record that is handwritten by a person who is not called as a witness and is unknown to the parties under the circumstances of this case.

 

[¶ 22] In Kanipes v. North American Phillips Electronics Corp ., 825 S.W.2d 426 (Tenn.App.1992), the Court of Appeals of Tennessee concluded that the mere fact a document is a business record does not mean that every statement contained in the document is admissible; rather, the admissibility of the challenged statement “is determined by whether the challenged statement from an unidentified source is offered for its truth, and whether the secondary statement also qualifies as an exception under the hearsay rule.” Id. at 428. In that case the Tennessee court held the handwritten notation was not admissible because the author of the statement was not only unavailable but was unknown. Here, while Bruesch was handed the bill of lading with the handwritten temperature on it, the record does not reveal that he knew the person, knew the person’s name or that the person who handed him the bill of lading had written the temperature on the bill of landing.

 

[¶ 23] Although there is other evidence in this record that arguably, by way of inference, might support the findings of the trial court, it is slim. I would reverse the judgment and remand for a new trial at which the handwritten temperature notation on the bill of lading is excluded unless the author of the notation is available to testify.

 

[¶ 24] GERALD W. VANDEWALLE, C.J.