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https://www.courtlistener.com/api/rest/v3/opinions/2547997/
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352 S.W.3d 350 (2011)
Zachary S. BUDA, Appellant,
v.
Mark J. SCHULER, Appellee.
No. 2010-CA-001087-MR.
Court of Appeals of Kentucky.
September 23, 2011.
*352 Christopher McDowell, Cincinnati, OH, for appellant.
Scott M. Powers, Newport, KY, for appellee.
Before KELLER and LAMBERT, Judges; SHAKE,[1] Senior Judge.
OPINION
SHAKE, Senior Judge:
Zachary Buda (Buda) appeals from a Campbell Circuit Court summary judgment in favor of Mark Schuler (Schuler). In its judgment, the trial court found that Buda was liable for injuries sustained by Schuler and awarded Schuler damages in the amount of $468,281.14. Buda bases his appeal on two grounds: (1) that there was a material issue of genuine fact concerning his liability; and (2) that the trial court erred by awarding Schuler damages for lost profits to his corporation and punitive damages. Following a careful review of the record and applicable case law, we affirm the circuit court summary judgment.
I. Factual Background
Schuler is a chiropractor with offices located in Kentucky and Ohio. On September 7, 2007, Schuler walked from his office in Newport, Kentucky, to a local bar to meet Cindy Mei (Mei), who worked at the bar. Schuler and Mei were acquaintances and had only seen one another at the bar a few times. Schuler drank a couple of beers and waited for Mei to finish her shift. After the bar closed, Mei drove Schuler to "The Liar's Club," a bar and grill located a couple of blocks away.
While at "The Liar's Club," Schuler and Mei ordered a few beers and started playing pool. Shortly thereafter, Buda, who was admittedly intoxicated, walked to the pool table and started talking to Schuler and Mei. When Mei left the billiard area to order another beer, Buda began bullying Schuler and criticizing his ability to play pool. Schuler asked him to leave. Eventually, Buda walked away.
As the bar closed, Schuler and Mei walked into the parking lot to enter Mei's car. Buda approached Schuler and a physical altercation resulted.
A. Buda's Version of the Facts
When Schuler told Buda to leave their table, Buda claims that Schuler used profanity and abrasive language. Buda claims that Schuler's language and behavior inside the bar prompted him to confront Schuler in the parking lot. In his deposition, Buda claimed that this confrontation led to both parties cursing at each other. Then, Schuler pushed Buda backwards and got into the passenger's side of the car. Buda admits that he prevented Schuler from closing the passenger door and repeatedly hit Schuler with his fists. However, Buda claims that he did not have any weapons or objects in his hands and only hit Schuler's mid-arm and torso area. During the altercation, Schuler climbed into the backseat of Mei's car. Buda testified that neither Schuler nor Mei ever mentioned that Schuler's leg was injured.
*353 B. Schuler's Version of the Facts
In his deposition, Schuler claims that he did not curse or use abrasive language toward Buda while playing pool. Schuler also denies that he shoved Buda. Instead, Schuler testified Buda ran toward him, yelling, and wielding a nightstick, cue stick, or baseball bat. Schuler testified that Buda entered the passenger side of Mei's car and hit his leg, between his right knee and ankle, with the stick. Eventually, Schuler got into the backseat of the car and Mei locked the doors. Buda ran away.
Mei's version of events was fairly similar to Schuler's account. However, she claimed that Buda did not enter the car. In addition, Mei claimed that she put the car in gear but stopped once she noticed that Schuler was "half hanging out" of the car.
C. Buda's Arrest and Criminal Charges
Less than two weeks after the altercation, Buda was questioned by police. The investigating officer noted that "[Buda] stated he doesn't remember having a weapon, but because he was drunk he may have used something and can't recall." Buda claims that the statement reflected the officer's opinions and was not a quote.
On May 13, 2008, Buda entered an Alford[2] plea to one count of second-degree assault, which contains the following elements:
(1) A person is guilty of assault in the second degree when:
(a) He intentionally causes serious physical injury to another person; or
(b) He intentionally causes physical injury to another person by means of a deadly weapon or dangerous instrument; or
(c) He wantonly causes serious physical injury to another person by means of a deadly weapon or a dangerous instrument.
KRS 508.020.
Buda claimed that he did not intend to seriously harm Schuler and did not admit to using a weapon. During his sentencing hearing, however, Buda apologized to Schuler, said he did not intend to cause severe injuries but apologized for the serious injuries he inflicted. He never actually admitted that he hit Schuler's leg.
D. Procedural History of the Civil Case
On July 3, 2008 Schuler filed a complaint in the Campbell Circuit Court claiming that Buda assaulted and battered him, thereby causing serious injury to his right leg. Schuler's complaint sought damages for past medical expenses, future medical expenses, loss of business, lost income, pain and suffering, and punitive damages.
On December 31, 2008, Schuler moved for summary judgment. He argued that Buda admitted liability in both his guilty plea and the apology he gave Schuler at the sentencing hearing. Buda opposed Schuler's motion and claimed that genuine issues of material fact existed. The trial court stated that "Buda has not presented any affirmative evidence opposing Schuler's overwhelming evidence that the injuries he sustained to his leg on the night of the assault were caused by Buda" and granted summary judgment in favor of Schuler.
Following a hearing, held on April 8, 2010, the trial court awarded Schuler damages in the amount of $468,281.14 for medical expenses, lost earnings, past pain and suffering, future pain and suffering, and punitive damages. This appeal follows.
*354 II. Summary Judgment
When ruling on a party's motion for summary judgment, the trial court must view all evidence in the light most favorable to the non-moving party and resolve all doubts in his favor. Hallahan v. The Courier-Journal, 138 S.W.3d 699, 705 (Ky.App.2004). The movant bears the initial burden of showing that no genuine issue of fact exists. Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476, 482 (Ky.1991). Then, the burden shifts to the non-movant to show "at least some affirmative evidence showing that there is a genuine issue of material fact for trial." Id. Summary judgment "is only proper where the movant shows that the adverse party could not prevail under any circumstances." Id. at 480.
When reviewing a summary judgment decision, appellate courts need not defer to the trial court's ruling. Hallahan, 138 S.W.3d at 705. As legal conclusions are involved and findings of fact are not at issue, appellate review shall be conducted under a de novo standard. Id. Appellate courts must only ask "whether the trial court correctly found there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter of law." Id. at 704.
The record contains uncontroverted evidence that Buda caused serious physical injury to Schuler. In their depositions, both Schuler and Mei testified that Buda repeatedly hit Schuler's leg with a stick-like object. The severity of Schuler's injuries was not in question and was easily proved through medical records, police records, pictures, and depositions.
Although Buda denies that he caused Schuler's leg injuries, he admitted that he repeatedly hit Schuler and apologized for causing severe injury. Further, Buda took responsibility for Schuler's injuries in a letter of apology that he read during his sentencing hearing.
"The inquiry should be whether, from the evidence of record, facts exist which would make it possible for the non-moving party to prevail." Welch v. American Publishing Co. of Kentucky, 3 S.W.3d 724, 730 (Ky.1999). Although Buda tries to create factual questions with a different version of facts, his factual discrepancies are not only unbelievable, they are insignificant in light of his statements on the record taking responsibility for severe injuries inflected on Schuler and the fact that Schuler's only body part which was severely injured was his leg. The trial court did not err by disregarding Buda's incredible factual claims and by finding an absence of a genuine factual dispute.
III. Damages
A. Lost Corporate Compensation
Buda claims that the trial court erred by awarding $50,000 to compensate Schuler for his inability to earn income for Family Chiropractic Center, Inc., a for-profit corporation, solely owned by Schuler. While Schuler received his base salary of $5,000 per month during the time he was unable to work as a result of the injuries inflicted upon him by Buda, he claimed that he was additionally entitled to sums which would have been earned had he been able to work during the time he was recuperating.
Under Kentucky law, corporations are viewed as separate and distinct legal entities. Daniels v. CDB Bell, LLC, 300 S.W.3d 204, 211 (Ky.App.2009). That said, whether an injured person may recover damages for the loss of time devoted to their own business depends upon the nature of the business loss. As stated in the Restatement (Second) of Torts, § 924, cmt. c:
*355 When the injured person was not receiving a salary, but owned and was operating a business that was deprived of his services by the injury, his damages are the value of his services in the business during the period. If his services, rather than the capital invested or the services of others, were the predominant factor in producing the profits, evidence of the diminution of profits from the business will be received as bearing on his loss of earning capacity. . . . If, however, the income of the business is chiefly the result of capital invested or the services of others, the damages are determined by the market value of the services that the plaintiff was prevented from giving, that is, the amount commonly paid for the services in businesses of like nature. In this case evidence as to the extent of the business and the nature of his services is admissible, but not evidence as to the amount of profits before and after the loss.
Although Schuler continued to receive some salary, the salary received was a fraction of what the income would have been to the corporation and concomitantly to him. His labor was the sole source of income for his business. Therefore, the trial court correctly concluded that Schuler was entitled to such damages.
Buda argues that Schuler failed to prove the amount of his lost profits with reasonable certainty and failed to plead "special damages" in his complaint. Schuler testified that his corporation has net revenues of $15,000 per month. As the finder of fact, the trial court is vested with the responsibility of weighing and evaluating the credibility of witnesses and the reliability of evidence. Kentucky Rules of Civil Procedure (CR) 52.01. An appellate court will not disturb the trial court's findings unless those findings are clearly erroneous and unsupported by substantial evidence. Moore v. Asente, 110 S.W.3d 336, 354 (Ky.2003). Substantial evidence is evidence that contains "sufficient probative value to induce conviction in the minds of reasonable men." Id. (citations omitted). Although Schuler could have presented documentation to support his calculations, the trial court found his testimony to be reliable and sufficient. The court's findings were based upon sufficient evidence.
Buda also claims that Schuler failed to specifically plead lost profits. However, Schuler's amended complaint stated, "As a result of the assault and battery, the Plaintiff lost income and lost business from his practice." The complaint also advised that Schuler intended to seek damages in the amount of $95,000 in lost profits to his business. Buda had ample notice of Schuler's claims. The trial court did not err in its conclusion.
B. Punitive Damages
Buda argues that the conduct in this case does not rise to the level of conduct required for an award of punitive damages. Punitive damages are appropriate when the defendant exhibited outrageous conduct with reckless disregard for the rights of others. Horton v. Union Light, Heat & Power Co., 690 S.W.2d 382, 389 (Ky.1985).
KRS 411.186 provides, in part:
(1) In any civil action where claims for punitive damages are included, the jury or judge if jury trial has been waived, shall determine concurrently with all other issues presented, whether punitive damages may be assessed.
(2) If the trier of fact determines that punitive damages should be awarded, the trier of fact shall then assess the sum of punitive damages. In determining the amount of punitive damages to be assessed, the trier of fact should consider the following factors:
*356 (a) The likelihood at the relevant time that serious harm would arise from the defendant's misconduct;
(b) The degree of the defendant's awareness of that likelihood;
(c) The profitability of the misconduct to the defendant;
(d) The duration of the misconduct and any concealment of it by the defendant; and
(e) Any actions by the defendant to remedy the misconduct once it became known to the defendant.
The record contains significant evidence indicating that Buda viciously attacked Schuler, severely beating him with an object. This conduct constitutes an egregious display of total disregard for the safety of others. Therefore, the trial court's decision to award punitive damages is supported by the record.
C. Medical Expenses
Finally, Buda claims that Schuler's medical bills were unreasonable because Schuler's health insurance contracted with healthcare providers to accept less payment than the full amount billed. Buda claims that this inequity results in a windfall for plaintiffs.
In Baptist Healthcare Systems, Inc. v. Miller, 177 S.W.3d 676 (Ky.2005), the Kentucky Supreme Court specifically concluded that a plaintiff may recover the full amount of medical bills even though the health insurance company negotiated to pay less than the full amount.
Accordingly, we affirm the Campbell Circuit Court.
ALL CONCUR.
NOTES
[1] Senior Judge Ann O'Malley Shake sitting as Special Judge by assignment of the Chief Justice pursuant to Section 110(5)(b) of the Kentucky Constitution and Kentucky Revised Statutes (KRS) 21.580.
[2] North Carolina v. Alford, 400 U.S. 25, 91 S. Ct. 160, 27 L. Ed. 2d 162 (1970).
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287 F.Supp.2d 180 (2003)
Andre PORTER, Plaintiff,
v.
Mr. Donald SELSKY and Mr. Acting Captain Walter, Defendants.
No. 95-CV-598C(F).
United States District Court, W.D. New York.
August 29, 2003.
*181 *182 Hodgson Russ LLP (Patrick J. Long, Esq., of Counsel), Buffalo, NY, for Plaintiff.
Eliot Spitzer, Attorney General of the State of New York (Ann C. Williams, Esq., Assistant Attorney General, of Counsel), Buffalo, NY, for Defendants.
CURTIN, District Judge.
Presently before the court is defendants' motion for summary judgment dismissing *183 the complaint (Item 85), plaintiff's cross-motion seeking to amend the complaint to add an additional defendant (Item 111), and plaintiff's motion for reconsideration of this court's May 7, 1997 decision and order (Item 124). Oral argument of these motions was heard on July 7, 2003. For the reasons that follow, defendants' motion for summary judgment is granted, plaintiff's cross-motion to amend the complaint is denied, and plaintiff's motion for reconsideration is denied.
BACKGROUND
Plaintiff commenced this action in July 1995, alleging violations of his civil rights. Specifically, he alleged that he was denied due process in the context of a disciplinary hearing, and that he was confined under inhumane conditions at the Wende Correctional Facility ("Wende") maintained by the New York State Department of Correctional Services ("DOCS"), in violation of the Eighth Amendment. In its May 7, 1997 decision, the court granted defendants' motion for partial summary judgment, dismissing the due process claims against all defendants and the Eighth Amendment claims as against defendants Thomas A. Coughlin, III, Frank E. Irvin and John P. Keane. The court denied the motion with respect to the Eighth Amendment claims against defendants Donald Selsky and Acting Captain Walter (Item 34). Porter v. Coughlin, 964 F.Supp. 97 (W.D.N.Y.1997).
In March 1998, in response to the defendants' request for a more definite statement, plaintiff filed an amended complaint, in which he alleged that defendants Selsky and Walter conspired to place him in a cruel and unusual environment by assigning him to a cell in Wende's Special Housing Unit ("SHU") in close proximity to feces-throwing inmates (Item 50). In August 1998, defendants moved for summary judgment (Item 56). In an order dated March 26, 1999, the court denied the motion with leave to renew, and ordered the parties to complete discovery (Item 65). Discovery proceeded, and in January 2000 the court granted plaintiff's motion for assignment of counsel (Item 76).
In January 2001, defendants again moved for summary judgment (Item 85). On May 15, 2001, after two substitutions of counsel, plaintiff filed a cross-motion for an order staying consideration of the motion for summary judgment and allowing additional discovery, including the depositions of defendant Selsky and Rickey Branning, a former Deputy Superintendent at Wende (now retired) (Item 96). The court granted plaintiff's cross-motion on January 31, 2002 (Item 101). The requested discovery was produced, and depositions were conducted in August and September 2002. At a meeting with counsel on October 9, 2002, the parties informed the court that discovery was complete, and the defendants renewed their motion for summary judgment (Item 108).
Plaintiff subsequently sought and was granted an extension of time, until January 10, 2003, to respond to the defendants' motion for summary judgment. On January 10, 2003, without responding to the motion for summary judgment, plaintiff filed a cross-motion to amend the complaint to add Rickey Branning as a defendant (Item 110). Defendants then filed a memorandum of law in opposition to the plaintiff's cross-motion and in further support of their motion for summary judgment (Item 116). In an order dated April 21, 2003, the court directed plaintiff to file a response to the motion for summary judgment by May 6, 2003 (Item 117). The plaintiff's response was filed May 7, 2003 (Items 118, 119).
Meanwhile, in a letter dated May 6, 2003, plaintiff's counsel sought the court's *184 permission to file a motion for reconsideration of plaintiff's double jeopardy cause of action, which was dismissed as a result of the May 7, 1997 decision. The court granted permission, and the motion was filed on May 30, 2003 (Item 124). Defendants responded (Item 127), and oral argument of all pending motions was heard on July 7, 2003. For the reasons that follow, defendants' motion for summary judgment is granted, plaintiff's motions to amend and for reconsideration are denied, and the complaint is dismissed.
DISCUSSION
I. Defendants' Motion for Summary Judgment
Summary judgment shall be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). When a motion for summary judgment is made, the adverse party may not rest upon the mere allegations in his pleadings. The response "by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e).
In his remaining causes of action, pursuant to 42 U.S.C. §§ 1983, 1985, and 1986, plaintiff alleges that defendants Selsky and Walter conspired to place him in the SHU in close proximity to feces-throwing inmates in violation of the Eighth Amendment prohibition against cruel and unusual punishment. As an initial matter, the doctrine of respondeat superior does not apply to § 1983 actions. Zamakshari v. Dvoskin, 899 F.Supp. 1097, 1109 (S.D.N.Y.1995). Thus, a state employee cannot be held liable under 42 U.S.C. § 1983 absent a showing that he was personally involved in the violation of the plaintiff's constitutional rights. Colon v. Coughlin, 58 F.3d 865, 873 (2d Cir.1995). The personal involvement of a supervisory defendant may be shown by evidence that: (1) the defendant participated directly in the alleged constitutional violation, (2) the defendant, after being informed of the violation through a report or appeal, failed to remedy the wrong, (3) the defendant created a policy or custom under which unconstitutional practices occurred, or allowed the continuance of such a policy or custom, (4) the defendant was grossly negligent in supervising subordinates who committed the wrongful acts, or (5) the defendant exhibited deliberate indifference to the rights of inmates by failing to act on information indicating that unconstitutional acts were occurring. Id. (citing Wright v. Smith, 21 F.3d 496, 501 (2d Cir.1994); Williams v. Smith, 781 F.2d 319, 323-24 (2d Cir.1986)).
In support of their motion for summary judgment, defendants Selsky and Walter have submitted evidence showing that neither of them had the authority or responsibility for plaintiff's cell placement, and neither defendant had any role in plaintiff's cell assignment or movements while he was housed in the SHU at Wende. Defendant Selsky, in his Declaration, stated that he has been DOCS' Director of Special Housing and Inmate Discipline since 1988 (Item 88, ¶ 1). In that capacity, he is responsible for general oversight of the inmate disciplinary system and the operation of the SHUs at the various correctional facilities statewide, and for responding to inmate appeals of disciplinary decisions (id. at ¶ 3). He has no authority to direct the cell assignment of an inmate within an SHU at a particular facility (id. at ¶ 5). Furthermore, he never directed or participated in any decision regarding the cell assignment or movement of plaintiff, or *185 any other inmate at Wende (id. at ¶ 6). Likewise, he never discussed, conferred, or otherwise entered into an agreement with defendant Walter or any other person regarding the cell assignment or movement of plaintiff, or any other inmate at Wende, to a particular cell in the SHU (id. at ¶ 7).
Defendant Walter, in his Declaration, stated that he is designated as an "Acting Captain" when he acts as a hearing officer in inmate disciplinary proceedings (Item 90, ¶ 2). Appended to his Declaration are Watch Commander log sheets from those days in 1993 and 1994 when defendant Walter was the Watch Commander (id., Exh. A). Defendant Walter states, and the log sheets confirm, that he was not the Watch Commander on any day that plaintiff was moved from one cell to another in the SHU at Wende (id. at ¶ 14). He states that he never directed or otherwise participated in any decision regarding plaintiff's cell assignment or movement in the SHU (id. at ¶ 17). Additionally, he never discussed, conferred, or entered into an agreement with defendant Selsky or any other person regarding plaintiff's cell assignment or movement in the SHU at Wende (id. at ¶ 18).
In his Declaration, Jeffrey Skinner, Deputy Superintendent of Security at Wende, stated that he is responsible for authorizing and/or approving inmate cell assignments and movement (Item 89, ¶ 1). In case of an emergency, a "Watch Commander" can direct an inmate cell movement, which must be authorized by the Deputy Superintendent of Security by the end of the day (id. at ¶ 6). Mr. Skinner stated that defendant Walter, when designated as an "Acting Captain," had no authority to authorize or approve inmate cell placement or movement (id. at ¶ 7). Additionally, Skinner stated that defendant Selsky does not participate in any decision regarding cell assignment or movement at Wende (id. at ¶ 8).
In opposition to defendants' summary judgment motion, plaintiff argues that his confinement in the Wende SHU under inhumane and barbarous conditions, which included the throwing of feces, setting of fires, and flooding of cells by neighboring inmates, amounted to cruel and unusual punishment prohibited by the Eighth Amendment. In this regard, the courts have long recognized that the Eighth Amendment's prohibition against cruel and unusual punishment includes an inmate's right to be protected from the assaultive conduct of other inmates. Farmer v. Brennan, 511 U.S. 825, 833, 114 S.Ct. 1970, 128 L.Ed.2d 811 (1994). In Farmer, the Court set forth a two-part standard for determining whether this right has been violated, as follows:
First, the deprivation alleged must be, objectively, sufficiently serious. For a claim (like the one here) based on a failure to prevent harm, the inmate must show that he is incarcerated under conditions posing a substantial risk of serious harm.
The second requirement follows from the principle that only the unnecessary and wanton infliction of pain implicates the Eighth Amendment. To violate the Cruel and Unusual Punishments Clause, a prison official must have a sufficiently culpable state of mind. In prison-conditions cases that state of mind is one of deliberate indifference to inmate health or safety ....
Id. at 834, 114 S.Ct. 1970 (internal quotation marks and citations omitted).
The Court explained that prison officials who actually knew of a substantial risk to inmate health or safety may successfully defend a claim of deliberate indifference if they can demonstrate that they responded reasonably to the risk, even if *186 the harm ultimately was not averted. Id. at 844, 114 S.Ct. 1970. As stated by the Court:
A prison official's duty under the Eighth Amendment is to ensure "reasonable safety," a standard that incorporates due regard for prison officials' "unenviable task of keeping dangerous men in safe custody under humane conditions." Whether one puts it in terms of duty or deliberate indifference, prison officials who act reasonably cannot be found liable under the Cruel and Unusual Punishments Clause.
Id. at 844-45, 114 S.Ct. 1970 (citations omitted). Thus, a prison official may be held liable under the Eighth Amendment for failing to protect inmates from harm "only if he knows that inmates face a substantial risk of serious harm and disregards that risk by failing to take reasonable measures to abate it." Id. at 847, 114 S.Ct. 1970; see also Hamilton v. Poole, 1997 WL 626406, at *2-3 (W.D.N.Y. Sept. 22, 1997).
In this case, plaintiff contends that the risks to his health and safety in the Wende SHU were so obvious that defendants Walter and Selsky, as part of the general chain of command, were aware of those risks and were deliberately indifferent to them. Plaintiff has summarized the log books from the SHU at Wende. The log book entries reveal that the SHU is indeed an extremely unpleasant place, where feces-throwing, spitting, urinating, overflowing toilets, and fires set by inmates are regular occurrences. However, the log entries also show that Wende officials spend a great deal of time addressing these acts, cleaning and disinfecting cells, moving inmates behind plexiglass shields, and punishing the violators. In fact, in the only feces-throwing incident in which plaintiff was involved during the time period relevant to the complaint in this case, the offending inmate (Franco) was immediately moved to a cell behind a plexiglass shield (Item 90, ¶ 8; Item 119, ¶¶ 10-11), and defendant Walter conducted separate disciplinary hearings for plaintiff and inmate Franco (Item 90, ¶ 9).
The log entries as a whole do not indicate that plaintiff was particularly victimized by other SHU inmates committing unhygienic or unsafe acts, or that defendants deliberately disregarded substantial risks to plaintiff's health and safety, but rather that such acts were primarily directed at Corrections Officers, or at the SHU population in general (as in the case of toilet-flooding or fires), and that responsible prison officials took reasonable measures to abate the risks. Under these circumstances, it cannot be said that plaintiff was deprived of life's basic necessities while in the SHU simply because he was housed in proximity to feces-throwing inmates. In fact, the court's review of the extensive record indicates that every inmate housed in the SHU was subjected to unpleasant conditions at the hands of other inmates, and that defendants were regularly required to and did address the unhygienic acts.
Based on this analysis, plaintiff has failed to meet his burden of setting forth specific facts showing that his confinement in the Wende SHU under these conditions posed a substantial risk of serious harm as to which defendants were deliberately indifferent. Accordingly, no reasonable jury could find in favor of plaintiff on his Eighth Amendment claim, and defendants are entitled to summary judgment dismissing this claim as a matter of law.
Plaintiff fares no better on his conspiracy claims. In order to state a claim for conspiracy under § 1983, plaintiff must show that the defendants acted in a willful manner, culminating in an agreement, understanding, or meeting of the minds that *187 violated the plaintiff's federal constitutional or statutory rights, privileges, or immunities. D'Andrea v. Hulton, 81 F.Supp.2d 440, 445 (W.D.N.Y.1999); Katz v. Morgenthau, 709 F.Supp. 1219, 1231 (S.D.N.Y. 1989), aff'd in relevant part, 892 F.2d 20 (2d Cir.1989). In other words, plaintiff must demonstrate that defendants Selsky and Walter "agreed" or "reached an understanding" to violate his constitutional rights. Duff v. Coughlin, 794 F.Supp. 521, 525 (S.D.N.Y.1992).
There is no evidence in the extensive record to show or suggest that any such agreement existed between defendants Selsky and Walter, or any other prison officials. Accordingly, plaintiff has failed to meet his burden on this motion to come forward with proof that the defendants reached an agreement or understanding to willfully violate his constitutional rights by placing plaintiff in proximity to feces-throwing inmates.
To state a conspiracy claim under 42 U.S.C. § 1985, plaintiff must allege (1) some racial or other class-based discriminatory animus underlying the defendants' actions, and (2) that the conspiracy was aimed at interfering with the plaintiff's protected rights. Bray v. Alexandria Women's Health Clinic, 506 U.S. 263, 268, 113 S.Ct. 753, 122 L.Ed.2d 34 (1993); Gagliardi v. Village of Pawling, 18 F.3d 188, 194 (2d Cir.1994). Conclusory allegations of conspiracy are not sufficient to state a claim under § 1985. Temple of the Lost Sheep, Inc. v. Abrams, 930 F.2d 178, 185 (2d Cir.), cert. denied, 502 U.S. 866, 112 S.Ct. 193, 116 L.Ed.2d 153 (1991). Accordingly, in the absence of any showing or even any allegations of racial or other invidious discriminatory animus on the part of defendants Selsky and Walter, plaintiff's § 1985 conspiracy claim must be dismissed. Because § 1985 liability is a predicate to liability under 42 U.S.C. § 1986, plaintiff's § 1986 claim is also dismissed. See 42 U.S.C. § 1986; Brown v. City of Oneonta, 221 F.3d 329, 341 (2d Cir.2000), cert. denied, 534 U.S. 816, 122 S.Ct. 44, 151 L.Ed.2d 16 (2001); Rivera v. Goord, 119 F.Supp.2d 327, 346 (S.D.N.Y. 2000).
On the basis of the foregoing, I find that plaintiff has failed to raise a genuine issue of material fact for trial on any of the claims set forth in his complaint. Accordingly, defendant is entitled to summary judgment dismissing the complaint as a matter of law.
II. Plaintiff's Cross Motion to Amend the Complaint
In lieu of a response to the motion for summary judgment, plaintiff filed a cross-motion to amend the complaint to name Rickey Branning, retired Deputy Superintendent of Security at Wende, as an additional defendant. In his Declaration in support of the cross-motion to amend the complaint, plaintiff's counsel states:
The fundamental allegation of plaintiff's remaining causes of action is that he was moved without justification to be housed next to inmates known to commit unhygienic acts by defendants Selsky and Walter. Defendants themselves concede that the individual with the authority and the responsibility to approve any cell movement of plaintiff was Deputy Superintendent of Security Branning.
(Item 113, Long Decl., ¶ 17). Further, plaintiff's counsel states that "any cell movement of plaintiff in the Special Housing Unit was approved and condoned" by Branning (id., ¶ 19). In his deposition of September 24, 2002, Branning stated that he had general oversight responsibility for inmate cell movement in the SHU at Wende (Item 11, Exh. B, pp. 9-10).
*188 Generally, the grant of leave to amend the pleadings is within the discretion of the trial court, and it shall be "freely given when justice so requires." Fed.R.Civ.P. 15(a); See Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971); Nerney v. Valente & Sons Repair Shop, 66 F.3d 25, 28 (2d Cir.1995). Valid reasons for denying leave to amend include delay, undue prejudice to the opposing party, bad faith or dilatory motive on the part of the movant, and futility of the amendment. Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962); Acito v. IMCERA Group, Inc., 47 F.3d 47, 55 (2d Cir.1995).
Plaintiff's motion to amend is denied on several grounds. First, this case has been pending since 1995, and plaintiff was aware in 1999 (when defendants responded to plaintiff's interrogatories) that neither Selsky nor Walter had any role in plaintiff's cell assignment or movement in the SHU. Additionally, at the time of Walter's deposition in September 2000, plaintiff was aware that internal cell movement was approved by either the Superintendent or the Deputy Superintendent of Security. In the meeting on October 9, 2002, plaintiff's current counsel (his third) announced that discovery was completed, and defendants renewed their motion for summary judgment. Plaintiff's counsel never stated his intention to amend the complaint until January 10, 2003, when he filed this motion on the day that his response to the summary judgment motion was due. Under these circumstances, it is not difficult to conclude that plaintiff inexplicably delayed his application to add Branning as a defendant, and granting leave to do so now would cause undue prejudice to defendants.
Additionally, as defendants point out, the proposed amended complaint contains no specific allegations against Branning. Plaintiff alleges only generally that the defendants conspired to deprive plaintiff of his constitutional rights, and the claims against Branning are based solely on his supervisory status. As discussed above, this is insufficient to state a claim for supervisory liability under § 1983. Colon, 58 F.3d at 873.
Moreover, as the above analysis amply demonstrates, any attempt to state a claim that Rickey Branning violated plaintiff's Eighth Amendment rights, or that he conspired with any other prison official to do so, would be futile. Simply put, the extensive record before the court, developed as the result of eight years of litigation, demonstrates that the conditions of plaintiff's confinement in the Wende SHU did not pose a substantial risk of serious harm as to which defendants were deliberately indifferent.
Accordingly, plaintiff's motion for leave to amend the complaint is denied.
III. Plaintiff's Motion for Reconsideration
Finally, plaintiff seeks to have the court reconsider its May 1997 decision in which the court dismissed plaintiff's claim that he was denied due process at his April 14, 1993 disciplinary hearing. As explained in that decision, the April 14, 1993 hearing pertained to a misbehavior report charging plaintiff with a violation of DOCS Rule 1.00 (Penal Law Offense)[1] for his involvement in an inmate disturbance which took *189 place in May 1991 at the Southport Correctional Facility. Plaintiff was convicted in December 1992 in Chemung County Court on a charge of promoting prison contraband (New York Penal Law § 205.25) in connection with the May 1991 incident at Southport, and was sentenced to an additional prison term of 3-to-6 years to be served consecutive to his underlying sentence of 4 to 12 years for robbery. See People v. Porter, 220 A.D.2d 884, 632 N.Y.S.2d 336 (3rd Dep't 1995), appeal denied, 87 N.Y.2d 1023, 644 N.Y.S.2d 157, 666 N.E.2d 1071 (1996). Plaintiff was found guilty at the April 14, 1993 disciplinary hearing, and received a penalty of five years in the SHU, later reduced on appeal to three years. Porter, 964 F.Supp. at 100.
In ruling on plaintiff's due process claim, this court stated:
The purpose of the April 14 hearing was to determine whether plaintiff had already been found guilty in state court of promoting prison contraband in the first degree [under Penal Law 205.25], and if so, to assign an appropriate penalty for this violation. Thus, all the hearing officer had to do to find a prison rule violation in this case was to ascertain whether plaintiff had been actually convicted in state court. The hearing was not an opportunity for plaintiff to reargue the merits of the underlying charge. The prison officials had the opportunity to impose their own penalty on plaintiff for his involvement in the Southport riot without implicating double jeopardy.
Porter, 964 F.Supp. at 103 n. 1 (citing Bolanos v. Coughlin, 1993 WL 762112, at *13 (S.D.N.Y. Oct. 15, 1993)).
Plaintiff, relying on Hudson v. United States, 522 U.S. 93, 118 S.Ct. 488, 139 L.Ed.2d 450 (1997), now argues that there has been a change in the law of double jeopardy, and that he should be allowed to reargue this claim because he was not represented by counsel when the court issued the decision in May 1997. Defendants contend that plaintiff has not brought this motion within a reasonable time in violation of Fed.R.Civ.P. 60(b), and that Hudson does not require a different result in any event. Because I agree that the holding in the Hudson case has not "call[ed] into serious question the correctness of the court's judgment ..." with respect to whether the protections of the Fifth Amendment's double jeopardy clause attach to prison disciplinary proceedings, Sargent v. Columbia Forest Prod., Inc., 75 F.3d 86, 90 (2d Cir.1996), quoted in Figueroa v. Fischer, 2003 WL 1701997, at *7 (S.D.N.Y. March 31, 2003), I find it unnecessary to address defendant's timeliness argument.
In Hudson, the Supreme Court held that the double jeopardy clause did not bar the criminal prosecution of bank officials arising out of the same lending transactions that formed the basis for administrative penalties previously imposed by the federal Office of the Comptroller of the Currency ("OCC"), because the prior OCC proceedings were civil, not criminal, in nature. Hudson, 522 U.S. at 95-96, 118 S.Ct. 488. In reaching this result, the Court articulated the following factors to guide the determination as to whether a particular punishment invokes double jeopardy: (1) whether the sanction involves an affirmative disability or restraint; (2) whether it has historically been regarded as a punishment; (3) whether it comes into play only on a finding of scienter; (4) whether its operation will promote the traditional aims of punishment-retribution and deterrence; (5) whether the behavior to which it applies is already a crime; (6) whether an alternative purpose to which it may rationally be connected is assignable for it; and (7) whether it appears excessive *190 in relation to the alternative purpose assigned. Id. at 99-100, 118 S.Ct. 488 (citing Kennedy v. Mendoza-Martinez, 372 U.S. 144, 168-69, 83 S.Ct. 554, 9 L.Ed.2d 644 (1963)).
In United States v. Mayes, 158 F.3d 1215 (11th Cir.1998), cert. denied, 525 U.S. 1185, 119 S.Ct. 1130, 143 L.Ed.2d 123 (1999), a case on point, the Eleventh Circuit Court of Appeals applied the Hudson factors and concluded that disciplinary sanctions imposed on several inmates for various violations of institutional rules and regulations in connection with a prison riot at the Federal Correctional Institution at Talladega, Alabama, did not bar subsequent criminal prosecutions for the same conduct. The court first discussed the general rule, longstanding in the majority of the federal circuits, that prison disciplinary sanctions do not bar subsequent criminal prosecutions on double jeopardy grounds. Id. at 1220 (citing Garrity v. Fiedler, 41 F.3d 1150, 1152 (7th Cir.1994) (collecting cases), cert. denied, 514 U.S. 1044, 115 S.Ct. 1420, 131 L.Ed.2d 303 (1995)). The Eleventh Circuit noted that although the Supreme Court's decision in United States v. Halper, 490 U.S. 435, 109 S.Ct. 1892, 104 L.Ed.2d 487 (1989), altered the analysis somewhat, every circuit court decision to address the issue subsequent to Halper, including the Second Circuit's decision in United States v. Hernandez-Fundora, 58 F.3d 802 (2d Cir.), cert. denied, 515 U.S. 1127, 115 S.Ct. 2288, 132 L.Ed.2d 290 (1995), distinguished Halper, declined to recognize an exception to the general rule, and rejected the prisoners' double jeopardy challenges. Mayes, 158 F.3d at 1220 n. 9.
The court in Mayes then engaged in a lengthy, well-reasoned analysis of the federal Bureau of Prisons ("BOP") regulations authorizing prison disciplinary sanctions, using the Hudson/Kennedy framework, and concluded that the BOP's regulatory scheme is not "so punitive as to override the government's intent to create remedial administrative penalties for inmate misconduct." Id. at 1224. The court distinguished the prison setting from other administrative proceedings, taking into account "the fact that a prison's remedial and punitive interests are inextricably related." Id. Quoting the Second Circuit's Hernandez-Fundora opinion, the court noted that "`[p]unitive interests and remedial interests ... are nowhere so tightly intertwined as in the prison setting, where the government's remedial interest is to maintain order and to prevent violent altercations among a population of criminals' and where `remedial concerns require "punishing" individuals for violent or other disruptive conduct.'" Id. (quoting Hernandez-Fundora, 58 F.3d at 806, 807).
The Second Circuit has not substantively weighed in on the issue since Hernandez-Fundora and Hudson were decided, and has not seen fit to engage in the type of analysis undertaken by the Eleventh Circuit in Mayes. However, several lower federal courts within the circuit, as well as the New York Court of Appeals, have (since Halper and Hudson) routinely rejected state prisoners' double jeopardy challenges to disciplinary sanctions imposed under DOCS' administrative scheme, adhering to the traditional rule that prison disciplinary sanctions do not trigger the protections of the double jeopardy clause. See, e.g., Lisbon v. Goord, 2003 WL 1990291 (S.D.N.Y. April 29, 2003) (citing Bolanos); Baker v. Finn, 2001 WL 1338919 (S.D.N.Y. October 31, 2001) (same); People v. Hart, 93 N.Y.2d 825, 687 N.Y.S.2d 617, 710 N.E.2d 263 (1999) (consecutive sentence of 3½ to 7 years upon conviction for escape, in addition to disciplinary sanction of 15 years in SHU for same conduct, did not invoke double jeopardy; citing People v. Vasquez, 89 N.Y.2d *191 521, 532, 655 N.Y.S.2d 870, 678 N.E.2d 482 (1997) (disciplinary sanctions were not "so grossly unrelated to the noncriminal governmental objectives at stake in a prison environment that they may only be viewed as criminal punishment")).
For these reasons, plaintiff's motion for reconsideration is denied.
CONCLUSION
Based on the foregoing, defendants' motion for summary judgment (Item 85) is granted, the plaintiff's cross-motion to amend the complaint (Item 111) is denied, the plaintiff's motion for reconsideration (Item 124) is denied, and the complaint is dismissed. The Clerk of the Court is directed to enter judgment in favor of defendants.
So ordered.
NOTES
[1] Rule 1.00 provides:
Any Penal Law offense may be referred to law enforcement agencies for prosecution through the courts. In addition, departmental sanctions may be imposed based upon a criminal conviction.
7 N.Y.C.R.R. § 270.2(A).
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79 So. 3d 192 (2012)
Gloria McNEALY, Appellant,
v.
VERIZON SUPPORT CENTER/SEDGWICK CLAIMS MANAGEMENT SERVICES INC. #1, AIG Holdings, Inc. # 2, Appellees.
No. 1D11-1451.
District Court of Appeal of Florida, First District.
February 9, 2012.
Bill McCabe, Longwood, and Joey Oquist, St. Petersburg, for Appellant.
J. Craig Delesie, Jr., of Kadyk & Delesie, Tampa, for Appellees.
PER CURIAM.
In this workers' compensation appeal, Claimant argues the Judge of Compensation Claims (JCC) erred in denying her request to select or change her primary care provider and likewise erred in denying her claim for attorney's fees and costs. We agree the JCC erred and reverse for further proceedings consistent with this opinion.
Background
The relevant facts are not in dispute. Claimant sustained a compensable repetitive motion injury on April 11, 2001, involving both hands/wrists. At all times relevant to this appeal, medical treatment was *193 provided to Claimant via a managed care arrangement. When Claimant became dissatisfied with her initial treating orthopedic physician, Dr. Rodriguez, she filed a petition for benefits seeking an alternative physician, which resulted in her and her attorney selecting Dr. Okun, also an orthopedic physician, to provide treatment. Claimant first saw Dr. Okun on September 16, 2009, and remained under his care through the time of the hearing under review.
On October 22, 2010, Claimant filed another petition for benefits, this one seeking authorization for a primary care provider as well as attorney's fees and costs. The Employer/Carrier (E/C) asserted that Dr. Okun, based on the definitions in chapter 440, Florida Statutes, was both a primary care provider and an authorized treating physician and, under the facts of this case, such a combination was not inappropriate. The JCC denied the claims, finding that authorization of a separate primary care provider seemed redundant and not medically necessary. The JCC specifically accepted the E/C's argument that Dr. Okun could serve as both an authorized treating physician and a primary care provider.
Analysis
Because resolution of this issue requires statutory interpretation, our review is de novo. See Lombardi v. S. Wine & Spirits, 890 So. 2d 1128, 1129 (Fla. 1st DCA 2004). Two provisions, one statute and one rule, are relevant in this analysis. Section 440.134(6)(c)10., Florida Statutes (2000), provides that the managed care plan of operation must include "[a] provision for the selection of a primary care provider by the employee from among primary providers in the provider network." Florida Administrative Code Rule 59A-23.003(7)(i) requires this of the provider network:
The insurer or delegated entity, may direct injured employees to a single primary care provider or a selected group of primary care providers within the provider network for assessment and initial treatment. However, the employee shall have the right to select a primary care provider and thereafter, to request one change of primary care provider and of each authorized treating specialty provider during the course of treatment for each injury.
The E/C's managed care program states that it "shall include":
j. A provision for the selection of a [primary care provider] by the employee from among primary providers in the provider network:
The provision for the selection for a primary care provider by the employee from among primary providers in the provider network is described in the policy entitled "Assuring Covered Employees Receive All Initial Services From a [Primary Care Provider] Participating in the Provider Network, Except for Emergency Care".
The policy referenced in that statement was not included in the record; however, such an omission does not preclude this analysis. See Theiss v. City of Panama City Beach, 65 So. 3d 117, 118 (Fla. 1st DCA 2011) (holding right to select primary care provider is legislatively decreed; thus, it was not necessary for claimant to introduce into evidence managed care plan to establish rights).
The record is unclear as to whether Claimant's request for a change in physician from Dr. Rodriguez to Dr. Okun was a request for a change only as to the authorized treating specialist or whether it was also her initial selection of a primary care provider. Based on the plain language of the rule, however, the answer to that question is not relevant here. Because an injured employee whose medical *194 treatment is provided via a managed care arrangement is entitled to select a primary care provider and thereafter select one change in primary care provider, Claimant was entitled to make a selection. See Fla. Admin. Code R. 59A-23.003(7)(i). Claimant was not required to establish the medical necessity of the request. See Theiss, 65 So.3d at 118 ("Moreover, because an injured employee has been legislatively granted, in mandatory language, the unmitigated right to select and change his or her primary care provider during the course of treatment for an injury, we conclude that this right is not dependent upon a showing of medical necessity."). Finally, because Claimant was entitled to the claimed benefit, Claimant was entitled to E/C-paid attorney's fees and costs.
Accordingly, we REVERSE the order denying Claimant the right to select or change her primary care provider, and REMAND for entry of an order granting Claimant the benefits requested.
LEWIS, ROBERTS, and RAY, JJ., concur.
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293 N.J. Super. 170 (1996)
679 A.2d 1206
J. JOSEPHSON, INC., PLAINTIFF-RESPONDENT,
v.
CRUM & FORSTER INSURANCE COMPANY, FIREMAN'S FUND INSURANCE COMPANY, LUMBERMEN'S MUTUAL CASUALTY COMPANY, PACIFIC EMPLOYERS INSURANCE COMPANY AND ZURICH-AMERICAN COMPANY, DEFENDANTS, AND HARTFORD INSURANCE GROUP, DEFENDANT-APPELLANT.
Superior Court of New Jersey, Appellate Division.
Argued May 8, 1996.
Decided August 6, 1996.
*172 Before Judges KING, LANDAU and KLEINER.
*173 Michael F. O'Neill argued the cause for appellant (Purcell, Ries, Shannon, Mulcahy & O'Neill, attorneys; Susan R. Rubright, on the brief).
Ellis Medoway argued the cause for respondent (Archer & Greiner, attorneys; Mr. Medoway and Edward C. Laird, on the brief).
The opinion of the court was delivered by KING, P.J.A.D.
This pollution insurance coverage dispute presents several issues for resolution. We conclude that the Law Division judge: (1) correctly decided that New Jersey's substantive law applied even though the waste disposal was in the Commonwealth of Pennsylvania; (2) correctly construed the implications of the comprehensive general liability policy (CGL) in the circumstances of the lawful disposal of hazardous waste through properly licensed and regulated haulers and disposal sites; (3) incorrectly granted summary judgment to the insured in the face of a claim that the insured intentionally polluted in violation of the standard enunciated in Morton International v. General Accident, 134 N.J. 1, 629 A.2d 831 (1993), cert. denied, ___ U.S. ___, 114 S.Ct. 2764, 129 L.Ed.2d 878 (1994), where the record and discovery were too incomplete for such a factual determination; and (4) incorrectly ruled that pollution coverage was available under the personal injury endorsement feature of the insured's CGL policy, see United States Bronze Powders, Inc. v. Commerce & Industry Insurance Company, 293 N.J. Super. 12, 17-18, 679 A.2d 674 (App.Div. 1996).
I.
On February 2, 1990 plaintiff J. Josephson, Inc. (plaintiff) filed a nine-count complaint against defendants, Kemper Insurance Group (Kemper), Lumbermen's Mutual Casualty Company (Lumbermen's), Fireman's Fund Insurance Company (Fireman's Fund), Hartford Insurance Group (Hartford or defendant) and Crum & *174 Forster Insurance Company (Crum & Forster), plaintiff's general liability insurers, seeking a declaratory judgment that it was entitled to a defense and indemnification from these defendants in connection with environmental pollution claims made against plaintiff with respect to three waste sites in New Jersey, one New York site and another in Elkton, Maryland. Hartford denied the material allegations of the complaint and asserted separate defenses, including a bar to coverage by the exclusions in Hartford's liability policies.
On November 1, 1991 plaintiff filed a second amended complaint adding two additional insurers as defendants: Pacific Employers Insurance Company (Pacific) and Zurich-American Insurance Company (Zurich). The complaint added a demand for declaratory relief seeking coverage relating to claims arising out of a waste site in Pennsylvania and also added a claim for bad faith; plaintiff deleted claims concerning the Elkton, Maryland site. Defendant answered and denied liability under its policy.
Pursuant to Case Management Order I, plaintiff moved for partial summary judgment on the issues of choice of law and the interpretation of the pollution exclusion clauses in defendant's policy. Also the Case Management Order also stayed discovery pending the summary judgment motion on these substantive issues.
The motion was heard by Judge Napolitano on May 14, 1992. At that time Hartford took the position that no decision on choice of law could be made because discovery had not been completed and plaintiff had denied the requisite discovery. The judge dismissed Hartford's concern, noting that the Case Management Order barred discovery pending these motions. The judge said that he had everything he needed to resolve the choice of law issue, namely, the existence of the policies, the location of the sites, and the identity of the parties. He concluded that New Jersey law applied. He did not address the requested interpretation of the pollution exclusion clauses in the policies at that time. One year later, in April 1993, the judge issued a written decision, subsequently published, J. Josephson v. Crum & Forster Ins. Co., *175 265 N.J. Super. 230, 626 A.2d 81 (Law Div. 1993), in which he elaborated on his reasons for finding that New Jersey law applied to all locations, both in-state and out-of-state. In a footnote the judge declined to render the requested interpretation of the pollution clauses, concluding that at this stage of the litigation, such a ruling would be nothing more than an advisory opinion. Id. at 233 n. 1, 626 A.2d 81. After the judge issued his written decision, Lumbermen's sought leave from this court to appeal that portion of the decision dealing with the choice of law. The motion was denied on June 28, 1993.
On March 28, 1994 plaintiff moved for summary judgment against all defendants as to all sites involved in the litigation. Hartford cross-moved for partial summary judgment on the issue of precisely when the damage occurred with respect to three New Jersey sites and as to all policies which contained an absolute pollution exclusion clause. Four days before the return of the motion, Hartford moved on short notice to amend the judge's choice-of-law order. Prior to the motion hearing date, September 23, 1994, plaintiff reached a settlement and dismissed all defendant carriers from the action except Hartford. This settlement left only the claims against Hartford regarding the Industrial Solvents and Chemical Company (ISCC) Pennsylvania site in issue.
Plaintiff's summary judgment motion was argued before Judge Napolitano on September 23, 1994. Again, Hartford argued that summary judgment was inappropriate because there was insufficient discovery to enable the court to determine whether plaintiff intentionally discharged a known pollutant. The judge disagreed. Holding that the law required coverage in environmental tort cases except where the insured intended to cause the harm, the judge found further discovery unnecessary because "there is no sensible way to infer intent to harm the environment when [as here] licensed waste haulers are used to dispose of waste properly in accordance with very specific regulatory requirements." The judge found, as a matter of law, that plaintiff "did not intend *176 environmental damage when it follows the law and uses licensed waste haulers to dispose of [hazardous waste]." The judge found it "inconceivable that this type of behavior could be consistent with an intention to pollute."
The judge refused to revisit his decision on the choice-of-law ruling and denied Hartford's motion in that regard. He also denied Hartford's cross-motions for partial summary judgment.
On September 23, 1994 the judge ordered Hartford to pay plaintiff about $153,000 in incurred remediation costs and $266,000 for incurred defense costs, plus prejudgment interest. Hartford was also ordered to assume the defense of and indemnification for future claims.
No order issued, however, with respect to the denial of Hartford's cross-motions for partial summary judgment on the absolute pollution exclusion clauses and Hartford's application for reconsideration of the choice-of-law ruling. Hartford raised a series of objections to the form of plaintiff's proposed order on these issues. On January 24, 1995 the judge filed an order denying Hartford's cross-motion for partial summary judgment based on the absolute pollution exclusion clauses. He found it unnecessary to reach that issue because the Hartford policies upon which plaintiff was granted summary judgment were sufficient to cover the defense and indemnification costs awarded plaintiff. The judge also found that the personal injury liability endorsement provided an alternative basis for coverage, even if the absolute pollution exclusion clauses barred coverage. Finally, Hartford's application for reconsideration of the choice-of-law ruling was denied. On the same day, the judge filed a supplemental order, (1) granting plaintiff's motion for summary judgment against Hartford, and (2) modifying the amounts Hartford was ordered to pay plaintiff for counsel fees and interest awarded under the September 23, 1994 order.
II.
Plaintiff is a Georgia corporation which manufactures wall coverings. Since 1969 plaintiff's principal place of business has been *177 in South Hackensack, New Jersey, where it leased four buildings and maintained over one hundred employees.
In the wallcovering manufacturing process, various patterns were printed on a sheet known as a substrate, composed of PVC or paper sheeting. The primary machinery employed in the process were Gravure printers which used several stations to apply various colors to the substrate and used inks mixed with one or more solvents. Different types of wastes were created in this process. One type was created from the non-reusable material left in the printing pans; another was scrap substrate generated from a defective product or the process of trimming the substrate to the appropriate dimensions; pan washers which were essentially washing machines for the ink-mixture pans created another type of waste; and, finally, the rags used to manually wipe down some of the pans were also waste materials.
These wastes were considered hazardous. Plaintiff contracted with licensed waste disposal haulers to transport and dispose of them. The type of waste generated and transported by these haulers was identified on DEP official waste manifests. The documents showed that plaintiff contracted with Scientific Chemical Processing, Inc. (SCP) to transport and treat some of its waste which SCP deposited at three locations in New Jersey: 416 Paterson Plank Road, Carlstadt; 411 Wilson Avenue, Newark; and Lone Pine in Freehold.
In May 1985 the U.S. Environmental Protection Agency (EPA) notified plaintiff that the agency considered it a potentially responsible party for costs incurred in the cleanup of the Carlstadt site which had been contaminated by waste generated by plaintiff, among others. Plaintiff received a similar notice in September 1985 with respect to the Lone Pine site and eventually another as to the Wilson Avenue site. Plaintiff notified its insurers of these claims, requesting a defense and indemnification pursuant to the policies issued by the respective insurers.
Between 1979 and 1980, plaintiff had contracted with Hazardous Waste Disposal to transport and dispose of about twelve shipments *178 of its waste, which eventually were deposited at the Shore Realty Site in Glenwood Landing, New York. By letter of August 3, 1989 the State of New York notified plaintiff that it was considered a potentially responsible party for costs incurred in the cleanup of contamination occurring at the Shore Realty Site.
Between 1982 and 1984, plaintiff contracted with the Delaware Container Company (Delaware Container) for waste removal and treatment. Delaware Container transported this waste to the ISCC site in Yorkhaven, Pennsylvania, on fourteen occasions. On December 5, 1990 the Pennsylvania Department of Environmental Resources (DER) notified plaintiff that it was responsible for costs related to the cleanup of contamination in the soil and ground water surrounding the ISCC site, which damage was allegedly caused in part by the disposal of plaintiff's waste.
Between 1978 and 1987, the period involved in this case, plaintiff was insured by various comprehensive general liability contracts issued by the defendant insurers. These policies were all procured through John M. Riehle, Inc., a New York City insurance broker. There is no dispute about the availability of the Hartford policies during the pertinent periods.
As noted, plaintiff settled with Lumbermen's, Zurich and Pacific prior to the September 23, 1994 argument on the summary judgment motion. The settlement with Pacific and Zurich required those companies to pay plaintiff an undisclosed lump sum. The agreement with Lumbermen's also required payment of a lump sum and payment of all defense and remediation costs incurred by plaintiff in connection with the New Jersey sites. Plaintiff entered into a "de minimis" settlement agreement with regard to the New York Shore Realty site in 1993. Thus, only the costs of defense and indemnification for remediation of the ISCC site in Pennsylvania remain at issue in this case. All of the waste deposits at that site were made during the period of Hartford's coverage.
Hartford issued a series of primary comprehensive general liability (CGL) and umbrella or excess policies to plaintiff, effective *179 between May 25, 1982, and November 1, 1986. All of the CGL policies effective May 25, 1982 through May 25, 1986, and the excess policies effective May 25, 1982 through May 26, 1984, contained the standard pollution exclusion clause, which provides that:
This insurance does not apply:
....
(f) to bodily injury or property damage arising out of the discharge, dispersal, release, or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants, into or upon land, the atmosphere or any water course or body of water; but this exclusion does not apply if such discharge, dispersal, release or escape is sudden or accidental.
The primary policy effective May 25, 1986 through November 1, 1986, and the excess policies effective May 26, 1985 through November 1, 1986 contained an absolute pollution exclusion clause in two forms: the first was a separate endorsement which provided a detailed exclusion clause and the second was a substitute for another exclusion clause, exclusion D. Those absolute pollution exclusion clauses provided as follows:
It is agreed that the exclusion relating to the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants is replaced by the following:
1. to bodily injury or property damage arising out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants:
(a.) at or from premises owned, rented or occupied by the named insured;
(b.) at or from any site or location used by or for the named insured or others for the handling, storage, disposal, processing or treatment of waste;
(c.) which are at any time transported, handled, stored, treated, disposed of, or processed as waste by or for the named insured or any person or organization for whom the named insured or any person or organization for whom the named insured may be legally responsible; or
(d.) at or from any site or location on which the named insured or any contractors or subcontractors working directly or indirectly on behalf of the named insured are performing operations:
(i) if the pollutants are brought on or to the site or location in connection with such operations; or
(ii) if the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize the pollutants.
*180 2. to any loss, cost or expense arising out of any governmental direction or request that the named insured test for, monitor, clean up, remove, contain, treat, detoxify or neutralize pollutants.
Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes material to be recycled, reconditioned or reclaimed.
The parties agreed that Exclusion D is eliminated and replaced by the following:
D. to bodily injury and property damage arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminates or pollutants into or upon land, the atmosphere or any water course or body of water.
Defendant Hartford now appeals from the grant of summary judgment to plaintiff holding it liable to defend and indemnify plaintiff under the terms of the policies and assessing damages for costs incurred in the defense of the actions filed against it with respect to the ISCC Pennsylvania site.
Hartford raises a number of issues on appeal which we summarize:
I. WHETHER THE JUDGE ERRED IN DENYING DEFENDANTS MOTION FOR RECONSIDERATION OF ITS CHOICE OF LAW DECISION.
II. WHETHER THE JUDGE ERRED IN GRANTING PLAINTIFF SUMMARY JUDGMENT.
A. DID THE JUDGE MISINTERPRET THE SUPREME COURTS TEST FOR DETERMINING THE SCOPE OF THE POLLUTION EXCLUSION CLAUSE SET OUT IN MORTON.
B. DID THE JUDGE MISINTERPRET MORTON'S TEST FOR DETERMINING WHETHER THERE WAS A COVERED OCCURRENCE UNDER THE POLICY.
C. WAS SUMMARY JUDGMENT INAPPROPRIATE BECAUSE DISCOVERY WAS INCOMPLETE.
III. WHETHER THERE WAS COMPETENT EVIDENCE TO SUPPORT THE JUDGE'S ASSESSMENT OF DAMAGES AGAINST HARTFORD AND WHETHER DAMAGES SHOULD HAVE BEEN APPORTIONED ON A PRO RATA BASIS.
IV. WHETHER THE JUDGE'S ORDER IN PLAINTIFF'S FAVOR ON THE ABSOLUTE POLLUTION EXCLUSION CLAUSE WAS SUPPORTED BY ADEQUATE FINDINGS.
*181 V. WHETHER THE JUDGE ERRED IN AWARDING PLAINTIFF ATTORNEY'S FEES.
VI. WHETHER THE JUDGE ERRED IN DENYING DEFENDANTS CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO THE NEW JERSEY SITES ON THE GROUND THAT THE PROPERTY DAMAGE WAS MANIFEST BEFORE THE INCEPTION OF DEFENDANT'S POLICIES.
Our review of the record convinces us that the judgment must be affirmed in part, remanded in part, and reversed in part.
III.
We consider first the choice-of-law issue because it is outcome determinative. Hartford contends that the judge erred in denying its motion for reconsideration of his choice-of-law ruling because he was legally incorrect in ruling that New Jersey law governed the interpretation of an insurance policy which involved waste dumped at an out-of-state site. Plaintiff responds that Hartford has waived its right to challenge the judge's choice-of-law ruling because it did not oppose plaintiff's motion for partial summary judgment on that issue. Pointing to a footnote in Lumbermen's opposition brief and to a statement made by defendant's counsel during oral argument on the choice-of-law motion in May 1992, plaintiff maintains that defendant chose not to oppose plaintiff's motion seeking to have New Jersey law applied to the interpretation of the policies. From this evidence, plaintiff concludes that defendant has no standing to challenge the judge's decision either on the motion for reconsideration or on appeal.
We conclude that plaintiff misreads the position taken by Hartford in the Law Division. The footnote in Lumbermen's brief says only that Hartford agreed that Judge Napolitano should apply New Jersey's choice-of-law principles to the facts at hand to resolve the issue of what law "should apply to the sites which are the subject matter of this litigation." By that statement Hartford was not abandoning its opposition to plaintiff's claim that New Jersey substantive law should apply to the declaratory judgment proceeding. It was stating only that the Law Division should use New Jersey's choice-of-law rules to determine which law would *182 apply to the substantive issues raised by the declaratory judgment action. Similarly, at the oral argument on the choice of law motion, counsel told the court "that your Honor should utilize the choice of law principles which your Honor believes are applicable in this jurisdiction." Although counsel went on to say that "We do not tell you what state law should apply to a particular issue which your Honor may be considering," we do not read this as asserting that defendant was electing to abandon the issue. Rather, defendant seemed to say it would like the judge to use New Jersey's choice-of-law precepts to determine whether New Jersey or another state's law should govern the interpretation of the policy provisions.
Although it is true, as plaintiff points out, that two other insurers, but not Hartford, unsuccessfully sought leave to appeal Judge Napolitano's decision on the choice of law (J. Josephson v. Crum & Forster Ins., supra, 265 N.J. Super. 230, 626 A.2d 81), the fact that Hartford did not join is not determinative. Without leave to appeal, Hartford was required, like the others, to wait until a final decision was rendered in order to challenge the choice-of-law ruling. R. 2:2-3(b).
The question before us is whether Judge Napolitano correctly concluded New Jersey law applied to this declaratory judgment action where the plaintiff was seeking coverage under an insurance policy issued by defendant for damages incurred when its waste was deposited in an out-of-state site. Defendant contends that the judge rendered a decision at odds with our Supreme Court's pronouncement on controlling choice-of-law rules in Gilbert Spruance v. Pennsylvania Manufacturers, 134 N.J. 96, 629 A.2d 885 (1993), Gilbert Spruance was decided on July 21, 1993, three months after the judge's written decision in the case before us. Defendant claims this ruling condemns the judge's analysis and conclusion as erroneous.
We think defendant is wrong in its claim that the judge's approach to the choice-of-law problem is at odds with the analysis used by our Supreme Court in Gilbert Spruance. On the contrary, *183 the judge's methodology in analyzing this choice-of-law problem was quite similar to that employed by our Supreme Court in its decision three months later.
The factual contexts of Gilbert Spruance and this case are reverse images of each other. In Gilbert Spruance the Court was concerned with which law would apply in construing a policy containing a pollution exclusion clause where the insured was a Pennsylvania manufacturing concern which had consigned its waste to independent haulers who transported the waste to landfills in New Jersey. Those New Jersey sites were later the basis of multiple toxic tort claims for personal injury and property damage against the insured. 134 N.J. at 98, 629 A.2d 885. In the present case, the insured is a New Jersey corporation whose waste was disposed of by licensed waste haulers at waste sites in Pennsylvania, as well as in New York, New Jersey and Maryland.
Our Supreme Court held in Gilbert Spruance that in determining which choice-of-law rule will govern interpretation of CGL policies, we must look first to the Restatement (Second) of Conflicts of Laws, § 193. That section provides that the law of the state, which the parties understood was the principal location of the insured risk will govern, unless some other state has a more significant relationship to the transaction and to the parties when measured under principles set out in the Restatement, supra, § 6. But where the subject matter of the insurance is an operation or activity which is predictably multi-state, the significance of the principal location of the insured risk diminishes and the governing law is that of the state with the dominant significant relationship according to the principles set out in Restatement § 6. Gilbert Spruance, supra, 134 N.J. at 112, 629 A.2d 885. Under Restatement § 6, the general considerations pertinent to a court's conflict-of-law analysis are (1) the needs of the interstate and international systems; (2) relevant policies of the forum; (3) relevant policies of other interested states and the relative interests of the states in the determination of a particular issue; (4) the protection of justified expectations; (5) the basic policies underlying the *184 particular field of law; (6) certainty, predictability and uniformity of result; and (7) ease in the determination and application of the law to be applied. Id. at 103, 629 A.2d 885.
The Court also addressed the problem of how to determine where the insured risk is located. With respect to hazardous-waste cases the Court rejected an arbitrary choice of either the state of generation or the state of disposal. Instead, because the risk (waste disposal) was transient "a more extended analysis pursuant to [Restatement] § 6(2) is appropriate to determine whether apart from or in addition to § 193 significance, [either state] has a more significant relationship to the transaction and the parties." Id. at 112-13, 629 A.2d 885, (quoting A. Johnson & Co. v. Aetna Casualty & Sur. Co., 741 F. Supp. 298, 300 (D.Mass. 1990), aff'd, 933 F.2d 66 (1st Cir.1991)). The Court concluded that when the facts of the case before it were measured against the principles enunciated in Restatement § 6, New Jersey had the dominant significant relationship in Gilbert Spruance where out-of-state-generated waste foreseeably came to rest in New Jersey. Id. at 113, 629 A.2d 885.
Relying upon this court's decision in Gilbert Spruance v. Pennsylvania Mfrs. Ass'n Ins., 254 N.J. Super. 43, 603 A.2d 61 (App. Div. 1992), aff'd, 134 N.J. 96, 629 A.2d 885 (1993), Judge Napolitano came to the conclusion that New Jersey law would apply to the interpretation of the pollution exclusion clauses contained in the several policies, with respect to determining coverage for the waste sites located in New Jersey. J. Josephson, supra, 265 N.J. Super. at 238, 626 A.2d 81. In determining which law governed interpretation of policies where the waste sites were located out-of-state, the judge rejected a standard which would uniformly apply the law of the state where the hazardous waste site was located. He opted for a more flexible approach. He analyzed the Restatement § 6 factors to determine which state had a substantial interest in seeing its law applied. Id. at 239-40, 626 A.2d 81. He then engaged in an extended and detailed analysis of those factors and concluded that New Jersey had a substantial interest *185 in the outcome of the litigation, a substantial contact with at least one of the principal litigants, and a strong public policy affecting health, safety and welfare at odds with at least one competing state (Pennsylvania). He decided that New Jersey law should apply to the interpretation of these insurance policies, no matter where the waste site was located. Id. at 245, 626 A.2d 81.
We conclude that defendant's claim that the judge's method of analysis was inconsistent with the method employed by our Supreme Court in Gilbert Spruance is unfounded. The approach taken was the same: use of the Restatement § 6 factors to determine which state had the more significant relationship to the transactions and the parties.
The Supreme Court was well aware of Judge Napolitano's decision and recognized that Gilbert Spruance did not encompass "the problem presented when waste generated in New Jersey predictably is disposed of in another state." 134 N.J. at 113, 629 A.2d 885. The Court remarked that the U.S. District Court in Leksi, Inc. v. Federal Ins. Co., 736 F. Supp. 1331 (D.N.J. 1990), held unequivocally that "in the absence of a choice of law provision [in the insurance contracts], the state where the toxic waste comes to rest is the state whose law will apply, provided it was reasonably foreseeable that the waste would come to rest there." Gilbert Spruance, supra, 134 N.J. at 113-14, 629 A.2d 885. Our Supreme Court continued:
Specifically, we express no view on the proposition stated in J. Josephson, Inc., supra, that when another state is the foreseeable location of the waste-site, the court must engage in a section 6 analysis to determine if that state has the most significant relationship with the parties, the transaction, and the outcome of the controversy an analysis that requires the court "to sift through and analyze, however laborious [the task], the competing and varied interest of the states involved.... 265 N.J. Super. at 239, 626 A.2d 81."
[Id. at 114, 629 A.2d 885.]
We do not think that the Supreme Court was suggesting that Judge Napolitano's approach was incorrect. While the Court quoted from Leksi, we think that the Court was expressing no opinion either way. The Court was simply contrasting Leksi's *186 unequivocal stance holding the site of the waste disposal determinative in the choice-of-law with Josephson's Restatement § 6 analysis. Though the Supreme Court adopted Leksi's conclusion that when Restatement § 6 principles were applied to cases where out-of-state generators deposited waste in New Jersey, and this State had the dominant significant relationship, the Court did not endorse Leksi and embrace its principles in their entirety. Instead, the Court expressly declined to consider the situation posed in the case before us: waste generated in New Jersey and disposed of in another state.
This precise factual situation was recently before the Third Circuit in General Ceramics Inc. v. Firemen's Fund Ins. Co., 66 F.3d 647 (3d Cir.1995). There, General Ceramics, a New Jersey company which manufactured ceramic products at its main plant in Haskell, New Jersey, contracted with private waste haulers to transport its contaminated waste from that facility to a resource recovery and processing facility in McAdoo, Pennsylvania. In 1981 General Ceramics received notice from the EPA and the Pennsylvania DER that it was required to participate in a cleanup, monitoring and remediation program for the McAdoo site because of its 1977 and 1978 waste deposits. General Ceramic sought indemnification from its insurer, Home Insurance Company (Home), incorporated in New Hampshire with its principal place of business in New York. All of General Ceramic's policies were obtained through a New York insurance broker. The Home policies were occurrence-based and contained the standard pollution exclusion clause providing that the exclusion would not apply if the discharge, release, dispersal or escape of pollutants was sudden and accidental.
In the federal district court in New Jersey, summary judgment was granted in favor of Home. General Ceramic's cross-motion for summary judgment was denied on the ground that Pennsylvania law applied and that under Pennsylvania law, the gradual discharge of pollutants was not covered under the sudden and accidental exception to the pollution exclusion clause. Id. at 650-51. *187 The Third Circuit disagreed with that conclusion and held that New Jersey law applied and that coverage was provided for property damage caused by the gradual release of pollutants into the environment. Id. at 651.
In arriving at that conclusion, the Third Circuit relied primarily upon our Supreme Court's holding in Gilbert Spruance. Id. at 652-54. The court said that the district court also relied upon Gilbert Spruance, and had concluded, erroneously, that Pennsylvania law would apply to this contract dispute. The Third Circuit posited that the district court had succumbed to the temptation of extracting a "bright line rule" from Gilbert Spruance, i.e., the state in which the waste disposal site is located has the most significant contacts with the subject matter of the litigation cleanup of a hazardous waste site and therefore the disposal state's substantive law should be applied as long as it was reasonably foreseeable to the contracting parties that the insured's waste could predictably come to rest in that state. Id. at 654-55. The Third Circuit rejected that understanding, concluding that Gilbert Spruance stood for a more flexible analysis under the Restatement principles, particularly Restatement §§ 6 and 193. The court used the Restatement-favored factors in analyzing whether, under the facts of the case before it, New Jersey or Pennsylvania was the state with the more significant relationship to the transaction and the parties. Id. at 655.
Of the factors set out in Restatement § 6(2), the Third Circuit found critical the competing interest of the respective states in having their particular rules govern in light of the purposes and policies behind each of those competing rules. Id. at 656. The competing rules were Pennsylvania's and New Jersey's respective judicial interpretations of the "sudden and accidental" exclusion exception in CGL policies. Ibid. In arriving at its conclusion that coverage was available even where the discharge of pollution was gradual, our Supreme Court in Morton focused upon the insurance industry's misrepresentation that the pollution exclusion clause would not reduce liability coverage. Id. at 656-57 (citing Morton *188 Intern., supra, 134 N.J. 1, 629 A.2d 831). The Third Circuit observed that New Jersey's interpretation of that policy provision was born of a concern for insureds who purchased coverage based on the state's regulatory approval of the standard CGL policies. The underlying policies prompting this interpretation by our high court were the protection of the New Jersey insureds and the integrity of New Jersey insurance contract negotiations, as well as promotion of honest dealings with this State's regulatory agencies. Id. at 657. These interests were implicated in the case before it. The Third Circuit observed that the insured was a New Jersey corporation with its main plant and headquarters in New Jersey, from which it paid its premiums on the policy. This public policy focus in Morton was contrasted with the focus in Gilbert Spruance where the insured was located out-of-state and the waste was generated out-of-state but resulted in in-state environmental damage. The state interest implicated in Gilbert Spruance was New Jersey's interest in securing financial resources to remediate New Jersey toxic waste sites and compensate New Jersey victims of pollution. Ibid.
In examining the policies behind the Pennsylvania court's more restrictive interpretation of the pollution exclusion clause exception, the Third Circuit observed that the interpretation reflected Pennsylvania's interest in giving effect to the literal meaning of unambiguous contract terms. Pennsylvania's rejection of claims that the "sudden and accidental" exception afforded coverage for gradual pollution reflected a view that the contracting parties were in the best position to ascertain their own needs. Pennsylvania ostensibly had decided that a secure commercial environment will exist if it enforces commercial agreements entered into between private parties "as written" and remains neutral on the substance of those agreements. Thus, the Third Circuit concluded that Pennsylvania's rule was designed to not intrude upon the contracting parties by giving them the freedom to bargain for and agree on the allocation of risk which they deemed appropriate. However, the Third Circuit also observed that this interest is implicated only when at least one of the parties is a Pennsylvania *189 domiciliary a situation which did not exist in the case before it which involved a New Jersey insured, General Ceramics; a New Hampshire insurer, Home Indemnity; and a New York insurance broker. That the waste ultimately ended up in Pennsylvania was not controlling, even though the Commonwealth's policy was to give effect to the plain meaning of an unambiguous contract and leave the allocation of risk to the contracting parties. Id. at 657-58. The Third Circuit concluded that, upon examination of the purposes of each state's law, New Jersey's policy purposes were better served by the application of New Jersey law where its interests and contacts dominated.
This conclusion about the purposes of the respective state's laws governed the Third Circuit's analysis of the remaining Restatement § 6 factors and supported the ruling that New Jersey law should be applied to the interpretation of the pollution exclusion clause in the Home Indemnity policy. Id. at 658-59. The Third Circuit's analysis of a case nearly identical to the present case strongly supports the view that New Jersey law should be applied to these policies even though plaintiff's waste was deposited at a Pennsylvania site. Here we also have a New Jersey generator and insured, policies written and issued by a New York broker, and a Connecticut insurance company. We see nothing in Gilbert Spruance to suggest that the Law Division judge's analysis was incorrect. Indeed, it is entirely consistent with both Gilbert Spruance and the Third Circuit's decision in General Ceramics. Although the Law Division judge did not engage in quite the same analysis of the respective policies and purposes of New Jersey's and Pennsylvania's legal interpretations of the pollution exclusion clause language, he used the same framework of analysis and arrived at the same conclusion as the Third Circuit on facts virtually identical to those in General Ceramics.
Gilbert Spruance makes clear there is no bright line rule with respect to deciding conflict-of-laws issues where environmental litigation is concerned. The Third Circuit recognized this and, interestingly enough, Judge Napolitano perceived this even though *190 he did not have the benefit of the Supreme Court's holding in Gilbert Spruance at the time he rendered his decision. In our view, the Third Circuit's observations of the interests of the two states and its conclusion that New Jersey's policies and purposes are appropriately furthered by the application of its law to cases such as these are equally applicable to the case before us.
We will apply New Jersey's law to Hartford's insurance policies. In the present case, applying New Jersey law will not disrupt Pennsylvania's regulatory efforts because it has demonstrated no interest in interfering with the contractual relationships between New Jersey insureds and their insurers. And, of course, this case does not involve any Pennsylvania insureds or their insurers. We uphold the Law Division's choice-of-law decision: New Jersey law governs the interpretation of the policies issued by Hartford to plaintiff. "[O]nly the purposes of New Jersey law are implicated here...." General Ceramics Inc., supra, 66 F.3d at 658. Cf., NL Industries, Inc. v. Commercial Union Ins. Co., 65 F.3d 314 (3rd Cir.1995) (New York held state with dominant interests). For a recent example of governmental-interest analysis in choice-of-law see Gantes v. Kason Corporation, 145 N.J. 478, 679 A.2d 106 (1996).
IV.
In three separate points, defendant argues that summary judgment was improperly granted to plaintiff because: (1) the judge misinterpreted the Supreme Court's test for determining the scope of the pollution exclusion clause set out in Morton; (2) the judge misinterpreted Morton's test for determining whether there was a covered occurrence under the policy; and (3) the judge granted summary judgment inappropriately because discovery was incomplete.
IV(A).
Defendant contends that the judge failed to properly apply Morton's "intentional discharge of a known pollutant" test to *191 determine whether the insurance policies' pollution exclusion clauses would preclude coverage under the facts of this case. Defendant asserts that the judge erred "in grafting onto the Morton pollution exclusion ruling an exception where the waste is transferred to and transported by a licensed waste hauler."
In Morton our Supreme Court settled the vexing questions of how the standard pollution exclusion clause and the definition of a covered "occurrence" found in CGL policies should be interpreted where claims for coverage were based on environmental pollution. There, the insured sought coverage for cleanup costs related to the remediation of Berry's Creek, a waterway polluted by discharges from a mercury processing plant operated for over forty years by Morton's predecessors. 134 N.J. at 7-8, 629 A.2d 831. Morton sought coverage under policies which provided indemnification for property damage "resulting from an occurrence" except where that property damage arose out of the discharge, dispersal, release or escape of contaminants or pollutants in or upon land. That exclusion, however, did not apply if "such discharge, dispersal, release or escape is sudden and accidental." Id. at 11, 629 A.2d 831. An occurrence was defined as an "unexpected event or happening ... or a continuous or repeated exposure to conditions" resulting in property damage "provided the insured did not intend or anticipate that injury to or destruction of property would result." Id. at 10, 629 A.2d 831.
In establishing the scope of the pollution exclusion clause, the Court held that the phrase "sudden and accidental" related not to the damage caused by the pollution, but only to the "discharge, dispersal, release or escape" of pollutants for which coverage was provided. Consequently, the Court held that the phrase "sudden and accidental" described "only those discharges, dispersals, releases, and escapes of pollutants that occur abruptly or unexpectedly and are unintended." Id. at 28-29, 629 A.2d 831. However, the Court went on to state that such an interpretation would "sharply and dramatically" restrict the coverage that previously had been provided under CGL policies for property damage *192 caused by accidental pollution, because prior thereto, under occurrence-based policies, coverage was provided for any type of property damage that was "neither expected nor intended from the standpoint of the insured." Id. at 29, 629 A.2d 831. When the standard pollution exclusion clause was presented to state insurance regulatory agencies, the industry maintained that the exclusion would simply clarify existing coverage and there would be a continuation of coverage for pollution-caused injuries which resulted from an accident. Ibid. However, the language of the clause did not support that representation. Rather, the clause virtually eliminated pollution-caused property damage coverage. For that reasons, the Supreme Court declined to enforce the standard pollution exclusion clause as written and held instead that
notwithstanding the literal terms of the standard pollution-exclusion clause, that clause will be construed to provide coverage identical with that provided under the prior occurrence-based policy, except that the clause will be interpreted to preclude coverage in cases in which the insured intentionally discharges a known pollutant, irrespective of whether the resulting property damage was intended or expected. We expressly limit our holding concerning the limited effect of the pollution-exclusion clause to cases in which the insured or an agent specifically authorized to act for the insured intentionally discharges a known pollutant.
[Id. at 78, 629 A.2d 831.]
Applying that holding to the case before him, Judge Napolitano concluded:
I am prepared to find as a matter of law ... that I'm sure that it [Josephson] did not intend environmental damage when it follows the law and uses licensed waste haulers to dispose of it, because the Legislature at least on two levels of government, state and federal, unless there is something glaring here that we all have missed [sic], it's inconceivable that this type of behavior could be consistent with an intention to pollute; that's the finding that I am prepared to make. It's a common sense finding. It's also based on the fact that nothing is here to contradict that.
... [T]here is no sensible way to infer intent to harm the environment when licensed waste haulers are used to dispose of waste properly in accordance with very specific regulatory requirements or face egregious statutory penalties; for those reasons the court finds as a matter of law that Josephson did not intend to dispose of the waste in such a way as to cause an environmental harm.
Defendant vigorously disagrees with this holding. On this appeal, defendant takes the position that the hauler is the agent of the generator of the waste and, as such, when the hauler intentionally *193 discharges a known pollutant, that intent is imputed to the generator-insured, who is barred from recovery under the policy by operation of the pollution exclusion clause. Thus, the question presented by this appeal is whether, for the purposes of a CGL policy, an insured-generator of waste "intentionally discharges a known pollutant" when it gives its waste to a licensed hauler who disposes of that waste in such a manner that it leaks or escapes and pollutes the environment. As presented, this is a fairly novel issue in this State and nearly everywhere else. While there are a few cases involving questions of insurance coverage for insured-generators and pollution-related damages caused by third-party disposal of the generator's waste, only several have faced this precise query. The others have focused on the interpretation of the "sudden and accidental" exception in the pollution exclusion clause; the resulting interpretation determined coverage under the policy. Whether there actually was an intentional discharge of a known pollutant by the insured was not a factor.
The District of New Jersey federal court dealt with this issue in Nestle Foods Corp. v. Aetna Casualty and Surety Co., 842 F. Supp. 125 (D.N.J. 1993), a case relied upon by plaintiff and roundly criticized by defendant. (The Nestle reasoning was rejected by a California federal district court in Trico Industries, Inc. v. Travelers Indemnity Co., 853 F. Supp. 1190, 1193 (C.D.Cal. 1994), where the court, applying Missouri law, concluded it could not follow the Nestle interpretation of the pollution exclusion clause.)
In Nestle, the court granted the plaintiff-insured's motion for summary judgment, finding the pollution exclusion clause did not apply. Nestle had contracted with a licensed waste hauler to transport and dispose of its waste, which the hauler took to the Lone Pine Landfill. Id. at 127. Nestle was subsequently notified by the New Jersey DEP that it was a potentially responsible party with respect to the cleanup of the landfill. Nestle sued its insurer, Aetna, when it refused to provide a defense and indemnify it for the cleanup costs. Ibid. In concluding that the pollution *194 exclusion clause in Aetna's policy did not bar coverage, the court quoted Morton's holding that the pollution exclusion clause would apply only to insureds who intentionally discharged a known pollutant. Id. at 131. However, the court did not examine Nestle's intent with respect to the pollution discharge. Rather the court's framing of the question focused on the discharge, not on Nestle's intent: "Did Nestle discharge the known pollutant," not "Did Nestle intend to discharge a known pollutant." While the court noted that there was no dispute that Nestle's wastes were intentionally discharged into the landfill by the independent hauler, the court found:
[T]he plain and ordinary meanings of "discharge, dispersal, release or escape" do not encompass the transfer of wastes to an independent hauler which, in turn, disposes of the wastes at a landfill as a matter of law. All of these terms intrinsically evoke a transition from a state of confinement to movement... [T]he argument advanced by Aetna that deposit of wastes in a landfill is intentionally discharged into the landfill "misses the point so far as the actual language of the policies is concerned." ... Likewise, all of Aetna's arguments and citations in support of its contention that "[a]s long as there is a reasonable relationship between the pollution and the pollutants, coverage is excluded," Deft. Opp. Brf. at 4, are not consistent with the scope of the pollution exclusion established by Morton (insured "... intentionally discharged ... a known pollutant").... Although Morton does not construe the term "discharge," this court is guided by the premise that the plain meaning of the pollution-exclusion clause itself compels the conclusion that "discharge, dispersal, release or escape" does not extend to the disposal of waste at a landfill under the circumstances attendant to Nestle's claims. Accordingly, Nestle's motion for summary judgment on the pollution exclusion is granted, since Aetna has failed to meet the threshold definition of "discharge," as that term is employed under Morton. Therefore, Aetna is barred from raising the pollution exclusion clause as a means of denying coverage on the subject policies.
[Id. at 131-32.]
The New Jersey federal district court relied in part on language in a case where the Sixth Circuit held the pollution exclusion clause barred coverage for insured-assessed "EPA cleanup costs for an industrial waste site to which its licensed waste hauler carted the waste and stored it at the contaminated site." F.L. Aerospace v. Aetna Cas. & Sur. Co., 897 F.2d 214, 215-16 (6th Cir.1990), cert. denied, 498 U.S. 911, 111 S.Ct. 284, 112 L.Ed.2d 238 (1990). Although the Sixth Circuit found the exclusion applicable *195 because the "discharge, release, dispersal or escape of pollutants into the environment" was not "sudden and accidental" since it took place over a period of years, the court agreed that the "mere delivery of waste for storage at a facility that is licensed to store waste is not a discharge of pollutants into the environment." Id. at 220.
U.S. Fidelity & Guaranty Co. v. Specialty Coatings, 180 Ill. App.3d 378, 129 Ill.Dec. 306, 535 N.E.2d 1071, appeal denied, 127 Ill.2d 643, 136 Ill.Dec. 609, 545 N.E.2d 133 (1989), a case discussed by Morton, supra, 134 N.J. at 64, 629 A.2d 831, also involved an insured's liability for environmental pollution due to its independent waste recycler's illegal dumping of the insured's waste. 129 Ill.Dec. at 308-09, 535 N.E.2d at 1073-74. There the insured argued that the pollution exclusion clause was inapplicable because it was ambiguous and should be construed against the insurer. The insured claimed that the exclusion's language did not specify that it applied only when the insured actively discharged the pollutant or even where the polluting acts were done by third parties. Id. 129 Ill.Dec. at 310-11, 535 N.E.2d at 1075-76. The Illinois appellate court agreed that the clause was ambiguous for that reason and also noted, as did Morton, that the insurance industry misrepresented the scope of coverage available under the policy, given the pollution exclusion clause's requirement that the discharge, release, dispersal, or escape of pollutants be sudden and accidental. Id. at 311-13, 535 N.E.2d at 1076-78. That combination of factors led the court to affirm the lower court's finding that the pollution exclusion clause did not apply. Id. at 313, 535 N.E.2d at 1078.
Buckeye Union Insurance Co. v. Liberty Solvents and Chemicals Co., 17 Ohio App.3d 127, 477 N.E.2d 1227 (1984), also cited by Morton, 134 N.J. at 66, 629 A.2d 831, involved an independent waste hauler whose disposal of the defendant's waste rendered the defendant liable for costs incurred to clean up polluted surface waters, soil and groundwater in and around the disposal site. Id. 477 N.E.2d at 1229. The Ohio Court of Appeals found nothing in *196 the complaint filed against the insured to compel the conclusion that it intended or expected the environmental harm, thereby putting the insured's claim outside the policy definition of a covered occurrence. The court also held that, from the standpoint of the insured, the release of the contaminants was sudden and accidental; therefore, the policy's pollution exclusion clause was not a bar to recovery. Id. at 1233, 1235. That same rationale was used by the Ohio Court of Appeals three years later in Kipin Industries, Inc. v. American Universal Insurance Co., 41 Ohio App.3d 228, 535 N.E.2d 334, 337-38 (1987), to find coverage for pollution-related damages caused by the plaintiff's waste hauler's improper disposal of the plaintiff's waste.
Our research discloses four additional cases involving insureds who were sued for pollution-related damages actually caused by their waste haulers; in all of these cases the courts found no coverage. In Ray Industries, Inc. v. Liberty Mutual Ins. Co., 974 F.2d 754, 769 (6th Cir.1992), Borg-Warner Corp. v. INA, 174 A.D.2d 24, 577 N.Y.S.2d 953, 957-58 (1992), leave to appeal denied, 80 N.Y.2d 753, 587 N.Y.S.2d 905, 600 N.E.2d 632 (1992); and Centennial Ins. Co. v. Lumbermens Mutual Casualty Co., 677 F. Supp. 342, 348-49 (E.D.Pa. 1987), the courts found that the respective policies' pollution exclusion clauses applied because the pollution took place over a long period and thus could not qualify for the exclusion's exception as a sudden and accidental occurrence. The New York court specifically asserted it was irrelevant that the waste was actually dumped into the landfill by an independent transporter: "The plain language of the pollution exclusion precludes coverage for the insured's liability arising out of `the' (not `its') discharge of pollutants." Borg-Warner, supra, at 577 N.Y.S.2d at 958. That same rationale was the sole basis for the Sixth Circuit Court of Appeals' ruling that the pollution exclusion clause in the insurance policy barred coverage to the insured. In United States Fidelity and Guaranty Co. v. Whitesides Co., 932 F.2d 1169 (6th Cir.1991), the insured argued that the exclusion did not apply because it had merely delivered the toxic waste to a transporter for disposal and had not itself *197 released any pollutants into the environment. Id. at 1170. The court rejected the claim, holding that "the policy does not say that U.S.F. & G. will not insure against liability for Whitesides' release. Rather, it says that it will not insure against liability for the release. Whitesides' liability to EPA arises out of the release of the substance." Id. at 1171.
Because of our Supreme Court's holding in Morton, these cases which turn on a different interpretation of the "sudden and accidental" pollution exclusion clause are of no help in resolving the present case. Indeed, it appears that the only cases similar in factual context and legal underpinning to the present situation is the Nestle decision and CPS Chemical Co. Inc. v. Continental Ins. Co., 199 N.J. Super. 558, 564-65, 489 A.2d 1265 (Law Div. 1984), modified and rev'd on other grounds, 203 N.J. Super. 15, 495 A.2d 886 (App.Div. 1985); the Law Division opinion was cited with approval in Morton, supra, 134 N.J. at 45, 629 A.2d 831. In CPS Chemical, the Law Division stated in a similar disposal context: "In order to satisfy the accidental aspect, it is sufficient that a person engaged by plaintiff [insured] is alleged to have committed acts which were not expected or foreseen by the plaintiff, ... As between the plaintiff and its insurance carrier, and viewed from the standpoint of the insured, the acts were accidental." 199 N.J. Super. at 565, 489 A.2d 1265. The CPS Chemical view has been cited with approval in similar contexts in Continental Ins. v. N.E. Pharm. & Chem., Inc., 811 F.2d 1180, 1183 n. 5 (8th Cir.1987), and Mraz v. American Universal Ins. Co., 616 F. Supp. 1173, 1177 (D.Md. 1985).
There is one recent Appellate Division decision on the periphery of the issue presented here which is instructive. In Astro Pak Corp. v. Fireman's Fund Ins. Co., 284 N.J. Super. 491, 665 A.2d 1113 (App.Div.), certif. denied, 143 N.J. 323, 670 A.2d 1065 (1995), the insurers appealed from a declaratory judgment ruling that their CGL policies issued to the plaintiff-insured, a licensed transporter of hazard waste, required them to indemnify it against a landfill operator's claims that it was liable for clean-up and remediation *198 costs incurred as a result of pollution which leaked out of a landfill and into the adjoining Raritan River. Id. at 493-94, 665 A.2d 1113. The policies contained a standard pollution exclusion clause, and both insurers argued that the plaintiff intentionally deposited the pollutants at the landfill and that the exclusion was fully applicable to this waste hauler. The trial judge found otherwise, concluding that the pollution exclusion clause was inapplicable because the waste was deposited at an approved dump, a site licensed by the State to receive it. Id. at 500, 665 A.2d 1113. We agreed with the trial judge and rejected the insurer's argument. We held:
The trial judge here determined that the discharge into the state-approved landfill was not the polluting of the "environment." While this statement might be somewhat broad if applied to unusual situations, it is clear that Astro Pak's actions constituted possible pollution only because of the defective nature of the landfill. The offending "pollution" was the escape caused by this defect, not the placing of the pollutants into the landfill.
[Id. at 501, 665 A.2d 1113.]
Judge Dreier's opinion in Astro Pak provided an explanation by way of analogy, stating that had Astro Pak deposited polluting material in a large above-ground tank over a period of time and the tank later leaked, one could not say that pollution had been caused each time a bucket of sludge had been thrown into the tank. It was the escape of the pollutants from the tank which caused the damage and "would be the operative event." Ibid. The analysis would not change if that tank were in-ground or on another's property, "provided it was reasonable to assume that the tank was capable of holding the pollutants and was properly authorized by the State to receive the material." Ibid.
While Astro Pak might not squarely answer the question of a generator's liability or intent to pollute, one could certainly conclude that if a transporter is not deemed to have intentionally polluted a landfill when it deposits waste at a facility licensed to receive the waste, then the generator could not be guilty of intentional pollution on an agency theory.
*199 In the case before us, defendant's focus is on Nestle, which defendant argues we should not follow because it goes beyond Morton's holding and ignores Morton's focus on the intent and knowledge of the insured. Admittedly, Nestle does not address the insured's intent. However, defendant ignores the fact that an insured's intent is irrelevant unless it is related to the "discharge of a known pollutant." It seems logical to us that there must first be a determination that there has been a "discharge" by the insured of a known pollutant before there need be an inquiry as to whether that discharge was intentional. The Nestle court took the first step and concluded that there was no discharge by the insured; the discharge was accomplished by an independent waste hauler. Therefore, the Nestle court had no need to examine the issue of the insured's intent. Consequently, we do not agree with defendant that Nestle is out of line with Morton and should be disregarded by us.
One question not answered (or even asked) in the Nestle case was whether the independent transporter could be deemed an "agent specifically authorized to act for the insured intentionally discharging a known pollutant." Morton, 134 N.J. at 78, 629 A.2d 831. If plaintiff in the case before us was not "discharging" when it gave its waste to the transporter for disposal, the transporter was not acting as its agent for the purposes of discharging polluting waste. Viewing plaintiffs conduct in a common sense manner, it seems to us likely that plaintiff Josephson was releasing its waste to the transporter for the purpose of having it disposed of properly and lawfully. We think it is important to remember that plaintiff's liability for the property damage caused at the waste disposal site is created by virtue of a statute making generators of waste deposited at a site, which thereafter becomes contaminated absolutely liable for the site's cleanup, regardless of the legality of the disposal in the first instance. See Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.A. §§ 9601 to 9675 (CERCLA). There is no similar "strict liability" concept implicated when interpreting the scope of the *200 standard pollution exclusion clause under Morton. Unless the insurer establishes that the insured intentionally discharged a known pollutant or had specifically authorized an agent to act for it in intentionally discharging a known pollutant, the pollution exclusion clause will not bar coverage. The insurer must establish that the insured and the hauler or carrier in effect knowingly collaborated or conspired to intentionally discharge known pollutants illegally or improperly before coverage is voided. If the insured followed the rules and engaged a responsible licensed hauler to legally dispose of hazardous waste and had no knowledge of or complicity in illegal disposal, the coverage is enforceable.
The judge here found, as a matter of law, that plaintiff did not "intend environmental damage when it follows the law and uses licensed waste haulers to dispose of it." The judge found it "inconceivable that this type of behavior could be consistent with an intention to pollute." The judge then found "as a matter of law that Josephson did not intend to dispose of the waste in such a way as to cause an environmental harm." The judge focused on plaintiff's intent, finding none as a matter of law. If these were indeed the facts, the judge was no doubt correct.
The closest analogy to Judge Napolitano's finding is that of the trial judge in Astro Pak when he concluded that the discharge into a state-approved landfill did not constitute the polluting of the environment. But that finding in Astro Pak was made at the end of a trial after all the proofs were presented. The judge was able to assess Astro Pak's conduct in light of the fully developed record. Indeed, we there cautioned that the trial court's statement was too broad to be universally applied. We found the statement acceptable in that case because the facts established that the pollution was caused solely by the leaking landfill and not by the deposits into the landfill. Astro Pak, supra, 284 N.J. Super. at 501, 665 A.2d 1113.
Here, summary judgment was granted on the finding, as a matter of law, that the insured had no intent to pollute. It seems logical to conclude that there is no intent to discharge a known *201 pollutant if, as in Astro Pak, lawfully placing pollutants in a licensed landfill does not constitute environmental pollution, or if, as in Nestle, there is no discharge where waste is transferred to an licensed independent hauler for proper disposal.
Nevertheless, there was a substantial factual question raised by defendant Hartford as to whether such a finding was at all appropriate for summary judgment on this record, given the fact that this case involves a question of intent, and the incomplete discovery and unclear state of the record.
IV(B).
The judge actually made no explicit holding that there was a covered occurrence. The question is, what effect did his finding as to plaintiff's intent to pollute have on defendant's argument that there was no occurrence because the property damage was expected or intended from the standpoint of the insured.
Morton held that in environmental litigation whether there has been a covered occurrence requires a case-by-case analysis to determine the existence of "exceptional circumstances that objectively establish the insured's intent to injure [the environment]." Morton, 134 N.J. at 86, 629 A.2d 831, (quoting Voorhees v. Preferred Mutual Ins. Co., 128 N.J. 165, 185, 607 A.2d 1255 (1992)). The Court said:
Those circumstances include the duration of the discharges, whether the discharges occurred intentionally, negligently, or innocently, the quality of the insured's knowledge concerning the harmful propensities of the pollutants, whether regulatory authorities attempted to discourage or prevent the insured's conduct, and the existence of subjective knowledge concerning the possibility or likelihood of harm.
[Morton, supra, 134 N.J. at 86-87, 629 A.2d 831.]
On appeal, defendant complains that the judge's finding of no intention to pollute where wastes are consigned to a licensed hauler ignored the "legal standards" set out above. Defendant also complains that making such a determination in the absence of completed discovery deprived it of the opportunity "to explore and establish the five objective factors brought to light by Morton."
*202 If plaintiff did not intentionally discharge a known pollutant into the environment when it consigned its waste to a responsible licensed hauler, it could not have either expected or intended to injure the environment when this waste was deposited in the landfills so as to exempt the claims against plaintiff from the policy definition of a covered occurrence. Nevertheless, Morton stressed that the resolution of the occurrence question requires a case-by-case, fact-sensitive inquiry as to all of the factors listed in the opinion. Indeed, the Supreme Court in Morton proceeded to "focus on those factors that [the Court] previously... identified [as] significant" in determining whether the trial court there properly concluded, as a matter of law, that Morton's predecessors had intended or expected environmental injury. 134 N.J. at 91, 629 A.2d 831. The Supreme Court was able to do so, even though that finding was made on a motion for summary judgment, because "the trial court in this proceeding had before it extensive discovery and testimonial evidence" from a prior litigation "sufficient to permit an informed determination about whether material factual issues remained in dispute." Id. at 90, 629 A.2d 831. This is precisely what defendant in the present case claims was lacking before the motion judge, making it inappropriate to summarily dispose of the occurrence issue and the pollution exclusion clause issue.
We conclude that the judge's finding as a matter of law that plaintiff did not intentionally discharge known pollutants did not properly resolve the issue of whether there was a covered occurrence under these policies. The judge was required to make a more thorough analysis of the facts in light of the factors set out by the Supreme Court in Morton. We conclude that this could not have been done on summary judgment on this record.
IV(C).
We next turn to defendant's contention that the plaintiff's motion for summary judgment should not have been entertained because discovery had not been completed. R. 4:46-2 directs that *203 a court should deny a summary judgment motion only where the party opposing the motion has come forward with evidence that creates a "genuine issue as to any material facts challenged." Brill v. Guardian Life Ins. Co., 142 N.J. 520, 529, 666 A.2d 146 (1995). Brill, the most recent pronouncement of our Supreme Court on summary judgment motions, did not focus on the length of time a party had to discover the evidence necessary to create a genuine material fact issue before a matter was ready to be evaluated on a motion for summary judgment. The motion itself may be made as early as twenty days from the service of the complaint. R. 4:46-1. Nevertheless, case law has made plain, a matter is not "ripe" for summary judgment where discovery is incomplete.
In Velantzas v. Colgate-Palmolive Co., 109 N.J. 189, 193, 536 A.2d 237 (1988), our Supreme Court reversed our affirmance of summary judgment because the case had not been fully developed with respect to critical factual issues. Recently, we reversed orders for summary judgment entered in two cases where the matters were not at the appropriate stage for disposition. In Hermann Forwarding Co. v. Pappas Ins. Co., 273 N.J. Super. 54, 640 A.2d 1200 (App.Div. 1994), a suit seeking to recover an over-payment of premiums submitted to the defendant broker, we held that
we are satisfied that this matter as a whole was not ripe for determination by summary judgment. As we have observed, the critical factual issues were not fully developed before the trial court. Pretrial discovery had not been completed. According to a letter submitted to the motions clerk by Liberty Mutual in opposition to the summary judgment motions, depositions have not been taken and neither Credit Corporation nor the Pappas defendants had answered interrogatories. Thus, the summary judgment motions were premature and the trial court should not have entertained them. The motions should have been either continued, dismissed or denied in order to afford Liberty Mutual a reasonable opportunity to complete pretrial discovery.
[Id. at 64, 640 A.2d 1200.]
Similarly, in Rutgers v. Liberty Mutual Ins. Co., 277 N.J. Super. 571, 649 A.2d 1362 (App.Div. 1994), appeal dismissed, 143 N.J. 314, 670 A.2d 1057 (1995), we reversed the grant of partial summary *204 judgment to plaintiff and "remanded the matter to the Law Division for complete development of the factual record so that a proper determination" as to coverage could be made. Id. at 582, 649 A.2d 1362. However, discovery must proceed in a timely fashion. When the incompleteness of discovery is raised as a defense to a motion for summary judgment, that party must establish that there is a likelihood that further discovery would supply the necessary information. Auster v. Kinoian, 153 N.J. Super. 52, 378 A.2d 1171 (App.Div. 1977).
The question then is: was defendant here afforded a reasonable opportunity for discovery on the material issue of whether plaintiff expected the disposal of its waste would harm the environment, which implicated questions concerning "the quality of [plaintiff's] knowledge concerning the harmful propensities of the pollutants, whether regulatory authorities attempted to discourage or prevent [plaintiff's] conduct, and the existence of subjective knowledge concerning the possibility of likelihood of harm." Morton, supra, 134 N.J. at 86-87, 629 A.2d 831.
Plaintiff's original complaint was filed in February 1990, amended twice in March of 1990 and amended again in November 1991. Hartford responded twice, in July 1990 and again in December 1991. In December 1990 Hartford propounded interrogatories and document demands upon plaintiff. Among the questions defendant asked of plaintiff were those seeking the identification of "each person who is or was primarily responsible for overseeing the disposal of waste material at the site;" the identity of persons having knowledge of or charged with the responsibility for releasing, storing, transporting or disposing of plaintiff's hazardous waste; the identity of all substances generated as waste by plaintiff; and the identity of any consultants employed by plaintiff regarding the management and disposal of hazardous waste material. Plaintiff's response to these interrogatories was particularly vague when it came to providing names of individuals who might provide information. Josephson repeatedly claimed ignorance of those individuals who were "primarily responsible" for either *205 overseeing operations at the landfills or overseeing the disposal of waste materials. Instead, plaintiff offered to make available to defendant documents it had received regarding the landfill sites which "may contain information" sought after by defendant.
On December 20, 1991 Judge Napolitano issued Case Management Order I which suspended resolution of "the various discovery motions presently pending before this court" as well as "any discovery motions which may hereinafter be filed" until plaintiff's motion for partial summary judgment on the issues of choice of law and pollution exclusion clause interpretation were resolved. Apparently, this stay of the discovery motion resolution operated as more than simply a suspension of discovery-motion practice. It was seemingly understood by all, particularly the judge, that the discovery process had been halted. In the May 14, 1992 oral argument and subsequent oral decision on plaintiff's choice-of-law motion, plaintiff's counsel tried to explain to the judge that there had only been "some discovery" to that date. The judge responded:
Well, you shouldn't feel defensive about the absence of discovery. It was my own order that barred that, but Mr. Bowens [Hartford's counsel] will get all the discovery that he wants. You all will after after today. And you may very well that's not to say that mind [sic] is easily changed or that it would even be appropriate to go back and forth. But you may very well come up with something which causes you to to make a motion to have this matter addressed again in light of evidence which you could not know of now because I barred discovery.
On July 6, 1992 plaintiff submitted answers to defendant's supplemental interrogatories. In these answers plaintiff provided the names of four individuals, one of whom was the company environmental counsel, who had information about the company's manufacturing processes. However, when defendant asked for the identity of "all persons having knowledge with respect to the manner in which it was arranged for any of your substances to be disposed of at each [landfill] site," defendant was directed to plaintiff's response to another interrogatory which did not list any names but simply indicated how plaintiff classified its waste for purposes of disposal. Defendant was similarly directed to the same interrogatory answer when it asked for the identity of all *206 persons who had knowledge about the manner in which plaintiff arranged to dispose of its waste, the identity of all persons involved in the hauling of the waste, and for details of the operation and disposal activities at each landfill as well. Plaintiff did, however, provide a list of names of individuals who had responsibility for plaintiff's environmental affairs.
By letter dated July 2, 1993 defendant complained to Judge Napolitano that plaintiff had not submitted fully responsive answers to the supplemental interrogatories which were propounded to elicit information "regarding waste management practices undertaken by plaintiff and plaintiff's knowledge regarding its waste disposal, among other relevant topics." Defendant noted that although plaintiff referred in one answer to Material Safety Data Sheets (MSDS), which it claimed it would release upon entry of a protective order, the order had never been finalized and thus the documents had not yet been produced. Among other things, defendant complained about plaintiff's failure to provide the names of persons involved in the hauling of plaintiff's waste and those engaged in the operation and disposal activities at the landfill. Defendant also complained of plaintiff's failure to provide the names of persons in plaintiff's employ who had responsibility for selecting or inspecting the disposal sites or for shipping or manifesting substances shipped to the site, pointing out that this question, like the others, was relevant to plaintiff's knowledge of how its waste was being handled and whether plaintiff expected or intended the waste would cause damage to the environment. By letter dated September 13, 1993 plaintiff's counsel provided an apparent response to defendant's letter to the court. But this letter did not respond to all of the deficiencies listed by plaintiff, particularly defendant's request for the names of individuals responsible for waste disposal. Plaintiff again promised to provide the MSDS referred to in previous interrogatories.
Defendant was also provided with plaintiff's response to interrogatories propounded by Lumbermen's, although it is not clear from the record precisely when these responses, dated July 6, *207 1992, were in fact provided to defendant. In those responses, plaintiff denied knowing the identity of any of its employees who were responsible for "engaging the services of each waste transporter" who took plaintiff's waste to the landfill sites. Defendant was directed to shipment documents which plaintiff had already provided. However, plaintiff provided Lumbermen's with the names of the same four individuals it listed in Hartford's interrogatories as having knowledge of the manufacturing process and listed as well the source of the raw materials it used in the manufacturing process. In an undated series of responses to Lumbermen's first set of interrogatories (the interrogatories themselves are not included), plaintiff provided a list of seven former employees and two current employees who "may have knowledge of facts relevant to this case." Plaintiff's appellate brief claims that defendant was provided with these answers as part of the discovery process.
As a result of the May 14, 1992 motion hearing, Judge Napolitano ruled notwithstanding plaintiff designated documents as privileged on grounds of confidentiality agreements entered into in the underlying matters were to be turned over to defendant nonetheless. In response, plaintiff provided an amended privilege log of documents listing over 1600 documents as to which plaintiff asserted privileges of attorney-client and work product and which contained additional documents not previously claimed to be privileged. Therefore, in August 1992, defendant moved to compel plaintiff to produce the documents, or, in the alternative, to submit them for an in camera inspection by the court to determine the legitimacy of the claim of privilege.
For reasons unexplained in the record, not until June 16, 1993 did the judge enter a second Case Management Order. That order required, among other things, that plaintiff provide both court and counsel with a privilege log identifying documents plaintiff sought to protect based on the attorney-client or work product privilege. The next case management conference was *208 scheduled for July 27, 1993 at which time "the parties shall be prepared to identify those individuals they may want to depose."
On August 6, 1993 the motion judge conducted a case management conference by telephone. Case Management Order III, entered the same day, required that by August 20, 1993 plaintiff provide defendant with (1) all documents previously demanded but not supplied with the exception of those to which plaintiff claimed a privilege, and (2) more responsive answers to the supplementary interrogatories propounded by the defendants. On September 17, 1993 the judge was to rule on defendant's motion to compel production of documents listed on plaintiff's privilege list and on the same day the court was to hold a case management conference "at which time counsel will identify initial individuals for deposition." According to defendant, the parties never appeared before the court for that purpose in September 1993.
Apparently the parties did not appear before the court again until the September 23, 1994 motion for summary judgment. At that time, defendant took the position that the motion judge could not find as a matter of law that plaintiff did not intend to pollute when it gave its waste to a licensed hauler because the Morton Court made no distinction between the legal or illegal discharge of a known pollutant when it articulated the standard for giving effect to a pollution exclusion clause. Furthermore, the carrier argued that the landfills to which plaintiff's hauler took plaintiff's waste were all shut down by the New Jersey DEP by the late 1970s because of environmental contamination. According to defense counsel, there was a very real question about what plaintiff knew in the 1970s about where its waste was going, the type of arrangement plaintiff had with the haulers, and generally what plaintiff knew about how its waste was being handled.
Plaintiff countered by taking exception to the notion that defendant did not have an opportunity for discovery, pointing to the voluminous documents, responses to interrogatories, and supplemental responses to interrogatories, as well as defendant's access to DEP files, since the case was filed in February 1990. While *209 plaintiff acknowledged that no depositions were taken, it also pointed out that at no time were depositions prohibited. According to plaintiff, defendant knew "about Josephson's people inside that were packaging this waste to go out for independent haulers to take away. They knew the identity of this individual." Plaintiff queried why defendant did not depose these individuals. Defense counsel explained why there were no depositions, noting the "tortured history of trying to obtain documents, trying to sort our privileged documents, privileged logs." She argued that it was "wasteful to depose people from Josephson and then realize later on that plaintiff had subsequent documents," theretofore labeled privileged, which would have a critical bearing on whether the depositions should ever take place. According to defense counsel, if plaintiff had been forthcoming with its documents and privileged logs, "the delays in court would not have happened."
The judge disagreed, ruling "that the argument that there might be something there is groundless because there were adequate instruments of discovery available to discover what might have been there." The judge held that "all of that notwithstanding, I am prepared to find as a matter of law that plaintiff did not intend environmental damage when it follows the law and uses licensed waste haulers to dispose of [the waste] ... it's inconceivable that this type of behavior could be consistent with an intention to pollute."
The judge apparently thought the alleged incompleteness of discovery irrelevant because he was ready to hold as a matter of law that any hazardous waste generator who followed regulations and used a licensed waste hauler to dispose of its waste could not be deemed to have intended to pollute so as to either raise the bar of a pollution exclusion clause or take the polluting incident outside the definition of a covered occurrence. There is support for the judge's reasoning insofar as the pollution exclusion clause is concerned and we agree with it, as a general proposition. That finding, however, was not dispositive of the question of whether there was a covered occurrence because additional factors must be *210 considered in determining whether an insured intended or expected harm would come to the environment as a result of the disposal of toxic waste per the Morton standards.
We are satisfied that the record was not ripe for resolution by summary judgment. We conclude that a remand for further discovery and thereafter a renewed summary judgment motion or a plenary factual hearing is the better way to resolve this rather novel case, especially since the choice of law and coverage concepts now are clarified.
Further, the damage issue must be revisited completely on the remand. We eschew treatment of the damage issue on this record, which is quite inadequate for that task. This remand on damages includes the issue of any counsel fee award for pursuing this declaratory judgment action. R. 4:42-9(a)(6). Such an award must await the outcome of the proceeding and is discretionary. Felicetta v. Commercial Union Ins. Co., 117 N.J. Super. 524, 528, 285 A.2d 242 (App.Div. 1971), certif. denied, 60 N.J. 141, 286 A.2d 514 (1972).
V.
Defendant next contends that the judge erred in denying its motion for partial summary judgment because of its absolute pollution exclusion clause. The judge denied defendant's motion in this aspect on the ground that even if the absolute pollution exclusion barred coverage, there would be coverage under the policy's personal injury liability endorsement. We disagree and reverse on this point. Relying on Harvard Industries, Inc. v. Aetna Casualty & Surety Co., 273 N.J. Super. 467, 642 A.2d 438 (Law Div. 1993), plaintiff contends that the complaint's allegations fall within defendant Hartford's policy coverage for "personal injury" and are thus exempt from the pollution exclusion clause. Plaintiff urges us to adopt Harvard's reasoning. We decline.
Harvard Industries was decided on a motion for summary judgment filed by one of forty carriers sued by Harvard, which was seeking coverage for a variety of occurrences. Id. at 472, 642 *211 A.2d 438. The motion focused on the policy's pollution exclusion clause which denied coverage for "bodily injury" and "property damage" caused by the described pollutants. Harvard argued that the exclusion did not include "personal injury," which was defined by the policy as, among other things, "wrongful entry or eviction, or other invasion of the right of private occupancy." Id. at 476, 642 A.2d 438. Harvard claimed that the trespass and nuisance claims asserted against it fell within that definition of "personal injury." Permitting environmental contamination to migrate onto the property of another constituted both a trespass and a nuisance, as well as an "entry or ... other invasion of the right of private occupancy." Id. at 478, 642 A.2d 438. The Law Division judge agreed.
The judge concluded that because (1) a trespass is an unauthorized entry onto the property of another, (2) the essence of a nuisance is an unreasonable interference with the use and enjoyment of land, and (3) the dispersal of contaminants can unreasonably or substantially interfere with a private property owner's occupancy, claims such as trespass or nuisance were not excluded by the absolute pollution exclusion, but fit within the definition of "personal injury" covered under the policy. Id. at 478-79, 642 A.2d 438.
Hartford's policy here provides coverage for personal injury which it defines as follows:
"[P]ersonal injury" means injury, other than advertising injury, arising out of one or more of the following offenses committed during the policy period in the conduct of the named insured's business:
(1) the publication or utterance of a libel or slander or of other defamatory or disparaging material, or a publication or utterance in violation of an individual's right of privacy;
(2) false arrest, detention or imprisonment, or malicious prosecution;
(3) wrongful entry or eviction or other invasion of an individual's right of privacy; or
(4) discrimination or humiliation not committed by or at the direction of the insured or any executive officer, director, stockholder, partner or member thereof, but only with respect to injury to the feelings or reputation of a natural person;
*212 Because Hartford defines "personal injury" in the same terms as the policy considered in Harvard, plaintiff sought coverage under its rationale.
A review of both federal and state cases reveals that few courts have taken the analytical approach of Harvard. The weight of authority holds that, in the presence of a pollution exclusion clause, personal injury coverage is not available for damages caused by environmental pollutants. See United States Bronze Powders, Inc. v. Commerce & Industry Ins. Company, supra, 293 N.J. Super. at 17, 679 A.2d 674.
A California case, often cited by courts dealing with this issue, Titan Corporation v. Aetna Casualty, 22 Cal. App.4th 457, 27 Cal. Rptr.2d 476 (1994), had its genesis in the environmental cleanup operation which accompanied the closing of Titan's New Jersey plant. Aetna denied coverage for the contamination cleanup costs relying on the pollution exclusion clause of its policy. Id. 27 Cal. Rptr.2d at 478. The case went to a bench trial on the issue of whether the policy covered the nearly $900,000 in cleanup costs, which the jury in the first phase of the trial found had been incurred. The trial judge found all of the policy's exclusions inapplicable. The Court of Appeal did not.
On appeal Titan argued that coverage was afforded under the "personal injury" endorsement of the policy because the pollution claims constituted "wrongful entry or eviction or other invasion of the right of private occupancy." The trial judge, in a footnote, agreed with Titan's position but the appellate court disagreed. Id. at 485. The Court of Appeal held:
The trial court's approach violated basic principles of contract interpretation. We interpret contracts (including insurance policies) as a whole, with each clause lending meaning to the others. Importantly we should interpret contractual language in a manner which gives force and effect to every clause rather than to one which renders clauses nugatory. The policy here unambiguously declares it will not pay for either bodily injury or property damage when the cause of such injury or damage is pollution. Under the interpretation urged by Titan and adopted by the trial court, that exclusion will never operate, because the pollution exclusions's "property damage" provisions are relevant only to eliminate liability for third party property injury. However, under the trial court's interpretation, *213 such injury would simply be relabeled as an "other invasion of the right of private occupancy," rendering the pollution exclusion a dead appendage to the policy.
We interpret the coverage afforded by the personal injury portion of the policy as being limited to damage other than the injury to realty which an occupier of land may suffer when his quiet enjoyment of occupancy is disturbed. [Id. at 486 (citations omitted.)]
The California court quoted at length from a case decided the year before where the Pennsylvania Superior Court rejected the insured's claim of coverage for otherwise-excluded pollution damages under the "other invasion of the right of private occupancy" definition of personal injury. The court ruled that:
To hold otherwise would emasculate the clear and unambiguous provisions of the pollution exclusion and could not be justified except as an unwarranted straining to reach a result different than that intended by the parties.
[O'Brien Energy Systems v. American Employers' Insurance Co., 427 Pa.Super. 456, 629 A.2d 957, 964 (1993), appeal denied, 537 Pa. 633, 642 A.2d 487 (1994).]
Accord Union Oil Co. of Cal. v. International Ins. Co., 37 Cal. App.4th 930, 44 Cal. Rptr.2d 4, 7-10 (1995) (following Titan, supra, found no personal injury coverage for gasoline tank lead); Legarra v. Federated Mutual Ins. Co., 35 Cal. App.4th 1472, 42 Cal. Rptr.2d 101, 108-09 (1995) (groundwater contamination by gasoline leak not a covered personal injury as defined in the policy because it clearly fell within the pollution exclusion clause and to allow coverage defeated the policy language).
The New York Court of Appeals took much the same approach in a declaratory judgment action brought by Columbia County, seeking coverage for claims made in a suit against it by a property owner whose land abutted the county's landfill, from which leachate had allegedly contaminated its property. County of Columbia v. Continental Ins. Co., 83 N.Y.2d 618, 612 N.Y.S.2d 345, 347-48, 634 N.E.2d 946, 948-49 (1994). The Supreme Court and Appellate Division found in favor of the insurer. The Court of Appeals affirmed, rejecting the county's claim that the personal injury endorsement provided coverage despite the existence of a pollution exclusion clause in the policies. Id. 612 N.Y.S.2d at 349, 634 N.E.2d at 950. As in Hartford's policy in this case, the policy at issue in Columbia, supra, defined personal injury as a "wrongful *214 entry or eviction or other invasion of the right of private occupancy." Id. 612 N.Y.S.2d at 347, 634 N.E.2d at 948. In ruling on that definition, the New York court held that that endorsement was intended to reach only purposeful acts undertaken by the insured or its agents.
Evidence that only purposeful acts were to fall within the purview of the personal injury endorsement is provided, in part, by examining the types of torts enumerated in the endorsement in addition to wrongful entry, eviction and invasion: false arrest, detention, imprisonment, malicious prosecution, defamation and invasion of privacy by publication. Read in the context of these other enumerated torts, the provision here could not have been intended to cover the kind of indirect and incremental harm that results to property interests from pollution.
[Id. 612 N.Y.S.2d at 349, 634 N.E.2d at 950.]
The court also ruled that to accept the policy construction advanced by the county would render the pollution exclusion clause meaningless. "It would be illogical to conclude that the claims fail because of the pollution exclusion while also concluding that the insurer wrote a personal injury endorsement to cover the same eventuality." Ibid. The court concluded that the personal injury coverage was not available to cover injuries arising from pollution-generated damage. Ibid. See also U.S. Fidelity & Guaranty Co. v. B & B Oil Well Service, 910 F. Supp. 1172, 1183-86 (S.D.Miss. 1995), for a survey of jurisdictions which have dealt with the personal injury protection endorsement and agreed with the reasoning of those cases which held that no coverage for pollution risks was available under the endorsement. Contra, Great Northern Nekoosa Corporation v. Aetna Cas. & Sur. Co., 921 F. Supp. 401 (N.D.Miss. 1996); Titan Holdings Syndicate v. City of Keene, N.H., 898 F.2d 265 (1st Cir.1990); Pipefitters Welfare Educational Fund v. Westchester Fire Ins. Co., 976 F.2d 1037 (7th Cir.1992); Blackhawk-Central City Sanitation District v. American Guarantee and Liability Ins. Co., 856 F. Supp. 584 (D.Colo. 1994).
Subsequent federal court decisions have rejected the reasoning of the cases finding coverage, essentially because they effectively rendered the pollution exclusion clause meaningless and violated established tenets of contract interpretation. In Harrow Products, Inc. v. Liberty Mut. Ins. Co., 64 F.3d 1015 (6th Cir.1995), the *215 Court of Appeals upheld the district court's ruling in the insurers' favor that pollution-caused damages could not be recovered under the policies' personal injury coverage in the face of a pollution exclusion clause. Id. at 1022. Citing and discussing at length County of Columbia, supra, 83 N.Y.2d 618, 612 N.Y.S.2d 345, 634 N.E.2d 946, O'Brien Energy Systems, supra, 629 A.2d 957; and Titan Corp., supra, 22 Cal. App.4th 457, 27 Cal. Rptr.2d 476, the court held that the personal injury endorsement does not contemplate coverage for damages to property by pollution because to hold otherwise would contradict the express provisions of a pollution exclusion clause. Harrow Products, supra, at 64 F.3d at 1024. Harrow, applying Michigan law, required the court to give effect to all words in an insurance contract if they serve a reasonable purpose. Ibid. The court expressly rejected the rationale of Titan Holdings Syndicate, 898 F.2d 265, and Pipefitters Welfare Educ. Fund, 976 F.2d 1037, noting that neither opinion addressed the effect of a clear and unambiguous pollution exclusion clause elsewhere in the policy on the personal injury endorsement. Accord Northbrook Indemnity Ins. Co. v. Water Dist. Management Co., Inc., 892 F. Supp. 170, 175-76 (S.D.Tex. 1995), where the court found the absolute pollution exclusion clause unambiguous and found no personal injury coverage for well water contamination because to so find "would render the pollution exclusion meaningless;" East Quincy Services District v. Continental Ins. Co., 864 F. Supp. 976, 980-82 (E.D.Cal. 1994), where the court found no personal injury coverage for a groundwater pollution claim in the face of a pollution exclusion clause and an insurer only has a duty to defend against any personal injury claims distinct from bodily injury and property damage and the term "wrongful entry cannot be understood to cover pollution migrating from another property given the pollution exclusion clause and because the unintended release of pollutants from one property to another does not involve a claim of occupancy by one person over another and is not remotely analogous to the intentional torts that are enumerated in the personal injury coverage;" Staefa Control-System Inc. v. St. Paul Fire & Marine Ins. Co., 847 F. Supp. 1460, *216 1473-74 (N.D.Cal.), amended, 875 F. Supp. 656 (N.D.Cal. 1994), where the court, relying on Titan Corp., found no personal injury coverage for soil and water contamination damage in the face of an unambiguous pollution exclusion clause. Accord U.S. Fidelity & Guaranty Co., supra, 910 F. Supp. 1172. Dryden Oil Co. of New England, Inc. v. Travelers Indemnity Co., 91 F.3d 278 (1st Cir.1996).
Like the federal cases finding coverage for pollution damage claims under personal injury endorsements, Harvard Industries, supra, 273 N.J. Super. 467, 642 A.2d 438, fails to consider or discuss the ramifications of holding that pollution-related claims of trespass and nuisance constitute a covered personal injury in the face of a pollution exclusion clause. New Jersey has long adhered to certain fundamental rules for interpreting insurance policies. Naturally, as contracts of adhesion, such policies are subject to special rules of interpretation. Meier v. New Jersey Life Ins. Co., 101 N.J. 597, 611, 503 A.2d 862 (1986). Policies are construed liberally in the insured's favor so that coverage is afforded "to the full extent that any fair interpretation will allow." Kievit v. Loyal Protective Life Ins. Co., 34 N.J. 475, 482, 170 A.2d 22 (1961), (quoting Danek v. Hommer, 28 N.J. Super. 68, 76, 100 A.2d 198 (App.Div. 1953), aff'd, 15 N.J. 573, 105 A.2d 677 (1954)). Nevertheless, in the absence of an ambiguity, courts must not engage in a strained construction to support the imposition of liability. A court should not write a better policy of insurance for the insured than the one purchased. Longobardi v. Chubb Ins. Co., 121 N.J. 530, 537, 582 A.2d 1257 (1990). Furthermore, insurance policy exclusions are strictly construed. Bello v. Hurley Limousines, Inc., 249 N.J. Super. 31, 40-41, 591 A.2d 1356 (App.Div. 1991). If plainly expressed, insurers are entitled to have liability limitations construed and enforced as expressed. Sinopoli v. North River Ins. Co., 244 N.J. Super. 245, 250-51, 581 A.2d 1368 (App.Div. 1990), certif. denied, 127 N.J. 325, 604 A.2d 600 (1991). Equally fundamental is the principle that an insurance contract must be interpreted by considering the agreement as a whole, and whenever possible, meaning must be given to all of its parts. Owens-Illinois, Inc. v. United Inc. Co., 264 N.J. Super. 460, 490, 625 A.2d *217 1 (App.Div. 1993), aff'd in part, rev'd in part, remanded in part o.g., 138 N.J. 437, 650 A.2d 974 (1994).
The Harvard view bypasses these principles and effectively wipes out the pollution exclusion clause by judicially writing into the policy an exception to that exclusion for pollution-based claims of trespass and nuisance. This is not contract interpretation but a reconstruction and reformulation of the insurance contract. There is nothing in any of our reported decisions to support this result, and the weight of authority elsewhere is to the contrary.
We disagree with Harvard and disapprove the Law Division judge's ruling in favor of plaintiff on this coverage claim. There is no pollution coverage for plaintiff under the personal injury endorsement's trespass and nuisance features in Hartford's policy.
Affirmed in part; reversed in part; remanded for further proceedings.
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350 S.W.3d 823 (2011)
Yolanda BROOKS, Appellant,
v.
Charles BROOKS, Appellee.
No. 2010-CA-001720-MR.
Court of Appeals of Kentucky.
June 24, 2011.
*824 Dawn R. Watts, Jackson, KY, for appellant.
Hershel Branson, Jr., Jackson, KY, for appellee.
Before DIXON, STUMBO, and VANMETER, Judges.
OPINION
VANMETER, Judge:
Yolanda Brooks appeals from the Wolfe Circuit Court's findings of fact, conclusions of law, and decree of dissolution. For the following reasons, we affirm.
Yolanda and Charles Brooks were married for over twenty-one years when Charles petitioned the trial court for dissolution of the marriage. At the time of the hearing, Charles was forty-four years of age and Yolanda was thirty-eight years of age. Both parties were in good health. Charles was employed as a Rank I teacher by the Morgan County Board of Education and by Morehead State University and earned $43,694 annual gross income, with a monthly net income of $2,879.06. He obtained his degree during the course of the marriage. Yolanda had no income. She has a seventh grade education and her work life has consisted of six years of unskilled labor as a nursing assistant in various nursing homes. She has not worked in the last fifteen years; instead, she was a homemaker and raised the parties' children.
The trial court awarded the parties joint custody of their two minor children, naming Charles as the primary residential custodian and granting visitation rights to Yolanda. The court ordered Yolanda to pay child support to Charles in the amount of $60 per month for nine months, at which time the children will turn eighteen years of age and graduate from high school. The court ordered Charles to pay maintenance to Yolanda in the amount of $360 per month for two and a half years to enable Yolanda to obtain a GED and job training since she is presently unable to support herself. The child support payments were ordered to off-set the maintenance payments during the first nine months.
*825 The parties did not dispute which items of property were nonmarital and the court restored all nonmarital property to its owner. The court then divided the marital property between the parties and entered a final decree of dissolution of marriage. This appeal followed.
On appeal, Yolanda claims (1) she is entitled to a greater share of the marital property since the trial court excepted from classification as marital property Charles' Kentucky Teachers' Retirement System ("KTRS") account, (2) the maintenance award of $360 per month for a period of two and a half years is insufficient, and (3) the needs and wants of the parties' two minor children should not have been considered when the marital property was divided. We disagree.
Our review of the trial court's findings of fact "is governed by the rule that such findings shall not be set aside unless clearly erroneous." Gosney v. Glenn, 163 S.W.3d 894, 898 (Ky.App.2005). A factual finding is not clearly erroneous if supported by substantial evidence. Id. (citations omitted). Substantial evidence is evidence, when taken alone or in light of all the evidence "that a reasonable mind would accept as adequate to support a conclusion." Moore v. Asente, 110 S.W.3d 336, 354 (Ky.2003) (citations omitted). The trial court's conclusions of law, however, are subject to independent de novo appellate determination. Gosney, 163 S.W.3d at 898-99 (citations omitted).
First, Yolanda argues that she is entitled to a greater portion of the marital property, specifically, a portion equal to one-half the value of Charles' KTRS account per KRS[1] 403.190.
Pursuant to KRS 403.190, "[u]nless specifically exempt by statute, Kentucky treats all retirement benefits accumulated during the marriage as marital property subject to classification and division upon divorce." Shown v. Shown, 233 S.W.3d 718, 720 (Ky.2007) (citing Holman v. Holman, 84 S.W.3d 903, 907 (Ky.2002)). In this case, KRS 161.700 specifically exempts KTRS retirement benefits accumulated during the marriage from being classified as marital property subject to division. KRS 161.700 provides, in pertinent part:
(3) Retirement allowance, disability allowance, accumulated contributions, or any other benefit under the retirement system shall not be classified as marital property pursuant to KRS 403.190(1), except to the extent permitted under KRS 403.190(4). Retirement allowance, disability allowance, accumulated contributions, or any other benefit under the retirement system shall not be considered as an economic circumstance during the division of marital property in an action for dissolution of marriage pursuant to KRS 403.190(1)(d), except to the extent permitted under KRS 403.190(4).
(emphasis added).
KRS 403.190(4) provides, in part:
(4) If the retirement benefits of one spouse are excepted from classification as marital property, or not considered as an economic circumstance during the division of marital property, then the retirement benefits of the other spouse shall also be excepted, or not considered, as the case may be. However, the level of exception provided to the spouse with the greater retirement benefit shall not exceed the level of exception provided to the other spouse.
KRS 403.190(4).
Yolanda directs us to the case of Shown v. Shown, 233 S.W.3d 718 (Ky.2007), in *826 which the husband had a KTRS account valued at approximately $80,000, and the wife had a Fidelity Simplified Employee Pension (SEP-IRA) valued at approximately $1,800. Id. at 719. In an action for dissolution of the marriage, the husband argued that his KTRS account was entirely exempt from classification and division as marital property per KRS 161.700(2), while the wife argued that per KRS 403.190(4), the husband's KTRS account was divisible marital property to the extent it exceeded her SEP-IRA. Id. at 719-20.
In reconciling KRS 161.700 and KRS 403.190, the Court determined that the exemptions provided in KRS 161.700(2) were subject to the limitations provided in KRS 403.190(4). Id. at 721. Therefore, the Court ruled that the husband could only exclude from classification as marital property amounts of his KTRS account that did not exceed the amount in the wife's SEP-IRA. Id. The Court further held that the wife's SEP-IRA constituted retirement benefits for the purpose of triggering the divisionary rule under KRS 403.190(4). Id. at 722.
In this case, unlike in Shown, Yolanda has no retirement account and thus, the divisionary rule under KRS 403.190(4) is not triggered. Thus, under KRS 161.700, Charles' KTRS account is nonmarital property and cannot be treated as an economic circumstance for purposes of dividing marital property. Accordingly, the trial court did not err by exempting Charles' KTRS account from classification as marital property.[2]
Next, Yolanda asserts that the maintenance award of $360 per month for a period of two and a half years is insufficient and was an abuse of the trial court's discretion.
KRS 403.200 governs awards for spousal maintenance and provides:
(1) In a proceeding for dissolution of marriage ... the court may grant a maintenance order for either spouse only if it finds that the spouse seeking maintenance:
(a) Lacks sufficient property, including marital property apportioned to him, to provide for his reasonable needs; and
(b) Is unable to support himself through appropriate employment ....
(2) The maintenance order shall be in such amounts and for such periods of time as the court deems just, and after considering all relevant factors including:
(a) The financial resources of the party seeking maintenance, including marital property apportioned to him, and his ability to meet his needs independently...;
(b) The time necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment;
(c) The standard of living established during the marriage;
(d) The duration of the marriage;
(e) The age, and the physical and emotional condition of the spouse seeking maintenance; and
*827 (f) The ability of the spouse from whom maintenance is sought to meet his needs while meeting those of the spouse seeking maintenance.
An award of maintenance lies within the discretion of the trial court and a reviewing court will uphold the award if the trial court did not abuse its discretion or base its decision on findings of fact that are clearly erroneous. Powell v. Powell, 107 S.W.3d 222, 224 (Ky.2003) (citations omitted).
Here, the trial court determined that Yolanda was entitled to an award of maintenance since she lacked sufficient property to provide for her reasonable needs and was unable to support herself through appropriate employment due to her lack of job skills and education. The court found that Yolanda was thirty-eight years of age, in good health, and currently residing with a friend. The court further found that Charles had a monthly disposable income of $1,275 with which he was to meet the needs of himself and the parties' two minor children. Upon considering the factors set forth in KRS 403.200, the court determined that two and a half years of maintenance would allow Yolanda sufficient time to obtain a GED and job training. Based on our review of the record, we are unable to say the trial court's award of maintenance in this instance was an abuse of its discretion.
Finally, Yolanda claims that the trial court erred by considering the needs and wants of the parties' two minor children in dividing the marital property per KRS 403.190. Specifically, she argues that the trial court improperly awarded a vehicle to Charles for their children to use as transportation to school.
KRS 403.190 requires the trial court to divide marital property in just proportions after considering all relevant factors. In this case, the record shows that the trial court awarded the 1998 Pontiac Grand Prix to Yolanda and the 2008 Dodge Charger and 2003 Jeep Liberty to Charles. The trial court reasoned that the parties' two children would need the Jeep to drive to school. The Grand Prix was valued at $3,775 and no indebtedness appears to be outstanding. The value of the Dodge Charger was $18,125 and the Jeep Liberty was valued at $9,125. Charles was charged with paying the indebtedness on the vehicles awarded to him; a balance of $18,382.44 with a monthly payment of $360.44.
Yolanda maintains that she should have been awarded the Jeep, and that her need to have a reliable vehicle for her use should have been paramount to her children's need for a vehicle. She further claims that the Grand Prix has approximately a quarter million miles on the odometer and that no evidence was presented showing that the parties' children drove the Jeep to school. However, our review of the record reveals that the trial court considered all relevant factors in making its award. In addition, Yolanda has failed to cite any authority in support of her argument that the trial court's consideration of the children's transportation needs in these circumstances was an abuse of its discretion.
The order of the Wolfe Circuit Court is affirmed.
DIXON, Judge, Concurs.
STUMBO, Judge, Dissents and Files Separate Opinion.
STUMBO, Judge, dissenting:
Respectfully, I must dissent. This case represents the absurd result referred to in Wheeler & Clevenger Oil Co. v. Washburn, 127 S.W.3d 609, 614 (Ky.2004). The trial court and majority have ignored the only *828 significant asset of the marriage not exempt from consideration: Appellant's educational degrees. When the parties married, Yolanda was sixteen and had already given birth to their first child. Charles was a teacher's aide and six years her senior. His degree, teaching certificate, and Rank I status were obtained during the marriage. While a degree is not an asset to be divided, it can and should have played a larger role in the trial court's consideration. I would reverse and remand to the trial court.
NOTES
[1] Kentucky Revised Statutes.
[2] Though it seems harsh that in Shown, the wife benefited from the divisionary rule when she had a retirement account worth $1,800, while in this case Yolanda does not benefit at all since she has no retirement account, we are bound by the precedent set forth in Shown and obligated to enforce the apparent meaning of the statutes. Wheeler & Clevenger Oil Co. v. Washburn, 127 S.W.3d 609, 614 (Ky.2004) ("This Court has steadfastly adhered to the plain-meaning rule unless to do so would constitute an absurd result.") (internal citation and quotation omitted).
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94 P.3d 830 (2004)
136 N.M. 87
2004-NMCA-087
Frank CORDOVA, as Administrator of the Estate of Antonio Cordova Plaintiff-Appellant,
v.
Wayne LARSEN, Riolino Pollo, Jose "Bennie" Salazar, Leroy Urioste, Ted Drennan, Ralph McNutt, Albert Briggs, Santos Baca, Truman Woods, City of Albuquerque, County of Bernalillo, State of New Mexico, Defendants-Appellees.
No. 23,846.
Court of Appeals of New Mexico.
May 19, 2004.
*831 Narciso Garcia, Jr., Garcia Law Office, Albuquerque, Lauro D. Silva, Albuquerque, for Appellant.
*832 Robert M. White, City Attorney, Kathryn Levy, Assistant City Attorney, City of Albuquerque, Albuquerque, for City Appellees.
Tito D. Chavez, Bernalillo County Attorney, Linda M. Matteucci, Assistant County Attorney, Bernalillo County Attorney's Office, Albuquerque, William D. Slease, Jonlyn M. Martinez, Slease & Martinez, P.A., Albuquerque, for County Appellees.
Jerry Walz, Walz & Associates, Cedar Crest, for State Appellees.
OPINION
PICKARD, J.
{1} Plaintiff filed an independent action in state court pursuant to Rule 1-060(B)(6) NMRA 2004, seeking to set aside the judgment in favor of the defendants in a 1973 wrongful death action. Defendants removed the case to federal court. Defendants moved to dismiss, arguing res judicata and collateral estoppel based on a 2000 federal court judgment dismissing a federal independent action in which Plaintiff and another party sought to set aside the same 1973 judgment. Plaintiff moved to remand the case to state court. The federal district court denied Defendants' motion to dismiss, yet also remanded the case to state district court. On remand, Defendants again argued that the independent action was barred by res judicata. The district court agreed with Defendants and dismissed the claim, and Plaintiff now appeals. We hold that the federal court order denying Defendants' motion to dismiss did not preclude the state court's consideration of Defendants' arguments. We also hold that the 2000 federal court judgment precludes Plaintiff's claim. We affirm.
FACTS AND PROCEDURAL HISTORY
{2} In 1972, Antonio Cordova (Cordova) and Rito Canales (Canales) were killed by police officers. Acting as administrator of Cordova's estate, Mary Cordova, his mother, filed a wrongful death suit in state district court. In keeping with the understanding of the parties, we refer to this district court case as Cordova I. In 1973, the district court granted summary judgment for the defendants in Cordova I. Cordova v. City of Albuquerque, 86 N.M. 697, 699, 526 P.2d 1290, 1292 (Ct.App.1974). We affirmed the district court ruling in Cordova I in 1974. Id. [hereinafter Cordova II, in keeping with the understanding of the parties]. In our discussion of Cordova II, we explained that Plaintiff's unsupported innuendos that a defense witness, Tim Chapa, was in a conspiracy with the defendants to kill Cordova and Canales did not create a factual issue regarding whether such a conspiracy existed. We noted that Plaintiff's innuendos were directly contradicted by the summary judgment motion, which was accompanied by numerous affidavits that denied the existence of any conspiracy, including one from Chapa himself. Id. at 702, 526 P.2d at 1295.
{3} As Cordova I proceeded in state court, the estate of Canales filed a similar suit in federal district court, which we refer to herein as Canales I. That case went to trial in January 1974 and also included the issue of whether Tim Chapa was part of a conspiracy with the police. The jury found for the defendants.
{4} In 1999, Tim Chapa made an affidavit that purported to "clear [his] conscience in this matter regarding the hom[i]cides of Rito Canales and Antonio Cordova in January of 1972." The affidavit stated that Chapa had been a confidential informant for the state police in the 1960s and 70s, that he was asked to infiltrate an organization called the Black Berets, that he had devised a plan in conjunction with the police to kill members of this organization, and that the plan had culminated in the shootings of Cordova and Canales. Chapa also stated that the police officers involved threatened to kill him if he ever exposed this plan and that he denied the existence of the conspiracy during all the subsequent court proceedings because he feared for his life.
{5} In 1999, based on the Chapa affidavit, the Cordova and Canales families filed an independent action in the federal district court under Fed.R.Civ.P. 60(b), referred to hereinafter as Canales & Cordova I. Canales v. Larsen, No. CIV 99-1259 JC/RLP (D.N.M. Apr. 10, 2000). Federal Rule 60(b) reads in pertinent part:
*833 (b) Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence; Fraud, Etc. On motion and upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reasons: ... (6) any other reason justifying relief from the operation of the judgment.... This rule does not limit the power of a court to entertain an independent action to relieve a party from a judgment, order, or proceeding, or to grant relief to a defendant not actually personally notified as provided in Title 28, U.S.C., § 1655, or to set aside a judgment for fraud upon the court.
The suit asked the federal district court to set aside the judgments in Cordova I and Canales I. On April 10, 2000, the federal district court declined to do so, finding that the plaintiffs had failed to state a claim of fraud on the court, that the plaintiffs failed to demonstrate a meritorious underlying claim as Federal Rule 60(b) requires, and that the interests of finality required dismissal. The basis for the district court's ruling grounded on failure to state a claim of fraud on the court was (1) the distinction explained in Bulloch v. United States, 763 F.2d 1115, 1121 (10th Cir.1985), between fraud on the court, i.e., fraud directed to the judicial machinery itself, and ordinary fraud, i.e., false evidence or perjury and (2) the conclusion that Plaintiff alleged only the latter. In February 2001, the Tenth Circuit affirmed the federal district court's decision in a memorandum opinion. Canales v. Larsen, No. 00-2164, 2001 WL 184221 (10th Cir.Feb. 26, 2001).
{6} While Canales & Cordova I was proceeding in federal district court, Plaintiff filed another complaint in state district court. This complaint also cited Chapa's changed story and stated that it was an independent action to set aside the judgment in Cordova I, pursuant to Rule 1-060(B). Rule 1-060(B) is identical to its federal counterpart, Rule 60(b), except that it omits the passage concerning the United States Code. We refer to the litigation in this case, which extends to the present appeal, as Cordova III.
{7} Defendants removed Cordova III to federal district court in February 2000, prior to the federal district court's disposition of Canales & Cordova I. On April 28, 2000, after the federal district court dismissed Canales & Cordova I, Plaintiff moved to remand Cordova III to state court on the grounds that the removal motion was untimely and that state law predominated. Then, in June 2000, Defendants moved to dismiss Cordova III, arguing that because the federal district court had decided that Plaintiff failed to state a claim in Canales & Cordova I, Plaintiff's claims and issues in Cordova III were precluded.
{8} In May 2001, the federal district court issued a memorandum opinion and order remanding Cordova III to state court and denying Defendants' motion to dismiss. Cordova v. Larsen, No. CIV 00-273 JC/RLP (D.N.M. May 11, 2001). In the opinion, the federal court raised a jurisdictional issue sua sponte, citing the Rooker [v. Fidelity Trust Co., 263 U.S. 413, 44 S. Ct. 149, 68 L. Ed. 362 (1923)]-[District of Columbia Court of Appeals v.] Feldman,[ 460 U.S. 462, 103 S. Ct. 1303, 75 L. Ed. 2d 206 (1983)] doctrine, which bars lower federal court review of state court judgments. Id. at 5. The court cited a lack of subject matter jurisdiction as the basis for its remand of the case back to state court. Id. at 6. The court also addressed Defendants' motion to dismiss, explaining that because the Rooker-Feldman doctrine was a bar to its jurisdiction to review Cordova I, Canales & Cordova I was improperly decided and could not have a preclusive effect on Cordova III. Id. at 7.
{9} After returning to the state district court following remand, Defendants filed a motion to dismiss, arguing again that the decision in Canales & Cordova I precluded the claims and issues in Cordova III. The state district court dismissed Plaintiff's complaint with prejudice. Plaintiff appeals from this order of dismissal.
1. The "law of the case" doctrine does not bar Defendants from relitigating their defense.
{10} Plaintiff argues that the United States District Court's decision in Cordova III already decided the issue of whether Defendants could assert res judicata *834 (claim preclusion) and collateral estoppel (issue preclusion) defenses, holding that they did not apply because the federal district court lacked jurisdiction to review Cordova I. Although Plaintiff frames his argument as a matter of claim preclusion, the proper analysis is whether the federal district court's order denying Defendants' motion to dismiss became the "law of the case" in the subsequent state court proceedings. See Joan Steinman, Law of the Case: A Judicial Puzzle in Consolidated and Transferred Cases and in Multidistrict Litigation, 135 U. Pa. L.Rev. 595, 597 (1987). Like claim preclusion and issue preclusion, law of the case doctrine precludes relitigation of an issue. Id. at 597-98. "Under the law of the case doctrine, a decision on an issue of law made at one stage of a case becomes a binding precedent in successive stages of the same litigation." Souter v. Ancae Heating & Air Conditioning, 2002-NMCA-078, ¶ 24, 132 N.M. 608, 52 P.3d 980. The doctrine is similar to issue preclusion, except that issue preclusion relates to litigation of the same issue in successive suits, whereas law of the case doctrine relates to litigation of the same issue recurring within the same suit. Steinman, supra at 598 n. 8. As with other preclusion doctrines, we review the application of law of the case doctrine de novo. Wolford v. Lasater, 1999-NMCA-024, ¶ 4, 126 N.M. 614, 973 P.2d 866 (stating that review of claim preclusion is a legal question to be reviewed de novo).
{11} As a general matter, when a case is transferred from one district court to another, decisions of the transferring court are binding on the transferee court. 18 James Wm. Moore et al., Moore's Federal Practice § 134.22[3][a] at 134-54.5 to -55 (2003). However, there are several factors that counsel against a court's application of law of the case doctrine. Law of the case doctrine is discretionary, and courts will not use the doctrine when the decision to be applied preclusively is clearly erroneous or when it would result in manifest injustice. Trujillo v. City of Albuquerque, 1998-NMSC-031, ¶ 41, 125 N.M. 721, 965 P.2d 305.
{12} The federal district court in the present case based its decision on the Rooker-Feldman doctrine. The Rooker-Feldman doctrine stems from the federal statutory provision that the United States Supreme Court may review state court judgments through a writ of certiorari. 28 U.S.C. § 1257(a) (2001); see Pittsburg County Rural Water Dist. No. 7 v. City of McAlester, 358 F.3d 694, 706-07 (10th Cir.2004). From this starting point, the United States Supreme Court announced in Rooker v. Fidelity Trust Co., 263 U.S. 413, 415-16, 44 S. Ct. 149, 68 L. Ed. 362 (1923), that a federal district court correctly dismissed a petition seeking to set aside a state court judgment on constitutional grounds because the United States Supreme Court is the only federal court with the power to set aside or modify state court judgments. In District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S. Ct. 1303, 75 L. Ed. 2d 206 (1983), the United States Supreme Court extended the rule that "lower federal courts possess no power whatever to sit in direct review of state court decisions" to encompass claims that are "inextricably intertwined with" a state court judgment. Id. at 483, 103 S. Ct. 1303 n. 16 (internal quotation marks and citation omitted). The Rooker-Feldman doctrine is a jurisdictional bar. See Pittsburg County Rural Water Dist. No. 7, 358 F.3d at 705, 707. The federal district court in the present case based its remand on Rooker-Feldman, stating that if it retained jurisdiction, "it would require a federal court to determine whether or not the state court judgment in Cordova I was erroneously entered or was void." Cordova v. Larsen, No. CIV 00-0273 JC/RLP, at 6.
{13} Initially, we note that we see support for the federal court's concern about the propriety of a federal court entertaining an independent action for relief from a state court judgment. Commentators suggest that the federal Anti-Injunction Act, 28 U.S.C. § 2283 (1948), and comity considerations should bar federal courts from entertaining such an action when similar relief is available in the jurisdiction rendering the judgment to be reopened. Restatement (Second) of Judgments § 79 cmt. d (1982); 11 Charles Alan Wright, Arthur R. Miller and Mary Kay Kane, Federal Practice and Procedure § 2868 at 405-07 (2d ed.1995). *835 Others suggest that while jurisdiction to entertain a motion for relief from a state judgment may exist in the federal court, abstention is appropriate when a party seeks this type of relief. 12 James Wm. Moore et al., Moore's Federal Practice § 60.84[3] at 60-241 to -42 (2003). Federal circuits appear to be divided on the issue. Compare Lundborg v. Phoenix Leasing, Inc., 91 F.3d 265, 272-73 (1st Cir.1996) (holding that abstention is proper because independent actions to reopen a judgment were available under state law, no federal interest was implicated, and comity principles counseled against reopening a state judgment), and Sherman v. Marion County Child Support Div., 224 F. Supp. 2d 1220, 1225-26 (S.D.Ind.2002) (holding that Rooker-Feldman doctrine barred a Rule 60(b) action to set aside a state court judgment), with Morrel v. Nationwide Mut. Fire Ins. Co., 188 F.3d 218, 222-23 (4th Cir.1999) (relying on a pre-Rooker case to suggest that federal courts do have jurisdiction to entertain independent actions under Rule 60(b) that seek to reopen state court judgments), and Securities & Exchange Comm'n v. ESM Group, Inc., 835 F.2d 270, 272-73 (11th Cir.1988) (evaluating the merits of a Rule 60(b) independent action to set aside a state court judgment).
{14} However, although the federal district court's decision to remand the case for lack of subject matter jurisdiction appears to be well supported, Plaintiff asserts that an order issued contemporaneously with the remand order precludes Defendants' arguments. This is problematic because a court without jurisdiction to hear a case cannot issue a valid order on the merits of that case. Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 94-95, 118 S. Ct. 1003, 140 L. Ed. 2d 210 (1998). Once the federal district court decided it had no jurisdiction, the best course of action would have been to send the motion to dismiss back to the state court. See In re Bear River Drainage Dist., 267 F.2d 849, 851 (10th Cir.1959). We recognize that adoption of a per se rule affording no preclusive effect to a remanding federal court's orders could pose its own problems. See 18B Charles Alan Wright et al., Federal Practice and Procedure § 4478.4 at 787-90 (2d ed.2002). However, in this case, an additional issue compounds the difficulty of applying the federal court's order denying the motion to dismiss as the law of the case.
{15} The federal district court in Cordova III based its denial of Defendants' motion to dismiss on the theory that the decision in Canales & Cordova I cannot be used to preclude issues or claims because the court lacked subject matter jurisdiction to set aside Cordova I. This is inaccurate. First, it is well established that "[a] party that has had an opportunity to litigate the question of subject-matter jurisdiction may not ... reopen that question in a collateral attack upon an adverse judgment." Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 n. 9, 102 S. Ct. 2099, 72 L. Ed. 2d 492 (1982); see also Chicot County Drainage Dist. v. Baxter State Bank, 308 U.S. 371, 376, 60 S. Ct. 317, 84 L. Ed. 329 (1940) (stating a lower federal court's determination of jurisdiction is not subject to collateral attack when parties are before the court "in accordance with the requirements of due process"). Plaintiff, having availed himself of federal court jurisdiction in Canales & Cordova I and never contesting federal jurisdiction during that proceeding, cannot now advance his cause through a collateral attack on the federal court's jurisdiction in that case.
{16} Second, it is critical to note that the judgment in Canales & Cordova I was final and all appeals were completed. In contrast to a judgment rendered by a court that is known to have no subject matter jurisdiction while the case is pending, federal courts have held that "lack of subject matter jurisdiction [in a finally determined case] generally has no bearing on the preclusive effect of the judgment." 18 Moore's Federal Practice § 131.30[1][d] at 131-89 (gathering federal cases on this point). If a court were to determine that a final and closed judgment has no preclusive effect because the rendering court had no subject matter jurisdiction, this would be tantamount to an impermissible collateral attack on the closed judgment. Courts do not have the power to prevent a party from using a finally determined case preclusively in the way that the federal district *836 court did here. See Ansalve v. State Farm Mut. Auto. Ins. Co., 669 So. 2d 1328, 1332-33 (La.Ct.App.1996) (explaining that judgments in cases in which the federal court did not have subject matter jurisdiction but proceeded to final judgment without objection have preclusive effect, while orders issued by a court whose lack of jurisdiction is determined during the proceedings do not). Accordingly, Plaintiff's assertion that when "jurisdiction is lacking the judgment is void" applies to the federal district court's denial of Defendants' motion to dismiss because the case was still pending. However, Plaintiff's assertion does not apply to permit a collateral attack on the final and closed judgment in Canales & Cordova I. See id.
{17} Plaintiff's contention that Defendants should be bound by the federal district court's decision because they failed to take an appeal from it is also incorrect. The remand order in this case was made pursuant to 28 U.S.C. § 1447(c) (2001), which states, "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." Federal law clearly states that there is no appellate review of remand orders based on 28 U.S.C. § 1447(c). 28 U.S.C. § 1447(d); Kennedy v. Lubar, 273 F.3d 1293, 1297 (10th Cir.2001). Because we have held that the federal court decision on the motion to dismiss in this case prior to remand was void for lack of subject matter jurisdiction, we see no reason to consider whether Defendants might have applied for interlocutory appeal of that motion alone.
{18} In summary, our holding casts no doubt on the federal district court's decision to remand the case for lack of subject matter jurisdiction. It is this very decision that left the court without power to render a decision on Defendants' motion to dismiss. In addition, even if the court had the authority to decide Defendants' motion to dismiss, it denied the motion through an erroneous collateral attack on Canales & Cordova I. For these reasons, we hold that the federal district court's denial of Defendants' motion to dismiss does not preclude Defendants from raising their arguments again in state district court.
2. Claim preclusion bars Plaintiff's claims.
{19} "The doctrine of claim preclusion ... prevents a party from repeatedly bringing the same cause of action against the same person." Ford v. N.M. Dep't of Pub. Safety, 119 N.M. 405, 407, 891 P.2d 546, 548 (Ct.App.1994). Defendants argue that the federal court decision in Canales & Cordova I bars Plaintiff's claim because Plaintiff raised the same issues and the federal courts decided that his arguments were insufficient to support a Rule 60(b) independent action.
{20} We review the trial court's application of claim preclusion de novo. Wolford, 1999-NMCA-024, ¶ 4, 126 N.M. 614, 973 P.2d 866. In determining the preclusive effect of a federal court judgment, we look to the federal law of claim preclusion. Ford, 119 N.M. at 409, 891 P.2d at 550. There are four elements that must be present in order to determine that a claim is precluded: (1) there must have been a final judgment on the merits, (2) the parties must be identical or in privity, (3) the suit must have been based on the same cause of action, and (4) the plaintiff must have had the full and fair opportunity to litigate the claim. Nwosun v. Gen. Mills Rests., 124 F.3d 1255, 1257 (10th Cir.1997), limited on other grounds by Yapp v. Excel Corp., 186 F.3d 1222, 1227 (10th Cir.1999).
{21} Plaintiff does not contest that the parties and cause of action are the same in this action and Canales & Cordova I. Plaintiff argues that there was no valid final judgment on the merits because of the subject matter jurisdiction issues discussed above, which we have already resolved and need not reiterate. Plaintiff also argues that he has not had a full and fair opportunity to litigate the matter because there has never been a judgment on the merits of his original wrongful death claim due to the alleged conspiracy detailed in the Chapa affidavit. Plaintiff misapprehends the requirements of this element. Defendants do not assert that the judgment on the merits of his wrongful death claim in Cordova I precludes the present claim. Instead, Defendants assert that the merits of Plaintiff's Rule 60(b) independent action have *837 already been determined in Canales & Cordova I. Plaintiff does not argue, and there is no question that, Plaintiff had a full and fair opportunity to litigate his Rule 60(b) independent action in the federal district court and on appeal. Thus, this requirement is fulfilled.
{22} Plaintiff also argues that an extraordinary and compelling reason exists to overcome claim preclusion. He cites our opinion in Apodaca v. AAA Gas Co., 2003-NMCA-085, ¶ 84, 134 N.M. 77, 73 P.3d 215, which stated that a party may overcome policies favoring preclusion when "one of the parties conceals material information, labors under some physical or mental disability that impedes effective litigation, or where the different amounts in controversy between the two actions would render preclusion unfair." He argues that in this case, parties concealed material information as alleged in the Chapa affidavit. Again, this is the incorrect analysis. There is no allegation that Defendants concealed material information in the case being applied preclusively, that is, in Canales & Cordova I. Defendants' alleged concealment of information occurred during Cordova I, and this allegation was part of Plaintiff's fully litigated case in Canales & Cordova I. No other extraordinary circumstances counsel against application of claim preclusion here.
{23} To the contrary, policy considerations informing the doctrine of claim preclusion counsel in favor of Defendants. "The underlying principle behind res judicata is to relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and by preventing inconsistent decisions, encourage reliance on adjudication." Three Rivers Land Co., Inc. v. Maddoux, 98 N.M. 690, 694, 652 P.2d 240, 244 (1982) (internal quotation marks, citation, and emphasis omitted), overruled on other grounds by Universal Life Church v. Coxon, 105 N.M. 57, 58, 728 P.2d 467, 468 (1986). We are presented here with a case in which Plaintiff did not even await resolution of his claim in federal court in Canales & Cordova I before filing an identical claim in state court in Cordova III. Two weeks after receiving an unfavorable decision in federal court, Plaintiff moved to remand his state court action, which had been removed to federal court, back to state court. This was a blatant attempt to avoid the federal court's adverse decision, as evidenced by a statement in Plaintiff's response to Defendants' motion to dismiss: "[I]f this [c]ourt denies Plaintiff's [m]otion to [r]emand, then Plaintiff agrees that the doctrines of res judicata and/or collateral estoppel, based upon the court[']s prior judgment, bar Cordova's claim." Plaintiff provides us with no authority for the proposition that a judgment that is preclusive in federal court is not preclusive in state court. Yet, he seeks to capitalize on the federal district court's remand of the case to force Defendants into another round of litigation on the same claim. This is completely contrary to the considerations of conservation of judicial resources and avoidance of the cost and effort associated with protracted litigation.
CONCLUSION
{24} We affirm the trial court's dismissal of Plaintiff's claim based on the doctrine of claim preclusion.
{25} IT IS SO ORDERED.
ALARID and SUTIN, JJ., concur.
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531 U.S. 28 (2000)
SINKFIELD et al.
v.
KELLEY et al.
No. 00-132.
United States Supreme Court.
Decided November 27, 2000.[*]
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF ALABAMA
Per Curiam.
These cases involve a challenge to Alabama state legislative districts under the equal protection principles announced *29 by this Court in Shaw v. Reno, 509 U. S. 630 (1993). Appellees, the plaintiffs below, are white Alabama voters who are residents of various majority-white districts. The districts in which appellees reside are adjacent to majorityminority districts. All of the districts were created under a state redistricting plan whose acknowledged purpose was the maximization of the number of majority-minority districts in Alabama. Appellants in No. 00-132 are a group of African-American voters whose initial state lawsuit resulted in the adoption of the redistricting plan at issue. Appellants in No. 00-133 are Alabama state officials.
Appellees brought suit in the United States District Court for the Middle District of Alabama challenging their own districts as the products of unconstitutional racial gerrymandering. A three-judge court convened to hear the case pursuant to 28 U. S. C. § 2284. The District Court ultimately held that seven of the challenged majority-white districts were the product of unconstitutional racial gerrymandering and enjoined their use in any election. 96 F. Supp. 2d 1301 (MD Ala. 2000). On direct appeal to this Court pursuant to 28 U. S. C. § 1253, appellants in both cases contend, among other things, that appellees lack standing to maintain this suit under our decision in United States v. Hays, 515 U. S. 737 (1995). We agree.
Hays involved a challenge to Louisiana's districting plan for its Board of Elementary and Secondary Education. The plan contained two majority-minority districts. The appellees lived in a majority-white district that bordered on one of the majority-minority districts. The appellees challenged the entire plan, including their own district, as an unconstitutional racial gerrymander under our decision in Shaw v. Reno, supra. United States v. Hays, 515 U. S., at 739-742.
We concluded that the appellees lacked standing to maintain their challenge. We assumed for the sake of argument that the evidence was sufficient to state a Shaw claim with respect to the neighboring majority-minority district. Id., *30 at 746. But we concluded that the appellees had not shown a cognizable injury under the Fourteenth Amendment because they did not reside in the majority-minority district and had not otherwise shown that they had "personally been denied equal treatment." Id., at 744-746 (internal quotation marks omitted). The appellees' failure to show the requisite injury, we noted, was not changed by the fact that the racial composition of their own district might have been different had the legislature drawn the adjacent majority-minority district another way. Id., at 746.
Appellees' position here is essentially indistinguishable from that of the appellees in Hays. Appellees are challenging their own majority-white districts as the product of unconstitutional racial gerrymandering under a redistricting plan whose purpose was the creation of majorityminority districts, some of which border appellees' districts. Like the appellees in Hays, they have neither alleged nor produced any evidence that any of them was assigned to his or her district as a direct result of having "personally been subjected to a racial classification." Id., at 745; see also Shaw v. Hunt, 517 U. S. 899, 904 (1996). Rather, appellees suggest that they are entitled to a presumption of injuryin-fact because the bizarre shapes of their districts reveal that the districts were the product of an unconstitutional racial gerrymander. See App. to Pet. for Cert. 120a, 148a, 153a.
The shapes of appellees' districts, however, were necessarily influenced by the shapes of the majority-minority districts upon which they border, and appellees have produced no evidence that anything other than the deliberate creation of those majority-minority districts is responsible for the districting lines of which they complain. Appellees' suggestion thus boils down to the claim that an unconstitutional use of race in drawing the boundaries of majority-minority districts necessarily involves an unconstitutional use of race in drawing the boundaries of neighboring majority-white *31 districts. We rejected that argument in Hays, explaining that evidence sufficient to support a Shaw claim with respect to a majority-minority district did "not prove anything" with respect to a neighboring majority-white district in which the appellees resided. 515 U. S., at 746. Accordingly, "an allegation to that effect does not allege a cognizable injury under the Fourteenth Amendment." Ibid.
The judgment of the District Court is vacated, and the cases are remanded with instructions to dismiss the complaint.
It is so ordered.
NOTES
[*] Together with No. 00-133, Bennett, Secretary of State of Alabama, et al. v. Kelley et al., also on appeal from the same court.
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804 N.E.2d 560 (2004)
208 Ill. 2d 371
281 Ill. Dec. 595
In re Leonard Thomas TIMPONE, Attorney, Respondent.
No. 93178.
Supreme Court of Illinois.
January 23, 2004.
*562 Steven R. Splitt, Chicago, for the Administrator of the Attorney Registration and Disciplinary Commission.
Michael Lee Tinaglia, Chicago, for respondent
Justice FREEMAN delivered the opinion of the court:
Respondent, Leonard Thomas Timpone, was charged with various violations of the Rules of Professional Conduct (Rules) (134 Ill.2d R. 1.1 et seq). in a three-count complaint filed by the Administrator of the Attorney Registration and Disciplinary Commission (ARDC). The Hearing Board found that the Administrator established that respondent: (1) entered into a business transaction with a client without making proper disclosures; (2) converted and commingled funds belonging to another client; and (3) engaged in conduct involving fraud, dishonesty, deceit or misrepresentation. The Hearing Board `recommended disbarment as a sanction. The Review Board affirmed those findings and rejected respondent's plea for a lesser sanction. The matter is now before this court on respondent's exceptions to the findings and conclusions of the Review Board.
I. BACKGROUND
Respondent has been licensed to practice law since 1970. In 1993, we suspended him for three years. See In re Timpone, 157 Ill. 2d 178, 191 Ill. Dec. 55, 623 N.E.2d 300 (1993). The charges in the matter before us now are based on transactions involving two clients, Richard Rzewnicki and Fulton Purnell. We will discuss the facts relating to each client in turn.
A. The Rzewnicki Transactions
In count I of the complaint the Administrator alleged that respondent engaged in several ethical violations arising from a loan transaction between respondent and Rzewnicki. Among other things, the Administrator alleged that respondent: (1) engaged in conduct involving fraud, dishonesty, deceit, or misrepresentation (134 *563 Ill.2d R. 8.4(a)(4)); (2) entered into a business transaction with a client without making proper disclosures where the lawyer and client have conflicting interests and the client expects the lawyer to exercise his professional judgment on the client's behalf (134 Ill.2d R. 1.8); and (3) engaged in conduct "which tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute" in violation of Supreme Court Rule 771 (134 Ill.2d R. 771).
Respondent represented Rzewnicki in a dissolution of marriage proceeding from 1980 through 1983 and assisted him in the sale of his marital residence in 1987 and 1988. Respondent performed no further legal work for Rzewnicki until 1992, when he defended Rzewnicki on a DUI charge and a building code violation.
Approximately two months after the sale of the marital residence, Rzewnicki loaned respondent $35,000 from the proceeds of the sale. The loan was never repaid, and in January 1999, Rzewnicki obtained a default judgment against respondent. The judgment remains unsatisfied.
Rzewnicki claimed that he loaned the money to respondent because he trusted respondent as "his lawyer," and because he was told he would receive a good return. However, in a pretrial deposition, Rzewnicki described the services respondent performed for him in December of 1988 by testifying that he was an "exclient" and that "[he] had nothing binding at that time."
Respondent argued before the Hearing Board that he and Rzewnicki did not have an attorney-client relationship at the time in question, and that the loan agreement arose out of their friendship rather than the relation of attorney and client. Therefore, although a debtor-creditor relationship existed with Rzewnicki, his receipt of the loan did not violate any of the provisions of the Rules. The Hearing Board disagreed.
Relying on the reasoning in In re Imming, 131 Ill. 2d 239, 137 Ill. Dec. 62, 545 N.E.2d 715 (1989), the Hearing Board found that respondent and Rzewnicki had an attorney-client relationship at the time of the loan. The Hearing Board also found that respondent violated his fiduciary duty to his client by, among other things: (1) failing to advise Rzewnicki that there were limits on the types of transactions an attorney could enter into with a client; (2) failing to advise him to consult independent counsel before making the loan; and (3) providing no collateral for the loan and giving Rzewnicki no promissory note evidencing the loan or the interest rate until five years after the transaction. The Review Board noted that respondent did not challenge any of the factual findings of the Hearing Board and affirmed all of those findings.
B. The Purnell Transactions
Counts II and III of the Administrator's complaintinvolve respondent's representation of Fulton Purnell and statements made to the ARDC regarding that representation. In count II, the Administrator alleged that respondent: (1) converted his client's funds; (2) failed to hold his client's property separate from his own (134 Ill.2d R. 1.15(a)); and (3) failed to promptly deliver funds to a client (134 Ill.2d R. 1.15(b)). In count III, the Administrator alleged that respondent: (1) made a statement of material fact known by the lawyer to be false in connection with a lawyer disciplinary matter (134 Ill.2d R. 8.1(a)(1)); and (2) induced another to engage in conduct when the lawyer knows that the conduct will violate the Rules of Professional Conduct (134 Ill.2d R. 8.4(a)(4)). Regarding both counts II and III, the Administrator alleged that respondent engaged in conduct involving fraud, dishonesty, deceit, *564 or misrepresentation, in violation of Rule 8.4(a)(4), and also engaged in conduct "which tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute" in violation of Supreme Court Rule 771. The Hearing Board's findings on these allegations are not challenged by respondent.
Fulton Purnell engaged respondent to represent him in a proceeding to set aside a judgment-by-confession taken against him by Leo Hickman. He was referred to respondent by a mutual friend, John Jordan, who had been represented in the past by respondent.
According to respondent, he expended considerable time and effort in his attempt to set aside the Hickman judgment-by-confession. In September, 1998, respondent received a check for $23,448.94 made out to Purnell in settlement of the Hickman case. This check was deposited in respondent's client fees account on September 21, 1998. The check was endorsed, "Fulton Purnell Pay to Leonard Timpone." The handwriting was identified by respondent's associate, Gail Golub, as that of Gina Biers, respondent's secretary.
Respondent did not have a trust account at the time he deposited Purnell's check. He maintained a client fees account and an operating account at the same bank and money would be transferred from the fees account to the operating account as checks were written on the operating account. Respondent's firm did not have a client trust account until 1999.
Respondent testified that he, Jordan, and Purnell had a three-way telephone conversation in the early fall of 1998, at the time of a visit by Purnell to Jordan's home. According to respondent, Purnell authorized him to sign his name to the settlement check and deduct his fee. This account was confirmed by Jordan, but denied by Purnell. Purnell denied ever having a three-way telephone conversation with respondent and Jordan and denied authorizing respondent to sign his name to the check and deduct his fees.
In September 1998, Purnell received a letter from respondent enclosing a check for $10,742.19. The letter stated that he had received $23,448.94 in the Hickman matter and had deducted the balance of almost $12,000 in attorney fees.
Before Purnell cashed the $10,742.19 check from respondent, the balance in respondent's client fees account fell under $10,000 on at least three occasions. Respondent denied using Purnell's funds for his own purposes.
In early November 1998, respondent received a letter from the ARDC, requesting a response to allegations raised by Purnell as to the handling of the Hickman settlement check. At respondent's direction, Golub wrote to the Administrator's counsel on his behalf, stating, "As for Mr. Purnell's settlement of funds, the entirety of the settlement remains in our client trust account." On January 6, 1999, also at respondent's direction, Golub again wrote to the Administrator's counsel, advising, "As I stated in an earlier letter to your office, however, the entirety of the [Hickman settlement] check remains in our client fees account."
Based on this testimony, the Hearing Board found that respondent had converted Purnell's funds, as charged in the complaint. The Board, citing In re Clayter, 78 Ill. 2d 276, 282, 35 Ill. Dec. 790, 399 N.E.2d 1318 (1980), noted that a conversion occurs any time an account holding funds on behalf of a client drops below the sums due the client, even if the drop in the balance happens inadvertently. The Hearing Board also found Purnell's testimony that he never gave respondent authority to negotiate the settlement check more credible *565 than the version of events given by respondent. The Board similarly found that respondent failed to hold property of a client separate from his own property in violation of Rule 1.15(a).
The Hearing Board likewise found that respondent violated Rule 1.15(b) by failing to promptly deliver to Purnell funds that Purnell was entitled to receive. The Board found that he was not entitled to deduct those funds from the Hickman settlement proceeds without a fee agreement, regardless of whether he was still owed fees for the completed work. Without an agreement, respondent had engaged in conduct involving fraud, dishonesty, deceit, or misrepresentation and conduct "which tends to defeat the administration of justice or bring the courts or the legal profession into disrepute." 134 Ill.2d R. 771. The Hearing Board also noted that, although respondent was censured in 1994 for failure to timely file a tax return, he had not yet filed a return for 1998.
As to count III, the Hearing Board found that the charged conduct had been proved because the two letters in response to the ARDC inquiry, prepared at the direction and with the approval of respondent, contained false statements known by him to be false. He did not have aclient trust account, as stated in the first letter, and the "entirety" of Purnell's settlement check did not remain in his account, as stated in the second letter.
Respondent did not challenge any of these findings and conclusions in his exceptions to the Hearing Board's recommendations. The findings were, accordingly, affirmed by the Review Board. The Boards' findings as to the allegations in counts II and III are likewise not challenged in this court.
C. Evidence in Aggravation and Mitigation
The Hearing Board noted that respondent had been disciplined on two prior occasions. This court suspended him for three years in 1993 for misconduct including conversion and commingling of client funds, failing to maintain complete records of client funds, neglecting client cases, hiding assets from the court, and misrepresenting a matter to the ARDC. In re Timpone, 157 Ill. 2d 178, 191 Ill. Dec. 55, 623 N.E.2d 300 (1993). In 1994, he was censured for failure to timely file tax returns for the years 1984 through 1988. In re Timpone, M.R. 9862 (March 30, 1994). Relying on In re Levin, 101 Ill. 2d 535, 541-42, 463 N.E.2d 715, 79 Ill. Dec. 161 (1984), the Hearing Board considered the similarities between respondent's prior and current misconduct and the length of time between the prior and current acts.
The Hearing Board also considered in aggravation the fact that respondent never repaid the loan to Rzewnicki, despite the fact that he earned significant income in the years between the loan in 1988 and his suspension in 1993. Relying on In re Smith, 75 Ill. 2d 134, 142, 25 Ill. Dec. 660, 387 N.E.2d 316, 25 Ill. Dec. 660 (1979), the Hearing Board found respondent's lack of candor and remorse to be an aggravating factor. The Board noted that throughout the course of the disciplinary hearing, respondent justified and minimized his actions rather than accepting responsibility for them.
In mitigation, respondent testified that he engaged in community service work and that he took cases for people who could not pay his fees. He also stated that he had "learned his lesson" from failing to document his transactions with Purnell. Golub testified that at the time of the disciplinary hearing, respondent's firm had one "official" pro bono case and 10 to 20 "unofficial" pro bono cases where the firm was working for reduced rates in order to provide low-income people with representation in domestic relations cases. The Hearing *566 Board found this testimony to be essentially self-serving and insufficient to warrant substantial consideration as evidence in mitigation. The Hearing Board recommended disbarment.
Before the Review Board, respondent challenged the disbarment recommendation on the ground that the Hearing Board over-emphasized the prior discipline. The Review Board rejected that argument, observing that the type of misconduct proved in this case is serious and, in the absence of any aggravating or mitigating factors, would likely warrant a sanction ranging from a lengthy suspension to disbarment. The Review Board concluded that the timing of the present misconduct, occurring on the heels of the prior suspension, respondent's lack of candor or remorse, and his continued tax violations despite prior discipline indicate that a lengthy suspension would not induce respondent to rehabilitate himself. Therefore, the Review Board affirmed the findings and conclusions of the Hearing Board and recommended disbarment.
Before this court, respondent argues that the Rzewnicki transaction should not be considered because an attorney-client relationship did not exist at the time of the loan. He also argues that a lengthy suspension would be the appropriate sanction for the Purnell transaction.
II. ANALYSIS
The rules controlling our review of the reports and recommendations of both the Hearing Board and the Review Board are well established. The Administrator bears the burden of proving the allegations contained within the complaint by clear and convincing evidence. 137 Ill.2d R. 758(b); 166 Ill.2d R. 753(c)(6). Moreover, the findings of fact made by the Hearing Board are to be treated virtually the same as the findings of any initial trier of fact. In re Parker, 149 Ill. 2d 222, 233, 172 Ill. Dec. 188, 595 N.E.2d 549 (1992). Deference is to be accorded to the factual findings of the Hearing Board because the Hearing Board is in a position to observe the witnesses' demeanor, judge their credibility, and resolve conflicting testimony. In re Spak, 188 Ill. 2d 53, 66, 241 Ill. Dec. 618, 719 N.E.2d 747 (1999). Accordingly, this court will generally not disturb the Board's factual findings unless they are against the manifest weight of the evidence. In re Ushvjima, 119 Ill. 2d 51, 56-57, 115 Ill. Dec. 548, 518 N.E.2d 73 (1987). We are not, however, bound by the disciplinary recommendations of either the Hearing Board or the Review Board because those recommendations are advisory and the ultimate responsibility for imposing discipline rests with this court. In re Eckberg, 192 Ill. 2d 70, 85, 248 Ill. Dec. 246, 733 N.E.2d 1244 (2000); In re Howard, 188 Ill. 2d 423, 434, 721 N.E.2d 1126, 242 Ill. Dec. 595 (1999).
A. Count I: Improper Business Transaction
Respondent submits that the conclusion of the Hearing Board, as affirmed by the Reviewing Board, i.e., that an attorney-client relationship existed at the time of the loans, was against the manifest weight of the evidence. Respondent notes that the Hearing Board expressly stated that "no violation of attorney disciplinary rules would be at issue here if respondent entered into a business transaction with Rzewnicki based upon Rzewnicki's personal friendship with respondent rather than the attorney-client relationship." Thus, if the Hearing Board's determination that an attorney-client relationship existed at the time of the loan transaction is against the manifest weight of the evidence, the Rule violations alleged in count I of the complaint were not proved. See In re Smith, *567 168 Ill. 2d 269, 283, 659 N.E.2d 896, 213 Ill. Dec. 550 (1995).
The Administrator, citing Attorney Registration and Disciplinary Commission Rule 302(f)(5), initially asserts that respondent's argument concerning the existence of an attorney-client relationship has been waived since it was not expressly argued before the Review Board. Rule 302(f)(5) is similar to Supreme Court Rule 341(e)(7) (177 Ill.2d R. 341(e)(7)), providing that the appellant's brief to the Review Board must include a section entitled "Argument," containing the contentions of the party and the reasons therefor, and warns that points not argued are waived. In his brief before the Review Board, respondent essentially contended that the Hearing Board had over-emphasized respondent's prior discipline and argued that a suspension, rather than disbarment, would be the appropriate sanction. According to the Administrator, respondent's brief contained no specific argument that the Hearing Board erred in finding that an attorney-client relationship existed between respondent and Rzewnicki.
Respondent's brief before the Review Board did, however, contain the following contentions:
"Thus we emphasize the following evidentiary facts, as reported by the hearing Board:
1. Though Leonard had represented Richard Rzewnicki before and after his marital home was sold, he did not represent him when the home was sold in late 1988.
2. Leonard did not represent Rzewnicki in any pending legal matter when Rzewnicki loaned him money, which derived from the sale of the home."
Respondent argued before the Review Board that Rzewnicki described himself as an ex-client at the time the loan was made, and pointed out that there was a gap of over four years between the time respondent completed the post-decree work in 1988 and his representation of Rzewnicki on the DUI and building code violation cases in 1992-93. Thus, although not precisely characterized as a point relied on for reversal, it is clear that respondent disputed the Hearing Board's analysis and conclusion that the loan occurred during the attorney-client relationship.
It is well established that the rule of waiver is a limitation on parties and not on reviewing courts. Welch v. Johnson, 147 Ill. 2d 40, 48, 588 N.E.2d 1119, 167 Ill. Dec. 989, 588 N.E.2d 1119 (1992). To reach a just result, this court may override considerations of waiver and consider a point not raised below. Welch, 147 Ill.2d at 48, 167 Ill. Dec. 989, 588 N.E.2d 1119. Under the circumstances presented by the record in this case, we decline to apply waiver and will consider respondent's argument on its merits.
Turning to the merits of the argument, the Hearing Board found that respondent was not performing any legal services for Rzewnicki at the exact time the loan transaction took place. However, this court has established that, while an attorney's relation to a client generally ceases on completion and satisfaction of the matter the attorney was employed to conduct, special circumstances or arrangements may show a continuation of the relationship. Imming, 131 Ill.2d at 252, 137 Ill. Dec. 62, 545 N.E.2d 715. The Hearing Board found that such special circumstances existed here. The Review Board affirmed this finding.
The special circumstances found by the Hearing Board in this ease were as follows: (1) Rzewnicki stated emphatically and without hesitation that he considered respondent to be his lawyer, not his friend; (2) the loan transaction took place, upon *568 the request of respondent, within Weeks of respondent's completion of work on a postdecree matter that generated the funds; and (3) Rzewnicki testified that the funds loaned to respondent were generated by the work respondent performed on his behalf.
The Hearing Board found the relationship of Rzewnicki and respondent to be analogous to the eight creditors and the attorney disciplined in Imming. In that case, the respondent was disciplined for breach of his fiduciary duties to eight investors who were, at the time of the investments, either clients or former clients. Imming, 131 Ill.2d at 253, 137 Ill. Dec. 62, 545 N.E.2d 715. The Imming `court held that the Hearing Board could reasonably have concluded that in the case of four of the investors, the funds in question were the product of respondent's legal work that was concluded so close in time to the legal services rendered as to induce the client to believe that respondent's business transactions were a continuation of the attorneyclient relationship. Imming, 131 Ill.2d at 254,137 Ill. Dec. 62, 545 N.E.2d 715. In the case of the other four investors, respondent was performing legal services for them at the time of the loan or shortly afterward. Imming, 131 Ill.2d at 253, 137 Ill. Dec. 62, 545 N.E.2d 715.
While we believe that some differences exist between the facts of the present case and the facts in Imming, we do not believe those differences compel a conclusion opposite to that made by the Hearing Board. We further acknowledge that Rzewnicki's sworn testimony was at odds with his deposition. However, credibility determinations rest with the Hearing Board. We cannot say that the findings made by the Hearing Board were against the manifest weight of the evidence. We therefore affirm the findings made by the Hearing Board with respect to the Rzewnicki transactions.
B. Appropriate Sanction
As previously noted, respondent does not challenge the boards' factual findings as to the allegations in counts II and III. We therefore turn to the issue of the appropriate discipline to be imposed in this case. Supreme Court Rule 771 addresses the types of discipline attorneys may be subjected to in Illinois. 134 Ill.2d R. 771. The sanctions range from the severest, disbarment, to the most lenient, reprimand. See 134 Ill.2d R. 771.
Respondent argues that suspension, not disbarment, is the appropriate sanction for his misconduct. Although we agree that disbarment is not appropriate in this case, we disagree that a mere suspension in justified under the facts.
This court has described disbarment as "the utter destruction of an attorney's professional life, his character and his livelihood and therefore a court should use disbarment in moderation." In re Yamaguchi, 118 Ill. 2d 417, 428-29, 113 Ill. Dec. 928, 515 N.E.2d 1235 (1987).
Initially, we note that this court has imposed a lesser sanction than disbarment in cases involving transactions similar to those in the case before us. In Imming, discussed earlier, a two-year suspension was imposed for improper business transactions with clients. Imming, 131 Ill.2d at 261, 137 Ill. Dec. 62, 545 N.E.2d 715. Similarly, a two-year suspension was imposed for similar misconduct in In re Rosin, 118 Ill. 2d 365, 113 Ill. Dec. 276, 515 N.E.2d 85 (1987). In In re Joyce, 133 Ill. 2d 16, 32, 139 Ill. Dec. 720, 549 N.E.2d 232 (1989), we likewise imposed a two-year suspension for commingling and conversion of client funds. In respondent's earlier disciplinary matter, we imposed a three-year suspension for similar misconduct involving six *569 different clients. Timpone, 157 Ill.2d at 200,191 Ill. Dec. 55, 623 N.E.2d 300.
The Review Board noted that the type of conduct at issue in this case likely warrants a sanction ranging from a lengthy suspension to disbarment. Of these cases cited by the Review Board in its written decision, we find distinguishable those where disbarment was ordered. In each of those cases, certain aggravation existed which is notably absent in the case at bar. See In re Feldman, 89 Ill. 2d 7, 59 Ill. Dec. 103, 431 N.E.2d 388 (1982) (ordering disbarment for intentional misconduct, including converting a client's funds then wrongfully signing another client's name on checks to cover up the first conversion); In re Stillo, 68 Ill. 2d 49, 11 Ill. Dec. 289, 368 N.E.2d 897 (1977) (ordering disbarment for breach of attorney-client relationship to obtain loan from client which was never repaid in addition to settling a case without the client's consent, and converting client funds).
The Administrator argues that our holding in In re Blank, 145 Ill. 2d 534, 165 Ill. Dec. 709 (1991), strongly supports the boards' recommendations. In that case, the respondent was found to have neglected three clients' cases, engaged in dishonesty, and converted funds on two occasions when he allowed his trust account balance to fall to zero while he was supposed to be holding money for a medical provider. The Hearing Board and the Review Board recommended a two-year suspension. Blank, 145 Ill.2d at 537, 165 Ill. Dec. 709, 585 N.E.2d 105. This court imposed disbarment, citing the gravity of the misconduct and respondent's recidivism. Blank, 145 Ill.2d at 554-55, 165 Ill. Dec. 709, 585 N.E.2d 105.
We agree with the Administrator that respondent's recidivism is a factor that cannot be ignored in this case. However, in In re Howard, 188 Ill. 2d 423, 242 Ill. Dec. 595, 721 N.E.2d 1126 (1999), we imposed a two-year suspension on a lawyer who had been reprimanded for neglecting criminal cases, who was later suspended for two additional years for misconduct including conversion of client funds, and whose name had been stricken from the roll of attorneys practicing before the Seventh Circuit Court of Appeals. Despite his suspension, he continued to practice law and submitted false information to an Alaskan court where he applied for admission pro hac vice. Noting our holding in Yamaguchi, the majority found disbarment unwarranted, in part because corrupt motives and moral turpitude were not clearly shown. Howard, 188 Ill.2d at 441-42, 242 Ill. Dec. 595, 721 N.E.2d 1126.
This court has held that in determining the quantum of discipline the court will mete out, "the degree of punishment imposed in a disciplinary proceeding is based upon an evaluation of the evidence, the respondent's past record, his attitude at the disciplinary proceeding, and the best interests of society." Imming, 131 Ill.2d at 260, 137 Ill. Dec. 62, 545 N.E.2d 715. We have also repeatedly stressed that where corrupt motives and moral turpitude are not clearly shown, the proper punishment is suspension rather than disbarment. In re Chapman, 69 Ill. 2d 494, 501, 14 Ill. Dec. 479, 372 N.E.2d 675 (1978). Taking into account respondent's recidivism, we cannot say that a "suspension for a specified period of time" (134 Ill.2d R. 771(d)), however lengthy, as respondent suggests, is appropriate. Respondent does not appear to have grasped the importance of his ethical obligations, particularly when his friends are his clients. For this reason, we believe that a "suspension for a specified period and until further order of court" (emphasis added) (134 Ill.2d R. 771(c)) serves the purpose of our disciplinary processes. We stress that, after disbarment, *570 this sanction is the most severe that we can impose on an attorney. In our view, the "until further order of court" portion of the discipline reflects our agreement with the Administrator that respondent's recidivism warrants more than mere suspension.
Finally, we feel compelled to address several points raised in dissent. The dissent accuses us of failing to sanction the misconduct at issue in this case consistently with the sanctions imposed in other cases involving similar misconduct. The dissent also criticizes us for failing to take into account respondent's recidivism. With respect to the cases involving similar misconduct, the dissent states that we distinguish two cases, In re Stillo and In re Feldman, whereas the dissenting justices believe that no meaningful distinction exists between those cases and the case at bar. With respect to Stillo, the dissent states that it is "difficult to discern what aggravating factor was present [there] that is `notably absent' [here] except perhaps, for Stillo's accepting a settlement offer without prior authorization from his client." 208 Ill. 2d at 392-93, 281 Ill.Dec. at 608, 804 N.E.2d at 573 (Garman, J., dissenting, joined by Thomas, J.). Accepting a settlement offer without client consent is a serious ethical lapse and would be further aggravation to the misconduct that was charged here. We believe that the absence of such misconduct here makes this case distinguishable from Stillo. With respect to Feldman, the dissent fails to note that at least nine check forgeries were also at issue there. Fortunately, the misconduct here, although similar, does not rise to that level. We therefore respectfully disagree that "there is no meaningful distinction to be made between Stillo, Feldman, and the present case and: the same sanctiondisbarmentshould be imposed." 208 Ill. 2d at 393-94, 281 Dl Dec. at 609, 804 N.E.2d at 574 (Garman, J., dissenting, joined by Thomas, J.). Discipline cases must be judged on their facts, and while the discipline imposed from case to case should be consistent, we must take into account the factual differences that do exist from case to case. In our view, the factual differences; between these two cases and the case at bar compel the conclusion that the discipline imposed here need not be similar.
As for the other cases involving similar misconduct, we note that the suspension ordered in In re Rosin was for a two-year period. The suspension ordered here, 42 months, is nearly twice as long in duration. The same can be said for In re Joyce, where another two-year suspension was imposed. Clearly, standing alone, the misconduct at issue here does not, in normal circumstances, warrant disbarment. However, this case is not normal in that respondent has had disciplinary action taken against him before, as the dissent correctly notes. Our decision to add the "until further order of court" language to the suspension belies the dissent's belief that we have failed to take into account respondent's recidivism. We have considered the recidivism and have decided to suspend respondent, not only for a period of time nearly double in length that had been imposed in similar cases, but also until further order of court.
The dissent takes issue with our decision to suspend respondent for a specified period of time and until further order of the court, intimating that the sanction does not give "sufficient attention to our responsibility to protect the public from respondent's habitual misconduct or to protect the integrity of the profession." 208 Ill. 2d at 390, 281 Ill.Dec. at 607, 804 N.E.2d at 572 (Garman, J., dissenting, joined by Thomas, J.). The dissent suggests that its *571 preferred sanction, disbarment, would accomplish those goals.
As noted earlier in this opinion, Supreme Court Rule 771 lists the various forms of discipline that are at this court's disposal. A popular misconception regarding disbarment in this state is that a disbarred lawyer will never be allowed to practice law in Illinois again. This is not true. Supreme Court Rule 767 provides that
"[a]n attorney who has been disbarred * * * or suspended until further order of the court may file his verified petition with the clerk of the court seeking to be reinstated to the roll of attorneys admitted to practice law in this State." 134 Ill.2d R. 767.
Thus, attorneys who are disbarred may seek reinstatement just as those who are suspended until further order of court. In both cases, the disciplined attorney must seek a court order before he or she will be allowed to practice. In the case of a disbarred attorney, he or she must wait until five years after the date of disbarment before seeking reinstatement. 166 Ill.2d R. 767. In the case of the suspended attorney, he or she may not seek reinstatement until the period of suspension has passed. Critically, both forms of discipline share a common characteristic, i.e., in order to practice again, the disciplined attorney must first seek an order of this court to do so.
In light of the foregoing, it is difficult to accept the dissent's position that the discipline we impose upon respondent somehow fails to "protect the public from respondent's habitual misconduct or to protect the integrity of the profession." The public is no more protected under the type of discipline the dissent would impose upon respondent than the sanction that we have chosen to impose today. Likewise, the integrity of the profession is no less protected under our sanction. The only practical difference between the two forms of discipline is that under the dissent's position, respondent would be ineligible to seek reinstatement for approximately one year longer than under our's. Given the fact that respondent will not practice until this court allows him to do so, this difference is, in our view, negligible. As the dissent itself acknowledges, "our goal [in such cases] is not to punish the attorney." Howard, 188 Ill.2d at 434, 242 Ill. Dec. 595, 721 N.E.2d 1126. We have previously noted that disbarment is a form of discipline that should be used in moderation. The sanction we impose today reflects our recognition of that fact while remaining faithful to the goals of attorney discipline that this court has developed over the years.
III. CONCLUSION
Respondent Leonard Thomas Timpone is suspended from the practice of law for 42 months and until the further order of this court, effective March 26, 2001, the date of his interim suspension pursuant to Supreme Court Rule 774.
Respondent suspended.
Justice FITZGERALD took no part in the consideration or decision of this case.
Justice GARMAN, dissenting:
I agree with the majority that, given the deference that must be afforded to the Hearing Board as the finder of fact (In re Spak, 188 Ill. 2d 53, 66, 241 Ill. Dec. 618, 719 N.E.2d 747 (1999)), and our prior case law regarding similar misconduct (In re Imming, 131 Ill. 2d 239, 137 Ill. Dec. 62, 545 N.E.2d 715 (1989)), the findings of the Hearing Board must be affirmed.
I disagree, however, with the majority's decision to reject the recommendations of the Hearing Board, the Review Board, and the Administrator that respondent be disbarred. *572 These recommendations are, of course, purely advisory. This court has the ultimate responsibility for imposing attorney discipline. In re Chandler, 161 Ill. 2d 459, 472-73, 204 Ill. Dec. 249, 641 N.E.2d 473 (1994). In doing so, we strive to achieve predictability and fairness by imposing sanctions consistent with those imposed for similar misconduct. In re Howard, 188 Ill. 2d 423, 440, 242 Ill. Dec. 595, 721 N.E.2d 1126 (1999). Nevertheless, we approach each case with the understanding that "our goal is not to punish the attorney but rather to protect the public from incompetent or unscrupulous attorneys, to maintain the integrity of the profession, and to protect the administration of justice from reproach." Howard, 188 Ill.2d at 434, 242 Ill. Dec. 595, 721 N.E.2d 1126. In my opinion, the majority has not given sufficient attention to our responsibility to protect the public from respondent's habitual misconduct or to protect the integrity of the profession.
Although the majority cites cases in which similar misconduct has not resulted in disbarment (208 Ill.2d at 384, 281 Ill. Dec. at 603-604, 804 N.E.2d at 568-569), and cases in which repeat offenders have not been disbarred (208 Ill.2d at 385, 281 Ill. Dec. at 604, 804 N.E.2d at 569), I do not find these cases persuasive because this respondent has been disciplined on not just one but two prior occasions. He was suspended for three years in 1993 for conversion and commingling of client funds, failing to maintain complete records of client funds, neglecting cases, hiding assets from the court, and making misrepresentations to the ARDC. He was censured in 1994 for failure to file tax returns for five consecutive years. 208 Ill. 2d at 378, 281 Ill.Dec. at 600-601, 804 N.E.2d at 565-566. The majority, however, does not give great weight to respondent's prior misconduct as a factor in aggravation. Rather, the majority would require proof of corrupt motives or moral turpitude, rather than mere habitual misconduct, before imposing the severe sanction of disbarment. 208 Ill.2d at 385, 281 Ill. Dec. at 604, 804 N.E.2d at 569.
Similar Misconduct
The majority notes that in Imming a two-year suspension was imposed when the attorney engaged in transactions similar to the loan at issue in Count I. 208 Ill. 2d at 384, 281 Ill.Dec. at 603-604, 804 N.E.2d at 568-569. The Hearing and Review Boards recommended a two-year suspension for Imming, while the Administrator recommended disbarment. Imming, unlike the respondent in the present case, "had a previously unblemished record for 26 years." Imming, 131 Ill.2d at 261, 137 Ill. Dec. 62, 545 N.E.2d 715. This court noted that the "degree of punishment imposed in a disciplinary proceeding is based upon an evaluation of the evidence, the respondent's past record, his attitude at the disciplinary proceeding, and the best interests of society." Imming, 131 Ill.2d at 260, 137 Ill. Dec. 62, 545 N.E.2d 715. Further, although "we endeavor to achieve uniformity in imposing discipline, * * * we also consider each case on its own merits." Imming, 131 Ill.2d at 260, 137 Ill. Dec. 62, 545 N.E.2d 715. In the end, this court concluded that a two-year suspension "would be sufficient deterrence to impress upon respondent and others the absolute necessity of full disclosure in business transactions with clients and the impropriety of overreaching in the attorneyclient relationship." Imming, 131 Ill.2d at 261,137 Ill. Dec. 62, 545 N.E.2d 715.
The facts relevant to determining the proper sanction in the present case are readily distinguishable from the facts in Imming. Respondent does not have an unblemished record; he did not display an attitude of cooperation or remorse at the *573 disciplinary hearing; and he has not been sufficiently deterred from misconduct by a prior three-year suspension.
The majority also points to the two-year suspension imposed in In re Rosin, 118 Ill. 2d 365, 113 Ill. Dec. 276, 515 N.E.2d 85 (1987), for misconduct similar to respondent's. 208 Ill. 2d at 384, 281 Ill.Dec. at 603-604, 804 N.E.2d at 568-569. In Rosin, the record was "replete with both aggravating and mitigating circumstances" (Rosin, 118 Ill.2d at 387, 113 Ill. Dec. 276, 515 N.E.2d 85), while in the present case, there are aggravating circumstances, but no mitigating circumstances. In mitigation, Rosin received no benefit from his conduct, he did not intentionally defraud his client, and he had no prior history of disciplinary action. Respondent, in contrast, did profit from his misconduct by securing and failing to repay a loan and by retaining funds that should have been promptly disbursed to a client. Further, he has twice been subjected to professional discipline. In aggravation, the Administrator cited uncharged conduct of Rosin's. Rosin, 118 Ill.2d at 388, 113 Ill. Dec. 276, 515 N.E.2d 85. In the present case, respondent's failure to file recent tax returns, even after a previous censure for the same conduct, is uncharged conduct that the boards and the Administrator considered an aggravating circumstance.
In re Joyce, 133 Ill. 2d 16, 139 Ill. Dec. 720, 549 N.E.2d 232 (1989), in which a twoyear suspension was imposed for commingling and conversion of client funds (208 Ill.2d at 384, 281 Ill.Dec. at 603-604, 804 N.E.2d at 568-569), is likewise unpersuasive. In Joyce, although the respondent attorney continued to deny any wrongdoing, he had been practicing for almost 20 years with no disciplinary record.
The majority distinguishes two cases cited by the Review Board in its written decision on the basis that, in each case, "certain aggravation existed which is notably absent" in the present case. 208 Ill. 2d at 384, 281 Ill.Dec. at 604, 804 N.E.2d at 569. In In re Stillo, 68 Ill. 2d 49, 51, 11 Ill. Dec. 289, 368 N.E.2d 897 (1977), this *574 court ordered disbarment of an attorney who converted client funds and then compounded his wrongdoing by signing another client's name on checks to obtain funds so that he could cover up the earlier conversion. It is the intentional nature of his misconduct, as evidenced by the attempted cover-up, that the majority apparently finds to be a sufficient aggravating factor to justify disbarment. 208 Ill. 2d at 384. 281 Ill.Dec. at 603-604, 804 N.E.2d at 568-569. However, in Feldman, this court noted that "the offense of conversion is sufficient to justify disbarment" and, further, disbarment has been imposed "in situations involving similar or less flagrant misconduct" than that committed by Feldman. Feldman, 89 Ill.2d at 11, 59 Ill. Dec. 103, 431 N.E.2d 388. In addition, Feldman argued that a lesser sanction would be appropriate, given that this was the first instance in which he had been charged with professional misconduct. Feldman, 89 Ill.2d at 13, 59 Ill. Dec. 103, 431 N.E.2d 388. As this court accurately observed, however, "the wrong committed does not constitute an isolated incident, Rather, respondent has manifested a pattern of behavior which clearly tends to bring the legal profession into disrepute." Feldman, 89 Ill.2d at 13, 59 Ill. Dec. 103, 431 N.E.2d 388. Respondent in the present case has also manifested a pattern of behavior that brings the profession into disrepute.
In my opinion, there is no meaningful distinction to be made between Stillo, Feldman, and the present case and the same sanctiondisbarmentshould be imposed.
Recidivism
While the lack of prior discipline is often seen as a mitigating factor (see Imming, 131 Ill. 2d 239, 137 Ill. Dec. 62, 545 N.E.2d 715; Joyce, 133 Ill. 2d 16, 139 Ill. Dec. 720, 549 N.E.2d 232; Rosin, 118 Ill. 2d 365, 113 Ill. Dec. 276, 515 N.E.2d 85), a history of prior discipline may be viewed as a factor in aggravation (see Imming, 131 D1.2d at 260, 137 Ill. Dec. 62, 545 N.E.2d 715 ("respondent's past record" is relevant to determination of discipline to be meted out)). With regard to this aggravating factor, the majority notes the Administrator's reliance on In re Blank, 145 Ill. 2d 534, 165 Ill. Dec. 709, 585 N.E.2d 105 (1991), but does not attempt to distinguish that case. 208 Ill. 2d at 384-85, 281 Ill.Dec. at 604, 804 N.E.2d at 569. Instead, the majority relies on Howard, 188 Ill. 2d 423, 242 Ill. Dec. 595, 721 N.E.2d 1126. 208 Ill.2d at 385, 281 Ill. Dec. at 604, 804 N.E.2d at 569.
In Blank, both the Hearing Board and the Review Board recommended that the respondent be suspended for two years while the respondent argued that a twoyear suspension was excessive. Blank, 145 Ill.2d at 554, 165 Ill. Dec. 709, 585 N.E.2d 105. This court, however, ordered him disbarred because, unlike an attorney suspended for 18 months for similar misconduct, Blank was a recidivist. Blank, 145 Ill.2d at 554, 165 Ill. Dec. 709, 585 N.E.2d 105, citing In re Fox, 122 Ill. 2d 402, 119 Ill. Dec. 370, 522 N.E.2d 1229 (1988). Attorney Blank had not been previously suspended. In fact, his previous discipline consisted only of a censure in 1984 for mishandling of a client's funds. Blank, 145 Ill.2d at 554, 165 Ill. Dec. 709, 585 N.E.2d 105. Factors supporting disbarment were his recidivism, the gravity of his offenses, and the fact that Blank failed to recognize his improper conduct and attempted to blame his problems on another. Blank, 145 Ill.2d at 555, 165 Ill. Dec. 709, 585 N.E.2d 105. I agree with the Administrator that Blank offers sound support for disbarment in the present case.
In Howard, the Hearing Board recommended a two-year suspension for an attorney who made a misrepresentation regarding a past suspension in a petition to *575 practice pro hac vice in another state, neglected a criminal appeal, engaged in the practice of law while under a prior suspension, and failed to promptly return unearned fees. The Review Board adopted the Hearing Board's findings of fact, but reduced the recommended suspension to a period of three months. Howard, 188 Ill.2d at 425, 242 Ill. Dec. 595, 721 N.E.2d 1126. The Administrator filed exceptions, arguing that the misconduct proven in this case, coupled with Howard's history of prior misconduct, demanded a sanction "far in excess of the three months" recommended by the Review Board. This court agreed. Howard, 188 Ill.2d at 440, 242 Ill. Dec. 595, 721 N.E.2d 1126.
Three dissenting justices advocated disbarment of Howard, but the majority rejected disbarment, stating that "where corrupt motives and moral turpitude are not clearly shown, the proper punishment is suspension rather than disbarment." Howard, 188 Ill.2d at 441, 242 Ill. Dec. 595, 721 N.E.2d 1126. With regard to his recidivism, this court noted that the acts underlying the earlier suspension occurred during the same period of time as the neglect of the criminal appeal that formed a substantial part of the current matter. Howard, 188 Ill.2d at 441-2, 242 Ill. Dec. 595, 721 N.E.2d 1126. In addition, the previous suspension was for five months so that a suspension for two years, more than four times the duration of the earlier suspension, would be "sufficiently meaningful" to have the desired effect. Howard, 188 Ill.2d at 442, 242 Ill. Dec. 595, 721 N.E.2d 1126. Finally, there was substantial mitigation based on Howard's "years of dedicated service to the community, to his church, and to a segment of the population that is often overlooked." Howard, 188 Ill.2d at 442, 242 Ill. Dec. 595, 721 N.E.2d 1126.
Respondent in the present case did not demonstrate a substantial degree of mitigation. As the majority notes, the Hearing Board found his testimony regarding community service and pro bono representation essentially self-serving and insufficient to warrant substantial consideration. 208 Ill. 2d at 378-79, 281 Ill.Dec. at 600-601, 804 N.E.2d at 565-566. He expressed no remorse and, indeed, made false statements to the ARDC. In addition, the majority is not imposing a suspension four times as long as the earlier suspension. The 42 month suspension is a mere six months longer than respondent's threeyear suspension, the "until further order" provision notwithstanding.
The present case can also be distinguished from Howard on the basis of the timing of the various offenses. The misconduct at issue in count I of the present complaint occurred in 1988, prior to the earlier disciplinary actions. Thus, it is conceivable, I suppose, that the intervening disciplinary actions had such an effect on respondent that he determined never to engage in such conduct again. The facts, however, do not support such an optimistic view. Although respondent solicited the loan from Rzewnicki prior to either of his two earlier disciplinary actions, he did not repay that loan even after his suspension expired and he was again earning sufficient funds to repay his debt. Rzewnicki obtained a default judgment against respondent in January 1999 and, still, respondent made no effort whatsoever to repay the loan. The misconduct at issue in count II of the complaint occurred in 1998, as did the false statements made by respondent to the ARDC, which are the subject of count III.
Previous disciplinary actions had no apparent effect on respondent. Indeed, the Hearing Board noted that he tended to justify and minimize his actions, rather *576 than accept responsibility for them. Respondent, however, told the Board that he had "learned his lesson" from his failure to document his transaction with Purnell. This statement should be viewed with skepticism since respondent did not learn his lesson regarding the maintenance of complete records even after a previous suspension. In re Timpone, 157 Ill. 2d 178, 191 Ill. Dec. 55, 623 N.E.2d 300 (1993).
I find the reasoning of the Review Board persuasive. The timing of the misconduct at issue demonstrates that the earlier suspension had no effect on respondent's conduct. This three-year suspension ended in 1996 and he was again mishandling client funds as early as 1998. Similarly, although respondent was censured in 1994 for failure to file a timely tax return, he had not filed his 1998 return by the time of his hearing before the Hearing Board. His lack of candor and remorse weigh in favor of a severe sanction. The Review Board, thus, concluded that even a lengthy suspension would not alter respondent's conduct.
Corrupt Motives or Moral Turpitude
Even when respondent's repeated offenses are taken into consideration, the majority is reluctant to disbar an attorney in the absence of evidence of corrupt motives or moral turpitude. The cases relied upon are Howard, 188 Ill.2d at 441, 242 Ill. Dec. 595, 721 N.E.2d 1126 ("where corrupt motives and moral turpitude are not clearly shown, the proper punishment is suspension rather than disbarment"), and In re Chapman, 69 Ill. 2d 494, 501, 14 Ill. Dec. 479, 372 N.E.2d 675 (1978) ("`Suspension is a proper punishment "where a corrupt motive and moral turpitude are not clearly shown"'"), quoting In re Taylor, 66 Ill. 2d 567, 571, 6 Ill. Dec. 898, 363 N.E.2d 845 (1977), quoting In re Ahern, 23 Ill. 2d 69, 74, 177 N.E.2d 197 (1961).
On the other hand, there are numerous cases in which this court has equated conversion of client funds with corruption. See, e.g., In re Himmel, 125 Ill. 2d 531, 543, 127 Ill. Dec. 708, 533 N.E.2d 790 (1988) ("It is clear that conversion of client funds is, indeed, conduct involving moral turpitude") (citing In re Levin, 118 Ill. 2d 77, 88, 112 Ill. Dec. 708, 514 N.E.2d 174 (1987), and Stillo, 68 Ill.2d at 54, 11 Ill. Dec. 289, 368 N.E.2d 897).
Although respondent's conduct is certainly less blameworthy than that of an attorney who sets out to deliberately defraud his clients, it is not the result of mere inadvertence, or a single instance of yielding to temptation, or inexperience, or personal pressures related to family matters or to health, He has demonstrated for more than a decade that he cannot be trusted to conform his conduct to the Rules of Professional Conduct. His recidivism is the evidence of corruption.
Conclusion
Disbarment is a severe penalty that should be used only in cases of serious misconduct. In re Yamaguchi, 118 Ill. 2d 417, 428-29, 113 Ill. Dec. 928, 515 N.E.2d 1235 (1987) (declining to disbar attorney who aided another in the unauthorized practice of law and imposing six-month suspension recommended by Review Board where respondent had no history of professional discipline, did not profit or attempt to profit from his misconduct, and neither harmed nor intended to harm anyone). Respondent's pattern of misconduct is serious, repeated, and remorseless. It is this court's duty to protect the public from such conduct. Respondent should be disbarred.
Justice THOMAS joins in this dissent.
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342 S.W.3d 296 (2011)
Kenneth Wayne BURKE, Appellant,
v.
COMMONWEALTH of Kentucky, Appellee.
No. 2010-CA-000655-MR.
Court of Appeals of Kentucky.
June 10, 2011.
Samuel N. Potter, Assistant Public Advocate, Frankfort, KY, for appellant.
*297 Jack Conway, Attorney General of Kentucky, Julie Scott Jernigan, Assistant Attorney General, Frankfort, KY, for appellee.
Before CLAYTON and NICKELL, Judges; ISAAC,[1] Senior Judge.
OPINION
CLAYTON, Judge:
This action is before us as an appeal of the revocation of Appellant, Kenneth Wayne Burke's probation. We affirm the decision of the trial court.
BACKGROUND INFORMATION
Burke originally pled guilty to Receiving Stolen Property over $300.00 and Persistent Felony Offender I on March 24, 2009. Pursuant to a plea agreement he reached with the Commonwealth, Burke received a ten-year sentence with one year to serve. The remaining nine years was probated for five years.
On November 18, 2009, the Commonwealth filed a motion to revoke Burke's probation. It was alleged that Burke stole a vehicle, failed to report to his probation officer and left the state without permission. On January 25, 2010, a probation revocation hearing was held. At the hearing, Burke stipulated to the probation violations alleged against him. As a result, the trial court revoked his probation. Burke then filed this appeal.
STANDARD OF REVIEW
In reviewing probation hearings, we review the trial court's findings for abuse of discretion. Tiryung v. Com., 717 S.W.2d 503, 504 (Ky.App.1986). Abuse of discretion occurs when "the trial judge's decision was arbitrary, unreasonable, unfair, or unsupported by sound legal principles." Com. v. English, 993 S.W.2d 941, 945 (Ky.1999).
DISCUSSION
In Morrissey v. Brewer, 408 U.S. 471-72, 92 S. Ct. 2593, 2596, 33 L. Ed. 2d 484 (1972), the U.S. Supreme Court held that, in parole revocation matters, due process requires the following:
a) written notice of the claimed violations of parole;
b) disclosure to the parolee of evidence against him;
c) opportunity to be heard in person and to present witnesses and documentary evidence;
d) the right to confront and cross-examine adverse witnesses ...;
e) a `neutral and detached' hearing body...; and
f) a written statement by the factfinders as to the evidence relied on and reasons for revoking parole.
In Gagnon v. Scarpelli, 411 U.S. 778, 782, 93 S. Ct. 1756, 1760, 36 L. Ed. 2d 656 (1973), the Court held that these requirements applied in revoking a defendant's probation as well. See also A.C. v. Com., 314 S.W.3d 319 (Ky.App.2010). In Rasdon v. Com., 701 S.W.2d 716 (Ky.App.1986), the Kentucky Court of Appeals held that due process in probation revocation proceedings requires written findings, which may be oral or written as long as it is on the record, and the defendant is informed of the reasons. Further, Burke argues that he was not advised that he could waive his constitutional rights. Gagnon requires that a probation hearing have the due *298 process requirements as outlined in Morrissey. Burke was given all of the protections to which he was entitled. A revocation hearing, unlike a guilty plea, is not a stage of a criminal proceeding. The protections pursuant to Boykin v. Alabama, 395 U.S. 238, 89 S. Ct. 1709, 23 L. Ed. 2d 274 (1969) or Miranda v. Arizona, 384 U.S. 436, 86 S. Ct. 1602, 16 L. Ed. 2d 694 (1966) are not required. Burke has not claimed that the court did not afford him the protections as outlined in Gagnon and Morrissey, only that the court did not advise him that he could waive his constitutional rights. There was no requirement for the court to do so and, therefore, no due process violation.
In the present action, Burke had written notice of the grounds when the motion to revoke was filed. At the hearing, no witnesses were called, although there is every indication from the record that he could have chosen to call witnesses had he been so inclined. There is no indication that the trial judge was unfair or impartial, and he set forth on the record that he was revoking Burke's probation because he had failed to check in with his probation officer. Thus, we find the trial court did not abuse its discretion in this case. We thus affirm the decision of the trial court to revoke Burke's probation.
ALL CONCUR.
NOTES
[1] Senior Judge Sheila R. Isaac sitting as Special Judge by assignment of the Chief Justice pursuant to Section 110(5)(b) of the Kentucky Constitution and Kentucky Revised Statutes (KRS) 21.580.
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85 So.3d 1160 (2012)
Miakkar BROWN, Appellant,
v.
STATE of Florida, Appellee.
No. 4D10-1566.
District Court of Appeal of Florida, Fourth District.
April 11, 2012.
*1161 Antony P. Ryan, Regional Counsel, and Nancy Jack, Assistant Regional Counsel, Office of Criminal Conflict and Civil Regional Counsel, West Palm Beach, for appellant.
Pamela Jo Bondi, Attorney General, Tallahassee, and Joseph A. Tringali, Assistant Attorney General, West Palm Beach, for appellee.
WARNER, J.
Appellant, convicted of burglary and grand theft, challenges his conviction for grand theft. He claims that the evidence was insufficient to prove that he was in possession of the stolen items, and nor, he argues, did the state identify specific items of jewelry or their values. As to the latter issue, the matter was not preserved for appeal. As to the former, we conclude that the evidence was sufficient to sustain the conviction. We thus affirm.
At the non-jury trial, victim Richard Trask testified that at the time of the burglary, he and his wife lived in a ground floor unit at a condominium in Palm Beach Gardens. They were in the process of moving and had boxes in the unit, but on the morning of the burglary everything was neat and orderly when they both left to feed their horse. No jewelry was out and the door was locked when they left.
When they returned about forty-five minutes later, there was an unfamiliar car backed into one of the parking spots right next to their unit, which Mr. Trask noticed because he knew his neighbors' cars. Mr. Trask testified that as he was coming around the corner toward the front door to his unit, he "saw the front door opening and ... saw the criminal coming out [the] front door." He did not recognize the person but was able to describe his physical features and that he was wearing "very distinct bright yellow T-shirt with the number 85" on the back of it. Mr. Trask identified appellant as the man leaving his house.
Mr. Trask was about ten to fifteen feet away from the door at that point. Mr. *1162 Trask yelled "hey" to the man as he left, and the man turned around and made an obscene gesture. Mr. Trask was able to see his face at that point and stated that "[h]e looked like he possibly was carrying something," since "[h]e had his arms together" tight against his body. Trask, however, did not see any specific item in his hands. Appellant then fled around the side of the building.
Trask started to chase appellant but then returned to the condominium where his wife was calling 911. They discovered that their place had been ransacked with drawers opened and their belongings thrown around. Trask then jumped in his car to chase appellant. He saw appellant running along a canal which ran alongside of the condominium complex. Trask lost visual contact with him and returned to the condominium. Later, the couple met with Palm Beach Gardens Police Department officers, who had apprehended a suspect about a quarter mile from the condo building very shortly thereafter. Mr. Trask was able to identify him immediately.
After he returned to his unit, Trask observed pry marks on the front door, and some of the wood was broken. Both noted that Mrs. Trask's jewelry box was upside down on the bed. All of her heirloom jewelry from her grandmother plus her wedding ring were gone. These included rings, necklaces, and bracelets all appraised at approximately $18,000. The box had been in its place with all the jewelry inside when they left that morning. In addition $500 in cash was missing from the bedroom. They never recovered any of the jewelry or the cash.
Two officers testified and described their pursuit and apprehension of appellant, as well as the Trasks' positive and immediate identification of him. They also inspected the Trasks' unit and took pictures, which were admitted into evidence.
At the close of the state's case, defense counsel moved for judgment of acquittal, arguing that the state had not shown that appellant was ever in possession of any stolen property. He also contended that the state had proved nothing more than the appellant's proximity to the unit. The court denied the motion.
Appellant testified in his defense. At the time of the incident, he was employed by an escort agency, which required him to wait for the girls outside the residence in which they were on call. He was at the Trasks' condominium building that day for that purpose. When he saw Mr. Trask, he walked away, because he was smoking marijuana while waiting. He said he was standing by their door and never entered the apartment; he denied taking anything from the apartment. Appellant claimed that he did not tell the officers about his job because "it's like an undercover prostitution thing."
The trial court found appellant guilty of both burglary and grand theft. It sentenced him to fifteen years for the burglary as a prison releasee reoffender and five years for the grand theft, consecutive to each other and to any other term that appellant was currently serving from any other convictions.
He appealed his convictions, and this court affirmed. Brown v. State, 993 So.2d 534 (Fla. 4th DCA 2008). He then filed a petition alleging ineffective assistance of appellate counsel, pursuant to rule 9.141(c), Florida Rules of Appellate Procedure, alleging four grounds. This court granted appellant's petition in part, limiting the issue on appeal to whether the trial court erred in denying the motion for judgment of acquittal on the charge of grand theft.
This court reviews de novo the sufficiency of evidence to support a verdict. *1163 Valentin v. State, 974 So.2d 629, 630 (Fla. 4th DCA 2008). In a circumstantial evidence case, "[a]lthough the state is not required to rebut every variation of events which may be inferred from the evidence, it is required to present competent, substantial evidence which is inconsistent with the defendant's theory of events." Lesane v. State, 895 So.2d 1231, 1233 (Fla. 4th DCA 2005) (citing State v. Law, 559 So.2d 187, 189 (Fla.1989)).
To prove the crime of theft, the state was required to prove that appellant knowingly obtained or used, or endeavored to obtain or use, the Trasks' property with intent to permanently or temporarily deprive the Trasks of its use. § 812.014(1)(a), Fla. Stat. (2004). Appellant argues that the state proved only his presence at the condominium, and "mere presence at the scene of the crime [is] insufficient to establish participation in the offense." Garcia v. State, 899 So.2d 447, 450 (Fla. 4th DCA 2005). There was no direct evidence that he possessed any property of the Trasks, which in this case would be the jewelry and the cash.
The state's case, however, rested on more than "mere presence" at the scene. Mr. Trask observed appellant exiting the condominium, from which the Trasks had been absent for only forty-five minutes. Appellant was a stranger. Mr. Trask believed that appellant appeared to be holding something, although he couldn't identify anything specific. However, when the Trasks entered their condominium, they found it ransacked and the jewelry box turned over with all of the valuable items and the cash gone. Those items had been there when the Trasks left their unit. Pry marks on the front door evidenced a forced entry. Equally important, appellant fled the scene, and flight is evidence of consciousness of guilt. Straight v. State, 397 So.2d 903, 908 (Fla.1981).
Appellant's reasonable hypothesis of innocence to which he testified was that he was not in the condominium but simply at the complex waiting for an escort who was with a client. His story, however, was directly contradicted by Mr. Trask who definitively testified that he observed appellant exiting his apartment. Therefore, the state presented evidence inconsistent with appellant's reasonable hypothesis. Law, 559 So.2d at 189. As there was sufficient evidence to support the grand theft charge, the court did not err in denying the motion for judgment of acquittal, either at the close of the state's case or the close of all the evidence.
Appellant primarily relies on Jenkins v. State, 342 So.2d 1097 (Fla. 1st DCA 1977), Broner v. State, 559 So.2d 745 (Fla. 2d DCA 1990), and S.R.W. v. State, 725 So.2d 1140 (Fla. 2d DCA 1998), to support his position that the evidence was insufficient to sustain his conviction. Although in each case the appellate court found the evidence insufficient to support a conviction for grand theft, we find these cases distinguishable. In Jenkins, 342 So.2d at 1097, the defendant was invited into the victim's residence. When the victim left the room for a few moments and returned, Jenkins was gone and an envelope containing the victim's social security check was missing. In Broner, 559 So.2d at 746, the defendant visited his aunt's home. The aunt went upstairs for a period of time. When she returned, Broner was gone, as was her videocassette player. A witness saw Broner leave the residence without anything in his hands. One would expect that someone would notice an item as large as a videocassette player had Broner taken it. In S.R.W., 725 So.2d at 1140, a pager was found to be missing when S.R.W. was in the home of her friend. S.R.W. helped her friend look for the pager but it was never found. In each of these cases, and in *1164 contrast to the facts of this case, the defendant was either a friend or relative invited into the home. After the defendant left, an item was found to be missing. In none of these cases was there evidence of forced entry, burglary, ransacking of the home, or flight.
We also distinguish M.E.R. v. State, 993 So.2d 1145 (Fla. 2d DCA 2008), which was not cited by the parties but is similar to the foregoing cases. There, a witness saw M.E.R. hanging around an apartment building where the victimized family lived. The family left around 2:00 p.m., and the witness saw M.E.R., who was a former boyfriend of the daughter in the family, enter the apartment. He exited later with his shirt off and wrapped under his arm. The witness could not tell if there was anything in the shirt. Several hours later the family returned home and the mother discovered that three pairs of her shoes and various electronic games, a Play Station, clothing, and a cell phone were missing. M.E.R. had been seen hanging out in the apartment breezeway with several other youths. The court held that the evidence was insufficient to convict M.E.R. of grand theft, because he had not been seen with any of the stolen items, and any of the other children with him could have entered the apartment and taken the items. The state charged M.E.R. with the theft only of the shoes and the Play Station. As in Broner, these items were of a size that would have been noticed by the witness who saw M.E.R. exit the apartment. In M.E.R., as in the other cases, there was no forcible entry, no ransacking of the apartment, and no flight.
Appellant also claims that the state failed to offer sufficient proof of the value of the items stolen. This issue has not been preserved for appeal. Not only was no objection made to the testimony of valuation of the items stolen, but defense counsel did not move for a judgment of acquittal on this ground. "To preserve an argument for appeal, it must be asserted as the legal ground for the objection, exception, or motion below." Woods v. State, 733 So.2d 980, 984 (Fla.1999). See also Fla. R.Crim. P. 3.380(b) (motion for judgment of acquittal must fully set forth the grounds on which it is based).
For the foregoing reasons, we affirm the grand theft conviction.
STEVENSON and CONNER, JJ., concur.
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81 So. 3d 428 (2012)
STACY
v.
DEUTSCHE BANK NAT. TRUST CO.
No. 2D11-6466.
District Court of Appeal of Florida, Second District.
February 20, 2012.
DECISION WITHOUT PUBLISHED OPINION
Appeal dismissed.
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7 F. Supp. 1 (1934)
In re MISSOURI PAC. R. CO.
No. 6935.
District Court, E. D. Missouri, E. D.
June 20, 1934.
*2 Alexander & Green and James H. McIntosh, all of New York City, Fordyce, White, Mayne & Williams, of St. Louis, Mo., for Bankers' Trust and W. H. Bixby, trustees of St. Louis, I. M. & S. Ry. Co.
Edward J. White, of St. Louis, Mo., for trustees.
Davis, Polk, Wardwell, Gardiner & Reed, of New York City, Allen C. Orrick, of St. Louis, Mo., and Edwin S. Sunderland and Leighton H. Coleman, both of New York City, for trustees of First & Refunding Mortgage.
Green, Henry & Remmers and Max O'Rell Truitt, all of St. Louis, Mo., Cassius M. Clay, and Stanley F. Reed, both of Washington, D. C., for Reconstruction Finance Corporation.
Orris Bennett, Sp. Atty., Bureau of Internal Revenue, and Angus D. MacLean, Asst. Sol. Gen., both of Washington, D. C., and Harry C. Blanton, U. S. Dist. Atty., of Sikeston, Mo.
FARIS, District Judge.
The sole question presented here is the validity, vel non, of what I shall call, for brevity and convenience, the gold clause of the bonds secured by the mortgage in which interveners are trustees. This clause provides that these bonds shall be payable in "gold coin of the United States of the present standard of weight and fineness." The word "present," refers to the date of issue of the bonds, which was May 1, 1903.
Interveners contend, and their numerous adversaries, including the trustees of the debtor, deny, that Public Resolution 10, now section 463, title 31, U. S. C. (31 USCA § 463) passed by the Congress on June 5, 1933, is invalid, for that it offends against the Federal Constitution.
No formal pleading points out the part or clause of the organic law, which stand, as a prohibiting monitor to oppose the validity of the above resolution. But the trend of the argument convinces that the "due process" provision of the Fifth Amendment must have been held in mind by counsel for interveners.
So far as is presently pertinent here, section 463, supra, reads thus:
"Every provision contained in or made with respect to any obligation which purports to give the obligee a right to require payment in gold or a particular kind of coin or currency, or in an amount in money of the United States measured thereby, is declared to be against public policy; and no such provision shall be contained in or made with respect to any obligation hereafter incurred. Every obligation, heretofore or hereafter incurred, whether or not any such provision is contained therein or made with respect thereto, shall be discharged upon payment, dollar for dollar, in any coin or currency which at the time of payment is legal tender for public and private debts."
A few words of almost ancient history may add faint light to the case. Prior to the Civil War, it was a common custom to write into obligations for the payment of money, even into promissory notes, the provision that the debt should be payable in specie. The reason for this precaution was that much of the money then in circulation consisted of paper promises to pay, issued by so-called state banks. See Bronson v. Rodes, 7 Wall. 229, 19 L. Ed. 141. These were notorious for the ease with which they failed. It is not surprising, then, that the payee in an obligation should have endeavored to guard against payment in possibly worthless paper money.
In the fifteen-year period following the Civil War, and until the so-called resumption of specie payment in 1879, provisos for the payment in specie became fewer. There were probably two reasons for this: First, the enaction by the Congress of the Legal Tender Acts, and the decision of the Supreme Court in the Legal Tender Cases, 12 Wall. 457, 20 L. Ed. 287; and, second, because few men were so simple as to contract for payment in gold or specie, which reached *3 at one time in the fifteen-year period a premium, over the greenbacks of the era, of $2.85, or a little more. That is, it took $2.85 in the so-called legal tender money or "greenbacks" to buy a single dollar in gold.
Again, after gold and silver had become either directly or indirectly the monetary backing of well-nigh all of the paper money in circulation, and due it may be to that "prophetic discernment" mentioned by Mr. Justice Hughes (now Chief Justice) in the Schubert Case, 224 U.S. 603, 32 S. Ct. 589, 56 L. Ed. 911, it became and has continued to be the custom to write into bonds a gold clause of the sort here vexing the court. How much of this custom is due to mere conservatism of the lawyers who prepare these obligations and who are prone to walk in the tracks of those who passed that way before them, it is fruitless to inquire.
As forecast, there was, when the custom latterly began, no particular advantage derivable from the insertion of such a proviso. Ordinarily, gold bore no premium; for so-called gold notes passed and repassed on a parity with other paper money including the outstanding residue of greenbacks, although these gold notes, till recently (see Act of March 9, 1933 [12 USCA § 201 et seq.]; Gold Reserve Act January 30, 1934 [31 USCA §§ 315b, 408a, 408b, 441-446, 821, 821a]) could be redeemed on demand for coined gold, dollar for dollar. But this situation did not at all dam the ever-increasing flood of obligations, made payable on their faces in gold. This perhaps in many cases, at least, because the term "payable in gold coin of the United States of the present standard of weight and fineness" is a sonorous and mouth-filling phrase and indubitably it adds a dignity and a glamour of richness to all bonds, particularly to those which the maker had not and never had the remotest intention of ever paying in anything. There is another and political theory, but which, being political, has no place in a judicial opinion. But whether the origin of the custom was fortuitous merely, or considered and sinister, is after all immaterial.
It is of course conceded that the serious question here cannot thus be lightly dismissed, however lightly history may indicate it probably came into the case. For it involves, even though it may have arisen as a mere gesture, a most vital and serious question of constitutional law.
If the above-quoted language of the Congress be valid, then on its face it clearly relieves the debtor from compliance with the provisions of the gold clause of the bonds, and the question is solved; on the other hand, if the Congress had no power under the Constitution to pass Public Resolution 10, the debtor is not relieved from compliance, and the question is largely solved.
Every man of passing intelligence, at all in touch with business, knows that the sum total of bonds and notes in this nation alone, which are "payable in gold coin of the United States of the present standard of weight and fineness," exceeds by many billions the sum of this whole world's existing mined gold. These huge sums are variously estimated at from $90,000,000,000 to $125,000,000,000 of outstanding gold obligations, and $11,000,000,000 of available mined gold, but available only in the sense that it exists in the form of coin or bullion. These facts courts, presumably no less intelligent than mankind in common, may judicially notice. They cannot, of course, notice the exact sum of these extant gold obligations, nor is it important here. All that is relevant are the ultimate facts. When such an ultimate fact, impossible of proof, but known by all men, becomes relevant, especially arguendo as here, a court may take judicial notice of it; because in such case, every man knows it, but no man can prove it accurately, since accurate proof is humanly impossible.
It is, of course, impossible in fact, and it has now become impossible in law, to pay this huge sum of what I may call gold debts out of the world's comparatively meager supply of gold. Learned counsel for the interveners appreciate this impossibility; so they urge upon the court the alternative, not expressly stipulated in the bond, that payment must be made in current paper money, which has the present gold value of the sum agreed to be paid; in short and in effect that the debtor shall be required to pay for each dollar, about 70 cents more in paper money than it agreed to pay in gold.
While the disastrous economic effect of the enforcement of a contract standing alone rarely, if ever, affords a sufficient legal reason against enforcement, it may yet be considered an urgent reason why enforcement should not be decreed, if it is legally possible to avoid it. Germane, at least, if not analogous, is the settled rule in cases for specific performance. So, briefly, let the possible and probable economical effects of the adoption of interveners' contention be considered. It will well-nigh double the sum total of the debts outstanding and now saddled upon transportation and industry, upon states and *4 municipal corporations, and even upon many individuals. For hardly can it be doubted that these, lately staggering toward bankruptcy, under the bare letter of their debts, cannot carry this doubled load and survive. It is scarcely possible that at any time since the so-called depression of 1929 the total fair value of all of the actual wealth in this nation has exceeded the sum of $260,000,000,000. If to the sum of all debts, in whatever medium of exchange payable, there shall be added some $80,000,000,000 more, perforce the enforcement of the alleged alternative of the gold clause, then this country may well be bankrupt, in the sense, at least, that the total sum of its debts exceeds the total fair value of all of its assets. I refer, of course, to debts, both public and private. Concededly, the picture is overdrawn, because, in practice, payment of these vast sums, agreed to be paid in gold, will not contemporaneously be demanded or exacted. But the argument yet discloses a theoretical and perhaps possible situation, which is almost appalling.
So it is obvious, I think, that the upholding of these so-called gold clause contracts would vastly hurt, if not destroy, business, and shake, if not overturn, the entire financial structure of this country. It would, I repeat, bankrupt well-nigh every railroad, every municipality, every road district, or similar instrumentality of state government and wellnigh every state in the Union. And since, in the financial crash of these debtor classes, the creditor classes, now urging the letter of their bonds, might well themselves go down in the common ruin, this situation as already suggested should be avoided, if it is legally possible to do so, within constitutional limits. Specifically, what will happen in the case at bar? Can it be doubted that if the debtor here shall be compelled to pay $743,000,000, upon its mortgage indebtedness of $438,000,000, it will be utterly bankrupted and financially destroyed; that its general creditors and stockholders will get nothing, and even its bondholders will be paid only a part of their inflated debt?
I think it is fairly clear that validity may be decreed, without at all impinging upon the Constitution, and without stating a single novel proposition, but merely by following old rules, many times announced either concretely, or in principle, by the Supreme Court of the United States. And in doing so I shall not find it necessary at all to rely upon that well-settled canon of construction which admonishes that a statute may not be held constitutionally invalid till the court is convinced of invalidity beyond a doubt.
The legal propositions which seem to me to be decisive of the question mooted may be stated in questions. These questions are: (1) In whom, or in what entity in this nation, is the power lodged to say what shall be money, or the medium of exchange, for the payment of public and private debts? (2) If the answer be the Congress, then, has any citizen the constitutional right to so contract as to obstruct or nullify the above power of the Congress? (3) Is not every citizen to be deemed to hold in contemplation, when he makes a contract for the payment of money, the power of the Congress to alter and change the medium of exchange or money of the country, if such power be in the Congress? (4) Can a law or resolution of the Congress be declared invalid, when it does nothing, except to carry out a constitutional power of the Congress? (5) Have subsequent valid changes in the laws pertaining to gold coin rendered strict performance impossible in law? This fourth question is obviously a mere corollary.
The answer to the first premise in the chain of argument and proof, that these gold clause contracts are not enforceable to the ultimate letter of their language and alleged implications, is that the power to say what is money or the medium of exchange under the Constitution is vested in the Congress. Const. art. 1, § 8, cl. 5. Not only does the Constitution itself in full effect, say so; but, had it not said so, the power would yet rest in the Congress, perforce a universal right inherent in all sovereign nations. Lately, in an opinion in the case of Kercheval v. Ross, 7 F. Supp. 355, I had occasion to say this:
"Dissociated from international exigencies, or, more accurately, from the necessities of commerce between nations, and inhibitions, if any, found in the organic law, every sovereignty has the inherent power to decree anything to be money, or a medium of exchange which it may desire; as witness, the iron coins of Sparta, * * * and other historical instances of the use as money of practically worthless substances, which are too numerous to mention.
"It will be observed that the Federal Constitution nowhere categorically limits money to gold and silver, or even to metallic substances. It does say that `the Congress shall have power * * * to coin money (and) regulate the value thereof.' If it be argued, that the Congress by the use of the transitive verb `coin,' in the language quoted, intended that the money of the United States should be limited only to such metals as are capable of *5 being coined or minted, this argument is met by the decision of the Supreme Court of the United States in Knox v. Lee and Parker v. Davis, 12 Wall. 457, 20 L. Ed. 287, the so-called Legal Tender Cases. But such an argument is also met by the very language which concludes the sentence quoted; for, obviously, if the Congress has power to regulate the value of the coined or minted money of the United States, it may, so far as the Constitution is concerned, fix its value, or its so-called precious metal content, so low that, when judged by the standards of other nations, its value will be less than that of the paper on which so-called fiat money is printed."
Again, in this case of Kercheval v. Ross, discussing the physical absence of any constitutional prohibition against the passage by the Congress of an act which violates the obligation of a contract, I said this:
"There is no express constitutional inhibition anywhere to be found which forbids the Congress from passing an act which violates the obligation of a pre-existing contract. Not only will the Federal Constitution be read in vain to find such a provision, but the Supreme Court of the United States has repeatedly so ruled. Hepburn v. Griswold, 8 Wall. loc. cit. 623, 19 L. Ed. 513; Mitchell v. Clark, 110 U. S. loc. cit. 643, 4 S. Ct. 170, 312, 28 L. Ed. 279; Legal Tender Cases, 12 Wall. 457, 20 L. Ed. 287; New York v. United States, 257 U. S. loc. cit. 601, 42 S. Ct. 239, 66 L. Ed. 385. If occasionally the Supreme Court has seemed to find such inhibition, it has deduced it from the so-called spirit of the Constitution (See Hepburn Case, supra,) or it has allocated it (many times, no doubt, correctly) among the numerous offspring of that fertile and elastic provision touching `due process of law,' found in the Fifth Amendment. It is not, I repeat, to be found in any of the language of either the Constitution, or of the several amendments thereto."
Again, in this same case of Kercheval v. Ross, without at all intimating criticism of the Supreme Court, as is shown by the exception I made above, I said:
"I have never been able to see wherein the unhampered exercise by the Congress of the power to declare what shall be the medium of exchange at all impinges upon `due process of law,' when the constituent elements of that term are considered. (Duncan v. Missouri, 152 U. S. loc. cit. 382, 14 S. Ct. 570, 38 L. Ed. 485; State v. Guerringer, 265 Mo. 409, 178 S.W. 65). For there is the very highest judicial authority for the statement that:
"`Whatever power there is over the currency is vested in Congress. If the power to declare what is money is not in Congress, it is annihilated' (Legal Tender Cases, 12 Wall. loc. cit. 545, 20 L. Ed. 287)."
Also, in the Kercheval Case, in order arguendo to prove the thesis that the power to say what shall be money is inherent in a sovereign, I took occasion to say, this:
"The express power granted to the Congress `to coin money (and) regulate the value thereof,' was necessary only in an historical sense, and for the sake of clarity; this, for the reason that each of the original thirteen sovereign States had, in virtue of their sovereignties, the inherent right to say what should be the medium of exchange, or money, within their several jurisdiction. But for this fact, and the further fact that a voluntary union of independent states to form a single sovereign entity was then unique and unusual in this world, it would not have been necessary to confer express power on the Congress to deal with money. But the States each had this power, and it was deemed wise to take it from them. Therefore, induced, evidently, by the settled theory that the Federal Constitution is a grant and not a limitation of power, it was deemed wise to express the power, and this was done. But, I repeat, this was not necessary. The United States having, in effect, taken the power from the States would have inherited it and possessed it, by virtue of its own sovereignty, even if it had not been mentioned in the organic law. * * *
"So, I am of opinion that the United States has, through the Congress, the constitutional power to prescribe by statute what is legal tender for the payment of both public and private debts, either subsequent or antecedent in their accrual to the passage of the law. * * * Moreover, by the Act of June 28, 1834 [4 Stat. 699] it did in principle what is tantamount thereto, that is to say, by the Act last above-referred to, it decreased the gold content of the gold coins of the United States, which, of course, indirectly, if not directly, impaired the obligations of existing contracts."
"In the absence of any provision in the Federal Constitution forbidding the passage of a statute which violates the obligation of a contract, and in the light of the ruling of the Supreme Court in the Legal Tender Cases, supra, it seems impossible to escape the conclusion that the Congress possesses the *6 power to say what shall be the medium of exchange, even though the exercise of the power may indirectly result in the impairment of the obligation of existing contracts."
But the truth of this basic premise, in no way rests on my humble views, or on the rather plain language of a construable organic law; it rests on the decisions of the highest court in the land. See Legal Tender Cases, 12 Wall. loc. cit. 543, 20 L. Ed. 287; Veazie Bank v. Fenno, 8 Wall. 533, 19 L. Ed. 482.
From the above statement of the location of this power, the Supreme Court has never receded. Indeed, the truth of it is rendered so plain and simple, both by history and by logic, that it is almost amazing that it ever became necessary for the Supreme Court to point out the lodgment of the power.
If the premise laid down in the first question be proven, and none I feel sure will be hardy enough to deny it, I come in the argument, to the second premise, embodied in the second question, supra, which is:
Can any citizen (and I include, of course, corporations) be permitted to hamper, obstruct, forestall, or hamstring the Congress in the exercise of its power to declare what shall be money? It seems to me that the simple statement of the question furnishes its own answer. Again, in addition to the obvious answer dictated by the plainest and simplest logic and the reason of the thing, there is ample authority furnished by the numerous decisions of the Supreme Court of the United States, in cases on all fours in principle.
In my opinion, under many rulings of the Supreme Court of the United States, there can be no doubt that contracts, good when made, may become bad and incapable of enforcement, by reason of the passage by the Congress, acting within its constitutional limits, of subsequent prohibitions against the enforcement of such contracts. As witness, numerous cases decided by the Supreme Court of the United States which actually, or in effect, abrogated prior but perfectly good contracts, when such contracts were subsequently banned or forbidden by the Interstate Commerce Act (49 USCA § 1 et seq.). Just a few of these may be cited. See Louisville & Nashville R. Co. v. Mottley, 219 U.S. 467, 31 S. Ct. 265, 55 L. Ed. 297, 34 L. R. A. (N. S.) 671; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 20 S. Ct. 96, 44 L. Ed. 136; Philadelphia, B. & W. R. Co. v. Schubert, 224 U.S. 603, 32 S. Ct. 589, 56 L. Ed. 911; New York v. United States, 257 U.S. 591, 42 S. Ct. 239, 66 L. Ed. 385.
In the Case of Schubert, supra, the Supreme Court said, at page 613 of 224 U. S., 32 S. Ct. 589, 592, this:
"To subordinate the exercise of the Federal authority to the continuing operation of previous contracts would be to place, to this extent, the regulation of interstate commerce in the hands of private individuals, and to withdraw from the control of Congress so much of the field as they might choose, by prophetic discernment to bring within the range of their agreements. The Constitution recognizes no such limitation. It is of the essence of the delegated power of regulation that, within its sphere, Congress should be able to establish uniform rules, immediately obligatory, which as to future action, should transcend all inconsistent provisions. Prior arrangements were necessarily subject to this paramount authority." (Italics are mine.)
Before the above-quoted pronouncement, the Supreme Court had said, upon a question, in principle wholly germane, this:
"Long before the above cases were decided it was said in Legal Tender Cases [Knox v. Lee], 12 Wall. 457, 550, 551, 20 L. Ed. 287, 311, 312; that `as, in a state of civil society, property of a citizen or subject is ownership, subject to the lawful demands of the sovereign, so contracts must be understood as made in reference to the possible exercise of the rightful authority of the government, and no obligation of a contract can extend to the defeat of legitimate government authority.'
"These principles control the decision of the present question. The agreement between the railroad company and the Mottleys must necessarily be regarded as having been made subject to the possibility that, at some future time, Congress might so exert its whole constitutional power in regulating interstate commerce as to render that agreement unenforceable, or to impair its value. That the exercise of such power may be hampered or restricted to any extent by contracts previously made between individuals or corporations is inconceivable. The framers of the Constitution never intended any such state of things to exist." Louisville & Nashville R. Co. v. Mottley, 219 U.S. 467, 31 S. Ct. 265, 270, 55 L. Ed. 297, 34 L. R. A. (N. S.) 671.
In principle, I am wholly unable to distinguish the question before the Supreme Court, when it spoke as above quoted, from that of the question now confronting me in the case at bar. If I may immodestly venture *7 to be dogmatic, I assert the impossibility of distinguishing these questions. The powers of the Congress within the field of permissible legislation cannot be obstructed or nullified, by what Mr. Justice Hughes (now Chief Justice) characterized in the Schubert Case, supra, as "prophetic discernment." Any other and different conclusion, would be well-nigh abhorrent to both logic and common sense. For, I repeat, one who makes a contract, in a matter within the field of permissive congressional legislation, must be deemed to do so with the knowledge that a subsequent act of the Congress may render void his solemn agreement. This rule and principle, which is not capable of distinction here, runs through the very warp and woof of the Federal Constitution. It has been invoked, and it has served to revoke and abrogate an antecedent contract valid when made, between a lawyer and his client (Calhoun v. Massie, 253 U.S. 170, 40 S. Ct. 474, 64 L. Ed. 843); between a railroad and the holder of a free pass, issued antecedently and upon a good consideration (Louisville & Nashville R. Co. v. Mottley, supra); between an employee and a railway, when, sued under the Employers' Liability Act (45 US CA §§ 51-59), the railway set up an antecedent contract barring the beneficiary in a relief fund from maintaining an action for damages for personal injuries (Philadelphia B. & W. R. Co. v. Schubert, supra); between the United States and a bridge company, which constructed a bridge in navigable waters under state legislative sanction, valid when made (Union Bridge Co. v. United States, 209 U.S. 364, 27 S. Ct. 367, 51 L. Ed. 523; Monongahela Bridge Co. v. United States, 216 U.S. 177, 30 S. Ct. 356, 54 L. Ed. 435). It is not alone, I repeat, in the fields of interstate commerce, navigable waters, and lawyers' contracts for a fee for the recovery of money and pensions from the government, that the right of the individual to forestall and obstruct the Congress by an antecedent contract is denied. The same principle has repeatedly been applied by the Supreme Court in matters of riparian rights (see, Scranton v. Wheeler, 179 U.S. 141, 21 S. Ct. 48, 45 L. Ed. 126; Greenleaf, etc., Co. v. Garrison, 237 U.S. 251, 35 S. Ct. 551, 59 L. Ed. 939; Willink v. United States, 240 U.S. 572, 36 S. Ct. 422, 60 L. Ed. 808; Cubbins v. Mississippi, 241 U.S. 351, 36 S. Ct. 671, 60 L. Ed. 1041; Jackson v. United States, 230 U.S. 1, 33 S. Ct. 1011, 57 L. Ed. 1363), and under the several Bankrupt Acts (see Hanover Nat. Bank v. Moyses, 186 U.S. 187, 22 S. Ct. 857, 46 L. Ed. 1113; Canada Southern Ry. Co. v. Gebhard, 107 U.S. 527, 3 S. Ct. 363, 27 L. Ed. 1020; In re Klein, Fed. Cas. No. 7865; Sturges v. Crowninshield, 4 Wheat. 122, 4 L. Ed. 529).
It is difficult, if not impossible, to conceive of an act of the Congress which more clearly destroys in many phases, the obligations of antecedent contracts, than does a Bankruptcy Act. The creditor is presently forbidden to sue till the lapse of a stated period (section 29, title 11, U. S. C., section 205, subd. (l) title 11, U. S. C. [11 USCA § 29 and § 205 (l)]), and absolutely forbidden to sue after the discharge of the bankrupt. He must take but a part of his debt, and he must accept a composition forced on him by the votes and acts of others, when such composition and the taking of but a part are in the very teeth of his contract. Yet, because the Constitution relegated this subject to future congressional action, Bankruptcy Acts, however destructive to existing contractual rights, have been up to now uniformly upheld.
But a little diligence will unearth many other cases, which fully uphold the basic principle above announced. As forecast, the cases I cite above uphold the principle, that when a person makes a contract involving a subject-matter within the ambit of the Congress' constitutional field of permissive legislation, he does so at the peril that the Congress may so change or modify the law as to render his contract void or unenforceable.
The above considerations and the cases cited prove, I think conclusively, the truth and correctness of the third question. Questions (2) and (3) are wholly germane, and the answer to one furnishes the answer to the other. It has long been necessary, in order at all to enforce the law, to indulge the conclusive presumption that every citizen knows the law. Actually, of course, the presumption is a fiction, but it is so necessary a fiction that it is settled. So, if it be true, that the power to say what shall be money, be lodged in the Congress, then when a citizen makes a contract for the payment of his debt in gold, he must be deemed to have saddled himself with the knowledge, and to have had in contemplation the possibility, that his contract may become unenforceable, through the exercise by the Congress of the power to declare something other than gold to be money. But I am not called on here to further belabor this well-settled doctrine, or to cite any of that multitude of cases, which, without a dissenting voice uphold it; because *8 counsel for interveners concede in their briefs that "all the parties to these contracts are conclusively presumed to have known the law."
Coming to the proposition, or premise (4), which, as said is a mere corollary: Can a law, or resolution of the Congress be deemed, or held to be invalid, when it does nothing, except to carry out a power conferred on it, both by the Constitution and by virtue of the inherent sovereign right of the entity, for which the Congress is empowered to legislate. Again the question answers itself, even if the Supreme Court had not already repeatedly answered it. That answer is so plain and obvious as not to call for either exposition or the citation of authority.
In addition to the language already quoted from Public Resolution 10, the Congress saw fit to declare, in a preamble to this resolution, a policy of the Congress and to characterize gold clause contracts as being designed and calculated to "obstruct the power of the Congress to regulate the value of the money of the United States and are inconsistent with the declared policy of the Congress to maintain at all times the equal power of every dollar, coined or issued by the United States, in the market and in the payment of debts."
No attack is made here by counsel for interveners, for that the Congress has no power to declare a continuing and ever-binding policy; nor is that question at all relevant or involved here. It is enough that it has been declared to meet what the Congress deemed a present and pressing emergency. But learned counsel for interveners, in both their oral and printed arguments do insist most ably and strenuously that no public policy is at all involved in a matter of private contract between a corporation and individual bondholders as here.
I submit with deference that they have in this assumption fallen into grave error, in my opinion. Their conclusions upon the point are tantamount to the assertion that any two members of our national compact bottomed as it is, on representative government, may flout and disobey both the organic law and the mandate of their government, and arrogate to themselves a power which, as I labor to show, has been solemnly committed to the Congress alone. If this may be done by two contracting parties in any given contract, I see no reason why it may not be done in every contract; with at least the theoretical result to turn business and commerce back to ancient barter, or swapping of commodities. Commerce between the states, over which the Congress certainly has power, would be hampered or destroyed, and the only debts left payable in money would be debts due to and from the government itself. Surely, the power in the Congress to say what shall be money is not to be restricted to a medium of exchange, which is to be binding only when the government pays or is paid. No such narrow meaning is to be found in the language of the Supreme Court when it declared that "if the power to declare what is money, is not in the Congress, the power is annihilated."
Concededly, neither national policy, nor the Congress, is at all concerned ordinarily in the terms of any moral private contract, so long as that contract does not infringe upon, nullify, or circumvent a law of the Congress which it had the constitutional power to pass. It is a settled rule of law that a thing which may not be done directly, may not lawfully be done indirectly. Obviously, no two persons can by a private contract directly repeal a law passed by the Congress, and so by the same token they cannot do so by indirection.
But when all is said, the language of the preamble above quoted has little to do with this case. For the Congress used it as mere argument for the action it purposed taking, so I, in effect, have used it, in an effort lawfully to uphold, what the Congress did. But if the point were vital, it would I think lose all force, in view of the power of the Congress to forbid by suitable statutes the use as money of anything not put out under its own authority. See Veazie Bank v. Fenno, 8 Wall. 549, 19 L. Ed. 482; Merchants' National Bank v. United States, 101 U.S. 1, 25 L. Ed. 979; Briscoe v. Kentucky Bank, 11 Pet. 257, 9 L. Ed. 709; Sturges v. Crowninshield, 4 Wheat. 193, 4 L. Ed. 529; Ling Su Fan v. United States, 218 U.S. 302, 31 S. Ct. 21, 54 L. Ed. 1049, 30 L. R. A. (N. S.) 1176.
The policy which troubles here is that deducible from and expressed in the resolution itself. This policy, as forecast, is attacked by interveners by the bold contention that no private contract, whatever its terms and implications, and whatever its effects upon business, commerce, and the nation may be, is any concern of the Congress. Cases no doubt may be found which sustain this general contention in principle, but not in the broadness for which interveners here contend. Existing complexities of life, business, science, *9 and commerce have compelled a broader, saner, and more correct view.
Apposite to this view and illustrative of the concept, the Chief Justice of the United States, speaking for a majority of the Supreme Court, in the late case of Home Building & Loan Ass'n v. Blaisdell, 290 U.S. 398, 54 S. Ct. 231, 241, 78 L. Ed. 413, 88 A. L. R. 1481, said this:
"Where, in earlier days, it was thought that only the concerns of individuals or of classes were involved, and that those of the state itself were touched only remotely, it has later been found that the fundamental interests of the state are directly affected; and that the question is no longer merely that of one party to a contract as against another, but of the use of reasonable means to safeguard the economic structure upon which the good of all depends."
Again, and more recently, both the ordinary rule, and in fair effect, the exceptions to it and the modifications of it, are tersely stated by Mr. Justice Roberts in the case of Nebbia v. New York, 291 U.S. 502, 54 S. Ct. 505, 510, 78 L. Ed. 940, 89 A. L. R. 1469, thus:
"Under our form of government the use of property and the making of contracts are normally matters of private and not of public concern. The general rule is that both shall be free of governmental interference. But neither property rights nor contract rights are absolute; for government cannot exist if the citizen may at will use his property to the detriment of his fellows, or exercise his freedom of contract to work them harm. Equally fundamental with the private right is that of the public to regulate it in the common interest."
There is no subject on which the Congress is permitted to act which is more vital to labor, industry, and commerce than is the question of what shall be money. While, of course, in the business of the world, actual money is used in probably only one-fiftieth of the world's business, checks upon bank credits accounting for the remainder. This proportion is further vastly increased by the fact that banking experience discloses that about one-tenth of the total amount of deposits furnishes a sufficient safeguard. Concededly, the money of the nation is in the final analysis behind these checks and bank credits. So, if the money and credits of a country are permitted to pass into hands which close upon them, the effect upon labor, industry, and commerce are destructively disastrous, and, therefore, the matter of what shall be money is a matter in which the nation, and the Congress which legislates for it, is most vitally concerned.
But as mentioned already, another contention is put forward by those who urge the validity of the gold clause. In that contention, they say, that even if the debt cannot be paid in gold, they are yet entitled to payment in such sum in currency as shall equal the present gold value of the number of dollars involved; in short, in gold, or its equivalent. I think it ought to be sufficient to say of this contention, that it is not "so nominated in the bond." In other words, the contract does not say that if gold is no longer money when pay day comes, then payment shall be made in such money as is current; but on the basis of the amount of current money which a gold dollar will buy. I think the very terms of the contract preclude such a judgment.
The gold clause here vexing is not a promise to pay these bonds in gold as money. It is a promise to pay in gold, not as money, but as a mere commodity; the bulk whereof, or the quantity of gold to be paid, to be equal to the gold content of $1,000 of gold coin of the United States of the standard of weight and fineness as of May 1, 1903. See Gregory v. Morris, 96 U. S. loc. cit. 624, 24 L. Ed. 740; Bronson v. Rodes, 7 Wall. 229, 19 L. Ed. 141; Butler v. Horwitz, 7 Wall. 260, 19 L. Ed. 149. In short, it is a mere agreement of barter, or swapping of commodities. If in 1903 the contract had been that thirty years later the maker would pay to the holder of each bond 100 piculs of Chinese opium, how would the case stand? Since 1903, the Congress, having the power to do so, has forbidden the importation of opium (except under conditions designed to limit its use to medicinal purposes) and made the possession of it, in ordinary hands, a criminal offense. Act May 26, 1922, 42 Stats. 596 (21 USCA § 171 et seq.). Thus, since the contract to pay in piculs of opium has, since the contract was made, become impossible of performance by operation of law, what would be the situation? In law, I assume the contract would be void; in equity, the rights of the maker as well as those of the payee would be considered, and not those, as here insisted, of the payee alone. These equities, involving the alternative of utter destruction of the debtor herein and total losses to its unsecured creditors and stockholders, I have already pointed out. In such situation a court of equity might well say to the payee, that having seen fit to contract for payment not in *10 money, but in a presently unobtainable commodity, the money of payment must be such money as the law provides in ordinary cases, and to be measured in quantity by tale and not by the market price of the opium in 1934. The contention, I repeat, involves writing into the contract language neither expressed nor implied by its actual terms. It is a trite truism to say, that rarely, if ever, is a contract for the payment of a fixed sum of money carried out by the payment in money having the identical so-called purchasing power of the dollar agreed on, as and when agreed on. Between the date of the contract and the day of payment, the dollar will usually, if not always, rise or fall when measured in terms of purchasing power. When regard is had to the precise nature of money, this contention, absent a contractual basis, has but little more to sustain it than would the contention that payment in terms of dollars should be bottomed on the price of wheat. That is to say, if a dollar will, when the contract is made, buy two bushels of wheat, but when payment falls due the same dollar will buy only one bushel of wheat, then instead of the dollar agreed to be paid, $2 shall be exacted. And this, too, when the contract, as here, is silent on the point. Money is merely a medium of convenience through which wealth and labor are measured and moved in business and commerce, and between man and man.
But the contention that, absent as here, the legal and practical possibility of payment in gold coin, their debt must be paid in the equivalent of gold, is that on which interveners mainly and most confidently rely. Concededly, their reliance is bottomed on persuasive and most exalted authority, so far as concerns the bare rule of stare decisis. This cannot be said of any other of their contentions in this case. Upon the point that they are entitled to be paid in current paper money, which according to its present value is the equivalent of the gold dollars of their contract, they not only cite a recent decision of the English House of Lords, and two decisions of the Permanent Court of International Justice, but a line of cases decided by the Supreme Court of the United States, among which as typical are Gregory v. Morris, 96 U.S. 619, 24 L. Ed. 740; Trebilcock v. Wilson, 12 Wall. 687, 20 L. Ed. 460, and Bronson v. Rodes, 7 Wall. 229, 19 L. Ed. 141.
The decisions first above mentioned are merely persuasive, as coming from two great and learned tribunals. But as an inferior court, I am in duty bound to follow the rulings of the Supreme Court, unless it is legally possible to distinguish the case at bar from the facts, the law, and the situation existing, when the Gregory Case, the Trebilcock Case, and the Bronson Case were up for judgment.
Hampered by this bounden duty, there is yet small consolation in the fact that before Bronson v. Rodes, supra, and even after it, and until coerced by the decision of the Supreme Court in Trebilcock v. Wilson, supra, and by the federal supremacy in the matter, therein declared, a majority of the highest courts in the several states of the Union disagreed with the doctrine of Bronson v. Rodes. See note, 84 A. L. R. 1503 et seq.
Moreover, the learned writer of the above note, upon the point whether the question here vexing has been finally and authoritatively settled, says this:
"Although the validity and enforceability of provisions in contracts for payment in gold or cold coin have been sustained by many cases in this country, including a number of decisions by the Federal Supreme Court, the question cannot now apparently be regarded as authoritatively settled because of changes in legislation and in conditions. Both the interpretation and enforceability of the contract may conceivably be affected by these changes."
It may well be and arguendo conceded, that when resort is had for guidance to abstract justice and cold logic, the conclusions reached in each of the cases relied on by interveners are impeccable. But they were the result of the application of what I may call pure natural justice as contradistinguished from that same justice affected and modified by policy, statute, and Constitution. Natural justice is that tenet of philosophy which weighs the rights of mankind through the exercise of the most refined logic and fairness. It is germane, if not identical, with that ideal justice discussed and defined by Plato and Aristotle. But its field of operation must be unhampered by factual impossibility of performance or by restricting statutes, organic laws, or policies of state. So, if such justice shall infringe upon national policy, or the Constitution, or be opposed by a valid statute, it cannot be administered or applied.
This at first glance may seem harsh, but it must be borne in mind that in a republic, laws are made and policies are established by and for the greatest number for the greatest good; by and for the majority and not for the few. The latter may even be harmed *11 in person or property by the enforcement of a statute, which while harming the few yet helps the great majority. Ours is a government by law and not of men. Having adopted a Constitution, which defined the limits of legislative permission, we then delegated to the Congress, elected by the greater number of the people, the duty to represent and speak for all of the people in fixing policies and making laws. Every law deprives a few men of the alleged right to do what they wish to do, but that does not make the law bad, since it merely forbids the few from doing acts which harm the many. So, in fact, I think the harshness of the rule is upon the debtor and not upon the creditor.
Can it be doubted that the Congress had the right to say to those who had made contracts, the effect of which was to forestall and circumvent the Congress itself, that having usurped a power belonging to the Congress, they must give it back, because the exercise of it by a few willful men would vastly harm this country? Again, can there be any doubt that it would do so? It cannot, of course, be doubted that if payment be decreed to be made in the paper money equivalent of gold, the power of the Congress in the premises will be just as effectually thwarted and nullified, as if payment in gold were decreed.
In each of the cases, and classes of cases above mentioned and relied on by interveners, gold was readily obtainable (see Bronson v. Rodes, supra, 7 Wall. loc. cit. 251, 19 L. Ed. 141), nor was the possession of it, at the time and place fixed for payment, forbidden by law. Payment in gold in neither case was forbidden by either policy or statute. Here at bar, payment in gold, and even the possession of enough gold with which to make payment, are forbidden to both payee and maker, and gold is wholly unobtainable. See Gold Reserve Act, January 30, 1934, 48 Stat. 340 (31 USCA §§ 315b, 443). It was not so in the Gregory, Bronson, and Trebilcock Cases. Moreover, those cases, in effect, ruled that since the maker of the obligation involved had agreed to pay in gold or specie, and since he could lawfully obtain the agreed commodity of payment, he must do so, but if he saw fit not to pay in the commodity agreed on, he could offer and the payee must accept the equivalent in current paper money.
Reverting to, and elaborating the notion that factual and legal impossibility of performance excuses the breach of a contract, I quote what was said on the point by Judge Van Devanter (now Mr. Justice Van Devanter), in the case of United States v. Dietrich (C. C.) 126 F. 671, loc. cit. 674, thus:
"It is well established by the English courts and by the courts of this country, federal and state, that where performance of a contract or agreement, lawful in its inception, becomes unlawful by reason of any subsequent event, the contract or agreement is thereby dissolved or terminated, in so far as it remains executory, and both parties are excused from its further performance."
Nor is the legal situation at all affected, for that the bonds in question here fell due May 1, 1933. This for the reasons that the Act of March 9, 1933, was then in force, and the properties of the debtor were then in custodia legis.
I think the above considerations serve to distinguish the cases relied on by interveners from the facts and law up for decision in the case at bar.
Finally, interveners contend that, conceding the power of the Congress to pass a valid law, which indirectly renders void an antecedent contract, yet it may not pass a law which directly does the like.
Obviously, this contention is based on mere modality, and not on final result of the law. Likewise, the contention carries the tacit admission, and briefs of counsel the express assertion that the Congress may do indirectly that which it has no power to do directly. No cases are cited by counsel for the above doctrine, and I know of none which uphold it. I had deemed the law to be that a legislative body, no more than an individual, could do indirectly that which it had no lawful power to do directly. Quite often it has been ruled by the Supreme Court that a state Legislature could not in a law, by a mere subterfuge of intentional, or even of unintentional, confusion, bring about indirectly a legal result which it had no power to bring about directly. If in short the law on its bare face purported to produce a result in a field wherein the result was permissible, yet if the actual result was to invade a field wherein the result was prohibited, the law could not stand. This indicates that courts are concerned only with ultimate results, and not merely with the technical mode of consummation. I think the contention is in principle answered by the Nebbia Case and the Blaisdell Case, supra, as well as others I have cited herein.
Moreover, that identical thing which interveners seem to concede may be done lawfully has already been done in this case by laws and acts in pais, in nowise here attacked. *12 For on January 31, 1934, pursuant to power conferred by the Act of May 12, 1933 (31 USCA § 821), the President by proclamation reduced the gold content of the gold dollar, by comparison (cf., section 315, Title 31, U. S. C. [31 USCA § 315]), to a little more than 59 cents. But for other legislation (which I have already discussed) which took gold coin out of circulation, and forbade possession of it, payment in these deflated gold dollars would have had the identical effect of indirectly violating the obligation of interveners' contract. It would, I think, be an anomalous situation, if the Congress has the power to do indirectly a thing it possesses no power to do directly. As forecast, it is settled, I think, that a thing which cannot be done directly cannot be done indirectly. By parity of reasoning it seems clear that a thing which can be done indirectly can also be done directly. Germane to the notion, what was said in the Schubert Case, supra, seems apposite, thus: "Prior arrangements were necessarily subject to this paramount authority."
Summing up the premises laid down in the beginning, it seems to me impossible to escape these legal conclusions: (a) That in the Congress alone is lodged the power to say what shall be used as money; (b) no person in this nation has the right to make a contract the effect of which is to nullify, obstruct, or circumvent the power of the Congress to say what shall be the national money, or medium of exchange; (c) every person who enters into a contract is, in law, conclusively deemed to hold in contemplation the power of the Congress to alter and change the nature and so-called value of the medium of exchange, or money of the nation; (d) no law passed by the Congress can be invalid when it does no more than to carry out a power vested by the Constitution in the Congress; and (e) subsequent valid laws have rendered strict performance of the terms of the gold clause legally impossible.
And so it follows, that Public Resolution 10 is in my opinion valid; that the gold clause is therefore unenforceable in the ultimate letter thereof as urged by interveners, and is enforceable in equity only, to the extent that interveners, as trustees, are entitled to recover, or to be paid on each $1,000 par value bond in controversy, the sum of $1,000 in such money of the United States as is now current, or as shall be current when the final decree herein for payment is entered.
Let an order be presented for settlement and entry, accordingly.
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84 So. 3d 1018 (2010)
GREGORY DEWAYNE KNIGHT
v.
STATE.
No. CR-09-0571.
Court of Criminal Appeals of Alabama.
July 9, 2010.
DECISION WITHOUT PUBLISHED OPINION
Reh. denied.
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995 P.2d 555 (2000)
164 Or. App. 763
NORTHWEST NATURAL GAS COMPANY, an Oregon corporation, Appellant,
v.
CHASE GARDENS, INC., Respondent, and
Key Bank of Oregon, an Oregon state banking corporation; Willamette Production Credit Association, an Oregon business; Centennial Bank, an Oregon state banking corporation; Orix Credit Alliance, Inc., an Oregon corporation; Turco Engineering, Inc., an Oregon corporation; Benno Dobbe, dba Holland *556 America Bulb Farms, a Washington corporation; Westar Marketing Company, abn Oregon Natural Gas Development Corporation, an Oregon corporation; and State Accident Insurance Fund, an Oregon corporation, Defendants.
(16-91-01370; CA A90481)
Court of Appeals of Oregon.
Submitted on Remand July 23, 1999.
Decided January 5, 2000.
John R. Faust, Jr., and Schwabe, Williamson & Wyatt, Portland, for appellant.
Joel De Vore and Luvaas, Cobb, Richards & Fraser, Eugene, for respondent.
Before EDMONDS, Presiding Judge, and ARMSTRONG and KISTLER, Judges.
KISTLER, J.
This case is before us on remand from the Supreme Court so that we may consider Chase's[1] counterclaim for breach of contract. Northwest Natural Gas Co. v. Chase Gardens, Inc., 328 Or. 487, 982 P.2d 1117 (1999). We reverse on that counterclaim. In accordance with the Supreme Court's decision, we also reverse the judgment for Chase on its counterclaim for intentional interference with Chase's relationship with its bank. We affirm the judgment for NWNG on its claim for breach of contract.
In our original opinion, we affirmed the judgment in favor of Chase for intentional interference. We did not expressly decide Chase's counterclaim for breach of contract because the damages that NWNG recovered on that counterclaim were less than the judgment in its favor on the counterclaim for intentional interference. Northwest Natural Gas Co. v. Chase Gardens, Inc., 146 Or.App. 249, 933 P.2d 370 (1997). On reconsideration, we adhered to our holding, in part because we concluded that NWNG had not preserved the causation argument that it made in its petition for rehearing. Northwest Natural Gas Co. v. Chase Gardens, Inc., 147 Or.App. 586, 938 P.2d 778 (1997). The Supreme Court allowed NWNG's petition for review, held that it had adequately preserved the causation argument, and reversed the judgment on the intentional interference counterclaim for lack of proof of causation. The court then remanded the case to us so that we could decide the breach of contract counterclaim. 328 Or. at 502-03, 982 P.2d 1117.
*557 We will rely on the statement of the facts in our original opinion. 146 Or.App. at 252-58, 933 P.2d 370. The heart of Chase's breach of contract counterclaim is its argument that the promise that a NWNG official made before Chase entered into the contract, that "we will work with you," was part of the contract. That promise, according to Chase, limited NWNG's ability to file an agricultural services lien or to seek other noncontractual remedies if Chase failed to pay in accordance with the contractual terms. Chase argues that when NWNG filed the lien, it violated its contractual promise to accommodate Chase's agricultural cycles and failed to act in good faith. Although we did not expressly decide the contractual issues in our original opinion, our discussion of whether NWNG had an improper purpose when it filed the lien, together with the Supreme Court's decision on causation, essentially resolve the issue against Chase's position.
In its intentional interference counterclaim, Chase alleged that NWNG's purpose in filing the lien was improper because its objective was to obtain a more favorable position in relation to Chase's other creditors "than allowed by law or agreement between the parties * * *." We concluded, however, that because "the contract, by operation of law, permitted NWNG to file the lien, its purpose in doing so cannot be improper * * *." 146 Or.App. at 259, 933 P.2d 370 (emphasis added). In reaching that conclusion, we held that because NWNG had an express statutory right to a lien when it entered into the contract with Chase, that remedy was necessarily within the contemplation of the parties and became part of the contract by operation of law. Id. at 259-60, 933 P.2d 370. We also held that the fact that the contract expressly gave NWNG certain remedies in case of Chase's default did not prevent NWNG from exercising other remedies that it had under existing law. We then stated that, "[e]ven if we were to look outside the writings, NWNG's knowledge of Chase's situation and its statement that `we will work with you' do not constitute a waiver of a statutory right that is otherwise part of the contract." Id. at 260, 933 P.2d 370.
These statements resolve all of Chase's contractual issues relating to NWNG's action in filing the lien. The remaining issues involve whether NWNG breached its implied contractual obligation to act in good faith by some of its other actions, particularly by demanding an excessive deposit in the January 9 letter. However, even if NWNG did breach that duty, the Supreme Court's conclusion that there is no evidence that the January 9 letter caused the bank to withdraw Chase's line of credit means that the breach did not cause Chase any harm. 328 Or. at 501-02, 982 P.2d 1117.[2] Chase's position has always been that it was the loss of the line of credit that forced it to shut down; without a causal connection between NWNG's alleged breach of the implied duty of good faith and the bank's action, there is no basis for an award of damages. The trial court should have granted the motion for directed verdict on Chase's counterclaim for breach of contract.
Judgments for Chase on counterclaims reversed; otherwise affirmed.
NOTES
[1] We will refer to the parties in the same way that we and the Supreme Court have done in the previous opinions in this case.
[2] At trial, NWNG's counsel moved for a directed verdict on both the intentional interference and the contract claims on the ground that Chase had failed to prove causation. The Supreme Court's holdings that he thereby preserved the precise argument that NWNG made on appeal and that that argument is correct thus applies to the contract claim as much as to the intentional interference claim.
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79 So. 3d 923 (2012)
Jessica COMPTON, Appellant,
v.
STATE of Florida, Appellee.
No. 2D11-2980.
District Court of Appeal of Florida, Second District.
February 17, 2012.
*924 Jessica Compton, pro se.
MORRIS, Judge.
Jessica Compton appeals the summary denial of her motion for postconviction relief pursuant to Florida Rule of Criminal Procedure 3.800(a), in which she raised one claim of illegal sentence. We reverse and remand for the postconviction court to reconsider its treatment of Compton's motion.
On October 9, 2006, Compton pleaded guilty to battery on a law enforcement officer and resisting an officer with violence and was sentenced to sixty months' probation. A month later, Compton was alleged to have violated her probation by being in possession of drug paraphernalia. In March 2007, after a hearing on her violation of probation, Compton was sentenced to consecutive terms of five years' imprisonment on each of her underlying charges. On May 21, 2011, Compton filed the current motion pursuant to rule 3.800(a).
In her motion, Compton claims that she was illegally sentenced upon violation of her probation as a habitual felony offender (HFO) to consecutive five-year terms of imprisonment in violation of Hale v. State, 630 So. 2d 521, 525 (Fla.1993) (holding that the "trial court is not authorized ... to *925 both enhance [the defendant's] sentence as a habitual felony offender and make each of the enhanced habitual felony offender sentences ... consecutive, without specific legislative authorization in the habitual felony offender statute"). In support of her motion, Compton attached scoresheets that were prepared at her original sentencing and upon revocation of her probation. The scoresheets indicate that each time, Compton was designated an HFO.
We have identified deficiencies in Compton's motion. First, Compton has failed to specifically allege that her underlying charges were for multiple crimes committed during the same criminal episode, as required by Hale, 630 So.2d at 524. Although she makes this allegation in her initial brief on appeal, her failure to do so in her rule 3.800(a) motion rendered the motion facially insufficient. Furthermore, although she attached scoresheets intended to show that she was sentenced as an HFO, in situations where the sentence is in dispute, the oral pronouncement controls over the written sentencing document. See Ashley v. State, 850 So. 2d 1265, 1268 (Fla.2003). Therefore, the sentencing hearing would be determinative for a claim concerning the details of a sentence, and in rule 3.800(a) motions, "the burden remains with the petitioner to demonstrate an entitlement to relief on the face of the record." Williams v. State, 957 So. 2d 600, 604 (Fla. 2007).
In addition to the shortcomings of Compton's motion, the postconviction court's order also suffers some deficiencies. Rather than noting the facial insufficiency of Compton's claim and dismissing the motion, the court considered the claim on the merits. First, the court attempted to refute Compton's claim by attaching the written judgment and sentence from her convictions. Although these documents do not reflect HFO treatment, they are not ultimately controlling in this situation, particularly in light of the inconsistency between these documents and the scoresheets provided by Compton. Furthermore, the postconviction court briefly analyzed the single criminal episode issue. Relying upon the arrest affidavit, the court found that Compton's charges were the result of two separate incidents separated by a period of time. Although this finding may ultimately prove accurate, the court is not permitted to rely on such documents to make this determination:
[I]n Burgess v. State, 831 So. 2d 137, 141 (Fla.2002), the supreme court held that a trial court cannot rely on hearsay documentation that is contained in the trial court record, such as a police report, to determine a 3.800(a) Hale claim. The trial court may rely on any portion of the trial court record that is not hearsay, such as a trial transcript.
Wachter v. State, 868 So. 2d 629, 629 (Fla. 2d DCA 2004). In Burgess, 831 So.2d at 142, the supreme court also held that the proper mechanism for claims such as Compton's is a motion pursuant to rule 3.850, which can be resolved after an evidentiary hearing, if necessary. Nevertheless, "if the determination of whether the offenses were part of the same criminal episode can be made without resorting to extra-record facts," West v. State, 825 So. 2d 499, 500 (Fla. 2d DCA 2002), the claimant may raise a Hale claim pursuant to rule 3.800(a).
Ultimately, this case is troublesome because of the uncertainty surrounding the true nature of Compton's sentence. By assessing Compton's claim on the merits rather than dismissing her motion for failing to affirmatively allege that identifiable court records "demonstrate on their face an entitlement to relief," Fla. R.App. P. 3.800(a), the postconviction court erred. Accordingly, we reverse the denial of *926 Compton's rule 3.800(a) motion and remand for the postconviction court to dismiss Compton's motion as facially insufficient with leave to amend this claim.
Reversed and remanded.
DAVIS and CRENSHAW, JJ. Concur.
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101 N.H. 239 (1958)
JAMES I. HINES
v.
VIOLET E. DONOVAN & a.
No. 4605.
Supreme Court of New Hampshire
Argued January 7, 1958.
Decided March 20, 1958.
*240 Upton, Sanders & Upton (Mr. Frederic K. Upton orally), for the plaintiff.
Wyman, Starr, Booth, Wadleigh & Langdell (Mr. Wadleigh orally), for defendant Bean.
McLane, Carleton, Graf, Greene & Brown, for defendant Donovan, furnished no brief.
BLANDIN, J.
The first issue to be decided is whether the plaintiff James I. Hines or the defendant C. Lovell Bean was the effective cause of the sale of the real estate of Violet Donovan. On this question the Trial Court has found in favor of the plaintiff Hines. It seems unnecessary to detail the evidence because we believe that the Court's conclusion is a permissible one on the record before us. It follows that the defendant's exception to this finding is overruled. The plaintiff therefore is entitled to the commission (Williams v. Walker, 95 N.H. 231) unless there are other barriers to his recovery. The defendant asserts that such exist in that (1) the plaintiff's "own fraud bars recovery by him"; (2) even in the absence of fraud, he "is estopped by his own conduct from claiming commission"; and (3) paragragh 10 of the purchase and sale agreement between Donovan and the buyers, Norman J. Carter and his wife, is decisive in favor of Bean.
In order to determine the validity of these claims it is necessary to examine certain essential facts found by the Trial Court and by which we are bound if reasonable persons could so find on this record. Romano v. Company, 95 N.H. 404, 406, and authorities cited. It appears the plaintiff was employed by Mrs. Donovan to act as her attorney in settling her husband's estate which included the restaurant property, the sale of which caused the dispute. The plaintiff, who also deals in real estate, asked Mrs. Donovan on May 23, 1955, if he might list the property to which she replied, "Why certainly, Jim I hope you can sell it. I haven't had a nibble yet." Immediately after this the plaintiff dispatched an employee, Don Knapton, to see Carter who operated a local restaurant. Carter told Knapton he was "not interested," that various prices had been quoted all the way from $45,000 to $100,000 and that *241 even $45,000 was far too high so he had dropped the matter entirely. However, on being told the price was now $30,000, Carter, though telling Knapton he was still uninterested a statement which he later admitted was false, said that there should be no trouble in selling at a figure of around $30,000, but that if he did anything he would have to act through the defendant Bean Real Estate Agency because the local representative, a Mrs. Nerine Duarte, was his wife's best friend. No sooner had Knapton left than Carter got in touch with Mrs. Duarte and that same night he went to see Mrs. Donovan and told her that he and his wife would buy the property for $33,000 if the financing could be arranged. On May 25 an attorney employed by the defendant Bean prepared a first draft of a purchase and sale agreement between Mrs. Donovan and the Carters. On May 27, the plaintiff, acting for Mrs. Donovan, secured a copy of the proposed agreement which contained a provision, later to become clause 10 of the completed contract, which read as follows: "It is understood and agreed that this sale has been effected by the Bean Farm Agency, Concord, New Hampshire, and that upon delivery of the deed and bill of sale herein referred to, the vendor will pay said Bean Farm Agency the sum of three thousand dollars ($3,000) as full compensation for the part of the Bean Farm Agency in effecting said sale." Deciding that this would not sufficiently protect Mrs. Donovan, as in the event that Carter defaulted she might still be liable for the commission to Bean, the plaintiff had the clause amended to read as follows: "It is understood and agreed that this sale has been effected by the Bean Agency, Concord, New Hampshire, and that the vendor will pay said Bean Farm Agency the agent's commission in the sum of three thousand dollars ($3,000) if, as and when title passes, however, in the event the vendor shall fail to go through with this agreement for any reasons except defect in her title or failure to perform on the part of the purchasers the said vendor will pay the said Bean Farm Agency said three thousand dollars ($3,000) commission on demand."
Following this, the plaintiff on May 28 disclosed to Mrs. Donovan his claim for the commission, telling her that he felt paragraph 10 was a misrepresentation and that he, and not Bean, was legally entitled to the commission to which she remarked, "Of course, I didn't get a real offer up until the time you listed it." In spite of this, she said she felt the Bean agency having done most of the work was entitled to the commission. The plaintiff *242 told her that he thought it was an advantageous sale for her and that to protect her interest he would not make his claim for a commission until the deal went through as he believed that if he did the defendant would prevent the sale. He said that he preferred to take his "chances" on getting his commission rather than to jeopardize her interest. He informed her that when the transaction was consummated so that her money was safe, he would bring a bill in equity to prevent the payment of the commission to Bean and to obtain it for himself, which he did.
The contract, which was witnessed by the plaintiff, was executed by the principals on May 31, 1955. The plaintiff's bill in equity, brought to enforce his claim for a commission, was served on Mrs. Donovan on June 9, 1955, and the following day when the deeds were executed and the sale about to be consummated, the plaintiff informed the defendant Bean that he was going to claim the commission. At this Bean picked up the checks and said to the Carters, "Come, let's go. The deal is off." However, after a discussion with his own lawyer, he agreed that the money should be paid into court and that the court should decide who was entitled to it.
Taking up the defendant's claims, it appears the argument that because of Hines' fraud, or even in the absence of such fraud, he is estopped from claiming his commission does not require extended consideration. The plaintiff was not a party to the contract and made no representations therein. All he did was to attest the signatures of the parties. Mrs. Donovan testified that when she signed she intended to perform the agreement, in spite of Hines' advice, as she believed him to be wrong. In this state of the facts, it appears the cases cited by the defendant, holding that where a party to a contract signs it and does not intend to keep its terms he may be guilty of fraud (see Hunt v. Company, 94 N.H. 421, 423), are not applicable. The plaintiff was under no duty to make full disclosure of his intentions to the defendant as no relationship of trust or confidence existed between them. Jenness v. Payne, 81 N.H. 308. These experienced Yankee traders, as the record shows them to be, were dealing at arms' length, or perhaps it would be more accurate to say they were not even dealing within pistol range of each other. With reference to this phase of the affair the Trial Court, after seeing and hearing the parties and their witnesses, found as follows: "It is also argued by defendant Bean that Hines is estopped from claiming a commission because *243 he approved, as attorney for Mrs. Donovan, the purchase and sale agreement. At the execution of the agreement Hines found himself in the unenviable position of either looking after his own interests first or those of his client. To his credit he chose the latter course and advised her to sign because he felt it was for her best interests. He disclosed to Mrs. Donovan his claim for commission prior to the execution of said agreement." The Court also found that "Bean did not rely in good faith upon any conduct of Mr. Hines . . . [to his] detriment or prejudice," but on the contrary, that he and the Carters "connived together to deprive Hines of his commission and persuaded Mrs. Donovan that Bean was responsible for the sale," and that therefore there was no estoppel in Bean's favor. Thompson v. Currier, 70 N.H. 259, 266; Eyers Woolen Co. v. Gilsum, 84 N.H. 1, 7; 19 Am. Jur., Estoppel, s. 86. There was evidence upon which these findings could be made and it follows the defendant's exceptions to them and the Court's conclusion, must be overruled.
The defendant's contention that the Court erred in ruling that paragraph 10 was unenforceable must also fail. Bean claims the agreement between the Carters and Mrs. Donovan was for his benefit as a third party (Knox v. Perkins, 86 N.H. 66, 72); however, the Court has found that the clause was obtained by the defendant's connivance with the Carters for the express purpose of depriving the plaintiff of the commission to which he was entitled. That the defendant cannot be allowed to profit by his own wrong is too elementary a proposition to require citation. Upon this finding, the Court properly ruled as a matter of law (see Perry v. Company, 101 N.H. 97) that paragraph 10 was unenforceable.
We have then a situation where on sufficient evidence plaintiff Hines has been found to be the efficient cause of the sale. He would normally be entitled to the full commission. However, there remains a further important consideration.
We have sustained the findings of the Trial Court with respect to the integrity and good intent of the plaintiff in his conduct as Mrs. Donovan's attorney. But we believe it necessary in the best interest of the legal profession and in order to avoid similar unfortunate situations which might otherwise arise in the future to qualify our approval. The circumstances which arose because of competition between Hines and Bean for the commission may be thought to have confronted Hines with the ethical problem of *244 whether he could properly continue to represent his client with respect to the negotiations for the sale, and at the same time undertake to further his own conflicting interest as a broker. In consequence of his decision to continue as counsel, Mrs. Donovan was deprived of disinterested advice, which the better procedure would have demanded, until after she had executed a contract obligating her to pay a commission to Bean. The requirement that an attorney shall not represent conflicting interests, at least without full disclosure to the client both of the facts and their significance, is designed "to preclude the honest practitioner from putting himself in a position where he may be required to choose between conflicting duties, or be led to an attempt to reconcile conflicting interests rather than to enforce to their full extent the rights of the interest which he should alone represent." 1 Thornton, Attorneys at Law 308, s. 174. See also, 5 Am. Jur. 288, s. 48. Mrs. Donovan, whose position had been accurately described by her present attorney as a "stake holder" rather than an adverse party, has been put to extra expense through no fault of her own because she has had to retain new counsel to represent her in closing the sale and in this action. This was necessitated because her lawyer acted in the dual capacity of attorney and realtor. In all the circumstances, justice requires that Mrs. Donovan be reimbursed from the fund of $3,000 deposited in court for her reasonable expenses incurred in retaining new counsel and thereafter participating in these proceedings. The expenses are to be determined by the Superior Court unless the parties agree. The amount of the commission to which the plaintiff is decreed to be entitled should be correspondingly reduced.
Remanded.
WHEELER, J., did not sit; the others concurred.
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80 So. 3d 1030 (2012)
HAIMOWITZ
v.
STATE.
No. 2D11-6018.
District Court of Appeal of Florida, Second District.
February 2, 2012.
DECISION WITHOUT PUBLISHED OPINION
Mandamus denied.
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84 So. 3d 318 (2012)
GREEN
v.
STATE.
No. 2D11-4709.
District Court of Appeal of Florida, Second District.
March 23, 2012.
DECISION WITHOUT PUBLISHED OPINION
Affirmed.
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347 S.W.3d 20 (2009)
2009 Ark. 484
Vance Benton ROLLINS, Jr., Appellant
v.
STATE of Arkansas, Appellee.
No. CR 09-265.
Supreme Court of Arkansas.
October 8, 2009.
*21 Lassiter & Couch, by: Jack T. Lassiter and Erin Cassinelli Couch, Little Rock, for appellant.
Dustin McDaniel, Att'y Gen., by: LeaAnn J. Irvin, Ass't Att'y Gen., for appellee.
ELANA CUNNINGHAM WILLS, Justice.
Appellant Vance Rollins was charged with two counts of manslaughter after he caused a head-on car collision that killed Lawrence and Nina Humphrey. He was tried by a Perry County jury on October *22 24, 2007, and was sentenced to two consecutive four-year terms of imprisonment. Rollins appealed to the court of appeals, contending that there was insufficient evidence to support his manslaughter convictions. The court of appeals agreed, affirming his convictions but modifying the judgment to reflect the lesser-included offense of negligent homicide. Rollins v. State, 2009 Ark.App. 110, 302 S.W.3d 617. The State petitioned for review from the court of appeals' opinion, arguing that it was decided contrary to this court's prior decisions and involved an issue of substantial public interest that requires clarification.
When we grant review of a decision by the court of appeals, we review the case as though the appeal was originally filed in this court. See Brown v. State, 374 Ark. 341, 288 S.W.3d 226 (2008); Yarbrough v. State, 370 Ark. 31, 257 S.W.3d 50 (2007).
In his first argument for reversal, Rollins argues that the trial court erred in denying his motion for directed verdict because the evidence was insufficient to sustain the manslaughter conviction. On appeal, we treat a motion for directed verdict as a challenge to the sufficiency of the evidence. See Johnson v. State, 375 Ark. 462, 291 S.W.3d 581 (2009). We will affirm the circuit court's denial of a motion for directed verdict if there is substantial evidence, either direct or circumstantial, to support the jury's verdict. Id. This court has repeatedly defined substantial evidence as evidence forceful enough to compel a conclusion one way or the other beyond suspicion or conjecture. Hoyle v. State, 371 Ark. 495, 501, 268 S.W.3d 313, 318 (2007). In reviewing the sufficiency of the evidence, we view the evidence and all reasonable inferences deducible therefrom in the light most favorable to the State, without weighing it against conflicting evidence that may be favorable to the appellant, and affirm the verdict if it is supported by substantial evidence. Wetherington v. State, 319 Ark. 37, 889 S.W.2d 34 (1994).
As noted above, Rollins contends that the evidence introduced at trial was insufficient to support his manslaughter conviction. More specifically, he contends that the evidence was insufficient to demonstrate that he acted recklessly. Rollins was charged under Arkansas Code Annotated section 5-10-104(a)(3) (Repl.2006), which states that a person commits manslaughter if the "person recklessly causes the death of another person." "Recklessly" is defined in Arkansas Code Annotated section 5-2-202(3) (Repl.2006) as follows:
(A) A person acts recklessly with respect to attendant circumstances or a result of his or her conduct when the person consciously disregards a substantial and unjustifiable risk that the attendant circumstances exist or the result will occur.
(B) The risk must be of a nature and degree that disregard of the risk constitutes a gross deviation from the standard of care that a reasonable person would observe in the actor's situation[.]
At trial, the State introduced the testimony of O.J. and Barbara Williams. Mr. Williams testified that, on the day of the accident, he was driving southbound on Highway 7 towards Hot Springs when a vehicle came up behind him. Mr. Williams decided to let the vehicle pass him, so he slowed down and pulled over to the edge of his lane. The vehicle did not pass, and Mr. Williams resumed his speed. The vehicle, however, "just kept coming up behind" Mr. Williams, which made him nervous. Mr. Williams attempted several times over the course of about fifteen miles to slow down to let the other vehicle pass, but it never did. Mr. Williams said he never observed the vehicle cross the center *23 line, but the tailgating nonetheless made him nervous.
Finally, Mr. Williams pulled into a CCC camp and stopped for a while. After a few minutes, during which several other vehicles went down the road, he returned to the highway and resumed his journey. About five miles down the road, he saw that the vehicle that had been following him had been in a wreck. That vehicle was completely on the opposite side of the center lane, he said.
Barbara Williams described the vehicle behind them as "driving erratically." She said that the vehicle would repeatedly "come way up on our bumper, and then would back off." Mrs. Williams said that the other vehicle was "not fast," but would pull up close behind them and then back away without passing. She also described how they eventually pulled off the road at a CCC camp for five minutes or so and then, when they got back on the highway, they came upon the wreck. Mrs. Williams testified that the vehicle that had been following them was "obviously in the wrong lane."
The State's next witness was Linda Brewer, a nurse who witnessed the accident. Brewer said that she and her daughter had spent the day in Hot Springs and were driving north on Highway 7 at around 3:00 p.m. behind a tan car. As they started down a little grade, she saw a red sport-utility vehicle driving in their lane. At first, she thought it would swerve back, but then she saw the taillights of the tan car just before the SUV hit it. She saw a flash of flame, pulled up alongside the tan car and then, concerned about the fire, quickly accelerated past the wreck. She then pulled over and told her daughter to call 911.
Brewer ran first to the red SUV and tried to open the door but could not. She saw the driver moving around and told him to stay still. She then went to the tan car and tried to help its passengers, the Humphreys; however, they were badly injured, and both expired at the scene of the wreck. As she attempted to assist the Humphreys, she saw the driver of the red SUV, Rollins, trying to get out of his vehicle, so she ran back to help him. She told him that he had been in an accident and needed to sit still, but he got out and kept trying to open the back door of the SUV. Brewer heard him say "Molly," and she realized that there was someone else in the vehicle. After they managed to get the door open, Brewer saw a woman on the floorboards of the back seat. Brewer and her daughter helped the woman out of the vehicle. Rollins then began feeling around on the floorboard, and Brewer thought that perhaps he needed oxygen.
By that time, emergency vehicles had arrived, and Brewer went to speak with the emergency personnel. As she was doing so, she saw Rollins at the side of the road and thought he looked like he was going to pass out. She went to him and told him he needed to sit down; she also asked if he was hurt. He said that he was not, and as she looked at his hands, she saw him drop some green pills. Brewer said that, as a nurse, she thought they might be heart pills, so she asked whether he had any conditions that required medication. He shook his head, and she eventually got him to sit down. A moment or two later, however, he began struggling to get up, and Brewer again tried to get him to sit still. At that point, the woman who had been in the backseat of the SUV began hollering, and Rollins rolled over to try to get up. When he did, Brewer saw green pills underneath him, and she picked up three or four of them and later gave them to police.
Faith Miller, Brewer's daughter, also witnessed the collision. As they came *24 around a curve on the highway, she saw Rollins's red SUV "all the way" in their lane and also observed Rollins looking over his right shoulder. She said that Rollins was going fast around a curve and "never appeared to slow down, he didn't dodge, he didn't swerve." After the accident, Miller said that her mother went to help Rollins, who "was shaky and wobbly" and appeared to be "in shock and stuff."
Trooper Greg McNeese of the Arkansas State Police, who responded to the scene of the accident at 5:45 p.m., testified that an officer from the Perry County Sheriffs Office handed him the pills that Brewer had picked up; he placed them in an envelope and secured them in his vehicle. McNeese also testified that he found a duffel bag in the front passenger floorboard of the SUV that contained clothes, toiletries, and a black cigarette case with three pipes in it. Christa Hall, a forensic chemist at the Arkansas State Crime Laboratory, testified that the pipes tested positive for cocaine residue. Hall also testified that the green pills were hydrocodone and acetaminophen.
Shawn Wright, a nurse at St. Joseph's Hospital in Hot Springs, testified that he took a blood sample from Rollins on the day of the wreck; the blood-alcohol-report form indicates that the sample was collected at 7:15 p.m. Becky Carlisle, a forensic toxicologist at the Crime Lab, testified that she tested the blood samples that were taken from Rollins after the accident. The samples tested positive for cocaine and sertraline, or Zoloft, but the level of both drugs was less than .05 micrograms per milliliter, which indicated that the person had ingested the drugs, but it was a fairly low amount.[1] She said that she did not know how or when the drugs were ingested, and she could not ascertain how long either drug had been in the blood prior to the samples' being taken. When asked whether there was a period of time at which blood tests would no longer detect the ingestion of cocaine, Carlisle said it would be "over eight hours." Her testing revealed no other controlled substances in Rollins's blood sample, including hydrocodone. On cross-examination, Carlisle said that she could not give an opinion as to whether the person was impaired by the level of "whatever substances were to the degree that would interfere with normal functioning."
At the conclusion of the State's case, Rollins moved for a directed verdict on the manslaughter charges, arguing that the State had failed to prove the element of recklessness. The circuit court denied his motion, but it did agree to instruct the jury on the lesser-included charge of negligent homicide.[2] As noted above, the jury convicted Rollins on two counts of manslaughter and sentenced him to two consecutive four-year sentences.
Viewing all this evidence in the light most favorable to the State, and considering only the evidence that supports the verdict, we conclude that the circuit *25 court did not err in denying Rollins's motion for directed verdict. At issue in this appeal is whether the State proved that Rollins acted recklessly. As set out above, our statute declares that one acts recklessly "with respect to attendant circumstances or a result of his conduct when he consciously disregards a substantial and unjustifiable risk that the circumstances exist or the result will occur." Ark.Code Ann. § 5-2-202(3). The original commentary to the manslaughter statute, section 5-10-105, notes that the test for differentiating between reckless and negligent conduct is "whether the actor perceived the substantial risk of death or serious physical injury and disregarded it (reckless conduct) or failed to perceive the risk in the first place (negligent conduct)." Original Commentary to Ark.Code Ann. § 5-10-105 (Repl.1995).
In Hoyle v. State, 371 Ark. 495, 268 S.W.3d 313 (2008), this court considered a challenge to the sufficiency of the evidence in a manslaughter case with facts that are somewhat similar to the instant case. In Hoyle, the defendant was driving a tractor-trailer with a loaded chip hauler attached to it. Hoyle crossed the center line and struck an oncoming vehicle, killing two of its three occupants. The officers who responded to the accident scene suspected that Hoyle had been driving under the influence of drugs, and they took him to a hospital to obtain blood and urine samples. Those samples later revealed the presence of methamphetamine in Hoyle's system. Hoyle was subsequently charged and convicted of two counts of manslaughter. Hoyle, 371 Ark. at 497, 268 S.W.3d at 315.
On appeal, Hoyle argued that there was insufficient proof that he had acted recklessly. Id. at 503, 268 S.W.3d at 319. This court phrased the relevant inquiry as "whether the evidence ... demonstrated that Hoyle consciously disregarded a substantial and unjustifiable risk in driving while under the influence of methamphetamine." Id. The proof introduced at trial showed that Hoyle's vehicle, which was traveling southbound, crossed the center line and struck the vehicle driven by the victims at a forty-five degree angle. The driver of the truck who had been behind Hoyle said he never saw Hoyle apply his brakes prior to the accident and had earlier witnessed Hoyle almost run a tanker truck off the road. Id. at 498, 268 S.W.3d at 315. Another eyewitness said he never saw anything that would have caused Hoyle's vehicle to swerve into oncoming traffic. Id. at 500, 268 S.W.3d at 317.
In Hoyle, the State also offered the testimony of a board certified pathologist, Dr. Pappas, who stated that the presence of methamphetamine in the blood could cause agitation, irrational behavior, signs of psychosis, fatigue, and signs of paranoia; Dr. Pappas also opined that a person driving a vehicle under the influence of methamphetamine might drift in and out of a lane, exhibit risky behavior, or drive off the road. Id. at 499, 268 S.W.3d at 316. Another witness testified that Hoyle had a concentration of .221 micrograms of methamphetamine per milliliter in his blood, and Dr. Pappas stated that this concentration of the drug demonstrated that, at the time of the accident, Hoyle "was either coming up, going up, or he was certainly under the effect" of methamphetamine. Id. at 501, 268 S.W.3d at 317. This level of the drug in Hoyle's blood "without a doubt had a negative effect on [Hoyle's] driving." Id.
Given this proof, this court determined that there was substantial evidence that Hoyle had recklessly caused the deaths of the victims, stating that it did not agree that the jury would have had to resort to speculation and conjecture to conclude that the drugs in Hoyle's system "so altered his *26 motor skills that it was the cause of the wreck." Id. at 504, 268 S.W.3d at 319. The court concluded that Hoyle "consciously disregarded a substantial and unjustifiable risk that death might occur if he operated a commercial vehicle after ingesting methamphetamine, and the disregard thereof constituted a gross deviation from the standard of care that a reasonable person would observe in Hoyle's situation." Id.
Similarly, in Smith v. State, 3 Ark.App. 224, 623 S.W.2d 862 (1981), the court of appeals upheld a manslaughter conviction where the proof showed that the defendant acted recklessly. In Smith, as in the instant case, the appellant argued that she was, at most, guilty of negligent homicide. The court of appeals rejected her argument, though, pointing out that Smith had been drinking and was speeding when she hit a curve and lost control of her car. She hit a pedestrian and then drove into a ditch, whereupon she became hysterical because she had wrecked her mother's car. Afterward, she refused to return to the scene of the accident. Smith, 3 Ark.App. at 227, 623 S.W.2d at 863. The court of appeals held as follows:
We believe the evidence is without doubt substantial that appellant's conduct was reckless and exhibited a conscious disregard of a perceived risk. In sum, appellant was drinking to excess during midday and was driving a vehicle at high speeds on public streets and highways in a metropolitan area. This evidence alone clearly supports that appellant's actions exhibited a conscious disregard of people's lives and property. Appellant's actions subsequent to her striking the victim served to substantiate a knowledgeable but callous lack of concern for life when she rejected her passenger's request to return to the scene to determine whether she had run anyone down. Appellant's sole expressed concern after leaving the scene was to get her car fixed. Based on these facts, we see no reason to distinguish this case from the case of Kirkendall v. State, 265 Ark. 853, 581 S.W.2d 341 (1979), wherein the court affirmed a conviction of manslaughter on similar facts.
Id. at 228, 623 S.W.2d at 864.
In the present case, as in Hoyle and Smith, we conclude that the evidence supported the trial court's denial of Rollins's motion for directed verdict. Rollins argues that there was no testimony that the drugs in his blood would affect his ability to drive a vehicle, and thus there was no evidence that he had any knowledge of any risk. While no evidence was presented of Rollins's level of impairment or intoxication from ingesting cocaine, we note that such evidence is not necessary to sustain a conviction for reckless manslaughter.[3] Rather, the State needed only to prove that Rollins recklessly caused the death of another person. That is, the State was required to prove that Rollins consciously disregarded a substantial and unjustifiable risk of causing death, and that such risk was of a nature and degree that disregard of it constituted a gross deviation from the standard of care that a reasonable person would observe in the *27 actor's situation. See Ark.Code Ann. § 5-2-202(3)(A)-(B).
Although Rollins argues that there was no proof that he consciously disregarded a risk, this court has repeatedly noted that intent is rarely provable by direct evidence. See Watson v. State, 358 Ark. 212, 188 S.W.3d 921 (2004); Price v. State, 347 Ark. 708, 66 S.W.3d 653 (2002). Since intent ordinarily cannot be proven by direct evidence, jurors are allowed to draw upon their common knowledge and experience to infer it from the circumstances. Tarentino v. State, 302 Ark. 55, 786 S.W.2d 584 (1990). Here, there was evidence that Rollins had been driving erratically prior to the crash that occurred around 3:00 p.m., tailgating the Williamses for fifteen miles, driving fast on a curving highway, and crossing over the center line while looking over his shoulder. There was further testimony that he did not attempt to stop or swerve as he drove headfirst into the Humphreys' vehicle. Moreover, proof was presented from which the jury could infer that, at some point within the eight hours preceding the drawing of his blood at 7:15 p.m., Rollins had ingested cocaine. Taking all of these facts and circumstances together and viewing them in the light most favorable to the State, as we are required to do under our standard of review, we cannot agree that the circuit court erred in denying Rollins's motion for directed verdict.[4]
Rollins raises a second point on appeal, contending that the circuit court abused its discretion in denying his motion in limine in which he sought to exclude evidence of the hydrocodone pills and "smoking devices" found in Rollins's car and evidence of his use of cocaine. At a pretrial hearing, Rollins argued that the evidence was irrelevant because he was not charged with being under the influence of anything; the State countered that the evidence was relevant because it had charged Rollins with acting recklessly and was not precluded from showing that Rollins may have been affected by an illegal substance. The court denied the motion in limine, and the State introduced the pills and the smoking devices.
*28 On appeal, Rollins argues that the evidence of his use of controlled substances was irrelevant because it did not tend to make any fact at issue more or less probable. He contends that evidence that he had hydrocodone pills and pipes in his possession did not shed any light on whether taking cocaine or prescription medication would affect a person's ability to operate a vehicle, whether those substances actually had any effect on his ability to operate a vehicle or would affect anyone in a similar situation, or whether he realized that there was any potential risk in possessing or ingesting these substances and then consciously disregarded it. Rather, he urges that this evidence was simply intended to portray him in a bad light in the jury's eyes.
Relevant evidence is "evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Ark. R. Evid. 401. Evidentiary matters regarding the admissibility of evidence are left to the sound discretion of the trial court. Williams v. State, 374 Ark. 282, 287 S.W.3d 559 (2008); Grant v. State, 357 Ark. 91, 161 S.W.3d 785 (2004). A trial judge's ruling in this regard will not be reversed absent an abuse of discretion. Williams, supra. This high threshold does not simply require error in the trial court's decision but rather that the trial court act improvidently, thoughtlessly, or without due consideration. Id.
Here, the evidence of the pipes with cocaine residue was relevant, given the State's theory of the case. They were relevant in the sense that they made it more probable than not that Rollins had ingested cocaine at some time prior to the accident.[5] Therefore, we cannot say that the trial court abused its discretion in admitting them.
Affirmed; court of appeals reversed.
HANNAH, C.J., dissents.
JIM HANNAH, Chief Justice, dissenting.
I respectfully dissent. The State prosecuted Rollins for manslaughter, argued his conduct was reckless, and then offered evidence to prove that Rollins was negligent. The jury verdict of two convictions for manslaughter is unsupported by substantial evidence, and the circuit court erred in submitting the issue of manslaughter to the jury. The jury was left to speculation and conjecture.[1] The evidence does support the lesser-included offense of negligent homicide. Accordingly, I would affirm the judgment of the court of appeals, modify the judgment to two convictions for negligent homicide, and *29 sentence Rollins to the maximum allowed on both convictions.
The evidence the State offered was that Rollins was driving too fast and looked over his right shoulder about the time he approached a curve. The State also showed that through his inattention in looking back, Rollins crossed the double yellow line, veered into the lane of oncoming traffic, and struck the victims' car. This all constitutes evidence of negligence. However, the State's strategy at trial was to argue that the evidence of negligent conduct could satisfy the requirements of reckless conduct. This is apparent from the State's argument despite the State peppering its argument with the word "consciously." The State argued that Rollins "consciously disregarded the rules of the road" when he failed to make himself conscious of the conditions of the road in that he looked over his shoulder instead of keeping his eye on the road. According to the State, this caused him to cross a double yellow line in the curve and drive "entirely" on the wrong side of the road. Although the State couched its argument in terms of "conscious disregard," nothing offered showed that Rollins consciously decided to look away from the road, consciously decided to drive in the wrong lane on a curve, and consciously decided to remain in that wrong lane. The State in summary argued that Rollins consciously disregarded a perceived risk when he failed to abide by "basic driver safety" and when he failed to "be aware of the conditions" under which he was driving. According to the State, "all he had to do was stay on his side of the road," and in failing to do so, he was reckless. Thus, while characterizing the conduct as reckless, the State actually argues that Rollins was criminally negligent, that he should have been aware of the attendant circumstances, that he should have been aware of a substantial and unjustifiable risk, and that his failure to perceive the risk involves a gross deviation from the standard of care that a reasonable person would observe. See Ark.Code Ann. § 5-2-202 (Repl.2006). The State even argued that Rollins violated his "standard of care," which again reveals the State was arguing negligence. The evidence the State offered showed that Rollins exercised very poor judgment in taking his eyes from the road. That is negligence, either civil, or criminal, if the burden of proof can be met. There is no support in the evidence to show that Rollins consciously disregarded a substantial and unjustifiable risk with the knowledge of probable harmful consequences of a wrongful act, or that his conduct was a willful and deliberate failure to act to avoid the consequences. These are the requirements to prove reckless conduct. See Ark.Code Ann. § 5-2-202 (Repl.2006).
The State further argued Rollins might have been impaired by the drugs, but admitted it "did not know how that might affect you." Rollins's blood test showed that Rollins was not intoxicated, and the State chose not to put on an expert to testify about whether the level of cocaine in Rollins's blood could have impaired his driving. As the court of appeals concluded, on this record, the issue of driving under the influence was a closed question. Rollins v. State, 2009 Ark.App. 110, 302 S.W.3d 617, 619. The State chose not to pursue the question.
The accident and death of the elderly victims was horribly tragic. However, despite the tragedy, at best, the evidence the State offered shows that Rollins unintentionally veered into oncoming traffic when he failed to watch the road. There is no evidence that he consciously drove on the wrong side of the road. There is no evidence of a conscious disregard of a perceived risk. I do note the testimony by *30 Mr. and Mrs. Williams. Both testified that Rollins was driving erratically, in that he tailgated them for about fifteen miles prior to Williams pulling over to force Rollins to go by. While tailgating is hardly safe or appropriate behavior, it casts little if any light on whether Rollins consciously crossed the double yellow line, consciously drove in the oncoming lane on a curve, and consciously decided to remain in the wrong lane.
The majority errs in relying on Hoyle v. State, 371 Ark. 495, 268 S.W.3d 313 (2008), because Holye was intoxicated. He was driving an eighteen-wheeler. Prior to the accident causing a death, Hoyle almost ran a truck off the road. Expert testimony at trial showed that Hoyle had .221 micrograms methamphetamine per milliliter that without doubt affected his driving. Hoyle, 371 Ark. at 501, 268 S.W.3d at 319.
Other appeals from cases discussing criminally reckless conduct involve conscious conduct similar to Hoyle. In Prunty v. State, 271 Ark. 77, 607 S.W.2d 374 (1980) (manslaughter conviction), the appellant was drunk. He was observed driving erratically by weaving, passing cars in no-passing zones, and running cars off the road. In a chase with police, appellant exceeded 100 miles per hour. In a curve, appellant was in the wrong lane and struck an oncoming car. A person in that car died. In McGill v. State, 60 Ark.App. 246, 962 S.W.2d 382 (1998) (delinquency finding based on reckless conduct; criminal mischief in the first degree), McGill fishtailed the car as he drove around a corner so that he lost control of the car in the conscious disregard of the risk of a wreck, leading to the accident. The decision to fishtail was a conscious decision, leading to the accident. In Booth v. State, 26 Ark. App. 115, 761 S.W.2d 607 (1989) (manslaughter conviction), appellant was driving an eighteen-wheeler. Again, the appellant chose to drive while intoxicated. He began drinking in a bar in the mid-afternoon, and he became so intoxicated that the management of the bar refused to sell him any more alcohol. That evening, he went to another bar, and upon his return to the former bar an hour and one-half later, he was more intoxicated than before. He remained at the bar until it closed and then started off, despite being offered a place to stay and being asked not to drive. He struck another car and killed a person. In Clark v. State, 15 Ark.App. 393, 695 S.W.2d 396 (1985) (manslaughter conviction), appellant and his drinking buddy got so drunk that appellant passed out. Upon waking up, appellant thought there was an intruder in his yard. He retrieved a pistol and shot and killed his drinking buddy. In Smith v. State, 3 Ark.App. 224, 623 S.W.2d 862 (1981) (manslaughter conviction), appellant was drunk and driving. She was speeding, lost control in a curve, accelerated to scare her passenger, and hit a bump or pothole that made her lose control of the car. In the process, appellant hit and killed a pedestrian.
In each of the above-cited cases, there was conscious conduct. In McGill, the minor consciously chose to fishtail the car. The remaining cases involve manslaughter convictions, and in each there was a conscious decision to drink and drive. None of these cases are comparable to Rollins, who the State proved looked away from the road coming into a curve, veered into oncoming traffic, and hit the victims' car, killing them both. No proof was offered to show that Rollins's conduct was anything other than negligent. We have no idea why Rollins looked back. He veered off into the oncoming traffic just before the accident occurred. Had he been driving in the wrong lane over some distance, the argument that his conduct was a conscious disregard would be more convincing. The natural inference from the facts is that *31 Rollins looked back and did not realize he was slipping into the wrong lane. The conduct is hardly laudable, but the evidence offered rises only to negligence of some form. The State failed in proving Rollins consciously disregarded a substantial and unjustifiable risk that the attendant result would occur.
This court should rely on Hunter v. State, 341 Ark. 665, 19 S.W.3d 607 (2000). Hunter was not intoxicated and caused the death of three people in a head-on collision while in the wrong lane. In Hunter, this court affirmed a conviction for negligent homicide where Hunter knew the road, knew the double yellow line meant he was not allowed to pass, knew his vision was obscured by mist and spray from rain, and yet decided to pass on a hill where he knew it was unsafe. He collided with a car that came over the crest of the hill and killed three people. The court affirmed the denial of the directed-verdict motion, holding that the proof supported the allegation of a gross deviation from the standard of care that a reasonable person would observe in the situation. Hunter, 341 Ark. at 669, 19 S.W.3d at 610 (quoting Ark.Code Ann. § 5-2-202(4) (Repl.1997)). The court stated as follows on the issue of negligent and reckless conduct:
In the commentary to the above section, it is noted that negligent conduct is distinguished from reckless conduct primarily in that it does not involve the conscious disregard of a perceived risk. In order to be held to have acted negligently under § 5-10-105, it is not necessary that the actor be fully aware of a perceived risk and recklessly disregard it. It requires only a finding that under the circumstances he should have been aware of it and his failure to perceive it was a gross deviation from the care a reasonable, prudent person would exercise under those circumstances.
Hunter, 341 Ark. at 668, 19 S.W.3d at 609 (citing Phillips v. State, 6 Ark.App. 380, 382, 644 S.W.2d 288, 289 (1982)). The conduct in Hunter is far more intentional than what the proof shows in the present case, and that conduct was held to be criminally negligent. The majority rewrites the statute and judicially creates criminal liability for manslaughter contrary to the elements of the crime set out in the statutes enacted by the General Assembly.
While it is clear to me that the State failed to provide substantial evidence to support the jury's decision on manslaughter, it is also clear that the State provided substantial evidence to prove the lesser-included offense of negligent homicide. I agree with the court of appeals that pursuant to Dixon v. State, 260 Ark. 857, 545 S.W.2d 606 (1977), we should modify the judgments of conviction to the lesser-included offenses of negligent homicide under Arkansas Code Annotated section 5-10-105(b)(1) (Repl.2006) and set the sentence at the maximum allowed by law for negligent homicide.
NOTES
[1] Carlisle testified that the blood tests she used had a lower limit at which the tests were able to detect substances in the blood; .05 was "the lower limit, [and] that's why it's reported less than .05."
[2] The court instructed the jury that, to find Rollins guilty of negligent homicide, the State had to prove that he negligently caused the deaths of the Humphreys. This instruction stems from Arkansas Code Annotated section 5-10-105(b)(1) (Repl.2006), which makes negligent homicide a Class A misdemeanor. It differs from Arkansas Code Annotated section 5-10-105(a)(1)(A) (Repl.2006), which provides that a person commits negligent homicide if he negligently causes the death of another as a result of operating a vehicle while intoxicated. Negligent homicide under section 5-10-105(a)(1) is a Class C felony.
[3] Compare the offense of felony negligent homicide, which requires proof that the defendant caused the death of another person as a result of operating a vehicle while intoxicated. Ark.Code Ann. § 5-10-105(a)(1)(A). See also Robinson v. State, 98 Ark.App. 237, 254 S.W.3d 750 (2007) (defendant was convicted of felony negligent homicide, but the court of appeals reduced the conviction to negligent homicide, holding that evidence of merely ingesting a controlled substance, without further proof of actual intoxication or impairment, was not sufficient to prove the necessary element of intoxication).
[4] The dissent appears to conclude that the only evidence presented to the jury was that Rollins looked over his shoulder, and the dissent questions whether the State introduced proof that Rollins consciously made the decision to do so. This assertion ignores our longstanding principles that intent is rarely provable by direct evidence and that jurors may infer intent from the circumstances. Here, the attendant circumstanceswhich go largely unmentioned by the dissentshowed that Rollins had been driving erratically, was going fast, failed to slow down or swerve as he came upon the Humphreys' vehicle, and had cocaine in his bloodstream that the jury could have inferred had been ingested within the hours prior to the crash. As noted above, we are unwilling to conclude that a jury could not draw an inference of reckless conduct from these circumstances.
Moreover, the cases on which the dissent relies are not persuasive. For example, the only issue presented in Prunty v. State, 271 Ark. 77, 607 S.W.2d 374 (1980), was the admissibility of photographs. In Booth v. State, 26 Ark.App. 115, 761 S.W.2d 607 (1989), the primary question was whether circumstantial evidence proved that Booth was driving the vehicle that killed two people in a hit-and-run accident. The court in Clark v. State, 15 Ark. App. 393, 695 S.W.2d 396 (1985), merely stated in a conclusory fashion at the end of the opinion that the evidence proved that the defendant had acted recklessly. Finally, in McGill v. State, 60 Ark.App. 246, 962 S.W.2d 382 (1998), evidence of "fishtailing" a car constituted evidence of reckless behavior. While the dissent claims that McGill's decision to fishtail was a conscious decision that caused an accident, it fails to explain, in the present case, how the act of looking away from the road, when coupled with the other attendant circumstances, could not also have been evidence from which the jury could conclude that Rollins acted recklessly.
[5] Rollins also argues that the introduction of the hydrocodone pills was irrelevant because, if he "did not ingest the hydrocodone, the fact of his possessing it had no probative value unless he knew possessing it would and in fact did affect his ability to drive." However, Rollins appears to have failed to advance this particular contention in his arguments before the trial court; therefore, we do not reach it on appeal. See Davis v. State, 368 Ark. 401, 246 S.W.3d 862 (2007) (where a particular argument was not raised below, it was not preserved for appellate review).
[1] The majority takes exception to the dissent stating that there is a failure to explain how all the evidence offered "could not have been evidence from which the jury could conclude that Rollins acted recklessly." This misses the point. The judge failed to act as gatekeeper and allowed the jury to decide the question of whether Rollins was reckless when there was a lack of substantial evidence from which the jury could draw that conclusion. The circuit court erred in instructing the jury on manslaughter. The jury was left to speculation and conjecture.
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82 So. 3d 1202 (2012)
Manuel FERNANDEZ, R.N., Appellant,
v.
FLORIDA DEPARTMENT OF HEALTH, BOARD OF NURSING, Appellee.
No. 4D11-496.
District Court of Appeal of Florida, Fourth District.
March 21, 2012.
Kathryn L. Kasprzak, Orlando, for appellant.
Mark Graham Hanson, Tallahassee, for appellee.
DAMOORGIAN, J.
Manuel Fernandez appeals a final administrative order revoking his license to *1203 practice as a registered nurse in Florida for violations of sections 464.018(1)(h) and (n), Florida Statutes (2008), and concurrently rules 64B9-8.005(1)(e), (2)(c), and (2)(n), Florida Administrative Code (2006). We affirm in part and reverse in part.
By way of background, Fernandez was employed as a nurse at a health care facility where he had access to patients' medications, including Heparin. While visiting his friend at a hospital, Fernandez took it upon himself to administer Heparin to his friend. It is undisputed that Fernandez was not employed at the hospital and was not authorized to possess or administer Heparin to his friend.
Fernandez's actions prompted the Department of Health ("Department") to file a three count administrative complaint against Fernandez before the Board of Nursing ("Board"). The complaint alleged that Fernandez failed to meet minimal standards of acceptable and prevailing nursing practice (Counts I and II), and Fernandez engaged in unprofessional conduct (Count III). Because Fernandez only raises issues as to Counts I and II, we affirm Count III without discussion.
Fernandez elected an informal hearing. By doing so, Fernandez admitted the factual allegations, seeking only to mitigate the penalties that might be imposed. See § 120.57(2), Fla. Stat. (2008). The Board adopted the findings of facts alleged in the complaint and concluded that Fernandez had violated sections 464.018(1)(h) and (n).[1] The Department recommended that the Board permanently revoke Fernandez's license and assess costs in the amount of $2,952.93. The Board agreed and entered a final order adopting the recommendation, citing sections 464.018(2) and 456.072(2), Florida Statutes (2008),[2] as a basis for the penalty. This appeal follows.
Fernandez argues that the penalty imposed is unlawful because the Department failed to comply with the legislative requirement that there be penalty guidelines in place pursuant to section 456.079, Florida Statutes (2008), so as to alert licensees of prohibited actions and to ensure consistency in penalties imposed. See Arias v. State, Dep't of Bus. & Prof'l Regulation, Div. of Real Estate, 710 So. 2d 655, 658 (Fla. 3d DCA 1998). With respect to Count I, Fernandez is incorrect that rule 64B9-8.006, Florida Administrative Code (2006), fails to provide penalty guidelines.[3] However, there is merit to Fernandez's assertion that the disciplinary guidelines do not state a range of penalties for the alleged violation in Count II.
Arias is instructive to the issues in this case. In Arias, the Department of Business *1204 and Professional Regulation filed an administrative complaint, claiming that Arias, a real estate agent, violated a statutorily imposed duty under federal and Florida law. See id. at 657. The Florida Real Estate Commission agreed and issued a final order suspending her real estate license and imposing a fine. See id. On appeal, Arias argued that the statutory provision, which created disciplinary guidelines in the context of business and professional regulation proceedings, did not specify a penalty guideline for a "duty imposed upon her ... by law." Id. at 657-58. The Third District agreed and held that without any corresponding rule setting forth the range of penalties for the unlawful conduct proscribed in the statute, the real estate agent was not on notice of the penalties for which she could receive in an administrative proceeding. See id. at 659. The court explained that "the statutory language at issue in the instant case, combined with the total lack of guidelines for enforcement, left the licensee in a predicament ripe for arbitrary and erratic enforcement, and obviously provided no standards sufficiently governed by the legislature as to constitute a judicially reviewable discretion." Id.
In this case, unlike Arias, Count I adequately placed Fernandez on notice of the penalties that he could face for misappropriating drugs. Fernandez was charged with failing to meet minimal standards of acceptable and prevailing nursing practice in violation of section 464.018(1)(n) because he misappropriated drugs as defined by rule 64B9-8.005(2)(c).[4] The penalty range for misappropriating drugs is provided for in the guidelines of rule 64B9-8.006. The maximum penalty for a first time offense of misappropriating drugs is a fine, evaluation, and suspension, followed by a term of probation. See Fla. Admin. Code R. 64B9-8.006(3)(qq) (2006). However, the penalty imposed on Fernandez for Count I, permanent revocation, exceeded the penalty range specified in the guidelines.
We acknowledge that section 456.079(3), Florida Statutes (2008), gives the Board discretion to depart from the guidelines and impose a harsher penalty when there are aggravating circumstances. See 456.079(3), Fla. Stat. (2008); Lusskin v. Dep't of Health, 866 So. 2d 733, 736 (Fla. 4th DCA 2004); Arias, 710 So.2d at 659 (citing Criminal Justice Standards & Training Comm'n v. Bradley, 596 So. 2d 661, 663 (Fla.1992)). The final order on review does not articulate those "[c]ircumstances which may be considered for purposes of mitigation or aggravation of [a] penalty." See Fla. Admin. Code R. 64B9-8.006(5)(b) (2006). Accordingly, we reverse the penalty imposed on Count I and remand for a penalty consistent with the guideline. Our holding is without prejudice to the Board imposing a harsher penalty, provided it complies with section 456.079(3) and its own guideline. See Fla. Admin. Code R. 64B9-8.006(5)(b).
With respect to Count II, we reach a different holding. Count II alleged that Fernandez failed to meet minimal standards of acceptable and prevailing nursing practice in violation of section 464.018(1)(n) because he exceeded the authority granted by his license, educational preparation, or nursing experience as defined by rule 64B9-8.005(2)(n).[5] Fernandez correctly *1205 argues that there is no corresponding penalty guideline for the violation charged in Count II. This is precisely what occurred in Arias. Absent the penalty guidelines required by section 456.079, we are compelled by legislative mandate to reverse the penalty imposed for Count II.
Affirmed in Part; Reversed in Part and Remanded for proceedings consistent with this opinion.
WARNER and CONNER, JJ., concur.
NOTES
[1] Section 464.018(1)(h) states that "[u]nprofessional conduct, as defined by board rule" is grounds for denial of a license or disciplinary action as specified in section 456.072(2), Florida Statutes (2008). § 464.018(1)(h), Fla. Stat. (2008). Section 464.018(1)(n) states that "[f]ailing to meet minimal standards of acceptable and prevailing nursing practice, including engaging in acts for which the licensee is not qualified by training or experience" is grounds for denial of a license or disciplinary action as specified in section 456.072(2). § 464.018(1)(n), Fla. Stat. (2008).
[2] Section 464.018(2) states that the "board may enter an order ... imposing any of the penalties in s. 456.072(2) against any ... licensee who is found guilty of violating any provision of subsection (1) of this section...." § 464.018(2), Fla. Stat. (2008). Section 456.072(2)(b) provides for the "suspension or permanent revocation of a license" for violations of any grounds set forth in section 456.072(1) or the applicable practice act. § 456.072(2)(b), Fla. Stat. (2008).
[3] Rule 64B9-8.006 provides the disciplinary guidelines, range of penalties, and aggravating and mitigating circumstances used by the Board in discharging its duties under sections 464.018 and 456.072. Fla. Admin. Code R. 64B9-8.006 (2006).
[4] Rule 64B9-8.005(2)(c) provides that failing to meet minimal standards of acceptable and prevailing nursing practice includes "[m]isappropriating drugs." Fla. Admin. Code R. 64B9-8.005(2)(c) (2006).
[5] Rule 64B9-8.005(2)(n) provides that failing to meet minimal standards of acceptable and prevailing nursing practice includes "[p]racticing beyond the scope of the licensee's license, educational preparation or nursing experience." Fla. Admin. Code R. 64B9-8.005(2)(n) (2006).
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94 P.3d 694 (2004)
140 Idaho 389
Sandra REID, as Conservator of the Person and Estate of Cory L. Snyder, a protected person, Plaintiff-Appellant,
v.
Philip DUZET and Barbara Duzet, husband and wife, and the following described real property; a parcel of land on the South half of the Northeast quarter of Section 3, Township 49 North, Range 4 West, Boise Meridian, Kootenai County, State of Idaho, described as follows; commencing at the East quarter corner of said Section 3; thence North along the East line of said Section, 200 feet; thence West, parallel to the East-West center line of said Section, 600 feet, thence North 200 feet to the True Point of Beginning; thence continuing North to the South edge of Kidd Island Bay Road; thence West along said road, to a point 60 feet East of the Southwest corner of Tax No. 7522; thence South parallel to the North-South center line of said Section to a point 200 feet North of the East-West center line of said section; thence East to the Southwest corner of Tax No. 11557; thence North 200 feet; thence East 400 feet to the True Point of Beginning, Defendants-Respondents, and
John and Jane Does I through 100; and all other persons claiming any interest in the described real property, Defendants.
No. 29161.
Supreme Court of Idaho, Boise, April 2004 Term.
July 1, 2004.
*695 Vasseur & Schlotthauer, PLLC, Coeur d' Alene, for appellant. Brent G. Schlotthauer argued.
Owen, James, Vernon & Weeks, P.A., Coeur d' Alene, for respondents. Susan P. Weeks argued.
*696 TROUT, Chief Justice.
Appellant Sandra Reid appeals the district court's amended findings and decision following a bench trial. In that decision, the district judge declined to quiet title to certain real property in Kootenai County owned by Respondents Philip and Barbara Duzet (the Duzets). Reid contends the findings of fact do not properly and adequately support the conclusion that the prior owners of the property in question had established the actual location of the boundary line between their properties as a boundary by agreement. We affirm the district judge's decision.
I. FACTUAL AND PROCEDURAL BACKGROUND
In May 1979, Wilfred Vedder and Michael Caldero negotiated an oral agreement transferring a portion of Vedder's property to Caldero in exchange for a well and water rights owned by Caldero. Because of the odd shape of the property transferred to Caldero, this portion of land is referred to as the "top hat" property. In contemplation of the land transfer, Vedder and Caldero visually marked the agreed boundary of the property to be exchanged with rock piles and wooden stakes. When the legal description of the top hat property was drafted by Vedder, the description in the deed did not match the boundaries as agreed to by Vedder and Caldero, and a large portion of the property visually marked as belonging to Caldero was described in the deed as belonging to Vedder. Neither party had a survey performed to ensure the property description matched the agreed boundaries. Thereafter, the Vedder property passed to Janice Magnusen and then to Reid. Caldero sold the top hat property and, after several intervening owners, it ended up in the hands of the Duzets.
After she purchased the property in 1999, Reid had a survey performed and at that time discovered the discrepancy between the deed description and the boundaries as agreed upon by Vedder and Caldero. Reid subsequently brought this action against the Duzets to quiet title to the property in question, according to the legal description set forth in her deed.
After a court trial, the district judge ultimately entered amended findings of fact and an amended judgment, determining that Vedder and Caldero had established a definite boundary through landmarks visible to all parties and therefore, a boundary by agreement was created. Thus, the landmarks as established by Vedder and Caldero controlled and Reid was not entitled to quiet title to the land in question. Reid filed a timely appeal.
II. STANDARD OF REVIEW
This Court will only set aside a trial court's findings of fact if they are clearly erroneous. I.R.C.P. 52(a). In deciding whether findings of fact are clearly erroneous, this Court determines whether the findings are supported by substantial, competent evidence. Evidence is substantial if a reasonable trier of fact would accept it and rely on it. Findings based on substantial, competent evidence, although conflicting, will not be disturbed on appeal.
This Court exercises free review over conclusions of law.
Neider v. Shaw, 138 Idaho 503, 506, 65 P.3d 525, 528 (2003) (citations omitted).
III. DISCUSSION
Reid argues on appeal that the district judge improperly relied on the theory of boundary by agreement to resolve this dispute, asserting that the facts here do not support such a legal conclusion. Reid contends that Vedder and Caldero established an oral boundary prior to any dispute as to where the boundaries actually were and, because there was never a dispute between them, this case does not meet the requirements for a boundary by agreement.
Idaho case law is well established on the elements necessary for a boundary by agreement. "Boundary by agreement requires: (1) an uncertain or disputed boundary involving adjacent properties, and (2) an agreement fixing the boundary." Neider v. Shaw, 138 Idaho 503, 506, 65 P.3d 525, 528 (2003). Under this doctrine, these two requirements are set out in a specific order; *697 namely, there must be an uncertain or disputed boundary first, and then a subsequent agreement fixing the boundary. See Cox v. Clanton, 137 Idaho 492, 493, 50 P.3d 987, 990 (2002); Baxter v. Craney, 135 Idaho 166, 172, 16 P.3d 263, 269 (2000); Johnson v. Newport, 131 Idaho 521, 522, 960 P.2d 742, 743 (1998); Cameron v. Neal, 130 Idaho 898, 901, 950 P.2d 1237, 1240 (1997); Wells v. Williamson, 118 Idaho 37, 41, 794 P.2d 626, 630 (1990). One boundary by agreement case held that any oral agreement as to a boundary between two adjacent properties is valid only if there is a dispute or uncertainty as to the boundary at the time of the agreement and, absent such a dispute or uncertainty, such an oral agreement is a conveyance of land in violation of the statute of frauds. Kunkle v. Clinkingbeard, 66 Idaho 493, 497, 162 P.2d 892, 894 (1945).
Here, Vedder and Caldero established the boundaries of the property Caldero was acquiring from Vedder before any actual transfer was made. After they had agreed upon the boundaries of the land to be traded to Caldero, Vedder subsequently drew up a deed in which he inadvertently used a legal description of the property that inaccurately reflected the boundaries upon which the two had agreed. Because neither of the parties had a survey performed to verify the accuracy of the deed's legal description, neither Vedder or Caldero, nor their successors in interest, knew that the legal description did not reflect the boundaries as agreed to by Vedder and Caldero until Reid had her survey performed. Consequently, there was no uncertainty as to where the actual boundaries were between Vedder and Caldero at the time they established them because the property in question belonged to Vedder and had not yet been traded to Caldero. As a result Vedder and Caldero cannot be said to have resolved an uncertain boundary by their agreement they were simply marking part of Vedder's property to be traded to Caldero. Consequently, the district judge erred in relying on the doctrine of boundary by agreement.
Reid argues on appeal that not only is this not a boundary by agreement case, the attempt by Vedder to transfer the property to Caldero by an oral agreement is a violation of the statute of frauds. This is also an improper characterization of the facts. While Vedder and Caldero did orally agree to the boundaries, their oral agreement was not meant to be the sole memorial of the real property transaction. Subsequent to the agreement, Vedder then drafted a written deed to effectuate the transaction, though this deed contained an inaccurate description of the top hat property boundaries.
"Where an order of a lower court is correct, but based upon an erroneous theory, the order will be affirmed upon the correct theory." Andre v. Morrow, 106 Idaho 455, 459, 680 P.2d 1355, 1359 (1984). Thus, while we do not agree that the doctrine of boundary by agreement applies, nevertheless, there is a theory upon which the district judge's ruling may be upheld.
The record is clear that Vedder, Caldero, and all of the successors in interest to the Caldero property, accepted this deed as reflecting the agreed upon boundaries and relied upon that deed accordingly. The record also demonstrates that all of these successors in interest to the Caldero property knew with reasonable accuracy where the boundaries of the property were as originally agreed. As to the Vedder portion of the property, Vedder's son explained the orally agreed upon boundaries to Magnusen at the time she purchased it. James Zoellin, a successor to the Caldero property contemporaneous to Magnusen, also explained the approximate boundaries to Magnusen. However, when Reid purchased the property from Magnusen, Magnusen could not explain to her where the boundaries of the property were; only that there were some rock piles, but said she didn't know where the boundary line was located. Because there was snow on the ground when Reid purchased the property, she did not walk the property with Magnusen to see these rock piles or to investigate where the boundaries might be.
Reid claims she had no notice of the agreement between Vedder and Caldero and therefore, cannot be bound by it. While it is clear from the record that Reid did not have knowledge of the Vedder-Caldero agreement *698 as to the boundaries, the district judge did find that Reid had notice as to the structures the Duzets owned which were on land designated as Reid's according to the surveyed boundaries. The district judge found:
Although the Plaintiff was unaware of any marked property boundaries, choosing instead to rely on the deeded description, even a casual observation of the parcel would have revealed improvements in the area of the top hat. Those improvements, i.e., fencing, pens, wood shed, driveway, garage, and a home immediately east of the iron rod should have put them on notice that someone claimed an interest in this property, regardless of what the survey later revealed.
This Court held in Campbell v. Weisbrod, 73 Idaho 82, 245 P.2d 1052 (1952), that:
Where the seller and the buyer go upon the land and there agree upon and mark the boundary between the part to be conveyed and the part to be retained by the seller, the line thus fixed controls the courses and distances set out in the deed executed to effectuate the division agreed upon.
73 Idaho at 89, 245 P.2d at 1057. And, as we further ruled in Paurley v. Harris, 75 Idaho 112, 268 P.2d 351 (1954), "such an agreed boundary would also be binding upon a successor in interest of the seller, who purchased with notice of the agreement." 75 Idaho at 117, 268 P.2d at 353.
In Paurley, the plaintiffs, seeking to quiet title according to the metes and bounds description in the deed, claimed they had no knowledge of an agreement concerning the boundaries of the property sold to the defendants by the original owner of plaintiffs' property. However, this Court found:
The boundary, which defendants claim, was clearly marked by `a tight board fence', four or five feet in height, and the area on defendants' side of the fence was planted to lawn, shrubbery and trees. This would constitute notice to an intending purchaser, of defendants' possession. One buying property in the possession of a third party is put on notice of any claim of title or right of possession by such third party, which a reasonable investigation would reveal.
73 Idaho at 117, 268 P.2d at 353. In Campbell, the property in question was originally owned by the Weisbrods. They reached an agreement with the Austins as to where their respective property boundary should be at the time they sold a portion of their property to the Austins, but the deed prepared at the time did not accurately reflect their agreement. Their agreement was that the boundary line would be approximately twenty feet south of a house located on Weisbrods' parcel of property. The Campbells subsequently purchased the property from the Austins and claimed no knowledge of the agreement between the Weisbrods and the Austins and further claimed the property line was to the north of the house, so their property included the Weisbrods' house. This Court held:
It is without dispute that a line was agreed upon and marked on the ground, by and as between Weisbrods and Austins. As stated, Campbell denied knowledge of this agreement, and denied the line was pointed out to him. However, he testified that when he bought the property the `house' was occupied by Weisbrods as their home, and that they continued to occupy it to the time of trial so far as he knew. It is unreasonable to suppose that plaintiffs [the Campbells] thought they were buying that house, or that the description in their deed included the land on which it stood. To say the least, they were put on notice of a conflicting occupancy and claim of ownership.
73 Idaho at 90, 245 P.2d at 1057. As the district judge found, Reid knew or should have known that there existed structures upon the portion of the top hat area in dispute. Just as in the Campbell case, she could not have reasonably assumed she was purchasing either the structures or improvements, or the land on which they were situate. Though she did not know of the agreement between Vedder and Caldero as to the boundaries of the property she was purchasing, she did have notice that someone else claimed the disputed top hat property.
We have ruled: "In construing a deed the court should seek and, if possible, give effect to the intention of the parties." *699 Gardner v. Fliegel, 92 Idaho 767, 770, 450 P.2d 990, 993 (1969). There was sufficient evidence in the record to establish that the intent of Vedder and Caldero was to transfer to Caldero the top hat property, delineated by the boundaries agreed to by the two men and not according to the subsequent mistaken deed description. We agree with Reid that this case is not properly characterized as a boundary by agreement case. However, Idaho law provides that when two parties orally establish boundaries of property to be transferred from one to the other, and the subsequent written deed does not match those boundaries, the orally agreed upon boundaries will prevail. This oral agreement is binding upon all subsequent purchasers who have notice of the agreement, or who are put on notice at the time of purchase that the property as described by the inaccurate deed is claimed by someone other than the seller.
We uphold the district judge's decision because the result reached was correct. Because Reid does not dispute the actual location of the boundaries to the top hat property as determined by the district judge according to the testimony and evidence produced at trial, we uphold that determination as set forth in the amended findings and conclusions.
IV. CONCLUSION
We uphold the district judge's decision declining to quiet title in Reid and legally establishing the boundaries of the Duzets' property according to the original agreement between Vedder and Caldero as determined by the amended findings and conclusions. The orally agreed upon boundaries between Vedder and Caldero prevail over the subsequent mistaken deed description, where Reid had notice that the disputed portion of the top hat property was claimed by the Duzets at the time she purchased it. We award costs on appeal to the Duzets.
Justices SCHROEDER, KIDWELL, EISMANN and BURDICK concur.
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342 S.W.3d 458 (2011)
Marjorie GOODMAN and Bradley Goodman, Appellants-Respondents,
v.
HOLLY ANGLE, LMT, Respondent-Appellant.
Nos. WD 72602, WD 72915.
Missouri Court of Appeals, Western District.
June 21, 2011.
*460 Stephen R. Bough, Kansas City, MO, for Appellant/Respondents.
Matthew B. Heath, Kansas City, MO, Michael W. Blanton, Leawood, KS, Co-Counsel for Appellant/Respondent.
John R. Weist, Overland Park, KS, for Respondent-Appellant.
Before GARY D. WITT, P.J., JAMES EDWARD WELSH, and ALOK AHUJA, JJ.
JAMES EDWARD WELSH, Judge.
Marjorie Goodman and Bradley Goodman ("the Goodmans") appeal the circuit court's judgment following a jury verdict in favor of Holly Angle, LMT, on the Goodmans' negligence and loss of consortium claims against Angle. The Goodmans claim that the circuit court clearly erred in *461 overruling their Batson[1] challenges to Angle's use of her peremptory strikes against three minority venirepersons. The Goodmans also claim that the circuit court abused its discretion in refusing to allow them to cross-examine Angle about collateral issues that they contend would have impeached her credibility. Angle filed a cross-appeal, which is contingent upon our reversing and remanding for a new trial. Because we find no merit in the Goodmans' points on appeal, we affirm the circuit court's judgment and deny as moot Angle's cross-appeal.
In their lawsuit against Angle, the Goodmans alleged that, on May 8, 2006, Angle, a licensed massage therapist, was performing massage therapy on Marjorie.[2] During the massage, Marjorie began to have severe burning in her arms and loss of sensation below the armpits and was unable to move her legs. Marjorie was taken by ambulance to Truman Medical Center, where doctors discovered that she had a ruptured disc at the base of her neck. The ruptured disc caused her to have temporary paralysis. Marjorie underwent surgery and rehabilitative care.
The Goodmans filed their suit against Angle on April 29, 2008. The Goodmans claimed that Angle was negligent for, among other things, failing to properly perform therapeutic massage on Marjorie; failing to properly treat Marjorie's physical condition; failing to get Marjorie emergency medical care and treatment; and failing to properly perform a patient history to determine if Marjorie was a candidate for massage services. Alternatively, the Goodmans asserted that Angle was negligent under a theory of res ipsa loquitur.
The Goodmans contended that Angle's negligence directly and proximately caused Marjorie to suffer severe pain, numbness, weakness, the inability to use her lower extremities, abnormalities of bowel and bladder functions, and tremors. The Goodmans further alleged that Marjorie had suffered and would suffer great mental and physical pain, expenses for medical care and treatment, and economic loss. The Goodmans also sought damages for Bradley's loss of consortium.
A jury trial was held in April 2010. The jury found in favor of Angle on all counts. The Goodmans appeal.
In their first point on appeal, the Goodmans claim that the circuit court erred in overruling their Batson challenges against Angle's use of her peremptory strikes to remove three minority venirepersons. When reviewing a ruling on a Batson challenge, we accord the circuit court "great deference because its findings of fact largely depend on its evaluation of credibility and demeanor." Kesler-Ferguson v. Hy-Vee, Inc., 271 S.W.3d 556, 558 (Mo. banc 2008). We will reverse the circuit court's decision only if it is clearly erroneous. Id. To find that the decision is clearly erroneous, we "must have a definite and firm conviction that a mistake was made." Id.
Missouri has a three-step procedure for resolving a Batson challenge. Id. In the first step, the party challenging the strike must object and make a prima facie case of racial discrimination by identifying the protected class to which the potential juror belongs. Id. at 559; State v. Bateman, 318 S.W.3d 681, 689 (Mo. banc 2010), cert. denied, ___ U.S. ____, 131 S. Ct. 927, *462 178 L. Ed. 2d 772 (2011). In the second step, the proponent of the strike must present a specific and clear race-neutral reason for the strike. Id. "The second step of this process does not demand an explanation that is persuasive, or even plausible." Purkett v. Elem, 514 U.S. 765, 767-68, 115 S. Ct. 1769, 131 L. Ed. 2d 834 (1995). The sole issue at this stage is the facial validity of the explanation. Id. at 768, 115 S. Ct. 1769. Unless a discriminatory intent is inherent in the reason given, the circuit court should deem the reason to be neutral. Id.
If the proponent of the strike articulates an acceptable non-discriminatory reason for the strike, then, at the conclusion of the third step, the circuit court must decide whether the party challenging the strike "has proved purposeful racial discrimination." Id. at 767, 115 S. Ct. 1769. To prove purposeful racial discrimination, the party challenging the strike must demonstrate that the proffered reason for the strike was merely pretextual and that the strike was, in fact, motivated by race. Bateman, 318 S.W.3d at 689. To meet this standard, the party challenging the strike "must present evidence or specific analysis" showing that the proffered reason was pretextual. State v. Johnson, 930 S.W.2d 456, 460 (Mo.App.1996). The party "cannot simply rely on conclusory allegations that the real motivation for the strike was racial in nature." Id. Factors that may be relevant to the determination of pretext include: (1) "the presence of `similarly situated white jurors who were not struck,'" State v. Strong, 142 S.W.3d 702, 712 (Mo. banc 2004) (citation omitted); (2) "the degree of logical relevance between the explanation and the case to be tried in terms of the nature of the case and the types of evidence adduced," Kesler-Ferguson, 271 S.W.3d at 559; (3) "the striking attorney's demeanor or statements during voir dire," id.; and (4) the circuit court's past experience with the striking attorney. Id. Because the circuit court is in a better position to observe trial counsel's sincerity and credibility and to observe the racial makeup of the jury panel, we rely on the circuit court "to consider the plausibility of the striking party's explanations in light of the totality of the facts and circumstances surrounding the case." Id.
In this case, the Goodmans properly raised a Batson challenge to Angle's peremptory strike of Venireperson 9, an African-American male; Venireperson 17, an African-American female, and Venireperson 21, a Hispanic male. With regard to Venireperson 9, Angle responded that she struck him because the Goodmans had specifically asked the venire panel if anyone felt nervous when going to a health care provider for the first time. Angle explained that she believed that part of the Goodmans' case was going to be that Marjorie was nervous and that her nervousness caused her not to tell Angle everything about her physical condition before Angle treated her. Angle said that she struck Venireperson 9 because he said that he, like Marjorie, gets nervous when he goes to a new health care provider.
In response to Angle's race-neutral reason for striking Venireperson 9, the Goodmans told the court that the issue of whether Marjorie's nervousness caused her not to tell Angle everything about her physical condition would "not be any part of the case." The Goodmans said that the only reason they raised the issue in voir dire was because the intake form Marjorie completed for Angle said, "high blood pressure, scared of doctors." The Goodmans also argued that Venireperson 9 said that, despite his getting nervous, like Marjorie does, when he goes to a new health care provider, he would not favor one party over the other. The court overruled the *463 Goodmans' Batson challenge after finding that Angle's reason for striking Venireperson 9 was race-neutral.
We find no error in the court's overruling the Goodmans' Batson challenge to Angle's striking Venireperson 9. One of the main issues in the case, as framed by the Goodmans' amended petition, was whether Angle was negligent for failing to properly perform a patient history to determine if Marjorie was a candidate for massage therapy. Angle's defense on this issue was that Marjorie did not fully and adequately apprise Angle of her past medical history and current complaints before Angle began treating her. From the Goodmans' asking the venire panel if any of them were "like Marjorie Goodman" in that they got nervous or scared when going to a new healthcare provider, Angle could have reasonably anticipated that the Goodmans were going to counter Angle's defense with evidence that Marjorie was nervous and that her nervousness caused her not to disclose all of her medical problems to Angle. Angle may have reasonably believed that, because of their shared nervousness at going to a new health care provider, Venireperson 9 would have been sympathetic to Marjorie's position. Although the Goodmans' counsel told the court that such an argument would "not be any part of the case," the circuit court was not required to believe him or rely on his prognostication.[3] We will defer to the circuit court's determination. Id. at 558. The degree of logical relevance between Angle's explanation for the strike and the nature of the issues in the case supports the circuit court's determination that the explanation was race-neutral.
As for the Goodmans' claim that Venireperson 9 said that he would not favor one party over the other, "such an observation, while important in the context of dealing with a challenge for cause, is not relevant in determining the propriety of a peremptory strike." State v. Rollins, 321 S.W.3d 353, 367 (Mo.App.2010), cert. denied, ___ U.S. ____, 131 S. Ct. 2115, 179 L. Ed. 2d 910 (2011). "A venireperson's statement that he or she can set aside a prior experience and be `fair and impartial' does not resolve the issues in a Batson context where the party seeking to strike the venireperson might have reason to think otherwise." Id. at 367-68. The circuit court did not clearly err in overruling the Goodmans' Batson challenge to Angle's striking Venireperson 9.
In response to the Goodmans' Batson challenge to Angle's striking Venireperson 17, Angle reminded the court that she had moved to strike this venireperson for cause, but the court had denied her motion. Angle explained that her reasons for wanting to strike Venireperson 17 were because (1) Angle found her statements to be "very confusing, contradictory"; (2) she had a bad back problem, "which identifie[d] her with" Marjorie Goodman; and (3) at one point, she said that the only reason anyone should go to a massage therapist was for "relaxation," and "this case [was] going to involve more than simple relaxation." After Angle provided her reasons, the Goodmans made no argument that these reasons were pretextual. The court found that Angle's reasons were race-neutral and allowed the strike.
*464 Because the Goodmans failed to challenge Angle's race-neutral reasons at trial, they are precluded from challenging them on appeal. State v. Taylor, 944 S.W.2d 925, 934 (Mo. banc 1997). A party's failure to challenge the striking party's race-neutral explanations in any way waives any future complaint that the striking party's reasons were racially motivated and leaves nothing for the appellate court to review. Id. Therefore, we deny the Goodmans' claim of error concerning their Batson challenge to Angle's striking Venireperson 17.
The Goodmans' final Batson challenge was to Angle's striking Venireperson 21 as an alternate juror. The court's pool of alternate jurors consisted of four venirepersonstwo Caucasian females, one Caucasian male, and one Hispanic male. The court told the parties that they were each allowed one strike from the four. The Goodmans made their peremptory strike first and then gave the remaining three names to Angle to choose her peremptory strike. After the Goodmans struck one of the Caucasian females, Angle struck Venireperson 21, the Hispanic male.
In response to the Goodmans' Batson challenge, Angle told the court that two of the three venirepersons remaining on the pool of alternate jurors after the Goodmans' peremptory strike did not answer any questions or say anything during voir dire. The two silent venirepersons in the alternate pool were Venireperson 21 and Venireperson 23, a Caucasian male. Angle said that the reason that he struck Venireperson 21 instead of Venireperson 23 was because Venireperson 21's intake form indicated that his wife worked at Center-Point, a health care facility, while Venireperson 23 did not have that connection to the health care field. Upon the court's further questioning Angle about why Venireperson 21's connection to the health care field would be adverse to her. Angle said that she struck him because there were a lot of questions asked during voir dire regarding health care, working in the health care field, and being related to people in the health care field, but Venireperson 21 did not "speak up and explain the situation." The Goodmans' counsel responded that he specifically did not ask if anyone's spouse worked in the health care field. The court found that Angle's reasons for striking Venireperson 21 were race-neutral and denied the Goodmans' Batson challenge.
We first note that neither of the two alternate jurors deliberated in this case. The Eastern District of this court has ruled that, where no alternate jurors deliberate, the alternate venireperson's exclusion from the jury does not violate the constitutional rights of either the party opposing the strike or the excluded venireperson. State v. Carter, 889 S.W.2d 106, 109 (Mo.App.1994) (holding that "Batson does not stand for the proposition there is a Constitutional right to be an alternate juror"). We need not address this issue here because, as discussed hereinafter, a review of this point on the merits demonstrates that the circuit court did not err in overruling the challenge.[4]
Angle said that she struck Venireperson 21 because he did not say anything during voir dire. "A prospective juror's silence. . . is a permissible, facially neutral explanation for a peremptory strike." State v. Barnett, 980 S.W.2d 297, 302 (Mo. banc 1998). Although Venireperson 23 was also silent during voir dire, the two men were not similarly situated because Venireperson 21's wife worked in the health care field. The Goodmans are correct that panel members were asked about their own *465 medical and health care background and not that of their spouses. Panel members were, however, asked their opinions on several issues related to the health care field and health care providers. Also, when panel members were asked if there was anything else that they thought either party would want to know about them, two panel members volunteered that they had relatives in the health care field and another panel member volunteered that, while he did not fit exactly into the categories about which the parties had asked, he wanted to make the parties aware of his tangential connection to those categories. In light of these circumstances, the circuit court could have reasonably found Angle's explanation that she struck Venireperson 21 for failing to "speak up" plausible, and we defer to its decision to do so. The circuit court did not clearly err in overruling the Goodmans' Batson challenge to Angle's striking Venireperson 21.
In their second point, the Goodmans claim that the circuit court erred in refusing to allow them to question Angle about collateral issues that they contend would have impeached her credibility. The circuit court has broad discretion to admit or exclude evidence. Mitchell v. Kardesch, 313 S.W.3d 667, 674-75 (Mo. banc 2010). We will not disturb the circuit court's ruling unless we find an abuse of discretion. Id. at 675. An abuse of discretion occurs where the ruling "is clearly against the logic of the circumstances and is so unreasonable as to indicate a lack of careful consideration." Id. (internal quotation marks and citations omitted).
After calling Angle to testify as a witness in their case-in-chief, the Goodmans sought to examine her about a book that they had asked her to bring to trial. The book was entitled Gems and Minerals/Flower Essences. Angle objected on the basis of relevancy. During the subsequent bench conference, the Goodmans argued that the book was relevant to Angle's "qualifications to be a licensed massage therapist." Specifically, the Goodmans said that the book contained writings about practices and techniques that were "way outside the scope of normal massage therapy." The Goodmans admitted that Angle did not use any of the book's practices or techniques on Marjorie and, further, that the book was written three years after Angle treated Marjorie. Nevertheless, the Goodmans argued that questions about the book were relevant to show Angle's continuing education, which they claimed bore upon her credibility. The circuit court found the Goodmans' questions about the book irrelevant and sustained Angle's objection.
Later, the Goodmans made an offer of proof in which they told the court that they wanted to examine Angle about practices in the Gems and Minerals/Flower Essences book, another book entitled Intro to Vibe & Craniosacral Balancing, and an untitled book. The Goodmans told the court that Angle had produced these books in response to their request for any training materials that she had received. According to the court's description of the books, all of the books were notebooks that "mostly, if not exclusively, contain handwritten notes that appear to be written by [Angle]." The books were possibly from lectures or classes that Angle had attended. While the record indicates that the Gems and Minerals/Flower Essences book was written in 2009, there is no indication as to when the other books were written.[5] The Goodmans said that they would offer evidence that the practices and techniques in these books were "outside the scope of *466 what a licensed massage therapist does."[6] Again, the Goodmans admitted that Angle did not use any of the books' practices or techniques on Marjorie, but argued that her receiving the information contained in the books as part of her continuing education and training made her less credible and less trustworthy. The circuit court refused to admit evidence regarding the books. On appeal, the Goodmans argue that the circuit court erred in not allowing them to examine Angle about the books to impeach her credibility. We disagree.
The Goodmans' offer of proof was not sufficient to permit the circuit court to further consider their claim of admissibility or to preserve the record for appellate review. An offer of proof must be specific and definite and demonstrate three things: "(1) what the evidence will be; (2) the purpose and object of the evidence; and (3) each fact essential to establishing the admissibility of the evidence." Turner v. City of Independence, 186 S.W.3d 786, 790 (Mo.App.2006). The Goodmans' offer of proof failed to demonstrate the facts essential to establish the admissibility of their proposed examination.
The Goodmans argued that questions about Angle's having received the information contained in the books as part of her continuing education were relevant to Angle's qualifications and training. The offer of proof did not show that Angle ever used or even agreed with the practices and techniques in the books, however. All the Goodmans' offer of proof showed was that Angle received information concerning allegedly unconventional practices and techniques as part of her continuing education and training, made handwritten notes about the practices in the books, and retained possession of the books. While the Goodmans argued that "if [Angle]'s performing stuff outside the scope of what licensed massage therapists do, that's a big ding on her credibility," the Goodmans never demonstrated that the evidence would show that Angle was, in fact, performing the practices and techniques described in the books or even approved of such methods. The offer of proof was, therefore, deficient in this regard.
Nevertheless, we will explain, ex gratia, why the circuit court did not abuse its discretion in refusing to allow this line of questioning. Contrary to the Goodmans' claim, Angle's receiving information concerning allegedly unconventional practices and techniques as part of her continuing education and training had no bearing upon her credibility as a witness. In Mitchell, 313 S.W.3d at 675, the Missouri Supreme Court outlined the most commonly recognized methods of impeaching a witness's credibility:
admission of evidence showing the witness's incapacity or problems in his or her ability to perceive or memory;
admission of evidence of prior convictions;
admission of evidence of the witness's bias, interest or prejudice;
admission of prior inconsistent statements of the witness;
admission of evidence of the witness's character for truthfulness and veracity.
(Footnote omitted.) The Goodmans' proposed examination did not fall under any of these categories of impeachment. The Goodmans contend that, because Mitchell says that a witness "may be asked about specific instances of his or her own conduct that speak to his or her own character for *467 truth or veracity, even where the issue inquired about is not material to the substantive issues in the case," they were entitled to ask Angle about the collateral issue of the books. Id. at 677. The Goodmans' reliance upon Mitchell is misplaced, however, because Angle's receiving the information contained in the books as part of her continuing education and training did not speak at all to her character for truthfulness and veracity.
As for the Goodmans' contention that their proposed examination was relevant to Angle's qualifications as a licensed massage therapist, we note that nothing in the Goodmans' amended petition claimed that Angle lacked the competency or qualifications to be a licensed massage therapist. One of the main issues at trial was whether there were contraindications to massage therapy that Angle, as a licensed massage therapist, failed to recognize or consider in deciding to perform massage therapy on Marjorie. While the Goodmans argue that "Angle's qualifications and training relate[d] directly to her decision to perform massage therapy on Marjorie," we do not understand how Angle's receiving the information contained in these books, at least some if not all of which several years after she treated Marjorie, affected her qualifications as a licensed massage therapist to decide whether to treat Marjorie. There was no allegation or evidence that Angle used the allegedly unconventional practices and techniques from the books in treating Marjorie or that Angle relied upon the information in the books in making the decision to treat her. Angle's receiving and retaining the information contained in the books was not relevant to her credibility, her qualifications, or to any other issue in this case. The circuit court did not abuse its discretion in refusing to allow the Goodmans' proposed examination.
We, therefore, affirm the circuit court's judgment and dismiss as moot Angle's cross-appeal. All concur.
NOTES
[1] Batson v. Kentucky, 476 U.S. 79, 106 S. Ct. 1712, 90 L. Ed. 2d 69 (1986).
[2] Due to the appellants' shared last name, we will occasionally refer to Bradley Goodman and Marjorie Goodman by their first names. No familiarity is intended.
[3] In fact, the Goodmans did raise the issue in their case. In opening statement, the Goodmans told the jury that Marjorie "was a little nervous, she was a little scared, but she was still honest with this massage therapist." During direct examination, Marjorie's counsel asked her what she told Angle about her physical condition during her initial intake appointment on May 2, 2006. After testifying as to what she did and did not tell Angle, Marjorie testified that she "was nervous" during the appointment.
[4] For more on this issue, see Carter v. Kemna, 255 F.3d 589 (8th Cir.2001).
[5] The books were not part of the record on appeal.
[6] According to the Goodmans' offer of proof, the books describe practices such as using gemstones in massage therapy, submerging a person's head in salt water, and soaking food in Clorox.
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01-03-2023
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/2548288/
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94 P.3d 430 (2004)
2004 WY 89
AMOCO PRODUCTION COMPANY, Appellant (Petitioner),
v.
DEPARTMENT OF REVENUE, State of Wyoming and Board of County Commissioners of Uinta County, Appellees (Respondents).
No. 02-171.
Supreme Court of Wyoming.
July 23, 2004.
*433 Representing Appellant: John L. Bordes, Jr., of Oreck, Bradley, Crighton, Adams & Chase, Boulder, Colorado; Robert A. Swiech, Associate General Tax Counsel, BP America, Inc., Houston, Texas. Argument by Mr. Swiech.
Representing Appellee Wyoming Department of Revenue: Patrick J. Crank, Wyoming Attorney General; Martin L. Hardsocg, Senior Assistant Attorney General; Karl D. Anderson, Senior Assistant Attorney General. Argument by Mr. Anderson.
Representing Appellee Board of County Commissioners of Uinta County: Bruce A. Salzburg of Freudenthal, Salzburg & Bonds, P.C., Cheyenne, Wyoming.
Before GOLDEN, LEHMAN, KITE, and VOIGT, JJ., and BROOKS, D.J.
*434 GOLDEN, Justice.
[¶ 1] This is an appeal by Amoco Production Company (Amoco) from a decision by the State Board of Equalization (Board) assessing Amoco on underpayment of severance taxes and increasing gross product valuation on gas produced from the Whitney Canyon field in Uinta County for the production years 1990 through 1992. We will affirm in part and reverse in part.
ISSUES
[¶ 2] Amoco presents the following issues for review:
A. Uinta County lacks appeal rights in this matter.
B. Royalties and production taxes are not properly included in the direct cost ratio as costs of producing.
C. The decision of the Board confirming the Department's point of valuation was unsupported by substantial evidence and otherwise not in accord with Wyoming law.
D. The Department's disallowance of processing and transportation related expenses was arbitrary, capricious, an abuse of discretion and unsupported by substantial evidence.
E. The imposition of penalties was improper.
The Wyoming Department of Revenue states the issues as:
I. Did the State Board correctly conclude that the point of valuation for Amoco's Whitney Canyon production was the inlet to the initial transportation related compressor?
II. Did the State Board correctly conclude that Amoco failed to meet its burden of proof in regard to Amoco's claim that certain expenses were associated with processing at the Whitney Canyon Plant?
III. Did the State Board correctly conclude that the imposition of penalties by the Department was proper and justified?
IV. Did the State Board correctly conclude that production taxes and royalties are direct production costs?
The Board of County Commissioners of Uinta County states the issues as:
Whether the Board of County Commissioners of Uinta County was properly permitted to intervene as a party in the contested case hearing before the State Board of Equalization?
Whether, if the County was properly allowed to intervene in this case, the Board of Equalization could consider the propriety of the Department of Revenue's proportionate profits calculation used to assess Appellant's production in the years at issue in the case?
Whether the "direct cost ratio" used in calculating the taxable value of oil and gas production under the proportionate profits method includes production taxes and royalties as "direct costs of producing" the oil and gas?
FACTS
[¶ 3] In 1994, the Department of Audit (DOA) engaged an audit of Amoco's Whitney Canyon production for the years 1989 through 1992. In 1996, pursuant to the results of the audit, the Department of Revenue (the Department) issued a deficiency assessment against Amoco. Amoco timely appealed the deficiency assessment to the Board.
[¶ 4] Amoco and the Department eventually settled all issues involving the production year 1989. The only issues on appeal concern production years 1990 though 1992. Amoco valued its production during the years at issue under the proportionate profits methodology.[1] Uinta County intervened in *435 the administrative action and challenged the decision by the Department to not include production taxes and royalties as direct production costs within the context of the proportionate profits equation.
[¶ 5] Ultimately, the Board ruled in favor of Uinta County on the issue it raised and against Amoco on the issues Amoco initially appealed. Amoco requested and was granted reconsideration by the Board, but the reconsidered opinion contained no substantive changes to the issues herein appealed. Amoco timely appealed both the initial decision and the reconsidered opinion to district court. The district court certified the case to this Court pursuant to W.R.A.P. 12.09(b). Further details will be provided during the discussion of each issue as necessary.
STANDARD OF REVIEW
[¶ 6] When reviewing administrative decisions, this Court is guided by Wyo. Stat. Ann. § 16-3-114(c)(ii) (LexisNexis 2003), which provides in pertinent part:
(c) To the extent necessary to make a decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. In making the following determinations, the court shall review the whole record or those parts of it cited by a party and due account shall be taken of the rule of prejudicial error. The reviewing court shall:
* * * *
(ii) Hold unlawful and set aside agency action, findings and conclusions found to be:
(A) Arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law;
(B) Contrary to constitutional right, power, privilege or immunity;
(C) In excess of statutory jurisdiction, authority or limitations or lacking statutory right;
(D) Without observance of procedure required by law; or
(E) Unsupported by substantial evidence in a case reviewed on the record of an agency hearing provided by statute.
This Court will defer to an agency's findings of fact if they are supported by substantial evidence. Whiteman v. Workers' Safety and Comp. Div., 984 P.2d 1079, 1081 (Wyo.1999). Substantial evidence is "relevant evidence that a reasonable mind can accept as adequate to support an agency's conclusion." Id. (quoting Casper Oil Co. v. Evenson, 888 P.2d 221, 224 (Wyo.1995)). We will affirm an agency's conclusions of law only if they are in accordance with the law. Snyder v. State ex rel. Workers' Comp. Div., 957 P.2d 289, 293 (Wyo.1998). When an agency's determinations involve elements of law and fact, or ultimate facts, we do not give them the same deference we reserve for findings of basic fact. Basin Electric Power Coop., Inc. v. Dep't of Revenue, 970 P.2d 841, 850 (Wyo.1998). Instead, we separate the factual elements from the legal elements to determine whether the appropriate rule of law has been correctly applied to the facts and defer to the agency's ultimate factual finding only if there is no error in either stating or applying the law. Id. at 850-51. To the extent the controversy in the case at bar involves the proper application of appraisal methods to the facts, this is an issue of ultimate fact and requires de novo review. Id. at 851.
[¶ 7] The Department's valuations for state-assessed property are presumed valid, accurate, and correct. Chicago, Burlington & Quincy R.R. Co. v. Bruch, 400 P.2d 494, 498-99 (Wyo.1965). This presumption can only be overcome by credible evidence to the contrary. Id. In the absence of evidence to the contrary, we presume that the officials charged with establishing value exercised honest judgment in accordance with the applicable rules, regulations, and other directives that have passed public scrutiny, either through legislative enactment or agency rule-making, or both. Id.
[¶ 8] The petitioner has the initial burden to present sufficient credible evidence to overcome the presumption, and a mere difference of opinion as to value is not sufficient. Teton Valley Ranch v. State *436 Board of Equalization, 735 P.2d 107, 113 (Wyo.1987); Chicago, Burlington & Quincy R.R., 400 P.2d at 499. If the petitioner successfully overcomes the presumption, then the Board is required to equally weigh the evidence of all parties and measure it against the appropriate burden of proof. Basin, 970 P.2d at 851. Once the presumption is successfully overcome, the burden of going forward shifts to the Department to defend its valuation. Id. The petitioner, however, by challenging the valuation, bears the ultimate burden of persuasion to prove by a preponderance of the evidence that the valuation was not derived in accordance with the required constitutional and statutory requirements for valuing state-assessed property. Id.
DISCUSSION
Standing of Uinta County to Intervene
[¶ 9] During the audit process, Amoco and the Department agreed that production taxes and royalties should not be included as direct production costs in the proportionate profits equation. This decision reduced Amoco's tax obligation. After receiving the final deficiency notice from the Department, Amoco appealed to the Board on other issues. In September 1997, Uinta County moved to intervene. In May 1998, Uinta County filed its preliminary statement, which, for the first time, challenged the decision by the Department to not include production taxes and royalties as direct production costs.
[¶ 10] Amoco immediately filed a motion to vacate the order allowing intervention. The Board denied Amoco's motion without discussion or analysis. Uinta County remained a party to the action. Ultimately, the Board ruled in favor of Uinta County on the issue of its proffered definition of direct production costs. In its final order, the Board reviewed its decision to allow Uinta County to intervene. In essence, the Board simply determined that intervention by Uinta County was appropriate in the name of judicial economy.[2] On appeal, Amoco argues that Uinta County should never have been allowed to intervene.
[¶ 11] Amoco presents a very fundamental argument. Amoco argues a county has no sovereign authority beyond that granted by the legislature. State v. Bd. of Cty. Comm'rs of Johnson Cty., 642 P.2d 456, 457-58 (Wyo.1982). Amoco contends the legislature has never expressly granted a right to counties to intervene in Board actions between a taxpayer and the Department. Thus, Amoco argues, Uinta County simply lacks capacity to intervene.
[¶ 12] We believe this argument over-simplifies the issue. In general, intervention is simply a means by which an outsider with an appropriate interest may come into an existing action. The first inquiry is whether intervention in general is allowed in a contested case before the Board, and, assuming the answer is yes, our second inquiry is whether a county meets the criteria for intervention.
[¶ 13] We begin by examining the jurisdiction granted to the Board by the legislature. The Board's authority to hear contested cases is found in Wyo. Stat. Ann. § 39-1-304(a) (Michie 1997), recodified as § 39-11-102.1(c) (LexisNexis 2003):
The state board of equalization shall perform the duties specified in article 15, section 10 of the Wyoming constitution and shall hear appeals from county boards of equalization and review final decisions of the department upon application of any interested person adversely affected, including boards of county commissioners for the purposes of this subsection, under the contested case procedures of the Wyoming Administrative Procedure Act.
According to this statute, all contested cases before the Board are governed by the contested case procedures of the Wyoming Administrative Procedure Act (WAPA). Turning then to the WAPA, we find that intervention is provided for within the definition of "party": "`[p]arty' means each *437 person or agency named or admitted as a party or properly seeking and entitled as of right to be admitted as a party." Wyo. Stat. Ann. § 16-3-101(b)(vi) (LexisNexis 2003). Since a county is an agency under WAPA definitions pursuant to Wyo. Stat. Ann. § 16-3-101(b)(i) (LexisNexis 2003), § 16-3-101(b)(vi) allows for the possibility of a county intervening in a contested case if it can do so as of right.
[¶ 14] Intervention as of right is a well-recognized legal concept. While the legal requirements for intervention as of right are discussed in many cases, the requirements are reflected succinctly in W.R.C.P. 24(a):
(a) Intervention of right. Upon timely application anyone shall be permitted to intervene in an action:
(1) When a statute confers an unconditional right to intervene; or
(2) When the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.
The Board has promulgated its own rule of procedure directly applicable to intervention in contested case proceedings before the Board. The pertinent language of the Rule reads:
(a) Upon timely motion, any person, including a board of county commissioners, may be permitted to intervene in a case: (1) when a statute confers an unconditional right to intervene; or (2) when the movant claims an interest relating to the matter or transaction which is the subject of the case and is so situated that the disposition of the case may as a practical matter impair or impede his ability to protect that interest.
Rules of Practice and Procedure for Cases Before the Wyoming State Board of Equalization, ch. 2, § 14 (Oct. 22, 2001).
[¶ 15] The Board rule roughly follows W.R.C.P. 24(a). Significantly, however, the Board rule omits the condition that an applicant does not qualify to intervene as of right if its interests are adequately represented by existing parties. This condition is an established requirement for intervention as of right and as such the Board is not at liberty to omit it. By omitting this condition, the Board is attempting to expand the circumstances under which a party may intervene in a contested case beyond what is authorized by the legislature in the WAPA. "Administrative agencies have only those powers expressly conferred by statute. This legal principle applies with equal force to an agency's authority to promulgate rules. Rules promulgated in excess of an agency's statutory authority are null and void." State ex rel. Dep't of Revenue v. Buggy Bath Unlimited, Inc., 2001 WY 27, ¶ 10, 18 P.3d 1182, ¶ 10 (Wyo.2001) (citations omitted). The Board's rule regarding intervention is void because it does not accurately reflect the full legal requirements of intervention as of right.
[¶ 16] Although the Board rule on intervention is not valid, the Board still has authority under the WAPA to allow a county to intervene if the county qualifies for intervention as of right. We return to W.R.C.P. 24(a) for the appropriate guidance to determine if a county may intervene into a valuation dispute between a taxpayer and the Department as of right. A fundamental requirement of being allowed to intervene as of right is a significant, legally protectable interest.
While we may agree that Rule 24(a) lends itself to liberal construction, it is also true that one seeking intervention must present a significant protectable interest in the suit, rather than one that is contingent. O'Hara Group Denver, Ltd. v. Marcor Housing Systems Inc., Colo., 197 Colo. 530, 595 P.2d 679 (1979); In re Penn Central Commercial Paper Litigation, 62 F.R.D. 341 (1974), aff'd without opinion 515 F.2d 505 (2nd Cir.1975). Appellants were, therefore, obliged to demonstrate that they had a significant interest in the present litigation and not one that was merely contingent or similar to the interest of any member of the public at large.
Platte County School Dist. No. 1 v. Basin Elec. Power Co-op., 638 P.2d 1276, 1279 *438 (Wyo.1982). Certainly counties have a pecuniary interest in the taxable value of property as determined by the Department. Counties may levy and collect ad valorem taxes. Ad valorem taxes are based upon the taxable value of property as established by the Department. This pecuniary interest, however, does not translate necessarily into a legally protectable interest in the statutorily defined valuation process.
[¶ 17] Uinta County argues that § 39-11-102.1(c), quoted above, evidences a legislative intent that counties have a legally protectable interest in the valuation process. This Court recently has had occasion to discuss the impact of W.S. § 39-11-102.1(c) on the role of counties in the valuation process. While we agree that the legislature has granted counties limited appeal rights from a final decision of the Department, the exact scope of the authority the legislature has granted to counties is not entirely clear:
We conclude that by amending Wyo. Stat. Ann. § 39-11-102.1(c) in 1995, the legislature intended to grant counties the authority to file contested cases from final decisions of the DOR. Unfortunately, the legislature left intact several statutes which specify only the taxpayer and the Department as having rights to appeal. It did not indicate what decisions could be challenged by the county, or when. It failed to indicate how county appeals fit into the amended return and audit process. By granting counties the right to appeal, the legislature may have effectively eliminated any possibility of settlement of tax disputes under Wyo. Stat. Ann. § 39-11-103(b) (LexisNexis 2001) because, even if a dispute is settled, there is the risk of an appeal by a county. We urge the legislature to remedy these problems by clearly indicating its intent with respect to county appeals of ad valorem taxes and by clearly defining the scope and process for such appeals.
Bd. of Cty. Comm'rs for Sublette Cty. v. Exxon Mobil Corp., 2002 WY 151, ¶ 30, 55 P.3d 714, ¶ 30 (Wyo.2002). Unfortunately, as yet the legislature has not offered any clarification.[3]
[¶ 18] Guided by certain rules of statutory construction, the Exxon Court puzzled over the possible parameters of the appeal authority granted to the counties by the legislature:
"Courts may try to determine legislative intent by considering the type of statute being interpreted." Basin Elec. Power Coop. v. Bowen, 979 P.2d 503, 509 (Wyo.1999). "Tax statutes are to be construed in favor of the taxpayer and are not to be extended absent clear intent of the legislature." Id. (citing Chevron, U.S.A., Inc. v. State, 918 P.2d 980, 985 (Wyo.1996)).
In the interpretation of statutes levying taxes it is the established rule not to extend their provisions, by implication, beyond the clear import of the language used, or to enlarge their operations so as to embrace matters not specifically pointed out. In case of doubt they are construed most strongly against the government and in favor of the citizen.
Chevron, U.S.A., Inc. v. State, 918 P.2d 980, 984-85 (Wyo.1996) (citing Kelsey v. Taft, 72 Wyo. 210, 219-20, 263 P.2d 135, 138 (1953) (quoting Gould v. Gould, 245 U.S. 151, 153, 38 S. Ct. 53, 62 L. Ed. 211 (1917))). The same principles of strict construction apply to statutes which grant authority to political sub-entities. "Since enabling legislation, through which all subordinate governmental instrumentalities must receive their authority, is a grant of sovereign power, it is subject to the usual rule of strict construction applicable to such grants." Norman J. Singer, Statutes and Statutory Construction § 64:1 (6th ed.2001 rev.) (footnote omitted). Because § 39-11-102.1(c) (LexisNexis 2001) is both a tax statute and one we are being asked to construe as a delegation of power from the State of Wyoming to the counties, we hold that it is appropriate to strictly construe it.
Assuming that the legislature intended to give some degree of authority to counties to appeal in ad valorem tax cases, *439 principles of strict construction require us to conclude that it did not intend the scope of such an appeal to extend into areas specifically addressed in other statutes. Specific statutes control over general statutes involving the same subject. Thunderbasin Land, Livestock & Inv. Co. v. Laramie County, 5 P.3d 774, 782 (Wyo.2000). Consequently, a county's appeal may not challenge valuation methodology. Such appeals are governed by Wyo. Stat. Ann. § 39-14-203(b) (LexisNexis 2001). Such an appeal may not challenge an annual value certification, as that matter is addressed by Wyo. Stat. Ann. §§ 39-13-102(n) and 39-14-209(b)(iv) (LexisNexis 2001). The County cannot force an audit of a taxpayer through a contested case, as that responsibility is given to the Departments of Audit and Revenue under Wyo. Stat. Ann. § 39-14-208(b) (LexisNexis 2001). It follows that the County's appeal must be limited in scope to specific errors allegedly committed by the DOR.
Exxon, ¶¶ 32, 33.
[¶ 19] Ultimately the Exxon Court did not have to define the appeal powers of a county because it determined that the valuation notice being appealed by the county was not a final, appealable order. Still, the statutory framework described above allows counties only a very limited role in the valuation process. In Exxon, we excluded participation by the counties in all matters that are governed by a specific statute. Thus we specifically held that a county could not seek review of valuation methodology or the annual valuation certification.
[¶ 20] Remembering our rule of strict construction, and given that the legislature has made no further amendments to the relevant tax statutes, we find that the legislature did not intend to expand the role of the counties in the valuation process. We have previously summarized the roles of the parties in the property valuation process:
There exists then, under current state taxation methodology, three state players and the counties: the state Department of Revenue with the collection and taxation supervision responsibilities; the State Board of Equalization with a semi-judicial appeal and supervisory responsibility; and the Mineral Audit Division of the Department of Audit with a delinquency audit responsibility; and finally, county governments which have a direct pecuniary interest in the collection of the ad valorem tax. Value is established by the Department of Revenue subject to appeal to the State Board of Equalization with the function of the counties regarding ad valorem tax only limited to a quantities validation program for collection.
Union Pacific Resources Co. v. State, 839 P.2d 356, 377 (Wyo.1992). We believe the role of the counties remains the same. The only difference is that now a county can bring a contested case before the Board to challenge Department findings as to quantity or any similar alleged error. A county cannot challenge a decision by the Department regarding valuation methodology or any substantive decision regarding the application of a chosen valuation methodology, including the definition of inputs into valuation equations.
[¶ 21] Returning to the argument presented by Uinta County, we do not agree that § 39-11-102.1(c) expresses a legislative intent to create a greater role for counties in the valuation process. The legislature has not expressly expanded the role of counties beyond a very limited involvement in the valuation process, and we decline to do so under the guise of statutory interpretation. The statute referenced by Uinta County does not confer upon counties the requisite interest to intervene as of right into a contested case before the Board brought by a taxpayer against the Department challenging substantive methodology decisions by the Department regarding valuation.
[¶ 22] Given the statutorily limited role of counties in the valuation process, even should we find that counties have the requisite interest for intervention, we are compelled to find that the interests of the counties is already adequately represented by the Department. The legislature has developed a framework in which valuation is the unique function of the Department. Not even the Board can challenge that function by changing definitions adopted by the Department. This Court *440 previously has differentiated between the functions assigned to the Board and the functions assigned to the Department:
We begin by summarizing the statutory structure of the Department and the Board [of Equalization]. The Board is a constitutional body, and the legislature is required to establish a Board of Equalization charged with the duty to equalize the valuation of all property in the state. Wyo. Const. art. 15, §§ 9 & 10. In Wyo. Sess. Laws. ch. 174, §§ 39-1-101, et seq. (1991), the legislature created the Department as a separate agency from the Board, and assigned to it administrative functions relating to taxation and revenue that previously had been the responsibilities of the Board. Union Pacific Resources Co. v. State, 839 P.2d 356, 363 (Wyo.1992) (UPRC I). It specifically charged the Department with the function of valuation of property for purposes of tax assessment, "while the Board `became an independent quasi-judicial organization with constitutional and statutory duties to equalize valuation and decide disagreements regarding statutory provisions affecting the assessment, levy and collection of taxes.' UPRC I, 839 P.2d at 363." Union Pacific Resources Co. v. State Bd. of Equalization for the State of Wyo., 895 P.2d 464, 466 (Wyo.1995) (UPRC II).
Amoco Production Co. v. Wyoming State Bd. of Equalization, 12 P.3d 668, 672 (Wyo.2000). This Court determined that the functions were distinct:
The only way to harmonize the various descriptions of the review or appeal function of the Board is to hold that the Board is limited to an adjudicatory decision making its review on the record. It is only by either approving the determination of the Department, or by disapproving the determination and remanding the matter to the Department, that the issues brought before the Board for review can be resolved successfully without invading the statutory prerogatives of the Department. The statutory mandate to the Board is not to maximize revenue or to punish nettlesome taxpayers, but to assure the equality of taxation and fairly adjudicate disputes brought before it.
Id. at 674.
[¶ 23] Counties must also bow to the valuation authority of the Department. While the legislature undoubtedly is aware of the pecuniary interest of the counties in property valuation, the legislature has made the policy decision to assign to the Department the exclusive function to value property, subject only to review as directed by the legislature. As explained above, the legislature has limited the involvement of counties in the valuation process. This provides for a streamlined process wherein the Department is responsible for representing the interests of all state entities.
[¶ 24] While we understand counties at times may seriously question the valuation decisions of the Department, counties are but political subdivisions of the state. As such, when a county advances a position contrary to the position of the Department, theoretically the county is taking a position against itself. Bringing such infighting before the courts is not lightly allowed:
A county is a political or civil division of the state, created to aid in the administration of government.
"A county is but an agency or arm of the state government, created, organized, and existing for civil and political purposes, particularly for the purpose of administering locally the general powers and policies of the state, and as a matter of public convenience in the administration of the government. * * * " 20 C.J.S. Counties § 1, pp. 754-755.
"The County is a political subdivision of the State whose creation and whose powers and duties are derived from the constitution and statutory law. * * * " Cottonwood City Electors v. Salt Lake County Board of Commissioners, 28 Utah 2d 121, 499 P.2d 270, 271 (1972).
See 56 Am.Jur.2d Municipal Corporations, Counties and Other Political Subdivisions, § 5, p. 74; and Bondurant v. Board of Trustees of Memorial Hospital of Converse County, Wyo., 354 P.2d 219, 221 (1960).
*441 Accordingly, the County cannot sue the State, its creator, in the absence of a specific constitutional or statutory provision authorizing such an action. See Board of County Commissioners of County of Otero v. State Board of Social Services, 186 Colo. 435, 528 P.2d 244 (1974); Board of County Commissioners of County of Dolores v. Love, 172 Colo. 121, 470 P.2d 861 (1970); and Salt Lake County v. Liquor Control Commission, 11 Utah 2d 235, 357 P.2d 488 (1960).
"As its mere agent, * * * a county may not sue the state. * * * " 20 C.J.S. Counties § 320, p. 1283, citing Albany County v. Hooker, 204 N.Y. 1, 97 N.E. 403 (1912).
See Athanson v. Grasso, 411 F. Supp. 1153 (D.C.Conn.1976). Counties are not sovereign entities. They do not comprise a federation within the state. Reynolds v. Sims, 377 U.S. 533, 84 S. Ct. 1362, 12 L. Ed. 2d 506, reh. denied 379 U.S. 870, 85 S. Ct. 12, 13 L. Ed. 2d 76 (1964). They are part of the state itself. One cannot sue himself. Proceedings in our courts contemplate an adversary situation upon which they are based.
* * * *
Since one cannot have a position adverse to his own position, one cannot bring an action against himself. The County being a division of the State, it cannot sue the State.
State v. Bd. of Cty. Comm'rs of Johnson Cty., 642 P.2d 456, 457-58 (Wyo.1982). Limitations on the authority of a county to bring a judicial action against the state reflect an appropriate separation of powers. A court is not necessarily the most appropriate forum for the resolution of intrabranch and intraagency policy disputes, and neither is the Board acting in its quasi-judicial function of adjudicating contested cases. Any specific arguments the counties may have regarding valuation should be directly addressed to the Department.[4] If the counties are not satisfied with their current level of interaction with the Department or with the representation they are receiving from the Department, their complaints are more appropriately directed to the legislature.
[¶ 25] In sum, under the current statutory framework the legislature has authorized only a very limited role for counties in the valuation process. The legislature has made the policy decision that the Department is the state entity responsible for valuing property. Counties, as subdivisions of the state, must rely upon the Department to adequately protect their interests in valuing property. For our purposes, this means that counties do not meet the necessary criteria for intervention as of right in a contested case between a taxpayer and the Department. In fact, the clear conclusion from the foregoing analysis is that counties simply cannot challenge, through participation in a contested case in any capacity, the valuation methodology or the application of that methodology, including definitions as determined by the Department of the components of a valuation equation. Uinta County should not have been allowed to intervene as of right and certainly should not have been allowed to bring the issue of the definition of direct costs of production.
[¶ 26] The Department, in its brief, presents no argument as to the propriety of the intervention by Uinta County into the administrative case. Instead, the Department argues that this Court should review the merits of the issue presented by Uinta County in the name of judicial economy. The Department informs this Court that it has accepted the ruling of the Board on this issue and has informed all affected taxpayers to include production taxes and royalties as direct production costs. The taxpayers, predictably, have appealed the Department's decision. The Department argues that, since this Court will have to decide the issue at some point, it might as well do so now. This argument, however, ignores the procedural posture of this case. We have already held *442 that Uinta County had no authority to intervene. We have also held that Uinta County cannot legally challenge the initial decision by the Department on this issue. Thus, this issue has no place in this particular proceeding at this stage. Judicial economy cannot be invoked as a pretext for this Court to issue an advisory opinion. We decline to review the issue on the merits.[5] The contested case should have proceeded without the intervention of Uinta County or a review of the issue brought by Uinta County. Uinta County is dismissed from this appeal. Upon remand, Uinta County, as well as the issue it presented, must be dismissed from the action.
[¶ 27] The improper intervention of Uinta County does not taint, however, the entire proceedings. Improper intervention generally does not affect jurisdiction. See W.R.C.P. 21. The contested case hearing was conducted in distinct phases. In the first phase, Uinta County bore the burden of presenting its case with regards to its proposed definition of direct costs under the proportionate profits method. After evidence was presented on this issue, the contested case switched to the next phase in which Amoco bore the burden on its issues. Uinta County was allowed to participate in this phase. Uinta County questioned the witnesses called by Amoco and the Department but did not call any witnesses of its own. Under the facts of this case we will accept the decision of the Board on the remaining issues and will continue with our review thereof.
Point of Valuation
[¶ 28] For context, in its most simplified form, under the proportionate profits method of valuation, any increase in direct production costs increases tax liability. Any decrease in direct processing or direct transportation costs increases tax liability. The second and third issues raised by Amoco challenge decisions by the DOA and the Department to recategorize certain expenses, increasing Amoco's tax liability.
[¶ 29] With regard to the point of valuation, Wyo. Stat. Ann. § 39-2-208(b) (Michie 1997), recodified as § 39-14-203(b) (LexisNexis 2003), defines the point of valuation for gas:
(ii) The fair market value for crude oil, lease condensate and natural gas shall be determined after the production process is completed. Notwithstanding paragraph (x) of this subsection, expenses incurred by the producer prior to the point of valuation are not deductible in determining the fair market value of the mineral;
* * * *
(iv) The production process for natural gas is completed after extracting from the well, gathering, separating, injecting and any other activity which occurs before the outlet of the initial dehydrator. When no dehydration is performed, other than within a processing facility, the production process is completed at the inlet to the initial transportation related compressor, custody transfer meter or processing facility, whichever occurs first.
The parties to this case agree that no dehydration occurs in the field, so the point of valuation is either the inlet to the initial transportation related compressor, custody transfer meter or processing facility, whichever comes first.
[¶ 30] The physical layout of Whitney Canyon is not disputed. In paragraph 64 of its decision, the Board found:
*443 After extraction from the well, [Amoco's] gas passed through a well location meter, was heated to prevent the formation of hydrates and placed in the gathering system at a plant process control valve. The gathering system collected the production from the wells served by the Whitney Canyon plant and transported the gas to a compressor station and then to the inlet to [Amoco's] Whitney Canyon plant.
The first meter, described by the Board as a well location meter, is a volume control meter. It measures the volume of gas being produced. After the gas has passed through the volume control meter and is heated, it passes through control valves that are exclusively controlled by the plant operators. The purpose of these valves is to control the amount of hydrogen sulfide entering the system. By use of the control valves, the plant operator can mix the different gas streams in any combination that is most efficient for plant production. Beyond the control valves is a transportation related compressor and then the processing facility. Title to the gas remains with Amoco until sold at the tailgate of the plant.
[¶ 31] For statutory purposes, then, the compressor comes before the plant so the inlet to the compressor would be the point of valuation unless there is a "custody transfer meter" before the compressor. This, of course, is where the battle is joined. Amoco claims the volume meters at the wellheads legally constitute "custody transfer meters" as required by statute. The DOA and the Department, however, determined that custody did not transfer until the product was sold at the tailgate of the plant and thus the volume meters at the wellheads were not custody transfer meters. The Board determined that Amoco did not present adequate proof that the volume meters at the wellhead were custody transfer meters as contemplated under the statute.
[¶ 32] Amoco's proof at hearing consisted primarily of testimony from its production tax audit coordinator, Mr. Bill Warren:
Q: Talk to me about the gathering lines a little bit. You said that it's Amoco's position that processing starts right at the wellhead; is that right?
A: The point of valuation being the wellhead meter, the meter at the inlet of the inlet line or the gas collection line.
Q: What kind of meter is that at the wellhead?
A: It's not a sales meter as such.
Q: Is it a custody transfer meter?
A: In theory, for state tax purposes, it's a custody transfer meter. In theory only, for the simple reason that the products that's going through that meter are unprocessed.
Q: Are the products being sold when they go through that meter at that point?
A: The products are sold at the tailgate of the Whitney Canyon Plant, but the value of those products and the volume of those products are driven right back down that inlet line right to that point of valuation.
Q: Would you agree with me that the meters at the wellhead are class A check meters?
A: I've heard the term class A, and I'd say that that's probably a true statement. It would take an engineer to confirm that, but based on what I know about a class A meter, I'd say that's true.
Q: And would you agree with me that class A meter is not the same thing as a custody transfer meter?
A: Again, I would say that a custody transfer meter in a normal sense is not that same kind of meter that again, if you use the word "custody transfer meter" for this particular meter, you're talking about for severance purposes. You're not talking about you're talking about severance purposes, but realizing that there is a specific meter at the tailgate of the plant that's used for selling NGLs and gas, not the same meter.
Q: They are not the same meter?
A: No.
* * * *
Q: Earlier you testified that a class A check meter is different than a custody meter, correct?
A: I would say that it could be different. Again, I am not a meter expert and it *444 would take an engineer to be a meter expert. But normally LACT meters, and I forgot the word I'm looking for, a LACT meter applies to oil, and a LACT meter is definitely a different meter than a so-called class A meter as far as I'm concerned.
And also when you're talking about gas measurement, there are all kinds of new-type gas measurement meters that are available now and I don't think that they fit into the term "class A meter." The class A meter to me is a meter that's used in a field to measure volume, and that volume is used at a later point in time for allocation purposes. That's what I would normally think of as a class A meter.
Mr. Paul Syring, a senior tax representative for Amoco based in Denver, also testified that the volume meters at the wellheads are custody transfer meters. Finally, Amoco admitted into evidence a Processing Agreement between the producers and the processor that, on appeal, Amoco claims provides for the legal transfer of custody from the producer to the processor at the inlet to the gas transportation system.
[¶ 33] The Board rejected Amoco's evidence. The Board specifically held:
We reject [Amoco's] contention that the volume meters located at or near the wellhead and prior to the inlet to the gathering system are custody transfer meters as that term is used in Wyoming Statute 39-2-208(b)(ii) [recodified as § 39-14-203(b)(iv)]. The only testimony even remotely identifying the volume meters as custody transfer meters came from Mr. Warren. He said only that they were custody transfer meters "[i]n theory only, for purposes of taxation." We find that testimony unpersuasive. We do not believe the legislature contemplated the use of a theoretical custody transfer meter as the point of valuation for taxation purposes.
We conclude that the custody transfer contemplated by that section is the transfer of custody from the producer to the purchaser. This interpretation is consistent with the definition of "lease automatic custody transfer meter" used by the legislature for crude oil valuation requiring a transfer from a producer to purchaser. Wyoming Statute 39-2-208(m)(v) [recodified as § 39-14-203(b)(iii)]. In this case transfer from producer to purchaser occurs at the tailgate of the processing plant, not at the beginning of the gathering system.
(Emphasis in original). Since Amoco did not prove that the volume meters at the wellhead were custody transfer meters, the Board affirmed the Department's decision that the point of valuation is the inlet to the compressor.
[¶ 34] Amoco repeats its arguments in this appeal. Amoco adds that the Board was incorrect when it determined that a custody transfer was limited to a transfer between a producer and a purchaser. "Custody transfer meter" is not defined by either statute or rule. Neither party suggests that a custody transfer meter is a term of art specific to the gas industry. Instead, the parties argue that the term should be defined based upon the plain meaning of the words. The parties are correct. Statutory construction involves a question of law and as such the review of this Court is de novo. Our primary consideration in construing statutes is to determine the intent of the legislature. We begin by construing the statutory language according to the ordinary and obvious meaning of the words at issue according to their arrangement and connection. Loberg v. State, 2004 WY 48, ¶ 5, 88 P.3d 1045, ¶ 5 (Wyo.2004).
[¶ 35] "Custody" is defined as "immediate charge and control... exercised by a person or an authority; also: safekeeping." Merriam-Webster's Collegiate Dictionary 285 (10th ed.2000). "Transfer" is defined as "to convey from one person, place, or situation to another: transport" or "to cause to pass from one to another: transmit" or "to make over the possession or control of: convey." Id. at 1249. "Meter" is defined as "one that measures; esp: an official measurer of commodities." Id. at 729. Construing the words in the context of valuing gas, a custody transfer meter is an official measurer of gas as it passes from one entity to another for the other's immediate charge or control.
*445 [¶ 36] Applying this definition to the facts of this case, even the Department in its brief admits that the Board's conclusion that the transfer must be between the producer and a purchaser is incorrect. The statute does not require a change in title. Further, the Department placed a great deal of emphasis in its presentation on the fact that the meter selected by Amoco as a custody transfer meter is a volume meter and not what is normally considered a sales meter. While the physical characteristics of the meter designated as a custody transfer meter may have evidentiary value, the physical type of the meter is not definitive. Standing by itself, the type of meter does not determine whether custody is being transferred at the meter.
[¶ 37] While the analysis of the Board may be incorrect, Amoco still bears the burden of presenting credible evidence supporting its position that the volume meters at the wellheads are custody transfer meters. Amoco produced two employees who simply made a blanket statement that the volume meters at the wellheads were custody transfer meters for state tax purposes. Amoco then generically argued that a producer agreement provided for the transfer of custody of the gas at the inlet to the gathering system. Amoco does not provide any specific discussion regarding the agreement nor does it specify any particular provision in the producer agreement.[6] Under these facts, we hold that Amoco has not met its burden of presenting credible evidence that the volume meters at the wellhead are custody transfer meters. Thus, under the statute, the determination of the DOA and the Department that the point of valuation is at the inlet to the compressor is affirmed.[7]
Processing Expenses
[¶ 38] Upon audit, the DOA disallowed several expense sub-accounts that Amoco had included as direct costs of producing. Amoco personnel stamp invoices with account and sub-account numbers. Account number 9272 is the processing expense account for Amoco's Evanston District. Amoco's Evanston District not only includes the Whitney Canyon fields and plant, but also the Painter fields, the Painter Gas plant, the Ryckman Creek fields, the Clear Creek fields, the East Painter fields, the Anschutz plant and the Anschutz fields. The sub-account numbers distinguish various types of expenses. For instance, sub-account number XXXX-XX is a sub-account for truck and service equipment expenses. Sub-account 9272-11 includes automobile expenses. There are also location identifiers on the invoices, also supplied by Amoco personnel. The auditor for the DOA, Mr. Derek Weekly, testified that he understood Amoco's accounting and coding system.
[¶ 39] Amoco presents several challenges to the audit methods. First, Amoco challenges the independence of the auditor. Mr. Weekly consulted with Ellwood Soderlind for certain parts of the audit. Mr. Soderlind was the DOA auditor who was responsible for an audit of Whitney Canyon for production years 1983 through 1988. Production during those years was valued according to the netback method. Production for the year 1989, a year included in Mr. Weekly's audit, was also valued according to the netback method. For the sake of consistency, Mr. Weekly was told to deny any expenses that he found that were the same as expenses that Mr. Soderlind denied in his audit for the prior production years. The testimony is clear, however, that Mr. Weekly only coordinated with Mr. Soderlind regarding expenses *446 for production year 1989. Because of the change in valuation method to the proportionate profits method, Mr. Weekly used his own judgment for all expenses for production years 1990 through 1992. Since only production years 1990 through 1992 are at issue in this appeal, we need not decide if the coordination between Mr. Weekly and Mr. Soderlind for production year 1989 presents a problem regarding the independence of audit decisions.
[¶ 40] Amoco's next complaint regards the process the auditor used to determine if an expense was allowable as a direct processing expense. The auditor testified that he used a three-step process in analyzing receipts. First, the auditor looked at the expense to see if he could relate it directly back to the Whitney Canyon plant. The auditor testified that many expenses could only be traced to the Evanston District and could not be related directly back to the Whitney Canyon plant. These expenses were denied. The auditor also checked the nature of the expense to verify if it was something that could be directly utilized by Whitney Canyon. For instance, the auditor found an invoice for nitrogen that was allocated to Whitney Canyon but delivered to Painter field. The auditor knew that nitrogen was regularly used at Painter field but was unaware of any substantial use for nitrogen at Whitney Canyon. The auditor thus disallowed the expense even though the invoice was stamped with a Whitney Canyon plant allocation.
[¶ 41] The second step was to determine if the expense was allowable as a processing or transportation expense by statute or rule. The third step was to determine if the expense was directly related to processing the gas stream at the Whitney Canyon plant. Mr. Weekly provided the following example of how the process worked:
The 9272, sub-account 1 was charges from other company operations. And what we found was allocations to overhead, whether it was to the plant in Wyoming, the Evanston District was one part of these overhead breakout. There was also plants out of the state of Wyoming. It was different areas out of the state of Wyoming. It was just basically trying to pinpoint where these expenses occurred.
What I found were expenses that were charged to the Evanston District. The Evanston District, and I think I testified to it yesterday, can include a vast array of things. You have the Whitney Canyon Gas Plant, the Painter Gas Plant, the Anschutz Gas Plant, plus you have all the fields, you have the Painter fields, Ryckman Creek fields, the Clear Creek fields, Anschutz fields, Whitney Canyon fields, Carter Creek fields and then you have the offices in Evanston alone. So I couldn't pinpoint that directly back to Whitney Canyon.
There were breakouts that would actually take the Evanston District, they numbered it like 80, 81, 83, something like that, that you can tie back to Whitney Canyon, but I still could not tell what that labor was doing. Was it directly related to the processing of gas?
If you look at the definition in the Board rules under what's allowable under the processing, it specifically states, "Labor whose primary purpose is processing a gas stream." And then it goes further on in that. And so I had to look at it in my threefold system. Number one, I felt I couldn't tie it right back to the Whitney Canyon Gas Plant. I can tie it back to Whitney Canyon because there's a statement in there that said Whitney Canyon; however, that can mean field, it can mean sulfur haul road, sulfur loadout terminal, the wells themselves. I couldn't tie it right back to the plant. So I felt at that point really that I said no to my first point.
My second point, whether I can fit it into the statutes or rules, again, it was labor directly related whose primary purpose is processing that gas stream. I couldn't tell where that labor was occurring, so I said no on that point that I could not tie it into labor that was directly responsible for processing that gas stream.
On the third point, is it a direct expense, and I had to say no on that because that labor that is, you know, just kind of overhead labor that can be distinguished out elsewhere is considered an indirect overhead, *447 in my opinion, so I said no to all three categories, so therefore I disallowed sub-account 1.
Mr. Weekly was able to give similarly specific testimony with regards to each sub-account he disallowed.
[¶ 42] Amoco takes particular issue with the third step in Mr. Weekly's analysis. Amoco contends that expenses do not have to be directly related to the processing of the gas stream to qualify as a production or transportation expense. Amoco complains that the legislature could not possibly have intended expenses such as the land lease for the plant and environmental permits be disallowed as processing expenses. However, such expenses are not direct costs of gas processing. The intent of the legislature must be determined based upon the plain language of the statute. Wyoming Statute § 39-2-208(d)(iv), recodified as § 39-14-203(b)(vi) (LexisNexis 2003) states:
(D) Proportionate profits The fair market value is:
(I) The total amount received from the sale of the minerals minus exempt royalties, nonexempt royalties and production taxes times the quotient of the direct cost of producing the minerals divided by the direct cost of producing, processing and transporting the minerals; plus
(II) Nonexempt royalties and production taxes.
The statute, in very plain and direct terms, clearly requires the use of direct costs in the quotient. Mr. Weekly's analysis is supported by statute.
[¶ 43] Amoco argues that its books and records are kept in accordance with generally accepted accounting principles. Its business records are created and kept in the usual and ordinary course of business and must be presumed credible. Thus, Amoco argues that the auditor acted arbitrarily and capriciously in attempting to independently verify the invoices.[8] Amoco's argument inappropriately shifts the burden of proof. The valuation of the Department is presumed valid. The officials charged with establishing value are presumed to have exercised honest judgment in accordance with applicable statutes, rules, and regulations. It is Amoco's burden to present credible evidence rebutting these presumptions. At the hearing, Amoco presented testimony from Mr. Warren that further documentation is and always has been available and had Mr. Weekly only asked, Mr. Warren would have produced any further documentation Mr. Weekly required to satisfy his three-step process. Unfortunately, Mr. Warren's offer came too late. Even at the hearing no documentation was introduced on any disallowed expense that provided the specific information that Mr. Weekly testified he needed to allow the expense. Amoco simply failed in its burden of proof.
[¶ 44] Amoco also presents several challenges to the audit as a whole. First, Amoco claims the audit was inconsistent because the auditor only audited processing accounts. The auditor never audited production accounts. Any disallowance of a production expense would have lowered Amoco's tax liability. Amoco argues that the audit was not fair because its only purpose was to increase Amoco's tax liability, with no attempt being made to conduct a thorough, consistent audit. Amoco, however, cites to no authority to support its proposition that the audit was unfair and makes no argument that it was prejudiced by the failure of the auditor to audit production accounts. This Court does not consider arguments not supported by cogent argument or pertinent authority. Dobson v. Stahla, 2003 WY 6N, 63 P.3d 209 (Wyo.2003).
[¶ 45] Amoco next cites to several instances in the record where it alleges inconsistencies in the testimony of Mr. Weekly. This presents an issue of credibility. Credibility is properly assessed by the Board, as the body with the duty to weigh the evidence and determine the credibility of the witnesses. Gilmore v. Oil & Gas Conservation Comm'n, 642 P.2d 773, 776 (Wyo.1982) ("we may not substitute our opinion as to the *448 weight and credibility of the evidence for that of the Wyoming Oil and Gas Conservation Commission"). Ultimately this argument comes down to a challenge on the sufficiency of the evidence. Without going into further detail, it is clear from the Board's decision that the Board found the testimony of Mr. Weekly to be credible and determined that substantial evidence existed to support his decisions. Upon reviewing the entire record, this Court finds the decision by the Board on this issue to be supported by substantial evidence.
[¶ 46] Amoco also complains about the sampling method used by the auditor. The auditor disallowed sub-accounts in full based upon a sampling of expenses within the sub-accounts. If the majority of expenses sampled in a sub-account were disallowed, the auditor disallowed the entire sub-account. Amoco argues that a ratio of disallowed expenses to allowed expenses should have been established for each sub-account. This error ratio then should have been projected onto the total expenses in the sub-account to determine the amount disallowed. In other words, if a sampling showed 60% of expenses sampled were not allowable, then 60% of the entire account should be disallowed, with the remainder of the account being allowed.
[¶ 47] Amoco bases its argument on DOA rule Chapter 11, § 14:
Examination of Records.
(a) Auditors may use sampling methods which are approved under generally accepted auditing standards to test the audited entity's accounting system and records. Based upon the results of the tests, the auditors, in consultation with the audit supervisor, shall determine whether to continue or terminate the audit.
(b) If the test results show that the audit should be continued, the auditors may conduct the audit by the use of approved sampling methods. If the auditors elect to use a sample projection, the audited entity will be informed and the sampling method used will be explained. Sampling means that a valid portion or percentage of accounts, invoices, purchase or sale documents, or other records representative of the time frame being audited, will be examined and the results will be projected for the total population from which the sample is drawn.
Department of Audit's General Auditing Rules and Procedures, ch. 11, § 14 (Nov. 30, 1992). Amoco does not, however, provide specific argument as to the meaning and application of this rule.
[¶ 48] This rule only requires that the results of the sampling be projected for the total population of the sub-account being sampled. The rule does not address what should happen to the sub-account once the results of the sampling are projected. Amoco argues that the sub-account should be allowed, with only a ratio of expenses disallowed. The auditor, however, determined that the results of the sampling would be to determine if the sub-account as a whole would be allowable or not. Thus, if his sampling revealed some non-allowable expenses, but the sampling as a whole revealed the expenses were allowable, the auditor projected that result to the sub-account and allowed the entire sub-account. If his sampling showed that the sample population was non-allowable, he projected that determination to the entire sub-account and disallowed the entire sub-account.
[¶ 49] Neither the result suggested by Amoco nor the result applied by the auditor violates the DOA rule. The rule simply is not applicable to the issue. The auditor specifically testified that throwing out entire sub-accounts based upon a finding that the sample population for that sub-account was not allowable was a common practice in the industry. Amoco presents no argument to the contrary. In general, Amoco has not met its burden of proof that any of the actions of the auditor were arbitrary, capricious, constituted an abuse of discretion or are unsupported by substantial evidence. The decision of the Board regarding the audit expenses is affirmed.
Penalties
[¶ 50] As an initial note, Amoco was not penalized for the extra taxable value associated with the addition of royalties and *449 production taxes as direct costs of producing. The Board determined that its decision on that issue could not have been foreseen and so penalties were not warranted. Amoco was assessed penalties for the extra taxable value associated with the recategorization of the gathering lines from a processing expense to a production expense and the disallowance of several claimed processing expenses.
[¶ 51] On appeal, Amoco contends that it should not be subject to penalties because it fully reported all of its volumes and the actual proceeds it received. The difference in the taxable value is a result of reasonable differences of opinion regarding the categorization of some of the expenses. Amoco reported in good faith and had no reason to know or even guess that its categorization of these expenses would be rejected. Amoco's argument continues that, since it voluntarily complied with all requirements of self-reporting, it should not be penalized.
[¶ 52] Whatever may be the merits of Amoco's argument on appeal, Amoco did not present this argument to the Board. In fact, the only argument presented by Amoco at the contested case hearing was in its written closing in which it claimed that the Department had not introduced any evidence supporting the imposition of penalties. Amoco argued that penalties are not supported absent evidence of non-compliance or negligence. The Board did not accept this attempt at switching the burden of proof. Amoco did not even mention penalties in its motion for reconsideration.
[¶ 53] This Court does not review issues that were not properly developed below.
We have stated that "`[w]e strongly adhere to the rule forbidding us to "consider for the first time on appeal issues that were neither raised in, nor argued to, the trial court," except for those issues which are jurisdictional or are fundamental in nature.'" Hronek v. St. Joseph's Children's Home, 866 P.2d 1305, 1309 (Wyo.1994) (quoting Bredthauer v. TSP, 864 P.2d 442, 446-47 (Wyo.1993) and Oatts v. Jorgenson, 821 P.2d 108, 111 (Wyo.1991)). "`We follow this rule because "it is unfair to reverse a ruling of a trial court for reasons that were not presented to it, whether it be legal theories or issues never formally raised in the pleadings nor argued to the trial court."'" Hronek, 866 P.2d at 1309 (quoting Bredthauer, 864 P.2d at 446-47 and Oatts, 821 P.2d at 111); see also 5 Am.Jur.2d Appellate Review § 690 (1995). "We of course must not judge the matter of abuse of discretion on the basis of showings made to us on appeal. We must judge on the basis of showings made to the trial court...." Holly Sugar Corp. v. Perez, 508 P.2d 595, 599 (Wyo.1973). We have articulated and followed this principle on numerous occasions. See Rock Springs Land and Timber, Inc. v. Lore, 2003 WY 100, ¶ 35, 75 P.3d 614, 627 (Wyo.2003); State v. Campbell County School Dist., 2001 WY 90, ¶ 35, 32 P.3d 325, 333 (Wyo.2001); Daley v. Wenzel, 2001 WY 80, ¶ 19, 30 P.3d 547, 552-53 (Wyo.2001); Robinson v. Pacificorp, 10 P.3d 1133, 1136 (Wyo.2000); Cooper v. Town of Pinedale, 1 P.3d 1197, 1208 (Wyo.2000); WW Enterprises, Inc. v. City of Cheyenne, 956 P.2d 353, 356 (Wyo.1998); Squaw Mountain Cattle Co. v. Bowen, 804 P.2d 1292, 1296 (Wyo.1991); Epple v. Clark, 804 P.2d 678, 681 (Wyo.1991); Esponda v. Esponda, 796 P.2d 799, 802 (Wyo.1990); R.O. Corp. v. John H. Bell Iron Mountain Ranch Co., 781 P.2d 910, 913 (Wyo.1989); U.S. Aviation, Inc. v. Wyoming Avionics, Inc., 664 P.2d 121, 125 (Wyo.1983); Roush v. Roush, 589 P.2d 841, 844 (Wyo.1979); Thickman v. Schunk, 391 P.2d 939, 943 (Wyo.1964); Gore v. John, 61 Wyo. 246, 157 P.2d 552, 556 (1945); and Ideal Bakery v. Schryver, 43 Wyo. 108, 299 P. 284, 293 (1931).
Yates v. Yates, 2003 WY 161, ¶ 13, 81 P.3d 184 (Wyo.2003). Amoco does not contend that this issue is either jurisdictional or fundamental. This Court does not consider the imposition of penalties under the circumstances of this case to be so fundamental as to require our review when Amoco failed to present its current argument against the imposition of such penalties before the Board.[9]
*450 CONCLUSION
[¶ 54] This action began as a contested case brought by Amoco against the Department. Uinta County should not have been allowed to intervene in the contested case. Uinta County is dismissed from this appeal. Upon remand, the Board must dismiss Uinta County as a party and the issue it raised. The Board's decision on the issue raised by Uinta County is vacated. The result of this is to reinstate the initial determination of the Department that production taxes and royalties should not be included as a direct cost of production in the proportionate profits equation.
[¶ 55] All audit issues are affirmed. Valuation by the Department is presumed accurate. Amoco did not present sufficient credible evidence to overcome this presumption. Amoco's issue concerning the imposition of penalties is not properly before this Court and as such the imposition of penalties is summarily affirmed. The case is remanded for further proceedings consistent with this opinion.
NOTES
[1] The proportionate profits methodology is defined by Wyo. Stat. Ann. § 39-2-208(d)(iv) (Michie 1997) recodified as § 39-14-203(b)(vi) (LexisNexis 2003):
(D) Proportionate profits The fair market value is:
(I) The total amount received from the sale of the minerals minus exempt royalties, nonexempt royalties and production taxes times the quotient of the direct cost of producing the minerals divided by the direct cost of producing, processing and transporting the minerals; plus
(II) Nonexempt royalties and production taxes.
[2] Because, for purposes of this appeal, there is no substantive difference between the Board's original opinion and its reconsidered opinion, all references to the opinion of the Board will refer solely to the reconsidered opinion.
[3] Interestingly, one of the reasons given by Uinta County justifying its right to intervene was to prevent Amoco and the Department from settling any issues without participation by Uinta County.
[4] As an example of one method of handling interagency disputes without resort to any judicial process, there was testimony in the underlying contested case hearing that the DOA and the Department operate under a Memorandum of Understanding that provides for how a dispute between the two Departments will be handled. The testimony was that any disagreement would work its way up through both Departments and ultimately go to the governor if necessary.
[5] Uinta County also argues that this Court should decide the merits of the issue in the name of judicial economy. It argues that it will bring the issue in its appeal of the final valuation notice in this case. Our holding that Uinta County cannot appeal this issue forecloses any further discussion on the issue. In its final order, the Board suggested that judicial economy is served because Uinta County could request a review of the decision of the Department pursuant to § 39-11-102.1(c)(x) which requires the Board to "carefully examine into all cases wherein it is alleged that property subject to taxation" has been improperly assessed "or the law in any manner evaded or violated." This appeal presents no occasion for this Court to determine whether this conclusion by the Board is correct. We only note the obvious an examination under subsection (x) is a completely different proceeding than a contested case under subsection (a). The principle of judicial economy does not justify completely ignoring statutorily based procedural requirements. Again, we decline to issue an advisory opinion.
[6] Amoco initially referred this Court to 324 pages of the record when it presented its argument regarding the producer agreement in its brief.
[7] Amoco also argued that the issue of when production ceases, and thus the location of the point of valuation, was decided in Chevron v. State, 918 P.2d 980 (Wyo.1996), and cannot be revisited pursuant to the doctrines of collateral estoppel and res judicata. We reject this argument because the analysis in Chevron discussing production and the point of valuation was grounded upon a statutory definition read in pari materia with other statutes. The legislature changed the core statute at issue in Chevron in 1990. The 1990 version of the statute is applicable to the instant facts. Thus the Chevron discussion regarding point of valuation and production has been superseded by statute. The same applies to any decision made by the Board regarding the point of valuation for Whitney Canyon for prior production years under the netback method of valuation.
[8] This seems perhaps an ironic charge given that Amoco's first complaint regarded its perceived lack of independence of the auditor.
[9] In its reply brief, Amoco raises yet another objection to the ruling of the Board regarding imposition of penalties. Amoco argues that the Department's determination of penalties violated the decision of this Court in Amoco Production Co. v. Wyoming State Bd. of Equalization, 12 P.3d 668 (Wyo.2000), that requires the Department to determine the net tax deficiency of Amoco across the state before imposing a penalty. Again, this issue is not properly before this Court and is not so fundamental as to relieve counsel of its obligation to present its arguments according to established procedure.
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94 P.3d 25 (2004)
2004 OK 25
Julie BARNES, Appellant,
v.
OKLAHOMA FARM BUREAU MUTUAL INSURANCE COMPANY, Appellee.
No. 97,259.
Supreme Court of Oklahoma.
April 6, 2004.
Rehearing Denied June 28, 2004.
*26 James A. Scimeca, Miller, Dollarhide, and Joe E. White, Jr., White Law Firm, Oklahoma City, for Plaintiff/Appellant.
Robert B. Mills and Margaret K. Myers, Oklahoma City, for Defendant/Appellee.
HARGRAVE, J.
¶ 1 The question in this post-remand proceeding is whether the plaintiff/appellant established entitlement to award of attorney fees under an exception to the American Rule.[1] In Barnes v. Oklahoma Farm Bureau Mutual Ins. Co., 2000 OK 55, 11 P.3d 162, the plaintiff/appellant's award of attorney fees under Brashier v. Farmers Ins. Co., Inc., 1996 OK 86, 925 P.2d 20, was reversed and the case remanded to give plaintiff the opportunity to seek attorney fees under an exception to the American Rule. On remand, the plaintiff asserted three grounds for entitlement to attorney fees: 1) that attorney fees are allowed by statute: 36 O.S.2001 § 1219; 2) common law exception for bad faith litigation conduct under City National Bank & Trust Co. v. Owens, 1977 OK 86, 565 P.2d 4; and 3) common law exception for conferring a benefit on a class of persons/private attorney general rationale. The third-listed exception is not before us because it was not raised in the petition for certiorari. Hough v. Leonard, 1993 OK 112, 867 P.2d 438.
¶ 2 Plaintiff had been awarded attorney fees originally by the trial court, under authority of Brashier v. Farmers Ins. Co., Inc., 1996 OK 86, 925 P.2d 20, as a common law element of recovery on a bad faith claim on an uninsured motorist insurance policy. On appeal, we overruled Brashier to the extent that it held a UM/UIM insured entitled to recover attorney fees as a common law element of damage for an insurer's bad faith refusal to settle a UM/UIM claim. Because Barnes did not have the benefit of our ruling when seeking attorney fees in the trial court, we remanded to the trial court to give her an opportunity to apply for attorney fees under a recognized exception to the American Rule. 11 P.3d at 182. We noted that one such exception is where an opponent engages in bad faith, wanton or oppressive litigation conduct wherein the trial court in the exercise of its inherent equitable power may award attorney fees. We said that whether Barnes could prove herself entitled to such fees under the City National exception would be a question for the trial court upon proper presentation of pleadings and proof. Id. We stated in footnote 17 that no statutory grounds exist for an award of attorney fees in UM/UIM lawsuits by insureds against their insurance companies.
¶ 3 Both the trial court and the Court of Civil Appeals rejected plaintiff's argument that § 1219 provided a statutory basis for attorney fees. As to the bad faith litigation conduct exception to the American Rule under City National, supra, the trial court found that no such conduct was present. The Court of Civil Appeals reversed, finding that City National applied. The Court of Civil Appeals then applied 23 O.S. § 103 to limit the amount of attorney fees to be awarded to $10,000. We granted certiorari.
¶ 4 Plaintiff argues that there is a statutory basis for award of attorney fees in UM cases under 36 O.S.2001 § 1219, which *27 allows for attorneys fees as a result of litigation in cases brought on "accident and health" insurance policies.[2] Section 1219 requires clean claims of an insured to be reimbursed within 45 calendar days after receipt of the claim. In the event litigation should ensue based upon such a claim, § 1219(G) provides that the prevailing party shall be entitled to recover a reasonable attorney's fee to be set by the court and taxed as costs against the party or parties who do not prevail. Plaintiff interprets "accident and health policy" to include uninsured motorist policies.
¶ 5 "Accident and health insurance policy" is defined in subsection (B)(1) of section 1219 as any policy that provides accident and health insurance as defined in 36 O.S.1991 § 703. Section 703 defines accident and health insurance as follows:
"`Accident and health insurance' is insurance against bodily injury, disablement, or death by an accident or accidental means, or the expense thereof, or against disablement or expense resulting from sickness, and every insurance appertaining thereto."
Plaintiffs primary argument is that because Julie Barnes was involved in an accident and sued her UM insurer, then this was an action under an accident and health insurance policy.
¶ 6 The defendant argues that the definition in 36 O.S. § 703 does not include uninsured motorist coverage. Vehicle insurance is defined separately from health and accident insurance. 36 O.S. § 706 defines vehicle insurance as:
"... insurance against loss of or damage to any land vehicle... and against any loss, liability or expense resulting from or incident to ownership, maintenance or use of any such vehicle ... together with insurance against accidental death or accidental injury to individuals, including the named insured, while in, entering, alighting from, adjusting, repairing, cranking or caused by being struck by a vehicle ..., if such insurance is issued as a part of insurance on the vehicle..." (emphasis added).
Section 707 of title 36, which defines "casualty insurance," specifically states that it includes vehicle insurance as defined in § 706 and accident and health insurance as defined in § 703, along with several other kinds of insurance listed therein. The Health Care Fraud Prevention Act, codified at 36 O.S. § 1219.1 applies to "accident and health insurance policies" as defined therein. A review of the sections of the Insurance Code persuades us that when the legislature intends to include or exclude a particular kind of insurance, it does so. Section 1219 was amended by Laws 2003, ch. 197 § 52 to supplement the definition of "accident and health insurance policy" to include any subscriber certificate or any evidence of coverage issued by a health maintenance organization to any person in this state.
¶ 7 Plaintiff argues that Lester v. Sparks, 1978 OK 68, 583 P.2d 1097 supports her position because Sparks noted that a single automobile insurance policy contains a number of different kinds of insurance coverage; plaintiff quotes from pages 1099-1100:
"As we analyze this policy and similar standardized policies, we find it contains six or more conditions, coverages or contracts interwoven and dealt with. Our statutes contemplate that certain coverages are not only overlapping but are included *28 in an automobile policy; see 36 O.S.1971 §§ 701. It is not bold to say that a modern automobile insurance policy encompasses accident, property, vehicle and casualty coverages."
Barnes' reliance on Sparks is misplaced. Sparks says only that certain coverages not only overlap, but are included in an automobile policy. It says only that a modern automobile insurance policy encompasses accident, property, vehicle and casualty coverage. It does not mean that a UM policy is also an "accident and health policy" as defined in § 1219. An automobile insurance policy does encompass many types of coverage, one of which is UM, if that coverage is elected by the insured. We cannot interpret § 1219 as a basis for the award of attorney fees in this uninsured motorist policy case.
¶ 8 Uninsured motorist insurance is covered at 36 O.S.2001 § 3636. Article 36 of the Insurance Code applies to the insurance contract in general. 36 O.S. § 3629 deals with forms of proof of loss and offer of settlement or rejection of claims. Section 3629(B) places a duty on the insurer, after receiving a proof of loss, to submit a written offer of settlement or rejection of the claim to the insured within ninety (90) days of receipt of that proof of loss. Upon a judgment rendered to either party, costs and attorney fees shall be allowable to the prevailing party. Thus, § 3629(B) provides for prevailing party attorney fees where an insurer fails to submit an offer of settlement or rejection of the claim within 90 days after proof of loss and where judgment is entered. However, the last line of section 3629(B) specifically excludes uninsured motorist coverage from application of the section: "This provision shall not apply to uninsured motorist coverage."
¶ 9 Section 3629(B) specifically addresses uninsured motorist coverage. It provides for the award of prevailing party attorney fees except for uninsured motorist coverage, to which the section does not apply. Accident and health insurance is defined separately from vehicle insurance, and § 1219 applies only to cases involving accident and health insurance. The accident and health insurer is required to reimburse all clean claims within 45 calendar days after receipt of the claim. It appears that the intent of the legislature was to create a shorter time period for the reimbursement of clean claims on accident and health policies. Defendants point out that the purpose of uninsured motorist insurance is to provide an injured person with the same protection that he would have had if the at-fault motorist had carried liability insurance.
¶ 10 We are not persuaded by plaintiff's arguments. We reiterated in Barnes that there is no statutory authorization for recovery of an attorney fee in this case. Footnote 17 of the opinion stated that the decision was limited to UM/UIM lawsuits by insureds against their insurance companies, ie., a situation where no statute or contractual provision allows for the recovery of attorney fees. 11 P.3d at 182. We referenced, for comparison, Taylor v. State Farm Fire & Cas. Co., 1999 OK 44, 981 P.2d 1253. Plaintiff/appellant relies upon Taylor as support for the award of attorney fees to her. Taylor, however, was a suit by insureds under their homeowner's insurance policy; it was not an uninsured motorist case. The questions presented were certified to this Court from a federal court, and basically asked whether Brashier v. Farmers Ins. Co., 1996 OK 86, 925 P.2d 20, barred the right to recover attorney fees and prejudgment interest under 36 O.S. § 3629 on the facts presented. Taylor listed two sources of authority for counsel-fee allowances in bad-faith tort claims: 36 O.S. § 3629 and the Brashier rationale. Inasmuch as Brashier's allowance of attorney fees in UM/UIM cases was overruled in Barnes v. Oklahoma Farm Bureau, 2000 OK 55, 11 P.3d 162, the Taylor case does not provide support for plaintiff/appellant's quest. Taylor recognized that UM coverage was explicitly excluded from the purview of 36 O.S. § 3629. 981 P.2d at 1259.
¶ 11 We cannot find that uninsured motorist insurance is "accident and health" insurance as contemplated by section 1219 and section 703. We would be thwarting legislative intent if we ignored the plain language of 36 O.S. § 3629(B)and redefined UM insurance as "health and accident" insurance. If the legislature wishes to provide for attorney *29 fees in UM cases, then they can do so by legislative enactment.[3]
¶ 12 The plaintiff, on remand, also sought to recover attorney fees under "bad faith litigation conduct" exception to the American Rule set out in City National Bank & Trust Co. v. Owens, 1977 OK 86, 565 P.2d 4, which is known as the "bad faith, wanton or oppressive litigation misconduct" exception. See, Barnes v. Okla. Farm Bureau Mut. Ins., 11 P.3d 162 at 182. Plaintiff's argument is that the defendant in this case had no legitimate defense to the underlying contract claim and then compounded its conduct by it's "ill-fated attempt to defend the bad faith claim." The trial court denied attorney fees, finding that "the actions in this case do not fall within the exception" as set forth in the case of City National Bank & Trust Co. v. Owens.
¶ 13 City National recognized certain exceptions to the American Rule in Oklahoma, including the award of counsel fees to a successful party when his opponent has acted "in bad faith, vexatiously, wantonly, or for oppressive reasons." 565 P.2d at 8. Because plaintiff's actions were oppressive, and because the oppressive action of a party was, even at common law recognized as giving rise to an exception to the general rule regarding the awarding of attorney fees, we held that the court, in the exercise of its inherent equitable powers did not exceed its jurisdiction, powers or discretion. 565 P.2d at 8-9. City National specifically pointed out that the defendant was not seeking recovery of attorney fees as prevailing party in the case, but rather for the time and expense wasted when the plaintiff dismissed its case without prejudice after 4 days of trial, after all the evidence and testimony had been introduced, the parties had rested and the court had prepared instructions. We said that in that case there was little doubt that plaintiff's actions were oppressive because the defendant incurred great time and expense in the trial of the case, which was all for nothing after plaintiff's dismissal of the case without prejudice. The plaintiff took the opportunity to test the strength and weakness of his case, which permitted the plaintiff to use the courtroom as a "rehearsal hall" at the expense of his adversaries and the People. 565 P.2d at 7. City National allowed the award of attorney fees in that case for oppressive litigation conduct. As we noted in Barnes, the trial court is exercising its inherent equitable power in awarding such attorney fees. 11 P.3d at 182.
¶ 14 In the case at bar, the defendant argued that there was no finding of bad faith litigation conduct in this case, as there was in City National v. Owens, but rather that the conduct complained of was what led to filing the lawsuit in the first place. The trial court agreed that no City National circumstances existed. We recently discussed the difference between bad faith litigation conduct, as in City National, and the situation where the conduct sanctioned was for bringing the lawsuit and defending against a motion to dismiss. State ex rel. Tal v. City of Oklahoma City, 2002 OK 97, 61 P.3d 234, 247.
¶ 15 In State ex rel. Tal, we overturned the trial court's award of attorney fees under City National v. Owens. We said that for the inherent authority of the trial court to award attorney fees against a party for bad faith litigation misconduct to apply, "overriding considerations" must indicate the need for such a recovery. In Tal the trial court had sanctioned the plaintiffs for bringing a qui tam action to challenge Oklahoma City's development project after the city obtained a declaratory judgment that the agreements were lawful. A review of the record in that case led us to conclude that the plaintiffs were not sanctioned for any actual litigation misconduct or culpable conduct of their own, but rather the conduct sanctioned was for having filed the lawsuit and for mounting a response to the motion to dismiss. We said that it was not objectively unreasonable to have filed the qui tam suit and to have mounted a response to defendants' motion to dismiss and because the record did not support *30 a conclusion that there was some overriding need for a monetary attorney fee sanction, the trial judge abused his discretion in using his inherent power against plaintiffs as he did. Tal at 248-249. See also, Sooner Trailer Mfg. Co. v. Gay, 1998 OK CIV APP 194, 972 P.2d 1177, 1179 ("The egregious conduct which City National addressed was bad faith conduct during the litigation, not the conduct occurring which gave rise to the litigation.")
¶ 16 The conduct complained of in the case at bar by defendant is the conduct that led to the bringing of the action. Defendant's complained-of actions in the case at bar formed the basis of the bad faith claim filed by the plaintiff, and formed the basis for the award of punitive damages in the case.
¶ 17 Because we agree with the trial court that plaintiff has not shown entitlement to attorney fees under the bad-faith litigation conduct exception of City National, we need not address plaintiff's assertions that 23 O.S. § 103 is unconstitutional. That section limits attorney fees awarded as a penalty in actions for damages for personal injury or to personal rights to $10,000.[4]
¶ 18 Title 23 O.S.2001 § 103 provides:
In any action for damages for personal injury except injury resulting in death, or in any action for damages to personal rights the court shall, subsequent to adjudication on the merits and upon motion of a prevailing party, determine whether a claim or defense asserted in the action by a nonprevailing party was asserted in bad faith, was not well grounded in fact, or was unwarranted by existing law or good faith argument for the extension, modification or reversal of existing law. Upon so finding, the court shall enter a judgment ordering such nonprevailing party to reimburse the prevailing party an amount not to exceed Ten Thousand Dollars ($10,000.00) for reasonable costs, including attorneys fees, incurred with respect to such claim or defense. (italics added)
Plaintiff did not assert a right to attorney fees under section 103. See, Meadows v. Wal-Mart Stores, 2001 OK 25, 21 P.3d 48;Beard v. Richards, 1991 OK 117, 820 P.2d 812. Plaintiff argued that section 103 does not apply.
CONCLUSION
¶ 19 On remand from Barnes v. Oklahoma Farm Bureau Mutual Ins. Co., 2000 OK 55, 11 P.3d 162, plaintiff was given leave to seek attorney fees under an exception, if any, to the American Rule. Plaintiff sought to assert a statutory basis for the award under 36 O.S. § 1219, which allows for attorney fees in certain claims upon "accident and health" policies. We find that uninsured motorist insurance is not accident and health insurance as defined by section 1219 and section 703. As an exception to the American Rule, plaintiff sought to recover attorney fees for oppressive litigation conduct under authority of City National Bank v. Owens. But the conduct complained of was not oppressive conduct during litigation so as to trigger the trial court's inherent power to award attorney fees. We agree with the trial court that the actions complained of do not fall within the City National bad faith litigation conduct exception to the American Rule. Finally, plaintiff did not seek to recover attorney fees under 23 O.S. § 103 and, based on our decision that the City National exception does not apply here, we need not address plaintiff's arguments that § 103 is unconstitutional.
CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS' OPINION IS VACATED; TRIAL COURT AFFIRMED.
¶ 20 Concur: WATT, C.J., HODGES, KAUGER, BOUDREAU, WINCHESTER, EDMONDSON, JJ.
¶ 21 Concur in part; dissent in part: LAVENDER, J.
*31 ¶ 22 OPALA, V.C.J., dissenting.
I must recede from today's pronouncement. The court's restrictive construction of the attorney's-fee allowance provisions of 36 O.S.2001 § 1219 and § 3629(B) offends the prohibition of disuniformity in court-applied procedural norms. That interdiction stands imposed by the provisions of Art. 5 § 46, Okl. Const. See Johnson v. Tony's Town Mister Quik, 1996 OK 138, ¶ 5, 915 P.2d 355, 357-58; Reynolds v. Porter, 1988 OK 88, ¶¶ 13-19, 760 P.2d 816, 822; Maule v. Independent School Dist. No. 9, 1985 OK 110, ¶ 12, 714 P.2d 198, 203-204. For my own analysis of the insurer's counsel-fee liability in this very cause see Barnes v. Oklahoma Farm Bureau Mutual Ins. Co., 2000 OK 55, 11 P.3d 162, 183-190 (Opala, J., dissenting).
NOTES
[1] Under the "American Rule" governing the award of attorney fees to a prevailing party, attorney fees are not ordinarily recoverable in the absence of a statute or an enforceable contract. Hall v. Cole, 412 U.S. 1, 4, 93 S. Ct. 1943, 1946, 36 L. Ed. 2d 702 (1973).
[2] 36 O.S.2001 § 1219 provides, in pertinent part:
A. In the administration, servicing, or processing of any accident and health insurance policy, every insurer shall reimburse all clean claims of an insured, an assignee of the insured, or a health care provider within forty-five (45) calendar days after receipt of the claim by the insurer.
B. As used in this section:
1. "Accident and health insurance policy" or "policy" means any policy, certificate, contract, agreement or other instrument that provides accident and health insurance, as defined in Section 703 of this title, to any person in this state;
2. "Clean claim" means a claim that has no defect or impropriety, including a lack of any required substantiating documentation, or particular circumstance requiring special treatment that impedes prompt payment.
...
G. In the event litigation should ensue based upon such a claim, the prevailing party shall be entitled to recover a reasonable attorney's fee to be set by the court and taxed as costs against the party or parties who do not prevail.
...
[3] We also said in Barnes that if attorney fees are to be recoverable in UM/UIM litigation brought by an insured against his/her insurer, like that brought by Barnes, it is the legislature that must authorize such a course, as it has done for other kinds of insurer/insured litigation in section 3629(B). 11 P.3d at 182.
[4] This court previously has determined that attorney fees awarded for personal injury or damages to personal rights under the City National v. Owens exception to the American Rule are limited to $10,000 by 23 O.S. § 103. Gorst v. Wagner, 1993 OK 50, 865 P.2d 1227. In Gorst, we held that the trial court's award of attorney fees in excess of $10,000.00 for bad faith litigation conduct in a civil conspiracy case violated the limitations of 23 O.S. § 103 and that, to the extent that the legislature had pre-empted the field by enacting § 103, City National v. Owens was inapplicable. 856 P.2d at 1228.
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80 So. 3d 171 (2010)
PUBLIC BUILDING AUTHORITY OF the CITY OF HUNTSVILLE
v.
ST. PAUL FIRE AND MARINE INSURANCE COMPANY.
Public Building Authority of the City of Huntsville.
v.
Dawson Building Contractors, Inc.
Dawson Building Contractors, Inc.
v.
Public Building Authority of the City of Huntsville.
Fibrebond Corporation, Raley & Associates, Frank J. Raley, Ruffin Enterprises, Inc., Richard McKee Hall, Enhanced Technical Construction, Inc., Bibler Masonry, Inc., Nolan Maintenance Company, Inc., and American Pan & Engineering Company, Inc.
v.
Public Building Authority of the City of Huntsville.
1080733, 1080734, 1080735, 1080736, 1080737, 1080738 and 1081297.
Supreme Court of Alabama.
October 8, 2010.
Rehearing Applications Denied September 16, 2011.
*172 Edward P. Meyerson and Donald J. Nettles of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Birmingham; and Michael I. Less of Less, Getz & Lipman, PLLC, Memphis, Tennessee, for Public Building Authority of the City of Huntsville.
David A. Dial, Nicholas P. Panayotopoulos, and Laura L. Voght of Weinberg, Wheeler, Hudgins, Gunn & Dial, LLC, Atlanta, Georgia; and Andrew P. Campbell and George A. Brockwell of Leitman, Siegel, *173 Payne & Campbell, P.C., Birmingham, for Dawson Building Contractors, Inc.
Andrew J. Sinor, Jr., and John S. Johnson of Hand Arendall LLC, Birmingham, and R. Scott Jenkins of Jones, Walker, Waechter, Poitevent, Carrére & Denégre, L.L.P., New Orleans, Louisiana, for Fibrebond Corporation; C. Peter Bolvig of Hall Conerly & Bolvig, Birmingham, for Frank J. Raley and Raley & Associates, Inc.; Samuel R. McCord, Birmingham, for Richard McKee Hall, Ruffin Enterprises, Inc., and Enhanced Technical Construction, Inc.; Oscar M. Price III and F. Brady Rigdon of Wallace Jordan Ratliff & Brandt, Birmingham, for Bibler Masonry, Inc., and Nolan Maintenance Company, Inc.; and Joseph A. Fawal of Fawal & Spina, Birmingham, and A. Joe Peddy of Smith, Spires & Peddy, Birmingham, for American Pan & Engineering Company, Inc.
M. Christian King, Nikaa Baugh Jordan, and Mitchell S. Ryan of Lightfoot, Franklin & White, L.L.C., Birmingham, for St. Paul Fire and Marine Insurance Company.
Samuel N. Crosby and George R. Irvine III of Stone, Granade & Crosby, P.C., Daphne, for amicus curiae The Surety & Fidelity Association of America, in support of St. Paul Fire and Marine Insurance Company.
Richard E. Smith and Oscar M. Price IV of Christian & Small, LLP, Birmingham, for amicus curiae Associated Builders and Contractors of Alabama, Inc., in support of Dawson Building Contractors, Inc.
PER CURIAM.
These consolidated appeals all arise from the same factual scenario. The Public Building Authority of the City of Huntsville ("the PBA") appeals from a summary judgment entered in favor of St. Paul Fire and Marine Insurance Company ("St. Paul") (cases no. 1080733 and no. 1080734), and it appeals by permission, pursuant to Rule 5, Ala. R.App. P., from the denial of its motion to reconsider the trial court's decision to grant Dawson Building Contractors, Inc. ("Dawson"), a partial summary judgment (cases no. 1080735 and no. 1080736). Dawson appeals by permission, pursuant to Rule 5, from an adverse portion of the trial court's order granting Dawson a partial summary judgment (cases no. 1080737 and no. 1080738). Fibrebond Corporation ("Fibrebond"); Raley & Associates and Frank J. Raley ("the Raley defendants"); Ruffin Enterprises, Inc.; Richard McKee Hall; Enhanced Technical Construction, Inc.; Bibler Masonry, Inc.; Nolan Maintenance Company, Inc.; and American Pan & Engineering Company, Inc. (hereinafter collectively referred to as "the subcontractors"), appeal by permission, pursuant to Rule 5, from the trial court's order granting in part and denying in part their motion for a summary judgment (case no. 1081297). All seven cases have been consolidated for the purpose of writing one opinion.
Facts and Procedural History
On February 4, 2004, Dawson, a building contractor headquartered in Gadsden, entered into a contract with the PBA ("the contract") pursuant to which Dawson agreed that it would act as the contractor for certain construction work on a project to build a modular jail and attendant facilities servicing the City of Huntsville and Madison County ("the project"). The contract was drafted by the PBA. Pursuant to the contract, Dawson was required to secure a penal bond in favor of the PBA ("the bond"). St. Paul issued the bond in the sum of $24,364,218, naming Dawson as the principal and the PBA as the owner and obligee.
*174 The PBA issued Dawson a notice to begin construction of the project on February 9, 2004. During construction, Dawson and various of the subcontractors informed the PBA of purported structural problems affecting the project. As a result, on October 11, 2005, the PBA suspended work on the project to investigate the situation and to identify the source of the structural problems. Construction proceeded sporadically until June 2006, when work on the project essentially halted at the PBA's direction.
On February 2, 2006, Dawson informed the PBA that Dawson was incurring substantial damage as a result of the delay. On June 6, 2006, while the PBA investigation into the structural problems was still ongoing, Dawson informed the PBA that it intended to terminate the contract.
On June 20, 2006, the PBA notified Dawson in writing that it would terminate the contract for convenience, effective June 30, 2006; St. Paul was copied on the letter. The termination-for-convenience provision in the contract states, in pertinent part:
"12.2.1.1 The Owner [the PBA] may for any reason whatsoever terminate performance under this Contract by the Contractor [Dawson] for convenience. The Owner shall give written notice of such termination to the Contractor specifying when termination becomes effective.
"12.2.1.2 The Contractor shall incur no further obligations in connection with the Work and the Contractor shall stop Work when such termination becomes effective. The Contractor shall also terminate outstanding orders and subcontracts. The Contractor shall settle the liabilities and claims arising out of the termination of subcontracts and orders. The Owner may direct the Contractor to assign the Contractor's right, title and interest under terminated orders of Subcontracts to the Owner or its designee."
In its letter terminating the contract for convenience, the PBA stated that it was reserving its right to convert the termination for convenience into one for cause if the facts warranted. The PBA's June 20, 2006, letter read, in pertinent part:
"Notwithstanding this termination by convenience, due to issues recently raised regarding the work and materials provided by Dawson, the PBA specifically reserves and does not waive any claims it currently has or may have against Dawson for defective and/or deficient work provided to the Project and/or for any latent defects arising from the work provided and/or performed by Dawson on the Project. Likewise, the PBA does not release Dawson from any of Dawson's contractual or warranty obligations.
"The PBA reserves the right to convert this termination for convenience into a termination for cause, if warranted, after the PBA has had an opportunity to inspect the work in place and review of all relevant documentation. The PBA will also look to Dawson to correct and repair any defective and/or deficient work related to the work performed or provided by Dawson on the Project. Finally, as noted herein, the PBA expressly reserves all rights of actions, claims, demands or other rights accorded by law or by contract with respect to the construction project which is the subject of the contract referenced above."
Following the PBA's termination for convenience of the contract, the PBA continued its investigation into the potential design and construction defects. On September 14, 2006, without notifying St. Paul, the PBA entered into a contract with Lee Builders, Inc. ("Lee Builders"), to *175 complete the project ("the completion contract"). The completion contract explicitly stated that Lee Builders would carry the project to completion:
"The parties acknowledge and understand that this Project was initiated and partially constructed pursuant to an earlier contract between [the PBA] and [Dawson]. That contract has now been terminated by [the PBA] effective June 30, 2006. This contract includes the completion of this Project from its current status, pursuant to recent design modifications and revisions to the project plans and specifications...."
Bruce Lee, vice president of Lee Builders, stated in his affidavit:
"From late August [of 2006] until January of 2007, Lee Builders' work on the Project was limited to site clean-up, construction preparation, on-site office trailer set-up, dewatering of the building, the installation of temporary rails on the building, the installation of a silt fence on the site, the temporary stabilization or `shoring' of identified areas of the building where life and safety concerns existed, and generally `closing-up' the building to preserve the existing interior from outside weather conditions.
"5. Between February and December of 2007, Lee Builders performed remedial work for the Project, based upon remedial drawings generated by the City of Huntsville's new structural engineer, Robinson and Associates, and/or pursuant to other directives from the City. At present, Lee Builders is working to achieve substantial completion of the Project."
On September 25, 2006, the PBA sent Dawson notice that, based on the results of its investigation, the PBA intended to convert its termination for convenience into a termination for cause. The PBA also requested a meeting with Dawson and St. Paul to discuss completion of the project.
On September 27, 2006, Dawson sued, among others, the PBA, alleging breach of contract and seeking payment owed under § 12.2.1.4 of the contract for the work performed before the PBA terminated the contract for convenience; Dawson also sought declaratory relief regarding the parties' rights and obligations under the applicable termination-for-convenience provision of the contract, § 12.2.1 (case no. CV-06-1887). The PBA responded by filing a separate action against Dawson and the subcontractors (case no. CV-06-1943).[1] The PBA alleged various tort and contract claims against the subcontractors; the tort claims included negligence, wantonness, fraud, and suppression.
In November 2006, a meeting was held between the PBA, Dawson, and St. Paul at the project site; the PBA alleges that November 2006 was the earliest St. Paul was available for such a meeting. The PBA alleges that St. Paul and its counsel toured the project site with an expert hired by St. Paul in order to inspect Dawson's work on the project.
On November 21, 2006, Dawson filed a motion for a partial summary judgment in case no. CV-06-1887, seeking a declaration from the trial court that the termination-for-convenience provision of the contract exclusively governed the parties' rights and obligations. Dawson argued that, because the PBA elected to terminate the contract for convenience, both parties' contractual obligations, except those specifically set out in § 12.2.1 of the contract, ended. The PBA opposed the motion.
On November 27, 2006, the PBA answered Dawson's complaint and asserted counterclaims of breach of contract, negligence, *176 wantonness, fraudulent misrepresentation, and fraudulent suppression. On December 4, 2006, having already canceled the contract pursuant to the termination-for-convenience provision, the PBA sent notice to Dawson and St. Paul purportedly converting the termination for convenience to a termination for cause:
"Please be advised that pursuant to [§ ] 12.2.2.1 of the Contract between Dawson Building Contractors and [the PBA], that the Contract is hereby terminated for cause. Furthermore, by copy of this letter, the PBA demands that, pursuant to [the bond], St. Paul undertake to perform its obligations under the [b]ond and complete the [contract] or obtain bids from qualified contractors, acceptable to the PBA, to complete the [contract]."
St. Paul denied the PBA's claim on December 21, 2006, citing, among other things, the PBA's termination of the contract for convenience and the completion contract the PBA had entered into with Lee Builders.
On January 3, 2007, the PBA filed an amended complaint in its action, adding St. Paul as a defendant. The PBA asserted claims of breach of contract and bad faith against St. Paul. On January 31, 2007, Dawson's action and the PBA's action were consolidated under case no. CV-06-1887 for purposes of discovery and trial.
On June 4, 2007, the PBA sent St. Paul a letter stating:
"For the last time and pursuant to the terms of the performance bond, demand is made for St. Paul to assume its obligations under the performance bond. If you wish to engage another contractor to correct and complete Dawson's work, the PBA will immediately terminate [Lee Builders'] contract for convenience and make the remaining contract fundssubject to adjust for Dawson's purported overbillingavailable to St. Paul to correct and complete Dawson's work."
On October 26, 2007, the Madison Circuit Court entered an order granting Dawson's motion for a partial summary judgment. On April 4, 2008, Dawson filed a motion for a summary judgment on the remaining claims against it, arguing that, pursuant to the trial court's order dated October 26, 2007, Dawson had no liability to the PBA. On April 21, 2008, the PBA sought reconsideration of the trial court's October 26, 2007, order pursuant to Rule 59(e), Ala. R. Civ. P, or, in the alternative, a clarification of that order. On November 5, 2008, the subcontractors filed a motion for a summary judgment as to all claims against them.
On December 9, 2008, the trial court denied the PBA's Rule 59(e) motion to alter, amend, or vacate or, in the alternative, to clarify the trial court's order dated October 26, 2007, holding that the contract had been terminated for convenience. In so doing, the trial court reaffirmed that the contract had been terminated for convenience but held that certain of Dawson's obligations survived under § 5.3 of the contract. On December 31, 2008, Dawson filed a Rule 59(e), Ala. R. Civ. P., motion to alter, amend, or vacate the trial court's order dated December 9, 2008, arguing that § 5.3 of the contract should not survive a termination for convenience of the contract. On January 22, 2009, the trial court denied Dawson's motion to alter, amend, or vacate the judgment.
On January 9, 2009, St. Paul filed a motion for a summary judgment, which the PBA opposed. The trial court entered a summary judgment in favor of St. Paul on January 30, 2009. On February 12, 2009, the PBA filed a Rule 59(e), Ala. R. Civ. P., motion to alter, amend, or vacate the trial court's order entering a summary judgment *177 in favor of St. Paul. Also on February 12, 2009, Dawson and the PBA each filed with the trial court a motion for an order certifying for permissive appeal under Rule 5(a), Ala. R.App. P., issues underlying the trial court's December 9, 2008, and January 22, 2009, orders.
On February 25, 2009, the trial court denied the PBA's Rule 59(e) motion and made its summary judgment for St. Paul final pursuant to Rule 54(b), Ala. R. Civ. P.; the PBA appealed on March 13, 2009 (cases no. 1080733 and no. 1080734). In the same order, the trial court also certified "that [its] order of December 9, 2008, as clarified by the order of January 22, 2009, is the proper subject for an interlocutory appeal."
On March 11, 2009, Dawson and the PBA filed separate petitions for permission to appeal the trial court's orders in this Court, which this Court granted (cases no. 1080735, no. 1080736, no. 1080737, and no. 1080738).
On May 20, 2009, the trial court granted in part and denied in part the subcontractors' summary-judgment motion. The trial court granted the subcontractors' summary-judgment motion as to the PBA's contract claims against them, but it denied the motion as to the PBA's tort claims against them. In denying the subcontractors' summary-judgment motion as to the PBA's tort claims, the trial court stated:
"The movants ... argue that the PBA may not assert tort claims against them. The primary basis for this argument is the economic loss doctrine, by which a cause of action in tort is barred if a commercial product malfunctioned or was defective and such malfunction or defect resulted in damage only to the product itself. The PBA defends by arguing that the economic loss doctrine has been interpreted by Alabama courts as applying only to AEMLD [Alabama Extended Manufacturer's Liability Doctrine] claims and has no bearing in a construction law dispute such as this one. While the movants cite a number of cases from other jurisdictions as authority for the conclusion that the doctrine may apply here, this Court rejects the argument. A review of reported decisions in Alabama construction cases fails to show an instance in which the economic loss doctrine has been used to bar a tort claim, and this Court will leave it up to the appellate courts whether to craft an expanded scope of this doctrine's application."
On June 17, 2009, the trial court certified for permissive appeal pursuant to Rule 5 the above portion of its interlocutory order dated May 20, 2009, which denied in part the subcontractors' summary-judgment motion. On June 30, 2009, the subcontractors filed a petition for permission to appeal the trial court's order in this Court, which this Court granted on August 11, 2009 (case no. 1081297).
Analysis
I. Cases no. 1080733 and no. 1080734
A. Additional Relevant Facts and Procedural History
The bond was written on form "AIA Document A-312," a form published by the American Institute of Architects. The bond imposes certain obligations on St. Paul in the event the PBA terminated the contract for default and satisfied certain conditions precedent set forth in the bond:
"If there is no Owner [PBA] Default, the Surety's [St. Paul's] obligation under this Bond shall arise after:
"3.1 The Owner has notified the Contractor [Dawson] and the Surety at its address described in Paragraph 10 below that the Owner is considering declaring a Contractor Default and has *178 requested and attempted to arrange a conference with the Contractor and the Surety to be held not later than fifteen days after receipt of such notice to discuss methods of performing the Construction Contract ...; and
"3.2 The Owner has declared a Contractor Default and formally terminated the Contractor's right to complete the contract. Such Contractor Default shall not be declared earlier than twenty days after the Contractor and the Surety have received notice as provided in Subsection 3.1; and
"3.3 The Owner has agreed to pay the Balance of the Contract Price to the surety in accordance with the terms of the Construction Contracts in accordance with the terms of the contract with the Owner."
In its motion for a summary judgment, St. Paul asserted three arguments:
"First, under Alabama law, the PBA failed to satisfy conditions precedent to St. Paul's obligations under the ... [b]ond prior to terminating Dawson for convenience. As this Court has ruled, the PBA's efforts to resurrect Dawson's Contract for the purposes of declaring Dawson in default and terminating for cause are `ineffective.' Thus, [the] PBA's post-termination efforts to declare Dawson in default and meet the other conditions of the [b]ond are immaterial. Rather, St. Paul's Principal (Dawson) was terminated for convenience without any preceding declaration of default, notice of intent to declare default, or termination for default pursuant to Paragraph 3 of the [b]ond. Consequently, St. Paul is released from any liability to the PBA.
"Second, even if the PBA could somehow establish compliance with the [b]ond's conditions precedent, this Court's Orders release [Dawson] from its performance obligations. Hence, pursuant to the well-established law of suretyship, St. Paul also is relieved of any obligations under the ... [b]ond. Indeed, St. Paul's liability for performance cannot exceed Dawson's. Third, regardless of the foregoing defenses, the PBA materially breached the terms of the Bond. Through its post-termination actions, the PBA impaired St. Paul's rights of suretyship, thereby rendering the [b]ond null and void under applicable law."
The trial court found St. Paul's first argument convincing and granted St. Paul's summary-judgment motion on that ground; the trial court did not consider St. Paul's other two arguments.
B. Standard of Review
This Court has clearly stated the standard by which it reviews the disposition of a summary-judgment motion:
"`"In reviewing the disposition of a motion for summary judgment, we utilize the same standard as that of the trial court in determining whether the evidence before the court made out a genuine issue of material fact" and whether the movant was entitled to a judgment as a matter of law. Bussey v. John Deere Co., 531 So. 2d 860, 862 (Ala.1988); Rule 56(c), Ala. R. Civ. P. When the movant makes a prima facie showing that there is no genuine issue of material fact, the burden then shifts to the nonmovant to present substantial evidence creating such an issue. Bass v. SouthTrust Bank of Baldwin County, 538 So. 2d 794, 797-98 (Ala. 1989). Evidence is "substantial" if it is of "such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life *179 Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala.1989).'
"Ex parte General Motors Corp., 769 So. 2d 903, 906 (Ala. 1999)."
Brown v. St. Vincent's Hosp., 899 So. 2d 227, 233 (Ala.2004). "Our review is further subject to the caveat that this Court must review the record in a light most favorable to the nonmovant and must resolve all reasonable doubts against the movant." Hobson v. American Cast Iron Pipe Co., 690 So. 2d 341, 344 (Ala.1997).
C. Discussion
The PBA alleges that the trial court's entry of a summary judgment for St. Paul was error because, the PBA argues, it fully complied with the conditions precedent to St. Paul's liability set forth in the bond. Alternatively, the PBA argues that it at least raised a genuine issue of material fact concerning its compliance with the conditions precedent set forth in the bond. We disagree with the PBA's argument, and we hold that the trial court's judgment is without error.
In Bank of Brewton, Inc. v. International Fidelity Insurance Co., 827 So. 2d 747 (Ala.2002), this Court interpreted an identical performance bond, also written on form "AIA Document A-312." This Court explained the plain language of paragraph 3 of the bond, as follows:
"The plain language of paragraph 3 is that in the event of a contractor default, the surety's obligation under the bond shall arise after the occurrence of the events listed in subparagraphs 3.1, 3.2, and 3.3. The owner first must give proper notice, call a meeting, discuss the problems, and attempt to resolve them (subparagraph 3.1); then, if the problems are not resolved, the owner must declare a contractor default, formally terminating the contractor's right to complete the contract, and must declare the default at least 20 days after giving notice (subparagraph 3.2); and finally the owner must agree to pay the balance of the contract to the surety or to a new contractor who will complete the contract as originally agreed (subparagraph 3.3)."
827 So.2d at 753.
In the present case, it is undisputed that the PBA terminated the contract for convenience effective June 30, 2006. The effect of such a termination, as stated in the contract, is that "[Dawson] shall incur no further obligations in connection with the Work and [Dawson] shall stop Work when such termination becomes effective." It is clear that, based on the PBA's termination of the contract for convenience, the PBA could not have subsequently satisfied the conditions precedent in the bond. Only after the PBA terminated the contract for convenience did it attempt to satisfy the conditions precedent, which, according to the plain language of the bond, is too late. Therefore, the trial court did not err in entering a summary judgment in favor of St. Paul.
The PBA argues that its June 30, 2006, termination for convenience was conditional and, thus, could be converted into a termination for cause if it was discovered that Dawson had defaulted under the contract. We find this argument unpersuasive. It is undisputed that the contract was terminated by the PBA for convenience effective June 30, 2006. Under the terms of the contract, a termination for convenience unequivocally terminates the contract and relieves Dawson from incurring any further obligation associated with the project. There is no language in the contract allowing a termination for convenience to be converted into a termination for cause, and the PBA offers no applicable legal authority to support its position that a termination for convenience may be *180 converted to a termination for cause absent contractual language allowing such a conversion. In light of the unambiguous terms of the contract, there is no basis for reading the contract in such a way as to allow the PBA to resuscitate a dead contract so that it may re-terminate it.
The PBA also addresses the other arguments raised by St. Paul in its summary-judgment motion. However, having decided that the trial court properly entered a summary judgment for St. Paul on the ground that the PBA failed to satisfy the conditions precedent to St. Paul's obligations under the bond, it is not necessary to address the other arguments.
II. Cases no. 1080735 and no. 1080736
Pursuant to Rule 5(a), Ala. R.App. P., the trial court certified the following question of law in its certification for permissive appeal in cases no. 1080735 and no. 1080736:
"(1) Whether the PBA, as owner of a commercial construction project, could legally convert termination of its contract with Dawson ..., the general contractor, into one for cause after having previously provided notice of termination for convenience, in the absence of explicit contractual language authorizing such a conversion."
In conducting our de novo review of a question presented on a permissive appeal, "this Court will not expand its review ... beyond the question of law stated by the trial court. Any such expansion would usurp the responsibility entrusted to the trial court by Rule 5(a)[, Ala. R.App. P.]." BE&K, Inc. v. Baker, 875 So. 2d 1185, 1189 (Ala.2003).
The PBA, as the appellant, alleges that the question presented by the permissive appeal is one of first impression and urges this Court to adopt what it characterizes as a two-step test set forth by the Court of Appeals of Texas in Accent Builders Co. v. Southwest Concrete Systems, Inc., 679 S.W.2d 106 (Tex.App.1984).[2] However, the interpretation of a contract does not present a novel legal issue. Rather, the rules of contract construction and interpretation are well established in Alabama and will be applied to answer the certified question presented by the trial court.
Under Alabama law, this Court, when interpreting a contract, must follow the plain language of the contract:
"`General contract law requires a court to enforce an unambiguous, lawful contract, as it is written. P & S Business, Inc. v. South Central Bell Telephone Co., 466 So. 2d 928, 931 (Ala.1985). See also McDonald v. U.S. Die Casting & Development Co., 541 So. 2d 1064 (Ala. 1989). A court may not make a new contract for the parties or rewrite their contract under the guise of construing it. Estes v. Monk, 464 So. 2d 103 (Ala.Civ. App.1985)....
"`. . . .
"`When interpreting a contract, a court should give the terms of the agreement their clear and plain meaning and should presume that the parties intended what the terms of the agreement clearly state. Pacific Enterprises Oil Co. (USA) v. Howell Petroleum Corp., 614 So. 2d 409 (Ala.1993).'"
*181 Dawkins v. Walker, 794 So. 2d 333, 339 (Ala.2001) (quoting Ex parte Dan Tucker Auto Sales, Inc., 718 So. 2d 33, 35-36 (Ala. 1998)); see also Southland Quality Homes, Inc. v. Williams, 781 So. 2d 949 (Ala.2000) (recognizing that the primary source for determining whether a contract is clear is the text of the document itself; when an instrument is unambiguous its construction and legal effect will be based upon what is found within the four corners of the instrument).
As noted above, nothing in the contract allowed for a conditional termination or for a conversion of a termination for convenience to a termination for cause. Therefore, in light of the unambiguous terms of the contract, we hold that the PBA cannot convert its termination for convenience to a termination for cause.
Also significant to our determination that the PBA's termination for convenience cannot be converted to a termination for cause is the language used in the sections of the contract providing for termination by the owner, i.e., the PBA. Section 12.2 of the contract sets forth the alternative ways the PBA may cancel the contract. Section 12.2.1 of the contract allows the PBA to cancel the contract for convenience but gives no right to the PBA to convert such a termination to one for cause. Section 12.2.2 of the contract, on the other hand, allows the PBA to cancel the contract for cause and explicitly grants the PBA the right to later convert such a termination to one for convenience if "a [c]ourt of competent jurisdiction" subsequently determines that the termination was without cause.
The legal maxim expressio unius est exclusio alterius (the expression of one thing is the exclusion of another) is frequently applied to aid courts in interpreting statutory language, and it is useful in this instance to interpret the language of the contract at issue here. See Bon Aventure, L.L.C. v. Craig Dyas, L.L.C., 3 So. 3d 859, 866 (Ala.2008) (Lyons, J., concurring in the result). Here, the PBA drafted the contract and gave itself the right in § 12.2.2 of the contract to convert a termination for cause to one for convenience. However, the PBA did not grant itself the same right in § 12.2.1 of the contract. The fact that the right to convert is included in § 12.2.2 of the contract, but not in § 12.2.1 of the contract, leads us to conclude a more restrictive boundary was intended in § 12.2.1, the provision under which the contract was terminated. For this reason as well, we answer the certified question of law in the negative; the PBA could not have converted its termination for convenience to one for cause absent contractual language granting it the right to do so. Therefore, we affirm the trial court's order dated December 9, 2008, to the extent that it denied the PBA's motion to alter, amend, or vacate the trial court's summary judgment in favor of Dawson based on its finding that the contract was terminated for convenience.
The PBA also argues that a summary judgment in favor of Dawson was inappropriate because, it says, genuine issues of material fact exist. However, this case is before this Court on permissive appeal pursuant to Rule 5. Therefore, the only issue before this Court is the question of law certified by the trial court. The PBA's argument is not properly before this Court and will not be addressed.
III. Cases no. 1080737 and no. 1080738
Pursuant to Rule 5(a), Ala. R.App. P., the trial court certified the following question of law in its certification for permissive appeal in cases no. 1080737 and no. 1080738:
"Whether Dawson has any remaining legal obligations owing to the PBA under *182 Section 5.3 of the contract between them if the contract is deemed to have been terminated for convenience."
Dawson, as the appellant, argues that § 5.3 of the contract does not survive the termination of the contract under § 12.2.1 because § 12.2.1 unambiguously terminates the contract and exclusively governs any obligation the parties have to one another following such termination. We agree.
Applying the principles of contract interpretation discussed earlier, it is clear from the plain language of the contract that § 5.3 does not survive the PBA's termination of the contract for convenience. In its entirety, § 12.2.1 provides:
"12.2.1.1 The Owner [the PBA] may for any reason whatsoever terminate performance under this Contract by the Contractor [Dawson] for convenience. The Owner shall give written notice of such termination to the Contractor specifying when termination becomes effective.
"12.2.1.2 The Contractor shall incur no further obligations in connection with the Work and the Contractor shall stop Work when such termination becomes effective. The Contractor shall also terminate outstanding orders and subcontracts. The Contractor shall settle the liabilities and claims arising out of the termination of subcontracts and orders. The Owner may direct the Contractor to assign the Contractor's right, title and interest under terminated orders of Subcontracts to the Owner or its designee.
"12.2.1.3 The Contractor shall transfer title and deliver to the Owner such completed or partially completed Work and materials, equipment, parts, fixtures, information and Contract rights as the Contractor has.
"12.2.1.4 (a) The Contractor shall submit a termination claim to the Owner and the Architect specifying the amounts due because of the termination for convenience together with costs, pricing or other data required by the Architect. If the Contractor fails to file a termination claim within one (1) year from the effective date of termination, the owner shall pay the Contractor, an amount derived in accordance with subparagraph (c) below.
"(b) The Owner and the Contractor may agree to the compensation, if any, due to the Contractor hereunder.
"(c) Absent agreement to the amount due to the Contractor, the Owner shall pay the Contractor the following amounts:
"(i) Contract prices for labor, materials, equipment and other services accepted under this Contract
"(ii) Reasonable costs incurred in preparing to perform and in performing the terminated portion of the Work, and in terminating the Contractor's performance, plus a fair and reasonable allowance for overhead and profit thereon (such profit shall not include anticipated profit or consequential damages); provided however, that if it appears that the Contractor would have not profited or would have sustained a loss if the entire Contract would have been completed, no profit shall be allowed or included and the amount of compensation shall be reduced to reflect the anticipated rate of loss, if any;
"(iii) Reasonable costs of settling and paying claims arising out of the termination of subcontracts or orders pursuant to Subparagraph 12.2.1.2 of this Paragraph. These costs shall not include amounts paid in accordance with other provisions hereof.
*183 "The Total sum to be paid the Contractor under this Subparagraph 12.2.1 shall not exceed the total Contract Price, as properly adjusted, reduced by the amount of payments otherwise made, and shall in no event include duplication of payment."
Section 12.2.1 clearly sets forth the method by which final payment is to be made to Dawson for the work it completed under the contract before the PBA's termination for convenience.
Further, when § 5.3 is read in the context of the article in which it is found, Article 5, it is clear that § 5.3 is an interim-payment mechanism to be used during the life of the contract. Section 5.2 of the contract requires the contract price to be paid through a series of "progress payments." Section 5.3 allows the progress payments to be modified. Specifically, § 5.3 provides:
"5.3.1 The Owner may decline to make payment, may withhold funds, and, if necessary, may demand the return of some or all of the amounts previously paid to the Contractor, to protect the Owner from loss because of:
"(a) defective Work not remedied by the Contractor nor, in the opinion of the Owner, likely to be remedied by the Contractor.
"(b) the quality of a portion, or all, of the Contractor's work not being in accordance with the requirements of this Contract.
"(c) the quantity of the Contractor's work not being as represented in the Contractor's Application for Payment.
"(d) claims made or likely to be made by third parties against the Owner or the Owner's property.
"(e) failure by the Contractor to use Contract funds, previously paid the Contractor by the Owner, to pay Contractor's work related obligations including Subcontractors, laborers, materialmen, material and equipment suppliers or others in a prompt and proper fashion.
"(f) evidence that the balance of the Work cannot be completed in accordance with the Contact for the unpaid balance of the Contract Price.
"(g) evidence related to the Contractor's rate of Progress which in the Owner's opinion indicates that the Work will not be completed in the time required for substantial or final completion.
"(h) the Contractor's persistent failure to carry out the Work or refusal to perform any of its obligations in accordance with the Contract.
"(i) damage or loss caused by the Contractor or a Subcontractor, materialman, laborer, or supplier to the Owner or a third party to whom the Owner is, or may be, liable.
"In the event that the Owner makes written demand upon the Contractor for amounts previously paid by the Owner as contemplated in this Subparagraph 5.3.1, the Contractor shall promptly comply with such demand."
Later in Article 5, § 5.7, entitled "Completion and Final Payment," makes clear that § 5.3 is to be applied only during the life of the contract and alters the final payment amount only if the final payment is made pursuant to § 5.7. Section 5.7.5 states that "[t]he Owner shall make final payment of all sums due the Contractor subject to [§ ] 5.3.1." When § 5.3 is analyzed within the context of Article 5 it is clear that § 5.3 is an interim-payment mechanism that may affect § 5.7 alone. However, § 5.3 has no effect on the final payment due under §§ 12.2.1 and 12.2.2; thus, it is not necessary to look to § 5.3 because § 12.2.1.4 governs.
*184 Our holding is further bolstered by the fact that the PBA did not include in § 5.3 of the contract any language indicating that that section would survive a termination for convenience. However, in § 12.2.2.2 of the contract, the PBA did include a clause indicating that that section of the contract would survive the termination of the contract:
"12.2.2.2 If the unpaid balance of the Contract Price exceeds the cost of finishing the work, including compensation for the Owner's and the Architect's additional services and expenses made necessary thereby, such excess shall be paid to the Contractor. If such costs exceed the unpaid balance, the Contractor shall pay the difference to the Owner. This obligation for payment shall survive the termination of the Contract."
(Emphasis added.) Therefore, we must conclude that had the PBA intended for § 5.3 to survive termination of the contract it would have so stated, as it did in § 12.2.2.2 of the contract.
We answer the question certified by the trial court in the negative; § 5.3 of the contract did not survive the PBA's termination for convenience. Therefore, we reverse the trial court's judgment to the extent that it held that § 5.3 survived the termination of the contract.
IV. Case no. 1081297
Pursuant to Rule 5(a), Ala. R.App. P., the trial court certified the following question of law in its certification for permissive appeal in case no. 1081297:
"Does the economic loss doctrine, first recognized in Alabama in Lloyd Wood Coal Co. v. Clark Equipment Co., 543 So. 2d 671 (Ala.1989), a product liability case, also apply in the context of a commercial construction dispute so as to preclude the [PBA], as the owner of the subject property, from asserting tort claims against various subcontractors given that the only damage claimed to have resulted from any defective conditions allegedly caused by the subcontractors was to the property itself?"
The economic-loss rule "prevents tort recovery when a product damages itself, causing economic loss, but does not cause personal injury or damage to any property other than itself." Vesta Fire Ins. Corp. v. Milam & Co. Constr., 901 So. 2d 84, 106-07 (Ala.2004). However, the economic-loss rule does not prevent a tort action when the injury caused is personal or is to property other than the complained-of product. See Lloyd Wood Coal Co. v. Clark Equip. Co., 543 So. 2d 671, 674 (Ala.1989) (adopting the reasoning of East River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 106 S. Ct. 2295, 90 L. Ed. 2d 865 (1986)).
In denying the subcontractors' summary-judgment motion, the trial court properly recognized that this Court has not applied the economic-loss rule to bar a tort claim in a commercial-construction context. Rather, as the trial court held,
"the Supreme Court of Alabama appears to have instead focused on whether there exists a duty from which a tort might arise in a construction context. See, e.g., RaCON, Inc. v. Tuscaloosa County, 953 So. 2d 321 (Ala.2006); Berkel & Co. Contractors, Inc. v. Providence Hosp., 454 So. 2d 496 (Ala.1984)."
Berkel & Co. Contractors, Inc., 454 So. 2d 496 (Ala.1984), provides clear legal precedent concerning the situation presented by the certified question; thus, we see no reason to apply the economic-loss rule to bar tort claims in a commercial-construction context.
In RaCON, Inc. v. Tuscaloosa County, 953 So. 2d 321 (Ala.2006), we applied Berkel to determine whether one party had a duty in tort to another in a commercial-construction *185 context. In RaCON, a county undertook a project to extend a road. The county hired a project engineer, Burk-Kleinpeter, Inc. ("BKI"), which retained a consultant, TTL, Inc., "to perform consulting services for BKI on soil or other geotechnical conditions along the proposed roadway." 953 So. 2d at 323. TTL provided studies that BKI used in developing the bid package for the project. Based on TTL's studies, the bid package indicated that "rock buttresses might be required by BKI on the project." 953 So. 2d at 325. RaCON, Inc., submitted a bid for the project. RaCON alleged that,
"prior to bidding, [a RaCON representative] had conversations with Jeff Wood of BKI and Jim Bamberger of TTL in which both Wood and Bamberger allegedly assured [the representative] that (a) ALDOT specification 219[[3]] applied to the project; (b) RaCON's interpretation of ALDOT specification 219, i.e., that rock buttresses were intended as remedial, not preventive, structures to correct actual slope failures, was accurate; and (c) rock buttresses would be required only as a last resort on the project if less costly measures (e.g., installation of above ground or subsurface drainage systems) failed to correct a landslide."
953 So.2d at 325. As a result, RaCON did not include the cost of constructing rock buttresses in its final bid "because it was willing to take a commercial risk that there would be no slope failures on the project that would require" the construction of rock buttresses. 953 So. 2d at 325. RaCON was awarded the project and contracted with the county.
Three slope failures occurred during RaCON's preliminary construction work. As a result of the slope failures, which RaCON alleged it remedied by installing underground drains, RaCON was furnished with designs by TTL for the rock buttresses to be constructed. RaCON constructed the rock buttresses under protest, claiming that the construction of the rock buttresses was extra work not contemplated under the contract. RaCON later sued TTL, among others, alleging negligence and seeking damages resulting from its work on the project. TTL moved for a summary judgment, which the trial court granted, finding that TTL owed no duty to RaCON.
On appeal, in considering whether TTL owed RaCON a duty for purposes of its negligence claim, we stated:
"RaCON and TTL acknowledge that this Court has rejected the absence of privity of contract as a defense to a negligence claim against a party to a construction project. Berkel & Co. Contractors, Inc. v. Providence Hosp., 454 So. 2d 496, 501 (Ala.1984). This Court held in Berkel that a subcontractor retained by the general contractor to install foundational pilings for a building could assert a negligence claim against the owner, Providence Hospital, for expenses incurred by the subcontractor in performing that work. 454 So. 2d at 503. The Berkel Court noted six factors that should be analyzed to determine whether a party not in privity with the claimant owes the claimant a duty of care in a construction setting. Those six factors are as follows:
"`"`(1) [T]he extent to which the transaction was intended to affect the other person; (2) the foreseeability of harm to him; (3) the degree of certainty that he suffered injury; (4) the *186 closeness of the connection between the defendant's conduct and the injury; (5) the moral blame attached to such conduct; and (6) the policy of preventing future harm.'"'
"454 So.2d at 503 (quoting Howe v. Bishop, 446 So. 2d 11, 15 (Ala.1984) (Torbert, C.J., concurring in the result), quoting in turn United Leasing Corp. v. Miller, 45 N.C.App. 400, 406-07, 263 S.E.2d 313, 318 (1980))."
RaCON, 953 So.2d at 334-35. Applying the Berkel factors to the facts in RaCON, we held that TTL did not owe RaCON a duty of care, and, thus, we affirmed the trial court's judgment granting TTL's summary-judgment motion.
The same analysis and factors derived from Berkel and applied in RaCON apply in the present case, obviating any need to apply the economic-loss rule in a commercial-construction context. Rather, our focus is on whether the claimant was owed a duty by the party he is suing, as demonstrated by the trial court's following holding:
"From [Berkel] comes a number of factors to be considered in deciding whether to impose a duty in a construction context. Those factors lead to the necessity of conducting a fact-intensive inquiry. At this juncture, the Court cannot conclude that the movants are entitled to a judgment as a matter of law. Rather, further evidence regarding the parties' relationships is needed before the Court can comfortably address the matter."
Therefore, we answer the certified question in the negative and affirm the trial court's judgment denying the subcontractors' summary-judgment motion concerning the PBA's tort claims against them.
Conclusion
Based on the foregoing, we affirm the trial court's judgments in cases no. 1080733, no. 1080734, no. 1080735, no. 1080736, and no. 1081297, and we reverse the trial court's judgments in cases no. 1080737 and no. 1080738 and remand the cases.
1080733AFFIRMED.
1080734AFFIRMED.
1080735AFFIRMED.
1080736AFFIRMED.
1080737REVERSED AND REMANDED.
1080738REVERSED AND REMANDED.
1081297AFFIRMED.
COBB, C.J., and LYONS, WOODALL, STUART, SMITH, BOLIN, PARKER, and SHAW, JJ., concur.
MURDOCK, J., dissents.
MURDOCK, Justice (dissenting).
I disagree with the interpretation of § 12.2.1.2 of the contract set out in the main opinion and the corollary holding that § 5.3 does not apply in this case.
The language of § 12.2.1.2 of the contract bears repeating:
"12.2.1.2 The Contractor shall incur no further obligations in connection with the Work and the Contractor shall stop Work when such termination becomes effective. The Contractor shall also terminate outstanding orders and subcontracts. The Contractor shall settle the liabilities and claims arising out of the termination of subcontracts and orders. The Owner may direct the Contractor to assign the Contractor's right, title and *187 interest under terminated orders of Subcontracts to the Owner or its designee."
(Emphasis added.)
The first clause of the first sentence of this section is not a provision relieving the contractor of any liability or responsibility under the contract; rather, it is a directive to the contractor that, if and when the owner invokes its right to terminate the contract for reasons other than for cause, the contractor is not to incur any "further" obligations beyond those to which it has already committed itself. In other words, it is a command to the contractor to cease and desist from entering into any new or additional commitments to subcontractors and suppliers. This, in my view, is simply a plain reading of the language in this clause.
"`General contract law requires a court to enforce an unambiguous, lawful contract, as it is written. P & S Business, Inc. v. South Central Bell Telephone Co., 466 So. 2d 928, 931 (Ala.1985). See also McDonald v. U.S. Die Casting & Development Co., 541 So. 2d 1064 (Ala.1989). A court may not make a new contract for the parties or rewrite their contract under the guise of construing it. Estes v. Monk, 464 So. 2d 103 (Ala.Civ.App. 1985)....'"
Dawkins v. Walker, 794 So. 2d 333, 339 (Ala.2001) (quoting Ex parte Dan Tucker Auto Sales, Inc., 718 So. 2d 33, 35-36 (Ala. 1998)). Furthermore, it is a reading of this language that is in pari materia with the remainder of the first sentence, which commands that "the Contractor shall stop Work" upon a termination for convenience. See Celtic Life Ins. Co. v. McLendon, 814 So. 2d 222, 224 (Ala.2001) (noting that contracts "`are construed so as to give effect to the intention of the parties, and, to determine this intent, a court must examine more than an isolated sentence or term; it must read each phrase in the context of all other provisions'" (quoting Attorneys Ins. Mut. of Alabama, Inc. v. Smith, Blocker & Lowther, P.C., 703 So. 2d 866, 870 (Ala.1996) (emphasis omitted))); Sullivan, Long & Hagerty v. Southern Elec. Generating Co., 667 So. 2d 722, 725 (Ala.1995) ("Terms of a written instrument should be construed in pari materia...."). Similarly, it is a reading that is consistent with the next sentence of § 12.2.1.2, which requires the contractor to "terminate outstanding order and subcontracts." See id.
Consistent with this understanding, I see nothing that prohibits the Public Building Authority of the City of Huntsville ("the PBA") from terminating the contract "for convenience," subsequently discovering or making a determination that a termination for cause is warranted, and then acting on that discovery or determination. A fortiori, the PBA could terminate for conveniencethereby halting any "further" work by the contractor while expressly reserving any claims against the contractor for defective work or, as it chose to do here, expressly reserving its right to thereafter assess the work that had been done by the contractor and subsequently terminate for cause if a termination for cause is found to be warranted.
I also disagree with the treatment as tort claims claims that are merely breach-of-contract claims against the subcontractors and the majority's decision not to apply the economic-loss rule to those claims.
NOTES
[1] On December 13, 2006, Dawson was voluntarily dismissed from the PBA's action.
[2] The PBA quotes the following from Accent Builders as the "two-part" test:
"[T]he question for the jury was not whether Accent intended to terminate for convenience, but instead whether it acted in bad faith or whether Southwest changed its position in reliance. Absent a finding on one or both of these issues, Accent was entitled as a matter of law to its issues pertaining to termination for cause."
679 S.W.2d at 110.
[3] ALDOT specification 219.203(a) provides that the work needed to correct a landslide varies based on the site conditions. Construction of a rock buttress is one of several methods discussed in ALDOT specification 219.203(a) to correct landslides.
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371 So. 2d 1032 (1978)
4245 CORPORATION, Mother's Lounge, Inc. and Cheetah, III, Inc., Petitioners,
v.
DIVISION OF BEVERAGE, Respondent.
No. FF-381.
District Court of Appeal of Florida, First District.
July 18, 1978.
*1033 Jennifer Hurst of Tobias Simon, P.A., Miami, for petitioners.
Dennis E. LaRosa, Tallahassee, for respondent.
MELVIN, Judge.
Petitioners, 4245 Corporation, Mother's Lounge, Inc., and Cheetah, III, Inc., bring their petition seeking to overturn the final order of the Division of Administrative Hearings that upheld the validity of a proposed rule of the Division of Beverage. The challenged Rule No. 7A-3.44 relates to "Entertainers, Attire and Conduct" in places of business licensed under the provisions of the beverage law, Division of Beverage. We have jurisdiction. See 4245 Corp., Mother's Lounge v. Div. of Beverage, 348 So. 2d 934 (Fla. 1st DCA 1977).
In summary, the proposed rule would forbid any licensee, holding a license under the Division of Beverage, to permit any person on the licensed premises to engage in certain sexual activity or to appear or entertain in a nude or semi-nude state. The proposed rule is set forth in an appendix to this opinion.
Petitioners urge this Court to cast aside the proposed rule as being in violation of their rights under the Constitution of the United States. The petitioners further urge that the proposed rule is invalid in that it exceeds the authority delegated by the Legislature of Florida to the Division of Beverage.
We do not reach the question of the constitutionality of the proposed rule. The proposed rule is invalid as being beyond the scope of authority that the Legislature has granted to the Division of Beverage.
The necessity for, or the desirability of, an administrative rule does not, of itself, bring into existence authority to promulgate such rule. While the Division may well be lauded for its effort to curb the type of gross immoral conduct such proposed rule would prohibit, the Division must first be vested with a valid legislative delegation of regulatory power accompanied by identifiable standards for its exercise. The Division of Beverage is an arm of the executive branch of our State. It may not, therefore, exercise any power properly belonging to the legislative branch unless it is first, by the legislature, duly authorized to do so.
1 Fla.Jur.2d Administrative Law, § 48, relating to rulemaking power provides, in part:
"The rulemaking power which the legislature may validly delegate to administrative agencies must be and is limited by the statute conferring the power. Administrative agencies, when empowered to do so, may make and enforce regulations to carry out powers definitely conferred on them, but they are not permitted to do more. The legislature cannot clothe them with more, and neither may they assume to do more. While an administrative agency may regulate, it may not legislate unless so authorized by the Constitution. Its power to adopt rules and regulations is limited to the yardstick laid down by the legislature. Moreover, the rules and regulations enacted by administrative agencies must be reasonable." (Emphasis supplied)
Thus, it is necessary to examine the statutory authority of the Division to enact the proposed rule.
The Division correctly states that it is empowered with rulemaking authority pursuant to Section 561.11, Florida Statutes (1975), which provides:
"(1) The division shall have full power and authority to make, adopt, amend or repeal rules, regulations, or administrative orders to carry out the purposes of the beverage law."
The Division further cites as authority Section 561.02, Florida Statutes (1975), which provides, in pertinent part that the Division of Beverage shall:
*1034 "... supervise the conduct, management, and operation of the manufacturing, packaging, distribution, and sale within the state of all alcoholic beverages and shall enforce the provisions of the Beverage Law and rules and regulations of the division in connection therewith." (Emphasis supplied)
An examination of the Beverage Law: Chapter 561 (Administration); Chapter 562 (Enforcement); Chapter 563 (Beer); Chapter 564 (Wine) and Chapter 565 (Liquor) reveals a comprehensive series of statutes relating to the Division's authority to issue, approve transfers of, renew, revoke and suspend beverage licenses. Further, the statutes provide for the prohibition of the sale of alcoholic beverages to minors, regulation of the hours of sale, penalties for the possession of untaxed alcoholic beverages and penalties for adulterating liquor. A thorough examination of the Beverage Law, however, does not reveal any statute of the requisite specificity remotely granting the Division the authority to regulate dress, or lack thereof, as an incident to supervising the conduct or management of licensed establishments. Absent such authority, the Division, by adoption of the proposed rule, would invade the field of the legislature, which it is proscribed from doing. The Florida Supreme Court has pronounced the rule:
"The legislature may not delegate the power to enact a law, or to declare what the law shall be, or to exercise an unrestricted discretion in applying a law; but it may enact a law, complete in itself, designed to accomplish a general public purpose, and may expressly authorize designated officials within definite valid limitations to provide rules and regulations for the complete operation and enforcement of the law within its expressed general purpose." State v. Atlantic Coast Line Ry. Co., 56 Fla. 617, 47 So. 969, at 976 (1908). (Emphasis supplied)
Should the legislature desire to grant to the Division of Beverage the authority to regulate the subject of conduct and dress of entertainers on licensed premises, it may do so by legislation, containing ascertainable standards, directing the Division to oversee such areas. See Cross Key Waterways v. Askew, 351 So. 2d 1062 (Fla. 1st DCA 1977). Absent such authority, the Division may not, by rule, require licensed employees to wear tuxedos, evening gowns, casual or sport clothes, or any type of dress, or by rule measure the quantity, or lack thereof, of dress, or specify the color scheme of the exterior or interior of the licensed premises.
We note that the activities the proposed rule would forbid are among those that the Legislature of Florida has already condemned as violative of the criminal laws of this State.
In summary, we decline to rule on the constitutionality of proposed Rule 7A-3.44 having determined that the same was promulgated without valid legislative authority.
Accordingly, the prayer of the petition for review is GRANTED and Rule 7A-3.44 purporting to regulate entertainers, attire and conduct is QUASHED.
ERVIN, J., concurs.
SMITH, Acting C.J., dissents with an opinion.
APPENDIX
7A-3.44 ENTERTAINERS, ATTIRE AND CONDUCT
(1) No licensee shall permit any person to perform acts of or
acts which simulate:
(a) Sexual intercourse, masturbation, sodomy,
bestiality, oral copulation, flagellation or any
sexual acts which are prohibited by law.
(b) The touching, caressing or fondling of the anus,
vulva or genitals.
(2) No licensee shall permit any person to use artificial
devices or inanimate objects to depict any of the prohibited
activities described above.
(3) No licensee shall permit the displaying of films, still
pictures, electronic reproduction or other visual reproduction
depicting
*1035 acts of a live performance of which is prohibited by this rule.
(4) The encouraging or permitting of any person on the licensed
premises to touch, caress or fondle the breasts, buttocks, anus
or genitals of any entertainer, employee, servant, or agent of
the licensee is prohibited. The encourageing (sic) or permitting
of any entertainer, employee, servant, or agent of the licensee
by any such person to touch, caress, or fondle the breasts,
buttocks, anus, or genitals of any other person on the licensed
premises is prohibited.
(5) It is prohibited to employ or use any person in or upon a
licensed premises while such person is unclothed or in such
attire, costume or clothing, as to expose to view any portion of
the pubic hair, anus, vulva, or genitals.
(6) No entertainer, employee, servant or agent of the licensee,
while not performing or entertaining as prescribed by this rule,
shall mingle or perform services for or with patrons as any host,
hostess, waiter, or waitress unless clothed as to cover from view
the pubic hair, anus, vulva and genitals.
(7) The prohibitions contained in this rule are not intended to
permit or encourage activities that are not otherwise permitted
by the law or under local community standards.
(8) If any provision of this rule or the application thereof to
any person or circumstances is held invalid, such invalidity
shall not affect the other provisions or application of the rule
which can be given effect without the invalid provision or
application and, to this end, provisions of this rule are
severable.
Specific Authority 561.11 FS. Law Implemented 561.02, 561.07,
561.08, 561.11, 561.29(1)(a) FS. History-New 76.
SMITH, Acting Chief Judge, dissenting:
I cannot equate the Division's proposed rule 7A-3.44 to a hypothetical one requiring licensees' employees to wear tuxedos and evening gowns, or specifying the color scheme of the licensed premises. This rule deters entertainers and other licensees' employees from sexual intercourse, masturbation, and other actual or simulated sexual conduct with each other or with patrons. This rule advises licensees that their licenses will be revoked for permitting employees to expose their sexual organs while entertaining or serving alcoholic drinks to patrons. Though the rule in certain parts is susceptible to an overbroad interpretation, which conceivably could prohibit dancing by fully clothed patrons, the rule's title and other provisions restrict its application to entertainers and other employees in their relations with patrons. The Division of Beverage so reads the rule, as evidenced by the hearing officer's order and by Division submissions to this court. The Division does not claim for itself authority to apply the rule absurdly; and, if it should later do so in license revocation proceedings, the district courts of appeal will no doubt intervene. Section 120.68, Florida Statutes (1977).
The majority have not reached the constitutional issues. Nor do I, except to say that Florida has a constitutionally legitimate interest in regulating sexual conduct on premises where the sale of alcoholic beverages is licensed, California v. LaRue, 409 U.S. 109, 93 S. Ct. 390, 34 L. Ed. 2d 342 (1972), and that any rule which unlawfully impinges First Amendment or other constitutional rights may, like any overbroad statute, be judicially narrowed in application. See White v. State, 330 So. 2d 3 (Fla. 1976).
What the majority finds wanting is legislative authority for this kind of regulation. I find such authority in Sections 561.02 and 561.11, Florida Statutes (1977), quoted in the majority opinion, and more particularly in Section 561.29, which the majority opinion does not mention. The latter statute authorizes the Division to revoke or suspend the license of any licensee for
(a) Violation by the licensee or his or its agents, officers, servants, or employees, on the licensed premises, or elsewhere while in the scope of employment, of any of the laws of this state or of the United States, ... or engaging in *1036 or permitting disorderly conduct on the licensed premises... .
If subject to constitutional limitations the state has power to prohibit and criminally punish disorderly conduct on the public streets, see White v. State, supra, it assuredly has authority to prohibit that conduct by alcoholic beverage licensees. In my view the legislature has done precisely that, and has authorized the Division, its enforcement agent, to promulgate more specific standards by rulemaking. That, clearly, is what the Division has sought to accomplish. We have repeatedly held that rulemaking such as this, providing notice of how an agency proposes to apply particularly a broad statutory standard, is a priority goal for all state agencies. Chapter 120, Florida Statutes (1977); McDonald v. Department of Banking and Finance, 346 So. 2d 569 (Fla. 1st DCA 1977). By invalidating this rule as without legislative authority, notwithstanding its relationship to Section 561.29, the court casts doubt on whether the Division may apply the "disorderly conduct" standard in the other, less preferable, fashion, by case-to-case adjudication. Sections 120.57, 120.60, Florida Statutes (1977).
I do not think Cross Key Waterways v. Askew, 351 So. 2d 1062 (Fla. 1st DCA 1977) is authority for the majority's decision. On the contrary, Cross Key stated, concerning general legislative standards far less susceptible to administrative and judicial application than "disorderly conduct," that
Such approximations of the threshold of legislative concern are meaningful in common parlance; they are a practical necessity in legislation regulating complex subjects; and, above all, they are now susceptible to refinement by policy statements adopted as rules under the 1974 Administrative Procedure Act, Chapter 120, and as so refined are judicially ascertainable and enforceable. [351 So.2d at 1069.]
I therefore dissent.
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94 P.3d 913 (2004)
193 Or.App. 822
LAING v. MAZUR-HART
Court of appeals of Oregon.
June 16, 2004.
Affirmed without opinion.
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3 N.Y.3d 421 (2004)
821 N.E.2d 519
788 N.Y.S.2d 281
DONNA McGRATH et al., Respondents,
v.
TOYS "R" US, INC., Appellant.
Court of Appeals of the State of New York.
Argued October 12, 2004.
Decided November 23, 2004.
*422 Quirk and Bakalor, P.C., New York City (H. Nicholas Goodman and Charles M. Henderson, III, of counsel), for appellant.
*423 Shanahan & Associates, P.C., New York City (Thomas D. Shanahan of counsel), and Meltzer Lopresti, LLP (Anthony A. LoPresti of counsel), for respondents.
*424 Lansner & Kubitschek, New York City (Carolyn A. Kubitschek of counsel), Eugene B. Nathanson and Norman L. Reimer for New York County Lawyers' Association, amicus curiae.
Michael A. Cardozo, Corporation Counsel, New York City (Edward F.X. Hart and Tahirih M. Sadrieh of counsel), for City of New York, amicus curiae.
*425 Craig Gurian, Brooklyn, for Anti-Discrimination Center of Metro New York, Inc., and others, amici curiae.
Chief Judge KAYE and Judges G.B. SMITH, CIPARICK and ROSENBLATT concur with Judge GRAFFEO; Judge READ dissents in part and votes to answer certified question 4 in the negative in a separate opinion in which Judge R.S. SMITH concurs.
OPINION OF THE COURT
GRAFFEO, J.
In Farrar v Hobby (506 US 103 [1992]), the United States Supreme Court concluded that a plaintiff in a federal civil rights action who obtains only nominal damages is a "prevailing party" eligible to apply for an attorney's fee award but that an award in those circumstances would rarely be appropriate unless *426 the litigation served a significant public purpose. Certifying four questions to this Court, the United States Court of Appeals for the Second Circuit has asked us to address whether the Farrar standard is applicable to attorney's fees awarded under the New York City Human Rights Law. Because the attorney's fee provision of the New York City Human Rights Law is textually indistinguishable from the federal statutes interpreted in Farrar and we find nothing in the legislative history that directs a different standard, we conclude that counsel fee awards under the City Human Rights Law are subject to the Farrar analysis.
I.
The three plaintiffs in this action, who identify themselves as preoperative transsexuals, commenced a federal action against defendant Toys "R" Us alleging that they were harassed by store employees while shopping in a Toys "R" Us store in December 2000. Plaintiffs contended that defendant's employees violated the New York City Human Rights Law, a civil rights statute that prohibits discrimination in public accommodation. In the complaint, plaintiffs sought compensatory and actual damages in an amount not less than $100,000 for each plaintiff, punitive damages in an amount not less than $100,000 for each plaintiff, attorney's fees and injunctive relief.
A nine-day jury trial ensued in June 2002. At trial, plaintiffs' attorney requested substantial compensatory and punitive damages, but did not seek injunctive relief. The jury rendered a verdict in favor of plaintiffs, finding that the conduct of defendant's employees violated plaintiffs' rights under the New York City Human Rights Law, but awarded damages of only $1 for each plaintiff.
Following the trial, plaintiffs applied for attorney's fees in the amount of approximately $206,000. Defendant opposed the request, arguing that a fee award was not warranted because plaintiffs had received only nominal damages. Noting that the attorney's fee provision in the New York City Human Rights Law is similar to the fee provisions in the federal civil rights statutes, the court applied the rule articulated by the United States Supreme Court in Farrar v Hobby (506 US 103 [1992]). In Farrar, the Supreme Court held that it will rarely be appropriate to grant attorney's fees in a case where plaintiff obtained only nominal damages unless the case served a significant public purpose. While recognizing that fee awards in nominal damages cases are not the norm, the District Court in this *427 case concluded that "[t]his case is one of those unusual and infrequent instances in which attorneys fees should be awarded." The court observed that this was the first public accommodation discrimination case to proceed to trial under the New York City Human Rights Law and the first case in which the rights of transsexuals were asserted and vindicated. In addition, at the time this action was commenced, it was unclear whether the New York City Human Rights Law covered transsexuals as the law was not amended to specifically include that class of individuals until just prior to trial. Ultimately, the District Court awarded attorney's fees in the amount of $193,551, the "lodestar" figure calculated by multiplying the number of hours reasonably expended on the litigation by a reasonable hourly rate.
Defendant appealed the attorney's fee determination to the Second Circuit, which noted that there are virtually no New York cases interpreting or applying the fee provision in the New York City Human Rights Law. Accordingly, the Second Circuit certified the following questions to this Court:
"1. In determining whether an award of attorney's fees is reasonable under New York City Administrative Code § 8-502(f), does New York apply the standards set forth in Farrar v. Hobby, 506 U.S. at 114-15, i.e., (a) that `the most critical factor . . . is the degree of success,' and (b) that when a party is awarded nominal damages, `the only reasonable fee is usually no fee at all'?
"2. If the Farrar standard does not apply, what standard should a court use to determine what constitutes a reasonable fee award for a prevailing party who has received only nominal damages?
"3. If the Farrar standard applies, does Administrative Code § 8-502(f) authorize a fee award to a prevailing plaintiff who receives only nominal damages but whose lawsuit served a significant public purpose?
"4. If New York recognizes `service of a significant public purpose' as a factor warranting an attorney's fee award to a plaintiff recovering only nominal damages, would a plaintiff who is the first to secure a favorable jury verdict on a claim of unlawful *428 discrimination against transsexuals in public accommodation, see N.Y. City Admin. Code § 8-107.4(a), be entitled to a fee award even though the law's prohibition of discrimination against transsexuals in employment, see id. § 8-107.1(a), has previously been recognized?" (McGrath v Toys "R" Us, Inc., 356 F3d 246, 254 [2d Cir 2004].)
We accepted the certified questions and now answer questions 1, 3 and 4 in the affirmative, rendering question 2 academic.
II.
Although the District Court employed the Farrar standard when it awarded attorney's fees, plaintiffs now argue that this Court should decline to follow Farrar because the rule is unduly restrictive. Plaintiffs suggest that Farrar was a significant departure from prior federal fee award jurisprudence that will impede the ability of individuals who have suffered discrimination to retain counsel to prosecute a meritorious civil rights claim. In urging rejection of the federal approach, plaintiffs primarily rely on statements in the legislative history of the local law that suggest that the law is intended to be broadly construed to effectuate its remedial purposes.
In New York, civil rights are cherished and highly protected. Legislation at the state and local levels prohibits discrimination in many spheres, including housing, employment and public accommodation. The litigation in this case was brought under the public accommodation provision of the New York City Human Rights Law, which protects against discrimination based on "actual or perceived race, creed, color, national origin, age, gender, disability, marital status, sexual orientation or alienage or citizenship status" (Administrative Code of City of NY § 8-107 [4] [a]).
A private action under the New York City Human Rights Law has been authorized since 1991 when the City Council amended the Code to grant the right to sue to any individual in a protected class who is subjected to discriminatory treatment. The legislation also gave a private party who prevailed in the lawsuit the right to seek attorney's fees. The fee provision states: "[i]n any civil action commenced pursuant to this section, the court, in its discretion, may award the prevailing party costs and reasonable attorney's fees" (Administrative Code § 8-502 [f]).
The attorney's fee provision is indistinguishable from provisions in comparable federal civil rights statutes. For example, *429 title VII of the Civil Rights Act of 1964's attorney's fee statute authorizes a court, in its discretion, to "allow the prevailing party . . . a reasonable attorney's fee . . . as part of the costs" (42 USC § 2000e-5 [k]). Similarly, 42 USC § 1988 (b), applicable to a myriad of civil rights claims, provides that "the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs."
Where our state and local civil rights statutes are substantively and textually similar to their federal counterparts, our Court has generally interpreted them consistently with federal precedent (see Forrest v Jewish Guild for Blind, 3 N.Y.3d 295, 305 n 3 [2004]; Rainer N. Mittl, Ophthalmologist, P.C. v New York State Div. of Human Rights, 100 NY2d 326 [2003]; Matter of Aurecchione v New York State Div. of Human Rights, 98 NY2d 21 [2002]; Ferrante v American Lung Assn., 90 NY2d 623, 629 [1997]). For instance, we have held that federal burden-shifting standards apply to claims brought under the state and local Human Rights Laws (see Forrest v Jewish Guild for Blind, 3 N.Y.3d at 305 n 3; Mittl v New York State Div. of Human Rights, 100 NY2d at 330-331). Where state and local provisions overlap with federal statutes, our approach to resolution of civil rights claims has been consistent with the federal courts in recognition of the fact that, whether enacted by Congress, the State Legislature or a local body, these statutes serve the same remedial purpose they are all designed to combat discrimination.
Under the comparable federal civil rights statutes authorizing fee awards, federal courts employ a two-step process for determining whether a discretionary attorney's fee award is appropriate (see Hensley v Eckerhart, 461 US 424, 433 [1983]). First, in order to be eligible to apply for an award, plaintiff must be a "prevailing party" in the litigation. If this threshold requirement is met, the court must then determine what constitutes a reasonable award, a discretionary inquiry that takes into account a multitude of factors, although "the most critical factor is the degree of success obtained" (id. at 436).[1] The determination is relatively straightforward when a plaintiff obtains *430 what amounts to complete relief plaintiff is usually entitled to an award that compensates counsel for the time reasonably expended in the lawsuit (id. at 435). Commonly referred to as the "lodestar" method, the amount of the award is calculated by multiplying the number of hours reasonably expended by a reasonable hourly rate, a procedure that subsumes many of the factors (id. at 434 n 9).
Since its 1983 decision in Hensley v Eckerhart, the Supreme Court has made clear that where a plaintiff obtains only partial success, the procedure for assessing a reasonable counsel fee award is more complex. The inquiry is not answered merely by applying the lodestar formula because, if plaintiff "has achieved only partial or limited success," an award based solely on the lodestar figure may be excessive (id. at 436). Emphasizing that calculation of an appropriate fee award is a discretionary procedure best left in the hands of trial courts who have a "superior understanding of the litigation," the Court noted that the trial court "should make clear that it has considered the relationship between the amount of the fee awarded and the results obtained" (id. at 437). If plaintiff has attained only partial success, the award may be adjusted accordingly.
In its 1992 decision in Farrar v Hobby, the Supreme Court addressed a particular type of partial success case the circumstance where a plaintiff obtains a favorable civil rights judgment on the merits but the only relief granted is nominal damages. The issue was whether a plaintiff who received only nominal damages was a "prevailing party" eligible to seek attorney's fees. The District Court in Farrar had awarded plaintiffs attorney's fees in the amount of $280,000, but the Fifth Circuit vacated the award, concluding plaintiffs were not prevailing parties and, as such, were ineligible for an attorney's fee award.
All nine members of the Supreme Court concluded that plaintiffs were prevailing parties under the federal statutes, *431 clarifying that "the prevailing party inquiry does not turn on the magnitude of the relief obtained" (Farrar v Hobby, 506 US at 114). The Court explained that "a plaintiff `prevails' when actual relief on the merits of his claim materially alters the legal relationship between the parties by modifying the defendant's behavior in a way that directly benefits the plaintiff" (id. at 111-112). Because a damages judgment, whatever the amount, forces defendant to pay a sum to plaintiff that defendant would not otherwise be required to pay, it modifies defendant's behavior in a manner beneficial to plaintiff, making plaintiff a prevailing party.
The Court split, however, on whether it should review the propriety of the amount of the award. Four Justices saw "no reason for the Court to reach out and decide what amount of attorney's fees constitutes a reasonable amount in this instance" because "[t]hat issue was neither presented in the petition for certiorari nor briefed by petitioners" (id. at 123 [partial dissent]). In contrast, the majority reasoned that "[a]lthough the `technical' nature of a nominal damages award or any other judgment does not affect the prevailing party inquiry, it does bear on the propriety of fees awarded" (id. at 114). In other words, the Court held that the fact that plaintiff obtained only nominal damages went to the second part of the attorney's fee inquiry the reasonableness of the award.
The Court emphasized its previous holding in Hensley that "the most critical factor in determining the reasonableness of a fee award is the degree of success obtained," thereby reasserting that where a plaintiff achieves only limited success, an award determined solely by calculating the lodestar may be excessive (id. [internal quotation marks omitted]). Applying that principle, the Court concluded that "[w]hen a plaintiff recovers only nominal damages because of his failure to prove an essential element of his claim for monetary relief. . . the only reasonable fee is usually no fee at all" (id. at 115 [internal citation omitted]). Comparing the amount of damages sought by the plaintiff ($17 million) with the amount recovered ($1), the Court found that the plaintiff in Farrar had obtained only a de minimis victory rendering any fee award in that case unreasonable as a matter of law.
Justice O'Connor concurred, but wrote separately to clarify that the difference between the amount of damages recovered and the amount sought is not the only factor to be considered in determining the degree of a plaintiff's success in a nominal *432 damages case. In appropriate cases, the court can consider the significance of the legal issue on which plaintiff prevailed and whether the litigation "accomplished some public goal other than occupying the time and energy of counsel, court, and client" (id. at 121-122 [concurring op]). This analysis has been referred to as the "significant public purpose" exception to the Farrar rule.
Federal courts have interpreted Farrar as holding that "while there is no per se rule that a plaintiff recovering nominal damages can never get a fee award . . . the award of fees in such a case will be rare" (Pino v Locascio, 101 F3d 235, 238 [2d Cir 1996]) and is appropriate only when plaintiff's success can be viewed as significant despite the failure to obtain more meaningful relief. For example, in Cabrera v Jakabovitz (24 F3d 372, 393 [2d Cir 1994], cert denied 513 US 876 [1994]), the Second Circuit held that a defendant who was ordered to pay only nominal damages could nonetheless be subject to pay an attorney's fee award because "plaintiffs prevailed on a significant legal issue namely, that landlords can be held liable for employing real estate brokers who are engaged in racial steering." Quoting Justice O'Connor's concurrence, the court noted that "[o]ne does not search `in vain for the public purpose' this litigation has served" (id.). But in a hostile work environment sexual harassment claim where plaintiff received only nominal damages and no new rule of law was recognized or applied, the Second Circuit relied on the Farrar standard to vacate an attorney's fee award (see Pino v Locascio, 101 F3d at 239). In Pino, the court found that "[t]he vast majority of civil rights litigation does not result in ground-breaking conclusions of law, and therefore, will only be appropriate candidates for fee awards if a plaintiff recovers some significant measure of damages or other meaningful relief" (id.).
Primarily relying on the legislative history of the 1991 amendment to the New York City Human Rights Law, plaintiffs in this case argue that the Farrar standard should not be applied to attorney's fee claims under the local law notwithstanding the fact that the language in the fee provision is substantively indistinguishable from the federal attorney's fee statutes. We are unpersuaded. There are many general statements in the legislative history indicating that the private right of action provision, adopted to keep the City at the forefront of human rights protection, should be liberally construed (see e.g. Report of Legal Div, Comm on Gen Welfare, at 12-13, Local Law Bill Jacket, Local *433 Law No. 39 [1991] of City of New York). As we recently observed when interpreting the punitive damages provision of the New York City Human Rights Law, added in the same 1991 legislation, "[t]hese statements merely reflect the broad policy behind the local law to discourage discrimination" (Krohn v New York City Police Dept., 2 N.Y.3d 329, 337 [2004]). But, in this instance, such broad expressions of overriding policy offer no basis to overlook the textual similarities between the local law fee provision and the federal statutes or to abandon our general practice of interpreting comparable civil rights statutes consistently, particularly since these broad policies are identical to those underlying the federal statutes.
There is sparse reference to the attorney's fee provision Administrative Code § 8-502 (f) in the legislative history, much less an indication that it is to be interpreted differently from its federal counterparts. In the Report of the Legal Division prepared for the City Council, a distinction is drawn between the city law as amended and the State Human Rights Law (see Executive Law § 296) since the latter does not authorize attorney's fee awards (Report of Legal Div, Comm on Gen Welfare, Section-by-Section Analysis, at 34-35, Local Law Bill Jacket, Local Law No. 39 [1991]). But no distinct standard for determining fee awards is described, nor is there any criticism of the federal approach to such awards. Certainly, there is no reference to the narrow issue we address today how attorney's fees are to be determined in nominal damages cases.
Granted, it is not surprising that the legislative history does not address the Farrar rule since the amendments predated Farrar by one year. But if Farrar constituted a departure from the attorney fee standard the City Council intended to adopt as plaintiffs suggest, we cannot discern it. The City Council has not hesitated in other circumstances to amend the New York City Human Rights Law to clarify its disagreement with evolving Supreme Court precedent. At the same time it added the private right of action provision in 1991, the City Council amended other parts of the Human Rights Law to expressly reject the Supreme Court's then-recent disparate impact analysis in Wards Cove Packing Co., Inc. v Atonio (490 US 642 [1989]) and to adopt for purposes of the New York City Human Rights Law the approach taken in the Supreme Court's prior decision in Griggs v Duke Power Co. (401 US 424 [1971]; see Administrative Code § 8-107 [17]; Report of Legal Div, Comm on Gen Welfare, Section-by-Section Analysis, at 22-23, Local Law Bill *434 Jacket, Local Law No. 39 [1991]).[2] Despite its evident willingness to amend the Human Rights Law to establish legal guidelines different from those of the Supreme Court, here the City Council has not acted to alter the attorney's fee provision in the 12 years since Farrar.[3] And, perhaps most significantly, long before Farrar, the Supreme Court had emphasized in Hensley that the degree of success obtained was the critical factor in determining a reasonable award in a case where plaintiff obtained only limited success. If the City Council disagreed with that approach, it had ample opportunity to say so.
Instead, the City Counsel adopted a fee provision that appears to have been modeled after the federal statutes interpreted in Farrar. Because the provision is substantively and textually indistinguishable from its federal counterparts, and absent any basis in the legislative history for a different standard, we conclude that the Farrar standard is applicable to attorney's fee claims under the New York City Human Rights Law.
III.
The Second Circuit has not asked us to apply the Farrar standard to the facts and circumstances of this case, or to review whether it was appropriate for the District Court to grant attorney's fees in the full lodestar figure given the extent of relief plaintiffs obtained. These tasks it has reserved to itself. As we understand question 4, we are to determine whether this claim could have fallen within the "significant public purpose" exception addressed in the Farrar concurrence even though, prior to this litigation, some courts had held that transsexuals were protected from employment discrimination under the New York City Human Rights Law. We answer the fourth question in the affirmative because we cannot say, as a matter of law, that a court that reached that conclusion would have abused its discretion.
New York City Administrative Code § 8-107 (4) (a) prohibits discrimination in public accommodation on the following *435 grounds: "actual or perceived race, creed, color, national origin, age, gender, disability, marital status, sexual orientation or alienage or citizenship status." Administrative Code § 8-107 (1) which covers discrimination in employment protects the same classes of individuals. At the time this litigation was commenced, the term gender was not defined in the Administrative Code and the term "sexual orientation" was defined as "heterosexuality, homosexuality, or bisexuality" (Administrative Code § 8-102 [20]). Thus, the former provision did not explicitly encompass discrimination based on transsexualism.
There were lower court decisions concluding that employment discrimination based on transsexualism fell under the anti-discrimination umbrella of the Code. For example, in Maffei v Kolaeton Indus. (164 Misc 2d 547 [Sup Ct, NY County 1995]), the trial court ruled that a person who identified herself as a transsexual had stated a claim under the New York City Human Rights Law's prohibition of gender discrimination in employment, despite the failure of the Code to expressly cover transsexuals. The New York City Commission on Human Rights had reached the same conclusion in administrative decisions (see e.g. Matter of Arroyo v New York City Health & Hosp. Corp., 1994 WL 932424 [NY City Commn on Human Rights 1994]).
About two months before this case went to trial, the City Council passed legislation that added a new definition of "gender" to the New York City Human Rights Law, erasing any doubt about whether transsexuals were protected under the Code (see Administrative Code § 8-102 [23]; Local Law No. 3 [2002] of City of New York).[4] The legislative history of the local law indicates that the City Council believed that the scope of the existing gender-based discrimination provision required clarification (see Local Law 3, § 1 ["Legislative findings and intent"]). In other words, the City Council determined that, in its view, the Code already protected transsexuals but was concerned that, without the amendment, the law could be misinterpreted as excluding this class of individuals from coverage.
In the District Court and again in this Court, defendant has emphasized that at the time this action was commenced, there *436 were lower court decisions interpreting the Code as protecting transsexuals from discrimination in employment. As such, defendant argues that this litigation was not significant. We do not believe that the latter necessarily follows from the former. As was apparent to the City Council, the fact that a handful of lower courts had interpreted the statute broadly did not put to rest the scope of coverage issue.
In this case, the District Court reasoned that the verdict was significant and performed a public purpose because it involved a series of "firsts" e.g., it was the first public accommodation case that went to verdict under the New York City Human Rights Law, and was the first judgment in favor of transsexuals. We cannot conclude that a judgment in favor of a historically unrecognized group can never serve an important public purpose; a groundbreaking verdict can educate the public concerning substantive rights and increase awareness as to the plight of a disadvantaged class. Particularly in the civil rights arena, a jury verdict can communicate community condemnation of unlawful discrimination. It is therefore reasonable for a court to consider whether the verdict served this function in determining the significance of the relief obtained, although this is neither the only factor that may be considered nor will it necessarily be determinative.
Given the uncertain state of the law at the time this action was commenced and the fact that the breadth of the Code was not clarified until shortly before trial, many city residents might have been unaware at the time of verdict that discrimination against transsexuals was prohibited. We are therefore unpersuaded that the fact that a few lower courts had interpreted the Code as covering transsexuals rendered plaintiffs' verdict the first of its kind insignificant as a matter of law. In light of the procedural posture of this case, the fact-dependent nature of the "significant public purpose" inquiry and the limits of certified question 4, we have no occasion to further address the District Court determination in this regard.[5]
Accordingly, certified questions 1, 3 and 4 should be answered in the affirmative and certified question 2 not answered upon the ground that it has been rendered academic.
*437 Read, J. (dissenting).
I dissent with respect to certified question 4 only, which I would answer in the negative.
In Cabrera v Jakabovitz (24 F3d 372 [2d Cir 1994]) the Second Circuit's seminal case applying the "significant public purpose" exception of Farrar v Hobby (506 US 103 [1992]) the court approved attorney's fees based on its conclusion that the plaintiffs had "prevailed on a significant legal issue namely, that landlords can be held liable for employing real estate brokers who are engaged in racial steering" (24 F3d at 393). In Cabrera, the plaintiffs, by creating a new rule making landlords vicariously liable for the discriminatory actions of the real estate brokers that they employ, prevailed on a novel issue of law that served a significant public purpose. As the Second Circuit later stressed in Pino v Locascio (101 F3d 235, 239 [2d Cir 1996]), however, the holding in Cabrera was "limited." "The vast majority of civil rights litigation does not result in ground-breaking conclusions of law, and therefore, will only be appropriate candidates for fee awards if a plaintiff recovers some significant measure of damages or other meaningful relief" (id.).
The plaintiffs here recovered only nominal damages and sought no injunctive relief. Under Farrar and the relevant Second Circuit precedent, Cabrera and Pino, adopted by us today, the question then becomes whether these plaintiffs achieved a "ground-breaking conclusion[ ] of law."
"[W]hen courts speak of issues of first impression, they speak only of these relatively few cases, which require consideration of adjustments of substantive rules of law" (Tancredi v Metropolitan Life Ins. Co., 256 F Supp 2d 196, 201 [SD NY 2003], revd on other grounds 378 F3d 220 [2d Cir 2004]). This is primarily because,
"[a]t too high a level of generality, there are no cases of first impression, while at too low a level, every case is one of first impression. . . . [A]lthough every motor vehicle accident case is one of `first impression,' there are very few indeed in which the factual context from which they are born requires courts to give serious consideration to altering or adjusting legal rules in order to resolve them. So too in all areas of the law" (id.).
While in some instances the first jury verdict pursuant to a particular statutory provision may qualify as a case of first impression, this cannot be so where, as here, the purportedly groundbreaking legal principle the recognition of transsexuals *438 as members of a protected class safeguarded against discrimination by the New York City Human Rights Law had already been supported by the only courts to have considered the question (see Maffei v Kolaeton Indus., 164 Misc 2d 547 [Sup Ct, NY County 1995]; Rentos v Oce-Office Sys., 1996 WL 737215, 1996 US Dist LEXIS 19060 [SD NY, Dec. 24, 1996]). As the majority points out, the New York City Commission on Human Rights, the administrative agency responsible for interpreting and enforcing the New York City Human Rights Law, had endorsed the same reading of the Human Rights Law in its administrative decisions.
In Maffei, which preceded plaintiffs' action by over six years, Supreme Court expressly rejected the argument of a transsexual plaintiff's employer that the New York City Human Rights Law did not recognize transsexuals as a protected class. In refusing to adopt the employer's narrow interpretation of the statutory phrase "discrimination based on sex," the court explained that the "New York City law is intended to bar all forms of discrimination in the workplace and to be broadly applied" (164 Misc 2d at 555 [emphasis added]). In Rentos, the United States District Court for the Southern District of New York embraced Maffei's interpretation, holding that the transsexual plaintiff's complaint, alleging employment discrimination based on "sex," "clearly allege[d] membership in what at least one court has found to be a protected class under city and state law" (1996 WL 737215, *9, 1996 US Dist LEXIS 19060, *26). The present litigation cannot be viewed as groundbreaking when the pioneering legal precedent had already been this firmly established.
Although believing that the New York City Human Rights Law already protected transsexuals against discrimination, the New York City Council adopted an amendment in 2002 to guard against any misinterpretation. The majority views the Council's action in this regard as further evidence of the uncertain state of the law when plaintiffs commenced this litigation. Once the amendment was enacted on April 30, 2002, however, plaintiffs' trial, which did not begin until about two months later, was rendered even more obviously irrelevant to establishing the protection of transsexuals under the New York City Human Rights Law.
In fact, the law was so certain that defendant Toys "R" Us never challenged plaintiffs' assertion that, as pre-operative transsexuals, they were members of a protected class under *439 Administrative Code § 8-107 (4). To the contrary, defendant acknowledged from the outset of this litigation that section 8-107 (4) of the Code, proscribing discrimination in places of public accommodation, applied to transsexuals and to plaintiffs as pre-operative transsexuals. Settlement talks collapsed on the eve of trial when plaintiffs demanded $600,000 (just reduced from $3.2 million plus attorney's fees), and defendant signaled a willingness to enter into productive negotiations only if plaintiffs lowered their demand to $60,000 (increased from a longstanding offer of $10,000). At trial, the parties litigated only factual issues related to whether and to what extent defendant's actions discriminated against plaintiffs. In short, defendant never contested the supposedly novel issue of law on which plaintiffs prevailed and premise their request for attorney's fees.
An attorney's fee provision in an anti-discrimination statute "is not a relief Act for lawyers" (Farrar, supra, 506 US at 122 [O'Connor, J., concurring] [citation and internal quotation marks omitted]). Rather, there is a strong "public interest in preventing dubious or trivial claims from flooding the . . . courts" (Adams v Rivera, 13 F Supp 2d 550, 553 [SD NY 1998]). If the fee provision in Administrative Code § 8-502 (f) encourages a gold rush of attorneys promoting doubtful or inconsequential claims, it will be of little value to either legitimate civil rights plaintiffs or the general public. Nor does the judicial system as a whole benefit from "a second [round of] litigation of significant dimension" over the propriety of attorney's fees (Texas State Teachers Assn. v Garland Ind. School Dist., 489 US 782, 791 [1989]).
An attorney's fee provision in a civil rights statute is a tool that, used sparingly, "ensures the vindication of important rights, even when large sums of money are not at stake, by making attorney's fees available under a private attorney general theory" (Farrar, 506 US at 122 [O'Connor, J., concurring]). Here, plaintiffs failed to accomplish any important public goal as private attorneys general by litigating a civil rights issue that had already been resolved in favor of transsexuals by the courts.
Following certification of questions by the United States Court of Appeals for the Second Circuit and acceptance of the questions *440 by this Court pursuant to section 500.17 of the Rules of Practice of the Court of Appeals (22 NYCRR 500.17), and after hearing argument by counsel for the parties and consideration of the briefs and the record submitted, certified questions 1, 3 and 4 answered in the affirmative and certified question 2 not answered upon the ground that it has been rendered academic.
NOTES
[1] The factors are: "(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the `undesirability' of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases" (Hensley v Eckerhart, 461 US at 430 n 3). New York courts have employed these factors to determine reasonable attorney's fee awards in New York City Human Rights Law claims (see McIntyre v Manhattan Ford, Lincoln-Mercury, Inc., 176 Misc 2d 325 [Sup Ct, NY County 1997], appeal dismissed 256 AD2d 269 [1st Dept 1998], appeal dismissed 93 NY2d 919 [1999], lv denied 94 NY2d 753 [1999] [where plaintiff received a judgment of more than $3 million, trial court awarded $268,156 in attorney's fees]; Bell v Helmsley, 2003 NY Slip Op 50866[U] [Sup Ct, NY County 2003] [where plaintiff obtained verdict in the amount of $11 million, later reduced to $554,000, court awarded $568,340 in attorney's fees]).
[2] Consistent with this distinction between the local law and its state and federal counterparts, this Court applied the Griggs disparate impact analysis in Levin v Yeshiva Univ. (96 NY2d 484 [2001]) when determining whether plaintiffs had stated a claim for sexual orientation discrimination under the New York City Human Rights Law.
[3] Notably, other aspects of the law have been amended during that time frame. As addressed in part III of this decision, the City Council amended the local law in 2002 by adding a new definition of "gender" to avoid what it viewed as an unduly narrow interpretation of that term by the courts.
[4] The law now provides: "The term `gender' shall include actual or perceived sex and shall also include a person's gender identity, self-image, appearance, behavior or expression, whether or not that gender identity, self-image, appearance, behavior or expression is different from that traditionally associated with the legal sex assigned to that person at birth" (Administrative Code § 8-102 [23]).
[5] The factors addressed in the dissent may be relevant to the federal court that will be evaluating the propriety of the fee award in this case. However, we are not asked in certified question 4 to determine whether this particular fee was warranted under the facts and circumstances of this case.
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78 P.3d 114 (2003)
190 Or. App. 280
OREGON STATE BAR, Appellant,
v.
Barry L. TAUB, Respondent.
16-00-18160; A115841.
Court of Appeals of Oregon.
Argued and Submitted June 19, 2003.
Decided October 22, 2003.
*115 Terence J. Hammons, Eugene, argued the cause for appellant. With him on the briefs was Hammons & Mills.
John C. Fisher, Dallas, argued the cause and filed the brief for respondent.
Before EDMONDS, Presiding Judge, and DEITS, Chief Judge,[*] and SCHUMAN, Judge.
SCHUMAN, J.
Plaintiff, the Oregon State Bar, brought this action to enjoin defendant from engaging in the unauthorized practice of law. Both parties filed motions for summary judgment. The trial court granted defendant's motion, denied plaintiff's, and entered judgment in favor of defendant. Plaintiff appeals. We reverse and remand.
Plaintiff assigns error to both the order granting defendant's motion for summary judgment and to the order denying plaintiff's. Both are subject to review, Cochran v. Connell, 53 Or.App. 933, 939-40, 632 P.2d 1385, rev. den., 292 Or. 109, 642 P.2d 311 (1981), and both are reviewed according to the same standard: summary judgment is appropriate if the record and all reasonable inferences that may be drawn from it, viewed in the light most favorable to the nonmoving party, disclose no issue of material fact and the moving party is entitled to judgment as a matter of law. ORCP 47 C; Jones v. General Motors Corp., 325 Or. 404, 408, 939 P.2d 608 (1997).
The parties agree on the following facts. Defendant practiced as an attorney specializing in bankruptcy and dissolution of marriage until he was disbarred in 1998. In re Taub, 326 Or. 325, 951 P.2d 720 (1998). He then began conducting what he advertises to the public as a paralegal service, principally in the same fields. When a potential customer first contacts defendant, he sends the customer a letter requesting information relevant to the customer's legal problem. In dissolution cases, that letter asks the customer to provide basic personal information and details about the marriage the customer wishes to dissolve and to send the answers to defendant. In bankruptcy cases, the defendant asks the customer to complete a list of monthly expenditures and requests that the customer provide defendant with financial *116 documents and information. Both letters anticipate a meeting, either in person or by telephone: the dissolution letter states, "As soon as I receive this form from you I will call you to discuss what you want on the paperwork[,]" and the bankruptcy letter states, "At the appointment we will discuss everything else that needs to be on the paperwork." The customer also receives a letter asking him or her to authorize defendant to prepare the necessary documents; that letter contains a check-the-box list asking the customer to indicate whether the case is a Chapter 7 Bankruptcy, CoPetitioner Divorce, Divorce, or "Other."
Defendant and the customer then meet, either in person or by telephone. Using the information elicited from the customer, defendant completes the appropriate documents. The level of the customer's participation in document preparation varies from customer to customer. Sometimes the customer provides all of the necessary information with no input from defendant; on other occasions, as defendant testified in his deposition, "to some extent, I might use [the customer's answers on the forms], and to some extent not, depending upon, you know, what the individual situation is." On occasion, customers have questions about the information defendant has asked them to provide; when that occurs, defendant "[u]sually * * * answer[s] the question with it is best to go have a consultation with an attorney about that * * *." Where a document requires the result of a mathematical calculation based on the application of a statutory formula to raw data provided by the customer, defendant performs the calculation and fills in the appropriate space on the document. Ultimately, defendant himself prepares a final version of the documents, returns them to the customer, and, based on information available from the clerk of the court, instructs the customer as to where and how to file them.
Oregon law provides that, with the exception of pro se litigants, "no person shall practice law * * * unless that person is an active member of the Oregon State Bar"; the Bar has authority to seek an injunction against a person its Board of Governors believes to be violating that restriction. ORS 9.160; ORS 9.166. Because defendant has been disbarred, the sole question in this case is whether his business constitutes the practice of law. This court recently defined "the practice of law" in Oregon State Bar v. Smith, 149 Or.App. 171, 942 P.2d 793, rev. den., 326 Or. 62, 944 P.2d 949 (1997), cert. den., 522 U.S. 1117, 118 S.Ct. 1055, 140 L.Ed.2d 117 (1998). The defendants in Smith operated a paralegal services business that provided customers with legal forms and individualized legal advice. Id. at 173, 942 P.2d 793. In holding that the defendants had unlawfully engaged in the practice of law, we stated that "certain core criteria are well settled. * * * [T]he practice of law means the exercise of professional judgment in applying legal principles to address another person's individualized needs through analysis, advice, or other assistance." Id. at 183, 942 P.2d 793.
This definition of law practice has two aspects: exercise of professional judgment and application of legal principles to individual cases. An exercise of professional judgment occurs any time there is "informed or trained discretion * * * exercised in the selection or drafting of a document to meet the [legal] needs of the persons being served[;]" an "intelligent choice [made] between alternative methods" of drafting a legal document, State Bar v. Security Escrows, Inc., 233 Or. 80, 89, 91, 377 P.2d 334 (1962); or advice given that "involves the application of legal principles[,]" State Bar v. Miller & Co., 235 Or. 341, 344, 385 P.2d 181 (1963). Application of legal principles to individual circumstances occurs when, for example, a paralegal gives advice to clients that is specific to the individual client, see In re Morin, 319 Or. 547, 878 P.2d 393 (1994), or when a nonlawyer recommends particular legal forms tailored to the recipient's particular problems, State ex rel Oregon State Bar v. Wright, 280 Or. 713, 719, 573 P.2d 294 (1977).
Oregon courts have frequently applied these criteria to the preparation by nonlawyers of legally significant documents and forms. In Security Escrows, Inc., the Oregon Supreme Court stated that, "[i]f the customer does not know what forms to use or how *117 to direct their completion, then he needs legal advice. If the customer does know what he wants and how he wants it done, he needs only a scrivener." 233 Or. at 93, 377 P.2d 334. In Oregon State Bar v. Gilchrist, 272 Or. 552, 538 P.2d 913 (1975), the nonlawyer defendants sold do-it-yourself divorce kits and conceded that they conducted interviews, recommended which forms within the kit to use, answered questions and otherwise counseled their customers. Id. at 557, 538 P.2d 913. The court held that the advertising and sale of the kits was not the practice of law, but that
"all personal contact between defendants and their customers in the nature of consultation, explanation, recommendation or advice or other assistance in selecting particular forms, in filling out any part of the forms, or suggesting or advising how the forms should be used in solving particular customer's marital problems does constitute the practice of law * * *."
Id. at 563-64, 538 P.2d 913.
Gilchrist was refined in later cases. In Oregon State Bar v. Fowler, 278 Or. 169, 172, 563 P.2d 674 (1977), the court held that the Oregon State Bar was not entitled to injunctive relief where the evidence showed only that the nonlawyer defendant used specific legal forms provided by the customer and that the customer dictated the precise terms and legal definitions used in the forms; in that situation, the court held, the defendant had not exercised any independent judgment. In Oregon State Bar v. Ortiz, 77 Or.App. 532, 713 P.2d 1068 (1986), the nonlawyer defendant advised and assisted customers in the preparation of citizenship and immigration visa applications. The court stated that, although "it does not require legal skill to fill out the forms, [an] understanding of the consequences attendant on their completion and filing * * * does require legal skill and judgment." Id. at 536, 713 P.2d 1068. Finally, in In re Morin, the court held that a paralegal unlawfully practiced law when he exercised his own discretion in recommending which trust or will forms clients should use. 319 Or. at 563, 878 P.2d 393.
As applied to the present situation, these cases teach that, if a reasonable finder of fact could infer from the record that defendant exercised independent judgment or discretion in the selection or recommendation of the forms provided to customers, selected the precise terms and information included in the documents, or provided advice regarding the customer's individual problems or the legal consequences of filing particular documents, then the trial court erred in granting defendant's motion for summary judgment. We conclude that the record supports several such inferences.
For example, defendant's first personal contact with the customer occurs after the customer responds to defendant's advertisement. Defendant's deposition testimony and the contents of the information request letter and "Customer Agreement" indicate that defendant may exercise independent professional judgment in response to the customer's case. At his deposition, defendant testified:
"[Defendant]: All I am going to say is this form was sent out to Mr. Horsley. Okay. It depends whatyou know, what the documentsthere is differentThis form, this letter, was went out to Mr. Horsley. I don't send the same letter out to every person.
"[Plaintiff's counsel]: Okay. So it is tailored to whatever it is you're doing for them?
"[Defendant]: It is tailored to what the forms are, what they ordered. Obviously if there's somebody who had kids, I'm not going to send them some form that doesn't apply to nonkids, because they requested different forms.
"* * * * *
"[Plaintiff's counsel]: For instance, [summary dissolution forms] are not intended for use when there is real estate involved? Is that true?
"[Defendant]: Are you asking me whatI would just say that whatever the forms say what they're appropriate for is what they're appropriate for."
(Emphasis added.) Defendant's statements here are ambiguous. They may illustrate the full extent of what he does during his initial conversations with the client; he could simply be responding to the specific requests of the customer. However, they may also show *118 that defendant uses his knowledge of the legal consequences of divorce and bankruptcy to guide the customer into making certain "requests" for documents.
Another ambiguity arises regarding defendant's "Customer Agreement," which, according to his testimony, he goes over with and explains to the customer. The agreement asks the customer to authorize defendant to prepare documents and requires the customer to choose between Chapter 7 Bankruptcy, CoPetitioner Divorce Documents, Divorce Documents, or "Other." On the existing record, we cannot know whether the "explanation" provided by defendant involves, for example, explaining the meaning of the legally significant phrase "copetitioner divorce," or whether explanations are limited to clarifying the parts of the agreement dealing with fees.
With some customers, defendant may well be the mere scrivener he claims to be, filling in the blanks with the information provided to him in the information request letter and employing no independent judgment at all. In other situationsfor example, where the customer partially completes forms, or completes information on an improper form, and brings it to defendanta different inference arises. Defendant's testimony is unclear as to how he deals with such situations:
"[T]his is probably a situation where the customer bought the forms, filled them out her or himself, and brought those in to me. And this typically happens where they say, I tried to do these. I can't do them. I want you to do them for me. And they will bring the forms in and give them to me. And to some extent, I might use them, and to some extent not, depending upon, you know, what the individual situation is."
(Emphasis added.) A rational factfinder could infer that defendant suggests the use of a different form, transposes information from the improper form to what he regards as the proper form, or uses his own discretion to complete forms. Further, defendant testified that, in response to questions from the customer, he "usually" advised consulting a lawyer, leaving open the possibility that sometimes he did not, and that some of those occasions might call for the individualized application of professional judgment. Those actions raise serious questions as to whether he is practicing law. In short, on the record before us, which does not contain any testimony or documents that might indicate the actual conversations that defendant had with any particular customer, a rational trier of fact could infer that defendant practices law by exercising professional judgment tailored to individual situations. The trial court therefore erred in granting defendant's motion for summary judgment.
Plaintiff also assigns error to the trial court's denial of its cross-motion for summary judgment. Our conclusion that the trial court erred in granting defendant's motion for summary judgment does not necessarily mean that it should have granted plaintiff's. See McKee v. Gilbert, 62 Or.App. 310, 321, 661 P.2d 97 (1983) ("That one party fails to satisfy the burden on his own motion does not imply that the opposing party has satisfied his burden and should be granted summary judgment." (Emphasis in original; citations omitted.)) In fact, our conclusion that the court erred in granting defendant's motion for summary judgment derives from our conclusion that there are disputed issues of material fact. That being the case, we also deny plaintiff's motion for summary judgment.
Reversed and remanded.
NOTES
[*] Deits, C.J., vice Kistler, J., resigned.
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01-03-2023
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/2549130/
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78 P.3d 341 (2003)
102 Hawai'i 528
In the Matter of Jane DOE, Respondent/Subject-Appellant.
Nos. 23534, 23806.
Intermediate Court of Appeals of Hawai'i.
September 30, 2003.
Cindy A.L. Goodness, Deputy Public Defender, State of Hawai`i for respondent/subject-appellant.
Julio C. Herrera, Deputy Attorney General, State of Hawai'i for petitioner-appellee Department of Health (Andrea J. Armitage, Jay K. Goss, and Mary Anne Magnier, Deputy Attorneys General, State of Hawai'i on the briefs).
BURNS, C.J., and WATANABE, J.; and FOLEY, J., concurring separately.
Opinion of the Court by WATANABE, J.
In these consolidated appeals[1] Respondent/Subject Appellant Jane Doe (Doe) challenges two orders entered by the Family *342 Court of the First Circuit (the family court), involuntarily committing her to the Hawai`i State Hospital (HSH) for successive ninety-day periods, upon petitions filed by Petitioner Appellee Department of Health, State of Hawai'i (the State) pursuant to Hawaii Revised Statutes (HRS) chapter 334 (1993).[2] Specifically, Doe appeals from the: (1) Findings and Order of Involuntary Hospitalization entered by Judge Marilyn Carlsmith (Judge Carlsmith) on June 19, 2000(Order 1); and (2) Findings and Order of Involuntary Hospitalization entered by Judge James R. Aiona, Jr. (Judge Aiona) on October 3, 2000 (Order 2).
There is no question that Doe suffers from a chronic and serious mental illness. She has been diagnosed as suffering from schizophrenia, paranoid type, as well as schizoaffective disorder, bipolar type, and has a history of: paranoid, persecutory delusions; responding to internal stimuli, as manifested by her talking to herself, gesturing, and engaging in purposeless behaviors; disturbed sleep; psychomotor agitation; disorganized thinking; rambling speech; lack of insight; and poor judgment. While she apparently has not been physically violent in the past, she often directs loud racist, inflammatory remarks at others, often in their faces, prompting concerns that she will provoke physical retaliation against her. During previous stays in mental institutions and halfway houses, Doe's words have led to angry confrontations with other patients and staff.
Although medication has been shown to help Doe, she refuses to take any voluntarily, partly due to her paranoia and mistrust of others. Doe's paranoia has also led to a history of poor self-care and neglect, with Doe often not eating out of fear that she would be "poisoned." Due to Doe's increasingly paranoid behavior, Doe's parents and brother, who have been appointed as the co-guardians of Doe's person (Co-guardians), are no longer able to care for Doe in their home. They have therefore supported the State's successive petitions to hospitalize Doe and involuntarily administer to her the medications they believe she needs to get better.
Pursuant to HRS chapter 334, the statutory criteria for involuntary hospitalization are as follows:
Involuntary hospitalization criteria. A person may be committed to a psychiatric facility for involuntary hospitalization, if the court finds:
(1) That the person is mentally ill or suffering from substance abuse;
(2) That the person is imminently dangerous to self or others, is gravely disabled or is obviously ill; and
(3) That the person is in need of care or treatment, or both, and there is no suitable alternative available through existing facilities and programs which would be less restrictive than hospitalization.
HRS § 334-60.2 (1993) (emphasis added). The first criterion must be established by the "beyond a reasonable doubt" standard, and the second and third criteria must be established by the "clear and convincing evidence" standard. HRS § 334-60.5(i) (Supp.2002).[3]
*343 In its petitions for Doe's involuntary hospitalization that underlie these appeals, the State claimed that Doe:
is a person who is mentally ill or suffering from substance abuse, and is imminently and substantially dangerous to self or others and is in need of care or treatment, or both, and that there is no suitable alternative available through existing facilities and programs which would be less restrictive than hospitalization, thereby being within the purview of chapter 334, Hawaii Revised Statutes, as amended, and as defined by law.
(Emphasis added.) In other words, as to the second statutory criterion, the State focused on Doe's "imminent dangerousness to self or others" and not on whether Doe was "gravely disabled or ... obviously ill[.]"[4]
On appeal, Doe does not challenge the family court's findings that she met the first and third criteria for involuntary hospitalization. Doe argues that she was unconstitutionally hospitalized because there was insufficient evidence that she was imminently dangerous to herself or others. Doe asserts that the family court's orders were based on mere "antisocial behavior," i.e., her aggressive racist remarks, and such remarks constituted protected free speech for which she could not be involuntarily hospitalized.
We reverse Orders 1 and 2.
BACKGROUND
Doe is a magna cum laude graduate from Chaminade University who has grappled with mental illness since her teen years. When she was thirteen years old, she was treated for depression. In December 1994, Doe was admitted to Queen's Medical Center (Queen's) after exhibiting bizarre behavior, including placing fish from the refrigerator into a mailbox. In August 1996, Doe was again hospitalized at Queen's for psychiatric treatment. In 1996 and 1997, Doe received follow-up outpatient treatment at the Kalihi-Palama Community Mental Health Center; however, she refused to take any medication and her paranoid behavior became progressively worse. She refused, for example, to eat food prepared at home because she thought the food was being poisoned.
On November 14, 1998, Doe was arrested and charged with Criminal Trespass in the First Degree after she loudly and abusively antagonized her parents and refused to leave their home when requested to do so. Because she bit the arresting police officer and resisted arrest, Doe was also charged with assault of a police officer and resisting arrest. Two days later, Doe was sent to the Women's Correctional Facility, where, upon psychiatric evaluation, she was determined to be unfit to proceed to trial.
On January 6, 1999, Doe was admitted to HSH for treatment and care. However, she refused treatment and never gained fitness. Consequently, the criminal charges against her were dropped on April 29, 1999.
PROCEDURAL HISTORY
A. Family Court Proceeding FC-M No. 99-0434
On July 16, 1999 in FC-M No. 99-0434, the State filed a Petition for Involuntary Hospitalization of Doe in the family court (Petition 1). Attached to Petition 1 was a Certificate of Physician signed by HSH staff psychiatrist Dr. Thomas E. Henry (Dr. Henry), who certified that he had examined Doe on July 15, 1999, at 9:00 a.m. and had reason to believe that she was:
mentally ill ... [a]s manifested by ... paranoid, persecutory delusions. Appears to be responding to internal stimuli. Sleep disturbance. Psychomotor agitation. Disorganized *344 thinking. Rambling speech. No insight. Poor judgement [sic][;]
....
imminently and substantially dangerous to... self ... [and] ... other persons ... [a]s manifested by such acts, attempts or threats as the following: incites anger, assaultive behaviors in peers, pushed peer, makes racial slurs, intrusive, does not respect boundaries[;]
....
... in need of care and/or treatment, and there is no alternative available through existing facilities and programs which would be less restrictive than hospitalization;
... not capable of realizing and making a rational decision with respect to his/her need for treatment.
On July 22, 1999, the family court, Judge Lillian Ramirez-Uy presiding, appointed Jerry I. Wilson, Esquire as the guardian ad litem (the GAL) for Doe.[5]
On July 29, 1999, the family court, Judge Peter Fong (Judge Fong) presiding, entered Findings and Order of Involuntary Hospitalization that granted Petition 1 and ordered Doe to be retained at HSH for "care and/or treatment until placement in an alternative facility for a period not to exceed 90 days, unless sooner discharged, from ... the termination date of the current commitment on July 27, 1999."
On October 15, 1999, the State filed a Repetition for Involuntary Hospitalization "to continue [Doe's] hospitalization" (Petition 2). In a Certificate of Physician filed in support of the repetition on October 19, 1999, Dr. Henry certified that he had examined Doe on October 14, 1999, and had reason to believe that Doe was
mentally ill[,] ... [a]s manifested by ... paranoid, persecutory delusions. Responding to internal stimuli as manifested by talking to self, gesturing, purposeless behaviors. Psychomotor agitation. Disturbed sleep. Disorganized, tangential thought process. Rambling speech. No insight. Poor judgement [sic].
Dr. Henry also stated that Doe was "imminently and substantially dangerous" to herself,
[a]s manifested by such acts, attempts or threats as the following: Incites others to anger & assaultive behaviors towards self. Pushed peer. Racial slurs. Intrusive, does not respect boundaries.
Finally, Dr. Henry certified that Doe was "in need of care and/or treatment, and there [was] no alternative available through existing facilities and programs which would be less restrictive than hospitalization" and that Doe was "not capable of realizing and making a rational decision with respect to ... her need for treatment."
On October 15, 1999, the State also filed a Motion for Order Authorizing the Involuntary Administration of Medication, seeking authority to involuntarily administer medications, including psychiatric medications, and involuntarily administer laboratory studies, as clinically necessary, to Doe. A proposed treatment plan for Doe prepared by Dr. Henry was attached to the motion.
In describing Doe's clinical status that prompted the proposed treatment plan for Doe, Dr. Henry stated, in part:
During this current hospitalization she has been under constant observation, and has been placed on, fifteen minute checks around the clock for protection of self and other [sic]. She has been loud, disruptive, and confrontational. She provokes and angers peers daily, using racial slurs. She displays paranoid behaviors. She expresses concerns about being monitored by video devices in the building that is being transmitted to computers at the nurse's station. She has attempted to cover objects she feels are monitoring her. To protect herself from being monitored she has covered windows, mirrors, and has attempted to bathe in the dark. She has refused food that she perceived to be prepared by an ethnic group she does not approve of, i.e. Japanese, Filipino, Portuguese, and Samoan. She has described her hospitalization as an experiment on her by the "Chings" who are controlled by the *345 Japanese because they married a Filipino. She feels that medications are poisons and tries to influence her peers not to take medications by telling them that prescription medication [sic] are poisonous. On 5/7/99, she knocked a chair over causing a peer to fall, stating that she did not want a Japanese sitting in the chair, threatening to throw or may have thrown books at that person, and persisted with loud, threatening remarks towards that person. The peer reportedly retaliated by hitting [Doe] with a small radio. [Doe] will taunt peers with various racial or derogatory remarks. On 9/8/99, she told a female peer of Polynesian ancestry, who is much larger than her, "... you make KPT look bad, you must not have graduated from Kamehameha", and again referring to the peer, "... she must be faking her symptoms. I don't want psychiatry or psychology putting me in an experimental group with her. She just wants to be paid to be in here." This peer was angered by [Doe's] remarks threatening bodily harm. [Doe] will frequently make statements that are sexual in nature. She has complained of being sexually molested while at HSH. These complaints have no basis of truth with [Doe] being under constant observation for safety concerns. Staff has voiced concerns about a possible history of sexual abuse because of her comments and behaviors (e.g. wearing several layers of clothing and using several sanitary napkins at once even when not on her menses). She made comments to a female staff during a group activity, "oh I let you get off on that ... you get your orgasms from giving classes... are your nipples hard when you talk to me? Are you having an orgasm now?" Her thought process has been described as loose, tangential, rambling, flighty, and word salad. At times she appears to be responding to internal stimuli, talking to herself, appearing hypervigilent, and anxious. Because of agitated, provocative, non-redirectable behaviors she has required emergency medications for behavioral control, as recently as, 8/6/99. She frequently has required time out or other behavioral methods to manage disruptive behaviors. On 9/16/99, [Doe] required seclusion for safety of self and others after she began provoking a female peer with racial slurs. During the incident the peer physically retaliated and despite staff attempts to redirect [Doe] from further escalation she remained loud, disorganized, and delusional continuing to put herself and others at risk of harm. She was able to regain some composure and was released from seclusion after two hours. On 10/4/99, it was reported that [Doe] made a derogatory remark to a male peer who was prevented by staff from attacking her.
Participation in other therapeutic activities and classes has been poor, with minimal to no active participation. She is unable to discuss a rational plan for discharge. She is not able to appropriately discuss legal issues regarding her present hospitalization. She has refused to participate in legal proceedings or work with any public defenders assigned to her case because she did not want any, "Japanese lawyers, doctors, judge or any Filipinos present," in the courtroom. She displays minimal insight and judgment is impaired with regards to her illness and needs. She has been non-compliant with recommended medications and treatment. She has displayed impaired sleep. Hygiene and grooming have been neglected. Report noted on, 8/10/99, indicated that [Doe] has not bathed for over two weeks (19 days) and had worn the same clothes for over a week. Because of her malodorous condition, peers and staff were unable to tolerate being in her presence. She has had to eat in a separate room so as not to offend her peers, further endangering her safety. She reportedly was assaulted 8/9/99, by a peer who was disgusted by her foul body odor. Presently, she continues to bathe irregularly and frequently wears the same clothes for several days.
Dr. Henry then described the purposes, side effects, and risks associated with the antipsychotic, anticholinergic, and mood stabilizer medications that he sought court authorization to administer to Doe.
On October 21, 1999, a hearing was held on Petition 2 and the State's motion to involuntarily *346 administer medication to Doe.[6] By a written order signed by Judge Fong and filed on November 12, 1999, the family court ordered that Doe be retained at HSH for "care and/or treatment ... for a period not to exceed ninety days." The family court also authorized the involuntary administration of medication to Doe, in accordance with clinically required treatment plans. The order provided, however, that "[b]efore involuntary medication or treatment is undertaken, the treating physician shall first make every attempt to secure [Doe's] cooperation and permission." Additionally, the order required that "prior to the involuntary administration of intramuscular medication, ... staff must with due diligence encourage [Doe] to take prescribed medication orally[.]"
On January 10, 2000, the State filed a Petition for Involuntary Outpatient Treatment. A Certificate of Physician was subsequently filed in support of this petition, in which Dr. Henry opined that Doe's condition had improved during the court-ordered treatment and that Doe was "capable of surviving safely in the community with available supervision from family, friends and others[.]" On January 20, 2000, following a January 19, 2000 hearing on the matter, the family court, Judge Vernon Woo presiding, entered Findings and Order of Involuntary Outpatient Treatment (the January 20, 2000 Order), finding by clear and convincing evidence that Doe was "capable of surviving safely in the community with available supervision of family, friends, and others." The January 20, 2000, Order stated, in pertinent part, as follows:
1. That [Doe] obtain outpatient treatment for a period of 180 days, from the date of discharge of January 21, 2000.
2. That Assertive Community Team [ (the ACT) ] is designated as the outpatient treatment psychiatrist who shall be responsible for the management and supervision of [Doe's] outpatient treatment....
3. That at the end of the period of treatment under this [o]rder, [Doe] is automatically and fully discharged.
4. That [Doe] shall not be forcibly detained for treatment or physically forced to take medication.
5. That if [Doe] fails or refuses to comply with this court order, i.e. refuses to obtain treatment and/or refuses to take the prescribed medication, the designated outpatient treatment psychiatrist shall so notify the [c]ourt, orally and in writing, at ... Mental Health Law Clerk, Family Court,....
(Emphases added.)
Apparently, when Doe read paragraph 4 of the January 20, 2000 Order and learned that she could not be physically forced to take medication, she stopped taking any. In accordance with paragraph 5 of the January 20, 2000 Order, therefore, the ACT psychiatrist who was treating Doe, Dr. Toshiyuki Shibata (Dr. Shibata), informed the family court law clerk of the situation. Advised by the law clerk that the family court lacked jurisdiction to remedy the situation, Dr. Shibata and Doe's parents then sought clarification from the family court of the January 20, 2000, Order.
When clarification of the January 20, 2000, Order was not forthcoming, the State, on May 26, 2000, filed another Petition for Involuntary Hospitalization in FC-M No. 99-0434 (Petition 3). In an accompanying Certificate of Physician, Dr. Lee Baumel (Dr. Baumel) certified that he had reason to believe that Doe was mentally ill and imminently and substantially dangerous to herself, as evidenced by the following:
1. refuses all medications (in and outside of hospital)
2. increasing paranoia
3. delusional ideation re "racists"
4. high level of agitation
5. disruptive and intrusive on psych unit
6. wandering off from TRAC Housing placing her at increased risk of harm
7. poor judgment
8. No appreciable insight
9. may be hallucinating?
10. refuses cooperation with [the ACT]
*347 11. parents are [Co-guardians]but she doesn't respond to their authority either.
At a June 1, 2000, hearing on Petition 3 before Judge Carlsmith,[7] Dr. Carlton, a psychiatrist at Queen's, apparently testified that neither he nor Dr. Baumel believed that [Doe] was imminently dangerous to herself or others. The State thereupon withdrew Petition 3 and the GAL orally moved for an Ex Parte Petition for Emergency Hospitalization of Doe to HSH, pursuant to HRS § 334-59 (Supp.2002).[8]
*348 Over the objection of Doe's counsel, Judge Carlsmith orally granted the ex parte motion.
The next day, the GAL memorialized his oral motion by filing a written Application for Emergency Examination and Treatment, which Judge Carlsmith granted the same day. On June 5, 2000, the family court, Judge Dan T. Kochi presiding, entered an expedited order that Doe "be administered medication as prescribed by medical authorities at [Queen's] or at [HSH]" and that Doe "be held at [HSH] pending a continued hearing of this matter on June 8, 2000[.]"
On June 7, 2000, Doe filed motions to vacate the expedited order and stay the expedited order for the administration of medication and for continued hearing. Doe argued that the expedited order violated HRS § 334-59 and her "constitutional right to due process" because the order required that she be held at HSH pending a continued hearing on January 8, 2000, despite the requirement in HRS § 334-59 that a patient admitted for emergency examination and hospitalization be released within forty-eight hours of the patient's admission, unless the patient voluntarily agreed to further hospitalization. Doe's motions were denied the same day.
On June 13, 2000, Judge Carlsmith entered an Order of Dismissal that dismissed Petition 3 and confirmed her prior oral order that Doe remain hospitalized at Queen's until June 1, 2000.
B. Family Court Proceeding FC-M No. 00-1-0444
On June 6, 2000, the State filed another Petition for Involuntary Hospitalization of Doe (Petition 4). This petition was supported by the certificates of two physicians. Dr. Bahram Taghabi (Dr. Taghabi), who had been Doe's treating psychiatrist since Doe's emergency admission to HSH on June 2, 2000, certified that Doe was mentally ill, as manifested by the following examples:
[Doe] has disorganized thinking, obsessed about racist issues, talks to herself, laughs out loud inappropriately, appears to be responding to internal stimuli; denies having any illness or any need for meds.
According to Dr. Taghabi, Doe was imminently and substantially dangerous to herself because her records reveal that she has "recently threatened to jump," had been wandering from her housing, and had poor self-care in regard to eating. Dr. Taghabi also stated that Doe was "gravely disabled or obviously ill as manifested by: [p]oor insight into mental illness, poor self[-]care, poor eating, wandering from housing." Further, Doe was "in need of care and/or treatment, ... there was no alternative available through existing facilities and programs which would be less restrictive than hospitalization[,]" and Doe was not "capable of realizing and making a rational decision with respect to [her] need for treatment." The certificate of the other physician,[9] was similar. According to this *349 physician, Doe was imminently and substantially dangerous to herself, as manifested by:
Intrusive behavior towards strangers. Inflammatory, perjorative comments to strangers. Wandering off from housing, poor self[-]care and eating with weight loss.
Additionally, Doe was gravely disabled or obviously ill, as manifested by: "[p]oor self[-]care, poor eating, wandering, impaired sense of self[-]protection."
Following a hearing on June 8, 2000, the family court, Judge Carlsmith presiding, entered Findings and Order of Involuntary Hospitalization, which dismissed Petition 4 for "lack of timely filing." The next day, Judge Carlsmith issued Amended Findings and Order of Involuntary Hospitalization, which, in addition to dismissing Petition 4 for lack of timely filing, ordered Doe "held for up to 48 hours from the date of hearing for emergency hospitalization pending the filing of a petition for involuntary hospitalization, as represented by Dr. BARRY TAGHAVI [sic]."
On June 9, 2000, Doe filed a Petition for Writ of Habeas Corpus and Writ of Prohibition, requesting that the family court release her from involuntary hospitalization and enjoin the State, the GAL, and Co-guardians from circumventing "statutory involuntary hospitalization procedures by way of filing repeated Emergency Ex-parte Applications for Examination and Hospitalization." Doe's petition was denied on July 25, 2000, by the family court, Judge Richard Perkins presiding.
C. Family Court Proceeding FC-M No. 00-1-0452
On June 8, 2000, while proceedings in FC-M No. 00-1-0444 were still ongoing, the State filed yet another Petition for Involuntary Hospitalization (Petition 5). In a supporting certificate filed on June 13, 2000, Dr. Taghabi stated that he had examined Doe on June 8, 2000 and had reason to believe that she was mentally ill, as manifested by the following:
Appears to be responding to internal stimuli; laughs inappropriately; bizarre thinking and appears paranoid; denies having psychiatric illness and refusing meds. Poor insight.
According to Dr. Taghabi, Doe was imminently and substantially dangerous to herself, as evidenced by the following: "Recently told brother she wanted to `jump.' Getting into altercations with others due to calling them racist names." Doe was also "gravely disabled or obviously ill as manifested by: wandering off from board and care and history of poor self[-]care and not eating."
On June 15, 2000, the family court, Judge Carlsmith presiding, held a hearing on Petition 5.[10] At the hearing, Dr. Taghabi testified that Doe was mentally ill and suffering from "schizophrenia paranoid type." He explained that Doe "appears to be responding to internal stimuli which is exhibited by laughing inappropriately, talking to herself and making remarks that are more out of the context of someone talking to themselves...." Doe also had a "thought disorder" and was unable "to maintain any meaningful interaction with other people." Additionally, Doe was "paranoid about certain races of people." To treat Doe's disorder, Dr. Taghabi had prescribed "xyprexa (phonetic spelling)," an antipsychotic medication that "helps with the positive symptoms of psychosis such as hallucinations and delusions and also helps with negative symptoms such as blunted (sic) affect, apathy for the external environment and ambivalence, difficulty making decisions and lack of expression affect." Dr. Taghabi opined that based on past reports and Doe's own statements, there was "very little chance" that Doe would take medications if she were not in HSH. When Dr. Taghabi was asked whether Doe could be dangerous to herself if she were released, the following colloquy ensued:
Q. Dr. Taghabi, do you have an opinion whether [Doe] would be dangerous to herself or others if released today?
*350 A. Yes, I have an opinion.
I think she would be dangerous to herself based on her current behaviors in the ward and also problems that were reported with her past behaviors when she was outside of the hospital.
When she was outside the hospital the report that I've got from her Guardian and also from the
[DOE'S ATTORNEY]: Objection, Hearsay.
THE COURT: I'll overrule.
Proceed.
THE WITNESS: The report that I've received is her initial report and also from her Guardian said that she wasshe has been enticing and provoking other patients where she was living to the point where they had become very angry.
And I have gotten a report that they havethere has been incidents of physical altercation. That she had been hit.
And also she's walking out in the streets, wandering off and going up to total strangers andand calling them derogatory racist remarks which could place her at significant risk.
If someone doesn't understand that she's mentally ill they could take that very personally and they could try to, you know, hurt her.
On the ward I've seen the same kind of behavior. She has been getting other patients upset and arousing the other patients andby going up to them and calling them racist remarks.
And also she's been doing this with the staff also. And this is again part of her obsessiveobsessive part of her illness of schizophrenia that her fear is geared towards racist issues.
....
Q. Has this behavior about her going you mentioned about going up to patients and staff and saying derogatory things straight toright to their face?
A. Yes.
Q. Has that changed at all this week? Has that happened this week?
A. It has happened this week, yes.
For example, we had aa master treatment plan and shewe invited her to come in and talk to us about our treatment plan and she looked at the window and said, "I don't (indiscernible) .... coming in because there are white people in there."
Q. `Cause there are what in there?
A. "White people in there. I don't want to be with white people" (inaudible, the witness drops voice)....
Then towards theone of the staff she went up to her and saidmade racist remarks towards her and she has also done that to other patients.
And the other patients have become very upset and it'sit'syou know, it's putting her at risk also on the unit so we have toyou know, we have to watch her.
Q. Is the staff intervening when this when this sort of things happens with the (indiscernible, simultaneous conversation)....
A. She's redirected verbally and (inaudible).... to do that. That's about it right now.
Q. Are there any other examples or concerns you have about her being a danger to herself if she were released today?
A. Not that I can think of.
Dr. Taghabi also testified that Doe was living in a twenty-four-hour supervised locked unit at HSH, where "she can't leave the quarters." This setting kept Doe "from wandering off and provoking other people or strangers who may retaliate against her racist remarks." The secure setting also prevented Doe "from being non-compliant with medications by encouraging that she take medications hopefully long enough for her to get better and have insight into her illness and be compliant with medications so that once she is released eventually she will be compliant with medications."
On cross-examination, Dr. Taghabi testified that he was not aware that Doe's previous doctor had found that Doe was not imminently dangerous to herself. Dr. Taghabi also admitted that Doe had not expressed *351 "suicidal ideations"[11] or "homicidal ideations" and had not physically harmed the staff or other patients. The doctor believed that Doe was a danger to herself because it was "probable" that Doe's racist remarks would result in retaliation, causing bodily injury. Additionally, he had
received word from [Doe's] mother that [Doe] while she was at a cottage here at [HSH] after discharge in January there was an episode where she turned on the burners where she was living and left them on. And that is something that has occurred but that's something that also should be noted that could potentially be a great risk for others[.]
Dr. Taghabi admitted that he had not substantiated whether the incident described by Doe's mother had actually occurred. Additionally, he acknowledged that he had no special training or qualifications to qualify him as an expert on how society would react to Doe's racist remarks. Finally, Dr. Taghabi related that he had not personally observed Doe go up to other patients and make racist remarks, so his testimony was based on information provided by nurses.
Doe's mother then testified that when Doe was released from HSH to the ACT program on January 21, 2000, she was placed in an emergency shelter "for what was supposed to be a few days to a week," until she could be placed in a community home. However, "when [Doe] got the discharge order saying that she could not be forcibly medicated and read the house rules[,] she decided she was not going to take any more medication." As a result, she could not be placed in a community home and ended up at a forensic cottage on HSH grounds.
Doe's mother related that on or about April 10, 2000, she dropped Doe off in `Aina Haina for a job interview. Doe was supposed to catch the bus after the interview and go back to the HSH cottage. However, Doe apparently missed the bus, did not return to the cottage, and spent the entire night in Chinatown without calling to inform anyone about her whereabouts. Regarding Doe's racist remarks, Doe's mother testified that she was not aware of any actual altercations resulting from Doe's behavior. Upon further questioning, Doe's mother testified:
Q. Have you actually witnessedever witnessed herher behaviors of saying racial remarks to strangers?
A. I have been with her many times although notno. When she was in the cottages she knew the staff and she would make racial remarks.
But I would take her shopping before her initial Hawaii State hospitalization and be in very public places and she would make very loud remarks regarding Japanese and Filipinos when we were in areas with very high population of those two nationalities; in the Waipahu area or in public, large public shopping centers.
Q. How didhow did that make you feel?
A. Very uncomfortable. I would tell her, "[Doe], please don't make those kind of remarks. Be quiet. Don't say anything."
And [Doe's] retention level and ability to control her behavior is sometimes about ten seconds. Sometimes she can manage for about ten minutes or fifteen minutes but then she would lose control again.
In addition, Doe's mother testified that Doe posed an additional danger to herself because in the past, she had refused to eat, based on a belief that the food was poisoned.
When asked whether Doe would be able to go home with her if released, Doe's mother responded: "No. Her behavior is not such that I could deal with it and it would be a definite danger to her father because of his medical problems that have gotten worse over the last year." Doe's mother explained that Doe's father was under medication for a number of medical ailments. "[Doe] has the idea that nobody should be taking medication and at one point quite a few years ago ... *352 [Doe's father] was given an antibiotic for an infection and [Doe] threw it away." When asked what kind of living situation would be set up for Doe if she were released, Doe's mother responded:
We have secured some disability income payments for her from social security against her wishes and that would be the only thing I could think of that might help to pay a rent but I don't think she would be in a good situation to live by herself.
Following closing arguments by the State, Doe, and the GAL, the family court orally ruled that: (1) Doe was "substantially dangerous and imminently dangerous to herself in that she has made theand continues to by refusing to take her medicine, making remarks that are uncontrolled, inflammatory, racial in situations where it is probable they will result in assaults that certainly could result in bodily injury and/or anything even more serious than that"; (2) Doe was mentally ill beyond a reasonable doubt in that she suffered from schizophrenia paranoid type; (3) Doe was in need of care and treatment by clear and convincing evidence; and (4) Doe cannot be placed elsewhere than HSH because there was no suitable environment less restrictive than hospitalization where Doe could be administered medications involuntarily.
On June 19, 2000, the family court entered Order 1, ordering that Doe be admitted to HSH for a period not to exceed ninety days. The family court found, in relevant part, as follows:
I. [Doe] is mentally ill, beyond a reasonable doubt, in that [Doe] suffers from Schizophrenia, paranoid-type[.]
....
J. [Doe] is imminently and substantially dangerous to self, by clear and convincing evidence, in that [Doe] recently has behaved in such a manner as to indicate that the person is unable, without supervision and the assistance of others, to satisfy the need for nourishment, essential medical care, shelter or self-protection, so that it is probable that death, substantial bodily injury, or serious physical debilitation or disease will result unless adequate treatment is afforded, i.e., by refusing to take medications and chronically making racist, loud, inflamatory [sic] remarks to strangers which are very provoking and which are likely/probably to cause dangerous retaliation[.]
....
K. [Doe] is in need of care and/or treatment, by clear and convincing evidence.
L. [Doe] is unable to be placed elsewhere because at present there is no suitable alternative where involuntary medications can be administered available through existing facilities and programs which would be less restrictive than hospitalization, by clear and convincing evidence.
M. [Doe] should be committed to a psychiatric facility.
On June 21, 2000, Doe filed a notice of appeal from Order 1. This appeal was designated as appeal No. 23534.
Thereafter, on August 17, 2000, the State filed a Repetition for Involuntary Hospitalization (Petition 6), seeking to continue Doe's involuntary hospitalization. In a Certificate of Physician attached to the Repetition, Dr. Janus Smolinski (Dr. Smolinski), expressed his belief that Doe was mentally ill and imminently and substantially dangerous to herself, as evidenced by the following:
[Doe] has been making racial accusatory comments towards Phillipinos [sic] numerous times a day. The comments are insulting and provoking strong reactions from others. If she made these comments in the community, she would most likely be assaulted by someone within a short period of time. On 8/12/00 she wanted to physically fight with a peer after verbal altercation.
On August 24, 2000, the family court, Judge Aiona presiding, held a hearing on Petition 6. Dr. Smolinski testified that in his opinion, Doe was mentally ill and suffering from schizoaffective disorder, bipolar type. Dr. Smolinski was asked whether Doe was dangerous to herself or others, and the following colloquy ensued:
*353 Q Dr. Smolinski, do you have an opinion whether [Doe] would be dangerous to herself or others if released today?
A Yes, I believe she would.
Q And it would dangerous [sic] to herself or others?
A Uh, to self and others.
Q What is the basis of your opinion?
A Okay. Well, she makes very strong racial remarks and she went and would be in the community and walk up to somebody of that ethnicity and make very strong remarks, you know, that somebody ishow much she hates and dislikes and that they are conspiring against her with loud voice and very close to somebody, getting literally in somebody's face, and she would most likely be assaulted sooner or later.
Q Why do you say that she would be a danger to others?
A Well, there was asome physicala threatened behavior. I don't know all the details but on the unit.
[DOE'S ATTORNEY]: I object as to hearsay (inaudible).
THE COURT: Okay. The objection
....
[THE STATE'S ATTORNEY]: Your Honor, the witness is an expert and he's allowed to testify as to hearsay.
THE COURT: That's true.
....
THE COURT: The objection's overruled.
Q [BY THE STATE'S ATTORNEY]: And how did you get the information about the incident?
A Just from staff.
Q You're the author of the certificate of physician that was filed on August 21st?
A Yes.
Q Okay. That was written on August 16?
Okay. You mentioned in there August 12th she wanted to physically fight with a peer after verbal altercation. Is that the visit you're talking about?
A Yes, that's the one.
Q Do you have any more details as to from your experience and from the information you got from staff as to what happened in that?
A I don't have all the details. I don't know. But the story is that when she, let's say, made some remarks, somebody responds. Then there will be some verbal exchange of verbal communication and she could get to the point that she could become assaulted.
Q So she didn't back down and walk away from this incident from your understanding?
A No. And my understanding is that it is very protective environment here so that if anything is happening like what happened on the 12th then the staff intervenes and the patient (inaudible) to different locations.
Q So the staff intervenes to prevent these things from happening here?
A Yes.
Q Okay. In your certificate of physician you also madediscussed something about unable to provide for food or clothing or shelter or make reasonable decisions regarding her care. Could you explain that.
A Yes. That she would be unable to take care of herself. If she would be discharged, it means providing forarranging for a place to live and then going and shopping and organizing in a way that she could do something, cook for herself or organize a (inaudible). And we all shop for clothing so (inaudible) for herself.
Q Um-hmm. And why is that?
A A secondary (inaudible) disorganization that she would be unable to put basically her thoughts together to the point that she could go that it would bethe example, let's say she would be in an apartment and she would have to organize her thoughts. Okay. So what do I have to do? I need food so I have to pay the checkbook (inaudible). And it requires some executive functioning on a level that she to my (inaudible) would be unable to do it.
On cross-examination, Dr. Smolinski was questioned about the details of the August 12th incident that he testified about in which
*354 Doe had allegedly wanted to physically fight with a peer. Dr. Smolinski admitted, after examining the progress notes in Doe's HSH clinical chart, that there was no entry for August 12. Dr. Smolinski also acknowledged that the incident upon which he based his opinion that Doe's racial remarks could endanger herself occurred on August 7. The following colloquy regarding the incident then ensued:
Q Okay. And regarding that incident is it correct that in the progress notes it mentioned that [Doe] was redirected after the other patient called [Doe] a bitch? Is that correct?
A Yes, that's correct.
Q Okay. And the redirection was verbal, not physical redirection; is that correct?
A Yes, that's correct.
Q Okay. And in that progress note there's no mention of [Doe] making any kind of racial remark; is that correct?
A I don't see any racial remarks.
Q Okay. And regarding the actual her actual wanting to fight, isn't it correct that what [Doe] said waswhat she asked the staff is if her and this other patient could engage in a supervised sparring match to relieve stress?
A Yes.
Q That's correct? Okay.
And that's the incident that you're talking about
A Yes.
Q Okay. And after being informed that that was not possible, there was no further incident; is that correct?
A I'm not aware of.
Q And could I direct your attention to the next entry at 24:00 hours.
A Yes.
Q It indicates that [Doe], regarding her emotional control, that she was redirectable (inaudible) justbut inappropriate verbally; is that correct?
A Yes.
Q Okay. And regarding these racial remarks that you testified to, can you be a little bit more specific as to what type of remarks? Are they personal attacks on the person like, you know, for instance like "You dumb F'in Japanese" or what kind of statement is it pertaining to?
A Well, it's awhenwhen I talk to her and she makes statementsstatementsgeneral statements against me, you know, Chinese. And then when (inaudible) when she sees somebody she makes a comment in regard to their specific Asian, start addressing by their race.
Q Okay.
A So it's notit's not like talking about that specific person, talking about that particular person, it's talking about that person but then it was of their race.
Q Uh-huh.
A So it's not specifically discussing some specifics of that person.
Q Okay. So she's basically verbalizing her opinions about race
A Yes.
Q when she sees somebody of that race?
A But then directed it towards a specific person.
Q On that person. Okay.
A But not specifics about that person.
Q Okay. And with these incidents, is it true that [Doe] is easily redirected? Have you ever had to physically redirect her is what I'm asking?
A Iin my understanding is, yes, that she's redirected verbally
Q Verbally.
Awhen something has happened.
Q Okay. Is it correct that other than the perceived danger from her racial statement that [Doe] otherwise demonstrates safe behavior?
A Well, racial and then, yeah, the incidents going to the beginning of August when she wanted to basically fight with the other patients. So then it was not racial (inaudible).
Q That's the incident you're talking about
A Yes.
*355 Dr. Smolinksi further testified that Doe had not experienced any "homicidal ideations" or "suicidal ideations[.]"
The only other witness for the State was Doe's brother, who related that during a court recess, "[Doe] had mentioned a previous ex-girlfriend who is of Filipino descent and blames me for her cause onhow should I say? Blames for the reasons of her being in here and blaming her because she is of Filipino descent it is her fault that she's in here and that I should be in this area."
Doe called as a witness Rosemary Calego (Calego), "a team leader for the [ACT]." Calego testified that if Doe were released from HSH, the ACT would assist her in getting accustomed to living independently, finding Doe a place to live, and managing Doe's medication.
The family court orally ruled, in relevant part, as follows:
... I find beyond a reasonable doubt that [Doe] is suffering from mental illness.
As to whether or not clear and convincing evidence has been presented to show that she is imminently and substantially dangerous, I don't believe that there's a time frame on imminentlyon imminent. I don't believe there's a time frame on recent past. However, obviously I think if you use common sense and common notions towards these terms, it's not something that happened a year ago or two years ago but the reference at this hearing that I've allowed evidence on is from the month of June I believe it was that I let it be established, from the month of June to recently.
There is a fine line between one's racial views and whether or not it is awhat is being said now is a relation to her mental illness. And it was testified that her comments are delusions of persecution and paranoia relating to race....
As far as the imminency of it, it appears that her behavior may be getting better, and that would only be from the fact that there is no real documentation within the past month relating to specific terms that she has used relating to race and threats. But obviously we had the testimony of her brother today in which she reiterated something relating to race and her situation. That in my mind is an indication of possible delusion of persecution.
It's obviously not a threat. There was no threat saying that I am going to do something to that person because of it. But I think it all falls in line with what the doctor has stated as to his opinion as to how she is placing herself in a position of imminent and substantial danger to herself or possibly others. So I find that element to be met.
As far as the need of care, the testimony is clear. Again, if the record bears me differently on this that the [ACT] leader here did not state that she would be eligible for housing or any other type ofI should say for housing as opposed to care. She did testify that they would provide whatever services they had and that she was eligible for those services such as monitoring of medication as well as possible service referral. But as far as housing, there was no testimony that she would be eligible for that and placed at this point in time if she were released on ... August 31st of this year.
It appears at this point in time that another concern is the compliance with medication and there is a doubt as to whether that is being done. And this seems to be the only setting at this point in time in which that can be monitored and then seeing if it, uhif it having any type of significant effect on her delusions of persecution and paranoia and, if not, why?
And so accordingly I will grant the petition for a period of 90 days or sooner.
On October 3, 2000, the family court entered its Order 2, in which the family court found, in pertinent part, as follows:
G [Doe] is mentally ill, beyond a reasonable doubt, in that the Subject suffers from Schizoaffective disorder, bi-polar type[.]
....
H [Doe] is imminently and substantially dangerous to others, by clear and convincing evidence, in that at the hearing [Doe] stated to her brother her belief that his Filipino girl friend and he are *356 the reason for her being in the hospital. This confirms the diagnosis of mental illness (Delusions of Persecution) and inappropriate and hostile actions towards Filipinos, again which is needed to diagnose mental illness.
I [Doe] is in need of care and/or treatment, by clear and convincing evidence.
J [Doe] is unable to be placed elsewhere because at present there is no suitable alternative available through existing facilities and programs which would be less restrictive than hospitalization, by clear and convincing evidence.
K [Doe] should be committed to a psychiatric facility.
The family court then ordered that Doe be involuntarily committed to HSH for a period not to exceed ninety days. Doe filed a timely amended notice of appeal from Order 2 on October 19, 2000. This appeal was designated as appeal No. 23806.
DISCUSSION
A. The Constitutional Boundaries for Civil Commitment of the Mentally Ill
The United States Supreme Court has recognized that "civil commitment [of the mentally ill] for any purpose constitutes a significant deprivation of liberty that requires due process protection." Addington v. Texas, 441 U.S. 418, 425, 99 S.Ct. 1804, 60 L.Ed.2d 323 (1979). The loss of a civil committee's autonomy is justified on the basis of two compelling societal interests:
The state has a legitimate interest under its parens patriae powers in providing care to its citizens who are unable because of emotional disorders to care for themselves; the state also has authority under its police power to protect the community from the dangerous tendencies of some who are mentally ill.
Id. at 426, 99 S.Ct. 1804.
The first Supreme Court decision to discuss any constitutional restrictions on civil commitment proceedings was O'Connor v. Donaldson, 422 U.S. 563, 95 S.Ct. 2486, 45 L.Ed.2d 396 (1975). In O'Connor, the respondent, Donaldson, had been involuntarily confined in a mental institution for almost fifteen years. During his confinement, Donaldson had repeatedly "demanded his release, claiming that he was dangerous to no one, that he was not mentally ill, and that, at any rate, the hospital was not providing treatment for his supposed illness." Id. at 565, 95 S.Ct. 2486. He subsequently filed a lawsuit under 42 U.S.C. § 1983, claiming that members of the hospital staff had "intentionally and maliciously deprived him of his constitutional right to liberty." Id. at 563, 95 S.Ct. 2486.
The evidence adduced at trial "demonstrated, without contradiction, that Donaldson had posed no danger to others during his long confinement, or indeed at any point in his life." Id. at 568, 95 S.Ct. 2486. There was no evidence adduced "that Donaldson had ever been suicidal or been thought likely to inflict injury upon himself." Id. Furthermore, "Donaldson's frequent requests for release had been supported by responsible persons willing to provide him any care he might need on release[,]" and the record showed that despite his apparently mild paranoid schizophrenia, Donaldson had been able, both before and after his commitment, to "earn his own living outside the hospital" through a "responsible job in hotel administration." Id. Finally, the evidence established that Donaldson's "confinement was a simple regime of enforced custodial care, not a program designed to alleviate or cure his supposed illness." Id. at 569, 95 S.Ct. 2486.
A jury returned a verdict in Donaldson's favor, which was affirmed by the Fifth Circuit Court of Appeals, and the hospital's superintendent appealed. The Supreme Court held that "[t]he fact that state law may have authorized confinement of the harmless mentally ill does not itself establish a constitutionally adequate purpose for the confinement." Id. at 574, 95 S.Ct. 2486. Additionally, the Supreme Court stated, even if Donaldson's original involuntary confinement was constitutionally permissible, such confinement "could not constitutionally continue after that basis no longer existed." The Court reasoned as follows:
A finding of `mental illness' alone cannot justify a State's locking a person up against his will and keeping him indefinitely *357 in simple custodial confinement. Assuming that that term can be given a reasonably precise content and that the `mentally ill' can be identified with reasonable accuracy, there is still no constitutional basis for confining such persons involuntarily if they are dangerous to no one and can live safely in freedom.
Id. at 575, 95 S.Ct. 2486. In a series of rhetorical questions and answers, the Supreme Court fleshed out its holding:
May the State confine the mentally ill merely to ensure them a living standard superior to that they enjoy in the private community? That the State has a proper interest in providing care and assistance to the unfortunate goes without saying. But the mere presence of mental illness does not disqualify a person from preferring his home to the comforts of an institution. Moreover, while the State may arguably confine a person to save him from harm, incarceration is rarely if ever a necessary condition for raising the living standards of those capable of surviving safely in freedom, on their own or with the help of family or friends. See Shelton v. Tucker, 364 U.S. 479, 488-490, 81 S.Ct. 247, 252-253, 5 L.Ed.2d 231.
May the State fence in the harmless mentally ill solely to save its citizens from exposure to those whose ways are different? One might as well ask if the State, to avoid public unease, could incarcerate all who are physically unattractive or socially eccentric. Mere public intolerance or animosity cannot constitutionally justify the deprivation of a person's physical liberty. See, e.g., Cohen v. California, 403 U.S. 15, 24-26, 91 S.Ct. 1780, 1787-1789, 29 L.Ed.2d 284; Coates v. City of Cincinnati, 402 U.S. 611, 615, 91 S.Ct. 1686, 1689, 29 L.Ed.2d 214; Street v. New York, 394 U.S. 576, 592, 89 S.Ct. 1354, 1365-1366, 22 L.Ed.2d 572; cf. U.S. Dept. of Agriculture v. Moreno, 413 U.S. 528, 534, 93 S.Ct. 2821, 2825-2826, 37 L.Ed.2d 782.
In short, a State cannot constitutionally confine without more a nondangerous individual who is capable of surviving safely in freedom by himself or with the help of willing and responsible family members or friends. Since the jury found, upon ample evidence, that O'Connor, as an agent of the State, knowingly did so confine Donaldson, it properly concluded that O'Connor violated Donaldson's constitutional right to freedom.
Id. at 575-76, 95 S.Ct. 2486 (emphases added). The O'Connor Court specifically refused to decide certain issues that are raised by the facts in this case:
[T]here is no reason now to decide ... whether the State may compulsorily confine a non-dangerous, mentally ill individual for the purpose of treatment.
... We need not decide whether, when, or by what procedures, a mentally ill person may be confined by the State on any of the grounds which, under contemporary statutes, are generally advanced to justify involuntary confinement of such a personto prevent injury to the public, to ensure his [or her] own survival or safety, or to alleviate or cure his [or her] illness.
Id. at 573-74, 95 S.Ct. 2486. The Court did, however, recognize that "dangerous conduct" might include evidence of gross self-neglect:
Of course, even if there is no foreseeable risk of self-injury or suicide, a person is literally `dangerous to himself' if for physical or other reasons he [or she] is helpless to avoid the hazards of freedom either through his [or her] own efforts or with the aid of willing family members or friends.
Id. at 574 n. 9, 95 S.Ct. 2486.
Subsequently, in Addington v. Texas, the Supreme Court held that an "individual's interest in the outcome of a civil commitment proceeding is of such weight and gravity that due process requires the state to justify confinement by proof more substantial than a mere preponderance of the evidence." 441 U.S. at 427, 99 S.Ct. 1804. The Addington Court held that the "proof beyond a reasonable doubt" standard was not required in such proceedings "because, given the uncertainties of psychiatric diagnosis, it may impose a burden the state cannot meet and thereby erect an unreasonable barrier to needed medical treatment." Id. at 432, 99 S.Ct. 1804. Instead, due process guarantees are satisfied as long as the standard of proof *358 applied is at least equal to or greater than the clear and convincing standard. Id. at 431-33, 99 S.Ct. 1804.
In Jones v. United States, 463 U.S. 354, 103 S.Ct. 3043, 77 L.Ed.2d 694 (1983), the petitioner, who suffered from "Schizophrenia, paranoid type," was arrested for attempting to steal a jacket from a department store. He was then charged with attempted petit larceny, a misdemeanor punishable by a maximum prison term of one year. Upon his acquittal by reason of insanity, the petitioner was committed indefinitely to a mental hospital, pursuant to a District of Columbia statute adopted by Congress to protect society and rehabilitate insane criminals. Id. at 356 n. 2, 103 S.Ct. 3043. After being hospitalized for more than one year, the maximum period he could have spent in prison if he had been convicted, the petitioner sought his release. In determining that the petitioner was not entitled to be released, the United States Supreme Court concluded:
We turn first to the question whether the finding of insanity at the criminal trial is sufficiently probative of mental illness and dangerousness to justify commitment. A verdict of not guilty by reason of insanity establishes two facts: (i) the defendant committed an act that constitutes a criminal offense, and (ii) he committed the act because of mental illness. Congress has determined that these findings constitute an adequate basis for hospitalizing the acquittee as a dangerous and mentally ill person.... We cannot say that it was unreasonable and therefore unconstitutional for Congress to make this determination.
The fact that a person has been found, beyond a reasonable doubt, to have committed a criminal act certainly indicates dangerousness.... Indeed, this concrete evidence generally may be at least as persuasive as any predictions about dangerousness that might be made in a civil-commitment proceeding. We do not agree with petitioner's suggestion that the requisite dangerousness is not established by proof that a person committed a non-violent crime against property. This Court never has held that "violence," however that term might be defined, is a prerequisite for a constitutional commitment.
Nor can we say that it was unreasonable for Congress to determine that the insanity acquittal supports an inference of continuing mental illness. It comports with common sense to conclude that someone whose mental illness was sufficient to lead him to commit a criminal act is likely to remain ill and in need of treatment. The precise evidentiary force of the insanity acquittal, of course, may vary from case to case, but the Due Process Clause does not require Congress to make classifications that fit every individual with the same degree of relevance.
Id. at 363-66 (emphasis added, citations and footnotes omitted). In a footnote, the Supreme Court emphasized that "dangerousness" should not be equated with "violence":
To describe the theft of watches and jewelry as `non-dangerous' is to confuse danger with violence. Larceny is usually less violent than murder or assault, but in terms of public policy the purpose of the statute is the same as to both." (footnote omitted). It also may be noted that crimes of theft frequently may result in violence from the efforts of the criminal to escape the victim to protect property or the police to apprehend the fleeing criminal.
Id. at 365 n. 14, 103 S.Ct. 3043 (quoting Overholser v. O'Beirne, 302 F.2d 852, 861 (1961)) (internal brackets and quotations marks omitted).
In Foucha v. Louisiana, 504 U.S. 71, 112 S.Ct. 1780, 118 L.Ed.2d 437 (1992), the United States Supreme Court, in a five-four decision, held unconstitutional a Louisiana statute that allowed the continued confinement in a psychiatric hospital of an insanity acquittee who had recovered from his mental illness but was still thought to be dangerous due to an antisocial personality. Id. at 77-80, 112 S.Ct. 1780.
The petitioner in Foucha had been committed to a mental institution after being found not guilty by reason of insanity of aggravated burglary and illegal discharge of a firearm. Approximately four years later, the hospital superintendent recommended the petitioner's discharge or release after a *359 hospital review panel concluded "that there had been no evidence of mental illness since admission and recommended that [petitioner] be conditionally discharged." Id. at 74, 112 S.Ct. 1780. At a hearing, one of the doctors testified that petitioner "probably suffered from a drug[-]induced psychosis but that he had recovered from the temporary condition; that he evidenced no signs of psychosis or neurosis and was in `good shape' mentally; that he had, however, an antisocial personality, a condition that is not a mental disease and that is untreatable." Id. at 75, 112 S.Ct. 1780. The doctor also testified that he would not "feel comfortable in certifying that [petitioner] would not be a danger to himself or other people" because the petitioner had been involved in "several altercations" while at the institution. Id. at 75, 112 S.Ct. 1780. On such a record, the trial court concluded that the "[petitioner] was dangerous to himself and others and ordered him returned to the mental institution." Id.
After granting certiorari, the United States Supreme Court majority observed that "[w]hen a person charged with having committed a crime is found not guilty by reason of insanity, ... a State may commit that person without satisfying the Addington burden with respect to mental illness and dangerousness." Id. at 76, 112 S.Ct. 1780 (citing Jones v. United States, 463 U.S. 354, 103 S.Ct. 3043, 77 L.Ed.2d 694 (1983)). The justification is that the verdict establishes that: (1) the defendant "committed an act" constituting a "criminal offense"; and (2) he or she committed this act because of a mental illness. Id. Accordingly, "it could be properly inferred that at the time of the verdict, the defendant was still mentally ill and dangerous and hence could be committed." Id. However, "the committed acquittee is entitled to release when he has recovered his sanity or is no longer dangerous[.]" Id. at 77, 112 S.Ct. 1780 (quoting Jones, 463 U.S. at 363, 103 S.Ct. 3043). The Supreme Court held that because the basis for holding the petitioner in a psychiatric facility had dissipated, i.e., he was no longer mentally ill, the state was "no longer entitled to hold him on that basis." Id. at 78, 112 S.Ct. 1780. Additionally, the state could not justify his continued confinement on the basis of his antisocial personality, because: (1) no determination had been made in a civil commitment proceeding of petitioner's current mental illness and dangerousness; (2) "if [petitioner] can no longer be held as an insanity acquittee in a mental hospital, he is entitled to constitutionally adequate procedures to establish the grounds for his confinement"; and (3) his confinement violated his substantive due process rights in that the state did not prove, by clear and convincing evidence, that he was mentally ill and dangerous but conceded that he was not mentally ill.[12]Id. at 78-80, 112 S.Ct. 1780.
*360 In a more recent case, Kansas v. Hendricks, 521 U.S. 346, 117 S.Ct. 2072, 138 L.Ed.2d 501 (1997), the Supreme Court was called upon to review the constitutionality of the Kansas Sexually Violent Predator Act, Kan. Stat. Ann. § 59-29a01 et seq. (1994), which established "procedures for the civil commitment of persons who, due to a `mental abnormality' or a `personality disorder,' are likely to engage in `predatory acts of sexual violence.'" Id. at 350, 117 S.Ct. 2072 (quoting Kan. Stat. Ann. § 59-29a01 et seq. (1994)). Under the Act, "mental abnormality" was defined as a "`congenital or acquired condition affecting the emotional or volitional capacity which predisposes the person to commit sexually violent offenses in a degree constituting such person a menace to the health and safety of others.'" Id. at 352, 117 S.Ct. 2072 (quoting Kan. Stat. Ann. § 59-29a02(b)).
After its passage, the Kansas Act was invoked to involuntarily commit Leroy Hendricks (Hendricks), an inmate with a long history of sexually molesting children, shortly before he was scheduled to be released from prison. Upon Hendricks' challenge to his commitment on due process, double jeopardy, and ex post facto grounds, the Kansas Supreme Court invalidated the Act, holding that the Act's "precommitment condition of a `mental abnormality' did not satisfy what the court perceived to be the `substantive' due process requirement that involuntary civil commitment must be predicated on a finding of `mental illness.'" Id. at 350, 117 S.Ct. 2072 (quoting In re Hendricks, 259 Kan. 246, 912 P.2d 129, 138 (1996)).
The United States Supreme Court reversed, holding that the procedures followed by Kansas met substantive due process requirements in that the Act "requires a finding of future dangerousness, and then links that finding to the existence of a `mental abnormality' or `personality disorder' that makes it difficult, if not impossible, for the person to control his dangerous behavior." Id. at 358, 117 S.Ct. 2072.
Responding to Hendricks' argument that a finding of "mental illness" was a prerequisite for civil commitment and that "mental abnormality is not equivalent to a `mental illness' because it is a term coined by the Kansas Legislature, rather than by the psychiatric community[,]" (id. at 359, 117 S.Ct. 2072, emphasis in original), the Supreme Court stated:
Contrary to Hendricks' assertion, the term "mental illness" is devoid of any talismanic significance. Not only do "psychiatrists disagree widely and frequently on what constitutes mental illness," Ake v. Oklahoma, 470 U.S. 68, 81, 105 S.Ct. 1087, 1095, 84 L.Ed.2d 53 (1985), but the Court itself has used a variety of expressions to describe the mental condition of those properly subject to civil confinement. See, e.g., Addington, supra, at 425-426, 99 S.Ct., at 1808-1810 (using the terms "emotionally disturbed" and "mentally ill"); Jackson v. Indiana, 406 U.S. 715, 732, 737, 92 S.Ct. 1845, 1855, 1857-1858, 32 L.Ed.2d 435 (1972) (using the terms "incompetency" and "insanity"); cf. Foucha, 504 U.S., at 88, 112 S.Ct., at 1789-1790 (O'CONNOR, J., concurring in part and concurring in judgment) (acknowledging State's authority to commit a person when there is "some medical justification for doing so").
Indeed, we have never required state legislatures to adopt any particular nomenclature in drafting civil commitment statutes. Rather, we have traditionally left to legislators the task of defining terms of a medical nature that have legal significance. Cf. Jones v. United States, 473 [463] U.S. 354, 365, n. 13, 103 S.Ct. 3043, 3050, n. 13, 77 L.Ed.2d 694 (1983). As a consequence, the States have, over the years, developed numerous specialized terms to define mental health concepts. Often, those definitions do not fit precisely with the definitions employed by the medical community. The legal definitions of "insanity" and "competency," for example, vary substantially from their psychiatric counterparts....
*361 To the extent that the civil commitment statutes we have considered set forth criteria relating to an individual's inability to control his dangerousness, the Kansas Act sets forth comparable criteria and Hendricks' condition doubtless satisfies those criteria. The mental health professionals who evaluated Hendricks diagnosed him as suffering from pedophilia, a condition the psychiatric profession itself classifies as a serious mental disorder....3
3 We recognize, of course, that psychiatric professionals are not in complete harmony in casting pedophilia, or paraphilias in general, as "mental illnesses." Compare Brief for American Psychiatric Association as Amicus Curiae 26 with Brief for Menninger Foundation et al. as Amici Curiae 22-25. These disagreements, however, do not tie the State's hands in setting the bounds of its civil commitment laws. In fact, it is precisely where such disagreement exists that legislatures have been afforded the widest latitude in drafting such statutes. Cf. Jones v. United States, 463 U.S. 354, 365, n. 13, 103 S.Ct. 3043, 3050, n. 13, 77 L.Ed.2d 694 (1983). As we have explained regarding congressional enactments, when a legislature "undertakes to act in areas fraught with medical and scientific uncertainties, legislative options must be especially broad and courts should be cautious not to rewrite legislation." Id., at 370, 103 S.Ct., at 3053(internal quotation marks and citation omitted).
Id. at 359-60, 117 S.Ct. 2072 (emphases added, citations omitted).
Subsequently, in Kansas v. Crane, 534 U.S. 407, 122 S.Ct. 867, 151 L.Ed.2d 856 (2002), the Supreme Court was asked by the State of Kansas to review the Kansas Supreme Court's application of Hendricks to the civil commitment of Michael Crane (Crane), a previously convicted sexual offender who suffered from both exhibitionism and antisocial personality disorder. The Kansas Supreme Court had held that Crane could not be civilly committed under the Kansas Sexual Predator Act absent a finding that he was completely unable to control his dangerous behavior. Id. at 410, 122 S.Ct. 867.
On appeal, the United States Supreme Court explained that Hendricks did not require "total or complete lack of control" on the part of a civil committee. Id. at 411, 122 S.Ct. 867 (emphases in original). Such "an absolutist approach is unworkable," the Supreme Court said, for "[i]nsistence upon absolute lack of control would risk barring the civil commitment of highly dangerous persons suffering severe mental abnormalities." Id. at 411-12, 122 S.Ct. 867. On the other hand, the Supreme Court stated, the Constitution does not "permit commitment of the type of dangerous sexual offender considered in Hendricks without any lack-of-control determination." Id. at 412, 122 S.Ct. 867. The Supreme Court elaborated as follows:
[W]e did not give to the phrase "lack of control" a particularly narrow or technical meaning. And we recognize that in cases where lack of control is at issue, "inability to control behavior" will not be demonstrable with mathematic precision. It is enough to say that there must be proof of serious difficulty in controlling behavior. And this, when viewed in light of such features of the case as the nature of the psychiatric diagnosis, and the severity of the mental abnormality itself, must be sufficient to distinguish the dangerous sexual offender whose serious mental illness, abnormality, or disorder subjects him to civil commitment from the dangerous but typical recidivist convicted in an ordinary criminal case....
We recognize that Hendricks as so read provides a less precise constitutional standard than would those more definite rules for which the parties have argued. But the Constitution's safeguards of human liberty in the area of mental illness and the law are not always best enforced through precise bright-line rules. For one thing, the States retain considerable leeway in defining the mental abnormalities and personality disorders that make an individual eligible for commitment.... For another, the science of psychiatry, which informs but does not control ultimate legal determinations, is an ever advancing science, whose distinctions do not seek precisely to mirror those of the law.
Id. at 413, 122 S.Ct. 867 (emphasis added, citations omitted).
In summary, under United States Supreme Court case law, a state cannot constitutionally confine a person based solely on antisocial behavior. In order to civilly commit an individual, there must be at least clear *362 and convincing evidence that the individual is "mentally ill" and "dangerous." Unfortunately, the Supreme Court has not provided any bright-line rules as to what constitutes "mental illness" or "dangerousness," and courts all over the country have struggled with these issues. The Supreme Court has stated, however, that much deference should be accorded to state legislatures to define these terms. Moreover, in Jones and O'Connor, the Court stated that "dangerousness" is not the equivalent of violence. It appears under O'Connor, moreover, that a mentally ill person incapable of "surviving safely in freedom by himself [or herself] or with the help of willing and responsible family members or friends" may be constitutionally confined.
With the foregoing constitutional backdrop, we turn to an examination of the Hawai'i statutes that govern involuntary hospitalization of the mentally ill.
B. Hawai'i's Statutory Framework for Involuntary Hospitalization
Hawai'i's statutory framework for involuntary hospitalization of the mentally ill has evolved over the last half century, prompted in large part by developments in case law and emerging social service models for dealing with the mentally ill in a more humane and rational manner.
Prior to 1967, Hawai'i's commitment statutes were based on a "legal model," in which a court order was necessary to involuntarily hospitalize a mentally ill person requiring institutional care. See Rev. Laws Haw. §§ 81-19 and 81-21 (1955).
In 1967, the Hawai'i legislature enacted into law, effective January 1, 1968, a comprehensive new chapter relating to mental health, mental illness, drug addiction, and alcoholism that radically changed the procedures for involuntarily committing for care and treatment persons who were mentally ill to an extent requiring hospitalization. 1967 Haw. Sess. L. Act 259, at 385. Under Act 259, which was codified as HRS chapter 334 (1968), initial admission of a mentally ill individual to a licensed psychiatric facility was effectuated solely by the administrator of the psychiatric facility or the administrator's deputy, upon the certificates of two licensed physicians, or in the case of an emergency admission, on the certificate of one physician. HRS §§ 334-51 to 334-55 (1968). This "medical model" for commitment was hailed as "progressive and liberal," Suzuki v. Quisenberry, 411 F.Supp. 1113, 1117 (D.Haw.1976) (Suzuki I), less "barbaric," and a more rational solution to dealing with the mentally ill, since it was "based primarily upon the safety, treatment, and rehabilitation of the individuals involved and secondarily upon the public safety and convenience." Samuel P. King, Thou Shalt Not Commit, 5 Hawai'i B.J. 46 (1968).
In Suzuki I, the United States District Court, Chief Judge Samuel P. King (Judge King) presiding, relied on O'Connor and its progeny to strike down as violative of the due process clause of the Fourteenth Amendment certain nonconsensual civil commitment statutory provisions[13] enacted by Act 259. Judge King also set forth the minimum due process requirements[14] that must be met in *363 connection with the nonemergency, nonconsensual commitment of a mentally ill person. Judge King retained jurisdiction of the case to rule on the constitutionality of any curative legislation that might be enacted.
In 1976, the legislature responded to Suzuki I by enacting Act 130, 1976 Haw. Sess. L. Act 130, at 229, which made numerous revisions to HRS chapter 334 to provide additional procedural safeguards and establish more restrictive substantive criteria for civil commitment. As codified, the criteria for involuntary hospitalization enacted by Act 130 were as follows:
(1) Criteria. A person may be committed to a psychiatric facility for involuntary hospitalization if the court finds:
(A) That the person is mentally ill or suffering from substance abuse, and
(B) That he [or she] is dangerous to himself [or herself] or others or to property, and
(C) That he [or she] is in need of care and/or treatment, and there is no suitable alternative available through existing facilities and programs which would be less restrictive than hospitalization.
HRS § 334-60(b) (1976). In a sequel lawsuit to Suzuki I, Judge King struck down as unconstitutional four provisions enacted by Act 130. Suzuki v. Yuen, 438 F.Supp. 1106 (D.Haw.1977) (Suzuki II). More precisely, Judge King held that: (1) dangerousness to property, a criterion for commitment under HRS § 334-60(b)(1)(B), was not a constitutional basis for commitment of an individual to a psychiatric facility in either an emergency or nonemergency situation, id. at 1110; (2) HRS § 334-60(b)(1)(B) was unconstitutionally "ambiguous as to the degree of dangerousness to self or others required" because it "fail[ed] to require the finding of a recent overt act, attempt or threat of imminent and substantial danger before commitment may occur[,]" id.; (3) HRS § 334-60(b)(4)(G)[15] violated due process because it permitted temporary commitment of an individual based on sufficient evidence rather than proof beyond a reasonable doubt, id. at 1111; and (4) HRS § 334-60(b)(4)(G), which provided that an individual could be temporarily hospitalized for refusing to participate in a psychiatric evaluation to determine whether he or she should be committed, unconstitutionally deprived the individual of his or her privilege against self-incrimination. Id. at 1112.
On appeal from Suzuki II, the Ninth Circuit Court of Appeals affirmed Judge King's first and second rulings but concluded that HRS § 334-60(b)(4)(G), as amended by Act 130, did not unconstitutionally deprive persons of their privilege against self-incrimination; additionally, it was not necessary for the State of Hawai'i to establish the elements of commitment by proof beyond a reasonable doubt. Suzuki v. Yuen, 617 F.2d 173 (9th Cir.1980) (Suzuki III) (affirming in part, reversing in part, and dismissing in part Suzuki II).
In 1984, the legislature repealed HRS § 334-60 and enacted a new statutory provision, codified in 1985 as HRS § 334-60.2 and entitled "Involuntary hospitalization criteria." 1984 Haw. Sess. L. Act 188, § 3 at 371-72. The involuntary hospitalization criteria set forth in HRS § 334-60.2 were identical to *364 the criteria listed in the repealed HRS § 334-60, except that with respect to the second criterion, the word "imminently" was added prior to the word "dangerous," presumably to bring the statute in line with Judge King's ruling in Suzuki II.
In 1985, the legislature added a new category of individuals who could be involuntarily hospitalized at a psychiatric facility, namely those who are "gravely disabled." 1985 Haw. Sess. L. Act 75, at 123. According to the legislative history of Senate Bill No. 73, which was ultimately enacted as Act 75:
The purpose of this bill is to enable the Family Court to order involuntary hospitalization for gravely disabled individuals.
Gravely disabled persons are those who, as a result of a mental disorder, are unable to care for themselves, are unable to communicate rational or responsible decisions regarding their personal welfare, and fail to recognize this inability. The bill would enable the [c]ourt to order these people to be hospitalized so they can receive the appropriate care and treatment. Under the current law, only persons who are a danger to themselves or others can be hospitalized involuntarily. Preventive care and treatment is not available to gravely disabled persons to keep them from reaching the critical stage of dangerousness.
Sen. Stand. Comm. Rep. No. 485, in 1985 Senate Journal, at 1089. See also Hse. Stand. Comm. Rep. No. 977, in 1985 House Journal, at 1473; Sen. Stand. Comm. Rep. No. 53, in 1985 Senate Journal, at 927.
In 1986, the legislature added the "obviously ill" as a further category of individuals who could be involuntarily hospitalized. 1986 Haw. Sess. L. Act 335, at 715. The legislative history of Senate Bill No. 1831-86, which was signed into law as Act 335, stated:
The purpose of this bill is to establish procedures for providing appropriate care and treatment to certain mentally ill individuals who cannot recognize their condition and appreciate the need for treatment. The bill applies only to individuals who suffer a disabling mental illnesses, [sic] and require medical treatment.
The law does not currently respond to the needs of many mentally ill individuals, including schizophrenics, whose distinctive illness can be largely controlled with medication, but whose condition is susceptible to rather sudden deterioration that, without medical intervention, is virtually certain to produce a severe or extreme disability in a short time. Your [Conference] Committee realizes that it is essential to respect the personal freedom of such individuals, and to guard against measures that are shaped more by social convenience than by the needs of the mentally ill.
Your Committee upon further consideration has amended S.B. No. 1831-86, S.D. 2, H.D. 1 by revising the definition of "obviously ill" to assure that it is legally sufficient to sustain involuntary hospitalization for treatment. The definition now focuses on individuals who cannot appreciate the serious and highly probable risks to their health and safety that will follow from refusing treatment, and also cannot comprehend the advantages of accepting medication.
Too often, mentally ill individuals are ignored until their conduct can be described as criminal, and their condition requires lengthy hospitalization. The police, called upon to control the mentally ill individual, may easily recognize that the misconduct reflects illness rather than criminal intent. Under the Act proposed by the bill, mental health workers will be summoned and the degrading process of criminalization can be avoided. Other equally but not necessarily obviously ill individuals may have to undergo an unfortunate process of further deterioration before they can be hospitalized for treatment.
Your Committee finds that the bill as amended meets an important need, and reflects the best current information about the mental conditions to which it could be applied.
Hse. Conf. Comm. Rep. No. 52-86, in 1986 House Journal, at 940. See also, Sen. Conf. Comm. Rep. No. 76-86, in 1986 Senate Journal, at 775.
Currently, the statutes governing involuntary civil commitment are codified in HRS chapter 334. The statutory criteria for commitment *365 are set forth in HRS § 334-60.2, which provides:
Involuntary hospitalization criteria. A person may be committed to a psychiatric facility for involuntary hospitalization, if the court finds:
(1) That the person is mentally ill or suffering from substance abuse;
(2) That the person is imminently dangerous to self or others, is gravely disabled or is obviously ill; and
(3) That the person is in need of care or treatment, or both, and there is no suitable alternative available through existing facilities and programs which would be less restrictive than hospitalization.
HRS § 334-60.2 (1993 & Supp.2002).
HRS § 334-1 defines various terms used in HRS chapter 334 and includes the following definitions that are relevant to these appeals:
"Dangerous to others" means likely to do substantial physical or emotional injury on another, as evidenced by a recent act, attempt or threat.
....
"Dangerous to self" means the person recently has threatened or attempted suicide or serious bodily harm; or the person recently has behaved in such a manner as to indicate that the person is unable, without supervision and the assistance of others, to satisfy the need for nourishment, essential medical care, shelter or self-protection, so that it is probable that death, substantial bodily injury, or serious physical debilitation or disease will result unless adequate treatment is afforded.
....
"Gravely disabled" means a condition in which a person, as a result of a mental disorder, (1) is unable to provide for that individual's basic personal needs for food, clothing, or shelter; (2) is unable to make or communicate rational or responsible decisions concerning the individual's personal welfare; and (3) lacks the capacity to understand that this is so.
....
"Mental health" means a state of social, psychological, and physical well-being, with capacity to function effectively in a variety of social roles.
"Mentally ill person" means a person having psychiatric disorder or other disease which substantially impairs the person's mental health and necessitates treatment or supervision.
"Obviously ill" means a condition in which a person's current behavior and previous history of mental illness, if known, indicate a disabling mental illness, and the person is incapable of understanding that there are serious and highly probable risks to health and safety involved in refusing treatment, the advantages of accepting treatment, or of understanding the advantages of accepting treatment and the alternatives to the particular treatment offered, after the advantages, risks, and alternatives have been explained to the person.
....
"Treatment" means the broad range of emergency, out-patient, intermediate, domiciliary, and inpatient services and care, including diagnostic evaluation, medical, psychiatric, psychological, and social service care, vocational rehabilitation, career counseling, and other special services which may be extended to handicapped persons.
HRS § 334-1 (1993 and Supp.2002).
C. Whether Doe Was Imminently Dangerous to Herself
Although the United States Supreme Court has required that an individual be "dangerous," as well as mentally ill, in order to be involuntarily committed, the Court has never set forth any parameters for determining "dangerousness", an inherently difficult prediction to make. Kathleen Winchell, The Need to Close Kentucky's Revolving Door: Proposal for a Movement Towards a Socially Responsible Approach to Treatment and Commitment of the Mentally Ill, 20 N. Ky. L.Rev. 189, 201 (2002). See also Caroline M. Mee and Harold V. Hall, Risky Business: Assessing Dangerousness in Hawai'i 24 U. Haw. L.Rev. 63 (2001). In an attempt to provide more definite standards for determining *366 dangerousness, the different states have legislated various criteria for making such an assessment. See People v. Stevens, 761 P.2d 768, 773 (Colo.1988) (discussing other states' statutory requirements).
In Hawai'i, the legislature has determined that in order to meet the "dangerousness" element for involuntary commitment, a person must be "imminently dangerous to self or others, ... gravely disabled or ... obviously ill." Since the State never alleged during proceedings below that Doe was "gravely disabled" or "obviously ill,"[16] the sole issue presented on appeal is whether there is clear and convincing evidence in the record to support the family court's findings in Orders 1 and 2 that Doe was "imminently dangerous to self or others."
1.
Turning first to Order 2, the family court specifically found that Doe was
imminently and substantially dangerous to others, by clear and convincing evidence, in that at the hearing [Doe] stated to her brother her belief that his Filipino girl friend and he are the reason for her being in the hospital. This confirms the diagnosis of mental illness (Delusions of Persecution) and inappropriate and hostile actions towards Filipinos, again which is needed to diagnose mental illness.
(Emphases added.) The foregoing language is confusing. A confirmation that Doe is mentally ill is not a finding that Doe is imminently and substantially dangerous to others.
Additionally, our review of the record indicates that although there was expert opinion testimony adduced that Doe was imminently dangerous to herself because her aggressive racist remarks might provoke an assault against her, no evidence was offered that Doe was imminently dangerous to others, including the racial groups that she made remarks about.
We therefore reverse Order 2.
2.
In Order 1, the family court found that
[Doe] is imminently and substantially dangerous to self, by clear and convincing evidence, in that [Doe] recently has behaved in such a manner as to indicate that the person is unable, without supervision and the assistance of others, to satisfy the need for nourishment, essential medical care, shelter or self-protection, so that it is probable that death, substantial bodily injury, or serious physical debilitation or disease will result unless adequate treatment is afforded, i.e. by refusing to take medications and chronically making racist, loud, inflammatory remarks to strangers which are very provoking and which are likely/probable to cause dangerous retaliation.
Doe contends that her refusal to take medications and her racist remarks to strangers constituted insufficient evidence to support the family court's finding that she was imminently and substantially dangerous to herself. In light of the statutory definition of the term "dangerous to self," we agree.
Pursuant to HRS § 334-1,
"[d]angerous to self" means the person recently has threatened or attempted suicide or serious bodily harm; or the person recently has behaved in such a manner as to indicate that the person is unable, without supervision and the assistance of others, to satisfy the need for nourishment, essential medical care, shelter or self-protection, so that it is probable that death, substantial bodily injury, or serious physical debilitation or disease will result unless adequate treatment is accorded.
HRS § 334-1 (1993 and Supp.2002) (emphasis added). The foregoing definition sets forth a much stricter standard for determining dangerousness than appears to be required by the United States Supreme Court. Under the Hawai'i statutory scheme, in order to establish that an individual is dangerous to self, there must be clear and convincing evidence that the individual either:
(a) Recently threatened or attempted suicide or serious bodily harm; or
*367 (b) Recently behaved in such a manner as to indicate that the individual is unable, without supervision and assistance, to satisfy his or her need for nourishment, essential medical care, shelter or self-protection, so that it is probable that death, substantial bodily injury, or serious physical debilitation or disease will result unless adequate treatment is afforded.
At the hearing on Petition 5, no evidence was presented that Doe had recently threatened or attempted suicide or serious bodily harm. The crucial issue, therefore, is whether there is clear and convincing evidence that Doe had recently behaved in such a manner as to indicate that she was unable, without supervision and assistance, to satisfy her need for nourishment, essential medical care, shelter or self-protection, so that she would probably die or suffer substantial bodily injury or serious physical debilitation or disease unless she were provided adequate treatment.
In determining that Doe was imminently and substantially dangerous to herself, the family court focused on Doe's refusal to take her medications and Doe's racist comments to strangers that the family court found would likely or probably provoke an assault on Doe. Under similar factual circumstances, other courts have concluded that involuntary hospitalization was permissible under their state statutes or case law. See, e.g., In re Emmett J., 333 Ill.App.3d 69, 266 Ill.Dec. 631, 775 N.E.2d 193 (2002) (upholding involuntary hospitalization where evidence revealed that the respondent was schizophrenic, refused to voluntarily take his medications, had no one willing to assist him in his care, and physician testified that the only way to treat respondent was to administer psychotropic medication); Boggs v. New York City Health & Hosps. Corp., 132 A.D.2d 340, 523 N.Y.S.2d 71 (1987) (Milonas, J. and Rosenberger, J. dissenting) (upholding involuntary commitment of petitioner where evidence demonstrated that petitioner: was mentally ill, having been diagnosed with chronic schizophrenia, paranoid type; was unable to comprehend her need for food, clothing, or shelter so that a threat of serious harm to her well-being was present; was in danger of assault because she screamed racial epithets at people; and engaged in self-destructive behavior, such as walking in front of moving cars).
To be considered "dangerous to self" under the Hawai'i statutory scheme, however, it is not enough that an individual is unable to satisfy the need for nourishment, essential medical care, shelter or self-protection without supervision and assistance of others. There must also be clear and convincing evidence that the individual's inability to satisfy his or her need for nourishment, essential medical care, shelter or self-protection without supervision and assistance of others will probably result in death, substantial bodily injury, or serious physical debilitation or disease unless adequate treatment is afforded to the individual. While there was clearly evidence adduced below that Doe's refusal to take her medications would result in her failure to get better, there was no clear and convincing evidence presented that Doe would probably die, or suffer substantial bodily injury, serious physical debilitation, or serious disease if she were not involuntarily hospitalized.
The basis of the family court's finding that Doe was imminently dangerous to herself, that Doe's racist remarks might provoke an assault against her, is also not supported by the record. While the evidence indicated that Doe's inappropriate remarks had upset other HSH patients and embarrassed her family in public, there was no evidence that any member of the public had ever retaliated or threatened to retaliate against Doe for her racist remarks in public. Regrettably, the type of behavior exhibited by Doe is not uncommon on the streets of many of America's larger cities, including Honolulu. We would like to think that most urban residents would realize that individuals such as Doe are mentally ill and respond with compassion, rather than anger and violence, when confronted by such individuals.
In light of our conclusion that Doe was not "dangerous to self," as that term is defined in HRS § 334-1, we need not address Doe's contention that her racist remarks constituted *368 free speech protected by the First Amendment.[17]
3.
At oral argument, the State's counsel informed this court that due to constitutional concerns, the decision was made not to seek Doe's involuntary hospitalization on grounds that Doe was dangerous to herself because she was "gravely disabled" or "obviously ill." In light of our discussion on the relevant Supreme Court case law, we believe that the State's concerns may be misplaced. The Supreme Court has left to state legislatures the task of defining terms of a medical nature that have legal significance, and Hawai`i's legislature has decided that mentally ill individuals who are rendered dangerous to themselves because they are "gravely disabled" or "obviously ill" may be involuntarily hospitalized. Moreover, other state courts have upheld the involuntary hospitalizations of individuals like Doe. See, e.g., Walker v. Dancer, 386 So.2d 475 (Ala.Civ.App.1980); People v. Stevens, supra; In re Emmett, supra; In re Mohr, 383 N.W.2d 539 (Iowa 1986); Consilvio v. Diana, 269 A.D.2d 310, 703 N.Y.S.2d 144 (2000); Boggs v. New York City Health & Hosps. Corp., supra; Brown v. Carolina Emergency Physicians, P.A., 348 S.C. 569, 560 S.E.2d 624 (2001).
Since the issue of whether Doe was dangerous to herself because she was "gravely disabled" or "obviously ill" was never presented on appeal, however, we decline to address the issue.
CONCLUSION
Based on the discussion above, we conclude, in light of the procedural posture of the cases underlying these appeals, that the record lacks clear and convincing evidence to support the involuntary hospitalization of Doe pursuant to Petitions 5 and 6. Accordingly, we reverse the Findings and Order of Involuntary Hospitalization entered on June 19, 2000 and the Findings and Order of Involuntary Hospitalization entered on October 3, 2000.
Concurring Opinion by FOLEY, J.
I concur because the record in this case lacks clear and convincing evidence that Doe was "imminently and substantially dangerous to self or others," as these terms are defined in HRS § 334-1. I find it unnecessary to engage in a discussion on the constitutionality of Hawai`i's statutes governing involuntary civil commitment as set forth in HRS Chapter 334. The constitutionality of these involuntary civil commitment proceedings are not called into question in this case. Because the State failed to meet the statutory standard for the involuntary civil commitment of Doe, it is also unnecessary to address Doe's constitutional argument that her racial slurs were protected speech.
NOTES
[1] On June 6, 2002, the two appeals (No. 23534 and No. 23806) filed by Respondent/Subject Appellant Jane Doe (Doe) were consolidated because they involved the same parties and similar issues.
[2] On February 6, 2001, Petitioner Appellee Department of Health, State of Hawai'i (the State) filed a motion to dismiss appeal No. 23534 as moot, on grounds that Doe had been discharged from the Hawai'i State Hospital. By an order dated February 28, 2001, the Hawai'i Supreme Court denied the State's motion, presumably because the appeal presented questions affecting the public interest that are capable of repetition, yet evading full review. See Okada Trucking Co. v. Board of Water Supply, 99 Hawai'i 191, 197, 53 P.3d 799, 805 (2002).
The parties also raised a mootness argument in the briefs for appeal No. 23806. As noted above, this argument has already been dismissed by the Hawai'i Supreme Court in appeal No. 23534. Because the issues presented in the two consolidated appeals are similar, the same result should be applied to appeal No. 23806. Accordingly, we conclude that appeal No. 23806 is not moot. Other courts have reached the same conclusion in similar situations. See, e.g., In re Stephanie B., 826 A.2d 985 (R.I.2003); State v. Walker, 93 Wash.App. 382, 967 P.2d 1289 (1998); State ex. rel. Shifflet v. Rudloff, 213 W.Va. 404, 582 S.E.2d 851 (2003).
[3] Hawaii Revised Statutes (HRS) § 334-60.5(i) (Supp.2002) provides, in relevant part:
If the court finds that the criteria for involuntary hospitalization under section 334-60-2.2(1) has been met beyond a reasonable doubt and that the criteria under sections 334-60.2(2) and 334-60.2(3) have been met by clear and convincing evidence, the court may issue an order to any police officer to deliver the subject to a facility that has agreed to admit the subject as an involuntary patient, or if the subject is already a patient in a psychiatric facility, authorize the facility to retain the patient for treatment for a period of ninety days unless sooner discharged.
[4] During oral arguments before this court, the deputy attorney general representing the State admitted that in seeking to involuntarily hospitalize Doe, the State focused on Doe's imminent and substantial dangerousness to self or others. The State did not seek to establish that Doe was "gravely disabled" or "obviously ill" because of concerns that involuntary hospitalization on such grounds would not pass constitutional muster.
[5] In all subsequent proceedings, Jerry I. Wilson, Esquire was appointed the guardian ad litem.
[6] The transcripts from the hearing are not contained in the record on appeal.
[7] The transcript from this hearing is not contained in the record on appeal apparently "due to a malfunction with the recording device[.]" All information regarding the hearing is from a Declaration of Counsel by the deputy public defender representing Doe at the hearing.
[8] HRS § 334-59 (Supp.2002) currently provides, as it did when the hearing on the Petition for Involuntary Hospitalization filed in FC-M No. 99-0434 on May 26, 2000 (Petition 3) was held, as follows:
Emergency examination and hospitalization.
(a) Initiation of proceedings. An emergency admission may be initiated as follows:
(1) If a police officer has reason to believe that a person is imminently dangerous to self or others, or is gravely disabled, or is obviously ill, the officer shall call for assistance from the mental health emergency workers designated by the director. Upon determination by the mental health emergency workers that the person is imminently dangerous to self or others, or is gravely disabled, or is obviously ill, the person shall be transported by ambulance or other suitable means, to a licensed psychiatric facility for further evaluation and possible emergency hospitalization. A police officer may also take into custody and transport to any facility designated by the director any person threatening or attempting suicide. The officer shall make application for the examination, observation, and diagnosis of the person in custody. The application shall state or shall be accompanied by a statement of the circumstances under which the person was taken into custody and the reasons therefor which shall be transmitted with the person to a physician or psychologist at the facility.
(2) Upon written or oral application of any licensed physician, psychologist, attorney, member of the clergy, health or social service professional, or any state or county employee in the course of employment, a judge may issue an ex parte order orally, but shall reduce the order to writing by the close of the next court day following the application, stating that there is probable cause to believe the person is mentally ill or suffering from substance abuse, is imminently dangerous to self or others, or is gravely disabled, or is obviously ill, and in need of care or treatment, or both, giving the findings on which the conclusion is based, and directing that a police officer or other suitable individual take the person into custody and deliver the person to the nearest facility designated by the director for emergency examination and treatment. The ex parte order shall be made a part of the patient's clinical record. If the application is oral, the person making the application shall reduce the application to writing and shall submit the same by noon of the next court day to the judge who issued the oral ex parte order. The written application shall be executed subject to the penalties of perjury but need not be sworn to before a notary public.
(3) Any licensed physician or psychologist who has examined a person and has reason to believe the person is:
(A) Mentally ill or suffering from substance abuse;
(B) Imminently dangerous to self or others, or is gravely disabled, or is obviously ill; and
(C) In need of care or treatment;
may direct transportation, by ambulance or other suitable means, to a licensed psychiatric facility for further evaluation and possible emergency hospitalization. A licensed physician may administer such treatment as is medically necessary, for the person's safe transportation. A licensed psychologist may administer such treatment as is psychologically necessary.
(b) Emergency examination. A patient who is delivered for emergency examination and treatment to a facility designated by the director shall be examined by a licensed physician without unnecessary delay, and may be given such treatment as is indicated by good medical practice. A psychiatrist or psychologist may further examine the patient to diagnose the presence or absence of a mental disorder, assess the risk that the patient may be dangerous to self or others, or is gravely disabled, or is obviously ill, and assess whether or not the patient needs to be hospitalized.
(c) Release from emergency examination. If the physician who performs the emergency examination, in consultation with a psychologist if applicable, concludes that the patient need not be hospitalized, the patient shall be discharged immediately unless the patient is under criminal charges, in which case the patient shall be returned to the custody of a law enforcement officer.
(d) Emergency hospitalization. If the physician or the psychologist who performs the emergency examination has reason to believe that the patient is:
(1) Mentally ill or suffering from substance abuse;
(2) Imminently dangerous to self or others, or is gravely disabled, or is obviously ill; and
(3) In need of care or treatment, or both;
the physician or the psychologist may direct that the patient be hospitalized on an emergency basis or cause the patient to be transferred to another psychiatric facility for emergency hospitalization, or both. The patient shall have the right immediately upon admission to telephone the patient's guardian or a family member including a reciprocal beneficiary, or an adult friend and an attorney. If the patient declines to exercise that right, the staff of the facility shall inform the adult patient of the right to waive notification to the family including a reciprocal beneficiary, and shall make reasonable efforts to ensure that the patient's guardian or family including a reciprocal beneficiary, is notified of the emergency admission but the patient's family including a reciprocal beneficiary, need not be notified if the patient is an adult and requests that there be no notification. The patient shall be allowed to confer with an attorney in private.
(e) Release from emergency hospitalization. If at any time during the period of emergency hospitalization the responsible physician concludes that the patient no longer meets the criteria for emergency hospitalization the physician shall discharge the patient. If the patient is under criminal charges, the patient shall be returned to the custody of a law enforcement officer. In any event, the patient must be released within forty-eight hours of the patient's admission, unless the patient voluntarily agrees to further hospitalization, or a proceeding for court-ordered evaluation or hospitalization, or both, is initiated as provided in section 334-60.3. If that time expires on a Saturday, Sunday, or holiday, the time for initiation is extended to the close of the next court day. Upon initiation of the proceedings the facility shall be authorized to detain the patient until further order of the court.
[9] We are unable to decipher the name of this physician from the physician's signature.
[10] The Family Court of the First Circuit took judicial notice of the related files in FC-M Nos. 99-0434 and XX-X-XXXX.
[11] The testimony of Dr. Bahram Taghabi (Dr. Taghabi) that Doe had not expressed "suicidal ideations" conflicts with his certificate in support of the Petition for Involuntary Hospitalization filed on June 8, 2000 (Petition 5), which stated that Doe had recently told her brother that "she wanted to jump." Dr. Taghabi never explained Doe's alleged threat to jump, and there was no testimony at the hearing on Petition 5 about the alleged threat.
[12] In State v. Miller, 84 Hawai'i 269, 933 P.2d 606 (1997), the Hawai'i Supreme Court held that HRS § 704-411(4) (1993), which places the burden on an insanity acquittee to establish his or her fitness to be released from a psychiatric facility by a preponderance of the evidence, did not violate due process. Id. at 275, 933 P.2d at 612. The court distinguished Foucha as follows:
... Foucha did not squarely address the constitutionality of placing the burden of proof on the insanity acquittee at the release hearing. However, a careful reading of that case indicates that the Supreme Court tacitly approved of such a procedure. For instance, the Court in Foucha relies heavily on Jones and its disparate treatment of insanity acquittees. The Court stated that so long as there is a legitimate basis for the continuing confinement of the insanity acquittee, the insanity acquittee may be treated differently from the civilly committed individual. 504 U.S. at 85, 112 S.Ct. at 1788. In the instant case, the state has alleged and argued that Miller, unlike Foucha, is still suffering from a mental illness that renders him dangerous. Therefore, because the state continues to have a legitimate reason to keep Miller in the mental facility, it may require him to prove his eligibility for release.
The Foucha court also meticulously distinguished Foucha from an insanity acquittee, instead of invalidating the Louisiana statute on its face. The Court held the Louisiana statute unconstitutional largely because, "the basis for holding Foucha in a psychiatric facility as an insanity acquittee had disappeared" when Louisiana acknowledged that Foucha was no longer mentally ill. Id. at 78, 112 S.Ct. at 1784. It logically follows that if Louisiana had successfully argued that Foucha was still mentally ill, as the state did in this case, Louisiana would have had a sufficient basis to recommit Foucha.
Finally, conspicuously absent from Foucha is a holding that the state must provide the same release procedures for insanity acquittees and civil committees. Given that the issue in Foucha was an insanity acquittee's petition for release, we find the Court's silence to be persuasive evidence of its approval of the different standards of proof at the release proceeding.
[13] Specifically, United States District Court Chief Judge Samuel P. King (Judge King) held:
Since [HRS] § 334-53 purports to authorize nonconsensual hospitalization of any person solely because that person may be `mentally ill... to an extent requiring hospitalization,' that provision of law is unconstitutional on its face. This conclusion necessarily applies also to the conversion of an emergency commitment to a long-term commitment pursuant to [HRS] § 334-54, to the transfer of patients between hospitals pursuant to [HRS] § 334-71 or from out-of-state pursuant to [HRS] § 334-73(b), and to the authorization set out in [HRS] § 334-51(a)(2) and (5).
Suzuki v. Quisenberry, 411 F.Supp. 1113, 1124-25 (D.Haw.1976) (Suzuki I).
[14] Judge King held that at a minimum, the following procedural safeguards were required in connection with the nonemergency, nonconsensual commitment of persons pursuant to mental health laws:
(A) Adequate prior notice.
(B) Prior hearing before a neutral judicial officer.
(C) The right to effective assistance of counsel.
(D) The right to be present at the hearing.
(E) The right to cross-examine witnesses and to offer evidence.
(F) Adherence to the rules of evidence applicable in criminal cases.
(G) The right to assert the privilege against self-incrimination.
(H) Proof beyond a reasonable doubt.
(I) A consideration of less restrictive alternatives.
(J) A record of the proceedings and written findings of fact.
(K) Appellate review.
(L) Periodic redeterminations of the basis for confinement.
Suzuki I, 411 F.Supp. at 1127 (1976).
[15] At the time, HRS § 334-60(b)(4)(G) provided:
(G) No individual may be found to require medical treatment unless at least one physician who has personally examined him testifies in person at the hearing. This testimony may be waived by the subject of the petition. If the subject of the petition has refused to be examined by a licensed physician, he may be examined by a court-appointed licensed physician. If he refuses and there is sufficient evidence to believe that the allegations of the petition are true, the court may make a temporary order committing him to a psychiatric facility for a period not more than five days for the purpose of a diagnostic examination and evaluation. The subject's refusal shall be treated as a denial that he is mentally ill or suffering from substance abuse. Nothing herein, however, shall limit the individual's privilege against self-incrimination.
HRS § 334-60(b)(4)(G) (1976) (emphasis added).
[16] See footnote 4.
[17] Although the Hawai'i Supreme Court recently held that racial slurs constitute fighting words that are not protected by the First Amendment, State v. Hoshijo, 102 Hawai'i 307, 321, 76 P.3d 550, 564 (2003) at 33-34 (Nakayama, J. dissenting, joined by Moon, C.J.), it is unclear whether the holding would apply to the factual circumstances of this case.
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https://www.courtlistener.com/api/rest/v3/opinions/2549137/
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78 P.3d 379 (2003)
139 Idaho 312
Gina L. LOHMAN, Plaintiff-Respondent-Cross Appellant,
v.
Kenton C. FLYNN, Defendant-Appellant-Cross Respondent.
No. 28607.
Supreme Court of Idaho, Boise, April 2003 Term.
June 27, 2003.
Rehearing Denied October 22, 2003.
*381 Clark & Feeney, Lewiston, for appellant. Charles M. Stroschein argued.
Randall, Blake & Cox, Lewiston, for respondent. Carmel A. McCurdy Lewis argued.
WALTERS, Justice.
Gina Lohman initiated this action against Kenton Flynn, the father of her child, seeking recovery of expenses in connection with the pregnancy and birth of the child and reimbursement for the expenses incurred in raising the child prior to the time child support was established in a paternity action. Following trial, the trial court utilized the child support guidelines to determine the amount to be paid by Flynn and awarded reimbursement for support of the child to Lohman within the applicable statute of limitation. *382 This case comes before the Court following the appeal to the district court, which held that Gina Lohman's request for reimbursement was barred by res judicata because the request should have been raised during the paternity action. Both parties appeal. We agree with the district court's analysis, reverse the trial court's judgment and dismiss the action.
FACTS AND PROCEDURAL BACKGROUND
Gina Lohman and Kenton Flynn had a child on June 25, 1990. The parties were never married. The issue of paternity arose at the time of the child's birth, but Lohman denied that Flynn was the father. Flynn, however, was aware of the possibility that he was the child's father.
Lohman filed an application for child support services with the State of Idaho in February 1999. In March 1999, the state brought a paternity action against Flynn. Flynn was found to be the child's father. On September 13, 1999, the court issued an Order of Paternity and Child Support. The order awarded child support to begin on August 1, 1999. The order also awarded an arrearage judgment for child support, for the period from the filing of the paternity action in March 1999 to July 31, 1999.
In January 2000, Lohman filed this action against Flynn in the magistrate division of the district court for reimbursement of expenses incurred in raising the child prior to the time paternity was established. Flynn filed a special appearance requesting the case be dismissed for lack of personal jurisdiction, improper venue, and lack of proper service of process. Flynn also filed an answer alleging affirmative defenses of res judicata, statute of limitation, laches, estoppel and failure to join these claims in the prior paternity action.
Following a hearing on the parties' pretrial motions, the trial court determined that the statute of limitation pursuant to I.C. § 5-218 applied and limited Lohman's claim to the years 1997-1999. The trial court also addressed evidentiary problems, such as Lohman failing to attend a deposition and failing to comply with discovery requests, finding that Lohman's noncompliance went directly to her burden of proof and if she was unable to meet the burden that she would have to face the repercussions of not prevailing on her claim. The magistrate considered Flynn's contentions that the court lacked personal jurisdiction and that Lohman's claim should be barred by res judicata and laches. The court found that Flynn had subjected himself to jurisdiction in the paternity action and that Flynn had resided and worked in Idaho, conferring jurisdiction upon the court. The magistrate determined that Lohman had an independent interest in seeking reimbursement from Flynn and that her case was not barred by res judicata. Further, the trial court concluded that laches did not apply because Flynn would not be prejudiced by the relief sought by Lohman. Finally, the magistrate determined if Lohman met her threshold burden of proof that the court would apply the child support guidelines to calculate the amount of reimbursement.
The trial court found that the evidence produced at trial established that Lohman provided food, clothing, housing and recreational necessities for the child since the time of her birth, although the exact amount of money expended was not documented. The evidence further established that Flynn had not provided Lohman support for the child prior to the paternity action. Following trial, the magistrate found that Lohman had met her burden of proof and awarded reimbursement for the period from January 20, 1997, until March 1999, in accordance with the child support guidelines.
Flynn appealed the magistrate's decision to the district court arguing, among other things, that Lohman's action was barred by res judicata. The district court agreed with Flynn's res judicata argument and reversed the magistrate's decision. The district court then remanded the case with directions to enter the judgment in favor of Flynn and dismiss the action.
ISSUES PRESENTED ON APPEAL
1. Did the court have jurisdiction over Flynn and was he properly served?
*383 2. Did the district court err in finding the doctrine of res judicata barred Lohman's request for reimbursement of past due child support?
3. Did the court err in making certain rulings on evidentiary objections throughout the pendency of this case?
4. Whether Lohman met her burden of proof in establishing reimbursement for amounts paid on behalf of the child?
5. Is Lohman's action barred by laches or estoppel for failing to pursue her action in a timely fashion?
6. Should the district court have awarded attorney fees to Flynn?
7. Is either of the parties entitled to attorney fees on appeal?
STANDARD OF REVIEW
When reviewing the decision of a district court acting in its appellate capacity over the magistrate division, the Supreme Court reviews the magistrate judge's decision independently of, but with due regard for, the district court's intermediate appellate decision. See Swanson v. Swanson, 134 Idaho 512, 515, 5 P.3d 973, 976 (2000); Balderson v. Balderson, 127 Idaho 48, 51, 896 P.2d 956, 959 (1995). The findings of fact by the magistrate judge will be upheld by this Court if they are supported by substantial, competent evidence in the record. Id. With respect to the trial court's conclusions of law, this Court exercises free review. Id.
The lower court's discretionary decisions will be upheld on appeal absent a showing that the court abused its discretion. Quiring v. Quiring, 130 Idaho 560, 563, 944 P.2d 695, 698 (1997). When an exercise of discretion is reviewed on appeal, the Court inquires: (1) whether the lower court rightly perceived the issue as one of discretion; (2) whether the court acted within the boundaries of such discretion and consistently with any legal standards applicable to specific choices; and (3) whether the court reached its decision by exercise of reason. Id. (citations omitted).
DISCUSSION
I.
Jurisdiction and Service of Process
A. Jurisdiction
Flynn argues that the trial court did not have personal jurisdiction over him because he was not a resident of Idaho nor has he had contact or lived within the state. Flynn contends that the court should not be able to bootstrap jurisdiction from the paternity action to this case. Flynn asserts that since this is a reimbursement action rather than a child support action, I.C. § 7-1026 should not be utilized to confer jurisdiction in the court. Lohman contends that Flynn is not excepted from jurisdiction pursuant to I.C. § 7-1026 because he stands as an obligor, not a petitioner. Lohman points out that Flynn subjected himself to jurisdiction in the paternity action. Further, Lohman notes that the baby was born in Idaho and that Flynn resided and worked both in Idaho and Washington.
The magistrate addressed whether the court had personal jurisdiction over Flynn and found the following:
The evidence in this case shows that [the child] was conceived in Idaho based upon Mr. Flynn's own exhibits. It is clear from the evidence prior to the conception of [the child], Mr. Flynn resided with Ms. Lohman both in Idaho and Washington and that he worked at Potlatch Corporation in Idaho as a contractor. Mr. Flynn subjected himself to jurisdiction of the court in the paternity action in Nez Perce County Case No. 99 00667. From these facts this Court has personal jurisdiction over Mr. Flynn for the purposes of this case. Therefore, Mr. Flynn's motion to dismiss for lack of personal jurisdiction is denied.
The district court did not address the issue of jurisdiction on appeal.
In order for a judgment to be declared void, there must be some jurisdictional defect in the court's authority to enter the judgment, either because the court lacks personal jurisdiction or because it lacks jurisdiction over the subject matter of the suit.
*384 Puphal v. Puphal, 105 Idaho 302, 306, 669 P.2d 191, 195 (1983).
Idaho Code § 7-1004 provides the basis for jurisdiction over a nonresident in child support cases:
In a proceeding to establish, enforce, or modify a support order or to determine parentage, a tribunal of this state may exercise personal jurisdiction over a nonresident individual or the individual's guardian or conservator if:
(1) The individual is personally served with notice within this state;
(2) The individual submits to the jurisdiction of this state by consent, by entering a general appearance, or by filing a responsive document having the effect of waiving any contest to personal jurisdiction;
(3) The individual resided with the child in this state;
(4) The individual resided in this state and provided prenatal expenses or support for the child;
(5) The child resides in this state as a result of the acts or directives of the individual;
(6) The individual engaged in sexual intercourse in this state and the child may have been conceived by that act of intercourse;
(7) The individual asserted parentage in the registry maintained in this state by the vital statistics unit of the department of health and welfare provided in section 16-1513, Idaho Code; or
(8) There is any other basis consistent with the constitutions of this state and the United States for the exercise of personal jurisdiction.
Idaho Code § 7-1026 grants limited immunity to a petitioner as follows:
(1) Participation by a petitioner in a proceeding before a responding tribunal, whether in person, by private attorney, or through services provided by the support enforcement agency, does not confer personal jurisdiction over the petitioner in another proceeding.
(2) A petitioner is not amenable to service of civil process while physically present in this state to participate in a proceeding under this chapter.
(3) The immunity granted by this section does not extend to civil litigation based on acts unrelated to a proceeding under this chapter committed by a party while present in this state to participate in the proceeding.
Although Flynn contends that jurisdiction cannot be conferred pursuant to I.C. § 7-1026, the trial court had personal jurisdiction pursuant to I.C. § 7-1004. From the trial court's order, it is apparent that the magistrate relied upon the conception of the child within Idaho and the fact that Flynn has previously resided in Idaho, not just the fact that Flynn submitted to jurisdiction in the paternity case. In the Paternity Affidavit submitted by Flynn as a trial exhibit, the state of conception is listed as Idaho. Further, the child resides in Idaho with her mother. Given both of these facts, the state of Idaho has personal jurisdiction over Flynn pursuant to I.C. § 7-1004(6) and (5).
This Court holds that personal jurisdiction over Flynn in the state of Idaho is proper.
B. Service of Process
Flynn contends that he was not properly served pursuant to I.R.C.P. 4(d)(2) because the papers were not served upon him personally but were left sitting on his doorstep. He filed a special appearance requesting the complaint be dismissed pursuant to I.R.C.P. 12(b)(2), (b)(3), (b)(4), (b)(5), (b)(6), 40(e)(1)(A) and I.C. § 5-404. Flynn specifically raised the issue of service in his special appearance by stating that he "was not personally served, nor was anyone in his residence of legal age served in person or otherwise." Flynn again raised the issue of proper service upon appeal to the district court even though the issue was not decided by the magistrate.
Lohman argues that Flynn waived this argument because he voluntarily appeared in the action and because he failed to request a timely hearing on the motion for dismissal and continued arguing the merits of the case without a ruling. Lohman further contends *385 that Flynn was placed on notice and had an opportunity to be heard.
Idaho Rule of Civil Procedure 4(d)(2) details the requirements for personal service upon individuals as follows:
Upon an individual other than those specified in subdivision (3) of this rule, by delivering a copy of the summons and of the complaint to the individual personally or by leaving copies thereof at the individual's dwelling house or usual place of abode with some person over the age of eighteen (18) years then residing therein or by delivering a copy of the summons and of the complaint to an agent authorized by appointment or by law to receive service of process.
The service of the summons confers the court with personal jurisdiction over a party. Engleman v. Milanez, 137 Idaho 83, 84, 44 P.3d 1138, 1139 (2002). The filing of a notice of appearance by a party is equivalent to the service of process upon that party. Id. Idaho Rule of Civil Procedure 4(i) provides that the voluntary appearance or service of any pleading by a party constitutes submission to the personal jurisdiction of the court. Id. Thus, the voluntary appearance by a party is equivalent to service of the summons upon that party. Id.
Rule 4(i) further provides that the voluntary appearance or service of any pleading by a party constitutes voluntary submission to the personal jurisdiction of the court "except as provided herein." It then lists three exceptions. First, filing a motion under Rule 12(b)(2), (4), or (5) does not constitute a voluntary appearance. Second, filing a motion asserting any other defense does not constitute a voluntary appearance if it is joined with a motion under Rule 12(b)(2), (4), or (5). Finally, filing a pleading and defending the lawsuit does not constitute a voluntary appearance if it is done after the trial court has denied the party's motion under Rule 12(b)(2), (4), or (5).
Id. at 84-85, 44 P.3d at 1139-1140.
Under I.R.C.P. 60(b)(4), a judgment may be set aside if that judgment is found to be void.
Generally, where a party has not been served with process or was improperly served with process, any judgment against such party is void. Wells v. Valley Natl. Bank of Arizona, 109 Ariz. 345, 509 P.2d 615 (1973). As we noted in Garren v. Rollis, 85 Idaho 86, 375 P.2d 994 (1962):
Under the due process clause of the Constitution of the United States, a personal judgment rendered without service of process on, or legal notice to, a defendant, in the absence of a voluntary appearance or waiver is void, and not merely voidable.
Thiel v. Stradley, 118 Idaho 86, 87, 794 P.2d 1142, 1143 (1990). Thus, a judgment taken in an action where service of process was not made, or improperly made, is void and may be vacated pursuant to I.R.C.P. 60(b)(4). Id. Under I.R.C.P. 60(b)(4), a litigant has a reasonable time within which to bring a motion to set aside a void judgment. Id. at 88, 794 P.2d at 1144.
The burden is on the serving party to clearly establish that proper service has been made. Dustin v. Beckstrand, 103 Idaho 780, 788, 654 P.2d 368, 376 (1982). This Court recently noted:
The burden is on the party who failed to effect timely service to demonstrate good cause. The determination of whether good cause exists is a factual one. The Court in [Shaw v. Martin, 20 Idaho 168, 175, 117 P. 853, 855 (1911)], that was not bound by a statute or rule defining timely service of a complaint, instructed that the factual question was "to be determined upon the proof offered and the diligence shown by the plaintiff in making such service, and must be decided by the court upon the facts as they are presented." In ascertaining whether good cause exists, there is no bright-line test; the question of whether legal excuse has been shown is a matter for judicial determination based upon the facts and circumstances in each case.
Martin v. Hoblit, 133 Idaho 372, 375, 987 P.2d 284, 287 (1999) (citations omitted).
Flynn did not subject himself to the jurisdiction of the court pursuant to I.R.C.P. 4(i) because he did not voluntarily appear. The *386 record does not contain a notice of service, nor is there a request for service of process on an out-of-state defendant. On the other hand, the record does not reflect that Flynn requested a hearing specifically on the service issue. Neither of the lower courts appear to have ruled upon the service of process issue.
It is clear that the papers were not left with a person at Flynn's residence; the papers were left on the front doorstep. From these facts alone, it would appear that Flynn was not properly served pursuant to I.R.C.P. 4(d)(2) and the judgment may be rendered void. However, this Court concludes that Flynn, by pursuing the case without requesting a hearing or final determination from either of the lower courts on the personal service of process question, abandoned the issue of personal service. Rule 4(i) of the Idaho Rules of Civil Procedure provides, "If, after a motion under Rule 12(b)(2), (4), or (5) is denied, the party pleads further and defends the action, such further appearance and defense of the action will not constitute a voluntary appearance under this rule." Pleading further and defending the action does not constitute a voluntary appearance only if it is done "after a motion under Rule 12(b)(2), (4) or (5) is denied." Because Flynn did not bring his motion to dismiss on for hearing, the trial court never denied it. Thus, his actions in defending the action on the merits constituted a voluntary appearance because they were done before any denial of his motion under rule 12(b)(2), (4), or (5).
II.
Res Judicata
Lohman contends the district court erred in holding that res judicata barred her claim for reimbursement. Lohman asserts that she is not seeking the same relief as the state sought in the paternity case and therefore res judicata should not bar her from bringing this action to attempt to recover her expenses for raising the child before paternity was established.
Flynn argues that the district court properly held the doctrine of res judicata barred Lohman's request for reimbursement. Flynn also contends he should not be required to relitigate the reimbursement of support prior to the date of filiation, when the paternity action already made an award for a period of time prior to the order.
Whether res judicata or collateral estoppel bars the relitigation of issues adjudicated in prior litigation between the same parties is a question of law upon which this Court exercises free review. Mastrangelo v. Sandstrom, Inc., 137 Idaho 844, 846, 55 P.3d 298, 300 (2002). There are five factors that must be considered in determining whether collateral estoppel will act as a bar:
1) the party against whom the earlier decision was asserted had a full and fair opportunity to litigate the issue decided in the earlier case; 2) the issue decided in the prior litigation was identical to the issue presented in the present action; 3) the issue sought to be precluded was actually decided in the prior litigation; 4) there was a final judgment on the merits in the prior litigation; and 5) the party against whom the issue is asserted was a party or in privity with a party to the prior litigation.
Western Indus. and Environmental Services, Inc. v. Kaldveer Associates, Inc., 126 Idaho 541, 544, 887 P.2d 1048, 1051 (1994).
Res judicata is comprised of claim preclusion (true res judicata) and issue preclusion (collateral estoppel). Under principles of claim preclusion, a valid final judgment rendered on the merits by a court of competent jurisdiction is an absolute bar to a subsequent action between the same parties upon the same claim. The three fundamental purposes served by res judicata are:
First, it "[preserves] the acceptability of judicial dispute resolution against the corrosive disrespect that would follow if the same matter were twice litigated to inconsistent results." Second, it serves the public interest in protecting the courts against the burdens of repetitious litigation; and third, it advances the private interest in repose from the harassment of repetitive claims.
*387 The doctrine of claim preclusion bars not only subsequent relitigation of a claim previously asserted, but also subsequent relitigation of any claims relating to the same cause of action which were actually made or which might have been made.
Hindmarsh v. Mock, 138 Idaho 92, 94, 57 P.3d 803, 805 (2002) (citations omitted).
The magistrate ruled upon Flynn's defense of res judicata in its pretrial order. The trial court found that there was not evidence that established that Lohman had participated in the paternity case nor that her claims were identical to the paternity action. Further, the magistrate found that Lohman did not have a full and fair opportunity to litigate her reimbursement claim and that the paternity action should not prevent her from bringing her own action. The magistrate concluded that
Ms. Lohman's interest is not derivative of the Department of Health and Welfare's interest in the first action. Ms. Lohman has an independent interest in seeking reimbursement from Mr. Flynn for the support of [the child] provided she can establish she expended her own funds for the support. Mr. Flynn should not be relieved of that responsibility just because he entered into a stipulation with the State of Idaho establishing his paternity and current child support obligation. For these reason Ms. Lohman's claim is not barred by the doctrine of res judicata.
The district court on appeal determined that Lohman's claim for reimbursement was barred by res judicata by finding that this action "might and should have been litigated in the first suit" because the state could have pursued an order for reimbursement in the paternity action. The district court found that Lohman and the state of Idaho were in privity and that Lohman derived a direct interest in the outcome of the prior litigation by the state.
As to the first factor, Lohman requested the state to initiate the paternity and child support case on her behalf. Following the initial contact, Lohman contends that she was only somewhat involved in the process, that she did not participate in the litigation nor was she informed on how the case was progressing or apprised of the status of the case. Idaho Code § 56-203A allows the state to "accept applications for support enforcement services on behalf of persons who are not recipients of public assistance and may take action as it seems appropriate to establish, modify or enforce support obligations against person owing a duty to pay support." This Court holds that I.C. § 56-203A appears broad enough to allow for Lohman to request the state to pursue her reimbursement claim in the paternity and child support action.
Second, in the prior action, the state established paternity of the child and set child support from the time the complaint was filed. Here, Lohman is seeking reimbursement for the expenses she incurred in raising the child prior to the time paternity was established, in essence, an allowance for prior support for the child. Third, the issue of reimbursement was not raised in the prior litigation, while the court addressed and awarded child support. Fourth, there was a final judgment on the merits in the prior litigation, but the judgment did not specifically address the reimbursement of prior expended funds.
The factor that this case turns on, is whether Lohman was in privity with the state of Idaho in the prior litigation. To establish privity, it must be shown that the plaintiff derived a direct interest in the outcome of the former litigation from the prior defendant. Gubler v. Brydon, 125 Idaho 107, 110, 867 P.2d 981, 984 (1994).
The magistrate found that Lohman and the state were not in privity because Lohman had an independent interest in seeking reimbursement, and stated "Flynn should not be relieved of [his] responsibility just because he entered into a stipulation with the State of Idaho establishing his paternity and child support obligation."
The district court found that there was privity between Lohman and the state because Lohman initiated the paternity action through the state, concluding:
that she paid a fee for the state to initiate the paternity action, that she chose to use the state to initiate the paternity action, *388 and that she received all money collected from the paternity action.... Since the state did not provide any public assistance on behalf of [the child], it did not have an independent basis for pursuing the paternity action. Instead, its right bring the action had to have derived from [Lohman's] interest, and, in fact, [Lohman] requested the state to bring the action. Additionally, since [Lohman] received all of the money collected as a result of the paternity action, [Lohman] `derived a direct interest in the outcome of the former litigation' from the State.
This Court agrees with the rationale of the district court and holds that privity was present between Lohman and the state. The state did not have an independent basis for pursuing this action, since it had not provided public assistance for the child. I.C. § 7-1110; see also I.C. § 56-203A. The state's interest derived from Lohman's request to act on her behalf to determine paternity and establish child support. I.C. § 56-203A. Although Lohman may not have been an active participant in the prior litigation, all of the benefits recovered were given to Lohman; the state had nothing to recover. Lohman clearly derived a direct interest in the outcome of the former litigation and, therefore, was in privity with the state.
This Court holds that the doctrine of res judicata bars Lohman from pursuing her claim for reimbursement of expenses incurred in supporting the child prior to paternity being established.
With this conclusion, the issues of evidentiary rulings, whether Lohman met her burden of proof, or the effect of laches and estoppel, need not be addressed by this Court.
IV.
Attorney Fees
A. Before the District Court
Flynn argues that the district court, acting in its appellate capacity, erred by denying his request for an award of attorney fees. Flynn contends that Lohman's action was frivolous, unreasonable and without foundation because of the prior paternity action.
The district court denied the award of attorney fees to both parties on appeal from the magistrate division because even though Flynn was the prevailing party and the issues he raised were legitimate, the court concluded that Lohman's prosecution of her action was not frivolous, unreasonable or without foundation.
A discretionary decision with regard to the award of attorney fees should be subject to vacation only upon a showing of an abuse of discretion. McCann v. McCann, 138 Idaho 228, 238, 61 P.3d 585, 595 (2002).
Here, the district court acknowledged that the award of attorney fees was within its discretion and utilized the legal standards applicable to the award of attorney fees on appeal to make its decision. There is nothing in Flynn's argument to show that the district court abused its discretion in denying attorney fees on appeal.
This Court holds that the district court did not err in denying attorney fees on the interim appeal to either party.
B. On Appeal
Both parties request attorney fees on this appeal. Flynn contends that he should be found to be the prevailing party and is entitled to attorney fees on appeal. Lohman asserts that Flynn has presented no cogent challenge to the trial judge's exercise of discretion and that his request for an award of attorney fees should be denied. Additionally, Lohman contends that Flynn presented no meaningful issue of a question of law and is merely requesting this Court to reweigh the evidence. Lohman asserts that she is entitled to attorney fees on appeal because the appeal from the district court was brought, pursued and defended frivolously, unreasonably or without foundation.
Idaho Code § 12-121 provides for the discretionary award of reasonable attorney fees to the prevailing party. This Court declines to award fees to either party because the appeal to the district court and to this Court raised issues of importance not previously decided.
*389 CONCLUSION
This Court concludes that personal jurisdiction over Flynn in the State of Idaho was proper. It is also concluded that Flynn abandoned his claim for improper service by failing to request a hearing or a ruling by the lower courts. This Court holds that res judicata bars Lohman's request for reimbursement as she should have requested it in the prior litigation. The case is remanded to the magistrate division with direction that the action be dismissed. No costs or fees awarded on appeal.
Chief Justice TROUT and Justices SCHROEDER, KIDWELL and EISMANN, concur.
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82 So. 3d 292 (2012)
STATE of Louisiana in the Interest of J.A.H.
No. 2012-CJ-0224.
Supreme Court of Louisiana.
February 17, 2012.
*293 Denied.
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84 So. 3d 1020 (2010)
GREGORY L. HUNTER
v.
ALABAMA BD. OF PARDONS & PAROLES.
No. CR-09-0852.
Court of Criminal Appeals of Alabama.
July 16, 2010.
DECISION WITHOUT PUBLISHED OPINION
Reh. denied.
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83 So. 3d 590 (2010)
ERNEST THURMAN, AS PERS. REPRESENTATIVE OF THE ESTATE OF GLADYS INEZ THURMAN
v.
LONG-LEWIS, INC., ET AL.
No. 1090118.
Supreme Court of Alabama.
May 21, 2010.
DECISION WITHOUT PUBLISHED OPINION
Affirmed.
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84 So. 3d 1041 (2012)
BROWN
v.
STATE.
No. 5D11-2783.
District Court of Appeal of Florida, Fifth District.
April 13, 2012.
DECISION WITHOUT PUBLISHED OPINION
Affirmed.
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85 So. 3d 489 (2012)
O'TOOLE
v.
STATE.
No. 1D11-5315.
District Court of Appeal of Florida, First District.
April 11, 2012.
DECISION WITHOUT PUBLISHED OPINION
Affirmed.
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83 So. 3d 918 (2012)
STATE of Florida, Appellant,
v.
Harry James CHUBBUCK, Appellee.
No. 4D10-5014.
District Court of Appeal of Florida, Fourth District.
March 7, 2012.
*919 Pamela Jo Bondi, Attorney General, Tallahassee, and Daniel P. Hyndman, Assistant Attorney General, West Palm Beach, for appellant.
Carey Haughwout, Public Defender, and Paul E. Petillo, Assistant Public Defender, for appellee.
EN BANC
PER CURIAM.
The state appeals a final order revoking Harry Chubbuck's probation and granting a downward departure sentence. We sua sponte consider this case en banc to recede from a line of our cases that imposes a requirement on a sentencing statute that goes beyond the plain language of the statute.
Pursuant to a plea bargain involving drug related offenses, Chubbuck was adjudicated guilty and placed on five years of probation with a condition that required him to abstain from the consumption of illegal drugs.
About a year later, the probation officer filed an affidavit alleging that Chubbuck had violated his probation, in that Chubbuck's urine had tested positive for cocaine.
At the beginning of the hearing on the probation violation, the parties staked out their positions on what the trial court should do if Chubbuck admitted the violation. The state argued that the court should revoke probation and either reinstate it or sentence Chubbuck to prison; the state represented that the bottom of the sentencing guidelines was 37.65 months. Chubbuck argued that the court should revoke probation and sentence him to time served, which was 97 or 98 days at that point, because he was "a very, very ill man" who should "get treated for all of the various things that ail him."
Chubbuck testified that he was in the United States Army between 1961 and 1971, where he served in Vietnam as a surgical technician on air ambulances during the Tet Offensive. During his time in the service, he was awarded a Bronze Star and a Silver Star, as well as 22 air medals, one air medal for each half hour of combat flight time. Chubbuck said that he was shot down four times in one day trying to retrieve a radio operator. He was undergoing treatment for Post-Traumatic Stress Disorder at a Veterans Administration hospital, which was helping his condition. Chubbuck also suffered from chronic obstructive pulmonary disease, "some sort of lower left ventricle problem," and diabetes.
Chubbuck's fiancée testified that Chubbuck was a law-abiding person who was "very ill"; she took him to the "VA all the time." Chubbuck introduced a multi-page statement summarizing his military service and health conditions; under oath, Chubbuck attested to the veracity of the information in the statement.
*920 Pointing to the testimony, Chubbuck asked the court to grant a downward departure, terminate probation, and sentence him to time served. He relied on subsection 921.0026(2)(d), Florida Statutes (2009), which allows a trial court to depart from the "lowest permissible sentence" if "[t]he defendant requires specialized treatment for a mental disorder that is unrelated to substance abuse or addiction or for a physical disability, and the defendant is amenable to treatment." In response, the state argued that there was no evidence to show that the Department of Corrections could not treat Chubbuck's illnesses, so subsection (2)(d) could not be used to justify a downward departure sentence.
The trial judge made the following findings:
This defendant does not belong in prison, and it's absurd to have a 66-year-old man, who put his life on the line for our country, and has the problems he now has under the supervision of the Department of Corrections . . .
The defendant has spent 97 days in jail because he tested positive for cocaine[.] [E]ven if he used cocaine[,] I question whether anybody in this courtroom or this world, who went through in Vietnam when people like me sat home in our own living rooms and watched the war on television, would have handled this any better than the defendant.
The defendant is not accused of committing any new crimes. He is 66 years old. He has so many problems now dealing with mental health and physical problems. The common sense says enough is enough.
. . . .
And the Court respects the State's right to appeal. I just hope that there comes a time when justice is not based solely on formulas and mathematical calculations. This is an unusual case, and I believe justice is best served by treating the time spent in jail as significant punishment for the violation, and the defendant needs to move on with his life.
So, the Court accepts his admission of violating probation, revokes probation.
. . . .
And sentence[s] him to [96[1]] days in jail with credit for [96] days time served.
On appeal, the state argues that because Chubbuck did not present evidence that the Department of Corrections cannot provide the required specialized treatment, there was no competent, substantial evidence to support the trial court's decision to impose a downward departure sentence under subsection 921.0026(2)(d). Thus, the state challenges the legal ability of the sentencing judge to depart downward, step one of a two-step process identified by the Supreme Court in Banks v. State, 732 So. 2d 1065, 1067-68 (Fla.1999). Under step one,
[t]he court must determine whether it can depart, whether there is a valid legal ground and adequate factual support for that ground in the case pending before it (step 1). Legal grounds are set forth in case law and statute, and facts supporting the ground must be proved at trial by "a preponderance of the evidence." This aspect of the court's decision to depart is a mixed question of law and fact and will be sustained on review if the court applied the right rule of law and if competent substantial evidence supports its ruling. Competent substantial evidence is tantamount to legally sufficient evidence, and the appellate *921 court will assess the record evidence for its sufficiency only, not its weight.
Id. at 1067.
Under Florida's sentencing statutes, "[a] downward departure from the lowest permissible sentence ... is prohibited unless there are circumstances or factors that reasonably justify the downward departure." § 921.0026(1), Fla. Stat. (2009). Subsection 921.0026(1) continues by indicating that subsection, 921.0026(2) provides a non-exclusive list of mitigating factors. Id. ("Mitigating factors to be considered include, but are not limited to, those listed in subsection (2)."). Although the trial court did not cite to a specific statutory section or use the term "mitigating factor," both the state and Chubbuck invoked subsection 921.0026(2)(d), and the court's findings on Chubbuck's health suggest that subsection as the ground for the court's departure.
Subsection 921.0026(2)(d) provides that a trial court may depart from the lowest permissible sentence if "[t]he defendant requires specialized treatment for a mental disorder that is unrelated to substance abuse or addiction or for a physical disability, and the defendant is amenable to treatment." This court and the other districts have supplemented the plain language of the statute with the further requirement that, "[i]f a departure is to be permitted on such ground, the defendant must also establish, by a preponderance of the evidence, that the Department of Corrections cannot provide the required `specialized treatment.'" State v. Gatto, 979 So. 2d 1232, 1233 (Fla. 4th DCA 2008); see also, e.g., State v. Ford, 48 So. 3d 948, 950 (Fla. 3d DCA 2010); State v. Scherber, 918 So. 2d 423, 424-25 (Fla. 2d DCA 2006); State v. Holmes, 909 So. 2d 526, 528 (Fla. 1st DCA 2005); State v. Mann, 866 So. 2d 179, 182 (Fla. 5th DCA 2004).
Here, the state correctly asserts that Chubbuck offered no evidence that the Department of Corrections could not provide Chubbuck the required treatment for his mental and physical disorders.
However, the plain language of subsection 921.0026(2)(d) does not require the defendant to make such a showing. We are persuaded by the concurring opinion of Judge Warner in State v. Hunter, 65 So. 3d 1123, 1125-26 (Fla. 4th DCA 2011), that we should recede from those of our cases that have added gloss to the statute. We adopt the reasoning in Judge Warner's concurring opinion as the opinion of the court:
I agree that this case should be affirmed, but I write separately to question whether the statutory factor of need of specialized treatment requires the defendant to prove that the treatment he needs is not available in the prison system. Because the statute does not make this a requirement, I would conclude that it is not part of the defendant's burden to prove this element in order for the trial court to determine that it can depart from the lowest permissible sentence under the Criminal Punishment Code.
Section 921.0026 provides mitigating circumstances "under which a departure from the lowest permissible sentence is reasonably justified...." These include: "(d) The defendant requires specialized treatment for a mental disorder that is unrelated to substance abuse or addiction or for a physical disability, and the defendant is amenable to treatment." Although not stated in the statute, there is a significant body of case law holding that to receive a sentence pursuant to section 921.0026(2)(d), there must be evidence that the Department of Corrections (DOC) cannot provide the specialized treatment required. See State v. Gatto, 979 So. 2d 1232, 1233 (Fla. 4th DCA 2008); State v. Green, 971 So.2d *922 146, 148 (Fla. 4th DCA 2007); State v. Scherber, 918 So. 2d 423, 424-25 (Fla. 2d DCA 2006); State v. Wheeler, 891 So. 2d 614, 616 (Fla. 2d DCA 2005); State v. Green, 890 So. 2d 1283, 1286 (Fla. 2d DCA 2005); State v. Mann, 866 So. 2d 179, 182 (Fla. 5th DCA 2004); State v. Tyrrell, 807 So. 2d 122, 128 (Fla. 5th DCA 2002); State v. Thompson, 754 So. 2d 126, 127 (Fla. 5th DCA 2000); State v. Abrams, 706 So. 2d 903, 904 (Fla. 2d DCA 1998).
This requirement appears to have had its origins in Abrams, the first time we find it mentioned in case law. Abrams involved a downward departure sentence from a guidelines sentence, because the crime for which he was being sentenced occurred in 1997, prior to the enactment of the Criminal Punishment Code. However, the statute at the time included the same mitigating factor but no reference to the unavailability of treatment in prison. See § 921.0026(2)(d), Fla. Stat. (1997). In Abrams, the court said, without citation to any authority: "There is no evidence in the record, however, that Mr. Abrams requires specialized treatment for HIV that cannot be provided through the Department of Corrections." 706 So. 2d at 904. On the other hand, in State v. Spioch, 706 So. 2d 32 (Fla. 5th DCA 1998), Judge Griffin accurately noted in discussing the same statute involved in Abrams, that
[A] lack of available treatment in prison is not required under the statute. Although illness is not a "get out of jail free card," a treatable physical disability is one of the circumstances where the legislature has chosen to re-invest trial judges with discretion to vary from sentencing guidelines.
Id. at 36. Despite this conflict of opinion between the districts, the courts appear to have turned the one sentence in Abrams into an additional element for the defendant to prove in order to obtain a downward departure sentence under section 921.0026(2)(d), Florida Statutes.1 Our court likewise adopted this element as part of the defendant's burden of proof, without any authority other than the citation of cases, which lead back to Abrams. See, e.g., Gatto, 979 So.2d at 1233; Green, 971 So.2d at 148.
1 Furthermore, the Fifth District's own case law is internally inconsistent. The Fifth District never receded from Spioch, but subsequent Fifth District opinions have required the defendant to prove that the Department cannot provide the specialized treatment required. See Mann, 866 So.2d at 182; Tyrrell, 807 So.2d at 128; Thompson, 754 So.2d at 127.
Sentencing statutes must be strictly construed according to their letter. See Perkins v. State, 576 So. 2d 1310, 1312 (Fla.1991); Atterbury v. State, 991 So. 2d 980, 981 (Fla. 4th DCA 2008). In sentencing, the trial judge should strictly follow the dictates of statutes. See Troutman v. State, 630 So. 2d 528, 533 n. 6 (Fla.1993), superseded by statute on other grounds as stated in Ritchie v. State, 670 So. 2d 924 (Fla.1996). In addition, the rule of lenity requires that when language of a statute is susceptible of differing constructions, it must be construed most favorably to the accused. See § 775.021(1), Fla. Stat. (2008).
By requiring the defendant seeking downward departure from a criminal punishment code sentence to prove that services to treat his or her medical condition are unavailable in prison, the courts have placed an additional burden on the defendant which is not required by the Legislature. In fact, nothing in the legislative history even hints that in order to justify a downward departure on this ground, services must be unavailable in prison to treat the condition. While that might be what the Legislature intended, I think it should state its intentions clearly so that no one has to *923 guess as to the requirements in punishment statutes.
The burden of proving a negative, i.e. that no treatment options exist in the prison system, is problematic for the defendant and defense attorneys. For instance, in this case the expert testified that she had been unable to reach Department of Corrections officials to have them explain their treatment procedures in the prison system. Instead she relied on other information, including her work with former inmates and the general protocols for treating mental illness, as well as other information which might be considered hearsay.
The prison system is a very large institution with very large medical facilities. To track down all of the available treatment in the system may be a daunting and very expensive task, adding to an already overburdened public defender system. On the other hand, the information on availability of treatment is readily available to the state. I think the state is in the better position to offer such proof in opposition to a downward departure.
Hunter, 65 So.3d at 1125-26 (Warner, J., specially concurring) (emphasis in original).
Here, the trial judge believed the testimony that Chubbuck had mental and physical problems for which he was receiving treatment at the Veterans' Administration Hospital. Neither the state nor Chubbuck offered any evidence as to the treatment options available to him at the Department of Corrections. The trial judge properly considered Chubbuck's age and medical conditions as "mitigating factors" that justified a downward departure. This finding was consistent with subsection 921.0026(2)(d).
We recede from Hunter, Belluscio, Gatto, and Green and certify direct conflict[2] with State v. Scherber, 918 So. 2d 423, 424-25 (Fla. 2d DCA 2006); State v. Wheeler, 891 So. 2d 614, 616 (Fla. 2d DCA 2005); State v. Green, 890 So. 2d 1283, 1286 (Fla. 2d DCA 2005); State v. Mann, 866 So. 2d 179, 182 (Fla. 5th DCA 2004); State v. Tyrrell, 807 So. 2d 122, 128 (Fla. 5th DCA 2002); State v. Thompson, 754 So. 2d 126, 127 (Fla. 5th DCA 2000); State v. Abrams, 706 So. 2d 903, 904 (Fla. 2d DCA 1998); State v. Ford, 48 So. 3d 948, 950 (Fla. 3d DCA 2010); and State v. Holmes, 909 So. 2d 526, 528 (Fla. 1st DCA 2005).
Because the state was not on notice of this court's present view of subsection 921.0026(2)(b) at the time of the sentencing hearing, we reverse the sentence to provide the state another opportunity to present evidence as to whether the Department of Corrections can provide the required "specialized treatment." Although the state had the opportunity to present such evidence at the sentencing hearing, we recognize the possibility that the state did not present such evidence given this court's view of the law at that time. We emphasize, however, that if the state presents such evidence at the new sentencing hearing, the trial court is not precluded from granting the defendant's request for a downward departure for the same reasons. Rather, the state's evidence is merely an additional factor which the trial court may consider in exercising its discretion as to whether to grant the defendant's request for a downward departure.
Reversed and remanded for a new sentencing hearing.
MAY, C.J., WARNER, POLEN, STEVENSON, GROSS, TAYLOR, DAMOORGIAN, CIKLIN, GERBER, LEVINE, and CONNER, JJ., concur.
*924 HAZOURI, J., recused.
GROSS, J., concurs specially with opinion.
GROSS, J., concurring specially.
I write to emphasize that the record presents reasons for a downward departure that support the circuit court's sentencing decision, in addition to the ground contained in subsection 921.0026(2)(d).
For the purpose of deciding whether to downwardly depart from the lowest permissible guidelines sentence, section 921.0026, Florida Statutes (2009) does not limit a sentencing judge to those "mitigating factors" specified in subsection 921.0026(2). Rather, subsection 921.0026(1) states that a judge is "prohibited" from downwardly departing
unless there are circumstances or factors that reasonably justify the downward departure. Mitigating factors to be considered include, but are not limited to, those listed in subsection (2).
(emphasis added). The statute thus allows the sentencing judge some discretion in identifying those mitigating factors and circumstances that justify a downward departure.
Here, in addition to Chubbuck's mental health and physical problems under subsection 921.0026(2)(d), the trial court also considered his age and the fact that he was not a danger to the general public. The court's sentence was consistent with research by criminologists and the sound utilization of the resources of the Department of Corrections. In 1995, in discussing the imposition of long, mandatory sentences for "three strikes" offenders,[3] the Florida Task Force for the Review of the Criminal Justice and Corrections Systems, a commission created by the legislature at Chapter 93-404, Laws of Florida, observed:
Most criminologists believe that the years between ages eighteen and thirty-four are the high crime years. As offenders age, they tend to commit fewer offenses. Many criminologists believe that incarcerating offenders well past their high crime years may be a poor use of expensive resources, especially if younger, more violent, and crime-prone offenders are released early after their first or second conviction because of limited space. In addition, older prison populations tend to have more frequent and expensive medical problems adding to the drain on resources.
Final Report, Florida Task Force for the Review of the Criminal Justice and Corrections Systems (January, 1995), p. 59.
NOTES
[1] The court originally announced a different number of days, but later corrected that number.
[2] See Fla. R.App. P. 9.030(a)(2)(A)(vi).
[3] "Basically, three strikes legislation imposes life (or extremely long) sentences on offenders who are convicted of a third felony. The legislation varies in the number of offenses (two in some states, including Georgia) needed to trigger the sanction, the type of offenses (in some states, the offenses must be violent felonies), and the method by which they were enacted...." Final Report, Florida Task Force for the Review of the Criminal Justice and Corrections Systems (January, 1995), p. 59.
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827 F. Supp. 1453 (1993)
UNITED STATES of America, and State of California, Plaintiffs,
v.
MONTROSE CHEMICAL CORPORATION OF CALIFORNIA, et al., Defendants.
and
Related Claims.
No. CV 90-3122 AAH (JRx).
United States District Court, C.D. California.
April 26, 1993.
*1454 Myles E. Flint, Acting Asst. Atty. Gen., Gerald F. George, Helen H. Kang, Environment and Natural Resources Div., U.S. Dept. of Justice, San Francisco, CA, Adam Kushner, Sharon Zamore, Environmental Enforcement Section Environment and Natural Resources Div., U.S. Dept. of Justice, Washington, DC, for U.S.
John A. Saurenman, Deputy Atty. Gen., Los Angeles, CA, for State of California.
Frank Rothman, Jose R. Allen, Peter Simshauser, Elizabeth P. Cowie, Skadden, Arps, Slate, Meagher & Flom, San Francisco, CA, for DDT Indus., defendants.
Paul Galvani, Ropes & Gray, Boston, MA, for ICI American Holdings, Inc., Rhone-Poulenc Basic Chemicals Co., Atkemix Thirty-Seven, Inc. Co., and Stauffer Management.
Moses Lasky, Charles B. Cohler, David M. Rosenberg-Wohl, William A. Logan, Lasky, Haas, Cohler & Munter, San Francisco, CA, for Westinghouse Elec. Corp.
B. Richard Marsh, Wesley G. Beverlin, Knapp, Marsh, Jones & Doran, Los Angeles, CA, Lloyd S. Guerci, Mayer Brown & Platt, Washington, DC, for LACSD and South Bay Cities Sanitation District.
Keith W. Pritsker, Deputy City Atty., Los Angeles, CA, for City of Los Angeles.
Rufus C. Young, Jr., S. Paul Bruguera, Stephen R. Onstot, Jeffrey Kightlinger, Burke, Williams & Sorensen, Los Angeles, CA, for Cities of Alhambra, Azusa, Bell, Bellflower, City of Commerce, Downey, El Monte, El Segundo, Glendora, Hawaiian Gardens, Hawthorne, Irwindale, La Canada, Flintridge, Lomita, Lynwood, Manhattan Beach, Montebello, Paramount, Pasadena, Sierra Madre and Temple City.
Richard G. Montevideo, Rutan & Tucker, Costa Mesa, CA, for City of Baldwin Park, Lawndale, Signal Hill and West Covina.
Cary S. Reisman, Wallin, Kress, Reisman, Price & Dilkes, Santa Monica, CA, for Cities of Bell Gardens Bradbury, Huntington Park, La Verne Maywood, Rosemead, San Gabriel and Santa Fe Springs.
David P. Waife, Mitchell E. Abbott, Richards, Watson & Gershon, Los Angeles, CA, for Cities of Artesia, Carson, Compton, Cudahy, La Habra Heights, La Puente Monrovia, Norwalk, Rancho Palo Verdes, Rolling Hills, San Marino, South El Monte, and South Gate.
Roger W. Springer, City Atty., Oliver, Stoever, Barr & Vose, Los Angeles, CA, for *1455 City of Covina Hermosa Beach and South Pasadena.
Christine Gosney, City Atty., Lynberg & Watkins, Los Angeles, CA, for City of Culver City.
Ronald T. Pohl, Asst. City Atty., Torrance, CA, for City of Torrance.
Joseph W. Fletcher, City Atty., Carolyn A. Barnes, Asst. City Atty., Burbank, CA, for City of Burbank.
David J. Prager, Los Angeles, CA, for County of Los Angeles.
Thomas L. Woodruff, Rourke & Woodruff, Orange, CA, for Cities of Anaheim, Brea, Buena Park, Cypress, Fountain Valley, Fullerton, Huntington Beach, Irvine, La Habra, La Habra Heights, La Palma, Los Alamitos, Newport Beach, Orange, Placentia, Santa Ana, Seal Beach, Stanton, Tustin, Villa Park, Yorba Linda, County Sanitation Dist. of Orange County, Costa Mesa Sanitation Dist., Garden Grove Sanitary Dist., Midway Sanitary Dist., Irving Ranch Water Dist., Los Alamitos County Water Dist. and Yorba Linda Water Dist.
Mary L. Walker, Stephen L. Marsh, Luce, Forward, Hamilton & Scripps, San Diego, CA, for Cities of Chino, Montclair and Upland and Liaison Counsel for Ontario, Fontana and Cucamonga County Water Dist.
Karl S. Lytz, Kimberly M. McCormick, Ronald R. Stuff, David Judson Barrett, Latham & Watkins, San Diego, CA, for Montrose Chemical Corp. of California.
ORDER GRANTING PLAINTIFFS' MOTION FOR ENTRY OF SECOND CONSENT DECREE
HAUK, Senior District Judge.
I. FACTS AND BACKGROUND
In this action, plaintiffs United States of America and the State of California ("Plaintiffs") seek entry of the second consent decree (the "Proposed Decree") resulting from the early settlement process that this Court established at its initial hearing in this matter on March 18, 1991. In early 1992, Plaintiffs lodged the first consent decree in this matter (the "Potlach Settlement"), which called for payment of $12 million by defendants Potlach Corporation and Simpson Paper Company. This Court granted entry of the Potlach Settlement on May 19, 1992.
The Proposed Decree now before the Court has been entered into by Plaintiffs and defendant County Sanitation District No. 2 of Los Angeles County ("LACSD") and certain third-party defendant local governmental entities ("Local Governmental Entities"). LACSD and the Local Governmental Entities are alleged to have owned or used sanitation systems and stormwater runoff systems that discharged wastewater to the ocean, or to have otherwise engaged in activities (such as mosquito abatement) which may have resulted in the discharge of hazardous substances such as DDT into the environment.
Plaintiffs had previously negotiated a proposed consent decree with LACSD and certain other sanitation districts in 1990. At that time, however, the Court expressed concern that the facts behind the proposed settlement remained unclear.[1] Plaintiffs subsequently withdrew this proposed consent decree at the request of LACSD to permit attempts to negotiate a settlement that would include a broader group of the Local Governmental Entities.
The Proposed Decree now before the Court is for $45.7 million. If this Court approves the Proposed Decree, LACSD and all 150 of the Local Governmental Entities will be removed from this action, greatly simplifying this litigation. The Proposed Decree calls for two substantial cash payments upon approval, one for $9.3 million for natural resource damages, and one for $3.5 million for response costs at the Montrose Chemical NPL Site ("Montrose Site").[2] Further payments totalling $33.6 million for natural resource damages would be made over *1456 the next four years. Solely at the discretion of Plaintiffs, up to $8.0 million of that money could be provided in the form of in-kind services. The Local Governmental Entities would also release any claims for natural resource damages or for response costs associated with the Montrose Site.
In return, the Local Governmental Entities would receive covenants not to sue for both claims asserted by Plaintiffs in this matter. Under the Proposed Decree, the Local Governmental Entities could not be sued in relation to either the Plaintiffs' natural resource damage claim, or the United State's claim for response costs associated with the Montrose Site. The covenants not to sue are subject to limited "reopener" provisions, which would permit Plaintiffs to seek additional natural resource or response costs damages to the extent that such claims were based on new information or unknown conditions. In addition, the natural resource trustees (the "Trustees") are given discretion under the Proposed Decree to decide how to allocate the damages. Under the terms of the Proposed Decree, however, the Trustees would exercise their discretion in compliance with the provisions of CERCLA.
As with the Potlach Settlement, there is opposition to entry of the Proposed Decree from the non-settling defendants, Montrose Chemical Corporation of California, et al. (the "DDT Defendants") and Westinghouse Electric Corporation ("Westinghouse").
II. NON-SETTLING DEFENDANTS' OBJECTIONS TO CONSENT DECREE
The DDT Defendants and Westinghouse challenge both the substantive and procedural fairness of the proposed settlement. Their objections are focused on five areas: 1) the proper role of this Court; 2) Plaintiffs' rationale for settlement; 3) the adequacy of the factual record; 4) the Proposed Decree's consistency with CERCLA; and 5) the Proposed Decree's limitation on additional damages resulting from implementation of secondary treatment.
A. Role of the Court
The DDT Defendants question the amount of deference this Court should give to Plaintiffs' evaluation of the facts and rationale for settlement. In its approval of the Potlach Settlement, this Court gave Plaintiffs' apportionment of liability great deference in the interest of early settlement. United States v. Montrose Chem. Corp. of Cal., 793 F. Supp. 237, 240 (C.D.Cal.1992).
In addition, Westinghouse questions the amount of deference this Court should give Special Master Peetris' recommendation (the "Recommendation"). As with the Potlach Settlement, the Special Master has recommended that this Court grant Plaintiffs' motion to enter the Proposed Decree.
B. Plaintiffs' Rationale for Settlement
The DDT Defendants and Westinghouse question the Plaintiffs' rationale for settlement, which took into account a variety of factors, with volumetric contribution the major factor for the industrial defendants. With regard to LACSD and the Local Governmental Entities, Plaintiffs took into consideration (1) the risks and costs of litigation; (2) the involvement of LACSD in early efforts to control the discharge of DDT and PCBs; (3) the public service nature of the settling parties' sewer collection; and (4) the fact that LACSD and the Local Governmental Entities were willing to engage in early settlement negotiations.
C. The Adequacy of the Factual Record
In questioning the adequacy of the factual record, the DDT Defendants and Westinghouse argue two points. First, they argue that the Proposed Decree's provision for contribution protection to the settling defendants should make the Proposed Decree subject to greater scrutiny by this Court with respect to the facts of the litigation.
Second, they claim that the facts supporting the Plaintiffs' rationale for settlement are absent or unreliable or wrong. In support of this argument, the non-settling defendants first argue that New York v. SCA Services, Inc., 1993 WL 59407 (S.D.N.Y.1993) represents a new trend in natural resource damages cases and provides a basis for this Court to depart from the approach it took *1457 when it approved the Potlach Settlement. SCA, however, is distinguishable from this case, since the settlors there were responsible for 90 percent of the contaminant damage, yet were only required to pay a sum equal to about one-third of the response costs. The Court's approval of the Proposed Decree here would not result in such a manifestly unjust outcome. In addition, the DDT Defendants and Westinghouse assert that Plaintiffs lack sufficient information regarding the discharge of hazardous substances by the settling parties. In support of their factual analysis, Plaintiffs cite interviews with representatives of the settling parties, conducted under the supervision of the Special Master, as well as public records.
Further, the DDT Defendants assert that Plaintiffs' estimates of DDT discharge from the Montrose Site are erroneous, and that there are numerous other sources of the DDT contamination. This argument was also unsuccessfully raised in opposition to the Potlach Settlement. Plaintiffs contend that the DDT Defendants' claims regarding "actual" DDT discharge are still imprecise and unsubstantiated. Finally, Westinghouse complains it has had difficulty scheduling depositions of its former employees. Plaintiffs respond, however, that there is no reason to believe that these witnesses will be determinative of the practices employed by Westinghouse at its facility.
D. Consistency with CERCLA: Settlement Funds and Response Costs
The DDT Defendants argue that the Proposed Decree is inconsistent with CERCLA in two respects: 1) the provision for the use of settlement funds violates CERCLA; and 2) CERCLA bars a certain geographic area on the Montrose site from inclusion within the scope of the covenant not to sue for natural resource damages.
1. Settlement Funds
The DDT Defendants assert that the Proposed Decree expands the Trustees' authority and discretion to allocate the settlement funds beyond what they can properly do under CERCLA. The DDT Defendants raised this argument unsuccessfully against the Potlach Settlement. The language of the Proposed Decree specifies that the Trustee's discretion must be exercised in accordance with the provisions of CERCLA.
2. Response Costs
The non-settling parties further assert that with respect to one area of the Montrose Site, namely the stormwater pathway from the site to its ocean outlet ("Stormwater Pathway"), there may be a bar as to the suit at this time for any residual resource damages associated with that particular area of the site. The non-settling parties suggest that this Court should reject the Proposed Decree due to this potential bar to the suit.
The Stormwater Pathway is an overlapping geographic area. That is, it is a subject of both the Plaintiffs' natural resource damage claim and the claim for response costs incurred with respect to the Montrose Site. Section 113(g)(1) of CERCLA bars the filing of an action with respect to a facility listed on the National Priorities List prior to the selection of a remedial action at that facility. 42 U.S.C. § 9613(g)(1). Because the Montrose Site is such a facility, and because no remedial action has yet been selected at the Montrose Site, this restriction may apply to the Stormwater Pathway. Thus, this prerequisite may potentially bar suit at this time for any residual damages associated with the Stormwater Pathway. Of course, the bar would not preclude the suit forever, but simply until there was a remedial action selected for the Montrose Site. Plaintiffs correctly point out, however, that nothing precludes the parties from settling claims even when they are potential claims.
E. Limitation on Additional Damages Resulting from Implementation of Secondary Treatment
The DDT defendants object to a provision in the Proposed Decree which limits the ability of Plaintiffs to seek further recovery from the Local Governmental Entities for natural resource damages that might arise from future release of hazardous substances. That limitation applies, however, only to the extent that the Local Governmental Entities can *1458 demonstrate that the contaminant releases result from the institution of full secondary treatment of the wastewater flowing through a sole outlet, namely the White's Point Outfall. This limitation may put the non-settling defendants at some additional risk if the nonsettlors are jointly and severally liable for the damages. Plaintiffs correctly argue, however, that this is a litigation risk inherent in the DDT Defendants' decision not participating in early settlement.
III. DISCUSSION
Before initially approving a the Proposed Decree in accordance with CERCLA, this Court must satisfy itself that the settlement is fair, reasonable, and consistent with the purposes of CERCLA. Montrose, 793 F.Supp. at 240 (citations omitted). In reviewing the Proposed Decree, the Court is guided by the following factors: (1) the relative costs and benefits of litigating this case under CERCLA; (2) the risks of establishing liability on the part of the settlors; (3) the good faith efforts and adversarial relationship of the negotiators; (4) the reasonableness of the settlement as compared to the settlor's potential volumetric contribution; (5) the ability of the settlors to withstand a greater judgment; and (6) the effect of settlement on the public interest as expressed in CERCLA. Id. at 240 (citing United States v. Rohm & Haas Company, 721 F. Supp. 666, 687 (D.N.J.1989).
This Court must also consider CERCLA's primary goal to encourage early settlement. It would be contrary to this goal to require, prior to approval of the Proposed Decree, precise information about the relative culpability of different defendants and the extent of the total harm caused. Id. (citing United States v. Cannons Engineering, 899 F.2d 79, 88 (1st Cir.1990)). Furthermore, because of this goal, courts have given the government's apportionment of liability great deference. Id. In spite of these considerations, however, the Court must still scrutinize the adequacy of the settlement process. In order to grant Plaintiffs' motion to enter the Proposed Decree, this Court must find the Proposed Decree to be both (1) the product of a procedurally fair process; and (2) substantively fair to the various parties in light of a reasonable reading of the facts in this case.
A. Procedural Fairness
Pursuant to the Court's order, Special Master Peetris has been directly involved in all settlement activities. The Special Master held settlement conferences with each set of defendants and ordered that the substance of the discussions be kept confidential. The Special Master has submitted his Recommendation to the Court indicating; and conclusively showing, that negotiations between Plaintiffs, LACSD and the Local Governmental Entities were made in good faith, and that the Proposed Decree is procedurally and substantively fair. Furthermore, the Special Master has assured the Court that all negotiations were between experienced counsel, adversarial in nature and held at arms length.
B. Substantive Fairness
As already discussed above, the DDT Defendants challenge the substantive fairness of the Proposed Decree. The $45.7 million proposed settlement figure, however, appears to be reasonable and fair. Significantly, the figure was not arrived at in an arbitrary manner. The Plaintiffs have explained in detail the methodology that they used in arriving at this figure. So long as the method selected by the Government appears to be reasonable, the Court should not interfere with the Governments determinations, particularly when buttressed by the Recommendation of the Special Master. Id. at 241 (citing Cannons Engineering, 899 F.2d at 87). Furthermore, the Courts have made it more than clear that proposed settlements should not be subjected to precision-seeking, nit-picking line-item scrutiny. Id. (citing United States v. Rohm & Haas Co., 721 F. Supp. 666, 687 (D.N.J.1989)).
IV. CONCLUSION
The Court, following the Recommendation of the Special Master, finds and concludes that the process of settlement and the settlement itself were and are fair and reasonable.
*1459 Based on this finding, the Court makes the following:
ORDER
Plaintiffs' Motion for Entry of Proposed Consent Decree is GRANTED.
NOTES
[1] To remedy this, the Court appointed Special Master Harry V. Peetris on March 18, 1991 to supervise all non-dispositive pretrial proceedings and to conduct and supervise settlement negotiations.
[2] The Montrose Chemical NPL Site is defined at paragraph 6.F of the Proposed Decree.
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81 So. 3d 433 (2012)
SCHMIDT
v.
NATIONSTAR MORTG. LLC.
No. 4D11-556.
District Court of Appeal of Florida, Fourth District.
March 7, 2012.
DECISION WITHOUT PUBLISHED OPINION
Affirmed.
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852 S.W.2d 671 (1993)
Antoine ABDEL-SATER, Appellant,
v.
The STATE of Texas, Appellee.
No. C14-92-00243-CR.
Court of Appeals of Texas, Houston (14th Dist.).
April 1, 1993.
*672 George McCall Secrest, Jr., Houston, for appellant.
Rikke Burke, Houston, for appellee.
Before ROBERTSON, CANNON and BOWERS, JJ.
OPINION
BOWERS, Justice.
Appellant entered a plea of not guilty before the jury to the offense of possession with intent to deliver a controlled substance, namely cocaine, weighing more than 400 grams. TEX.HEALTH & SAFETY CODE ANN. § 481.112. He was convicted and the jury assessed punishment at imprisonment for 80 years.
Appellant argues the trial court erred by not permitting appellant to disclose the terms of plea negotiations; by not requiring the State to disclose the identity of a confidential informant; by failing to charge the jury on a lesser included offense; and by refusing to instruct the jury that mere presence at the scene of a crime is insufficient to support a conviction for possession with intent to deliver. Appellant also argues that the evidence is insufficient. We affirm.
On April 3, 1990, pursuant to a search warrant, officers from the Harris County Sheriff's Department and the Houston Police Department searched appellant's apartment. The officers obtained the warrant based upon information received from a confidential informant who had proven reliable and credible in the past. The officers found evidence that appellant leased the apartment and also found drug paraphernalia; $16,500.00 in cash; three bags containing 9.6 grams of 88.6% pure cocaine; and one kilogram of 84.2% pure cocaine. After obtaining an arrest warrant, the officers arrested appellant the following day.
On April 9, 1990, appellant and his attorney met with an assistant district attorney to discuss appellant becoming an informant. *673 Appellant agreed to provide the State with enough information to indict three individuals for possession or delivery of more than 400 grams of cocaine. The State agreed that if appellant would supply the information within 60 days, and if appellant did not break any state or federal laws, the State would recommend appellant receive deferred adjudication. Appellant and the assistant district attorney signed the plea agreement. Appellant's bond was reduced, and he was released from jail that day. The record is silent as to why the plea agreement was not consummated.
In his first point of error, appellant argues the trial court erred by not allowing appellant to disclose to the jury the terms of the plea agreement. Officer Hill testified that the day after the plea agreement was signed, he received a phone call from appellant. Appellant told Officer Hill that in searching appellant's apartment, the officers had "missed some stuff." Appellant laughed and said "Well, I've gotyou missed three ounces." An hour later, appellant met Officer Hill and gave him three packages of cocaine totalling 81.0 grams. Appellant was not charged with possession of this additional contraband.
The plea agreement prohibited appellant from violating any state or federal laws. Appellant argues that in scrupulously following this requirement, appellant was prejudiced when the State elicited testimony from Officer Hill about appellant's phone call and subsequent act of delivering the 81.0 grams of cocaine to Officer Hill. Appellant argues he should have been allowed to disclose the plea negotiations and the circumstances surrounding his statement and actions.
Generally, statements made in the course of plea discussions are inadmissible. The exception to this general rule applies only when another statement made in the course of plea discussions already has been admitted. TEX.R.CRIM.EVID. 410.
Except as otherwise provided in this rule, evidence of the following is not admissible against the defendant who made the plea or was a participant in the plea discussions:
* * * * * *
(3) any statement made in the course of plea discussions with an attorney for the prosecuting authority which do not result in a plea of guilty or a plea of nolo contendere or which result in a plea of guilty or a plea of nolo contendere is later withdrawn. However, such a statement is admissible in any proceeding wherein another statement made in the course of the same plea or plea discussions has been introduced and the statement ought in fairness be considered contemporaneously with it.
TEX.R.CRIM.EVID. 410.
Appellant entered into plea negotiations with the State. Both appellant and the assistant district attorney signed the plea agreement. While the terms of the contract provided that the agreement was to be effective for 60 days after the initiation date, the negotiations and plea discussions ended when the contract was signed. Appellant's statement and delivery of the cocaine to Officer Hill, the day after the plea agreement was signed, was not part of the original plea negotiations. Because the statement was not part of the plea discussions, the trial court did not abuse its discretion in not allowing appellant to disclose the terms of the plea negotiations to the jury. We overrule appellant's first point of error.
In his second and third points of error, appellant claims the trial court erred by not requiring the State to disclose the identity of the confidential informant, and by refusing to have an in camera hearing to determine whether the informant's testimony would be admissible.
An informant's identity should be revealed when the testimony of the informant is necessary to a fair determination of the issues of guilt or innocence of the accused. TEX.R.CRIM.EVID. 508(c)(2); Bodin v. State, 807 S.W.2d 313, 317-18 (Tex. Crim.App.1991). Before revealing the informant's identity, the informer's potential testimony must significantly aid appellant, *674 and mere conjecture or supposition about possible relevance is insufficient. Appellant has the burden of demonstrating that the informant's identity must be disclosed. Appellant must make a plausible showing of how the informer's information may be important. This court must consider all of the circumstances of the case to determine if the trial court erred by not requiring the State to disclose the informer's identity. Edwards v. State, 813 S.W.2d 572, 580 (Tex.App.-Dallas 1991, pet. ref'd).
Appellant was charged with possession with intent to deliver over 400 grams of cocaine. Appellant acknowledges that the kilogram of cocaine had been secreted in the pant's leg of a pair of blue jeans found in the utility room in his apartment. Appellant argues, however, that the confidential informant was the only witness who could testify that appellant possessed the kilogram of cocaine with the intent to deliver it.
At the hearing on appellant's motion to disclose the informant's identity, Officer Hill testified that he used the information from the informant to obtain the search warrant, and that the informant had been working on this particular case with Officer Hill for three to four weeks.
Officer Hill stated in his affidavit supporting the warrant that "the informant told me that the informant was inside this apartment within the past 24 hours and that while inside this apartment, the informant saw a large number of small, clear, plastic baggies containing cocaine in the kitchen area. The informant also saw a brick of cocaine wrapped in brown paper in this kitchen also. The informant, who had seen cocaine on many occasions in the past, stated that this substance was in fact cocaine. The informant also stated that [appellant] said that the substance was cocaine and that it was for sale."
Appellant argued that the informant's identity was warranted because the informant was a material witness as to whether appellant knowingly committed the act charged. Appellant also argued that the informant's credibility was a material issue in determining the basis and legality of the State's search and seizure.
In his motions to require disclosure of the identity of the informant, appellant requested the following information: the informer's name or address; the informer's prior cooperation; the name and address of the informer's supervisor; the reason the informer became an informant; the informer's prior arrests and conviction record; all statements and memoranda of interviews; the method of payment and amount of payment; and promises and inducements made to the informer by government representatives.
The informant was not present when the warrant was executed and there is nothing in the record to indicate that the informant participated in the offense for which appellant was arrested, charged, and convicted. The informant's testimony was not essential to a fair determination of the issues of appellant's guilt or innocence; therefore, an in camera hearing was not required to determine whether the informant's identity would be admissible. We overrule appellant's second and third points of error.
In his fourth point of error, appellant argues that the trial court erred by failing to charge the jury on the lesser included offense of possession of more than 28 grams but less than 200 grams of cocaine.
This court must apply a two-prong test to determine if an instruction on a lesser included offense was required. First, the lesser offense must be included within the proof necessary to establish the offense charged. Second, there must be some evidence that if appellant is guilty, he is guilty only of the lesser offense. Aguilar v. State, 682 S.W.2d 556, 558 (Tex.Crim. App.1985).[1]
*675 Three separate quantities of cocaine were introduced into evidence: 9.6 grams seized from a sports coat found inside the walk-in closet of appellant's master bedroom; 81 grams that appellant gave Officer Hill the day after appellant was released from jail; and one kilogram of cocaine hidden in a pair of blue jeans found hanging on the utility room door of appellant's apartment.
Appellant concedes that the State linked him to the 9.6 grams and 81 grams of cocaine. Appellant argues that the State failed to link him to the kilogram of cocaine. Because of the State's alleged failure to link appellant to the kilogram of cocaine, appellant contends that the jury could have found that appellant did not possess the kilogram of cocaine; therefore, the jury should have been instructed on the lesser included offense.
Appellant was never charged with possession of the 81 grams of cocaine. He was on trial for possession of the 9.6 grams found in the sports coat and the kilogram found in the blue jeans. If the jury had found that appellant did not possess the kilogram, appellant would have been found guilty of possession of only 9.6 grams of cocaine.
Appellant requested a charge on the lesser included offense of possession of cocaine weighing more than 28 grams and less than 200 grams. The evidence does not indicate that appellant is guilty of that offense. We overrule appellant fourth point of error.
In his fifth point of error, appellant argues the evidence is insufficient, as a matter of law, to support his conviction. In reviewing the sufficiency of the evidence, the appellate court must view the evidence in the light most favorable to the verdict, and must determine whether any rational trier of fact could have found all the essential elements of the crime beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 99 S. Ct. 2781, 61 L. Ed. 2d 560; Jackson v. State, 672 S.W.2d 801 (Tex. Crim.App.1984). The standard of review is the same regardless of whether the case involves direct or circumstantial evidence. Jackson, 672 S.W.2d at 803.
To prove unlawful possession of a controlled substance, the State must show that appellant exercised care, control, and management over the contraband; and that appellant knew that what he possessed was contraband. Humason v. State, 728 S.W.2d 363, 364 (Tex.Crim.App.1987). Appellant argues that although the evidence was sufficient to link appellant to the apartment that was searched, the State did not prove that the apartment was exclusively or solely used or accessed only by appellant.
If the State does not show that appellant was in exclusive possession of the place where the contraband was found, it can not be concluded that appellant had knowledge of or control over the contraband unless there are additional independent facts and circumstances that affirmatively link appellant to the contraband. Cude v. State, 716 S.W.2d 46, 47 (Tex.Crim. App.1986). The facts and circumstances must create a reasonable inference that appellant knew of the controlled substance's existence and exercised control over it. Dickey v. State, 693 S.W.2d 386, 389 (Tex.Crim.App.1984). This court must determine if appellant was in exclusive possession of the apartment and if he was not, if the State established independent facts and circumstances to affirmatively link appellant to the kilogram of cocaine.
The record reveals that when police officers entered the apartment, they found a note pad on which appellant had written "To whom it may concern. My name is Antoine Abdel-Sater. Upon moving into my new place at ... I realize a lot of things that has [sic] not been done like...." In the master bedroom, the police found several receipts, cashier's checks and a checkbook bearing appellant's name and address. The lessor of the apartment testified that appellant was the lessee and the lessor was not aware of anyone else occupying the apartment. Two police officers testified *676 that the second bedroom was unoccupied. The bed did not have sheets on it, and dirty clothes were scattered around as though the bedroom was used as a laundry room.
Appellant maintains that the State only connected appellant to the apartment, and failed to connect appellant to the kilogram of cocaine found in blue jeans hanging up in the utility room, a common area of the apartment. An independent fact, indicating appellant's knowledge and control of the contraband, exists if the contraband was in close proximity to appellant and readily accessible to him. Also, an independent fact exists if the amount of contraband found is large enough to indicate that appellant knew of its presence. Hill v. State, 755 S.W.2d 197, 120 (Tex.App. Houston [14th Dist.] 1988, writ ref'd). If the amount of money found in appellant's possession is more than would normally be carried by an individual, it might be indicative of dealing in narcotics. Oaks v. State, 642 S.W.2d 174, 178 (Tex.Crim.App.1982).
The kilogram of cocaine was found in the apartment leased to appellant. Officer Riddle testified that a kilogram of cocaine is worth $100,000 on the street. Officer Riddle also testified that he found $16,500 in the pocket of a coat hanging in appellant's closet. This was the same pocket in which Officer Riddle discovered 9.6 grams of cocaine.
The State proved appellant exercised care, control, and management over the contraband and that appellant knew that what he possessed was contraband. The State also established independent facts and circumstances to affirmatively link appellant to the kilogram of cocaine.
We find after viewing the facts in this case, that a rational juror could have believed appellant possessed 400 grams or more of cocaine with the intent to distribute. We overrule appellant's fifth point of error.
In his sixth point of error, appellant asserts the trial court erred by refusing to instruct the jury that mere presence at the scene of a crime is insufficient to support a conviction for possession with the intent to deliver. Appellant argues that merely because he was connected to the premises searched and was present as an occupant of those premises, does not, in itself, establish knowledge and control over the contraband in question.
Appellant requested that the jury charge "include language that it is not enough for the State to show that [appellant] was merely present in the vicinity of the controlled substance." The trial court properly refused appellant's request because such an instruction would have constituted a comment on the weight of the evidence. Bass v. State, 830 S.W.2d 142, 147-48 (Tex. App.-Houston [14th Dist.] 1992, no pet.). We overrule appellant's sixth point of error.
Accordingly, we affirm the judgment of the trial court.
NOTES
[1] The Court of Criminal Appeals has recently modified the second-prong of this test noting that it was not the court's intention to change the substantive test, but only to interpret and clarify existing law. The second prong of the test requires that "some evidence must exist in the record that would permit a jury rationally to find that if the defendant is guilty, he is guilty only of the lesser offense." Rousseau v. State, ___ S.W.2d ___ (Tex.Crim.App., No. 70910, delivered February 24, 1993).
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827 F. Supp. 132 (1993)
Josephine COUNIHAN, Plaintiff,
v.
ALLSTATE INSURANCE COMPANY, Defendant.
No. CV 91-4281.
United States District Court, E.D. New York.
August 4, 1993.
*133 Richard B. Lind, New York City, for plaintiff.
Richard J. Inzerillo, P.C., Smithtown, NY, for defendant.
MEMORANDUM AND ORDER
WEXLER, District Judge.
Josephine Counihan ("Plaintiff" or "Counihan") brings this action, pursuant to 28 U.S.C. § 1332, against Allstate Insurance Company ("Defendant" or "Allstate") seeking money allegedly owed to Counihan as a result of Allstate's breach of contract and bad faith refusal to pay Plaintiff's claim for property damage arising under an Allstate homeowner's policy. Now before the Court are motions by both Plaintiff and Defendant for summary judgement pursuant to Rule 56 of the Federal Rules of Civil Procedure. For the reasons discussed below, Allstate's motion is granted and Counihan's motion is denied.
I. Background
Counihan owned a fifty percent interest in a house located at 890 Noyac Road, Noyac, New York ("the property"). On December 9, 1988, she purchased an Allstate insurance policy ("the policy"), whereby Allstate agreed to insure Plaintiff against all risks of loss or damage to her premises and property. The insurance on the property was for an amount not to exceed $98,000.
In February 1989, the United States seized the property and sought its forfeiture, pursuant to the Comprehensive Drug Abuse Prevention and Control Act of 1970, 21 U.S.C. § 881,[1] in a case captioned United States v. Certain Real Property & Premises Known as 890 Noyac Road ("Noyac Road I"). The illegal drug activity giving rise to the forfeiture under § 881 occurred on July 22, 1988. On July 2, 1990, a judgement in favor of the United States was entered in this Court. On October 3, 1991, the United States Court of Appeals for the Second Circuit reversed the judgment of Noyac Road I *134 and remanded the case back to this Court. United States v. Certain Real Property and Premises known as 890 Noyac Road, 945 F.2d 1252 (2d Cir.1991). On May 27, 1992, on retrial, a judgement in favor of the United States was again entered ("Noyac Road II"). Finally, on February 4, 1993, the Second Circuit affirmed the forfeiture in Noyac Road II.[2]
On November 1, 1990, there was a fire on the property, resulting in the total loss of the residence located there. The Allstate insurance policy was in effect on that date and Counihan has made a claim for coverage under the policy.
II. Discussion
In this case of first impression, the question the Court must decide is as follows: where, under 21 U.S.C. § 881, insured property is forfeited to the government retroactive to a time prior to the purchase of the insurance policy, does such retroactive forfeiture also act to render the policy void through retroactive divestiture of the insurable interest in the property?
Were there no relation back provision in the forfeiture statute, that is, were the forfeiture deemed effective only as of the date of final judgement, there would seem to be no question that Counihan, who had purchased her policy and whose loss had occurred well before May 27, 1992, the date judgement was entered in Noyac Road II, could have recovered under the policy.[3] However, § 881(h) provides that "[a]ll right, title, and interest in property described in subsection (a) of this section shall vest in the United States upon commission of the act giving rise to forfeiture under this section." Therefore, Counihan was divested of her interest in the property as of the date of the crime, July 22, 1988.
It is the purpose of § 881 to put teeth into the government's ability to combat the drug trade. See United States v. A Parcel of Land, Buildings, Appurtenances, and Improvements, Known as 92 Buena Vista Ave., Rumson, N.J., ___ U.S. ___, ___, 113 S. Ct. 1126, 1145, 122 L. Ed. 2d 469 (1993) (Kennedy, J., dissenting) (purpose of forfeiture under § 881 is "the desire to lessen the economic power of ... drug enterprises"). Were this Court to hold that, despite the retroactive operation of § 881 as to the property itself, insurance proceeds could be obtained where the property subject to forfeiture was destroyed, drug traffickers would have an incentive to commit arson in an attempt to avoid the effect of the forfeiture laws.[4]
Counihan, however, views this action as a typical defeasible title case. Relying on Deck v. Chautauqua County Patrons' Fire Relief Ass'n, 73 Misc. 2d 1048, 343 N.Y.S.2d 855 (1973), she argues that "the proper theory in ... cases of defeasible title is that the insured's claim to property is to be viewed as one of substance and provided it is not tainted *135 with fraud should be protected regardless of its ultimate validity."[5]Id. 343 N.Y.S.2d at 871. In Deck, a written instrument purporting to be a contract for the sale and purchase of real property had been executed and delivered by the parties. The purchasers paid a substantial down payment, entered into possession, and were considered by all concerned to be vendees under a contract to purchase the property. They obtained a policy of fire insurance to protect their interest therein, and a major fire loss was thereafter sustained. It was subsequently determined, in independent litigation between the purchasers and the sellers, that the purported contract was not a binding agreement. The defendant insurance company then refused to honor the fire claim, and the insureds brought suit. The court held that the plaintiffs possessed an insurable interest, despite the prior judicial determination that the underlying contract was unenforceable. Counihan argues that her own insurable interest likewise be recognized, despite the ultimate defeasement of her title to the insured property.
The Court first notes that Deck's formulation of "the proper theory in ... cases of defeasible title" is not binding on this Court.[6] Moreover, Deck is clearly distinguishable. Although Counihan, like the plaintiffs in Deck, obtained her policy at a time when she appeared to be the owner of the property, no relation back doctrine was operative in Deck.
Defeasible title cases generally deal with the situation created when parties enter into a transaction flawed by some technical irregularity.[7] At the time of the transaction, the parties believe title has passed. Because of the technical flaw, however, the possibility exists that the transaction will be annulled at some time in the future. The defeasibility of the title is not due to any wrongdoing by the insured;[8] rather, it is the result of imperfect lawyering. Moreover, the rationale behind the requirement of an insurable interest that wagering contracts are contrary to public policy, see Nelson v. New Hampshire Fire Ins. Co., 263 F.2d 586, 589-90 & n. 5 (9th Cir.1959) is not offended by allowing what had been believed to be the insured's valid insurable interest to remain valid.
The instant case, by contrast, deals not with the ordinary case of defeasible title, but with title which has been forfeited to the government in connection with the insured's illegal drug activity. Furthermore, as discussed above, the legislative purpose in enacting § 881 and public policy concerns favor a holding that the retroactive forfeiture of property under § 881 also acts to render any insurance policy on that property void through retroactive divestiture of the owner's insurable interest in that property.
Allstate maintains that Counihan is not entitled to the proceeds of the policy, arguing *136 that she lost her insurable interest in the property as a result of the forfeiture. All-state relies on the Insurance Law of the State of New York, which provides that:
No contract or policy of insurance on property made or issued in this state, or made or issued upon any property in this state, shall be enforceable except for the benefit of some person having an insurable interest in the property insured. In this article, "insurable interest" shall include any lawful and substantial economic interest in the safety or preservation of property from loss, destruction or pecuniary damage.
N.Y.Ins.Law § 3401 (McKinney 1985).
The New York Court of Appeals has defined an insurable interest as existing when a person "has such a relation or connection with, or concern in, such subject matter that he will derive pecuniary benefit or advantage from its preservation, or will suffer pecuniary loss or damage from its destruction, termination, or injury by the happening of the event insured against." Scarola v. Insurance Co. of N.A., 31 N.Y.2d 411, 340 N.Y.S.2d 630, 631-32, 292 N.E.2d 776, 777 (1972). A lack of an insurable interest in the property insured renders the property insurance void and unenforceable. Etterle v. Excelsior Ins. Co. of N.Y., 74 A.D.2d 436, 428 N.Y.S.2d 95, 96 (1980).
In light of the final judgement entered against Counihan, it is clear that at the time she purchased the policy, Plaintiff was not the owner of 890 Noyac Road. As a stranger, she would not "derive pecuniary benefit or advantage from its preservation, [nor] suffer pecuniary loss or damage from its destruction," and therefore had no insurable interest to support the policy she later purchased. Scarola, 340 N.Y.S.2d at 631-32, 292 N.E.2d at 777. Accordingly, this Court holds that under § 881, where property, otherwise duly insured, is forfeited to the government retroactive to a time prior to the purchase of the insurance policy, such forfeiture renders the policy void by retroactively divesting the policyholder of her insurable interest in the property.[9]
III. Conclusion
Accordingly, for the reasons stated above, Plaintiffs motion for summary judgement is denied. Defendant's motion for summary judgement is granted.
SO ORDERED.
NOTES
[1] Section 881 provides in pertinent part:
(a) Property subject
The following shall be subject to forfeiture to the United States and no property right shall exist in them:
....
(7) All real property including any right, title, and interest (including any leasehold interest) in the whole of any lot or tract of land and any appurtenances or improvements, which is used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of, a violation of this subchapter punishable by more than one year's imprisonment....
....
(h) Vesting of title in the United States
All right, title, and interest in property described in subsection (a) of this section shall vest in the United States upon commission of the act giving rise to forfeiture under this section.
[2] In this unpublished decision, the Second Circuit rejected Counihan's counterclaim for damages against the government. The court noted that "the issue is ... moot because appellant has no property interest in the premises."
[3] An in rem forfeiture proceeding is an action against the res, under the legal fiction that the forfeited object is itself the guilty party. Various Items of Personal Property v. United States, 282 U.S. 577, 581, 51 S. Ct. 282, 283, 75 L. Ed. 558 (1931); see also Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 680-86, 94 S. Ct. 2080, 2090-93, 40 L. Ed. 2d 452 (1974) (recounting the development of the law of forfeitures). The object subject to forfeiture is the defendant in such a proceeding; the personal rights of the object's owner are unaffected by an in rem forfeiture. Accordingly, if the res is destroyed, the government takes nothing.
A contract of insurance is a personal contract between the property owner and the insurer. McGraw-Edison Credit Corp. v. Allstate Ins. Co., 62 A.D.2d 872, 406 N.Y.S.2d 337, 339 (1978); City of Utica v. Park-Mill Corp., 41 N.Y.S.2d 248, 252 (Sup.Ct.1943). See generally 4 John A. Appleman & Jean Appleman, Insurance Law and Practice § 2105 (1969). The contract is about the property, but is not equivalent to the property. It cannot be said that when the property is destroyed, triggering the insurer's contractual obligation to pay money, that money is substituted for the property; the money merely compensates the policyholder for loss of the insured object. In the instant case, the government has not sought forfeiture of the insurance proceeds. Moreover, as a non-party to the insurance contract, it can have no claim to be so compensated. See Park-Mill, 41 N.Y.S.2d at 252.
[4] The Court notes that Allstate called the fire that destroyed Counihan's residence "suspicious in nature." (Brown Aff. Opp'n to Cross Mot. Ex. A at 2.)
[5] See also Appleman, Insurance Law and Practice § 2184 ("The theory is, in such cases of defeasible title, that the claim to property is one of substance, regardless of its ultimate validity in the event of direct contest between vendor and purchaser, which contest may also never occur.")
[6] In diversity cases, a federal court must ordinarily apply the substantive law of the state in which it sits. Erie R.R. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938); cf. Rules of Decision Act, 28 U.S.C. § 1652 (state statutes binding on federal courts). However, "the Erie doctrine is inapplicable to claims or issues created and governed by federal law, even if the jurisdiction of the federal court rests on diversity of citizenship." Maternally Yours, Inc. v. Your Maternity Shop, Inc., 234 F.2d 538, 541 (2d Cir. 1956). As the instant case turns upon the construction of a federal statute, 21 U.S.C. § 881, this Court is free to afford Deck (which is not a New York Court of Appeal decision and therefore would not bind this Court under Erie) and other New York state court decisions as much or as little weight as it sees fit.
[7] E.g., Still v. Travelers Indem. Co., 374 S.W.2d 95 (Sup.Ct.Mo.1963) (technically defective deed); Ward v. Concordia Fire Ins. Co. of Milwaukee, 218 Mo.App. 98, 262 S.W. 450 (1924) (purchaser from guardian of insane person did not obtain title because of defect in proceedings against insane person). See generally Appleman, Insurance Law and Practice, § 2184.
[8] In rare cases, it has been held that even where the voidability of title was due to fraud by the grantee on the grantor, the insurable interest of the grantee was not defeated. Cetkowski v. Knutson, 163 Minn. 492, 204 N.W. 528 (1925); Phoenix Ins. Co. v. Mitchell, 67 Ill. 43 (1873). However, equitable considerations mandated the result in those cases, and the insured was required to turn over the insurance proceeds to the defrauded grantor.
[9] Plaintiff also contends that under New York law, a party can retain in insurable interest in property even when he no longer possesses legal title. See Etterle, 428 N.Y.S.2d at 96-97 (collecting authorities). While these cases do support the proposition advanced, that proposition is in-apposite here. Allstate does not seek to avoid payment under Plaintiff's policy because her legal title, valid at the inception of the policy, terminated prior to the fire loss. Instead, All-state relies upon the fact that Plaintiff's title was divested before she ever purchased the policy. She cannot "retain" an insurable interest that she never had to begin with.
Counihan further attempts to show that in New York, when an insurer seeks to disclaim liability "through a purported exclusion clause in the policy," the insurer must prove that the insured clearly is not covered by the policy. As the instant case has nothing to do with an exclusion clause, the Court summarily rejects this argument.
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01-03-2023
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/1458584/
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827 F. Supp. 536 (1993)
UNITED STATES of America,
v.
Samuel HATCH and James Cooper, Jr.
No. FCR 93-20.
United States District Court, N.D. Indiana, Fort Wayne Division.
July 14, 1993.
*537 David H. Miller, for U.S.
Richard E. Beers, Donald C. Swanson, Jr. (Ret.), Fort Wayne, IN, for defendants.
*538 ORDER
WILLIAM C. LEE, District Judge.
This case is before the court on the Motion to Quash Illegal Arrest and Suppress Evidence filed by the defendants, Samuel Hatch and James Cooper, Jr. on May 26, 1993.[1] An evidentiary hearing was held on June 4, 1993, at which time the court took the matter under advisement and directed the parties to file supportive briefs. The defendants filed their "Memorandum of Law in Support of Motion to Quash Illegal Arrest and Suppress Evidence" on June 14, 1993. The government filed its response on June 15, 1993, and the defendants filed a reply on June 21, 1993. For the following reasons, the motion is DENIED.
Factual Background[2]
On the morning of April 20, 1993, Special Agent Kenneth E. Ivan of the Federal Bureau of Investigation Fort Wayne office, received a telephone call from an unknown individual. This anonymous tipster informed Agent Ivan that two black males, identified as Sam Hatch and James Cooper, had left the Miami, Florida area on April 19, 1993, at approximately 6:30 p.m. and were en route to Fort Wayne, Indiana with approximately five (5) kilograms of cocaine. The tipster described the vehicle the men would be driving as an older model Ford pick-up truck, white and gray in color, with wide tires, a tinted windshield and Florida license plate number LPS 71K. The tipster indicated that the five kilograms would be stored in the vehicle's gas tank. The tipster also advised that the two individuals would be arriving on U.S. Highway 33 into Fort Wayne, and that the cocaine would be delivered to an unspecified house just off Highway 33.
Agent Ivan forwarded this information to FBI Special Agent John McGauley who contacted Indiana State Trooper Rudy Eidam of the Allen County Drug Task Force. Agent McGauley requested the Task Force's assistance in intercepting the vehicle. Task Force member and Allen County Police Officer Steven Haxby used a computer simulator to calculate the approximate driving time and concluded that the vehicle would arrive in the Fort Wayne area within 22-24 hours of its departure from Miami, Florida. Various members of the Allen County Drug Task Force were notified and gathered south of Fort Wayne, near the intersection of U.S. Highway 33 and Indiana Highway 101 in Pleasant Mills, Indiana.
At about 5:40 p.m. on April 20, 1993, a vehicle similar to the one described by the anonymous tipster was spotted driving north on Highway 33. Members of the Task Force corroborated all the information the tipster had given regarding the vehicle and its occupants. The description of the truck (an older model Ford pick-up truck, white and gray in color, with wide tires, a tinted windshield and a Florida license plate), the license plate number, the occupants being two black males, the route of travel, and the time of arrival were all confirmed as matching the information in the tip. Furthermore, a check on the license plate numbers had identified the owner of the truck as Samuel Hatch. Officer Haxby, who had prior dealings with Samuel Hatch, visually identified Hatch as the driver through the windshield of the passing truck.
After the information in the tip was verified, Trooper Eidam radioed Trooper Tony Knox of the Indiana State Police, ordering Knox to use his marked squad car to pull Hatch's truck over. Knox was waiting at the southern boundary of Allen County on Highway 33. When Hatch and Cooper passed Knox, the Trooper pulled out behind the defendants and activated his flashing red emergency lights, indicating that the defendants should pull off the road. Approximately *539 one mile north of the southern boundary of Allen County on Highway 33, Hatch and Cooper pulled to the side of the road, where Knox stopped the defendants. Trooper Knox pulled his police squad car in just behind the Hatch's truck, on the shoulder of the road. Three other law enforcement vehicles quickly converged on Hatch's truck. Trooper Eidam pulled his car in front of Hatch's truck, onto the berm of the four lane divided highway. Allen County Officer Haxby stopped his unmarked police car in the right lane of the highway adjacent to Knox's vehicle. Agent McGauley, with his passenger Agent Steven Kell, pulled in behind Trooper Knox's vehicle in McGauley's unmarked FBI vehicle.
Upon stopping, Hatch promptly got out of his truck.[3] Trooper Knox immediately directed Hatch to get back into the truck. However, Hatch continued toward Trooper Knox, and Knox drew his weapon, ordering Hatch to return to the truck and place his hands upon the dashboard.[4] Three other officers surrounding the truck, Officer Haxby, Agent Kell and Trooper Eidam, also quickly drew their weapons, pointing them in Hatch's direction, and directing Hatch to comply with Knox's order. After the officers drew their weapons, Hatch complied with Knox's order by reentering the truck and placing his hands on the dashboard. The officers returned their weapons to their holsters when Hatch reentered his truck.[5]
At the time he pulled Hatch and Cooper over, Trooper Knox did not have his gun drawn; the officers did not have their weapons drawn until Hatch made the threatening gesture towards Trooper Knox. The incident in which the officers' weapons were drawn lasted very briefly.
After Hatch returned to the truck, and in accordance with Trooper Knox's instructions, Cooper then exited the truck through the passenger door. Upon Cooper's exit from the truck, Knox frisked Cooper for weapons. Finding no weapons, Knox directed Cooper to stand at the back of the truck. Trooper Knox next ordered Hatch to exit the truck. Knox then patted Hatch down for weapons, found no weapons, and escorted Hatch back near his squad car. At that time, Knox advised Hatch of his Miranda[6] rights. Hatch informed Knox that Hatch had owned the truck for some time.
Meanwhile, Agent McGauley and Agent Kell approached Cooper. McGauley testified that he identified himself by showing Cooper his credentials and his FBI badge. McGauley requested Cooper to accompany him back to his FBI vehicle to discuss the reason for the stop. The officers testified that April 20, 1993, was a windy and brisk day on the open highway and they wanted to question the suspects out of the cold.[7] McGauley further testified that he told Cooper he was absolutely not under arrest and that Cooper agreed to follow McGauley to McGauley's vehicle. Upon McGauley's suggestion, they walked toward McGauley's unmarked vehicle, with McGauley in front, followed by Cooper, and then Kell. Officer Haxby followed shortly thereafter.
Agent McGauley informed Cooper that Cooper was not under arrest and that he was free to leave. McGauley also advised Cooper of his rights when they were seated in McGauley's vehicle. Although Cooper testified that McGauley never informed him that he was free to leave and never informed him of his rights, McGauley, Kell, and Haxby testified that McGauley had so advised Cooper.[8] The court finds the officers more credible, *540 and that Cooper was told that he was not under arrest, that he was free to leave, and was advised of his rights.
Upon reaching McGauley's vehicle, McGauley entered the driver's side door, Cooper entered the passenger's side door, and Officer Haxby sat in back seat. Agent Kell stood outside the passenger door, where, with the window down, he listened to the conversation. McGauley informed Cooper of the information that the tipster had given them, and then asked Cooper if the information was correct. At first, Cooper denied knowing of any cocaine in the truck. After McGauley repeated his question two or three times, Cooper answered that there were "two kilos" in a suitcase behind the driver's seat.[9] The officers then left the car and went to talk to Hatch.
McGauley approached Hatch, identified himself as an FBI agent, told Hatch that he was not under arrest, and told him that he was free to go.[10] McGauley advised Hatch of his rights and then told him that they had reason to believe the truck contained cocaine. Hatch denied knowing of any cocaine in the truck. McGauley asked Hatch if he would consent to a search of the truck and Hatch orally agreed to a search. McGauley asked Hatch if he would sign a consent to search form and Hatch agreed. Knox prepared a consent to search form which McGauley carefully read to Hatch, as Hatch indicated that he had little education and could not read or write well. After reading each line on the consent form, McGauley paused to ask Hatch if he understood. After each line, Hatch stated that he did so understand. At 6:13 p.m., Hatch signed the consent form.
Agent McGauley, Trooper Eidam and other officers searched the truck and found a brown, soft-sided suitcase behind the driver's seat. Inside the unzipped suitcase were two packages wrapped in duct or packaging tape which the officers believed to contain cocaine. Eidam and Haxby then performed a field test on the contents of the two packages. One package contained $23,000 in U.S. currency, and the other package tested positive for cocaine. Both defendants were then formally placed under arrest and transported to the Allen County Jail.
The officers arranged for Hatch's truck to be towed to the Indiana State Police Post at Fort Wayne, where it was inventoried by Trooper Knox. Having sheltered the truck from the wind, Judd, Knox's canine, performed a narcotics search of the truck. Judd alerted under the back end of the truck near the gas tank.
The truck was secured until a search warrant was issued the next day by United States Magistrate Judge Roger B. Cosbey. While executing the warrant, the officers had the gas tank removed. The tank contained a false compartment in which the officers found four packages similar to those seized the previous day from the suitcase which was found behind the driver's seat. The four packages from the gas tank area also contained a white powdery substance which field tested positive for cocaine. In total, the truck contained 5 packages of cocaine and one package of $23,000 in U.S. currency. On April 21, 1993, both defendants were charged with violations of Title 21, United States Code, Section 841(a)(1), possession with intent to distribute more than 500 grams of cocaine.
*541 DISCUSSION
Samuel Hatch and James Cooper, Jr. maintain that they were subjected to an illegal search and seizure in violation of the Fourth Amendment, and therefore, all seized items should be suppressed from the evidence at their trial, pursuant to Wong Sun v. United States, 371 U.S. 471, 83 S. Ct. 407, 9 L. Ed. 2d 441 (1963). Hatch and Cooper argue: (1) that the "investigative stop" encounter was not based upon a reasonable suspicion; (2) that the encounter became an unconstitutional arrest when, with the truck surrounded by four law enforcement vehicles, the four officers leveled their service revolvers on Hatch and ordered him to re-enter his truck; and 3) that they did not freely consent to the search of Hatch's truck. The government argues that the law enforcement officers had a reasonably articulable suspicion of criminal activity which would justify an investigatory stop, that the stop performed was merely a short, investigatory detention which was minimally intrusive into the defendants' privacy, and that the defendants voluntarily consented to the search.
The court is thus called upon to decide the following three issues: First, whether the information given by the anonymous tipster gave the police reasonable suspicion or probable cause; second, whether the Hatch and Cooper were subjected to an investigatory stop, or whether they were subjected to such a degree of force that the stop was in fact an arrest; and third whether the defendants freely and voluntarily consented to the search.
The Legality of the Initial Stop
The first challenge posed by the defendants is that the information in the anonymous tip and the subsequent corroboration of that information did not give the police reasonable suspicion to make an investigatory stop or probable cause to make an arrest.
The court recognizes that not all encounters between the police and citizens implicate the Fourth Amendment's prohibition on unreasonable searches and seizures. Terry v. Ohio, 392 U.S. 1, 19, n. 16, 88 S. Ct. 1868, 1879, n. 16, 20 L. Ed. 2d 889 (1968); United States v. Edwards, 898 F.2d 1273, 1277 (7th Cir.1990). Three categories delineate the extent of Fourth Amendment protections associated with police-citizen encounters. In United States v. Johnson, 910 F.2d 1506, 1508 (7th Cir.1990), cert. denied 498 U.S. 1051, 111 S. Ct. 764, 112 L. Ed. 2d 783 (1991), the Seventh Circuit reviewed those categories and characterized them as follows:
The first category is an arrest, for which the Fourth Amendment requires that police have probable cause to believe that a person has committed or is committing a crime. The second category is an investigatory stop, which is limited to a brief, non-intrusive detention. This is also a Fourth Amendment `seizure,' but the officer need only have specific and articulable facts sufficient to give rise to a reasonable suspicion that a person has committed or is committing a crime. The third category involves no restraint on the citizen's liberty, and is characterized by an officer seeking the citizen's voluntary cooperation through non-coercive questioning. This is not a seizure within the meaning of the Fourth Amendment.
Johnson, 910 F.2d at 1508 (citations omitted); United States v. Williams, 945 F.2d 192, 195 (7th Cir.1991). With regard to the third category, the consensual encounter, "the degree of suspicion that is required is zero." United States v. Serna-Barreto, 842 F.2d 965, 966 (7th Cir.1988); Williams, 945 F.2d at 195.
In this case, the police unquestionably restrained the defendants' liberty to some degree by pulling over their truck, thus, the encounter must have been at least an investigatory stop. Terry authorizes an investigatory stop when the police have reasonably articulable suspicion of criminal activity. Id. 392 U.S. at 21-22, 88 S.Ct. at 1879-80. Reasonable suspicion is determined by the totality of the circumstances. Alabama v. White, 496 U.S. 325, 330, 110 S. Ct. 2412, 2416, 110 L. Ed. 2d 301 (1990), (citing United States v. Cortez, 449 U.S. 411, 417, 101 S. Ct. 690, 695, 66 L. Ed. 2d 621 (1981)). As the Supreme Court stated:
Reasonable suspicion is a less demanding standard than probable cause not only in the sense that reasonable suspicion can be *542 established with information that is different in quantity or content than that required to establish probable cause, but also in the sense that reasonable suspicion can arise from information that is less reliable than that required to show probable cause.
White, 496 U.S. 325, 330, 110 S.Ct. at 2416.
Additionally, the Seventh Circuit further explain this concept in United States v. Ocampo, 890 F.2d 1363, 1367-1368 (7th Cir. 1989):
In Terry v. Ohio, 392 U.S. 1, 88 S. Ct. 1868, 20 L. Ed. 2d 889 (1968), the Supreme Court held that consistent with the fourth amendment, a police officer who observes suspicious activity may, though he lacks the probable cause traditionally necessary to make an arrest, stop an individual briefly to investigate the circumstances provoking the suspicion, provided that the officer is "able to point to specific and articulable facts which, taken together with rational inferences from those facts, reasonably warrant that intrusion." Id. at 21, 88 S.Ct. at 1880. A Terry investigatory stop is a brief detention which gives officers a chance to verify (or dispel) well-founded suspicions that a person has been, is, or is about to be engaged in criminal activity. To determine whether an officer's suspicion of criminal activity was reasonable, a court must evaluate the totality of the circumstances as they appeared to the officer at the time of the stop. United States v. Cortez, 449 U.S. 411, 418, 101 S. Ct. 690, 695, 66 L. Ed. 2d 621 (1981).
The government argues that the combination of the anonymous tip and the subsequent verification of the facts in that tip provided the officers the reasonable suspicion to stop the defendants' truck. The defendants argue that an anonymous tip in and of itself does not provide sufficient reasonable suspicion for officers to stop a vehicle. As the Supreme Court has noted, an anonymous tip standing alone would not warrant a man of reasonable caution in the belief that a stop was appropriate. White 496 U.S. at 329, 110 S.Ct. at 2416, (citing Carroll v. United States, 267 U.S. 132, 45 S. Ct. 280, 69 L. Ed. 543 (1925)). However, as the Court further observed, an anonymous tip coupled with independent corroboration by the police of significant aspects of the informer's predictions may impart sufficient indicia of reliability to justify an investigatory stop of a suspect's car. White, 496 U.S. at 332, 110 S.Ct. at 2417.
When an anonymous tip contains a range of details relating not just to easily obtained facts and conditions existing at the time of the tip, but to future actions of third parties ordinarily not easily predicted, the information will likely have the sufficient indicia of reliability to justify an investigatory stop. White, 496 U.S. at 332, 110 S.Ct. at 2417; see also, Illinois v. Gates, 462 U.S. 213, 245, 103 S. Ct. 2317, 2335-36, 76 L. Ed. 2d 527 (1983). It is reasonable for the police to believe that a person with access to information about a person's future behavior is likely to also have access to reliable information about that individual's illegal activities. White, 496 U.S. at 332, 110 S.Ct. at 2417.
In White, the anonymous tip provided information regarding the defendants car, the approximate time of departure, and the destination of the defendant. Id. 496 U.S. at 327, 110 S.Ct. at 2414. Even though not all the details mentioned by the tipster were verified in that case, such as the name of the defendant and the precise apartment from which she left, the Supreme Court held that the independent corroboration by the police of most of the tipsters information satisfied the totality of the circumstances test. Id. 496 U.S. at 332, 110 S.Ct. at 2417.
In the present case, the tipster gave specific information regarding Hatch's vehicle, including make, color, width of tires, tint of windshield, and license tag numbers. The tipster also predicted the identity, race, gender and number of the occupants, the location, amount and quantity of the narcotics, and importantly, the defendants' destination. This last prediction about the defendants' destination is exactly the kind of future behavior which White and Gates said could only be known by those with reliable information.
Furthermore, the police verified all the information on Hatch's truck including the license tag numbers. Most importantly, the police visually identified Hatch as the driver *543 at a location approximately 1,300 miles away from the point of departure, Miami, Florida, at a time which would correlate with the departure time given in the tip. Therefore, given the quantity and quality of the information, and the officers' independent corroboration of the tipster's information, the court concludes that, in light of the totality of the circumstances, the police had reasonable suspicion to make an investigatory stop of Hatch and Cooper.
The court finds, and the government does not dispute that the information provided by the tipster, and the independent corroboration by the police, did not furnish the officers with probable cause at the time of the stop.[11] Thus, upon initiation of the stop, the officers could perform a limited investigatory stop, but could not make an arrest. Therefore, based on the foregoing, under these circumstances the officers had a particularized and objective basis to make an investigatory stop.
The Impact of the Officers Drawing Their Weapons
Given that at the time the officers stopped Hatch and Cooper, the police had reasonable suspicion to stop, but not probable cause to arrest the defendants, the court now turns to the second issue of whether the officers made a limited investigatory stop or whether the defendants were subjected to such a show of force that the stop was in fact an arrest. Hatch and Cooper argue that even if the officers' stop of Hatch's truck was supported by reasonable suspicion, the officers' conduct went beyond the brief investigatory stop that Terry permits. They contend that an arrest without probable cause occurred when the four officers drew their weapons and pointed them at Hatch. The government, however, argues that the officers' stop of the defendants was temporary, lasting no longer than necessary, was by means of least intrusion, and was not transformed into an arrest by the fact that the officers drew their weapons. Accordingly, the court must determine "whether the officer's actions were reasonably related in scope to the circumstances surrounding the Terry stop." Ocampo, 890 F.2d at 1368. In light of the facts of this case, this is a close question.
Since an investigatory stop is based upon less than probable cause, its scope must be limited, it must be temporary lasting no longer than necessary, and it must employ the least intrusive means reasonably available to promptly verify or dispel the suspicion. United States v. Teslim, 869 F.2d 316, 322 (7th Cir.1989) (citing, Florida v. Royer, 460 U.S. 491, 500, 103 S. Ct. 1319, 1325, 75 L. Ed. 2d 229 (1983)). The Seventh Circuit has indicated that the proper test for determining whether a given encounter rises to the level of a fourth amendment seizure is "if, in the totality of the circumstances, a reasonable person would not believe that his freedom of movement is restrained, or believes that he remains at liberty to disregard a police officer's request for information, a seizure has not occurred." Edwards, 898 F.2d at 1276. An arrest has occurred when "in view of all the circumstances surrounding the incident, a reasonable person would have believed he was not free to leave." Michigan v. Chesternut, 486 U.S. 567, 108 S. Ct. 1975, 100 L. Ed. 2d 565 (1988); United States v. Mendenhall, 446 U.S. 544, 100 S. Ct. 1870, 64 L. Ed. 2d 497 (1980). In United States v. Borys, 766 F.2d 304 (7th Cir.1985), cert. denied 474 U.S. 1082, 106 S. Ct. 852, 88 L. Ed. 2d 893 (1986), the Seventh Circuit set forth three factors relevant for determining whether a reasonable person would feel free to leave and disregard a police officer's request for information: (1) the conduct of the police; (2) the person of the individual citizen; and (3) the physical surroundings of the encounter. See also United States v. Novak, 870 F.2d 1345 (7th Cir.1991).
However, even given these guidelines, courts have been unable to develop a brightline test to determine when, given the "endless variation in facts and circumstances," police-citizen encounters exceed the bounds of mere investigative stops. Ocampo, 890 F.2d at 1368-69 (quoting, Florida v. Royer, 460 U.S. at 506-07, 103 S.Ct. at 1329). The Supreme Court, and the Seventh Circuit, as *544 well as other courts have agreed that depending upon the facts of each case, an officer can point a gun at a suspect without automatically transforming an investigatory Terry stop into an arrest. See United States v. Hensley, 469 U.S. 221, 235, 105 S. Ct. 675, 684, 83 L. Ed. 2d 604 (1985); Ocampo, 890 F.2d at 1369; and Serna-Barreto, 842 F.2d at 968.
In Hensley, the Supreme Court briefly commented that when a police officer had his gun drawn and pointed in the air while approaching the car of an armed robbery suspect who was reported to be armed and dangerous, the officer's conduct was reasonable and did not transform the Terry stop into an arrest. Hensley, 469 U.S. at 235, 105 S.Ct. at 684. There, the court concentrated on the fact that the suspect was reported to be armed and dangerous, in ruling that police officers are
authorized to take such steps as [are] reasonably necessary to protect their personal safety and to maintain the status quo during the course of the [Terry] stop. The ... officers' conduct was well within the permissible range in the context of suspects who are reported to be armed and dangerous.
Hensley, 469 U.S. at 235, 105 S.Ct. at 683-684.
In Ocampo, the Seventh Circuit court agreed, and quoted Hensley, observing:
In general, officers may take such steps as are "reasonably necessary to protect their personal safety and to maintain the status quo" so that the limited purposes of the stop may be achieved. United States v. Hensley, 469 U.S. 221, 105 S. Ct. 675, 83 L. Ed. 2d 604 (1985). As indicated by the language in Terry, the question of whether a seizure is an investigatory stop or an arrest involves the determination of whether the degree of intrusion into the suspect's personal security was reasonably related in scope to the circumstances at hand. Terry, 392 U.S. at 19-20, 88 S.Ct. at 1878-79. In reviewing the officers' actions, we take note of the admonition that the "circumstances before [the officer] are not to be dissected and viewed singly; rather, they must be considered as a whole." United States v. Hall, 525 F.2d 857, 859 (D.C.Cir.1976).
Ocampo, 890 F.2d at 1369.
The Ocampo panel then found that since there is no per se rule against the use of a weapon during an investigatory stop, the courts addressing the issue must be guided by the following general guideline: "Whether the officer's actions were reasonably related in scope to the circumstances surrounding the Terry stop." Id. 890 F.2d at 1368 (emphasis added); see also United States v. Lechuga, 925 F.2d 1035, 1039-1040 (7th Cir. 1991). The nature of the crime under investigation, the degree of suspicion, the location of the stop, the time of day and the reaction of the suspect to the approach of the police are all facts which bear on the issue of reasonableness. Ocampo, 890 F.2d at 1369; Serna-Barreto, 842 F.2d at 967. In assessing the reasonableness of such police action, courts cannot be blind to "the need for law enforcement officers to protect themselves and other prospective victims of violence in situations where they may lack probable cause for an arrest." Terry, 392 U.S. at 20, 88 S.Ct. at 1881; Ocampo 890 F.2d at 1369. The police officer must be allowed "to pursue his investigation without fear of violence." Adams v. Williams, 407 U.S. 143, 146, 92 S. Ct. 1921, 1923, 32 L. Ed. 2d 612 (1972); Ocampo 890 F.2d at 1369.
In Ocampo, two law enforcement officers approached suspected drug traffickers who were believed to be carrying a large shipment of drugs. Id. 890 F.2d at 1369. The suspects were seated in a car and the officers did not have them in full view, and additionally, the officers observed Ocampo fumbling under the seat with an unseen object. Id. Under those circumstances, the Seventh Circuit held that the officers' conduct was not so intrusive and unreasonable as to transform an investigatory stop into an arrest when one officer pointed a gun at the suspect during his approach. Id. 890 F.2d at 1370.
In that case the court did note that the officers "show of force was highly intrusive and under some circumstances would certainly be tantamount to an arrest." Id. 890 F.2d at 1369. However, the court noted that the *545 fact that the police could have executed the stop without the use of a weapon does not make the stop unreasonable. Id. 890 F.2d at 1370. As the Supreme Court has recognized, "[t]he fact that the protection of the public might, in the abstract, have been accomplished by `less intrusive' means does not, by itself, render the search unreasonable." Cady v. Dombrowski, 413 U.S. 433, 447, 93 S. Ct. 2523, 2531, 37 L. Ed. 2d 706 (1973); Ocampo, 890 F.2d at 1370.
The Seventh Circuit also addressed the distinction between a stop and an arrest in the context of drawn guns in Serna-Barreto:
The distinction between a stop and an arrest is one of degree, so it is not surprising that the courts have had difficulty in coming up with a bright-line test. Instead they have tended to follow the laundry-list approach, well illustrated by the list (not exhaustive) of factors (all relevant, none decisive, and no indication of how to weigh or compare them) in United States v. White, 648 F.2d 29, 34 (D.C.Cir.1981): officer's intent, impression conveyed, length of stop, questions asked, search made. Length of time seems the most important consideration in deciding whether a restraint is a mere stop or a full-fledged arrest, because it is a direct measure of the degree to which the citizen's freedom of action has been interfered with. But it cannot be the only factor. Remember that we are trying to balance the individual's interest in being left alone by the police with the community's interest in effective enforcement of the criminal laws.
Serna-Barreto, 842 F.2d at 966.
In Serna-Barreto, the court held that an illegal arrest had not occurred because the conduct of the police officers was reasonable under the circumstances. Id. 842 F.2d at 968. There, the officer pointed his gun at Serna-Barreto when he ordered her out of a car. Id. 842 F.2d at 966. The court ruled that this was a lawful stop because: the encounter occurred at night; the officers had reasonable suspicion that the suspects were involved in narcotics offenses; many drug traffickers are armed and they sometimes shoot policemen; the officer pointed his gun to protect himself; the suspects outnumbered the officers; the suspects were seated in a car and thus were not in full view of the approaching officer; and finally, Serna-Barreto testified that she was not scared by the gun. Id. 842 F.2d at 967-968. The court of appeals further commented:
The significance of the pointed gun is that it makes the encounter far more frightening than if the officer's gun remains holstered, or even drawn but pointed down at his side; and certainly where the danger of the encounter to the officer, though potentially serious, is not clear and present, the deliberate pointing of a gun at the suspect is problematic. See United States v. White, supra, 648 F.2d at 34 n. 27. It would be a sad day for the people of the United States if police had carte blanche to point a gun at each and every person of whom they had an "articulable suspicion" of engaging in criminal activity.
* * * * * *
Although we are troubled by the thought of allowing policemen to stop people at the point of a gun when probable cause to arrest is lacking, we are unwilling to hold that an investigative stop is never lawful when it can be effectuated safely only in that manner. It is not nice to have a gun pointed at you by a policeman but it is worse to have a gun pointed at you by a criminal, so there is a complex tradeoff involved in any proposal to reduce (or increase) the permissible scope of investigatory stops. We need not decide in this case just how great that scope should be, though clearly we are near the outer edge.
Serna-Barreto, 842 F.2d at 967-968.
However, in United States v. Novak, 870 F.2d 1345 (7th Cir.1991), the court of appeals reviewed another "show of force" case and determined that an investigatory stop had turned into a full-fledged warrantless arrest. There, upon reasonable suspicion provided by an informant's tip, a group of six to nine law enforcement officers stopped Novak and Leon, the two suspects, in a lighted public place at the Milwaukee airport. The two were suspected of bringing cocaine into Milwaukee on a flight from Miami. The suspects, who were not otherwise believed to be *546 armed or dangerous, were stopped in an enclosed airport walkway, offered no resistance, and made no suspicious moves, yet at least three officers drew and pointed their weapons at suspect Leon. One officer drew her weapon and pointed it at Leon's head at close range. There, the court of appeals held:
There was no justification for pointing a gun at Leon whom they had no intent to arrest at that time. In our judgment the encounter quickly constituted a full-fledged but warrantless arrest without probable cause. It would be surprising if under those circumstances Leon had felt free to leave.
The Novak court did not comment on, or appear to take into account the fact that drug dealers are often armed and pose a danger to police, as did the panels in Serna-Barreto and Ocampo, supra, and as did the panel in Lechuga, 925 F.2d at 1039. Furthermore, Novak pre-dated Ocampo, and the Novak court did not employ the now-routine analysis of determining whether the officers' actions were reasonable under the circumstances.
In Lechuga, one of the two police officers who approached the suspected cocaine trafficker's vehicle had his weapon drawn, although it was pointed at the ground. Id. 925 F.2d at 1039. The Seventh Circuit panel analyzed that case by noting:
One important circumstance to be considered is whether the show of force by police exceeded that reasonably necessary for their protection, a criterion which balances "the need for law enforcement officers to protect themselves ... in situations where they may lack probable cause for arrest," Terry, 392 U.S. at 20, 88 S.Ct. at 1879, with the severe intrusion that a motorist feels when he is pulled over and approached by police with their weapons in full view or even pointed at him. Where the suspect is thought to be armed, or even when he is thought to be involved in criminal activity in which the use of weapons is a commonplace, police may protect themselves by displaying their weapons. Allowing police ready access to their weapons in these circumstances is an unfortunate but necessary accommodation between the interests protected by the Fourth Amendment and the fact that "[i]nvestigative detentions involving suspects in vehicles are fraught with danger to police officers." Michigan v. Long, 463 U.S. 1032, 1047, 103 S. Ct. 3469, 3480, 77 L. Ed. 2d 1201 (1983). Other factors "which bear on the issue of reasonableness" are whether the stop was no longer than necessary to "confirm or dispel" the officer's suspicions, United States v. Sharpe, 470 U.S. 675, 686, 105 S. Ct. 1568, 1575, 84 L. Ed. 2d 605 (1985), "the location of the stop, the time of day and the reaction of the suspect to the approach of police...." Ocampo, 890 F.2d at 1369.
Lechuga, 925 F.2d at 1039.
The Lechuga court noted that the degree of intrusion into the suspect's personal security must be reasonably related in scope to the circumstances of the stop. Id. The panel specifically noted that an expansive range of police conduct is acceptable as long as the conduct is reasonably related to the circumstances at hand: "[A] motorist can be subjected to a broad range of undeniably intrusive police conduct based on no more than a police officer's reasonable suspicion that he is engaged in crime." Id. 925 F.2d at 1039-1040 (citing Ocampo, 890 F.2d at 1363). The expansive range of measures that law enforcement officers may take without transforming Terry stops into arrests include: allowing the use of drawn weapons during these encounters; allowing the police to block the suspect's vehicle in order to effectuate the stop; allowing the police to order a suspect to lie down on the ground; allowing the police to handcuff the suspect; allowing the police to detain suspects for extended periods while the police check for outstanding warrants. Lechuga, 925 F.2d at 1039 (citations omitted).
A number of other cases within and without the Seventh Circuit have addressed the question of whether the use of a drawn gun in connection with an investigatory stop converts the stop into an arrest. See United States v. Chaidez, 919 F.2d 1193 (7th Cir. 1990), cert. denied ___ U.S. ___, 112 S. Ct. 209, 116 L. Ed. 2d 167 (1991) (not an arrest *547 but "at the outer edge of investigatory stops" when two police vehicles surrounded the defendant and five officers approached with their guns drawn, but pointed downward); United States v. Merritt, 695 F.2d 1263 (10th Cir.1982), cert. denied 461 U.S. 916, 103 S. Ct. 1898, 77 L. Ed. 2d 286 (1983) (leveling of shotgun at defendant throughout the incident and order to "freeze" was not unreasonable police conduct under the circumstances given that the police were searching in the middle of the night for a murder suspect reported to be armed and dangerous); United States v. White, 648 F.2d 29 (D.C.Cir.1981), cert. denied 454 U.S. 924, 102 S. Ct. 424, 70 L. Ed. 2d 235, 70 L. Ed. 2d 233 (1981) (police officers' having their guns drawn but at their side and issuing orders to suspected narcotics traffickers at night to get out of vehicle for questioning did not convert investigatory stop of suspects into arrest); United States v. Jones, 759 F.2d 633 (8th Cir.1985), cert. denied 474 U.S. 837, 106 S. Ct. 113, 88 L. Ed. 2d 92 (1985) (brief show of guns was permissible under Terry when two police officers blocked the suspected burglar's car and approached the suspect with their guns drawn); and United States v. Ceballos, 654 F.2d 177 (2nd Cir. 1981) (blocking of defendant's car and approach of officers with guns drawn did not fit within the narrow exception developed to general rule requiring probable cause for arrest, there being an arrest at moment when progress of car was blocked and defendant was faced by officers with their guns drawn and ordered out of his car).[12]
In United States v. Strickler, 490 F.2d 378, 380 (9th Cir.1974), the Ninth Circuit held that the use of guns automatically turns a stop into an arrest. However, this "per se" view has been strongly rejected by the Seventh Circuit and most other circuit courts who have addressed this issue. See Serna-Barreto, 842 F.2d at 968; see also Ocampo, 890 F.2d at 1369. In fact, in United States v. Alvarez, 899 F.2d 833, 839 (9th Cir.1990), cert. denied 498 U.S. 1024, 111 S. Ct. 671, 112 L. Ed. 2d 663 (1991), the Ninth Circuit backed away from the per se view, holding that when three officers approached the suspect's vehicle with their weapons drawn, they reasonably feared for their safety, and "the manner of the stop did not convert the investigatory stop into an arrest."
In the present case, if the defendants felt as if they were not free to leave while the officers' weapons were drawn, that aspect of the stop lasted only for a few only moments. The defendants, suspected drug traffickers, were believed to be delivering five kilograms of cocaine from Miami to Fort Wayne when they were stopped just a few miles from their destination. When Trooper Knox pulled Hatch's truck over, Hatch promptly jumped out of his truck and started coming toward Knox. Knox immediately directed Hatch to get back into the truck; however, Hatch continued to advance toward Trooper Knox. Instantaneously, Knox responded by drawing his weapon, and ordering Hatch to return to the truck and to place his hands on the truck dashboard. When asked why he perceived this as a threatening incident, Trooper Knox testified that he drew his weapon on Hatch because, "I verbally had told the individual [Hatch] to get back in the vehicle and [yet] he proceeded to walk back towards me."
The three other officers near the truck, Officer Haxby, Agent Kell and Trooper Eidam, also sensed that Knox was threatened, and promptly drew their weapons, directing *548 Hatch to comply with Knox's order.[13] It was not unreasonable for these law enforcement officers to construe Hatch's leaving the truck and coming toward Trooper Knox as a possibly threatening gesture, especially when coupled with the fact that Hatch did not comply with Knox's initial directive to step back into the truck. At the time he pulled Hatch and Cooper over, Trooper Knox did not have his gun drawn; in fact, none of the officers had their weapons drawn until Hatch made the threatening gesture towards Trooper Knox. After Hatch returned back to the truck, the officers promptly put their weapons away. This show of force was fleeting, lasting only the few seconds it took to convince Hatch to return to his truck so that the officers' immediate self-preservation anxieties could be calmed.
The leveling of three or four[14] revolvers is undeniably forceful police conduct, and under some circumstances, would be indistinguishable from an arrest. Yet, as Ocampo, supra instructs, such police conduct, if justified under the circumstances, is quite permissible in a Terry stop. Hatch and Cooper were suspected of being cocaine traffickers, criminal activity in which the use of weapons is commonplace. "It is beyond dispute that drug traffickers are often armed and dangerous and that `they sometimes shoot policemen.'" Ocampo, 890 F.2d at 1369 (quoting Serna-Barreto, 842 F.2d at 967). Given the circumstances at hand, the officers were reasonably concerned for their own safety before they stopped the defendants. When Trooper Knox pulled Hatch over, Hatch immediately got out of his truck and advanced toward Trooper Knox, intensifying the Trooper's sense of danger. Then Hatch further exacerbated that sense of danger by failing to immediately return to the truck upon Knox's command.
After analyzing all the circumstances surrounding the seizure of the defendants here, the court does not find the officers' show of force so unreasonably intrusive as to constitute an arrest. Reviewing the situation through the eyes of reasonable and cautious police officers on the scene, the court cannot say that the officers acted unreasonably in responding to Hatch's movements by being prepared for possible violence. The officers could have reasonably believed that the precaution of drawing their weapons was necessary to protect themselves. After convincing Hatch to get back into the truck, the officers quickly put their weapons away. The show of force was no longer than necessary to dispel the officers' reasonable concern for their safety. The police conduct of giving directives to the defendants in a command tone while drawing and aiming four weapons at Hatch in an effort to protect themselves was not an unreasonable reaction under the circumstances.[15] Therefore, the officers' limited use of their weapons was a reasonable precaution in the context of this investigatory stop; the officers' actions were reasonably related in scope to the circumstances which presented themselves at that time.
Consent to Search
The defendants also challenge the validity of Hatch's consent to the search of Hatch's truck, and challenge Cooper's alleged incriminating statements. Hatch claims that his consent "was not knowingly, voluntarily, and intentionally given." He argues that he has only a third grade education and is illiterate, and thus, was unable to understand the consent form. Cooper claims that he did not make any incriminating statements to the officers. The government contends that Hatch's consent to the search of his truck was valid, and that Cooper voluntarily *549 provided the officers with further information regarding Hatch's and Cooper's drug trafficking.
Generally, a warrantless search is per se unreasonable, and runs afoul of the Fourth Amendment unless the search conforms to certain specified exceptions. Mincey v. Arizona, 437 U.S. 385, 390, 98 S. Ct. 2408, 2412, 57 L. Ed. 2d 290 (1978). In some circumstances "the public interest is such that neither a warrant or probable cause is required" to conduct a search. Maryland v. Buie, 494 U.S. 325, 331, 110 S. Ct. 1093, 1097, 108 L. Ed. 2d 276 (1990). Among those circumstances is the consent search, where, if the suspect validly waives the Fourth Amendment right, the search may be conducted without probable cause or warrant, Florida v. Jimeno, ___ U.S. ___, ___, 111 S. Ct. 1801, 1803, 114 L. Ed. 2d 297 (1991); Schneckloth v. Bustamonte, 412 U.S. 218, 219, 93 S. Ct. 2041, 2043-2044, 36 L. Ed. 2d 854 (1973). In a consent search, the permission to search need only be free and voluntary, and need not be knowing and intelligent. Schneckloth v. Bustamonte, 412 U.S. at 248-249, 93 S.Ct. at 2059. The question of voluntariness of the consent is a factual issue to be resolved in light of "the totality of all the circumstances." United States v. Mendenhall, 446 U.S. 544, 557, 100 S. Ct. 1870, 1879, 64 L. Ed. 2d 497 (1980).
After being sure of their safety, the officers frisked the defendants and separated them. Because of the wind and weather, and due to the passing traffic on the four-lane highway, Cooper was asked to follow Agent McGauley to McGauley's vehicle to discuss the purpose of the stop. In McGauley's vehicle Cooper engaged in his discussion with the officers, after being repeatedly told that he was free to go and that he need not answer any of the officers questions. Cooper was not illegally detained during this questioning. The officers unequivocally maintain that Cooper was advised of his rights and verbally consented to discuss the purpose of the stop with them. Despite his testimony to the contrary, in an abundance of caution, Agent McGauley timely warned Cooper of his Miranda rights. See supra, n. 7. This questioning was permissible within the scope of a Terry stop, supra.[16]
During the conversation between McGauley and Cooper in McGauley's vehicle, Cooper initially denied knowledge of any narcotics being in the truck. Subsequently, however, Cooper admitted that there were "two kilos" in a suitcase behind the driver's seat in Hatch's truck. This admission is denied by Cooper, but has been substantiated by the testimony of Agent McGauley, Agent Kell and Officer Haxby. After weighing the evidence and observing the witnesses, the court determines that Cooper made this voluntary admission.
The officers then approached Hatch, who was waiting near Trooper Knox's police vehicle. McGauley unequivocally maintains that he then told Hatch that he was free to go and that he was not under arrest. After McGauley told Hatch of the purpose of the stop, Hatch claimed he had no knowledge of any cocaine located in his truck, and verbally consented to the search of his truck. In addition to verbal consent, Hatch was then likewise asked to sign a written consent form at that time. In response, Hatch indicated that he would, but because of his limited education, he could not read or write very well. McGauley then carefully read the consent *550 form to Hatch, line by line. Hatch stated that he understood the form, and then Hatch signed the same. This written consent occurred just three-to-eight minutes after the initial stop was made.
The officers then conducted the search and found the two "kilo"-size packages behind the drivers seat in Hatch's truck. The packages were later determined to contain cocaine and $23,000 in United States currency.
As the court has found, supra, Hatch was not under arrest when he gave the officers consent to search his truck Hatch and Cooper were arrested only after the two packages of suspected cocaine were discovered in the baggage behind the truck seat.[17] Although Hatch claims his consent was not given knowingly or intelligently, in a consensual search, the permission to search need not be knowing and intelligent, rather all that is required is that the consent is freely and voluntarily given. Schneckloth, 412 U.S. at 248-249, 93 S.Ct. at 2059.
In light of all circumstances, and after hearing the evidence and weighing the credibility of the witnesses, the court finds that Cooper voluntarily told the officers that there was cocaine in the truck, and that Hatch did in fact give his verbal and written voluntary consent to a search of the truck before the detectives discovered the two packages of suspected cocaine. Hatch and Cooper validly waived their Fourth Amendment rights, and the search was, therefore, properly conducted without probable cause or warrant. See, Schneckloth v. Bustamonte, 412 U.S. 218, 93 S. Ct. 2041.
CONCLUSION
For the foregoing reasons, the defendant's motion to suppress evidence is DENIED.
NOTES
[1] Hatch filed his motion to suppress on May 26, 1993, and Cooper filed a similar motion on the following day, stating that he was relying on the arguments put forth in Hatch's motion and memoranda.
[2] The factual background is compiled from the evidentiary hearing. Where substantial factual disputes exist, they are so indicated. The facts as recited herein are as the court has found. At that June 4, 1993 hearing, the court heard testimony from FBI Agents John McGauley and Steven Kell, Indiana State Police Troopers Tony Knox and Rudy Eidam, Allen County Police Officer Steven Haxby, and defendant James Cooper. Defendant Samuel Hatch did not testify.
[3] Officer Haxby testified that when Trooper Knox pulled Hatch and Cooper over, "the driver's door opened up and Mr. Hatch jumped out of the truck."
[4] On direct examination, and in response to the question when asked why he drew his weapon on Hatch, Trooper Knox replied, "I verbally had told the individual [Hatch] to get back in the vehicle and [yet] he proceeded to walk back towards me."
[5] Officer Haxby returned his weapon to his vehicle.
[6] Miranda v. Arizona, 384 U.S. 436, 86 S. Ct. 1602, 16 L. Ed. 2d 694 (1966).
[7] Cooper agrees that the weather was "chilly" when he and Hatch were stopped.
[8] Agent McGauley testified that he told Cooper that Cooper was not under arrest and that he was free to leave, and that Cooper was advised of his rights when they were seated in McGauley's vehicle. Agent Kell testified that Cooper was advised of his rights during a pause in the walk from Hatch's truck to McGauley's vehicle. Officer Haxby testified that he and McGauley showed Cooper their badges in McGauley's vehicle and that McGauley told Cooper he was not under arrest and that he was free to leave. Cooper testified that McGauley said nothing when he approached Cooper. Cooper further testified that McGauley never advised him of his rights on the highway or in McGauley's car, but he did identify himself as a Special Agent of the FBI.
[9] Cooper maintains that he did not make any admissions and did not inform the officers of the location of "two kilos." However, McGauley, Haxby, and Kell all testified that Cooper did inform them that two kilos were behind the seat on Hatch's truck. The court finds the officers more credible in this regard.
[10] McGauley testified that he pointed north with his arm outstretched toward Fort Wayne when he told Hatch he was free to go. McGauley also testified that at that time, he would not have released the truck, as he believed probable cause existed, based on the corroborated tip and Cooper's admission.
[11] In fact, the case Agent, McGauley, testified that he knew at the time that the officers stopped Hatch and Cooper, that the officers did not have probable cause to arrest the suspects.
[12] In Ocampo, 890 F.2d at 1369, the court cited the following cases from other circuits which have agreed that an officer can point a gun at a suspect without transforming an investigatory stop into an arrest: United States v. White, 648 F.2d 29 (D.C.Cir.), cert. denied, 454 U.S. 924, 102 S. Ct. 424, 70 L. Ed. 2d 233 (1981); United States v. Trullo, 809 F.2d 108 (1st Cir.1987), cert. denied, 482 U.S. 916, 107 S. Ct. 3191, 96 L. Ed. 2d 679 (1988); United States v. Harley, 682 F.2d 398, 400-402 (2d Cir.1982); United States v. Manbeck, 744 F.2d 360, 377 (4th Cir.1984), cert. denied, 469 U.S. 1217, 105 S. Ct. 1197, 84 L. Ed. 2d 342 (1985); United States v. Hardnett, 804 F.2d 353 (6th Cir.1986), cert. denied, 479 U.S. 1097, 107 S. Ct. 1318, 94 L. Ed. 2d 171 (1987); United States v. Eisenberg, 807 F.2d 1446 (8th Cir.1986); United States v. Jones, 759 F.2d 633 (8th Cir.1985), cert. denied, 474 U.S. 837, 106 S. Ct. 113, 88 L. Ed. 2d 92 (1986); United States v. Merritt, 695 F.2d 1263, 1272-1274 (10th Cir.1982), cert. denied, 461 U.S. 916, 103 S. Ct. 1898, 77 L. Ed. 2d 286 (1983); United States v. Aldridge, 719 F.2d 368 (11th Cir.1983); United States v. Pantoja-Soto, 768 F.2d 1235 (11th Cir. 1985).
[13] Troopers Knox and Eidam did testify that they used their guns and "command tone" not only for their own protection, but to assert their authority over the defendants. Yet, this is really the same thing: the officers were demanding compliance for the limited purpose of securing their own safety.
[14] Officer Haxby testified that he was aiming at the ground between himself and the defendant.
[15] Furthermore, although the officers surrounded Hatch's truck with their police vehicles quickly after the stop, and although the officers drew their weapons during this encounter, the officers did not order the defendants to lie down on the ground, nor did they handcuff the defendants, nor detain the defendants for an extended period to perform some peripheral task such as checking for outstanding warrants. See Lechuga, 925 F.2d at 1039.
[16] The Miranda warnings regarding a suspect's Constitutional rights must be administered to a suspect prior to custodial interrogation. United States v. Fazio, 914 F.2d 950, 954 (7th Cir.1990); Rhode Island v. Innis, 446 U.S. 291, 300-301, 100 S. Ct. 1682, 1689, 64 L. Ed. 2d 297 (1980). In order to show a "custodial relationship" which would require administration of the Miranda warnings, the defendant must show he was formally arrested or that his freedom of movement was restricted to the degree associated with formal arrest. Fazio, at 955; Oregon v. Mathiason, 429 U.S. 492, 495, 97 S. Ct. 711, 714, 50 L. Ed. 2d 714 (1977). In determining whether a suspect's freedom of movement was restricted to the degree associated with arrest, the court considers the totality of the circumstances, and employs an objective analysis. United States v. Lennick, 917 F.2d 974, 977 (7th Cir.1990). "[T]he test is not whether the defendant was under a subjective belief that his or her movements were restricted, but whether a reasonable person in the defendant's position would believe that he or she was free to leave." Lennick, at 977. The court finds that Cooper was not subjected to arrest or the functional equivalent of arrest before Agent McGauley warned Cooper of his rights pursuant to Miranda.
[17] At the time Hatch gave his consent to the search of his truck, he and Cooper probably could have been arrested. Cooper's statement that there were "two kilos" behind the seat would have furnished the officers with sufficient probable cause to arrest the suspects.
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82 So. 3d 19 (2010)
A.L.
v.
K.C.T.
No. 2090123.
Court of Civil Appeals of Alabama.
June 18, 2010.
DECISION WITHOUT PUBLISHED OPINION
Affirmed.
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01-03-2023
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/2496001/
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516 F. Supp. 2d 832 (2007)
Johnny Jermaine SMITH, Plaintiff,
v.
Jim NICHOLSON, United States Secretary of Veterans Affairs, and Houston VA Medical Center, Defendants.
Civil Action No. H-06-1640.
United States District Court, S.D. Texas, Houston Division.
May 15, 2007.
*833 *834 *835 Gordon R Cooper, II, Houston, TX, for Plaintiff.
Samuel G. Longoria, US Attorneys Office, Houston, TX, for Defendants.
MEMORANDUM AND ORDER
LEE H. ROSENTHAL, District Judge.
Johnny Jermaine Smith worked for the Department of Veterans Affairs at the Houston Veterans Administration Medical Center. He has sued his former employer under the Privacy Act, 5 U.S.C. § § 552a, et seq. The defendant has moved to dismiss under Rule 12(b)(1) of the Federal Rules of Civil Procedure, arguing that Smith must sue under the Federal Employee's Compensation Act (FECA), 5 U.S.C. § 8101, et seq. (Docket Entry No. 11). Smith has filed a response with supporting affidavits. (Docket Entry No. 12).
Based on a careful review of the pleadings, the motion, the response, and the applicable law, this court denies the motion to dismiss but abates this case pending administrative review by the Department of Labor to determine whether the exclusive remedy provision of FECA applies. The reasons for this decision are set out below.
I. Background
In March 2006, Smith was employed as a Program Support Clerk for the Department of Veterans Affairs, assigned to the Michael DeBakey Medical Center Hospital in Houston, Texas. Smith's wife worked at the same hospital. On March 16, 2006, Smith went to work but left to obtain emergency medical care. Smith was hospitalized and treated at the same Medical Center VA hospital where he and his wife worked. Smith was released on March 21, 2006 and went back to work on March 27, 2006.
On March 20, 2006, while Smith's wife was in a store provided for hospital employees, she overheard two`women she did not know talking about Smith's medical condition. Smith's wife also learned that she had received multiple telephone calls at work asking about Smith's medical condition. Smith learned that hospital employees had disclosed his medical records, without authorization. Smith alleged and presented affidavits stating that information from his medical records was released at his workplace. As a result, he became the subject of malicious rumors "floating around in his workplace." (Docket Entry No. 12 at 4). Smith alleged that as a result of the unauthorized release of his confidential medical records, he suffered physical and mental injuries, including "distress, shame, embarrassment, loss of pride, loss of enjoyment of life and emotional trauma." (Docket Entry No. 1 at 5). *836 Smith seeks damages and an injunction against future unauthorized release of his confidential medical information.
The defendant moves to dismiss this Privacy Act suit on the ground that Smith is alleging an injury in the hospital where he worked, from the actions of government employees, such that FECA's exclusive remedy provision applies. Smith responds that he is alleging a Privacy Act violation and injury that occurred while he was a VA hospital patient, not an employee, and that FE CA does not apply. Smith attached affidavits from himself and his wife to support his argument.
II. The Legal Standards
A. The Motion to Dismiss
Federal Rule of Civil Procedure 12(b)(1) governs challenges to a court's subject matter jurisdiction. "A case is properly dismissed for lack of subject matter jurisdiction when the court lacks the statutory or constitutional power to adjudicate the case." Home Builders Ass'n of Miss., Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th Cir.1998) (quoting Nowak v. Ironworkers Local 6 Pension Fund, 81 F.3d 1182, 1187 (2d Cir.1996)). "Courts may dismiss for lack of subject matter jurisdiction on any one of three bases: (1) the complaint alone; (2) the complaint supplemented by undisputed facts in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts." Clark v. Tarrant County, 798 F.2d 736, 741 (5th Cir.1986) (citing Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir.1981)). The plaintiff bears the burden of demonstrating that subject matter jurisdiction exists. See Paterson v. Weinberger, 644 F.2d 521, 523 (5th Cir.1981). When examining a factual (as opposed to a facial) challenge to subject matter jurisdiction under Rule 12(b) (1), which does not implicate the merits of plaintiff's cause of action, the district court may consider matters outside the pleadings, such as testimony and affidavits. See Garcia, 104 F.3d at 1261.
A. FECA
FECA provides compensation for "the disability or death of an employee resulting from personal injury sustained while in the performance of his duty." 5 U.S.C. § 8112. The statute states:
The United States shall pay compensation as specified by this subchapter for the disability or death of an employee resulting from personal injury sustained while in the performance of his duty, unless the injury or death is
(1) caused by willful misconduct of the employee;
(2) caused by the employee's intention to bring about the injury or death of himself or of another; or
(3) proximately caused by the intoxication of the injured employee.
5 U.S.C. § 8102(a). FECA is the exclusive remedy for a federal employee's injuries if those injuries are within the statute's coverage. Section 8116(c) states:
The liability of the United States or an instrumentality thereof under this subchapter or any extension thereof with respect to the injury or death of an employee is exclusive and instead of all other liability of the United States or the instrumentality to the employee, his legal representative, spouse, dependents, next of kin, and any other person otherwise entitled to recover damages from the United States or the instrumentality because of the injury or death in a direct judicial proceeding, in a civil action, or in admiralty, or by an administrative or judicial proceeding under a workmen's compensation statute or under a Federal tort liability statute. *837 5 U.S.C. § 8116(c); see Bennett v. Barnett, 210 F.3d 272, 277 (5th Cir.2000); White v. United States, 143 F.3d 232, 234 (5th Cir. 1998). Like other worker's compensation statutes, FECA is "intended to serve as a substitute rather than a supplement for the tort suit." Bailey v. United States, 451 F.2d 963, 965 (5th Cir.1971)..
A federal court lacks subjectmatter jurisdiction over claims covered by FECA. See 5 U.S.C. § 8128(b); see also' Heilman v. United States, 731 F.2d 1104, 1110 (3d Cir.1984); DiPippa v. United States, 687 F.2d 14, 17 (3d Cir.1982). The Secretary has moved to dismiss on the basis that this court lacks jurisdiction because Smith's Privacy Act claim is within FECA's scope. A court must send a case to the Secretary of Labor to determine whether the claim is subject to`FECA's exclusive remedy provision if there is a "substantial question" as to FECA coverage of that claim. See Concordia v. U.S. Postal Service, 581 F.2d 439 (5th Cir.1978); White, 143 F.3d at 239. A "substantial question" exists unless the court is certain that the Secretary of Labor would find no coverage under FE CA. Horton v. United States, 144 Fed.Appx. 931, 932 (3d Cir. 2005). Unless the court finds that the outcome is certain, the court must allow the Secretary of Labor or his designee to determine FECA coverage questions that relate to the specific facts of the underlying compensation claim, such as whether the employee was injured on the job. See 5 U.S.C. § 8128(b); Sheehan v. United States, 896 F.2d 1168, 1174 (9th Cir.1990) (questions of coverage relating to the merits of the underlying compensation claim, such as whether the employee was injured on the job, must be deferred to the Secretary; questions about the scope of FECA are appropriate for the court to consider).
In White v. United States, 143 F'.3d at 234, the Fifth Circuit reversed a district court's refusal to abate a case pending the Secretary of Labor's determination of FECA coverage. The plaintiff in that case was injured in an automobile accident occurring after work ended, but on the employer's premises. The plaintiff employee argued against FECA coverage, contending that although the accident occurred on his employer's premises, he was no longer conducting the employer's business when he was injured. Id. at 236. The Fifth Circuit did not decide whether the claim was covered under the FECA. Instead, the court held that the case should be sent to the Secretary of Labor because the district court could not be "absolutely sure of what action the Secretary would take." Id. at 238 (citing Concordia, 581 F.2d 439). In reaching this result, the Fifth Circuit instructed that a district court should look to the Secretary's previous decisions to determine whether a substantial question of FECA coverage exists. White, 143 F.3d at 237 (giving recent administrative agency decisions on FECA coverage precedence over a previous Fifth Circuit decision involving similar facts); see also DiPippa, 687 F.2d at 16 ("In deference to such authority, this court has held that where a `substantial question' of FECA coverage exists, federal district courts will not entertain claims under the FTCA.").
The Employees' Compensation Appeals Board of the Department of Labor has interpreted the phrase "sustained in the performance of duty," which defines when FECA applies, "to be the equivalent of the commonly found prerequisite in worker's compensation law of`arising out of and in the course of employment.'" White, 143 F.3d at 235 (quoting Anneliese Ross, 42 E.C.A.B. 371, 373 (Empl.CompApp.B d.1991)). The Board has explained that "[i]n the compensation field, to occur in the course of employment, in general, an injury must occur (1) at a time when the employee may reasonably be said to be engaged in his or her master's *838 business; (2) at a place where he or she may reasonably be expected to be in connection with the employment; and (3) while he or she was reasonably fulfilling the duties of his or her employment or engaged in doing something incidental thereto." Id. (citing Ross, 42 E.C.A.B. at 373; Bradford N. Reed, No. 04-1768, 2005 WL 857514,`at *2 (Empl.Comp.App.Bd.2005)). Courts and the ECAB use a similar analysis of whether the employee's injury is sustained in the performance of duty: both ask whether there is a sufficient nexus between the injury and the employment to sustain FECA coverage. White, 143 F.3d at 235, Bailey, 451 F.2d at 966-67; Ross, 42 E.C.A.B. at 373-74.
A claim is within FECA's scope if there is a causal relationship between the employment itself, or the conditions under which it is to be performed, and the injury. See Wright v. United States, 717 F.2d 254, 260 (6th Cir.1983). The injury must occur when an employee is engaged in activities that are at least incidental to the employment and its responsibilities to be under FECA. M.P., No. 06-1168, 2006 WL 3544454, at *3 (Empl.Comp.App.Bd.2006). Even though an employee's injury sustained while going to or coming from work is generally not covered under FECA, because the injury does not occur in the performance of duty, courts have created a premises exception that provides FECA coverage to an employee injured on the employer's premises while driving to and from work. See White, 143 F.3d at 235. The premises rule is only one of a number of factors to be considered in deciding whether an injury is covered under FECA. Bailey v. United States, 451 F.2d 963, 966 (5th Cir.1971); Avasthi v. United States, 608 F.2d 1059, 1061 (5th Cir.1979) (finding a substantial question as to FECA coverage for a federal employee injured when he slipped and fell on the outside steps of his employer's building while walking to his automobile at the end of his work shift).
B. The Privacy Act
The Privacy Act generally prohibits the unauthorized release by a government agency of medical records. 5 U.S.C. § 552a (1996). The Act states that "[n]o agency shall disclose any record which is contained in a system of records by any means of communication to any person, or to another agency, except pursuant to a written request by, or with the prior written consent of, the individual to whom the record pertains." Id. at § 552a(b). The Privacy Act allows the injured person to bring a civil action against the agency that failed to comply with the law. Id. at § 552a(g)(1)(D). The Privacy Act provides that:
(4) In any suit brought under the provisions of subsection (g) (1)(C) or (D) of this section in which the court determines that the agency acted in a manner which was intentional or willful, the United States shall be liable to the individual in an amount equal to the sum of
(A) actual damages sustained by the individual as a result of the refusal or failure, but in no case shall a person entitled to recovery receive less than the sum of $1,000; and
(B) the costs of the action together with reasonable attorney fees as determined by the court.
5 U.S.C. § 552a(g)(1)(4). See Jacobs, 423 F.3d at 516 (citing Quinn v. Stone, 978 F.2d 126, 131 (3d Cir.1992)); see also Doe v. Chao, 540 U.S. 614, 124 S. Ct. 1204, 157 L. Ed. 2d 1122 (2004) (holding that the statute guarantees $1,000 only to plaintiffs who have suffered some actual damages).
To maintain a damages claim under subsection (g)(1)(D) for a violation of the Privacy Act's central prohibition *839 against disclosure, a plaintiff must show four elements: (1) the information is covered by the Act as a "record" contained in a "system of records"; (2) the agency disclosed the information; (3) the disclosure had an adverse effect on the plaintiff (an element with two components: (a) an adverse-effect standing requirement; and (b) a causal nexus between the disclosure and the adverse effect); and (4) the disclosure was willful or intentional. See Quinn v. Stone, 978 F.2d at 131. An adverse effect is shown by cognizable injury and a causal nexus between the injury and the violation of the Privacy Act. See Sweeney v. Chertoff, 178 Fed.Appx. 354, 358 (5th Cir.2006) (when the plaintiffs loss of pay was caused by his suspension, which in turn may have resulted from the agency's Privacy Act violations, "such a hypothetical counterfactual situation [was] not sufficient to meet the causation requirement"). The required causal link between the injury and the Privacy Act violation means that there must be an injury distinct from the violation of the Act itself. Emotional trauma, which can take the form of embarrassment or and emotional anguish, may be a cognizable injury. See Albright v. United States, 732 F.2d 181, 186 (D.C.Cir.1984); Quinn v. Stone, 978 F.2d at 135-36; Pippinger, 129 F.3d at 528; Parks v. United States IRS, 618 F.2d 677, 682-83 (10th Cir.1980).
III. Analysis
A. The Issue
The parties' dispute centers on whether Smith's Privacy Act damages claim is within FECA's scope. The defendant argues that Smith's own allegations and evidence show that he was injured at the workplace, where the disclosure of his medical records occurred and as a result he became the subject of malicious rumors and gossip spread by his coworkers. Smith responds that the unauthorized release of his medical records was unrelated to the performance of his job at the VA hospital because the release occurred while he was a patient in, rather than an employee working at, the hospital.
The threshold issue is whether there is a substantial question as to FECA coverage. If there is, this court must deny the motion to dismiss and abate the case until the Secretary, of Labor decides whether the claim is covered by FECA. "To avoid sending the case to the Secretary of Labor, we must essentially decide as a matter of law that, viewing all of the circumstances, the Secretary could not find FECA coverage of [the plaintiffs] claim." White, 143 F.3d at 234. (citing Concordia, 581 F.2d at 442; Bailey, 451 F.2d at 967). "Only if we are certain that the Secretary of Labor would conclude that the employee's injuries do not present a substantial question of coverage under FECA may we entertain the employee's FTCA claim without the employee first submitting the claim to the Secretary of Labor." White, 143 F.3d at 234 (citing Bailey, 451 F.2d at 965).
B. The Privacy Act Violation and Injury
The defendant's primary argument is that Smith himself alleged and provided affidavits stating that he suffered injury at his workplace because the release of his medical records was at his workplace and he was injured by rumors circulating among his coworkers as a result of that release. Smith's primary response is that the release occurred while he was a patient, not an employee. Two reported cases provide guidance. In Wright v. United States, 717 F.2d 254, 260 (6th Cir. 1983), the plaintiff, like Smith, was both an employee and a patient at a VA hospital. The plaintiff alleged that the physicians at the VA Hospital had performed surgery *840 negligently, resulting in physical harm. Id. at 256. The district court found that FECA applied and dismissed the tort suit under FECA's exclusive remedy provision. The Sixth Circuit reversed the district court.
In Wright, as in the present case, the plaintiff was performing her duties as an employee of the VA hospital when she became ill and was treated at the same hospital. Wright, 717 F.2d at 255. In Wright, as in the present case, the plaintiff argued that the injury suffered resulted from the fact that she was a patient of the hospital, not an employee. In refusing to find a substantial question of FECA coverage, the Sixth Circuit reasoned that a causal relationship between one's employment and the alleged injury cannot be established based solely on the fact that the allegedly tortious conduct took place on the employer's premises. Id. at 257. The fact that the sickness for which the plaintiff was treated manifested itself while she was on duty was not a sufficient relationship to the employee's job performance to establish coverage under FE CA. Id. at 258. The court noted that the plaintiff could have obtained medical care at any number of locations; it was merely a coincidence that she was treated at the same hospital where she worked. Id. The alleged injury resulted from the fact that she was treated as a patient, not from the fact that she was working as an employee. Id. (stating that the alleged injury from the surgery was not an expected consequence of the employee's secretarial position); see also Wallace v. United States, 669 F.2d 947, 954 (4th. Cir.1982) (holding that the plaintiffs alleged injuries from a flu shot were clearly not compensable under FECA simply because he received the shot on the premises of his federal employer); DeFilippo v. United States, 1998 WL 846120, at *2 (S.D.N.Y.1998) (finding no FECA coverage in a case involving an employee's allegations that she tripped and fell during a walk she decided to take on the employer's campus after she had left work, returned home, and then gone back to walk).
As in Wright, the fact that Smith happened to work at the same hospital where he received medical treatment and where the alleged Privacy Act violation occurred is not enough to bring the statutory claim within FECA. However, this case is distinguishable from Wright in that Smith also alleged that he suffered personal injury at his job, when he returned to work, because his coworkers spread rumors about the information contained in his medical records. This allegation of injury from the unauthorized release of medical records at the workplace is similar to the second of the two cases.
In Tippetts v. United States, 308 F.3d 1091 (10th Cir.2002), the Postal Service investigated the plaintiff employee's medical records related to his worker's compensation claim. Postal Service personnel incorrectly reported the contents of his medical records. The plaintiff was placed on administrative leave but was not told why. The plaintiff alleged that while he was on administrative leave, Postal Service employees revealed incorrect and damaging information about his medical conditions to his coworkers. The plaintiff sued under the Federal Tort Claim Act for emotional distress and financial loss because of the Postal Service's invasion of his privacy. Id. at 1093. Although the alleged release of private medical information did not occur while the plaintiff was working at his Postal Service job, the appellate court found a substantial question as to whether "an injury occurred during the employee's performance of his duty." Id. at 1095. The court ordered the district court to abate the case pending administrative review. Id.
*841 A Privacy Act claim requires a showing of both unauthorized disclosure and adverse effect or injury. Smith alleged and provided summary judgment evidence that he suffered physical and mental injury in his job from the unauthorized release of his medical records, because his medical condition "became the subject of malicious workers among his coworkers and such rumors were floating around the workplace." (Docket Entry No. 1 at 5). Like the plaintiff in Tippetts, and unlike the plaintiff in Wright, Smith alleged that he suffered injury at the workplace as a result of the unauthorized release of medical records by and to his coworkers. The unauthorized release of the medical records occurred while Smith was treated rather than working at the hospital, which was insufficient to bring the claim under FECA in Wright. But Smith also alleged and provided evidence that he suffered injury at work from the unauthorized release of the medical records. In Tippetts, a similar claim was sufficient to require administrative determination as to whether FECA applied. As in Tippetts, there is a substantial question as to whether Smith's injury occurred "in the performance of his duty" as a hospital employee.
Under White v. United States, this court finds a substantial question as to FECA coverage. The motion to dismiss is denied, but the case is abated and administratively closed pending the Secretary of Labor's determination of FECA coverage.
IV. Conclusion
The defendant's motion to dismiss is denied. This case is abated in order to permit a determination of FECA coverage by the Secretary of Labor. This case is administratively closed pending that determination. The parties must notify this court and seek reinstatement or dismissal within ten days of the Secretary's determination.
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9 A.3d 338 (2010)
299 Conn. 223
STATE of Connecticut
v.
Stanley BENJAMIN.
No. 18390.
Supreme Court of Connecticut.
Argued October 18, 2010.
Decided December 14, 2010.
*339 Glenn W. Falk, special public defender, for the appellant (defendant).
Robert J. Scheinblum, senior assistant state's attorney, with whom, on the brief, were John C. Smriga, state's attorney, and Pamela J. Esposito, assistant state's attorney, for the appellee (state).
ROGERS, C.J., and NORCOTT, KATZ, PALMER and VERTEFEUILLE, Js.
KATZ, J.
The defendant, Stanley Benjamin, appeals, pursuant to our grant of certification, from the Appellate Court's judgment affirming: (1) the trial court's judgment revoking his probation pursuant to General Statutes § 53a-32[1] on the basis of its finding *340 that the defendant had committed the crimes of assault on an elderly person in the third degree[2] and possession of narcotics; and (2) the judgment of conviction, rendered following a jury trial, of possession of narcotics in violation of General Statutes § 21a-279. State v. Benjamin, 114 Conn.App. 225, 968 A.2d 991 (2009). This court granted certification on the following issue: "Did the Appellate Court properly decline to reach the merits of the defendant's claims concerning one of two grounds on which the violation of probation finding was based [assault on an elderly person], when the defendant requested a remand for resentencing based solely on the less serious, undisputed ground [possession of narcotics]?" State v. Benjamin, 292 Conn. 912, 973 A.2d 660 (2009). Although the defendant had not challenged the propriety of either judgment regarding the charge of possession of narcotics, he had claimed that, insofar as the trial court's judgment revoking his probation had been based on its finding that he had assaulted an elderly person, that judgment should have been set aside because: (1) in making that finding, the court improperly relied on identification evidence that it should have suppressed; and (2) the evidence did not otherwise support the finding that he had been the perpetrator of the assault. The defendant further claimed that the trial court had abused its discretion by imposing a four year term of imprisonment based, in part, on his assault of an elderly person.
On appeal to this court, the defendant contends that the Appellate Court improperly concluded that it was unnecessary for it to review the merits of either of his claims regarding his identity as the perpetrator of the assault because the revocation of probation also had been based on his possession of narcotics, and that one basis for revocation was legally sufficient. With regard to his claim that the case should have been remanded for sentencing solely on the basis of his narcotics possession because the severity of his sentence had been affected by the assault charge, the defendant contends that the Appellate Court improperly concluded that that issue had been briefed inadequately. We conclude that the Appellate Court improperly determined that it did not need to reach the merits of the defendant's identification claims because of the impact the assault had on his sentence. We nonetheless conclude that, even if we were to assume, arguendo, that the trial court improperly had relied on the identification evidence, *341 there was nevertheless sufficient independent evidence on which the trial court reasonably could have made its finding that the defendant had committed the assault. Therefore, we conclude that the trial court properly revoked the defendant's probation and sentenced him on the basis of both the assault and the narcotics possession. Accordingly, we affirm the Appellate Court's judgment, but on different reasoning.
Before turning to the specific facts underlying the present case, we note the following procedural history. The state had filed an opposition to the defendant's petition for certification to appeal arguing, among other things, that the Appellate Court properly had refused to review the defendant's legal claims because they had been briefed inadequately. Following this court's grant of certification, pursuant to Practice Book § 84-11(a), the state filed the following statement of alternate grounds upon which the trial court's judgment should be affirmed if this court were to conclude that the Appellate Court improperly had refused to review the merits of the defendant's claims: "The trial court properly exercised its discretion in revoking the defendant's probation [and in sentencing him] based, in part, on the defendant's assault of an elderly person ... as well as possession of narcotics ... where: (1) There was sufficient evidence to support the trial court's conclusion that the defendant violated the terms of his probation based on third-degree assault of an elderly person, as well as possession of narcotics; (2) [t]he trial court properly refused to suppress the [victim's] out-of-court identification because the identification procedure was neither unnecessarily suggestive nor unreliable; and (3) [a]lternatively, even assuming, arguendo, that the trial court should have suppressed the out-of-court identification, there was more than enough evidence without it to find the defendant in violation of probation based, in part, on his assault of an elderly person." The state had raised and briefed each of these arguments in the Appellate Court, but that court did not reach them in light of its conclusion that the defendant had forfeited his right to appellate review due to inadequate briefing. See State v. Benjamin, supra, 114 Conn.App. at 232-33, 968 A.2d 991.
Following its reexamination of the record in this case, the state conceded in its brief and again during its oral argument to this court that the defendant adequately had briefed his claims that the trial court's judgment revoking his probation and sentencing him to a four year term of imprisonment should be reversed and that the case should be remanded for sentencing solely on the basis of his narcotics possession. Indeed, the state recognized that "all of the issues raised by the defendant centered upon his assertion that the trial court could not have factored his assault on an elderly person into its revocation or sentencing decisions." (Emphasis added.)
With this belated concession in mind, we turn to the following additional undisputed facts and procedural history, as set forth in the Appellate Court's opinion, that form the background of the issues before us. "The defendant was convicted of selling narcotics and, in 2003, was sentenced to a five year term of incarceration, execution suspended after one year, followed by three years of probation. In 2003, the defendant was released from incarceration, signed a conditions of probation form and began serving his probation. As is customary, one of the conditions of the defendant's probation was that he not violate any law of the state of Connecticut. On two subsequent occasions, the court extended the defendant's term of probation following the defendant's violation of *342 the conditions of his probation. Those events are not germane to this appeal.
"On June 10, 2006, while the defendant was serving his probation, he was arrested and charged, under docket number CR-06-216449-S (criminal case), with [having committed on that same day] possession of narcotics, assault of an elderly person in the third degree and attempt to commit robbery in the second degree. Following the defendant's arrest, the defendant was charged, under docket number CR-02-182546-S (violation of probation case), with having violated the terms of his probation by engaging in criminal conduct on June 10, 2006. The court granted the state's motion to consolidate the violation of probation case and the criminal case. [The state subsequently filed an amended information eliminating the robbery charge after the testimony of the alleged victim of the assault and robbery did not support the latter charge.]
"During jury deliberations in the criminal case, the court orally set forth its finding that the defendant had violated his probation by engaging in criminal conduct. The court found that on June 10, 2006, the defendant possessed narcotics and committed an assault on an elderly person, as alleged by the state in the criminal case.
"The jury found the defendant guilty of the narcotics charge but found him not guilty of the assault charge. Prior to sentencing in the criminal case, the court heard evidence in the dispositional phase of the violation of probation case. Following that proceeding, the court found that the beneficial purposes of probation were no longer being served. After hearing argument as to the proper sentence, the court noted that the defendant, aged fifty-three years, had an extensive record of criminal activity that spanned nearly his entire adult life and that prior efforts at rehabilitation had not yielded positive results. The court deemed the defendant's pre-sentence investigation report `one of the worst' that it had ever reviewed. The court also discussed the criminal activity at issue, possession of narcotics and assault. The court viewed that criminal conduct as evidence that the defendant had not made any progress toward becoming a law-abiding person.
"In the violation of probation case, the court sentenced the defendant to serve four years of his unexecuted sentence. As a result of the conviction in the criminal case, the court sentenced the defendant to a three year term of incarceration. The court ordered that the sentence in the criminal case run consecutively to the sentence in the violation of probation case, resulting in a total effective term of imprisonment of seven years." State v. Benjamin, supra, 114 Conn.App. at 227-29, 968 A.2d 991.
As we previously have noted, the Appellate Court affirmed the judgment on appeal, concluding that it was unnecessary for it to review the merits of the defendant's claims because the violation of probation judgment could be affirmed solely on the basis of the trial court's unchallenged finding with respect to the possession of narcotics and that the claim for resentencing was inadequately briefed. Our independent review of the record confirms the representations of both parties that all the issues raised by the defendant in the Appellate Court were predicated on his challenge to the trial court's improper reliance on his assault on an elderly person in its decision to revoke his probation and impose a four year prison term, which the defendant did brief adequately. Thus, although the Appellate Court was correct that the trial court's unchallenged finding regarding the defendant's possession of narcotics provided a sufficient basis for an adjudication of a violation of probation, *343 irrespective of whether the defendant had committed the assault; see State v. Wells, 112 Conn.App. 147, 156, 962 A.2d 810 (2009); the Appellate Court failed to recognize that the defendant's briefing on those claims also addressed the dispositional phase of the violation of probation proceeding.[3] See State v. Preston, 286 Conn. 367, 375-76, 944 A.2d 276 (2008) ("[R]evocation of probation hearings, pursuant to § 53a-32, are comprised of two distinct phases, each with a distinct purpose.... In the evidentiary phase, [a] factual determination by a trial court as to whether a probationer has violated a condition of probation must first be made.... In the dispositional phase, [i]f a violation is found, a court must next determine whether probation should be revoked because the beneficial aspects of probation are no longer being served." [Citations omitted; internal quotation marks omitted.]). Presumably, in the dispositional phase, the question of whether, in addition to possessing narcotics, the defendant also had committed the assault would have had some bearing on which disposition the court ordered and, if the court ordered the defendant to serve some portion of his suspended sentence as to that disposition, what that sentence would be. See General Statutes § 53a-32 (d) ("If such violation is established, the court may: [1] Continue the sentence of probation or conditional discharge; [2] modify or enlarge the conditions of probation or conditional discharge; [3] extend the period of probation or conditional discharge, provided the original period with any extensions shall not exceed the periods authorized by section 53a-29; or [4] revoke the sentence of probation or conditional discharge. If such sentence is revoked, the court shall require the defendant to serve the sentence imposed or impose any lesser sentence. Any such lesser sentence may include a term of imprisonment, all or a portion of which may be suspended entirely or after a period set by the court, followed by a period of probation with such conditions as the court may establish."). Rather than remand the case to the Appellate Court for it to reconsider the defendant's claims on the merits, however, we will address them in an effort to resolve this case expeditiously. See Finan v. Finan, 287 Conn. 491, 498, 949 A.2d 468 (2008) ("`Because both parties have briefed the issue and it was addressed at oral argument before this court,' we will review the issue in the interest of judicial economy. Montoya v. Montoya, 280 Conn. 605, 617 n. 11, 909 A.2d 947 [2006].").
We begin with the defendant's underlying claim that, following a hearing, the trial court improperly denied his motion to suppress the state's identification evidence from the alleged victim of the assault, Jesus Abrams, and that the trial court improperly relied on this impermissibly suggestive and unreliable identification in concluding that the defendant was the perpetrator of the assault of an elderly person. The defendant contends that, without this improper identification procedure, *344 the evidence was not sufficient to support the court's finding in the violation of probation case that he had committed an assault of an elderly person, and, accordingly, the judgment should be reversed and the case remanded for the trial court to consider whether to revoke the defendant's probation[4] and, if so, what disposition to impose. In support of his predicate claim that the trial court improperly denied his motion to suppress Abrams' identification, the defendant has provided a recitation of the evidence adduced at the hearing on the motion to suppress that raises questions about the suggestiveness of the identification procedure and the lack of reliability of the identification itself, particularly in light of the fact that Abrams was unable to identify the defendant at the hearing.[5] See State v. Ledbetter, 275 Conn. 534, 547-53, 881 A.2d 290 (2005) (discussing relevant considerations for determining suggestiveness and reliability), cert. denied, 547 U.S. 1082, 126 S. Ct. 1798, 164 L. Ed. 2d 537 (2006).
Integral to this claim is an assumption that a claim of unduly suggestive identification under the due process clause applies to a revocation of probation proceeding, an issue that this court has not yet definitively resolved. See State v. Daniels, 248 Conn. 64, 80 n. 16, 726 A.2d 520 (1999) (assuming, without deciding, that claim of unduly suggestive identification under due process clause applies to revocation of probation proceeding), overruled on other grounds by State v. Singleton, 274 Conn. 426, 876 A.2d 1 (2005); see also State v. Davis, 229 Conn. 285, 294, 641 A.2d 370 (1994) ("Although we do not decide the constitutional issue raised by the defendant, we must examine the issue of the applicable standard of proof for probation revocation proceedings in the context that the privilege of probation, once granted, is a constitutionally protected interest. The due process clause of the fourteenth amendment to the United States constitution requires that certain minimum procedural safeguards be observed in the process of revoking the conditional liberty created by probation.... This is so because the loss of liberty entailed is a serious deprivation requiring that the [probationer] be accorded due process." [Citations omitted; internal quotation marks omitted.]). As in Daniels, however, we need not decide that issue in the present case, because, even if we were to assume, without deciding, that the trial court improperly relied on the identification, we ultimately conclude that there was sufficient independent evidence upon which the trial court properly could have relied to conclude that the state had proven by a preponderance of the evidence that the defendant had committed the assault.[6]
The evidence produced by the state at trial discloses the following additional facts *345 upon which the trial court relied in making its determination that the defendant had committed the assault on Abrams. On June 10, 2006, Sergeants John Cummings and Kevin Gilleran, and Officer James Geremia of the Bridgeport police department, responded to a dispatch reporting a robbery and assault at 976 Iranistan Avenue in Bridgeport. They were provided additional information that the suspect was a black male, wearing a baseball cap, and that he had fled into apartment 10 at that location. When they arrived at the scene, the officers were greeted by a black male, standing in the doorway of the building. The male, later identified as the defendant, was wearing a baseball cap and was very excited, trying to get the officer's attention. The defendant appeared nervous, and even before the officers had an opportunity to question him or relate that they were responding to a reported robbery and assault, the defendant volunteered that the person the police were looking for was a Hispanic male who had fled down the street. Rather than chase after the person who the defendant claimed had committed the robbery and assault that the police were there to investigate, Cummings asked the defendant where he lived. When the defendant answered that he lived in apartment 10 at the address where they were standing, Cummings attempted to speak further with him, but the defendant became agitated and aggressive, necessitating his restraint. Following further investigation by other Bridgeport police officers, the defendant was placed under arrest for robbery and assault, and a search incident to that arrest resulted in the discovery of crack cocaine in the defendant's pants pocket.
The law governing the standard of proof for a violation of probation is well settled. Even when a defendant is acquitted of the underlying crime leading to the probation revocation proceeding, probation still may be revoked because all that is required in a probation violation proceeding is enough to satisfy the court within its sound judicial discretion that the probationer has not met the terms of his probation. Although the revocation may be based upon criminal conduct, "the constitution does not require that proof of such conduct be sufficient to sustain a criminal conviction." (Internal quotation marks omitted.) Payne v. Robinson, 10 Conn. App. 395, 402, 523 A.2d 917 (1987), aff'd, 207 Conn. 565, 541 A.2d 504, cert. denied, 488 U.S. 898, 109 S. Ct. 242, 102 L. Ed. 2d 230 (1988). Furthermore, it is well established that "the outcome of a criminal proceeding simply has no relevance whatsoever to an independent determination on the same facts made in a revocation of probation hearing." State v. Gauthier, 73 Conn.App. 781, 794, 809 A.2d 1132 (2002), cert. denied, 262 Conn. 937, 815 A.2d 137 (2003); see also id. ("[T]he most that can be said regarding the jury verdict is that the jury found that the alleged criminal conduct had not been proven beyond a reasonable doubt. The jury had no occasion to consider whether the charged conduct had been proven by a preponderance of the evidence, the standard of proof applicable to a probation revocation hearing.").
It is also well settled that "a trial court may not find a violation of probation unless it finds that the predicate facts underlying the violation have been established by a preponderance of the evidence at the hearingthat is, the evidence must induce a reasonable belief that it is more probable than not that the defendant has violated a condition of his or her probation." State v. Davis, supra, 229 Conn. at 302, 641 A.2d 370. "In making its factual determination, the trial court is entitled to draw reasonable and logical inferences *346 from the evidence." (Internal quotation marks omitted.) State v. McElveen, 69 Conn.App. 202, 205, 797 A.2d 534 (2002). Accordingly, "[a] challenge to the sufficiency of the evidence is based on the court's factual findings. The proper standard of review is whether the court's findings were clearly erroneous based on the evidence.... A court's finding of fact is clearly erroneous and its conclusions drawn from that finding lack sufficient evidence when there is no evidence in the record to support [the court's finding of fact] ... or when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." (Citation omitted; internal quotation marks omitted.) State v. Hooks, 80 Conn.App. 75, 80-81, 832 A.2d 690, cert. denied, 267 Conn. 908, 840 A.2d 1171 (2003). As we previously have indicated, however, a trial court's finding of a violation of probation is not clearly erroneous solely because of an acquittal at the criminal trial on the basis of the same alleged unlawful conduct.
The record in the present case shows that sufficient evidence was presented to support the trial court's finding that the state had demonstrated by a preponderance of the evidence that the defendant had perpetrated the assault on Abrams. As the trial court found in accordance with the evidence, the defendant was the only person in the area of the assault who matched the description of the suspect, and he was standing at the scene of the crime when the police officers arrived there within a very short time after the assault. As soon as the defendant saw the police and before the officers had a chance to inform him of the basis for their investigation, the defendant approached the officers and attempted to mislead them by stating that the assailant was a Hispanic male who had fled from the scene, urging them to pursue this alleged assailant quickly. The trial court reasonably relied on this evidence to infer the defendant's guilt. See State v. Moody, 214 Conn. 616, 626, 573 A.2d 716 (1990) ("misstatements of an accused, which a jury could reasonably conclude were made in an attempt to avoid detection of a crime or responsibility for a crime or were influenced by the commission of the criminal act, are admissible as evidence reflecting a consciousness of guilt" [internal quotation marks omitted]); State v. Oliveras, 210 Conn. 751, 759, 557 A.2d 534 (1989) ("[e]vidence that an accused has taken some kind of evasive action to avoid detection for a crime, such as flight, concealment of evidence, or [giving] a false statement, is ordinarily the basis for a charge on the inference of consciousness of guilt"). Last, but certainly not least, the defendant told the police that he lived in apartment 10 of the building to which they had responded, which is where the assailant reportedly had fled following the assault. Accordingly, there was sufficient evidence to support the trial court's finding that the defendant had assaulted an elderly person. In light of the fact that the defendant has not challenged the propriety of his conviction for possession of narcotics, this determination is dispositive of the defendant's appeal.
The judgment of the Appellate Court is affirmed.
In this opinion the other justices concurred.
NOTES
[1] General Statutes § 53a-32 provides in relevant part: "(a) At any time during the period of probation or conditional discharge, the court or any judge thereof may issue a warrant for the arrest of a defendant for violation of any of the conditions of probation or conditional discharge, or may issue a notice to appear to answer to a charge of such violation, which notice shall be personally served upon the defendant. Any such warrant shall authorize all officers named therein to return the defendant to the custody of the court or to any suitable detention facility designated by the court....
"(d) If such violation is established, the court may: (1) Continue the sentence of probation or conditional discharge; (2) modify or enlarge the conditions of probation or conditional discharge; (3) extend the period of probation or conditional discharge, provided the original period with any extensions shall not exceed the periods authorized by section 53a-29; or (4) revoke the sentence of probation or conditional discharge. If such sentence is revoked, the court shall require the defendant to serve the sentence imposed or impose any lesser sentence. Any such lesser sentence may include a term of imprisonment, all or a portion of which may be suspended entirely or after a period set by the court, followed by a period of probation with such conditions as the court may establish. No such revocation shall be ordered, except upon consideration of the whole record and unless such violation is established by the introduction of reliable and probative evidence and by a preponderance of the evidence."
Although § 53a-32 was amended since the time of the defendant's probation revocation proceedings; see Public Acts 2008, No. 08-102, § 7; the changes, including the redesignation of certain subsections, are not relevant to this appeal. For purposes of clarity, we refer herein to the current revision of the statute.
[2] "A person is guilty of assault of an elderly... person in the third degree when such person commits assault in the third degree under section 53a-61 and ... the victim of such assault has attained at least sixty years of age...." General Statutes § 53a-61a (a)(1). "A person is guilty of assault in the third degree when: (1) With intent to cause physical injury to another person, he causes such injury to such person or to a third person; or (2) he recklessly causes serious physical injury to another person; or (3) with criminal negligence, he causes physical injury to another person by means of a deadly weapon, a dangerous instrument or an electronic defense weapon." General Statutes § 53a-61 (a).
[3] In addition to his claim that the case should have been remanded for sentencing based solely on his narcotics possession because the severity of his sentence had been affected by the assault charge, the defendant also argued based on case law from Arizona that, faced only with the narcotics possession, the trial court "might have concluded that revocation was not warranted...." (Internal quotation marks omitted.) For the reasons set forth in State v. Wells, supra, 112 Conn.App. at 156, 962 A.2d 810, in the absence of some unique circumstance not present in this case, we abide by our well recognized jurisprudence that "to support a judgment of revocation of probation, [o]ur law does not require the state to prove that all conditions alleged were violated; it is sufficient to prove that one was violated." (Internal quotation marks omitted.)
[4] For the reasons set forth in footnote 3 of this opinion, we do not reach the defendant's challenge to the propriety of his adjudication of a violation of his probation, and we limit our review to his claims related to the disposition following the finding of such a violation.
[5] This identification had no relevance to the defendant's possession of narcotics conviction, which, as we previously have noted, has not been challenged on appeal.
[6] This determination also obviates the need for this court to direct the Appellate Court to remand the case to the trial court for a new dispositional phase of the probation revocation proceeding to consider whether the sentence based solely on the defendant's possession of narcotics was appropriate or whether to reduce the sentence in the absence of sufficient evidence of the assault. See State v. Strickland, 243 Conn. 339, 348, 703 A.2d 109 (1997) (noting that second, or dispositional, phase of probation hearing occurs if violation of probation is established in first phase).
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https://www.courtlistener.com/api/rest/v3/opinions/2548664/
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94 P.3d 372 (2004)
122 Wash.App. 507
PARADISE ORCHARDS GENERAL PARTNERSHIP, a Washington General Partnership, Appellants,
v.
George FEARING and Leavy, Schultz, Davis & Fearing, P.S., Respondents.
No. 22046-0-III.
Court of Appeals of Washington, Division 3, Panel Two.
July 13, 2004.
*374 Mark A. Johnson, Sims G. Weymuller, Donovan R. Flora, Johnson, Flora, Seattle, WA, for Appellants.
John R. Creatura, Tacoma, WA, for Respondents.
BROWN, J.
Paradise Orchards (Paradise) sued its former lawyer, George Fearing, and his law firm (collectively Mr. Fearing) in Benton County alleging he negligently prepared a remedies clause in an earnest money agreement involving the sale of Paradise's orchard. In previous litigation in Franklin County between Paradise and the buyer, a judge gave an interlocutory, unappealed ruling that the remedies clause did not allow specific performance, allegedly forcing Paradise to unfavorably settle with the purchaser before final judgment. The trial court held it was not *375 bound by the previous ruling, reasoned specific performance was an available remedy, and dismissed. On appeal, Paradise contends collateral estoppel precluded the trial court from reinterpretation of the remedies clause. We disagree, and affirm.
FACTS
This legal malpractice dispute arises from a failed real estate transaction in which Mr. Fearing represented the seller, Paradise. In August 1997, Stormy Mountain Fruit Company offered to buy Paradise's apple orchard and crop. The original offer contained a standard remedy clause limiting the seller's remedy upon failure to close. After exchanging drafts, Mr. Fearing prepared an earnest money agreement (agreement) acceptable to both buyer and seller. The agreement contained the following remedies clause (Paragraph 24):
Upon any default by the buyer, under this earnest money agreement, seller shall have the right to immediately repossess the property [interlineated part: after providing buyer with 15 days written notice of default]. In such event, seller shall have the right to maintain for itself, and to sell on its behalf, keeping the proceeds thereof, of any crop on the property. Seller shall have no obligation to reimburse buyer for any of the earnest money deposit.
Exh. 2 at 7-8.
After the closing fell through, Paradise sued Stormy Mountain and others not parties here for specific performance in the Franklin County Superior Court. After the summary judgment phase, Mr. Fearing ceased representing Paradise, apparently to facilitate his participation as a witness. In September 2000, the court interpreted the agreement and issued a three sentence memorandum decision, ruling the agreement was a valid contract and Paradise's remedy was "limited by the provisions of Paragraph 24." Exh. 1. Paradise did not seek appellate review of the adverse ruling. Instead, Paradise compromised and settled with Stormy Mountain for $335,000. No findings, conclusions, or final judgment were entered.
In December 2000, Paradise filed a legal malpractice suit in Benton County against Mr. Fearing and others no longer in this suit. In March 2003, the parties entered two relevant stipulations. First, the parties agreed to a bench trial. Second, the parties agreed that the trial court would first determine whether it had legal authority to revisit the Franklin County court's ruling regarding Paragraph 24 of the agreement.
The parties agreed that if the trial court revisited the ruling, it would then "determine whether or not the exclusive remedy in favor of Paradise Orchards against Stormy Mountain Fruit Company (Paragraph 24 of the Earnest Money Agreement) was repossession or whether repossession was additive to all other remedies under Washington law, including specific performance and money damages." Clerk's Papers (CP) at 20-21. The parties agreed that if the court determined "that repossession was additive to other remedies, including specific performance and money damages, then the Court will enter findings of fact and conclusions of law and enter judgment for the defendants against plaintiff on plaintiff's Complaint." CP at 21. Defendant's counterclaim is not an issue here.
On April 7, 2003, the trial court entered findings of fact and conclusions of law favoring Mr. Fearing. The trial court concluded collateral estoppel did not apply to the Franklin County court's ruling and against Mr. Fearing. "Since collateral estoppel does not apply, the Court has the right and obligation to evaluate the correctness of [the Franklin County court's] ruling that the `remedies clause' was an exclusive remedy and precluded plaintiff from recovering specific performance and/or money damages." CP at 14.
The trial court then concluded that the Franklin County court erred. "Because the parties did not specifically exclude all other remedies, the law implies that those remedies are not waived and may be pursued, in the alternative, to the stated right of repossession." CP at 14. The trial court supplemented that conclusion of law with the transcript of its oral ruling. "Based on the stipulation of the parties, since the Court *376 has determined that repossession was additive to other remedies, including specific performance and money damages, the Court hereby enters judgment for the defendants and against plaintiff on plaintiff's complaint." CP at 14. The trial court denied Paradise's motions to vacate the judgment and for a new trial. Paradise appealed both the trial court's ruling on the merits and denial of its post-trial motions.
ANALYSIS
A. Collateral Estoppel
The issue is whether the doctrine of collateral estoppel barred the trial court from revisiting the memorandum decision of the prior court.
"To prove legal malpractice, the plaintiff must show (1) employment of the attorney (giving rise to the duty), (2) failure by the attorney to exercise ordinary skill and knowledge (breach of the duty), (3) proximate cause (causation), and (4) resulting loss to the client (damages)." Kommavongsa v. Haskell, 149 Wash.2d 288, 300, 67 P.3d 1068 (2003) (citing Hizey v. Carpenter, 119 Wash.2d 251, 830 P.2d 646 (1992)). Here, Mr. Fearing's duty to Paradise is not in dispute. The disputed issue of the meaning of Paragraph 24 implicates primarily the causation element of Paradise's claim.
"Proximate cause consists of two elements: cause in fact and legal causation." Nielson v. Eisenhower & Carlson, 100 Wash.App. 584, 591, 999 P.2d 42 (2000) (citing City of Seattle v. Blume, 134 Wash.2d 243, 251, 947 P.2d 223 (1997)). "Cause in fact refers to the `but for' consequences of the act, that is, the immediate connection between an act and an injury." Blume, 134 Wash.2d at 251-52, 947 P.2d 223. "The `but for' test requires a plaintiff to establish that the act complained of probably caused the subsequent disability." Daugert v. Pappas, 104 Wash.2d 254, 260, 704 P.2d 600 (1985).
"Legal causation rests on policy considerations determining how far the consequences of a defendant's act should extend." Blume, 134 Wash.2d at 252, 947 P.2d 223. "It involves the question of whether liability should attach as a matter of law, even if the proof establishes cause in fact." Id. at 252, 947 P.2d 223. In our context, "proximate cause boils down to whether the client would have fared better but for the attorney's malpractice." Lavigne v. Chase, Haskell, Hayes & Kalamon, 112 Wash.App. 677, 683, 50 P.3d 306 (2002) (citing Daugert, 104 Wash.2d at 257, 704 P.2d 600; Brust v. Newton, 70 Wash.App. 286, 293-94, 852 P.2d 1092 (1993)).
"Collateral estoppel, also known as issue preclusion, `prevents relitigation of an issue after the party estopped has had a full and fair opportunity to present its case.'" Barr v. Day, 124 Wash.2d 318, 324-25, 879 P.2d 912 (1994) (quoting Hanson v. Snohomish, 121 Wash.2d 552, 561, 852 P.2d 295 (1993)). The party asserting collateral estoppel must prove four elements: (1) the issue decided in the prior action is identical to the issue considered in the second; (2) the prior adjudication ended in a final judgment on the merits; (3) the party to be estopped was a party or in privity with a party to the prior action; and (4) application of collateral estoppel will not work an injustice against the party to be estopped. Barr, 124 Wash.2d at 325, 879 P.2d 912; Hanson, 121 Wash.2d at 561-62, 852 P.2d 295.
The parties here do not dispute that both lawsuits concern the identical issue, the meaning of Paragraph 24 of the agreement. They dispute the second, third, and fourth elements of collateral estoppel. Mr. Fearing prevails on each element.
To invoke collateral estoppel the bound party must have "'had a full and fair opportunity'" to litigate the issue the first time around. Barr, 124 Wash.2d at 325, 879 P.2d 912 (quoting Hanson, 121 Wash.2d at 561, 852 P.2d 295). Mr. Fearing had no opportunity to litigate the meaning of Paragraph 24 on his own behalf. He was not a party to the Franklin County litigation. Nor was Mr. Fearing in a position to intervene as a party. Instead, Paradise enlisted Mr. Fearing, its former agent, as a witness in its behalf in aid of the factual assertion that its intent was to have specific performance as an additive remedy.
*377 The Franklin County court interpreted paragraph 24 of the agreement as a matter of law in an interlocutory ruling. While that may be the law of the Franklin County case, it is not the law of the Benton County case or a proper basis for Paradise's collateral estoppel arguments here. Even though the law of the case may form the basis for a collateral estoppel argument, the law of the case rule is discretionary and not applied when the result would be unjust. Greene v. Rothschild, 68 Wash.2d 1, 10, 414 P.2d 1013 (1966). Paradise did not seek discretionary review of the arguably erroneous interlocutory ruling or allow final judgment to be entered by the Franklin County court so it could appeal. Rather, Paradise opted to compromise and settle with the buyer instead of contesting the adverse ruling. For collateral estoppel purposes, the ruling was not a final judgment on the merits. Mr. Fearing was not a party or in privity with Paradise.
Moreover, in legal malpractice cases, it is the ordinary and accepted practice to have a "trial within a trial" to retry, or try for the first time, the merits of the case in which the alleged malpractice occurred to determine what a reasonable judge or finder of fact would have done absent the alleged malpractice. See, e.g., Daugert, 104 Wash.2d at 258-59, 704 P.2d 600; Brust, 70 Wash.App. at 293, 852 P.2d 1092; Halvorsen v. Ferguson, 46 Wash.App. 708, 713, 735 P.2d 675 (1986). Applying collateral estoppel here would unfairly deprive Mr. Fearing of his opportunity to argue the meaning of Paragraph 24 of the agreement. Given all, we conclude the Benton County trial court did not err in rejecting Paradise's collateral estoppel argument.
B. Interpretation of Paragraph 24 of the Earnest Money Agreement
The issue is whether the Benton County trial court erred in concluding Paradise's remedies were not limited by the language of Paragraph 24 of the Earnest Money Agreement (agreement) as was first determined by the Franklin County court.
Paradise contends the substantial evidence standard was appropriate in the trial court, and is the standard here. But no findings of fact were entered by the Franklin County court and no oral decision sheds light here. Rather, we have a three sentence conclusory memorandum decision indicating a legal interpretation. We apply a de novo standard of review to questions of law. Rasmussen v. Bendotti, 107 Wash.App. 947, 954, 29 P.3d 56 (2001).
Accordingly, our inquiry is whether the trial court interpreted Paragraph 24 of the agreement correctly to allow specific performance. An appellate court's primary goal in interpreting a contract is to ascertain the parties' intent. Anderson Hay & Grain Co., Inc. v. United Dominion Indus., Inc., 119 Wash.App. 249, 254, 76 P.3d 1205 (2003), review denied, 151 Wash.2d 1016, 88 P.3d 964 (2004); Kenney v. Read, 100 Wash.App. 467, 474, 997 P.2d 455, 4 P.3d 862 (2000). In determining the parties' intent, we will consider "`the contract as a whole, the subject matter and objective of the contract, all the circumstances surrounding the making of the contract, the subsequent acts and conduct of the parties to the contract, and the reasonableness of the respective interpretations advocated by the parties.'" Berg v. Hudesman, 115 Wash.2d 657, 667, 801 P.2d 222 (1990) (quoting Stender v. Twin City Foods, Inc., 82 Wash.2d 250, 254, 510 P.2d 221 (1973)).
"Generally, what the parties intend is a question of fact." Anderson Hay & Grain, 119 Wash.App. at 255, 76 P.3d 1205 (citing Kenney, 100 Wash.App. at 475, 997 P.2d 455). "However, the interpretation of an unambiguous contract is a question of law." Stranberg v. Lasz, 115 Wash.App. 396, 402, 63 P.3d 809 (2003) (citing Mayer v. Pierce County Med. Bureau, Inc., 80 Wash.App. 416, 420, 909 P.2d 1323 (1995)). "A provision is not ambiguous merely because the parties suggest opposing meanings." Stranberg, 115 Wash.App. at 402, 63 P.3d 809 (citing Mayer, 80 Wash.App. at 421, 909 P.2d 1323). Whether a contract provision is ambiguous is also a question of law subject to de novo review. Stranberg, 115 Wash.App. at 402, 63 P.3d 809.
"A court may look to parole evidence to explain an ambiguity in a contract." Stranberg, 115 Wash.App. at 402, 63 P.3d 809 *378 (citing State v. Nason, 96 Wash.App. 686, 691, 981 P.2d 866 (1999)). Even if the contract language is clear and unambiguous, the trial court may consider extrinsic evidence for the limited purpose of determining the intent of the parties. Berg, 115 Wash.2d at 669, 801 P.2d 222; Go2Net, Inc. v. C I Host, Inc., 115 Wash.App. 73, 84, 60 P.3d 1245 (2003); Bort v. Parker, 110 Wash.App. 561, 573, 42 P.3d 980, review denied, 147 Wash.2d 1013, 56 P.3d 565 (2002). The purpose of such evidence is to aid the trial court in interpreting what is contained in the contract and not for the purpose of proving intent independent of that contract. Berg, 115 Wash.2d at 669, 801 P.2d 222; Go2Net, 115 Wash.App. at 84, 60 P.3d 1245.
"Admissible extrinsic evidence does not include (1) evidence of a party's unilateral or subjective intent as to the meaning of a contract word or term, (2) evidence that would show an intention independent of the contract, or (3) evidence that varies, contradicts or modifies the written language of the contract." Bort, 110 Wash.App. at 574, 42 P.3d 980; accord Go2Net, 115 Wash.App. at 84, 60 P.3d 1245. We strive "to ascertain the meaning of what is written in the contract, and not what the parties intended to be written." Bort, 110 Wash.App. at 574, 42 P.3d 980 (citing Confederated Tribes of Chehalis Reservation v. Johnson, 135 Wash.2d 734, 752, 958 P.2d 260 (1998)); see also Go2Net, 115 Wash.App. at 85, 60 P.3d 1245.
Here, Paragraph 24 of the agreement partly states that in the event of the buyer's default the seller "shall have the right" to repossess the property and "shall have the right" to sell the apple crop and keep the proceeds. Exh. 2, at 7-8. The provision further states partly that the seller "shall have no obligation" to refund the earnest money deposit. Id. at 8. By using the clauses "shall have the right" and "shall have no obligation" the paragraph unambiguously implies that the buyer has discretion to invoke the enumerated remedies. In other words, Paragraph 24 of the agreement does not specify mandatory and exclusive remedies. Rather, it reserves the seller's right to invoke the enumerated remedies. No language in the agreement states the remedies are exclusive.
This interpretation is consistent with the long-held rule in Washington that a liquidated damages clause in a real estate purchase and sale contract does not foreclose the remedy of specific performance absent language in the contract specifying liquidated damages to be the sole and exclusive remedy. Asia Investment Co. v. Levin, 118 Wash. 620, 624-27, 204 P. 808 (1922); McCutchen v. Brink, 129 Wash. 103, 104-07, 224 P. 605 (1924). The proper function of a liquidated damages provision is to limit the non-breaching party's recovery of monetary damages, not to deprive the non-breaching party of the right to specific performance. Jenson v. Richens, 74 Wash.2d 41, 47, 442 P.2d 636 (1968); Asia Investment, 118 Wash. at 625-26, 204 P. 808.
The foregoing authorities are persuasive in the real estate purchase and sale context. Paradise relies upon an inapposite labor contract case, United Glass Workers' Local No. 188 v. Seitz, 65 Wash.2d 640, 642, 399 P.2d 74 (1965), which reasons a specific remedy provision is presumably the sole remedy. Asia Investment and its progeny control here.
RCW 64.04.005, the statute governing earnest money deposits, does not aid Paradise. If the earnest money deposit does not exceed five percent of the purchase price, and the earnest money agreement contains the required language, a provision in the agreement providing that forfeiture of the earnest money deposit is the "seller's sole and exclusive remedy" in the event of the purchaser's breach "is valid and enforceable, regardless of whether the seller incurs any actual damages." RCW 64.04.005(1)(a).
However, when the earnest money deposit is greater than five percent of the purchase price, "then the seller shall have all rights and remedies otherwise available at law or in equity as a result of the failure of the purchaser, without legal excuse, to complete the purchase." RCW 64.04.005(2). Here, the earnest money deposit exceeded five percent of the purchase price ($100,000 earnest money on approximately $1.745 million), according to the trial court. In passing, we note the Franklin County Court did not mention RCW 64.04.005 in its decision, however, the *379 parties and the Benton County court did discuss its applicability, and we have done so as well to acknowledge the arguments.
As for the extrinsic evidence of intent in the record reflecting the parties' subjective thoughts on the matter, it is not proper evidence under the context rule. Go2Net, 115 Wash.App. at 84, 60 P.3d 1245; Bort, 110 Wash.App. at 574, 42 P.3d 980. A more objective body of evidence is the accumulation of offers and counteroffers volleyed back and forth between the parties. The original earnest money agreement contained statutory language. Paradise's counteroffer proffered a remedies clause stating the seller "can" repossess the property. Exh. 4, 6, 7. Stormy Mountain proposed the "seller shall have all remedies due under law." Exh. 5. The end result was Paragraph 24, which we previously reasoned did not preclude multiple remedies, including specific performance.
The objective evidence suggests the parties did not intend to exclude specific performance. The focus of negotiation was whether repossession would be an express remedy, not an exclusive one. Paragraph 24 reflects that optional intent. Paradise urges us to impermissibly add language to the contract. See Go2Net, 115 Wash.App. at 84, 60 P.3d 1245; Bort, 110 Wash.App. at 574, 42 P.3d 980 (extrinsic evidence cannot be used to vary or modify the written words of the contract). Given all, Paradise's contentions are unpersuasive.
In sum, the trial court correctly reasoned the Franklin County court erred. Paradise could have challenged the earlier trial court's erroneous memorandum decision. It chose not to do so, thus giving up an opportunity to have the error rectified. Paradise cannot say as a matter of law that the error resulted in the unsatisfactory settlement with Stormy Mountain. Hence, Paradise fails to establish the legal causation element of its legal malpractice claim.
Affirmed.
WE CONCUR: KATO, A.C.J., and SCHULTHEIS, J.
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8 A.3d 1234 (2010)
Dione A. WASHINGTON, Appellant,
v.
UNITED STATES, Appellee.
No. 08-CO-1417.
District of Columbia Court of Appeals.
Submitted October 21, 2010.
Decided November 18, 2010.
Steven R. Kiersh, Washington, DC, appointed by the court, for appellant.
*1235 Ronald C. Machen Jr., United States Attorney, and Roy W. McLeese III, Mary B. McCord, and Lauren R. Bates, Assistant United States Attorneys, for appellee.
Before KRAMER, FISHER, and THOMPSON, Associate Judges.
FISHER, Associate Judge:
Appellant Dione Washington argues that the trial court erred when it revoked his probation upon learning that he had been convicted for criminal conduct that occurred before his probation began. Because the court knew those charges were pending at the time it imposed probation, we agree with appellant's argument and reverse.
I. Background
Appellant was arrested for acts occurring on July 24, 2007, and pled guilty on December 10, 2007, to the misdemeanor offenses of carrying a pistol without a license, possession of an unregistered firearm, and unlawful possession of ammunition. At that time, the prosecutor informed the trial court that appellant was under investigation by a grand jury for "Murder II while armed" based on conduct that occurred on June 2, 2007, and the court decided to defer sentencing to "trail the other case." However, after continuing the matter until March 19, 2008, and learning that the investigation was still pending, the trial court decided to proceed with sentencing. Appellant received three consecutive terms of one year of incarceration. All of that sentence was suspended, except for time served and two additional months' imprisonment, and the trial court imposed one year of supervised probation. The trial court did not in any way suggest that appellant's probationary sentence was conditioned on the outcome of the pending investigation.
Appellant was later found guilty of crimes arising from his conduct on June 2, 2007, including carrying a pistol without a license, possession of an unregistered firearm, unlawful possession of ammunition, assault with a dangerous weapon, and two counts of possession of a firearm during a crime of violence; he was sentenced for those offenses on October 17, 2008. A probation officer then reported these new convictions, suggesting that appellant had violated a condition of his probation by "fail[ing] to obey all laws." On October 29, 2008, the trial court revoked appellant's probation and sentenced him to three consecutive terms of twelve months' incarceration, stating that:
The issue here is that there is a conviction and sentencing on events that took place prior to Mr. Washington having been placed on probation.... The court could not have known that [the pending] matter would resolve in the way that it did and so, essentially what the court did was to give [the defendant] the benefit of the doubt.... The court does find that revocation is appropriate here. Had the [other] matter ... been resolved prior to the arrest and sentencing in the instant case [the defendant] would simply not have even been considered as a candidate for probation.... It should be noted that the judgment in the [other matter] was entered following Mr. Washington's placement on probation... and it is the judgment in that case that the court finds violative of Mr. Washington's probation.
II. Analysis
"[T]he two primary goals of probation" are rehabilitation of the convict and protection of society from future criminal violations. United States v. Knights, 534 *1236 U.S. 112, 119, 122 S. Ct. 587, 151 L. Ed. 2d 497 (2001). To serve these goals, probation officers are required to make reports "to the end that the court may be at all times fully informed of the circumstances and conduct of probationers." D.C.Code § 24-303 (2001).
Recognizing the purposes of probation, we have noted that "[a] probation revocation proceeding is not a criminal prosecution; rather, it is more in the nature of an administrative hearing intimately concerned with the probationer's rehabilitation." Short v. United States, 366 A.2d 781, 785 (D.C.1976) (citations omitted). "The decision whether to grant or revoke probation is a matter committed to the sound discretion of the sentencing court." Smith v. United States, 474 A.2d 1271, 1274 (D.C.1983) (citations omitted). In making that determination, the sentencing court "must balance the competing interests of the community in safety with the rehabilitative goals of probation." Id. (citation and internal quotation marks omitted). However, "[t]he threshold determination whether a probationer violated a condition of probation ... is not discretionary; it is instead a mixed question of fact (primarily, what actions did the probationer take?) and of law (did these actions constitute a violation of the probationary conditions?)." Resper v. United States, 527 A.2d 1257, 1260 (D.C.1987) (footnote omitted).
D.C.Code § 24-304(a) (2001) provides, in relevant part:
At any time during the probationary term the court may modify the terms and conditions of the order of probation, or may terminate such probation, when in the opinion of the court the ends of justice shall require, and when the probation is so terminated ... the court may revoke the order of probation and cause the rearrest of the probationer and impose a sentence....
Although the government correctly notes that § 24-304(a) is "a broad grant of authority" to the trial court to terminate and revoke probation, Brown v. United States, 900 A.2d 184, 188 (D.C.2006), that authority has limits. This court has recognized that a probationer's Fifth Amendment right to due process requires that revocation be based on a showing that the probationer has "`acted in violation of one or more conditions' of his probation." Carradine v. United States, 420 A.2d 1385, 1391 (D.C.1980) (quoting Gagnon v. Scarpelli, 411 U.S. 778, 784, 93 S. Ct. 1756, 36 L. Ed. 2d 656 (1973)). "[P]robation may not be revoked in the absence of a threshold determination that there has been a `violation' of the express conditions of probation, or of a condition so clearly implied that a probationer, in fairness, can be said to have notice of it." Id. at 1389 (footnote omitted).[1] "In effect, the loss of probation must have been a foreseeable consequence of the probationer's actions." Resper, 527 A.2d at 1260 (citations omitted).
This "foreseeable consequence" principle, which requires that the probationer "have acted, or failed to act, in a way that foreseeably could result in revocation," comports with both the requirements of due process and the rehabilitative purposes of probation. Carradine, 420 A.2d at 1390 (citing Douglas v. Buder, 412 U.S. 430, 432, 93 S. Ct. 2199, 37 L. Ed. 2d 52 (1973)). Except in circumstances not presented by this case, in which a defendant *1237 makes misrepresentations or fraudulently conceals information from the trial court in connection with sentencing,[2] a defendant can only engage in conduct triggering such a "foreseeable consequence" after he is sentenced. At that time he is given notice of the conditions of his probation and the term of probation begins. Id. at 1389; see Williams v. United States, 832 A.2d 158, 160 n. 3 (D.C.2003) ("[F]or purposes of revocation of probation, probation is deemed to have begun on the date of sentencing even if service of the probation has not begun." (citations omitted)).
The government argues that "a violation of a term or condition of probation is not always a necessary predicate to revocation," pointing to cases of fraudulent concealment such as Jones, discussed supra note 2. The point is well-taken, but it does not assist us here because the government does not allege that appellant willfully misled the trial court in this case. Of more interest is the government's reference to cases in which courts purportedly have upheld revocation based solely on "new information or a change of circumstances." Although there is broad dictum in these cases, the holding of the case on which the government principally relies turns on "fraudulent concealment of [the defendant's] continuing criminal conduct" and the "new and significant" information that "[the defendant], after sentence was imposed, continued to embezzle from the employer who vouched for him at the sentencing hearing." United States v. Jurgens, 626 F.2d 142, 144-45 & n. 1 (9th Cir.1980). The other cases cited by the government do not support the ruling of the trial court in this case.[3]
Here, of course, the trial court was fully aware of the allegations about appellant's prior conduct. If it wished to give appellant "the benefit of the doubt," but preserve its option to take the outcome of the pending investigation into account, it should have deferred sentencing until the grand jury investigation was concluded and any resulting charges were adjudicated.
We do not doubt that the conduct underlying appellant's new convictions is relevant to his suitability for probation. But that conduct occurred before probation was granted. Losing at trial (or even pleading guilty to criminal charges) is not the same thing as violating the law. In other words, it is the criminal conduct, not the adjudication of guilt, that would constitute a violation of probation. Other jurisdictions have reached a similar conclusion. See, e.g., United States v. Drinkall, 749 F.2d 20, 21 (8th Cir.1984) ("[T]he court may not revoke [the defendant's] probation based solely on unlawful conduct of which it or the government was aware at the time of sentencing."); Patuxent Inst. Bd. of Review v. Hancock, 329 Md. 556, 620 A.2d 917, 927 (1993) ("Revocation of probation *1238... must be based on conduct occurring subsequent to the grant of probation, but prior to its expiration." (citation omitted)); State v. Ballensky, 586 N.W.2d 163, 167 (N.D.1998) ("Revoking probation for conduct committed prior to the sentence to probation does not serve the rehabilitative purpose of probation and is contrary to law.").
III. Conclusion
The record does not support the trial court's finding that appellant violated a condition of his probation. The judgment of the Superior Court is hereby reversed, and this case is remanded with instructions to reinstate the sentence of probation.
So ordered.
NOTES
[1] "[T]here is implied within every grant of probation a condition that the probationer not violate the law while on probation." Carradine, 420 A.2d at 1389 n. 9 (emphasis added) (quoting Wright v. United States, 315 A.2d 839, 842 n. 7 (D.C.1974)) (internal quotation marks omitted).
[2] The government makes no allegation that this is the exceptional case of fraudulent concealment, which might compel a different result. See, e.g., Jones v. United States, 401 A.2d 473, 478 (D.C.1979) (finding no abuse of discretion in revocation of defendant's probation after defendant "willfully misled the court and the probation office" by failing to mention outstanding criminal charges in response to probation counselor's direct questioning).
[3] See United States v. Wickenhauser, 710 F.2d 486, 487 (8th Cir.1983) (citing Jurgens in dictum for proposition that probation may be revoked "based upon new information or a change of circumstances," but declining defendant's own request that his probation be revoked); Trueblood Longknife v. United States, 381 F.2d 17, 20 (9th Cir.1967) (finding no abuse of discretion in revocation of probation based on defendant's "efforts to knowingly and fraudulently conceal" his prior bankruptcy and use of an alias from trial court and probation office).
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18 A.3d 1054 (2011)
420 N.J. Super. 75
STATE of New Jersey, Plaintiff-Respondent,
v.
Terrence MILLER, Defendant-Appellant.
No. A-6243-07T4.
Superior Court of New Jersey, Appellate Division.
Argued March 2, 2011.
Decided May 10, 2011.
*1055 Stephen A. Caruso, Assistant Deputy Public Defender, argued the cause for appellant (Yvonne Smith Segars, Public Defender, attorney; Mr. Caruso, on the briefs).
Dorothy Hersh, Assistant Prosecutor, argued the cause for respondent (Joseph L. Bocchini, Jr., Mercer County Prosecutor, attorney; Ms. Hersh, of counsel and on the briefs).
Appellant filed a pro se supplemental brief.
Before Judges FUENTES, ASHRAFI[1] and NUGENT.
The opinion of the court was delivered by
ASHRAFI, J.A.D.
Defendant Terrence Miller[2] appeals from his conviction by a jury on two counts of third-degree possession of cocaine, N.J.S.A. 2C:35-10a(1); two counts of third-degree possession of cocaine with intent *1056 to distribute, N.J.S.A. 2C:35-5a(1); and one count of third-degree distribution of cocaine, N.J.S.A. 2C:35-5a(1).
The issue we address is whether the fact that defendant did not meet his substituted trial attorney until the morning scheduled for a suppression hearing and trial, by itself, constitutes deprivation of defendant's right to a fair trial, or whether defendant must show that he was prejudiced by the late contact with his trial attorney. Following precedents of our Supreme Court and our own prior decisions, we conclude that defendant is not entitled to a new trial without demonstrating ineffective assistance of counsel or other prejudice. Because defendant has not made either of those showings, we affirm his convictions.
We are not faced with a case where an attorney was first appointed to represent an indigent defendant on the day that a criminal trial was about to begin. Cf. Jablonowski v. State, 29 N.J.Super. 109, 102 A.2d 56 (App.Div.1953) (attorney was appointed to represent the defendant on the morning scheduled for trial and had less than two and a half hours to prepare). Nor is this a case where denying an adjournment "equaled requiring that defendant proceed without counsel" and, thus, defendant "in practice has been denied the right to be represented by counsel." State v. Hayes, 205 N.J. 522, 541, 16 A.3d 1028 (2011).
Defendant was actively represented by counsel from the Public Defender's Office in pretrial proceedings long before the scheduled trial date. Defendant and his attorneys had at least two weeks' notice that trial would begin on Monday, December 10, 2007. For reasons not revealed in our record, managing attorneys at the Public Defender's Office substituted a different Assistant Deputy Public Defender for the staff attorney who had represented defendant in earlier proceedings. At no time did either of the two Assistant Deputy Public Defenders assigned, or the managing attorneys, state to the trial court that they were unprepared to proceed, or request more time to investigate or gather evidence for presentation of a defense.
On December 10, 2007, newly-assigned counsel requested an adjournment because defendant wished to meet with him in "a calmer setting so that we can discuss and plan this particular matter." Counsel stated he had received the file the previous week and had time to review it and prepare for trial. His goal in requesting an adjournment was to develop "rapport" with his client. The trial judge denied the request. Because the central issue on appeal is whether that ruling violated defendant's right to a fair trial, we quote at length the relevant colloquy between defense counsel and the trial judge:
DEFENSE COUNSEL:I just wanted to state on the record, in my conversations with Mr. Miller this morning, because the nature of this change of assignment, this is the first opportunity I've had to meet with him, it goes without saying that Mr. Miller is expressing some
THE COURT: Concern?
DEFENSE COUNSEL:concern. And the reality is, judge, one develops a rapport with one's attorney, and that rapport isn't established on Day 1 when you're ready to start a suppression hearing, and ultimately proceed to trial.
And while I understand it is the Court's intention to call this matter and have this matter proceed to trial, in fairness to Mr. Miller, I think he would best prefer that this matter was adjourned to allow an opportunity for us to sit in ... a calmer setting so that we can discuss and plan this particular matter.
I've advised him that ... the file was provided to me sometime last week, with *1057 an opportunity for me to review and prepare. But to that end, I think Mr. Miller would still prefer that this matter not proceed at this time.
THE COURT: This Court had listed this matter for trial months ago. This isn't a surprise trial date. The Court has discussed the trial date with counsel for the past week or two. I think as much as three weeks ago the Court, or at least two weeks ago, the Court was aware that [former defense counsel] would not be able to try the case. For the record, [former defense counsel] was the original attorney representing Mr. Miller.
The Court was informed that the Public Defender's Office, ... the chief of that office, and ... the assistant chief[] were of the opinion that this case couldn't be tried because it would need new counsel. In fact, the Court was told that.
The Court's response was that under Rule 1:11 it is the Court that decides whether a case is going forward or whether there can be a change of counsel. The Public Defender's Office never came to the Court or said to the Court that it wanted specifically an adjournment, although the Court learned of it through [former defense counsel] ... who said that the higher ups thought that the matter just couldn't go ahead. The Court's response to [former defense counsel] was, well, you can go back and tell them that it is the judge who decides whether an attorney can be relieved, and under what conditions.
Rule 1:11 provides that the Court does not have to grant a request for change of counsel if it is going to delay the trial of the case. Clearly, that is the situation here.
This judge has been trying to get a handle on cases for several months and has been unable to move one for trial due to changes in the Public Defender's Office or the Prosecutor's Office with files. So the Court approximately two weeks ago said this matter is going to trial.
And it said that trying a drug case for a criminal defense attorney is as easy as trying an intersection accident case for a civil trial lawyer. The dispute here is not a difficult one to understand. The police are going to say that Mr. Miller was dealing drugs and they observed him do it in a particular fashion, and that they either saw him deal the drugs or saw him use an intermediary to deal the drugs, but the scenarios are essentially the same in every case. There is nothing difficult or complex about this case.
The Court is electing to hear the suppression motion this morning.... It will pick a jury tomorrow morning. And it will, then, proceed to try the case the balance of the day. The State has only two witnesses of which the Court is aware, unless it has to jump through the hoops of proving chain of custody, that might add a couple of incidental witnesses. But the State's case is simple and short.
....
That means that the defendant has today to prepare for the State's witnesses. Counsel has had the file. Reading a police report doesn't take very long. Meeting with a client doesn't take very long. And defense counsel will be well-prepared to proceed tomorrow.
In terms of producing witnesses, the defense doesn't have to do that until Friday. It strikes the Court that moving the case ahead at this time creates no prejudice to Mr. Miller. What it does do, and the Court will concede this, that Mr. Miller is greeted with some level of discomfort because he hashe has dealt with [former defense counsel]. *1058 But in terms of defending the case, the defendant is prejudiced in no way.
The trial court's ruling resulted in immediately proceeding to a suppression hearing, which was completed that morning.
At that hearing, Trenton Police Officer William Mulryne testified that on the afternoon of August 4, 2006, he was assigned to conduct surveillance of illicit street drug sales. At about 2:30 p.m., Mulryne saw from his concealed location a woman walk up to a man standing on the corner of Martin Luther King Boulevard and Fountain Avenue. He identified the man as defendant Miller. After a brief conversation, defendant walked to a nearby house and reached to the side of a window air conditioner at ground-level. Defendant walked back to the woman and "dropped some objects into her hand." The woman gave defendant what appeared to be paper currency and then walked away. Mulryne believed he had witnessed a hand-to-hand transaction for the sale of an illegal drug.
At 2:48 p.m., Mulryne saw a man, later identified as Joseph McKinney, approach defendant and engage in a brief conversation. Defendant again walked toward and reached up to the air conditioner. He then walked back to McKinney and handed him an unknown object and received paper currency. McKinney walked away from the area. Mulryne called to backup officers to confront and arrest McKinney. They did so and recovered rock cocaine from McKinney.
According to Mulryne's testimony, defendant left the corner of Martin Luther King Boulevard and Fountain Avenue shortly after the exchange with McKinney. About ten minutes later, defendant returned in a black Cadillac and walked into a delicatessen. Defendant was arrested within minutes, and the police seized from his person paper currency in various denominations amounting to $790. An officer also seized a bag containing rock cocaine from the air conditioner that defendant had twice approached.
Defense counsel cross-examined Mulryne, challenging his line of sight to the location of the alleged transactions. Using Mulryne's police report and a photograph of the scene taken by defendant after his arrest, defense counsel questioned Mulryne about his ability to see the individuals involved in the transactions through the branches of trees and other vegetation. He also questioned Mulryne about his reported use of binoculars during the surveillance, although he claimed to be no more than seventy-five feet away. In addition, defense counsel cross-examined Mulryne about the failure of the police to arrest the woman who had engaged in the first transaction and to obtain evidence from her.
Defendant was the only other witness at the suppression hearing. He testified he was not at the scene of the drug transactions but was downtown shopping for clothes at that time. On cross-examination, he said a person he only knew by a familiar name, not his true name, had given him a ride to the delicatessen and would support his testimony that he was downtown that day. The trial judge questioned defendant about his prior criminal record of five indictable convictions. Based on credibility findings in favor of the police officer and against defendant, the judge denied defendant's motion to suppress evidence.
After hearing defendant's testimony, the prosecutor expressed concern that the defense had not provided notice before the trial of a possible alibi defense, as required by Rule 3:12-2. But the prosecutor did not move to bar an alibi defense, and neither attorney requested an adjournment to investigate such a defense.
After the suppression hearing was concluded during the morning, defense counsel *1059 had the remainder of Monday, December 10, to meet with defendant and to plan for the trial beginning the following day. The court had already informed counsel that only the prosecution would need to present evidence the next day. Defense counsel had two additional days to prepare for a defense case because prior judicial commitments prevented the judge from hearing the trial again until Friday of that week.
On Tuesday, December 11, a jury was selected in the morning session. During the afternoon, counsel made opening statements, Officer Mulryne testified before the jury in similar fashion as at the suppression hearing, and defense counsel again cross-examined him about his line of sight and his ability to see and identify the individuals involved in the street transactions.
The State then called one of the officers who had arrested McKinney and defendant. His direct testimony was brief, as was his cross-examination. He testified that he and other officers stopped and arrested McKinney at a location away from the area where the alleged transactions had occurred. As the police approached, McKinney dropped an object to the ground, which the police recovered and found to contain rock cocaine. The officer also testified that he communicated with Officer Mulryne by radio, and then he participated in defendant's arrest at a corner on Martin Luther King Boulevard. He said defendant's arrest occurred about seven minutes after McKinney's arrest, and he found $790 on defendant's person. The officer further testified he found a bag containing rock cocaine concealed on the side of the air conditioner.
Defense counsel cross-examined the second officer about the denominations and nature of the money recovered from defendant, implying that the money was not in a form expected from street sales of illegal drugs. He also questioned the officer about the location of drugs recovered from the air conditioner and the access of other persons to the air conditioner. After the State rested and the jury was excused for the day, defense counsel moved for a judgment of acquittal, which the court denied.
Following the two intervening off-days, the trial resumed on Friday, December 14. Defense counsel came ready with three witnesses for the defense. McKinney testified first and admitted he had on his person a quantity of cocaine when he was arrested on that day. He denied that defendant had sold him the cocaine, testifying as follows:
DEFENSE COUNSEL: And in fact today it is your testimony that Mr. Miller did not sell you that [cocaine]?
MCKINNEY: He never sold me a thing. He don't sell drugs.
On cross-examination, McKinney testified he bought the cocaine on Calhoun Street from a man named "Wooden Head Willie." The prosecutor confronted McKinney with a statement he had given to the police at the time of his arrest, in which he described the location where he had purchased the cocaine as "Willow and Barber Street." McKinney was further impeached through other details in his earlier statement to the police, and he admitted having been convicted in 1986 of two counts of distribution of a controlled dangerous substance and in 1987 of endangering the welfare of a child.
Valerie Dawkins was the next defense witness. Counsel began direct examination by revealing that Dawkins had been convicted in 1998 of forgery. Dawkins testified she saw defendant outside her apartment located on Martin Luther King Boulevard between two and three o'clock on the day of his arrest, but she did not see him "on the corner engaging in any conversations with any individual" during that afternoon. According to Dawkins, defendant *1060 got out of his car and entered the delicatessen carrying "some bags in his hand." The next thing she saw was an unmarked car come up to the corner, some men entered the delicatessen, and they came out a few minutes later with defendant. At some point, more officers arrived in another unmarked car, and those officers searched the alleys on the other side of the street. One officer came out of an alley and said: "I got it." According to Dawkins, defendant immediately said: "That's not mine," to which an officer responded: "It's yours now."
Cynthia White was the third witness called by the defense. White did not have a criminal record. On the day of the arrest, she was in the area around the corner from the delicatessen waiting for her son's father, who had called to say he was coming to give her money for their son. White stated that at about 2:00 to 2:30 that afternoon, she saw defendant get out of a black Cadillac and go inside a store. She testified that "[a]fter a couple of hours standing out there the cops came out there. And they went inside the store and brought him out the store." She described defendant's demeanor at this point as "annoyed" and "mouth[ing] off" to the police officers. The prosecutor's cross-examination included the following testimony:
PROSECUTOR: How did you come to give a statement to Mr. Miller; how does he know you?
WHITE: Well, actually, a couple of months after that happened, I seen Mr. Miller downtown. He was passing out flyers on hisone of his matches, his boxing matches. And I asked what happened on that day, and he begin to tell me. And so he asked me, you know, I said, well, that is wrong, you know, the cops is always harassing people. And he asked me, well, you was there, you know I wasn't doing nothing wrong. I said no, I didn't see you do anything wrong. So actually, yes, I did write that statement, because I don't believe nobody should be behind bars who does not deserve it.
White further testified that she herself had been harassed by the police "a couple of times."
Defendant elected not to testify at the trial. Defense counsel made a closing argument to the jury based on the testimony of defense witnesses and cross-examination of the police officers. He argued that Officer Mulryne did not have clear sight of the area where the alleged drug sales had occurred, and he had incorrectly identified defendant as the person involved. He also argued that any person could have concealed the bag of rock cocaine in the air conditioner.
The jury's deliberations began after the lunch hour on Friday. The jury requested and heard a readback of the testimony of defense witness McKinney and then returned with its verdict the same afternoon, finding defendant guilty on all five counts presented to the jury.
The sentencing hearing was held more than six months later for reasons that are not relevant to this appeal. After appropriate merger of counts, the court sentenced defendant to five years' imprisonment with two years of parole ineligibility. We are informed that defendant has completed serving the period of parole ineligibility and has been released on parole.[3]
*1061 Against this record, defendant raises the following arguments:
POINT ONE
THE TRIAL COURT'S DENIAL OF DEFENDANT'S REQUEST FOR AN ADJOURNMENT DEPRIVED THE DEFENDANT OF A FAIR TRIAL AND DUE PROCESS OF LAW.
POINT TWO
THE INSTRUCTION ON DEFENDANT'S EXERCISE OF HIS RIGHT TO REMAIN SILENT SUGGESTED THAT HE HAD AN OBLIGATION TO TESTIFY AND THEREBY VIOLATED HIS STATE AND FEDERAL RIGHTS TO REMAIN SILENT. (Not Raised Below)
Defendant's second point has recently been rejected by our Supreme Court in State v. Dashawn Miller, 205 N.J. 109, 126-27, 13 A.3d 873 (2011).
We focus on the first point, that defendant's trial was unfair and a violation of his due process rights because he first met his substituted assigned attorney on the morning scheduled for his suppression hearing and trial, December 10, 2007. Defendant has not argued he was denied effective assistance of counsel as guaranteed by the Sixth Amendment of the United States Constitution and by Article I, Paragraph 10 of the New Jersey Constitution. Instead, he asserts it is fundamentally unfair to compel a defendant to proceed in a criminal case on the same day that he first meets his assigned trial attorney. We agree that due process requires sufficient time for defense counsel and defendant to confer and prepare, but what is sufficient time is determined by whether defendant has been prejudiced.
Our Supreme Court recently re-confirmed the long line of precedent in our courts holding that a decision to allow or deny an adjournment is discretionary, and a trial court's ruling in that regard will not lead to reversal of a conviction unless the defendant suffered "manifest wrong or injury." Hayes, supra, 205 N.J. at 537-38, 16 A.3d at 1037 (quoting State v. Doro, 103 N.J.L. 88, 93, 134 A. 611 (E. & A.1926), and other precedents). The Court also cited our discussion of the issue in State v. Furguson, 198 N.J.Super. 395, 401, 487 A.2d 730 (App.Div.), certif. denied, 101 N.J. 266, 501 A.2d 933 (1985), where we stated: "The public has a strong interest in the prompt and effective operation of its judicial institutions. A trial court therefore must have the power to tightly control its own calendar so that the assignment of cases cannot be manipulated by the defense counsel or the defendant." Hayes, supra, 205 N.J. at 537-38, 16 A.3d at 1037-38.[4]
Defendant and our dissenting colleague would dispense with the need to show prejudice when a defendant did not have prior contact with his substituted attorney and was required to proceed on the same day *1062 to a suppression hearing or trial. In such circumstances, it might often be advisable not to proceed immediately over a defendant's objection.[5] The constitutional question, however, is whether defendant was thus deprived of effective assistance of counsel, or otherwise prejudiced in violation of his due process rights.
In the absence of a showing of prejudice, prior cases decided by our Supreme Court and by us establish that defendant is not automatically entitled to a new trial simply because he had seemingly inadequate contact with his attorney. In fact, the circumstances in this case are less compelling than those in State v. Fritz, 105 N.J. 42, 519 A.2d 336 (1987), where our Supreme Court declined to hold that the defendant was entitled to a new trial without a showing of specific prejudice. We would deviate from the controlling precedent of Fritz and other cases if we were to adopt defendant's and our dissenting colleague's position.[6]
In Fritz, the Supreme Court considered on direct appeal the defendant's claim that he was deprived of effective assistance of counsel because the trial court refused to grant an adjournment so that his assigned Public Defender could prepare for trial. Id. at 44, 519 A.2d 336. His attorney had represented to the trial court that he had not discussed the case with defendant before the morning of trial, and moreover, the attorney was unprepared to proceed. Id. at 48, 519 A.2d 336. After the trial court denied an adjournment, the defendant was convicted at trial and sentenced to ten years' imprisonment for participating with other youths in an assault upon a Special Police Officer. Ibid.
The facts relevant to the defendant's representation in Fritz were that he had "only sporadic contact with the Public Defender's Office prior to trial." Id. at 47, 519 A.2d 336. An Assistant Deputy Public Defender, Meehan, had spoken to the defendant in December 1982 about a plea bargain, which the defendant refused. The case was then assigned to a different Assistant Deputy Public Defender, and "communications broke down." Ibid. On the morning of trial in May 1983, Meehan appeared on behalf of the defendant and told the court that "his first serious discussion with defendant" had just occurred "that very morning." Id. at 48, 519 A.2d 336. He requested a continuance, admitting that "he was unprepared to try the case." Ibid. In addition, counsel had neither contacted witnesses nor ordered a transcript of the probable cause hearing, at which the victim officer had given exculpatory testimony about the defendant's participation in the assault. Ibid. The trial court denied an adjournment, noting that the first day of trial was only for jury selection and counsel would have "this evening *1063 and tomorrow until nine o'clock to do whatever you are able to do." Ibid.
Considering these facts, our Supreme Court did not hold that the defendant had been denied a fair trial and was entitled to set aside his conviction as a matter of constitutional law, or fundamental fairness. Rather, the Court remanded the matter for a hearing to determine whether the defendant had been prejudiced at trial by his attorney's lack of preparation. Id. at 66-67, 519 A.2d 336. The Court declined to apply a presumption of ineffective assistance of counsel entitling the defendant to a new trial. See id. at 61-63, 519 A.2d 336.
The Court also confirmed the discretionary authority of the trial court to grant or deny an adjournment, and, after citing many precedents, stated: "We are satisfied from this collective judicial experience that the trial court's denial of defendant's motion for a continuance in this case to enable defense counsel to prepare did not completely vitiate the `crucible of meaningful adversarial testing.'" Id. at 63, 519 A.2d 336 (quoting U.S. v. Cronic, 466 U.S. 648, 656, 104 S.Ct. 2039, 2045, 80 L.Ed.2d 657, 666 (1984)). Furthermore, with language reminiscent of the trial court in this case, the Supreme Court stated that the assault, robbery, and weapons charges in Fritz "did not present overly difficult or complicated issues to an experienced criminal trial attorney." Id. at 63, 519 A.2d 336.
The record before us provides less reason to conclude that defendant's trial was per se unfair than the Supreme Court had in Fritz. The second Assistant Deputy Public Defender in this case stated he had received the file "last week, with an opportunity. . . to review and prepare." In addition, his use of the police report and a photograph provided by defendant showed that he had conferred with defendant and had prepared a strategy for the suppression hearing and trial.
The trial itself was not beginning until the next day, and the court's schedule gave defense counsel an intervening afternoon and two additional days to meet with defendant, to plan further strategy, and to seek witnesses and evidence for the defense. Denial of an adjournment on December 10 only resulted in proceeding that day to a suppression hearing with doubtful significance in the case.[7] Defense counsel never claimed he was unprepared or needed an adjournment for anything other than to develop "rapport" with his client and to allay his client's "concerns." The court's ruling was more accommodating to defendant and counsel than the ruling in Fritz, which nevertheless did not lead the Supreme Court to reverse the defendant's conviction without a further showing of ineffective assistance and prejudice.
Similarly, in State v. Garcia, 195 N.J. 192, 949 A.2d 208 (2008), the Supreme Court did not find sufficient ground to reverse the defendant's conviction, although it concluded the trial court had abused its discretion in denying a brief adjournment so that defense counsel could produce an incarcerated witness to testify on behalf of the defendant at trial. Id. at 198-99, 205, 949 A.2d 208. There, the denial of an adjournment implicated the *1064 same provisions of the federal and State constitutions as in this case.[8] Instead of reversing the conviction, the Supreme Court remanded to the trial court to determine whether the constitutional violation had prejudiced the defendant's right to a fair trial. See id. at 207, 949 A.2d 208.
Our own prior decisions have also not found fundamental unfairness in compelling a defendant to stand trial despite lack of adequate contact with a new attorney. In Furguson, supra, 198 N.J.Super. at 405, 487 A.2d 730, the defendant had previously been represented by competent counsel from the Public Defender's Office and had timely notice of the trial date but had belatedly obtained funds to retain private counsel. Newly-retained defense counsel first learned that the Monday trial schedule was firmly fixed when he arrived that same morning to seek an adjournment. The defendant had learned the previous Friday afternoon that the trial was proceeding but was unable to contact his new attorney that afternoon. Although the new attorney had met with the defendant and represented him in other proceedings several days before the trial, he was admittedly unprepared to defend him for the more serious robbery trial. Id. at 403-05, 487 A.2d 730. The trial court denied the request for adjournment, and the defendant was convicted of first-degree robbery. On appeal, we held the trial court's refusal to grant even a one-day adjournment did not require reversal of the defendant's conviction. Id. at 398, 402-03, 487 A.2d 730.
In State v. Rodriguez, 254 N.J.Super. 339, 341-42, 603 A.2d 536 (App.Div.1992), the defendant was tried and convicted of charges involving assault of his former girlfriend. The Assistant Deputy Public Defender who represented him at trial was not the same one who had represented the defendant in pretrial proceedings. The defendant had informed his prior Public Defender that the complaining victim had come to visit him at the jail after his arrest, thus calling into question her claims of violent assaults and other crimes upon her committed by the defendant. The substituted trial attorney only learned that information after the trial began. Id. at 344, 603 A.2d 536. Trial counsel requested a brief adjournment so that she could obtain jail records to impeach the testimony of the victim. The court refused to grant an adjournment, and the defendant was convicted. Ibid. We held it was error for the trial judge to refuse a brief adjournment, but the conviction would not be reversed because "in order to set aside a conviction, it must appear that the judge's exercise of discretion resulted in prejudice." Id. at 346, 603 A.2d 536.
Although each of these cited cases involved important constitutional rights of a defendant to present a defense, in each case both the Supreme Court and our own decisions required a showing of prejudice. In this case, our dissenting colleague concedes "the absence of direct prejudice" on the record presented, post at 99, 18 A.3d at 1069, but would hold as a matter of fundamental fairness that a court may not proceed as scheduled in the face of knowledge that a defendant has met his appointed attorney for the first time that day.
We do not dispute the statement that a fair system of criminal justice allows time for a defendant to meet with his attorney and to prepare his defenses. But defendant in this case was not summoned to stand trial in peremptory proceedings without adequate notice or time to obtain representation and to prepare. Defendant may have been concerned by the substitution *1065 of a different attorney for the one who had represented him previously, and he may have lacked confidence in the new attorney, but those facts by themselves do not establish that he received less than effective assistance of counsel or was otherwise prejudiced at the suppression hearing or at trial.
Nothing in the federal or State constitutions guarantees a criminal defendant good rapport with or confidence in his defense attorney. The constitutional guarantee is of effective assistance of counsel, not familiarity and confidence. The standard for determining whether a defendant has received that constitutional right has a long history of case law, most prominently enunciated in Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984), and Fritz, supra, 105 N.J. 42, 519 A.2d 336. To overturn a conviction, a defendant must show he has been prejudiced.
In countless post-conviction applications alleging ineffective assistance of counsel, convicted defendants have described ways that a criminal defense attorney did not fulfill their expectations. Even after meetings and full opportunity to plan a defense strategy, a defendant facing trial may feel uncomfortable with his attorney, whether court-appointed or retained, and both may wish for better rapport. But the test of a fair trial and conviction is whether the attorney performed in accordance with the constitutional guarantee of counsel, and also whether any deficient performance of the attorney that has been shown prejudiced the defense. Strickland, supra, 466 U.S. at 687, 104 S.Ct. at 2064, 80 L.Ed.2d at 693. The attorney that the defendant first meets on the morning of a hearing or trial may perform more effectively in his defense than the attorney who has developed a good relationship with the defendant but is inadequately prepared, lacks experience to devise good strategy, or simply makes poor decisions.
The dissent pursues a commendable objective of enhancing the appearance of fairness in the criminal justice system. It asserts we have not only the authority but a non-delegable duty and obligation to correct a wrong "to guarantee the proper administration of justice." Post at 99, 18 A.3d at 1069. However, not even the decisions of our Supreme Court the dissent cites attempted to impose a fixed rule of procedure for every case.[9]
*1066 The dissent also draws a distinction between indigent and financially able defendants, post at 83-85, 18 A.3d at 1059-60, but nothing presented to us suggests that defendant in this case received inferior representation at trial because he required the services of the Public Defender's Office. We have no reason to conclude that defendants represented by the Public Defender's Office in New Jersey suffer a disadvantage. Furthermore, those with modest financial ability to retain private counsel, such as the defendant in Furguson, supra, 198 N.J.Super. 395, 487 A.2d 730, for example, do not always control an attorney's availability to meet or to prepare.
As judges hearing one case with its own set of facts, we overstep our powers if we devise generally applicable rules without focusing on what the record shows in the case before us. To illustrate the point, we have no information on this record about the practices of court-appointed counsel and the private bar in covering pretrial hearings or municipal court matters for fellow counsel. Yet, our dissenting colleague's view would restrict a trial court's ability to proceed in such circumstances.
Our Supreme Court might choose, either by decision or rule, to prohibit a trial court from proceeding as scheduled when an attorney states he has only met his client that same day, but it has not previously done so. Fritz suggests that a client's opportunity to develop confidence in or rapport with his appointed attorney is not the standard that we must apply in assessing the fairness of the proceedings.
The record before us does not demonstrate prejudice in the representation provided by the Assistant Deputy Public Defender or otherwise at trial. Despite the passage of time, defendant has not produced any evidence that particular witnesses or evidence were overlooked because the suppression hearing began the same day and the trial the following day after he first met his substituted trial attorney. He has not demonstrated any aspect of the hearing or trial that would have been conducted differently if only defendant had met earlier with his new attorney.
Considering the substantial post-trial delay until sentencing, defendant had further opportunity to present evidence to the trial court that his defense had been prejudiced. He made no such showing.[10] We make no determination in this appeal as to whether defendant may yet present evidence in a proper application to the trial court under Rule 3:22 and applicable case law for post-conviction relief alleging ineffective assistance of counsel or other due process violation. We only conclude that the record and arguments before us do not show prejudice in denial of an adjournment on the scheduled date fixed earlier for defendant's suppression hearing and trial.
Affirmed.
*1067 FUENTES, J.A.D., dissenting.
The central issue raised in this appeal concerns the propriety of the trial court's decision to deny defendant's request to adjourn the trial in order to permit him to discuss the case with the attorney who had been assigned to represent him by the local Office of the Public Defender. It is undisputed that defendant had not met this attorney at any time prior to the day the case was scheduled for trial. It is equally undisputed that defendant did not play any role in the decision made by the local Office of the Public Defender to replace the attorney who had been representing him up to that point.
The trial judge denied defendant's request to adjourn the trial after noting that the attorneys of record in the case had been informed that the case was scheduled for trial on a peremptory basis. The judge took particular exception that no one from the Public Defender's Office had requested permission from the court to substitute the assigned counsel for defendant pursuant to Rule 1:11-2(a)(2).
Despite these undisputed facts, the majority affirms defendant's conviction relying on the well-established, yet in this case irrelevant proposition, that defendant cannot show how the trial court's decision prejudiced his right to effective assistance of counsel under the two-prong standard establish by the United States Supreme Court in Strickland v. Washington, 466 U.S. 668, 687, 104 S.Ct. 2052, 2064, 80 L.Ed.2d 674, 693 (1984), and adopted by our Supreme Court in State v. Fritz, 105 N.J. 42, 58, 519 A.2d 336 (1987).
The parties in this appeal were directed by this court to provide additional briefing addressing whether, under the circumstances presented, the trial court's denial of defense counsel's motion to adjourn the trial denied defendant fundamental fairness and due process of law. These are the principles that guide my analysis.
I deem it self-evident that a rational and just criminal justice system cannot accept as valid a conviction predicated on a scenario in which a defendant, through no fault of his or her own, meets his or her lawyer for the first time on the day the case is scheduled for trial. I emphasize that this defendant played no role in the decision made by the Office of the Public Defender to replace his previously assigned counsel. This is not a case in which a defendant is trying to "play the system" by attempting to discharge his lawyer in a manner intended to frustrate the administration of justice.
This case came to trial on December 10, 2007. After describing for the record the charges facing defendant, the trial judge asked the prosecutor whether the State was prepared to proceed on defendant's pending motion to suppress evidence "seized as a result of a warrantless search." The prosecutor informed the court that Detective Mulryne was present and ready to testify at the evidentiary hearing. This prompted the following colloquy between the trial judge and defense counsel:
DEFENSE COUNSEL:I just wanted to state on the record, in my conversations with Mr. Miller this morning, because the nature of this change of assignment, this is the first opportunity I've had to meet with him, it goes without saying that Mr. Miller is expressing some
THE COURT: Concern?
DEFENSE COUNSEL:concern. And the reality is, judge, one develops a rapport with one's attorney, and that rapport isn't established on Day 1 when you're ready to start a suppression hearing, and ultimately proceed to trial.
And while I understand it is the Court's intention to call this matter and have this matter proceed to trial, in fairness *1068 to Mr. Miller, I think he would best prefer that this matter was adjourned to allow an opportunity for us to sit in . . . a calmer setting so that we can discuss and plan this particular matter.
I've advised him that . . . the file was provided to me sometime last week, with an opportunity for me to review and prepare. But to that end, I think Mr. Miller would still prefer that this matter not proceed at this time.
THE COURT: This Court had listed this matter for trial months ago. This isn't a surprise trial date. The Court has discussed the trial date with counsel for the past week or two. I think as much as three weeks ago the Court, or at least two weeks ago, the Court was aware that [former defense counsel] would not be able to try the case. For the record, [former defense counsel] was the original attorney representing Mr. Miller.
The Court was informed that the Public Defender's Office, . . . the chief of that office, and . . . the assistant chief[] were of the opinion that this case couldn't be tried because it would need new counsel. In fact, the Court was told that.
The Court's response was that under Rule 1:11 it is the Court that decides whether a case is going forward or whether there can be a change of counsel. The Public Defender's Office never came to the Court or said to the Court that it wanted specifically an adjournment, although the Court learned of it through [former defense counsel] . . . who said that the higher ups thought that the matter just couldn't go ahead.
The Court's response to [former defense counsel] was, well, you can go back and tell them that it is the judge who decides whether an attorney can be relieved, and under what conditions.
Rule 1:11 provides that the Court does not have to grant a request for change of counsel if it is going to delay the trial of the case. Clearly, that is the situation here.
This judge has been trying to get a handle on cases for several months and has been unable to move one for trial due to changes in the Public Defender's Office or the Prosecutor's Office with files. So the Court approximately two weeks ago said this matter is going to trial.
And it said that trying a drug case for a criminal defense attorney is as easy as trying an intersection accident case for a civil trial lawyer. The dispute here is not a difficult one to understand. The police are going to say that Mr. Miller was dealing drugs and they observed him do it in a particular fashion, and that they either saw him deal the drugs or saw him use an intermediary to deal the drugs, but the scenarios are essentially the same in every case. There is nothing difficult or complex about this case.
The Court is electing to hear the suppression motion this morning. . . . It will pick a jury tomorrow morning. And it will, then, proceed to try the case the balance of the day. The State has only two witnesses of which the Court is aware, unless it has to jump through the hoops of proving chain of custody, that might add a couple of incidental witnesses. But the State's case is simple and short.
. . . .
That means that the defendant has today to prepare for the State's witnesses. Counsel has had the file. Reading a police report doesn't take very long. Meeting with a client doesn't take very long. And defense counsel will be well-prepared to proceed tomorrow.
In terms of producing witnesses, the defense doesn't have to do that until *1069 Friday. It strikes the Court that moving the case ahead at this time creates no prejudice to Mr. Miller. What it does do, and the Court will concede this, that Mr. Miller is greeted with some level of discomfort because he hashe has dealt with [former defense counsel]. But in terms of defending the case, the defendant is prejudiced in no way.
[(Emphasis added).]
The court then proceeded to the evidentiary hearing on defendant's motion to suppress. The trial began on December 11, 2007, and resumed and ended three days later on December 14, 2007.
It is well-settled that a trial court's decision to allow an adjournment is discretionary and is reversible only upon "a showing of an abuse of discretion causing defendant a manifest wrong or injury." State v. Furguson, 198 N.J.Super. 395, 402, 487 A.2d 730 (App.Div.), certif. denied, 101 N.J. 266, 501 A.2d 933 (1985). Ordinarily, "in order to set aside a conviction, it must appear that the judge's exercise of discretion resulted in prejudice." State v. Rodriguez, 254 N.J.Super. 339, 346, 603 A.2d 536 (App.Div.1992).
I am satisfied that, under the circumstances presented, the trial court mistakenly exercised its discretion in denying defendant's request to adjourn the trial to permit him more time to meet and discuss the case against him with his newly appointed defense counsel. Despite the absence of direct prejudice, the court's decision in this context fundamentally impugned the integrity of the trial, casting a shadow of unfairness over the proceedings that, in my view, can only be removed by a new trial.
Our authority, indeed obligation, to correct this wrong emanates from our non-delegable duty "to guarantee the proper administration of justice . . . and, particularly, the administration of criminal justice." State v. Williams, 93 N.J. 39, 62, 459 A.2d 641 (1983) (citations omitted). As the Court noted in State v. Cook, 179 N.J. 533, 561, 847 A.2d 530 (2004), "Our courts . . . have the independent obligation to take all appropriate measures to ensure the fair and proper administration of a criminal trial." To carry out this obligation, this court is vested with the power to fashion appropriate remedies to correct injustices in the manner criminal trials are conducted. Ibid. Where appropriate measures are available, "they should be employed to the fullest extent feasible to enhance the fairness of proceedings." Id. at 562, 847 A.2d 530.
In State v. Baker, 310 N.J.Super. 128, 138, 708 A.2d 429 (App.Div.1998), Judge Pressler noted that "the principle of fundamental fairness, standing alone as a ratio decidendi, is an amorphous doctrine," rendering its bounds tethered to a fact-sensitive analysis. Writing for a unanimous Court in State v. Sugar, 84 N.J. 1, 15, 417 A.2d 474 (1980), Justice Pashman noted that fundamental fairness relates to "our concern for judicial integrity," which "extends even to its mere appearance." Thus, "we have employed the notion of fundamental fairness to strike down official action that does not itself violate due process of law." Ibid. Given a clear need to redress a wrong, the doctrine of "fundamental fairness on occasion requires that a court prohibit conduct that does not transgress the Constitution." Ibid.
Invoking the doctrine of fundamental fairness, our Supreme Court has reversed a conviction for possession of cocaine with intent to distribute and ordered a new trial in a case where a criminal defendant did not have access to amenities in jail, such that he had to appear in court "in a visibly disheveled state," because his appearance could have affected his credibility. State v. Maisonet, 166 N.J. 9, 13, 19-21, 763 A.2d 1254 (2001).
*1070 Reversing defendant's conviction here does not depart from the principles we articulated in Furguson. I fully recognize the trial court's authority to manage the proceedings in this case, including "the power to tightly control its own calendar so that the assignment of cases cannot be manipulated by the defense counsel or the defendant." Furguson, supra, 198 N.J.Super. at 401, 487 A.2d 730; see also R. 1:11-2. I acknowledge that "when a defendant fails to act expeditiously in obtaining counsel of his own choice, the trial court must have the power to do what is reasonably necessary to meet the situation." Ibid. (internal quotations and citations omitted). There is nothing in this dissent that undermines or departs from the approach expressed in Furguson:
The procedure that may generally be employed where defendant seeks to change counsel is to allow a reasonable adjournment to permit the defendant to retain counsel of his own choice. The granting of a continuance necessarily rests within the sound discretion of the trial court, and the exercise of that discretion will not constitute reversible error in the absence of a showing of an abuse of discretion causing defendant a manifest wrong or injury.
[Id. at 402, 487 A.2d 730 (Emphasis added).]
By contrast, I emphasize here that defendant did not seek to adjourn the trial to obtain new counsel. The substitution of counsel occurred as a result of a decision reached by the supervisory staff of the local Office of the Public Defender. Although defendant was the person most affected by this decision, he was not consulted or asked to participate in any way. As the trial court itself recognized, defendant had been interacting with the staff attorney assigned by the Office of the Public Defender since the start of this case and had the right to expect that this attorney was the one who would represent him at trial. Substitute counsel's "appearance" on the day of trial took defendant by surprise.
Under these circumstances, the court's focus should have shifted to those responsible for this situationthe staff attorney originally assigned to represent defendant and the management staff of the local Public Defender's Office. The staff attorney, and if necessary the management of the Public Defender's Office, had a duty under Rule 1:11-2(a)(2) to seek leave from the court, with notice to defendant, to substitute counsel at this late stage of the proceedings. If such a motion had been filed, the court could have then determined whether substitution was warranted, and most importantly from defendant's perspective, assess the impact the substitution would have on defendant's right to effective assistance of counsel.
I also note that at least two weeks before the scheduled trial date, the management staff of the Office of the Public Defender "informed" the court in some fashion that the staff attorney assigned to defendant could not continue to represent him in this case. Despite this, the court decided to strictly enforce the requirements of Rule 1:11-2(a)(2) to defendant's detriment. Stated differently, although the Office of the Public Defender clearly erred by not seeking formal leave of the court to substitute counsel as required by Rule 1:11-2(a)(2), the court likewise erred in failing to protect defendant's right to a fundamentally fair trial by failing to act in a timely fashion to ensure that, if new defense counsel was indeed required, defendant would have sufficient time to meet and discuss his case with his new attorney well in advance of trial. In this procedural breakdown between the trial court and the Office of the Public Defender, both participants *1071 lost sight of defendant's right to a fundamentally fair trial.
In Ake v. Oklahoma, 470 U.S. 68, 76, 105 S.Ct. 1087, 1092, 84 L.Ed.2d 53, 61 (1985), Justice Marshall noted:
This Court has long recognized that when a State brings its judicial power to bear on an indigent defendant in a criminal proceeding, it must take steps to assure that the defendant has a fair opportunity to present his defense. This elementary principle, grounded in significant part on the Fourteenth Amendment's due process guarantee of fundamental fairness, derives from the belief that justice cannot be equal where, simply as a result of his poverty, a defendant is denied the opportunity to participate meaningfully in a judicial proceeding in which his liberty is at stake.
As a result of his financial inability to hire private counsel, defendant gave up his right to choose his own counsel and was forced to rely on the attorney provided by the Public Defender's Office. In establishing the Public Defender's Office, the Legislature
declared to be the policy of this State to provide for the realization of the constitutional guarantees of counsel in criminal cases for indigent defendants by means of the system and program established and authorized by this act to the end that no innocent person shall be convicted, and that the guilty, when convicted, shall be convicted only after a fair trial according to the due process of the law.
[N.J.S.A. 2A:158A-1 (emphasis added).]
By denying defendant's request for an adjournment of the trial under these circumstances, the trial court not only failed to hold those responsible for the disruption of the proceedings accountable, but also inadvertently permitted the internal management decisions of the Office of the Public Defender to create the appearance of two tiers of legal representation: one for those defendants who can control their attorneys' actions through the power of the purse string, and another for those who, because of their poverty, are at the mercy of staff attorneys beholden to their supervisors.[11] Such a prospect was not envisioned nor intended by the Legislature when it established the Public Defender's Office.
Finally, as a fellow judge, I understand the trial court's frustration in this case. Judicial resources should not be needlessly consumed and case management orders must be enforced lest they become a perfunctory exercise devoid of both substance and meaning. I am nevertheless compelled to note that "trying a drug case" bears no comparison to "trying an intersection accident case." Although both kinds of cases are indisputably deserving of the utmost professional care, the latter risks only monetary compensation to a civil litigant, with the prospect of an alternative source of recovery from a negligent lawyer, while the former imperils a person's freedom, the loss of which can never be restored or adequately compensated.
No matter how seemingly routine certain criminal trials may seem to those of us who labor in the judiciary, the prospect of losing one's freedom is never routine, nor can the awesome power of depriving a person of liberty ever be wielded without great care and respect. Similarly for lawyers, no matter how adroit a criminal defense attorney may be, each case brings with it unique challenges, not the least of *1072 which is developing what defense counsel referred to here as a "rapport" with the client, who has entrusted his or her freedom to that lawyer. Whether the charges involve possession of illicit drugs or murder, those of us in the criminal justice system must treat each case with the same level of care and commitment to justice.
I began this dissent by describing the need for reversal here as "self-evident." I conclude with a brief elaboration of that proposition. Our Supreme Court has characterized the attorney-client relationship as "a fiduciary one, involving the highest trust and confidence." In re Brown, 88 N.J. 443, 448-449, 443 A.2d 675 (1982). Between a defendant and criminal defense counsel, confidence and trust are qualities developed and nurtured by time and events. The lawyer must have the time necessary to explain to the client the intricacies of the legal process, review the evidence in the case, and agree upon a trial strategy in a manner that fosters "the highest trust and confidence." Ibid. How much time is needed for these essential aspects of the attorney-client relationship to develop must always be a case by case determination. Under the facts presented here, I am satisfied that defendant was not provided the time necessary to develop such a relationship with his counsel. See Avery v. Alabama, 308 U.S. 444, 60 S.Ct. 321, 84 L.Ed. 377 (1940) (expressing concern for perfunctory appointments of counsel).
Every once in a while a case comes before this court that tests our resolve as judges to remain true to the fundamental principles that set this great country apart from the rest of worldour commitment to the fundamental concept of fairness, a sense that justice was done, both in fact and in the manner it is perceived by those most affected by it. A system of criminal justice that permits a conviction to stand in a case where an indigent man, through no fault of his own, meets his attorney for the first time on the day the case is scheduled for trial, carries with it the indicia of a "show trial," a sham proceeding in which the outcome is perceived as predetermined. Because we are better than that, I respectfully dissent.
NOTES
[1] Judge Gilroy was on the panel when this appeal was listed for disposition without oral argument on November 4, 2010. Judge Ashrafi was substituted for Judge Gilroy when the case was rescheduled for oral argument.
[2] Although the spelling of defendant's name in the indictment and other court documents is "Terrence," it appears from signatures on the notice of appeal and other documents that defendant spells his name "Terrance." In testimony before the trial court, defendant stated he prefers to use the name "Culture Supreme El Bey."
[3] The Judgment of Conviction states that the sentence on count four was "an extended term of five (5) years" and the other sentences concurrent with count four. At the sentencing hearing, however, the court stated it was denying the State's motion for a discretionary extended term sentence. Because defendant has not raised the issue, and neither the length of the prison term nor parole eligibility was affected, we will not address further the apparent error in the Judgment of Conviction. Defendant may request correction of the Judgment in an application to the trial court.
[4] In Hayes, supra, 205 N.J. at 539-40, 16 A.3d at 1038-39, the Supreme Court held that the trial court had abused its discretionary authority in denying an adjournment and that the defendant had been prejudiced as a result. The defendant had sought an adjournment so that he could secure new counsel to pursue a motion to withdraw his guilty plea. The Supreme Court found prejudice because prior defense counsel perceived a conflict of interest and could not effectively represent defendant for that motion. The conflict forced the defendant to proceed on the motion without the aid of counsel. Id. at 540, 16 A.3d at 1039. The Court remanded the matter to the trial court to hold a hearing with new counsel on whether defendant was entitled to withdraw his guilty plea. Id. at 541-42, 16 A.3d at 1039-40. Here, defendant Miller was always represented by conflict-free counsel asserting that he was ready and able to represent defendant at the suppression hearing and trial.
[5] In this case, a brief adjournment of the suppression hearing for an hour or two could have been granted to allow counsel and defendant to confer. The court could then have inquired further to determine whether any meritorious reason for a longer adjournment had developed. But defense counsel made no such request for a brief adjournment, and the court itself did not suggest it. As the Supreme Court stated in Hayes, supra, "a mere difference in judicial opinion concerning the feasibility, expediency or pragmatical propriety of a ruling is [not] synonymous with abuse of judicial discretion." 205 N.J. at 539, 16 A.3d at 1038 (quoting Smith v. Smith, 17 N.J.Super. 128, 133, 85 A.2d 523 (App.Div. 1951), certif. denied, 9 N.J. 178, 87 A.2d 387 (1952)).
[6] Cf. State v. Zied, 116 N.J.L. 234, 237-39, 183 A. 210 (E. & A. 1936) (cited in Hayes, supra, 205 at 537-38, 16 A.3d at 1037) (Although due process of law would have been better served if appointed counsel had been granted an adjournment to allow more than four days to prepare for a murder trial, the Court's review of the record found no prejudice to defendant in proceeding with the trial as scheduled.).
[7] We cannot be certain from the available record what specific evidence defendant was seeking to suppress and on what ground. Defense counsel's oral argument at the suppression hearing was that the police had misidentified defendant as the person who conducted the hand-to-hand drug transactions, and the drugs recovered from the air conditioner could have been placed there by any number of persons. Misidentification, however, was an issue for the jury to determine at trial. It did not address a constitutional violation requiring suppression of evidence seized from McKinney and from a window air conditioner. It appears that the only evidence that might have been suppressed based on the defense arguments was the $790 seized from defendant's person.
[8] A defendant's right to compulsory process to compel witnesses to testify on his behalf is also protected by the Sixth Amendment to the United States Constitution and Article I, Paragraph 10 of the New Jersey Constitution.
[9] In State v. Williams, 93 N.J. 39, 70-71, 459 A.2d 641 (1983), the Court established a balancing rule to address the conflict between the rights of the public to open criminal court proceedings and the rights of a defendant to a fair trial, but the Court also acknowledged the issue may arise in "a wide, almost limitless variety of situations," and it urged further "continuing study to be undertaken" by the Court's rule committees in devising appropriate procedures. Likewise, in State v. Cook, 179 N.J. 533, 562, 847 A.2d 530 (2004), the Court recognized that a proposed rule requiring the recording of confessions was "important and nuanced, and should be addressed in a context broader than that permitted in any one criminal appeal." The Court stated that because "[t]he balancing of interests will require careful and deliberate study," it would establish a committee to study and make recommendations before announcing a generally-applicable rule through the exercise of its supervisory authority over criminal trials. Ibid.
Also unhelpful to the dissent's position is its citation to Avery v. Alabama, 308 U.S. 444, 60 S.Ct. 321, 84 L.Ed. 377 (1940), in support of its concern for "perfunctory appointments of counsel." Post at 104, 18 A.3d at 1072. In Avery, two attorneys had been appointed to represent the defendant in a capital case just three days before he stood trial, and the attorneys claimed they had insufficient time to prepare a defense. Id. at 447-49, 60 S.Ct. at 322-23, 84 L.Ed. at 380-81. The United States Supreme Court reviewed the record of the defendant's trial and unanimously concluded that the defendant had not been prejudiced by the late appointment of counsel. Id. at 448-53, 60 S.Ct. at 323-25, 84 L.Ed. at 380-83. We do not suggest that the Court today would affirm a capital conviction on similar facts, only that even such a drastic outcome has historically required a review of the actual record of the case.
[10] Defendant had filed a post-trial pro se motion to set aside the jury's verdict and to grant him a new trial. In papers submitted with that motion, defendant stated he did not trust his trial attorney and claimed that as many as twenty witnesses might have aided his defense, but he did not identify any additional witnesses besides the three who were called to testify. At the sentencing hearing, defendant's third attorney stated he was unaware of defendant's pro se motion, and the trial judge never ruled on it.
[11] See J. Aalberts, Thomas Boyt, and Lorne H. Seidman, Public Defender's Conundrum: Signaling Professionalism and Quality in the Absence of Price Robert, 39 San Diego L.Rev. 525 (2002).
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01-03-2023
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/1557951/
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493 F.Supp.2d 18 (2007)
Charles Blaine JONES, Plaintiff,
v.
Ben S. BERNANKE,[1] in his capacity as Chairman of the Board of Governors of the Federal Reserve System, Defendant.
Civil Action No. 04-1696 (RMU).
United States District Court, District of Columbia.
June 11, 2007.
*19 *20 *21 *22 Michael Gerard Kane, David Robert Cashdan, Cashdan & Kane, PLLC, Washington, DC, for Plaintiff.
*23 John L. Kuray, Katherine H. Wheatley, Board of Governors of the Federal Reserve System, Washington, DC, for Defendant.
MEMORANDUM OPINION
URBINA, District Judge.
DENYING THE DEFENDANT'S MOTION TO DISMISS AND GRANTING THE DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
I. INTRODUCTION
The plaintiff, Charles Blaine Jones, brings a four-count employment discrimination complaint[2] against his former employer, the Federal Reserve Board. The plaintiff alleges that the defendant discriminated against him on account of his age and gender in violation of the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 633a et seq. and Title VII of the Civil Rights Act ("Title VII"), 42 U.S.C. § 2000e-1 et seq., respectively and retaliated against him after he filed an age discrimination charge with the Equal Employment Opportunity Commission ("EEOC"). In response, the defendant moves for dismissal and for summary judgment on the age and gender discrimination counts. Because equitable estoppel is applicable, the court denies the defendant's motion to dismiss on jurisdictional grounds. Because the plaintiff has failed to meet his burden of proof for age and gender discrimination, however, the court grants the defendant's motion for summary judgment.
II. BACKGROUND
A. Factual Background
The plaintiff, a certified public accountant, was born on May 3, 1948. He began *24 working at the defendant's Division of Reserve Bank Operations and Payment Systems in April 1991. First Am. Compl. ("Compl.") at 2. In July 1993, the plaintiff transferred to the Division of Banking Supervision and Regulation at a level FR-27. Id.; Def.'s Mot. to Dismiss Counts I & II of the First Am. Compl. or, in the Alternative, for Summ. J. ("Def.'s Mot.") at 3.
The plaintiff alleges that in March 1998, Michael Martinson, his then-supervisor, did not promote him to a managerial position at the FR-29 level and instead selected Heidi Richards, a "woman in her early thirties." Compl. at 3-4. Concerned that Martinson was "effectuating [d]efendant's policy of promoting young women to positions of management," the plaintiff approached Martinson after Richards' selection. Pl.'s Opp'n to Def.'s Mot. to Dismiss and for Summ. J. ("Pl.'s Opp'n") at 6. In response to the plaintiff's concerns, in May 1998, Martinson allegedly promised the plaintiff a promotion to a FR-28 level. Compl. at 3. When the plaintiff inquired about his promised promotion in September 1998, Martinson allegedly assured him that he "would be promoted with the next group of promotions." Id. In May and June of 1999, the plaintiff confronted Martinson yet again and Martinson gave him the same response. Id. at 4. Based on Martinson's assurances of a promotion, the plaintiff did not pursue the matter with the defendant's EEOC office. Id. at 3.
Shortly thereafter, the plaintiff was sent abroad on a teaching assignment. Id. at 4. During this time period, a group of employees was promoted while another group received pay increases. Id. at 4. The plaintiff, however, was not among those employees that were promoted or received pay increases. When the plaintiff confronted Martinson about his failure to promote him, Martinson stated that he was unable to justify a promotion for the plaintiff because of "the limited nature of [the plaintiff's] work and responsibilities." Id. As a result, in November 1999 the plaintiff filed an informal charge with the defendant's EEOC office alleging retaliation. Id. at 4-5.
B. Procedural History
The plaintiff filed an amended complaint on August 29, 2006. Id. at 1. The complaint alleges that the defendant unlawfully retaliated against him by lowering his performance ratings in 2000, 2001, 2002, and 2003 and that the defendant discriminated against him on the basis of his age and gender by failing to promote him. Id. The defendant moves to dismiss or in the alternative for summary judgment. Def.'s Mot. at 1. The court now turns to the defendant's motion.
III. ANALYSIS
A. The Court Denies the Defendant's Motion to Dismiss Counts I and
II
The defendant moves to dismiss counts I and II[3] of the plaintiff's complaint, which allege that the plaintiff was not selected for the FR-29 position based on gender and age discrimination, on the basis that *25 the plaintiff did not pursue his administrative remedies in a timely manner. Def.'s Mot. at 2, 10. For the reasons that follow, the court denies the defendant's motion to dismiss.
(1) Legal Standard for Exhaustion of Administrative Remedies
In actions brought under Title VII and the ADEA, a court has authority over only those claims that are (1) contained in the plaintiffs administrative complaint or claims "like or reasonably related to" those claims in the administrative complaint and (2) claims for which the plaintiff exhausted administrative remedies. Park v. Howard Univ., 71 F.3d 904, 907 (D.C.Cir.1995); Caldwell v. ServiceMaster Corp.; 966 F.Supp. 33, 49 (D.D.C.1997). It is the defendant's burden to prove by a preponderance of the evidence that the plaintiff failed to exhaust administrative remedies. Brown v. Marsh, 777 F.2d 8, 13 (D.C.Cir.1985) (stating that "because untimely exhaustion of administrative remedies is an affirmative defense, the defendant bears the burden of pleading and proving it"). Meager, conclusory allegations that the plaintiff failed to exhaust his administrative remedies will not satisfy the defendant's burden. Id. at 12. (noting that a mere assertion of failure to exhaust administrative remedies without more is "clearly inadequate under prevailing regulations to establish a failure to exhaust administrative remedies").
Dismissal results when a plaintiff fails to exhaust administrative remedies. Rann v. Chao, 346 F.3d 192, 194-95 (D.C.Cir.2003) (affirming the trial court's dismissal of the plaintiffs ADEA claim for failure to exhaust administrative remedies); Gillet v. King, 931 F.Supp. 9, 12-13 (D.D.C.1996) (dismissing the plaintiff Title VII claim because he failed to exhaust his administrative remedies).
(2) Equitable Estoppel Applies to the Plaintiffs Claims
The defendant urges the court to dismiss the plaintiffs claim that the defendant discriminated against him when he was not promoted in March of 1998 because the plaintiff did not timely pursue his administrative remedies. Def.'s Mot. at 2, 10. The plaintiff concedes that he did not file his complaint with the EEOC in a timely manner, but he explains that the defendant dissuaded him from filing a timely complaint because Martinson promised him a promotion, albeit to a lower level than he originally sought. Compl. at 4; Def.'s Mot. at 10.
Equitable estoppel "prevents a defendant from asserting untimeliness where the defendant has taken active steps to prevent the plaintiff from litigating in time." Currier v. Radio Free Europe/Radio Liberty, Inc., 159 F.3d 1363, 1367 (D.C.Cir.1998) (emphasis in original). The defendant maintains that the court should not apply equitable estoppel to the instant facts because Martinson did not promise to promote the plaintiff to the FR-29 position, but rather, promised to promote him to the FR-28 level. Def.'s Mot. at 11-12. This promise of a promotion to a lower level than that sought by the plaintiff, the defendant argues, does not trigger equitable estoppel. Id.
An employer's misleading statements suggesting that a grievance will be resolved in the plaintiffs favor can establish equitable estoppel. Currier, 159 F.3d at 1368 (internal citations and quotations omitted). Because an employee in the plaintiffs position would be understandably reluctant to file an EEOC charge once he received a promise of a promotion, even if that promotion is not the same as the one the plaintiff originally sought, id.; see also Sanders v. Veneman, 131 *26 F.Supp.2d 225, 230 (D.D.C.2001) (tolling the timely filing requirement because the plaintiffs supervisor made repeated promises of an eventual promotion), the court denies the defendant's motion to dismiss on the basis of failure to exhaust administrative remedies in a timely fashion.
B. The Court Grants the Defendant's Motion for Summary Judgment on Counts I and II
(1) Legal Standard for a Motion for Summary Judgment
Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Diamond v. Atwood, 43 F.3d 1538, 1540 (D.C.Cir.1995). To determine which facts are "material," a court must look to the substantive law on which each claim rests. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A "genuine issue" is one whose resolution could establish an element of a claim or defense and, therefore, affect the outcome of the action. Celotex, 477 U.S. at 322, 106 S.Ct. 2548; Anderson, 477 U.S. at 248, 106 S.Ct. 2505.
In ruling on a motion for summary judgment, the court must draw all justifiable inferences in the nonmoving party's favor and accept the nonmoving party's evidence as true. Anderson, 477 U.S. at 255, 106 S.Ct. 2505. A nonmoving party, however, must establish more than "the mere existence of a scintilla of evidence" in support of its position. Id. at 252, 106 S.Ct. 2505. To prevail on a motion for summary judgment, the moving party must show that the nonmoving party "fail[ed] to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322, 106 S.Ct. 2548. By pointing to the absence of evidence proffered by the nonmoving party, a moving party may succeed on summary judgment. Id.
The moving party may defeat summary judgment through factual representations made in a sworn affidavit if he "support[s] his allegations . . . with facts in the record", Greene, 164 F.3d at 675 (quoting Harding v. Gray, 9 F.3d 150, 154 (D.C.Cir. 1993)), or provides "direct testimonial evidence," Arrington v. United States, 473 F.3d 329, 338 (D.C.Cir.2006). Indeed, for the court to accept anything less "would defeat the central purpose of the summary judgment device, which is to weed out those cases insufficiently meritorious to warrant the expense of a jury trial." Greene, 164 F.3d at 675.
Finally, the D.C. Circuit has directed that because it is difficult for a plaintiff to establish proof of discrimination, the court should view summary-judgment motions in such cases with special caution. See Aka v. Washington Hosp. Ctr., 116 F.3d 876, 879-80 (D.C.Cir.1997), overturned on other grounds, 156 F.3d 1284 (D.C.Cir.1998) (en banc); see also Johnson v. Digital Equip. Corp., 836 F.Supp. 14, 18 (D.D.C.1993).
(2) Legal Standard for Gender and Age Discrimination
Generally, to prevail on a claim of discrimination under Title VII or the ADEA, a plaintiff must follow a three-part burden-shifting analysis generally known as, the McDonnell Douglas framework. Lathram v. Snow, 336 F.3d 1085, 1088 *27 (D.C.Cir.2003). The Supreme Court explained the framework as follows:
First, the plaintiff has the burden of proving by the preponderance of the evidence a prima facie case of discrimination. Second, if the plaintiff succeeds in proving the prima facie case, the burden shifts to the defendant "to articulate some legitimate, nondiscriminatory reason for the employee's rejection". . . . Third, should the defendant carry this burden, the plaintiff must then have an opportunity to prove by a preponderance of the evidence that the legitimate reasons offered by the defendant were not its true reasons, but were a pretext for discrimination. . . . The ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff remains at all times with the plaintiff.
Tex. Dep't of Cmty. Affairs v. Burdine, 450 U.S. 248, 252-53, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981) (internal citations omitted) (quoting McDonnell Douglas v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973)).
To establish a prima facie case of race discrimination under Title VII, the plaintiff must show that "(1) [he] is a member of a protected class; (2)[he] suffered an adverse employment action; and (3) the unfavorable action gives rise to an inference of discrimination." Brown v. Brody, 199 F.3d 446, 452 (D.C.Cir.1999); Stewart v. Ashcroft 352 F.3d 422, 428 (D.C.Cir. 2003); Carroll v. England, 321 F.Supp.2d 58, 68 (D.D.C.2004). To establish a prima facie case of age discrimination under the ADEA, the plaintiff must demonstrate "facts sufficient to create a reasonable inference that age discrimination was a determining factor in the employment decision." Cuddy v. Carmen, 694 F.2d 853, 856-57 (D.C.Cir.1982); Miller v. Lyng, 660 F.Supp. 1375, 1377 (D.D.C.1987). Such an inference is created if the plaintiff can show (1) he belongs to the statutorily protected age group; (2) he was qualified for his position and was performing his job well enough to meet his employer's legitimate expectations; (3) he suffered an adverse employment action despite his qualifications and performance; and (4) he was disadvantaged in favor of similarly situated younger employees. Reeves, 530 U.S. at 142, 120 S.Ct. 2097; Hall, 175 F.3d at 1077; Paquin, 119 F.3d at 26 (citing Coburn v. Pan Am. World Airways, Inc., 711 F.2d 339, 342 (D.C.Cir.1983)).
"The burden of establishing a prima facie case of disparate treatment is not onerous." Burdine, 450 U.S. at 253, 101 S.Ct. 1089. If the plaintiff establishes a prima facie case, a presumption then arises that the employer unlawfully discriminated against the employee. Id. at 254, 101 S.Ct. 1089. To rebut this presumption, the employer must articulate a legitimate, non-discriminatory reason for its action. Id. The employer "need not persuade the court that it was actually motivated by the proffered reasons." Id. Rather, "[t]he defendant must clearly set forth, through the introduction of admissible evidence, reasons for its actions which, if believed by the trier of fact, would support a finding that unlawful discrimination was not the cause of the employment action." St. Mary's Honor Ctr. v. Hicks, 509 U.S. 502, 113 S.Ct. 2742, 125 L.Ed.2d 407 (1993).
If the employer successfully presents a legitimate, non-discriminatory reason for its actions, "the McDonnell Douglas framework with its presumptions and burdens disappears, and the sole remaining issue is discrimination vel non." Lathram, 336 F.3d at 1088 (internal citations omitted). At this point, to survive summary judgment, the plaintiff "must show that a reasonable jury could *28 conclude from all of the evidence that the adverse employment decision was made for a discriminatory reason." Id. (citing Aka v. Wash. Hosp. Ctr., 156 F.3d 1284, 1290 (D.C.Cir.1998)) (en banc). The court must consider whether the jury could infer discrimination from (1) the, plaintiffs prima facie case, (2) any evidence the plaintiff presents to attack the employer's proffered explanation, and (3) any further evidence of discrimination that may be available to the plaintiff. Waterhouse v. District of Columbia, 298 F.3d 989, 992-93 (D.C.Cir.2002) (quoting Aka, 156 F.3d at 1289). The plaintiff need not present evidence in each of these categories in order to avoid summary judgment. Aka, 156 F.3d at 1289. Rather, the court should assess the plaintiffs challenge to the employer's explanation in light of the totality of the circumstances of the case. Id. at 1291.
(3) The Court Grants the Defendant's Motion for Summary Judgment on the Gender Discrimination Claim
Under the McDonnell Douglas framework, the plaintiff bears the initial burden of establishing a prima facie case of sex discrimination. McDonnell Douglas, 411 U.S. at 802, 93 S.Ct. 1817. The plaintiff asserts that he has established a prima facie case by alleging that the defendant had a policy of advancing young women and because a high-level official referred to him as "old school."[4] Pl.'s Opp'n at 16. In addition, the plaintiff argues that he was more qualified for the FR-29 position than Richards. Id.
The plaintiff, a male, "is a member of a historically favored group," and hence does not belong to a protected class. Bryant v. Leavitt, 475 F.Supp.2d 15, 26 (D.D.C.2007); Bell v. Runyon, 1997 WL 540814, *2, 1997 U.S. Dist. LEXIS 10909, at *4 (D.D.C. July 16, 1997). As a male, the plaintiff may establish a prima facie case if he presents evidence of background circumstances that support an inference of discrimination.[5] Two types of evidence can constitute "background circumstances," namely (1) evidence indicating that an employer has some reason or inclination to discriminate against males, and (2) "evidence indicating that there is something fishy about the facts of the case at hand that raises an inference of discrimination." Harding, 9 F.3d at 153. Importantly, "the second type of `background circumstance' may create a prima fade case by itself." Id. And "other evidence about the `background' of the case at hand including an allegation of superior qualifications can be equally valuable" in establishing a prima fade case. Id. (internal quotation omitted). For the reasons that follow, the court concludes that the plaintiff has not established a prima facie case of gender discrimination.
a. The Defendant's Alleged Policy of Promoting Young Women
The plaintiff first attempts to make out a prima facie case by alleging that the defendant admitted it had a policy of promoting young women. Id. Although the plaintiff does not cite to the record to support this contention, he is presumably referring to Stephen Schemering's deposition testimony. During the deposition, the plaintiffs counsel asked Schemering whether the defendant had a policy of *29 promoting young women. Def.'s Reply Ex. 2 at 193-194. Schemering answered, "[o]nly in the context of EEO goals and objectives that would cover the gender issue." Id. at 194. When prodded further by the plaintiffs counsel, Schemering elaborated, "well, there again, one of the objectives of the diversified workplace and, you know, that is something we try to accomplish." Id. But, Martinson, who denied the plaintiff the promotion to the FR-29 position, told the plaintiffs counsel that he did not know of any practice of trying to promote young women into senior positions. Def.'s Reply Ex. 4 at 241.
At most, the defendant's deposition testimony shows that it has a "concern for diversity in the workplace." Lutes v. Goldin, 62 F.Supp.2d 118, 131 (D.D.C. 1999). But, an employer's statement that it is committed to diversity "if expressed in terms of creating opportunities for employees of different races and both genders . . . is not proof of discriminatory motive with respect to any specific hiring decision. Indeed, it would be difficult to find today a company of any size that does not have a diversity policy." Bernstein v. St. Paul Cos., Inc., 134 F.Supp.2d 730, 739 n. 12 (D.Md.2001) (internal citations omitted) (citing Lutes, 62 F.Supp.2d at 128); see also Reed v. Agilent Techs., Inc., 174 F.Supp.2d 176, 185 (D.De1.2001) (concluding that unless the plaintiff can demonstrate that the defendant's diversity policy "had some negative impact upon his individual employment situation, the mere existence of a policy promoting diversity awareness is not evidence of discrimination"). As Martinson stated that he was unaware of any alleged policy of promoting young women, the plaintiff cannot show that the policy had a negative impact on his employment situation. In short,' the mere existence of a diversity policy, without more, is insufficient to make out a prima facie case of reverse discrimination.
b. The "Old School" Comment
The plaintiff also attempts to establish a prima facie case by arguing that his third-level supervisor, William Ryback "who had input into Mr. Martinson's promotion of Ms. Richards [to the FR-29 position] justified the decision not to promote [the plaintiff] to an FR-28 position a year later by stating that [the plaintiff] was too `old school.'" Pl.'s Opp'n at 16. Although it was Ryback, and not Martinson, who made the comment, the plaintiff claims that because Martinson consulted Ryback about both the FR-29 and the FR-28 promotions, a reasonable jury could infer discriminatory animus on Martinson's part. Id. at 19-20. In its opposition, the defendant contends that Ryback's "old school" comment addressed the plaintiffs performance and leadership style and had nothing to do with the plaintiffs age. Def.'s Reply at 8. The defendant further points out that Ryback made the comment two years after Martinson declined to promote the plaintiff.
The court must examine whether a reasonable fact-finder could infer discriminatory animus on Martinson's part based on Ryback's comment. Gipson, 460 F.Supp.2d at 23. To this end, the court considers Ryback's old school remark in light of the surrounding circumstances. Threadgill, 377 F.Supp.2d. at 166-66. Ryback's statement was extracted from an affidavit he signed in July 2000, where Ryback used the term "old school" to mean that the plaintiff "was not a visionary or a motivational type performer" and that he was "more or less old school." Pl.'s Opp'n at 19; Def.'s Reply at 10. Leaving aside for one moment that the plaintiffs non-selection occurred before the allegedly discriminatory comment, Ryback's *30 affidavit indicates that the comment is not related to age, and at best, might be correlated to age. See Beeck v. Fed. Express Corp., 81 F.Supp.2d 48, 52 (D.D.C. 2000) (noting that when an employer's decision is wholly motivated by factors other than age, the problem of inaccurate and stigmatizing stereotypes disappears even if the motivating factor is correlated with age) (internal citation and quotation omitted).
Simply put, the plaintiffs allegation that he was not selected because Ryback considered him "old school" in July 2000 is not the same as alleging that Martinson did not promote him on the basis of his age in the year 1998. See id. at 53 (holding that an allegation claiming that the plaintiff is old school is not the same as claiming that he was fired because he was old). Additionally, the characterizations of the plaintiffs vision, motivational style, and leadership are independent, nondiscriminatory factors that justify his non-selection. See Young, 457 F.Supp.2d at 20 (noting that it is well within the employer's discretion "to base personnel decisions on nondiscriminatory factors in aggregate") (internal citations omitted). Because no reasonable factfinder could conclude that Ryback's comment, made in a July 2000 affidavit, is indicative of Martinson's alleged discriminatory animus in 1998, the plaintiff fails to establish pretext by way of the discriminatory remark. Gipson, 460 F.Supp.2d at 23.
c. The Plaintiff's Allegedly Superior Qualifications
The plaintiff argues that the facts he presents in the pretext section of his opposition brief also establish a prima facie case. Pl.'s Opp'n at 16. As discussed supra, a plaintiff may establish a prima facie case of reverse discrimination if he shows that he had "superior qualifications." Harding, 9 F.3d at 153. In support of the contention that he has superior qualifications, the plaintiff submits evidence of his experience with the Federal Reserve Board, his education, and his performance evaluations. Pl.'s Opp'n at 29. The plaintiff asserts that he was far more qualified than Richards for the FR-29 manager position because he had worked in the very division that needed a manager, whereas Richards had worked in another division (the Reserve Bank Operations and Payment Systems division) for six months at an FR-26 grade level. Pl.'s Opp'n 20-21. The defendant, on the other hand, maintains that Richards was more qualified than the plaintiff. Def.'s Consolidated Reply to Pl.'s Opp'n ("Def.'s Reply") at 16-17.
The plaintiff also argues that Richards did not have "six years [of] specialized experience" required for the FR-29 position as per the job announcement. Id. at 30. In addition, the plaintiff stresses that Richards would require extensive supplemental training to fulfill the duties of the position, particularly with respect to her supervisory skills. Id. The defendant responds by noting that the manager position involved new responsibilities that the plaintiff had never performed in his capacity as a supervisory Electronic Data Processing ("EDP") analyst, and as such, he too would need training to assume the managerial responsibilities. Def.'s Reply at 19. Further, the defendant contends that Richards possessed several years of relevant experience, as she had been a financial analyst for ten years, including stints as an analyst or senior analyst at the Board for five years and two years as a Financial Economist at the Department of Treasury. Id. at 18. The defendant also points to Richards' educational background: she has a bachelors degree in economics, a Masters in Public Administration from Harvard University, as well *31 as a doctorate degree in Finance from George Washington University. Def.'s Mot. at 17.
The plaintiff fails to make a prima facie case of reverse discrimination because he cannot show that his qualifications were superior to Richards' qualifications. Viewed in the light most favorable to the plaintiff, this is a situation in which the defendant chose between two equally qualified candidates. Specifically, "all internal candidates for positions at the Board were initially screened by the Division of Human Resources Management (`HRM') to ensure that they met the minimum qualifications for the position." Def.'s Reply at 18. Only those individuals who met the minimum qualifications for the position received an interview. Id. "Thus, both plaintiff's and Ms. Richards' qualifications were independently reviewed by HRM and determined to meet the minimum qualifications for the position." Id.
Although the plaintiff had more experience working at the Federal Reserve Board than Richards, he did not possess the requisite expertise in banking and securities, nor did he possess the relevant skill set required for the FR-29 manager position. Pl.'s Opp'n at 29; Def.'s Reply at 17-19. Despite the plaintiff's years of experience with the Board, he did not have experience performing the, job for which he applied. See Gutierrez, 435 F.Supp.2d at 71 (inferring a sufficient disparity in qualifications where the plaintiff had "many more years of distinguished service in that very job"). Further, although the plaintiff trained and advised other EDP analysts, his supervisory role was confined to IT and information systems, whereas Richards had acquired years of experience as a financial economist and as a senior analyst in the relevant areas of finance, banking and securities. Def.'s Reply. at 18; Pl.'s Opp'n at 24. Finally, both the plaintiff and Richards lacked experience in certain subject areas and both had positive performance evaluations during their time at the Board. Anderson v. Westinghouse Savannah River Co., 406 F.3d 248, 272 (4th Cir.2005) (stating that "the performance evaluation is a review of an employee's performance in her current position, while the process of selecting a person for a promotion involves a consideration of how that employee will perform in a different position. In other words, the performance evaluation and the interview selection stage, which involves an analysis of how the applicant meets the core and functional competencies of the position that is open, are not interchangeable" and noting that "[w]e cannot require that different supervisors within the same organization must reach the same conclusion on an employee's qualifications and abilities"). Because the plaintiff does not demonstrate that a reasonable jury could conclude that his qualifications were superior to those of Richards, the court determines that he has not made a prima facie case of gender discrimination. Harding, 9 F.3d at 153.
(4) The Court Grants the Defendant's Motion for Summary Judgment on the Age Discrimination Claim
In addition to gender discrimination, the plaintiff also alleges that the defendant discriminated against him on account of his age in violation of the ADEA. The defendant argues that it is entitled to summary judgment on the plaintiff's age discrimination claim because the plaintiff cannot prove that the defendant's reasons for not hiring him are pretextual and because no reasonable fact finder could find that the plaintiff's non-selection was due to age discrimination Def.'s Mot. 13, 16. The plaintiff, on the other hand, asserts that summary judgment is not appropriate because a reasonable fact finder could con elude that the defendant's decision to hire *32 an allegedly unqualified, younger woman raises an inference of discrimination and that the defendant's stated reasons for not hiring him are a pretext. Pl.'s Opp'n at 13, 15.
a. The Plaintiffs Prima Facie Case
In contrast to his sex discrimination claim, the plaintiff easily carries his burden of establishing a prima facie case of age discrimination.[6] At the time the plaintiff applied for the position he was 49 years old. Further, only qualified applicants were granted an interview and because the plaintiff received an interview, the court presumes that he was qualified for the position. The plaintiff, however, was not selected for the position and, instead, the position went to Richards who was 34 years old at the time of selection. Def.'s Reply at 18; Pl.'s Opp'n at 5; Threadgill v. Spellings, 377 F.Supp.2d 158, 161-162.
b. The Defendant's Legitimate, Nondiscriminatory Reason
The defendant asserts that Martinson "honestly and objectively believed that Richards was better qualified for the manager position as a result of her excellent credentials, communication skills, and experience in problem solving that would be applied to electronic banking, fiduciary activities, and the Shared National Credit Program." Def.'s Mot. at 14. Burdine, 450 U.S. at 254, 101 S.Ct. 1089. Before the selection process, Martinson had worked with Richards and "had been impressed with her analytical and communication skills," and he was also impressed with the level of responsibility her then-supervisor had given her. Id. Martinson also felt that the plaintiff was not able to explain things in non-technical terms and that he did not have strong skills in relevant areas, such as finance. Id. at 14-15. Because the defendant based its decision on non-discriminatory factors, the defendant has met it burden of rebutting the plaintiffs prima facie case. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 142, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000) (explaining that the defendant's "burden is one of production, not persuasion").
c. Pretext
The plaintiff attempts to establish that the defendant's proffered nondiscriminatory reason is pretextual in a number of ways. First, he argues that the defendant had an unwritten policy of promoting young women. Pl.'s Opp'n at 18-19. Second, he contends that Ryback referred to him as "old school." Id. at 19-20. Third, he points to alleged inconsistencies between Martinson's performance evaluations and Martinson's reasons for not selecting him. Id. at 20-23. Fourth, he argues that Richards was not as well-qualified as he was for the position. Id. The plaintiffs first, second, and fourth assertions regarding pretext are essentially the same facts that he proffered to support his prima facie case of discrimination. Id. at 15-16. For the reasons stated supra, however, these arguments are not sufficient to demonstrate that the defendant's proffered nondiscriminatory reason for not selecting the plaintiff is a pretext for age discrimination. Brown v. Bank One, N.A., 168 Fed.Appx. 46, 53 (6th Cir.2006) (stating that facts that were insufficient to establish a prima facie case were also insufficient to establish pretext).
With respect to the plaintiffs attempt to establish pretext by showing that Martinson's proffered nondiscriminatory *33 reason contradicts other accounts of his decision, Pl.'s Opp'n at 17, the court notes that an employment discrimination plaintiff can meet his burden of proving pretext by showing that the decision-maker's proffered nondiscriminatory reason was not the actual reason relied on, but was instead manufactured after the fact. Kalinoski v. Gutierrez, 435 F.Supp.2d 55, 72 (D.D.C.2006). In other words, a plaintiff can survive summary judgment if he shows that the employer's proffered, nondiscriminatory reason contradicts other accounts of its decision or that it is inconsistent with other contemporaneous accounts of the employer's decision. Id.; Gipson, 460 F.Supp.2d at 26-27.
In attempting to show that Martinson's reasons are pretextual, the plaintiff offers evidence from his performance evaluations for 1997, 1998, and 1999. Pl.'s Opp'n at 21-26. The performance evaluations highlight certain competencies and explicitly state that the plaintiff has "excellent communication skills," and "extensive background in both financial accounting and information systems." Id. at 24-25. The plaintiff reasons that the language in his performance evaluations contradicts Martinson's non-discriminatory reasons for non-selection. Id. at 25. The defendant, on the other hand, maintains that the performance evaluations for the years in question were not written by Martinson and that Martinson did not endorse the particular language in the evaluation. Def.'s Reply at 12. The defendant, moreover, claims that the performance evaluations support Martinson's view that the plaintiff was not qualified for the FR-29 supervisory position because he was too narrowly focused on IT issues. Id. at 13-14. The plaintiffs position as an EDP analyst focused exclusively on IT and Information Systems tasks and the performance evaluations that praise the plaintiffs skills relate to the IT functions of his job. Id. at 14-15.
The plaintiff has not demonstrated the type of "shifting rationale," or an after-the-fact statement that is required to establish that the defendant's nondiscriminatory reason is a pretext for discrimination. See Gutierrez, 435 F.Supp.2d at 68 (inferring a shifting rationale where the plaintiffs supervisor had mentioned that it replaced the plaintiff because of her job performance, yet, during a deposition, the plaintiffs supervisor stated that he had no concerns about the plaintiffs work performance). In the instant case, Martinson's view of the plaintiff s strength and weaknesses has not changed over time and the plaintiff has not shown that Martinson offered different or inconsistent explanations for the plaintiffs non-selection. For example, although the evaluations praise the plaintiffs communication skills in the area of his IT specialty, such praise is not inconsistent with Martinson's concern that the plaintiff is unable to explain things in "non-technical" terms. Def.'s Reply at 14. And, the plaintiffs inability to communicate with a wider audience is directly related to the communication skills that are required of the FR-29 position. Indeed, as stated supra, "the performance evaluation is a review of an employee's performance in [his] current position, while the process of selecting a person for a promotion involves a consideration of how that employee will perform in a different position." Anderson, 406 F.3d at 272. Accordingly, "the performance evaluation and the `interview selection stage, which involves an analysis of how the applicant meets the core and functional competencies of the position that is open, are not interchangeable." Id. Because the plaintiff cannot demonstrate that the defendant has offered contradictory reasons for his non-selection, the *34 plaintiff fails to establish a pretext for age discrimination.
IV. CONCLUSION
For the foregoing reasons, the court denies the defendant's motion to dismiss and grants the defendant's motion for summary judgment. An order consistent with this Memorandum Opinion is separately and contemporaneously issued this 11th day of June, 2007.
NOTES
[1] The complaint names former Chairman of the Board of Governors of the Federal Reserve System Alan Greenspan as the defendant in this suit. On February 1, 2006, Ben S. Bernanke succeeded Greenspan as the Chairman of the Board of Governors. Thus, pursuant to Rule 25(d)(1) of the Federal Rules of Civil Procedure, the court substitutes Ben Bernake for Alan Greenspan as the proper defendant in this suit. FED.R.CIv.P. 25(d)(1); Network Project v. Corp. for Pub. Broad., 398 F.Supp. 1332, 1336 (D.D.C.1975) (explaining that "[s]ubstitution is appropriate when the original officer is replaced by an acting officer").
[2] The plaintiff requests discovery pursuant to Federal Rule of Civil Procedure 56(f). The plaintiff, as the nonmoving party, must state by affidavit why he is unable to present the facts necessary to defeat summary judgment. Strang v. U.S. Arms Control & Disarmament Agency, 864 F.2d 859, 861 (D.C.Cir.1989); see also Hotel & "Rest. Employees Union, Local 25 v. Attorney Gen., 804 F.2d 1256, 1269 (D.C.Cir.1986) (noting that the affidavit requirement helps "prevent fishing expeditions"), vacated on other grounds, 808 F.2d 847 (D.C.Cir.1987). In addition, the plaintiff must show a reasonable basis to suggest that discovery would reveal triable issues, and the reasons why he cannot produce those facts in opposition to the motion. Byrd v. Envtl. Prot. Agency, 174 F.3d 239, 248 n. 8 (D.C.Cir. 1999).
Although the plaintiff in this case prepared an affidavit for discovery, the affidavit does nothing more than provide a narrative of the facts. In his opposition brief, however, the plaintiff describes the information he intends to discover and claims he cannot challenge the defendant's representations because he does not possess information pertinent to his claim. Pl.'s Opp'n to Def.'s Mot. to Dismiss and for Summ. J. ("Pl.'s Opp'n") at 11.
The court concludes that the plaintiff has not shown that discovery would reveal triable issues of fact because the record already contains evidence similar to that which the plaintiff intends to obtain through discovery. Compare Pl.'s Opp'n at 9-12 with Def.'s Mot to Dismiss Counts I & II of the First Am. Compl. or, in the Alternative, for Summ. J. ("Def.'s Mot.") Exs, 1-6 and Pl.'s Opp'n Exs. 1-18 and Def.'s Consolidated to Pl.'s Opp'n ("Def.'s Reply") Exs. 1-10. Additionally, the plaintiff does not explicitly state why he cannot oppose the defendant's motion for summary judgment and he does not explain how the information he seeks to discover would create triable issues of fact. Strang, 864 F.2d at 861 (denying the plaintiff's motion for discovery because the plaintiff did not concretely state why she could not oppose summary judgment and instead offered a conclusory statement that discovery would be invaluable to the case). Moreover, even if the plaintiff discovered the evidence he seeks, he would still be unable to establish pretext for discrim ination because the information the plaintiff intends to discover is either irrelevant, or is, again, sufficiently similar to information al ready in the record. Pl.'s Opp'n at 9-10, Accordingly, the court denies the plaintiff's request for discovery.
[3] In its motion, the defendant states that it only addresses the first two counts of the plaintiffs four-count complaint because it addressed the merits of the other counts in an earlier motion. The court, however, granted the plaintiff's motion to amend his complaint on August 29, 2006. "Because the original complaint now is superseded by the amended complaint, the court denies without prejudice all pending motions pertaining to the original complaint." Bancoult v. McNamara, 214 F.R.D. 5, 13 (D.D.C.2003). If the defendant wishes to address counts III and IV of the plaintiff's complaint via dispositive motion, the defendant may file its motion not later than thirty calendar days from the date of this opinion.
[4] The plaintiff presents these same arguments in support of his argument that the defendant's proffered nondiscriminatory reason for not promoting him are pretextual.
[5] "Such a showing replaces a minority plaintiff's showing of protected status." Bell v. Runyon, 1997 WL 540814, *2, 1997 U.S. Dist. LEXIS 10909, at *4 (D.D.C. July 16, 1997); see also Harding, 9 F.3d at 153.
[6] The defendant presumes the plaintiff met his initial burden for purposes of the summary judgment motion. Def.'s Mot. at 13; Pl.'s Opp'n at 15.
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22 So.3d 1117 (2009)
Diane BOUDREAUX, Wife of/and Richard Barney, Individually, and the Community of Acquets & Gains Existing Between Diane Boudreaux, Wife of/and Richard Barney
v.
PLAQUEMINES PARISH GOVERNMENT Through its PRESIDENT; Louisiana Department of Highways and/or Louisiana Department of Transportation & Development; BOH Brothers Construction Company, Inc., Through its President; and Linfield, Hunter & Junius, Inc., Consulting Engineers.
No. 2009-CA-0396.
Court of Appeal of Louisiana, Fourth Circuit.
September 30, 2009.
*1118 Joseph Neves Marcal, III, New Orleans, LA, Counsel for Plaintiff/Appellee Diane Boudreaux, Wife of/and Richard Barney.
H.F. Foster, III, John W. Waters, Jr., Bienvenu, Foster, Ryan & O'Bannon, LLC, New Orleans, LA, Counsel for Defendant/Appellant.
(Court composed of Judge DENNIS R. BAGNERIS, SR., Judge MICHAEL E. KIRBY, and Judge DAVID S. GORBATY).
DENNIS R. BAGNERIS, SR., Judge.
Defendant, Boh Brothers Construction, Inc., appeals a judgment of the trial court that found it committed civil trespass on Plaintiffs', Richard and Diane Barneys' (hereinafter "the Plaintiffs"), property. For the following reasons, we hereby affirm.
FACTS
In March of 2000, the Plaintiffs granted a right-of-way easement for a utility project to Plaquemines Parish (hereinafter "the Parish"). The Parish hired the engineering firm of Lindfield, Hunter, and Junius, Inc., (hereinafter, "Lindfield") along with the contractor, Boh Brothers Construction, Inc., (hereinafter, "Boh") to perform the necessary utility servitude work.
Upon completion of the utility servitude work, the Plaintiffs filed suit against the Parish, Lindfield, and Boh alleging that the work performed for the project resulted in a breach of their contract with the Parish and that the work of Boh was negligent and incompetent, which resulted in damage to their home. At the conclusion of a two day trial, the trial court requested that post-trial memoranda address whether Boh had the right to utilize the right-of-way for other purposes such as storage. Thereafter, the trial court dismissed the claims of the Plaintiffs against the Parish, the Parish engineers, and the State. The trial court also found that Boh's work did not cause any damage to the home of the Plaintiffs. However, the trial court did find that Boh did not have permission to have its equipment at the front of the Plaintiffs' property and thus committed civil trespass. The trial court awarded the sum of $17,625.66 to each plaintiff, a total of $35,251.32, plus interest and costs. In its well written reasons for judgment, the trial court stated, in pertinent part:
In the case at bar, at no place in the record did Boh get approval to use the right-of-way in front of the Barney property as a storage area for 6 months. Boh was wrong to assume that it could do this and should have notified the Parish of its intent so that the Parish could have contracted for such right.
An act of civil trespass is defined as "the unlawful invasion of the property or possession of another." Thibodeaux v. Krouse, 2008 WL 2329740, 2002-2557[, 991 So.2d 1126] (La.App. 1 Cir. 6/6/08). The elements of trespass are: intent to enter property that belongs to another (defendant need not know the property belongs to another) and physical entrance *1119 onto the land of another. Because the right-of-way for which the Barneys contracted does not include rights of storage, the Court finds that Boh is liable for its intentional trespass. Because Boh is an independent contractor, the Parish is not vicariously liable for its act. Even if Boh's act were considered negligent, the Parish has a "hold harmless clause" in its contract with Boh for any of Boh's negligent acts. Plaintiffs point out that Boh's foreman testified that the actual installation of the pipes and water lines in front of Plaintiffs' property took merely "... one day...." With no evidence to contradict this, the Court is concerned that Boh continuously accessed the right of way in front of the Barney home for approximately 6 months when the work required in front of the home should have been completed within a few days. Testimony revealed that Boh used the right-of-way in front of the Barney home and at times possibly part of the Barneys' property for storage of pipes, construction equipment, and construction vehicles. The record reflects that during the 6 month period of construction, the Barneys' water line was broken several times (Mrs. Barney testified to 5 times) with flooding of their front yard, access to the home via the driveway was blocked on numerous occasions (Mrs. Barney testified to once a week), there was the constant noise and vibration from the construction equipment and vehicles, as well as dust and debris in the air as a result thereof. Plaintiffs testified that pictures and a clock fell off the wall on different occasions. A family friend testified that the dishes on the table rattled when he ate dinner with the Barneys. All this despite the fact that the Barneys requested that the equipment be moved and that the continued use of the right-of-way in front of their property cease. Mr. Barney testified that he became frustrated because despite their concerns and complaints, "they seemed like they didn't care." Mrs. Barney testified that Boh brought its equipment on her property which was not agreed to in the right-of-way. She testified that she told Boh to get off her property, but they would not. The record reflects significant mental anguish on the part of the Barneys who experienced frustration and feelings of helplessness. Mrs. Barney testified that she experienced hair loss as a result of the stress for which her hairdresser recommended a hair product used by cancer patients. While the Barneys' concerns regarding damage to their home have been proven unfounded, the fact remains that they suffered constant inconvenience for 6 months. Mrs. Barney stated that she would not have signed the Right of Way document if she had known the duration and extent of the work that was to be done in front of her home.
The fact is, the right-of-way for which the Barneys did contract, does not allow for the duration or type of activities in front of their home. At no place in the Right-of-Way Agreement is there any mention of storage of construction vehicles/equipment or pipes. Contrarily, the Agreement states: "Upon completion of work upon Grantors' property, Grantee is to return the property to its condition prior to commencement of work." Again, work in front of the Barney home should have been completed in a matter of days. If Boh wanted to use the right-of-way for an extended period of time (here, 6 months), it should have notified the Parish to contract for this. Boh should not have assumed it had the right to store equipment and pipes on the right-of-way for 6 months. At the very *1120 least, the complaints of the Barneys should have made Boh inquire whether it had the right to do such a thing. Instead, the Barneys, understandably upset about the numerous inconveniences and concerns caused by 6 months of activity in front of their home, were ignored; the work activity in front of their home continued for months when it should have ceased within days.
Boh had a positive duty to minimize all damage; and upon completion of their activities, had an additional positive duty to remove their "works and debris". This positive duty is found in the Louisiana Civil Code in art. 743 and 745:
Art. 743. Accessory rights Rights that are necessary for the use of a servitude are acquired at the time the servitude is established. They are to be exercised in a way least inconvenient for the servient estate.
Art. 745. Right to enter into the servient estate The owner of the dominant estate has the right to enter with his workmen and equipment into the part of the servient estate that is needed for the construction or repair of works required for the use and preservation of the servitude. He may deposit materials to be used for the works and the debris that may result, under the obligation of causing the least possible damage and of removing them as soon as possible.
The Court finds that Boh did not adhere to this duty because it intentionally stored equipment and pipes in front of the Barney home for 6 months and subjected them to the inconveniences and mental anguish resulting there from despite the Barneys' repeated complaints. The Barneys, who contracted for work activity in front of their property that should have been completed within days, were subjected to approximately 6 months of work activity and the stress and inconveniences discussed above. The Court finds the Parish not to be at fault because Boh did not notify the Parish of its intent to use the right-of-way in front of the Barney home as a storage facility for 6 months. Had Boh done this, the Parish could have contracted for such rights. The Parish contracted properly to allow the work to be done in front the Barneys' property. If Bos [sic] needed a place for storage of their equipment and materials, it was their burden to notify the Parish of this.
The Court finds Lindfield to be without fault because their duty was only to ensure that Boh adhere to plans and specifications for the project. The storage of equipment and pipes is encompassed by the methods and means of performing the project for which the contractor, Boh, is responsible.
Damages
One who is wronged by a trespass may recover general damages suffered, including mental and physical pain, anguish, distress, and inconvenience. Lacombe v. Carter, 975 So.2d 687 (La.App. 3 Cir.2008). With regard to the amount of damages to be assessed against a trespasser, both for the invasion of plaintiffs property right and the resulting mental anguish, humiliation, and embarrassment, the trial court is afforded much discretion. Beasley v. Mouton, 408 So.2d 446 (La.App. 1 Cir., 1981[1981]). In another trespass case, an award of general damages in the amount of $29,750 was held to be an abuse of the trial judge's "much discretion." Awards of $10,000 and 7,500 respectively for the husband and wife who owned the property, were the maximum amounts that would compensate them for general damages they sustained, in *1121 addition to an award of $250 for property damage. Ard v. Samedan Oil Corp., 483 So.2d 925 (La.1986). Because that case arguably involved more aggravation than the case sub judice due to the escaping of cattle from a trespasser's act and the resultant aggravation of one month of problems related to this, the Court finds that the Plaintiffs in the case at bar are entitled to approximately a present-day one-seventh of that amount. Using a formula to account for inflation acquired off the internet at www.westegg.com/inflation/, one-seventh of $10,000.00 (or $1,428.57) in 1986 adjusted for inflation would equal $2,937.61 in 2007. Multiplying this by 6 to account for the increase in time of 1 month of inconvenience in the Ard case compared to 6 months in the case at bar, yields $17,625.66. Both Mr. and Mrs. Barney are awarded this amount for a total of $35,251.32.
Boh is at fault because it should not have assumed it had the legal right to use the right-of-way for storage of equipment and pipes for 6 months. Boh should have notified the Parish of its intent to use the right-of-way in front of the Barney home for 6 months so that the Parish could have contracted for this. The Court finds Boh liable for the total amount of $35,251.32.
Boh now appeals this final judgment. On appeal, Boh asserts the following assignments of error: (1) the trial court erred in finding that Boh was on the Plaintiffs' property without permission and thus guilty of civil trespass; (2) the trial court erred when it failed to find that Boh's activities along the front of the Plaintiffs' property was necessary in order to perform the work required by its contract with the Parish; (3) the trial court erred in its interpretation of the servitude; (4) the trial court erred in finding that Boh's equipment on the front of the Plaintiffs' property caused such aggravation and irritation to warrant compensation; and (5) the trial court abused its discretion in awarding excessive damages to the Plaintiffs.
DISCUSSION
The First Circuit Court of Appeal addressed the rights associated with a right-of-way in Carbo v. City of Slidell, 01-0170 (La.App. 1 Cir. 1/8/03), 844 So.2d 1. As stated in Carbo:
The right of use includes the rights contemplated or necessary to enjoyment at the time of the creation of the servitude, as well as rights that may later become necessary, provided that a greater burden is not imposed on the property. La. C.C. art. 642. Pursuant to La. C.C. art. 645, the following additional rules are applicable. The Parish has the right to enter with its workmen and equipment into the part of the Carbos' property that is needed for the construction or repair of works required for the use and preservation of the servitude. La. C.C. art. 745. See also La. R.S. 38:113 and Terrebonne Parish Police Jury v. Matherne, 405 So.2d 314, 317 (1981). The Parish may deposit materials to be used for the works and the debris that may result, under the obligation of causing the least possible damage and of removing them as soon as possible. The Parish has the right to make at its expense all works that are necessary for the use and preservation of the servitude. La. C.C. arts. 744 and 745; Tournillon v. Sewerage and Water Bd. of New Orleans, 96-1457 (La.App. 4 Cir. 2/12/97), 689 So.2d 655, writ denied, 97-0662 (La.4/25/97), 692 So.2d 1091; Dautreuil v. Degeyter, 436 So.2d 614, 617 (La.App. 3 Cir.1983). However, rights that are necessary for the use of the servitude are acquired at the time *1122 the servitude is established. They are to be exercised in a way least inconvenient for the property burdened by the servitude. La. C.C. art. 743; Jackson v. Jackson, 2000-2591, p. 10 (La.App. 1 Cir. 3/6/02), 818 So.2d 192, 199. See generally A. Yiannopoulos, 3 La. Civ. Law Treatise, Personal Servitudes, §§ 222-230, pp. 454-475 (4th Ed.2000).
Carbo, 844 So.2d at 12.
On March 9, 2000, the Plaintiffs entered into a servitude agreement entitled Servitude of Way for Water Lines and Sewer Lines Relocation with Plaquemines Parish Government. Specifically, the agreement states as follows, in pertinent part:
WHEREAS, Grantee (Plaquemines Parish Government) is in need of additional right-of-way for the purpose of construction and installation of a Parish Public Improvement Project, being the relocation of the water and sewer lines between City Price and Happy Jack as depicted on the plans prepared by Linfield, Hunter & Junius, Inc., dated July 17, 1998, entitled, "Utility Relocation Hwy. 23 Widening, City Price/Happy Jack, State Project No. XXX-XX-XXXX for Plaquemines Parish Government, Plaquemines Parish, Louisiana, Parish Project No. 98-05-02," a copy of which is on file in the Plaquemines Parish Government, Land Department, 102 Avenue G, Belle Chassé, Louisiana;
WHEREAS, Grantors (the Plaintiffs) are the owners of the hereinafter described land over which the said public improvement is needed.
LOT "D" is a parcel of land 231.4 feet wide along Louisiana State Highway 23, right-of-way, and approximately 237 feet wide along the Parish Drainage Canal, bounded on the lower side by the property of John Ancar and measuring approximately 1535.2 feet. Lot "D" to include ownership of river batture. All as more clearly shown on a plat of survey by Chalmers and Black, Civil Engineers, dated July 30, 1977, Community of Happy Jack, Parish of Plaquemines.
In accordance with survey of Hugh B. McCurdy, Jr., Land Surveyor, dated November 7, 1985, Lot "D" measures 231.4 feet front on Louisiana State Highway 23, a width in the rear of 237 feet, a depth on the sideline adjoining the property of J.L. Redmond of 1552.8 feet and a depth on the opposite sideline adjoining the property of John Ancar of 1535.2 feet.
NOW THEREFORE for and in consideration of the price and sum of THREE THOUSAND THREE HUNDRED THIRTY-ONE AND 25/100 ($3, 331.25) DOLLARS CASH, which price Grantee hereby binds and obligates itself to pay to Grantors upon the approval by Grantee of Grantors' good and unencumbered title to the hereinabove described property do hereby grant an assignable servitude for the said public improvement as shown on plan for Utility Relocation for Hwy. 23 Widening in City Price/Happy Jack by Dufrene Surveying & Engineering, Inc., dated February 12, 1999, and containing 5,125 square feet.
The Plaintiffs granted "all rights of ingress and egress to and from said servitude and easement for the purpose and benefits aforesaid." Further, the servitude agreement stated:
Grantors reserve the right to use and enjoy the above described lands, except as may be necessary for the purpose herein granted, provided Grantors shall not interfere with nor obstruct Grantee in the exercise of its rights hereunder, and shall not construct nor permit to be constructed any house, structure, reservoir or other obstruction within the permanent *1123 right-of-way and easement except for those improvements existing as of date of this document.
Grantee shall have the right to clear, and keep clear, all trees, undergrowth and other obstructions within the right-of-way with the exception of the existing cypress tree in said servitude and no spoil is to be removed from Grantors' property. Upon completion of work upon Grantors' property, Grantee is to return the property to its condition prior to commencement of work. Grantors acknowledge and agree that the consideration provided herein constitutes full and final settlement for the right-of-way herein granted and for any and all diminution in the value of Grantors remaining property as a result of the granting of this servitude and right-of-way.
We agree with the trial court that the servitude agreement was for the purpose of laying water and sewer lines in order for the new four lane highway to be constructed, and no other. Because the right-of-way for which the Plaintiffs contracted does not include the rights of storage, we agree with the trial court that Boh should be liable for its intentional trespass when it stored pipes, construction equipment, and construction vehicles on the Plaintiffs property for approximately six months. Accordingly, we find the trial court properly found that Boh committed a civil trespass when it stored its equipment on the Plaintiffs' property without contracting to do so.
Boh contends the trial court's award of $17,625.66 to each plaintiff, a total of $35,251.32, for general damages was in error and/or excessive. Thus, Boh contends we should reverse or reduce the trial court on its award of damages. The Plaintiffs argue that the damage award was reasonable and well within the vast discretion of the trial court.
The trial court's determination of the amount of an award of damages is a finding of fact. Ryan v. Zurich American Ins. Co., 07-2312 (La.7/1/08), 988 So.2d 214. Under the manifest error standard, in order to reverse a trial court's determination of a fact, an appellate court must review the record in its entirety and (1) find that a reasonable factual basis does not exist for the finding, and (2) further determine that the record establishes that the fact finder is clearly wrong or manifestly erroneous. On review, an appellate court must be cautious not to re-weigh the evidence or to substitute its own factual findings just because it would have decided the case differently. Ryan, 988 So.2d at 219. Further, it is only after articulated analysis of the facts discloses an abuse of discretion, that the award may on appellate review, for articulated reason, be considered excessive. Carollo v. Wilson, 353 So.2d 249 (La.1977). It is only after such determination of abuse has been reached, is a resort to prior awards appropriate for purposes of then determining what would be an appropriate award for the present case.
Our review of the record shows that the Plaintiffs were in fact put through a much greater inconvenience, worriment, and frustration by Boh when it stayed on their property for the six month time period. Under these facts, we do not find the trial court abused its vast discretion in setting the general damage award in this case.
For the foregoing reasons, the judgment of the trial court is affirmed.
AFFIRMED.
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971 F.Supp. 353 (1997)
S1 IL304 LIMITED LIABILITY COMPANY, Plaintiff,
v.
ANB CUST. FOR LG, Cook County ex rel., Hynes, et al., Defendants.
No. 96 C 2091.
United States District Court, N.D. Illinois, Eastern Division.
July 15, 1997.
*354 Edward Sidney Weil, Gary P. Segal, Schwartz, Cooper, Greenberg & Krauss, Chicago, IL, Jill Anne Glickstein, Rudnick & Wolfe, Chicago, IL, for S1 IL 304 Ltd. Liability.
Mark R. Davis, Jason Thomas Shilson, O'Keefe, Ashenden, Lyons & Ward, Chicago, IL, ANB Cust. for LG.
Donna M. Lach, State's Attorney of Cook County, Chicago, IL, for Thomas C. Hynes, Edward J. Rosewell, David Orr.
Stanford D. Marks, Chicago, IL, for Phoenix Bond & Indemnity Co.
MEMORANDUM OPINION AND ORDER
BUCKLO, District Judge.
The plaintiff, S1 IL304, a Delaware limited liability company ("S1"), instituted this declaratory judgment action seeking a declaration that (1) the tax liens and penalties on its real property are void based on prior ownership of the property by the Resolution Trust Corporation ("RTC"); and (2) S1 has a right to challenge the County Assessor's assessments of the property, the value of those assessments, and the property tax based thereon. After I dismissed S1's prior complaint for lack of subject matter jurisdiction, S1 IL304 Ltd. Liability Co. v. ANB Cust. for LG, 950 F.Supp. 242, 245-46 (N.D.Ill.1996), S1 filed an amended complaint claiming jurisdiction under the diversity statute, 28 U.S.C. § 1332. Defendants, ANB Cust. for LG ("ANB"), Phoenix Bond & Indemnity Company ("Phoenix"), and Thomas Hynes, Edward Rosewell and David Orr in their official capacities as Cook County Assessor, Treasurer and Clerk, respectively, (the "County") (collectively "Defendants") again have moved to dismiss the plaintiff's complaint for a lack of subject matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. In the alternative, the defendants have moved to dismiss for failure to state a claim, pursuant to Rule 12(b)(6). For the following reasons, the motion is granted in part and denied in part.
Jurisdictional Bar of the Tax Injunction Act
The Tax Injunction Act ("TIA"), 28 U.S.C. § 1341 (1994), provides that "the district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State." 28 U.S.C. § 1341. The TIA applies with equal force in cases, such as this one, where a plaintiff seeks a declaratory judgment. Franchise Tax Bd. v. Alcan Aluminium, 493 U.S. 331, 338, 110 S.Ct. 661, 666, 107 L.Ed.2d 696 (1990). Based on the language of the TIA and the effect of the declaration which S1 seeks, the defendants argue that the TIA deprives this court of jurisdiction in the above matter. In opposition, S1 argues that its claims fall outside the scope of the TIA.
Most of S1's claims fall within the purview of the TIA and therefore fall outside of my jurisdiction. In Count I, S1 seeks a declaration that ANB and Phoenix's tax liens on the property for 1993 and 1994 are void because of the RTC's prior ownership of a mortgage interest in the property. In Count II, S1 seeks a declaration that the County has no liens on the property for delinquent taxes in 1993 and 1994. Because ANB and Phoenix would be entitled to seek a refund on the tax certificates, and the County's method of tax collection would be restrained if S1 prevails on the merits of these two claims, this suit is barred by the TIA.
The tax sale and purchase process in *355 Illinois involves several steps.[1] The process begins when a tax lien attaches to the property on the first day of the year, and that lien acquires first priority over all other liens and encumbrances. 35 ILCS 200/21-75. The lien remains on the property until the tax is paid by the owner, an interested party, or a third-party purchaser at a tax sale. In Re McKeever, 132 B.R. at 1005. When a tax sale is held, a third-party may obtain a certificate of purchase in exchange for payment of the delinquent taxes. Id. This certificate gives the purchaser a lien on the property but not ownership of the property itself. Id. A tax purchaser may claim a refund for the price of the tax certificates, along with interest and costs, if the sale was in error. 35 ILCS 200/21-310, -315. Under Illinois law, a sale in error may be triggered by several conditions. For purposes of this motion, the relevant triggering condition for a sale in error is that the property is not subject to taxation. Id. 21-310(a)(1).
If S1 prevails on Counts I and II, the liens on the property would be declared void because the property was not subject to taxation as a consequence of the RTC's prior interest. Although the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) provides the RTC with protection only from the attachment of involuntary liens and not with exemption from real estate taxation, 12 U.S.C. § 1825(b)(1), (2), the effect in Illinois is the same. Illinois law provides for both in personam and in rem actions for delinquent property taxes, but an in personam action may not be pursued until a judgment has been issued on the property. People ex rel. Larson v. Rosewell, 88 Ill.App.3d 272, 43 Ill.Dec. 404, 406, 410 N.E.2d 404, 406 (1st Dist.1980). In other words, an in rem action for delinquent property taxes must precede an in personam action. A civil action to recover unpaid taxes from the property owner is merely a "`backstop'" procedure to recoup money for property which could not be sold at a tax sale. Id. e statute authorizing such actions states that "[t]he county board may, at any time after final judgment and order of sale against delinquent property under Section 21-180, institute a civil action ... in the circuit court for the whole amount due for taxes and special assessments on the delinquent or forfeited property." 35 ILCS 200/21-440 (emphasis added). This language only permits an in personam action once a in rem judgment against the property has been entered.
In this case, declaring the liens void would preclude an in rem judgment and result in no taxation on the property. The county court does not obtain jurisdiction until "the county collector makes his application for judgment and order for sale." Vulcan Materials Co. v. Bee Constr., 96 Ill.2d 159, 70 Ill.Dec. 465, 467, 449 N.E.2d 812, 814 (1983). The county collector, however, cannot make an application for judgment and order for sale if no liens are attached to the property. 35 ILCS 200/21-75, -110. Therefore, no in rem action against the property in this case could be commenced if the liens are declared void. Furthermore, if the liens are invalid, ANB and Phoenix would be entitled to a refund of the purchase price of the tax certificates as a sale in error, and the County would be left with unpaid tax bills. Without any land to which the tax liens could attach, the County could pursue neither an in rem action nor an in personam action to collect the taxes. The County would be left without any means for recovering the assessed taxes. Because these claims invoke the TIA, and S1 has access to a fast and efficient remedy in state court, S1 IL304, 950 F.Supp. at 246, I lack jurisdiction to adjudicate Counts I and II.[2]See RTC Commercial Assets Trust 1995-NP3-1 v. Phoenix Bond & Indemnity Co., 963 F.Supp. 706, 710 (N.D.Ill.1997); see also Fried v. Carey, 620 F.2d 591, 593 (7th Cir. 1978) (holding that TIA barred federal court *356 interference with the only legally available remedy that Illinois had to recover delinquent taxes).
Count IV of the complaint also is barred by the TIA for the same reasons. In Count IV, S1 has asked for a declaration of its right to challenge the assessments on the property at issue. This count directly affects the assessment of taxes and brings it within the scope of the TIA. RTC Commercial Assets, 963 F.Supp. at 710-11. Accordingly, Count IV will be dismissed.
Finally, S1 has requested in Count III that I declare invalid any penalty or interest liens attached to the property. The penalties involved are in the nature of interest owed on the delinquent taxes, pursuant to 35 ILCS 200/21-15 (1996). To determine whether this interest constitutes a tax within the meaning of the TIA, I look to Illinois law. See Reconstruction Fin. Corp. v. Beaver County, Pa., 328 U.S. 204, 209-10, 66 S.Ct. 992, 995-96, 90 L.Ed. 1172 (1946). Illinois courts as well as federal courts interpreting Illinois law have held that the interest charged on delinquent taxes constitutes a penalty and not a tax because the interest is imposed only on delinquent taxpayers and its effect is to encourage property owners to pay their taxes promptly. United States v. Nelson, 91 F.Supp. 557, 559-60 (N.D.Ill.1949); Village of Oak Lawn v. Rosewell, 128 Ill. App.3d 639, 83 Ill.Dec. 904. 907, 471 N.E.2d 203, 206 (1st Dist.1984), aff'd 113 Ill.2d 104, 100 Ill.Dec. 556, 497 N.E.2d 734 (1986); see also RTC Commercial Assets, 963 F.Supp. at 710-11. Because the interest liens are not characterized as taxes, Count III falls outside of the scope of the TIA, and I may exercise jurisdiction over this count. See Hager v. City of West Peoria, 84 F.3d 865, 871-72 (7th Cir.1996).
Count III Relief from Penalty Liens
Although I have jurisdiction over Count III, the issue remains whether S1 has stated a claim upon which relief can be granted. S1 seeks a declaration in Count III that the defendants do not hold any liens or claims for penalties arising during the RTC's receivership.[3] It bases its claim upon Section 1825(b)(3) which states that the RTC will not be liable for any penalties or fines resulting from a failure to pay any real property taxes.
S1 may assert the RTC's substantive rights under Section 1825(b)(3). In my prior decision in this case, I explained that the goal behind the extension of the RTC's rights to private parties was to help the FDIC in ridding "`the federal system of failed bank assets.'" S1 IL304, 950 F.Supp. at 245 (citation omitted). Although that goal is not served by extending the RTC's jurisdictional grant, it is served by extending the substantive rights of Section 1825 to private parties who purchase assets from the RTC. F.D.I.C. v. Bledsoe, 989 F.2d 805, 811 (5th Cir.1993); RTC Commercial Assets, 963 F.Supp. at 711-12.
Based on the language of the Section 1825(b)(3), S1 has stated a claim for relief from liability for the penalty liens attached to the property.[4] In fact, S1 appears to have a good chance of prevailing on this count, but no motion currently is pending which would permit the Court to rule. See RTC Commercial Assets, 963 F.Supp. at 711-12.
Conclusion
The motion to dismiss with respect to Counts I, II and IV is granted because the TIA bars the exercise of federal jurisdiction over these counts. The motion is denied *357 with respect to Count III because it states a viable claim.
NOTES
[1] For a more thorough discussion of Illinois law on the subject of tax sales and purchases, see In Re McKeever, 132 B.R. 996, 1005-07 (Bkrtcy. N.D.Ill.1991).
[2] S1 argues that it only seeks a declaration dissolving the tax liens and that its claims do not affect the assessment, levy, or collection of taxes. This is an illusory distinction. S1's action still is controlled by the TIA because "in dissolving a lien on property, a federal court interferes with the state's fiscal program just as surely as if it enjoined collection or assessment of the tax itself." Dawson v. Childs, 665 F.2d 705, 710 (5th Cir.1982).
[3] Of course, any liens for taxes or penalties which attached to the property prior to the RTC's interest were unaffected and still are valid. Irving Indep. School Dist. v. Packard Properties, 970 F.2d 58, 61-62 (5th Cir.1992).
[4] Although S1 may not be liable for the amounts of the penalty liens, Section 1825(b)(3) may not provide authority to void the penalty liens. See Simon v. Cebrick, 53 F.3d 17, 23 (3rd Cir.1995) (noting that "[b]oth parties acknowledge that the statute does not extinguish plaintiff's tax liens nor does it subordinate them to the FDIC's liens"); Matagorda County v. Law, 19 F.3d 215, 222 (5th Cir.1994) (stating that "[t]he FDIC has not contested the Taxing Units' authority to assess the taxes against the Law property nor the validity or priority of their subsequently imposed lien for the failure to pay taxes").
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32 Kan. App. 2d 1037 (2004)
VIRGIL BRUCE McCOMB, Appellee,
v.
STATE OF KANSAS, WYANDOTTE COUNTY SHERIFF, and KANSAS DEPARTMENT OF CORRECTIONS, Appellants.
No. 91,397.
Court of Appeals of Kansas.
Opinion filed July 23, 2004.
*1038 Timothy G. Madden, of Kansas Department of Corrections, for appellant.
Carl E. Cornwell, of Olathe, for appellee.
Before MARQUARDT, P.J., MALONE, J., and ERIC S. ROSEN, District Judge, assigned.
MALONE, J.
The State of Kansas, the Wyandotte County Sheriff, and the Kansas Department of Corrections (KDOC) appeal the district court's order granting Virgil Bruce McComb's K.S.A. 2003 Supp. 60-1501 petition. McComb was convicted of aggravated indecent liberties with a child, served time in prison, and was ultimately placed on postrelease supervision. He has always maintained his innocence. The sole issue is whether McComb's postrelease supervision can be revoked for his failure to participate in a sexual abuse treatment program (SATP) which requires McComb to accept responsibility for his crime. This is an issue of first impression.
*1039 Facts and procedural background
On August 28, 1996, McComb was convicted by a jury of four counts of aggravated indecent liberties with a child. The victim was his 10-year-old granddaughter. McComb received a sentence of 73 months' incarceration, followed by 24 months' postrelease supervision. At trial, McComb maintained he was not guilty.
McComb continued to claim his innocence throughout his incarceration. McComb was enrolled in the prison SATP, but he refused to sign an "admission of guilt." As a result, McComb lost privileges and benefits, including good time credits. McComb was first released from prison in April 2002. One of the conditions of his release was participation in a recommended SATP. The SATP is recognized by the parties as a therapeutic treatment program. The program requires the participant to admit guilt for the underlying offense on the theory that the participant cannot be treated for a problem until responsibility is accepted.
McComb reported to his therapy sessions but refused to sign an admission of guilt. In August 2002, following a preliminary hearing before the KDOC and a final hearing before the Kansas Parole Board (Board), McComb was found to have violated the conditions of his release. He was returned to prison and served 133 days in custody.
McComb was again released from prison on the condition that he successfully complete the same treatment program. Again, McComb reported to his therapy sessions but refused to sign the admission of guilt. Following a preliminary and final hearing, McComb was found to be in violation of the terms of his release and was again returned to prison. McComb served another 120 days.
After McComb was released for the third time, he told the therapist that he was guilty of the crime. Two weeks later, McComb again denied his guilt and was expelled from the program. A third revocation process was initiated against McComb. This time McComb waived his preliminary hearing before the KDOC and also waived his final hearing before the Board. Instead, on July 22, 2003, McComb filed a K.S.A. 2003 Supp. 60-1501 petition, claiming that the SATP condition of his release violated his Fifth *1040 Amendment privilege against self-incrimination and his Fourth Amendment right to be free from unreasonable seizure.
The KDOC's answer asserted that McComb's waiver of his hearing before the Board constituted a failure to exhaust administrative remedies. The KDOC also argued that the SATP condition was constitutional as applied to McComb.
Following an evidentiary hearing, the district court granted McComb's petition. On the waiver argument, the district court found that the parties had "stipulated" that if McComb had asserted his right to preliminary and final hearings, probable cause would have been found to revoke his release. On the merits of McComb's claim, the district court found that the Board's action in revoking McComb's postrelease supervision was "arbitrary and capricious and constitutes an abuse of discretion and a denial of due process of law." The district court ordered that McComb be released from prison and that he be allowed to serve the balance of his postrelease supervision term without the SATP condition.
This timely appeal follows.
Standard of review
"In reviewing a district court's decision reviewing an agency action, the appellate court must first determine whether the district court observed the requirements and restrictions placed upon it and then make the same review of the administrative agency's action as does the district court. [Citations omitted.]" Connelly v. Kansas Highway Patrol, 271 Kan. 944, 964, 26 P.3d 1246 (2001), cert. denied 534 U.S. 1081 (2002).
"While habeas corpus is the appropriate procedure for reviewing decisions of the Kansas Parole Board (Board), appellate review is limited to determining if the Board complied with the applicable statutes and whether its action was arbitrary or capricious." Brown v. Kansas Parole Board, 262 Kan. 903, Syl. ¶ 2, 943 P.2d 1240 (1997); see Swisher v. Hamilton, 12 Kan. App. 2d 183, 185, 740 P.2d 95, rev. denied 242 Kan. 905 (1987).
"An inmate's claim brought pursuant to K.S.A. 60-1501 et seq. must be based upon deprivation of a constitutional right or be subject to summary dismissal." Ramirez v. State, 23 Kan. App. 2d *1041 445, Syl. ¶ 3, 931 P.2d 1265, rev. denied 262 Kan. 962 (1987). Allegations must be made of shocking and intolerable conduct or continuing mistreatment of a constitutional stature. Swisher, 12 Kan. App. 2d at 184-85.
The question of whether an individual's constitutional rights have been violated is a question of law. Hearst v. State, 30 Kan. App. 2d 1052, 1055-56, 54 P.3d 518 (2002). An appellate court's review is unlimited. Gillespie v. Seymour, 250 Kan. 123, 129, 823 P.2d 782 (1991).
Exhaustion of administrative remedies
The KDOC asserts that McComb failed to exhaust his administrative remedies when he waived his hearing before the Board on the third attempt to revoke McComb's postrelease supervision. The KDOC correctly points out that if a party withholds an issue from determination by an agency, the issue is not properly preserved for judicial review. Shields v. J.E. Dunn Constr. Co., 24 Kan. App. 2d 382, 387, 946 P.2d 94 (1997). The KDOC contends that, had McComb requested a third hearing, the Board had the option to continue McComb's conditional release pursuant to K.S.A. 2003 Supp. 75-5217(b). The KDOC argues that the Board's action could not be considered "arbitrary and capricious," when the Board never actually made any findings or orders relating to McComb's third expulsion from the SATP.
McComb counters by arguing that the parties stipulated to the likely result of the Board hearing. McComb further argues that he was not required to seek an administrative remedy when the remedy is known to be inadequate. Specifically, McComb asserts that there "is no reason to believe that a third set of hearings [before the KDOC and the Board] would have yielded a different result."
An allegation that a party is required to or has failed to exhaust administrative remedies presents a question of law, and appellate court review is unlimited. NEA-Coffeyville v. U.S.D. No. 445, 268 Kan. 384, Syl. ¶ 3, 996 P.2d 821 (2002).
The district court found that the parties had "stipulated" that McComb's release would have been revoked had he requested a third hearing before the Board. No such written stipulation was *1042 ever filed in this case. However, the parties conducted a lengthy "stipulations hearing" where McComb offered to stipulate to that result. The KDOC never disagreed with the proposed stipulation and said nothing to prevent the court from believing that it agreed with McComb's analysis. Upon reviewing the entire transcript of the "stipulations hearing," we conclude that the district court reasonably believed that the parties were stipulating to the eventual outcome of the hearings.
More importantly, a party is not required to seek an administrative remedy when the remedy is known to be inadequate. In re Habeas Corpus Application of Pierpoint, 271 Kan. 620, 24 P.3d 128 (2001). In Pierpoint, an inmate made two requests for the assistance of counsel at a disciplinary hearing, which were both denied. The inmate subsequently filed a 60-1501 petition without requesting an agency hearing, and the KDOC responded by claiming that the inmate had failed to exhaust his administrative remedies. The court found that, under these circumstances, there was no reason to believe that another request for the presence of counsel would have yielded a different result. The court held the inmate was not required to exhaust his administrative remedies and noted that "[e]xhaustion of administrative remedies is not required when administrative remedies are inadequate or would serve no purpose." 271 Kan. 620, Syl. ¶ 2; see State ex rel. Pringle v. Heritage Baptist Temple, Inc., 236 Kan. 544, 549, 693 P.2d 1163 (1985).
McComb's situation is similar to the facts of Pierpoint. McComb had already exhausted his administrative remedies for the same violation on two prior occasions within the previous 12 months. Although the Board technically had the power to continue McComb's conditional release, from a practical standpoint, there is absolutely no evidence that the Board would have departed from its previous position. Under the specific facts of this case, the administrative remedies presented to McComb were inadequate, and the district court did not err in retaining jurisdiction after McComb waived his third round of administrative hearings.
McComb's sentence
Before turning to the merits of McComb's constitutional claims, *1043 we must understand the provisions of his sentence under the Kansas Sentencing Guidelines Act (KSGA), K.S.A. 21-4701 et seq. Every criminal sentence under the KSGA consists of two components: a determinative prison sentence and a period of postrelease supervision. See K.S.A. 2003 Supp. 21-4704; K.S.A. 2003 Supp. 21-4705. Postrelease supervision means "the release of a prisoner to the community after having served a period of imprisonment. . . subject to conditions imposed by the Kansas parole board and to the secretary of corrections' supervision." K.S.A. 21-4703(p). Although similar to "parole," which applies to prisoners sentenced prior to the enactment of the KSGA, postrelease supervision is distinctive because it is actually imposed by the court as a component of the original sentence. Understanding the provisions of McComb's sentence is essential in weighing the merits of his constitutional claims.
Fifth Amendment claim
Although McComb's K.S.A. 2003 Supp. 60-1501 petition briefly references an alleged violation of the Fourth Amendment to the United States Constitution and § 15 of Kansas Constitution Bill of Rights, this argument was never advanced in district court or on appeal. McComb's primary argument in district court and on appeal is that the SATP condition of his postrelease supervision violates his privilege against self-incrimination pursuant to the Fifth Amendment to the United States Constitution and § 10 of the Kansas Constitution Bill of Rights.
Initially, the KDOC contends that this issue is not properly before the court. The KDOC asserts that the district court ruled adversely to McComb on his Fifth Amendment claim and McComb failed to cross-appeal that ruling. This assertion is incorrect. The district court ruled that "under most circumstances" a treatment program requiring an admission of guilt does not constitute a Fifth Amendment violation. However, the district court ultimately made no specific finding relating to whether McComb's Fifth Amendment right was violated. Instead, the district court ruled in McComb's favor on other grounds. Thus, McComb is not precluded from asserting his Fifth Amendment claim on appeal.
*1044 McComb argues that the SATP condition of his postrelease supervision violates his constitutional privilege against self-incrimination. The Fifth Amendment and § 10 of the Kansas Constitution Bill of Rights provide that no person shall be compelled in any criminal case to be a witness against himself or herself. It has long been held that this privilege not only permits a person to refuse to testify against himself or herself at a criminal trial in which he or she is a defendant, but it also "privileges him not to answer official questions put to him in any other proceedings, civil or criminal, formal or informal, where the answers might incriminate him in future criminal proceedings." Lefkowitz v. Turley, 414 U.S. 70, 77, 38 L. Ed. 2d 274, 94 S. Ct. 316 (1973).
There are no cases which address the precise issue before this court. The KDOC relies primarily on McKune v. Lile, 536 U.S. 24, 153 L. Ed. 2d 47, 122 S. Ct. 2017 (2002). Lile brought an action under 42 U.S.C. § 1983 (1994) against Kansas prison officials, alleging that the prison SATP and corresponding regulations and policies violated his Fifth Amendment right against self-incrimination. Lile was convicted of rape, and the prison SATP required him to admit guilt for his crime. The program also required Lile to complete a sexual history form, which detailed all prior sexual activities, regardless of whether such activities constituted uncharged criminal offenses. Lile refused to participate in the program. As a result, his prison status was reduced from Level III to Level I, causing a reduction in Lile's visitation rights, access to a personal television, and other prison privileges.
The United States Supreme Court held that the adverse consequences faced by Lile for refusing to participate in the prison SATP were not so severe as to amount to compelled self-incrimination. 536 U.S. at 35-48. The Court stated:
"The Kansas SATP represents a sensible approach to reducing the serious danger that repeat sex offenders pose to many innocent persons, most often children. The State's interest in rehabilitation is undeniable. There is, furthermore, no indication that the SATP is merely an elaborate ruse to skirt the protections of the privilege against compelled self-incrimination. Rather, the program allows prison administrators to provide to those who need treatment the incentive to seek it." 536 U.S. at 48.
*1045 The importance of a prison SATP for convicted sex offenders was specifically addressed by the Court in Lile. "When convicted sex offenders reenter society, they are much more likely than any other type of offender to be rearrested for a new rape or sexual assault. [Citation omitted.] States thus have a vital interest in rehabilitating convicted sex offenders." 536 U.S. at 33.
As for the importance of a convicted sex offender admitting guilt, the Lile Court stated that "[a]cceptance of responsibility is the beginning of rehabilitation." 536 U.S. at 47. The Court further noted that "[t]he fact that these consequences are imposed on prisoners, rather than ordinary citizens, moreover, is important in weighing respondent's constitutional claim." 536 U.S. at 36.
McComb correctly points out that Lile is not controlling authority. Lile applies to a prison SATP for convicted sex offenders who are still incarcerated. Failure to successfully complete the SATP in Lile only resulted in the loss of prison privileges. Conversely, McComb faced the loss of his liberty for failure to participate in the SATP while on postrelease supervision.
McComb cites State v. Imlay, 249 Mont. 82, 90-91, 813 P.2d 979 (1991), where the Montana Supreme Court held that a suspended sentence could not be revoked for a failure to complete a sexual therapy program, where the basis for the failure to complete the program was a refusal to admit guilt. Other state courts have held that a probationer has a valid Fifth Amendment privilege not to be compelled to admit guilt for the crime of conviction. See James v. State, 75 P.3d 1065 (Alaska App. 2003); In re Butts, 582 S.E.2d 279, 286-88 (N.C. App. 2003); State ex rel. Tate v. Schwarz, 654 N.W.2d 438 (Wis. 2002).
Although not cited by either party, we find the Kansas Supreme Court decision in Bankes v. Simmons, 265 Kan. 341, 963 P.2d 412, cert. denied 525 U.S. 1060 (1998), to be relevant. The facts of Bankes are similar to the facts of Lile. Bankes, who had been convicted of indecent liberties with a child, refused to participate in a prison SATP which required admission of guilt for his crime. His refusal to participate resulted in a loss of prison privileges and good time credits for parole eligibility. Bankes filed a K.S.A. 60-1501 petition attacking the constitutionality of the regulations establishing *1046 the prison SATP. Bankes' petition was summarily dismissed by the district court.
The Kansas Supreme Court reversed, holding that the KDOC's refusal to award good time credits for parole eligibility violated Bankes' ex post facto rights, since the regulations were adopted after Bankes' conviction and imprisonment. 265 Kan. at 353. However, the court also addressed Bankes' claim that the SATP violated his Fifth Amendment privilege against self-incrimination. In ruling there was no Fifth Amendment violation, the court noted language from Minnesota v. Murphy, 465 U.S. 420, 435 n.7, 79 L. Ed. 2d 409, 104 S. Ct. 1136, reh. denied 466 U.S. 945 (1984), and concluded that the KDOC, in administering its SATP, "can insist that the petitioner admit responsibility, so long as his or her admission is not used against the petitioner in later criminal proceedings." (Emphasis added.) 265 Kan. at 352-53.
According to this language in Bankes, any information that an inmate is compelled to disclose as a condition of participating in a prison SATP cannot be used against the inmate in subsequent criminal proceedings. Arguably, this language is dicta because Bankes was not decided on Fifth Amendment grounds. Nevertheless, if this language is indeed the law of Kansas, it forecloses the possibility of the SATP condition being a Fifth Amendment violation.
In the absence of controlling authority, we conclude that the SATP condition requiring McComb to accept responsibility for his crime does not violate his Fifth Amendment privilege against self-incrimination. A convicted sex offender who claims innocence does not have greater constitutional rights than one who does not claim innocence. Furthermore, the cases which hold that a probationer cannot be required to admit guilt rely, in part, on the fact that such individuals still face the possibility of incarceration for their crimes. Probationers often have pending appeals or postconviction remedies which could affect the outcome of their cases. Here, McComb has served his entire sentence except for the postrelease supervision term and only faces further incarceration if he fails to admit his crime. It is hard to understand how any statement made now by McComb about his underlying crime could be used to further *1047 incriminate him. If the language of Bankes applies to McComb, any admission of responsibility by McComb in the SATP cannot be used against him in a subsequent criminal proceeding.
We note that drug offenders are faced with a similar predicament as McComb. The KDOC requires all persons convicted of drug offenses to successfully complete a substance abuse treatment program as a condition of postrelease supervision. Such programs require the offender to admit to a drug problem as the first step in rehabilitation. Failure to participate in such substance abuse treatment programs also can result in the revocation of postrelease supervision.
The admission of guilt as a necessary step toward rehabilitation has long been recognized in criminal jurisprudence. As noted by the Court in Lile, "the downward adjustment for acceptance of criminal responsibility" is an integral part of federal criminal law and is specifically provided for in the United States Sentencing Commission Guidelines Manual § 3E 1.1 (Nov. 2002). Lile, 536 U.S. at 47.
McComb's argument that he is trapped in a revolving door of incarceration simply because he proclaims his innocence is persuasive and has merit. On the other hand, adopting McComb's argument would necessarily result in a convicted sex offender deciding whether treatment was an appropriate condition of release. An offender could always avoid treatment by claiming innocence of the crime. Resolving this predicament against the offender, the court in Bankes concluded:
"This is not a terribly satisfactory outcome. Bankes stands convicted of the offense, but maintains his innocence. He would consequently be forced to admit guilt which he does not acknowledge in order to participate in SATP . . . . Whether Bankes and society will benefit from Bankes' treatment under those circumstances is not for the court to decide in this case. However, this situation does not appear to rise to the level of a Fifth Amendment violation." 265 Kan. at 353.
Finally, we note that the only issue before this court is whether McComb can be required to accept responsibility for his crime of conviction as a condition of postrelease supervision. The KDOC presented evidence that had McComb remained in the SATP, he *1048 may have also been required to discuss his entire sexual history, regardless of whether such activities constituted uncharged criminal offenses. Whether this requirement would violate McComb's Fifth Amendment right is a question we are not deciding. McComb's postrelease supervision was revoked because he failed to accept responsibility for his crime of conviction. This was the only SATP condition addressed in district court, and our ruling is limited to the facts presented.
Other constitutional claims
McComb's K.S.A. 2003 Supp. 60-1501 petition raised no additional constitutional claims. However, at one point during the hearing in district court, McComb's counsel argued that the SATP amounted to "cruel and unusual punishment." Thus, we will address whether the SATP condition of McComb's postrelease supervision violates the Eighth Amendment to the United States Constitution.
The Eighth Amendment prohibits "cruel and unusual punishment." Section 9 of the Kansas Constitution Bill of Rights, which forbids "cruel or unusual punishment," has been construed in the same manner as the Eighth Amendment. State v. Scott, 265 Kan. 1, 5, 961 P.2d 667 (1998); see Murphy v. Nelson, 260 Kan. 589, 597, 921 P.2d 1225 (1996). Punishments are cruel and unusual either by the method of punishment or the length of sentence. Scott, 265 Kan. at 8-9.
The constitutional prohibitions against cruel and unusual punishment have been found to prohibit punishment that either inflicts wanton pain or is grossly disproportionate to the severity of the crimes. Turner v. Maschner, 11 Kan. App. 2d 134, 134, 715 P.2d 425, rev. denied 239 Kan. 695 (1986) (citing Rhodes v. Chapman, 452 U.S. 337, 348, 69 L. Ed. 2d 59, 101 S. Ct. 2392 [1981]). Kansas courts have defined cruel and unusual punishment to mean treatment which is "inhumane, barbarous, or shocking to the conscience. [Citation omitted.]" Turner, 11 Kan. App. 2d at 134.
On appeal, McComb asserts that his "method of punishment" is cruel and unusual. McComb does not cite any case law to support his argument; instead he simply states that because he "has already *1049 served his sentence for the crime of conviction, his failure to admit guilt is being punished as a new offense. This punishment for maintaining innocence shocks the conscience." As previously discussed, however, McComb's postrelease supervision term constitutes a portion of his original sentence. Thus, McComb's failure to admit guilt is not being punished as a new offense.
Furthermore, the United States Supreme Court has already found that the "Kansas SATP represents a sensible approach to reducing the serious danger that repeat sex offenders pose to many innocent persons, most often children." Lile, 536 U.S. at 48. It has also been noted by the United States Supreme Court that "sex offenders are a serious threat in this nation." Lile, 536 U.S at 32. A State has a strong interest in the rehabilitation of sex offenders. 536 U.S. at 33. Therefore, a requirement that a convicted sex offender successfully complete a recommended SATP in order to facilitate rehabilitation does not appear to be inhumane, barbarous, or shocking to the conscience.
In Carroll v. Simmons, 89 Fed. Appx. 658, 660, 2004 WL 206329 (10th Cir. 2004), an inmate brought an action under 42 U.S.C. § 1983 (2000) against Kansas prison officials alleging that his refusal to participate in the prison SATP resulted in a "loss of good-time credits, denial of parole hearings, and a lengthening of his sentence for refusing to make a false confession." Carroll claimed this punishment constituted an Eighth Amendment violation. The Tenth Circuit Court of Appeals held: "We again conclude that the loss of certain privileges and good time credits due to a refusal to participate in a treatment program designed to rehabilitate sex offenders does not rise to the level of cruel and unusual punishment." Carroll, 89 Fed. Appx. at 661-62 (citing Gwinn v. Awmiller, 354 F.3d 1211, 1227-28 [10th Cir. 2004]).
The inmate in Carroll risked an extended term of incarceration if he refused to participate in the program. Likewise, McComb faced the possibility of serving the remainder of his postrelease sentence in prison for refusing to participate in the program. The factual differences between McComb's situation and the inmate in Carroll are not so striking as to warrant a different outcome. McComb's Eighth Amendment argument is without merit.
*1050 Finally, McComb argues on appeal that the SATP condition violates his due process and equal protection rights under the Fourteenth Amendment to the United States Constitution. McComb acknowledges that these arguments were not raised in district court. Issues not raised before the district court cannot be raised for the first time on appeal. Board of Lincoln County Comm'rs v. Nielander, 275 Kan. 257, 268, 62 P.3d 247 (2003).
Conclusion
McComb is still serving his original sentence for aggravated indecent liberties with a child. Until McComb completes his postrelease supervision term, he is subject to the KDOC's supervision. Therefore, McComb is not an "ordinary citizen" and any constitutional analysis must take that into consideration, especially when weighing the importance of rehabilitation against McComb's liberty interest. Lile, 536 U.S. at 36.
The SATP condition of McComb's postrelease supervision is reasonably related to his rehabilitation and the protection of the community. The requirement that McComb accept responsibility for his crime is constitutional. The enforcement of such a condition through the revocation of McComb's release is likewise constitutional. Since the Board's actions were constitutional, we do not believe they can be deemed arbitrary and capricious and an abuse of discretion. The Board's discretion in revoking a conditional release is broad, and a court has no authority to substitute its discretion for that of the Board. Swisher, 12 Kan. App. 2d at 185. Accordingly, we conclude that the district court erred in granting McComb's K.S.A. 2003 Supp. 60-1501 petition.
Reversed.
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01-03-2023
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/1816062/
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987 So.2d 92 (2008)
YOUNG
v.
STATE.
No. 5D07-2969.
District Court of Appeal of Florida, Fifth District.
July 22, 2008.
Decision without published opinion. Affirmed.
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01-03-2023
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/2548899/
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94 P.3d 667 (2004)
105 Hawai`i 112
Curtis SIMMONS; Cheryl Simmons, Plaintiffs-Appellants,
v.
Wanda PUU; Gary Puu; Hertz Corporation, Defendants-Appellees,
John Does 1-10; Jane Does 1-10; Doe Corporations 1-10; Doe Partnerships 1-10; Doe Governmental Entities 1-10; Roe Non-profit Corporations and/or Other Entities 1-10, Defendants.
No. 23714.
Supreme Court of Hawai`i.
July 23, 2004.
*668 Christopher F. Carroll, Wailuku, On the briefs, for the plaintiff-appellant Curtis Simmons.
Glenn I. Kimura, Hilo, and John S. Mukai, Honolulu, of Char, Hamilton Campbell & Thom, On the briefs, for the defendants-appellees The Hertz Corporation, Gary Puu.
MOON, C.J., LEVINSON, NAKAYAMA, ACOBA, and DUFFY, JJ.
Opinion of the Court by LEVINSON, J.
The plaintiff-appellant Curtis Simmons [hereinafter, "Curtis"] appeals from the final judgment of the second circuit court, the Honorable Shackley F. Raffetto presiding, filed on August 2, 2000.[1]
*669 Curtis's sole contention on appeal is that the circuit court erred in entering a January 18, 2000 order granting the motion of the defendants-appellees Gary Puu [hereinafter, "Gary"] and the Hertz Corporation [hereinafter, "Hertz"] [collectively hereinafter, "the Appellees"] for partial summary judgment regarding unfair claims settlement practices, filed on October 15, 1999. More specifically, Curtis argues (1) that, as a matter of public policy and as a logical extension of existing Hawai'i law, self-insurers can be liable in tort to third-party claimants[2] for bad faith settlement practices and (2) that there was a genuine issue of material fact as to whether the Appellees had dealt with him in bad faith, inasmuch as Curtis alleges that Hertz:
(a) compelled [him] to institute ... Small Claims Court litigation to recover amounts acknowledged by [a] Hertz claims adjuster to be legitimately due for property damage; (b) failed to promptly settle [his] property damage claim, where liability was self-evident, in order to gain an advantage as to [his] personal injury claim; (c) refused to pay claims shown to be valid based on available information; (d) failed to provide a written reasonable explanation for its delay; (e) did not attempt in good faith to effectuate prompt, fair, and equitable settlements of claims where liability was self-evident; and (f) did not provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of the personal injury claim.
Curtis also maintains that, even assuming arguendo that Hertz acted in good faith reliance upon a legal defense in refusing to settle his personal injury claim, Hertz relied on no such defense in failing to process his property damage claim in good faith, such that the circuit court erred in granting summary judgment in favor of the Appellees. The Appellees respond that the circuit court did not err in granting summary judgment in their favor, inasmuch as: (1) Hertz is not an insurer and does not have a claims practice, such that Curtis is not a third-party beneficiary with standing to sue Hertz for the tort of bad faith settlement practices; (2) a claim of bad faith settlement practices fails in the present circumstances as a matter of law because (a) Hertz is not bound by an obligation to pay Curtis and, even assuming that Hertz "improperly" withheld insurance payments from Curtis, (b) reasonable reliance upon an unsettled question of law or legal defense to liability does not constitute bad faith; and (3) Curtis has no statutory bad faith claim for relief based upon Hawai'i Revised Statutes (HRS) §§ 480-2 (1993)[3] and 480-13 (1993).[4]
*670 For the reasons discussed infra in section III, we hold that there is no common law tort claim of bad faith settlement practices available to third-party claimants to bring suit against self-insurers. Accordingly, we affirm the final judgment of the circuit court, filed on August 2, 2000, as to all claims and parties.
I. BACKGROUND:
The present matter arises out of an April 16, 1992 motor vehicle accident involving a vehicle operated by Curtis and occupied by the plaintiff Cheryl Simmons [hereinafter, "Cheryl"] [collectively hereinafter, "the Appellants"] and a vehicle operated by the defendant Wanda Puu [hereinafter, "Wanda"] on Pi'ilani Highway in Kihei, Maui. See supra note 1. Hertz owned, maintained, and self-insured the vehicle operated by Wanda, who was the lawful spouse of Gary, the manager of the Maui branch of Hertz "rent-a-car" at the time of the accident.
On May 7, 1992, the Appellants tendered a notice of claim for property damage and personal injuries to Acclamation Insurance Management Services [hereinafter, "AIMS"], an adjusting agency retained by Hertz. In late May 1992, a representative of AIMS orally responded to the Appellants' claim, stating that "Hertz may deny liability on the grounds that Wanda was not an authorized driver of the Hertz vehicle" and that "Hertz had not yet made a coverage decision with regard to the accident." Hertz's written policy governing the use of its cars by a manager's spouse reflected that Wanda's operation of the vehicle was not authorized, inasmuch as a manager's spouse was banned from using a Hertz car except (1) on vacation or days off when the manager was present or (2) occasionally for convenience (e.g., if a Hertz car was parked behind the family vehicle, thereby obstructing its movement), and neither of the foregoing exceptions applied to the circumstances of the accident.
On September 14, 1992, Curtis filed an action Civil No. SCW92-245 against Hertz in the small claims division of the district court of the second circuit. Curtis sought $1,985.80 in damages for rental car, towing, and storage expenses resulting from the accident. By letter dated October 2, 1992, Hertz, through its AIMS adjuster, requested that Curtis dismiss the small claims action because the presiding judge in the small claims court had advised Curtis that the action risked preclusion from pursuing his additional liability claims based on res judicata. By letter dated October 14, 1992, Curtis informed the AIMS adjuster that he would not dismiss his small claims action, although he ultimately did so as to Hertz and filed a second small claims action, Civil No. SCW92-377, against Wanda on December 24, 1992. Curtis again sought $1,985.80 for rental car, towing, and storage expenses, and the small claims court entered judgment in favor of Curtis on February 11, 1993. On April 16, 1993, Curtis filed an acknowledgment of the satisfaction of the judgment against Wanda.
On October 4, 1995, the Appellants filed a complaint in the circuit court of the second circuit against Wanda and the Appellees seeking recovery for personal injuries arising from the accident. The Appellants' original complaint alleged several theories of liability as to their personal injuries, none of which are relevant to the resolution of the present matter. See infra section III. On or about October 2, 1996, Hertz settled Cheryl's claim, and the circuit court entered a stipulation for dismissal with prejudice on October 24, 1996. See supra note 1. The circuit court entered a *671 notice of dismissal as to Wanda on November 22, 1996 and a final order of dismissal on December 26, 1996. See supra note 1.
On March 24, 1997, the Appellees filed a motion for summary judgment [hereinafter, "MSJ I"] as to Curtis's personal injury claims. On May 19, 1997, the circuit court entered an order partially granting MSJ I on the issue of negligent entrustment and denying it without prejudice as to the remaining issues so that Curtis could conduct further discovery.
On October 10, 1997, the Appellees filed another motion for summary judgment [hereinafter, "MSJ II"], which challenged Curtis's marital relationship and respondeat superior theories of liability. On October 13, 1997, in his memorandum in opposition to MSJ II, Curtis asserted a claim of bad faith settlement practices against Hertz; prior to filing the memorandum, Curtis had not raised that issue.[5] On October 17, 1997, the circuit court conducted a hearing on MSJ II. After the circuit court orally granted MSJ II, Curtis orally moved to amend the pleadings to include his claim of bad faith settlement practices, and the circuit court instructed Curtis to file a motion to amend the pleadings.
On October 28, 1997, Curtis filed a motion to amend pleadings, asserting "a claim of bad faith settlement practices against Hertz as self-insurer of a vehicle negligently driven by Wanda that caused Curtis's personal injuries." On December 9, 1997, the circuit court entered an order granting Curtis's motion to amend pleadings. On December 12, 1997, Curtis filed his second amended complaint, adding Count III, which alleged, inter alia, as follows:
COUNT THREE
....
22. HERTZ, its agents, employees, contractors or any of them, engaged in unfair and deceptive acts and practices in the administration of [Curtis's] property damage and personal injury claims.
23. HERTZ, its agents, employees, contractors, or any of them failed to deal fairly and in good faith in the administration of [Curtis's] property damage and personal injury claims.
24. As a direct and legal result of ... HERTZ's negligent, reckless acts, or omissions (and/or any of the Defendants herein), [Curtis] has suffered economic and psychological damages, including punitive damages.
On January 14, 1998, the circuit court entered an order granting the Appellees' MSJ II "on the issue of the liability of ... Gary ... and any related respondeat superior liability of ... Hertz ... for any of the actions of ... Gary...." The circuit court also ordered that "the argument as to any unfair settlement practice stated in ... Curtis['s] ... Memorandum Opposing [MSJ II] ... stricken without prejudice to [Curtis's] Second Amended Complaint."
On January 22, 1999, Curtis filed a motion for partial summary judgment [hereinafter, "MSJ III], specifically regarding, inter alia, the following "material facts and issues": (1) that Hertz's Certificate of Self-Insurance, premised upon its "self-insurer agreement" with the State of Hawai'i, see infra section III.B, "was in effect at the time of the accident and evidenced compliance by Hertz with Hawai'i's basic no-fault insurance coverage requirements set forth in HRS § 431:10C-301 (requiring minimum liability coverage of $35,000 for bodily injury, $10,000 for property damage and $15,000 for no-fault benefits)"; and (2) that Hertz's "self-insurer agreement"
required Hertz to pay on behalf of the operator of the self-insured vehicle any sums the operator may legally be obligated to pay for injury or damage to others arising out of the operation of the self-insured vehicle and required that Hertz comply with all requirements of the no-fault law and applicable regulations, directives or orders of the [Insurance] Commissioner, including those relating to processing any paying of claims.
*672 On March 12, 1999, the circuit court entered an order partially granting MSJ III as to the foregoing issues.
On March 15, 1999, the Appellees filed a motion for partial summary judgment [hereinafter, "MSJ IV"] as to Count III of Curtis's second amended complaint, maintaining in their memorandum in support (1) that Hertz is not an insurer and has no insurance claims practices, (2) that Curtis may not assert a private claim for relief pursuant to HRS chapter 431, article 13,[6] and (3) that Curtis has no claim for relief under HRS §§ 480-2 and 480-13, see supra notes 3 and 4. On May 5, 1999, the circuit court conducted a hearing on MSJ IV, orally granting the motion as to any statutory claims of bad faith settlement practices and otherwise continuing the hearing to May 26, 1999 for the purpose of resolving Curtis's remaining common law claim of bad faith. On June 8, 1999, the circuit court entered an order partially granting MSJ IV as to any statutory claim of bad faith settlement practices that Curtis may have asserted against the Appellees.
On May 18, 1999, the Appellees filed two motions for partial summary judgment [hereinafter, "MSJs V & VI"] regarding (1) "lack of damages," alleging that Curtis "cannot establish the essential element of damages as a matter of law," and (2) "punitive damages," contending that "there is no genuine issue of material fact and [the Appellees] are entitled to judgment as a matter of law with respect to punitive damages." On July 26, 1999, the circuit court entered two orders partially granting and partially denying MSJs V & VI, specifically ruling that "damages that will be allowed are those related to the common law bad faith tort claim which may be proven by ... Curtis...."
On October 15, 1999, the Appellees filed yet another motion for partial summary judgment regarding Curtis's claim of bad faith settlement practices [hereinafter, "MSJ VII"]. On December 22, 1999, after additional briefing by both parties, the circuit court conducted a hearing on MSJ VII and orally ruled in favor of the Appellees:
THE COURT:....
It looks like what happened was Hertz took the position, "Look, we have got a legal defense here based upon the splitting of cause of actions [(i.e., Curtis's decision to bring the small claims court action for property damage separately from the personal injury action in circuit court)], so we are not going to pay," and the Plaintiff's position is that's bad faith under common law principles, and after thinking about this for a long time, I think that the issue of whether that is bad faith is susceptible to summary judgment, and I am going to find that there's no genuine issue of material fact regarding that, and that it was not bad faith to rely upon the legal defense, and I am going to grant the motion on that basis, but not on the splitting of the cause of action.
....
THE COURT: ... I just didn't feel after thinking about this for a long time that ... taking a position based upon a legal position is bad faith.
On January 18, 2000, the circuit court entered a written order granting the Appellees' MSJ VII. On August 2, 2000, the circuit court entered final judgment as to all claims and parties. On August 31, 2000, Curtis timely filed a notice of appeal.
II. STANDARD OF REVIEW
We review the circuit court's grant or denial of summary judgment de novo. Hawai'i Community Federal Credit Union v. Keka, 94 Hawai'i 213, 221, 11 P.3d 1, 9 (2000). The standard for granting a motion for summary judgment is settled:
[S]ummary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, *673 together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. A fact is material if proof of that fact would have the effect of establishing or refuting one of the essential elements of a cause of action or defense asserted by the parties. The evidence must be viewed in the light most favorable to the non-moving party. In other words, we must view all of the evidence and the inferences drawn therefrom in the light most favorable to the party opposing the motion.
Id. (citations and internal quotation marks omitted).
Kahale v. City and County of Honolulu, 104 Hawai'i 341, 344, 90 P.3d 233, 236 (2004) (quoting SCI Management Corp. v. Sims, 101 Hawai'i 438, 445, 71 P.3d 389, 396 (2003) (quoting Coon v. City and County of Honolulu, 98 Hawai'i 233, 244-45, 47 P.3d 348, 359-60 (2002))).
III. DISCUSSION
On appeal, Curtis argues, inter alia, that self-insurers can be liable in tort to third-party claimants for bad faith settlement practices, on the following grounds: (1) that Budget Rent-A-Car Systems, Inc. v. Ricardo, 85 Hawai'i 243, 942 P.2d 507 (1997), and Alzharani v. Pacific Int'l Services Corp., 82 Hawai'i 466, 923 P.2d 408 (1996), suggest that, like insurers, self-insurers must "perform[ ] ... the duties that arise from statutes and regulations applicable to ... self-insurance"; (2) that Colonial Penn Ins. Co. v. First Ins. Co. of Hawai'i, Ltd., 71 Haw. 42, 780 P.2d 1112 (1989), and Best Place, Inc. v. Penn America Ins. Co., 82 Hawai'i 120, 920 P.2d 334 (1996), "are indications... that an injured claimant is entitled [under common law principles] to good faith in regard to claims against a third-party tortfeasor's insurer"; and (3) that Curtis was entitled to assert a bad faith claim for relief based on a third-party beneficiary theory because "Hertz's [self-insurer a]greement with the State required that Curtis ... be assured that Hertz as a self-insurer would fairly process and promptly pay his claims."
In response, the Appellees contend, inter alia, that there exists no common law claim for relief entitling third-party claimants to sue self-insurers for bad faith settlement practices, inasmuch as Hertz is not an insurer and has no claims practices, such that Curtis is not a third-party beneficiary with standing to sue Hertz for the tort of bad faith settlement practices. We agree with the Appellees.[7]
A. The Common Law Tort Of Bad Faith Settlement Practices Only Arises Out Of A Contractual Relationship Between An Insurer And An Insured.
1. Requirement of underlying insurance contract
In Best Place, this court held that "Hawai'i now recognizes a bad faith cause of action in the first-party insurance context[,]" reasoning as follows: "(1) there is case law in this jurisdiction, as well as various statutory provisions contemplating a cause of action for insurer bad faith; and (2) recognizing a bad faith cause of action would not contravene the legislative intent with respect to the remedies for insurer misconduct." 82 Hawai'i at 127, 920 P.2d at 341. More specifically, this court largely relied on contract law as fundamental to its adoption of the bad faith claim for relief:
Historically, the duty of good faith and fair dealing was implied in contracts with conditions of satisfaction, e.g., a contract for the painting of a portrait or for the supply of materials. However, every contract contains an implied covenant of good faith and fair dealing that neither party will do anything that will deprive the other of the benefits of the agreement. Comunale v. Traders & Gen. Ins. Co., 50 Cal. 2d 654, 328 P.2d 198, 200 (1958); Wagenseller v. Scottsdale Memorial Hospital, 147 Ariz. 370, 383, 710 P.2d 1025, 1038 (1985); Kerrigan v. City of Boston, 361 Mass. 24, 278 *674 N.E.2d 387, 393 (1972). But see English v. Fischer, 660 S.W.2d 521, 522 (Tex.1983) (concluding that there is no covenant of good faith and fair dealing implied in every contract).
In the insurance context, courts first recognized the duty of good faith and fair dealing where the issue was whether a liability insurer wrongfully refused to settle a third-party claim. The early case of Brassil v. Maryland Casualty Co., 210 N.Y. 235, 104 N.E. 622 (1914), recognized the principle that the obligation of good faith and fair dealing underlies all written agreements and that a breach of this obligation is a breach of contract. In Brassil, the New York Court of Appeals stated:
[T]here is a contractual obligation of universal force which underlies all written agreements. It is the obligation of good faith in carrying out what is written....
[The insured's] rights ... go deeper than the mere surface of the contract written for him [or her] by the [insurer]. Its stipulations imposed obligations based upon those principles of fair dealing which enter into every contract.
Brassil, 104 N.E. at 624. The court then held that the insurer breached its contractual obligation of good faith when it unreasonably failed to settle a third-party settlement offer. Id.
In Hilker v. Western Automobile Ins. Co., 204 Wis. 1, 231 N.W. 257, 259-60 (1930), aff'd on reh'g, 204 Wis. 1, 235 N.W. 413 (1931), the Supreme Court of Wisconsin, citing Brassil, supra, set forth the following rationale for imposing liability upon an insurer who refused to settle a third-party claim within policy limits:
In view of the fact that these contracts of insurance are prepared by the company and not prescribed by law, the tendency of the decisions has been to extend, rather than to circumscribe, the field of liability on the part of the company and to hold that the rights of the insured `go deeper than the mere surface of the contract written for him by the defendant. Its stipulations imposed obligations based upon those principles of fair dealing which enter into every contract.' Brassil, 104 N.E. at 624, L.R.A.1915A, 629, 632. The covenant of good faith and fair dealing, of course, is not limited to insurance contracts.
The cornerstone of the decisions in Brassil and Hilker is that, in every contract, there is an implied covenant of good faith and fair dealing.
The obligation to deal in good faith is now a well-established principle of contract law. Restatement (Second) Contracts § 205 (1979) provides that "[e]very contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement." In Hawai'i Leasing v. Klein, 5 Haw.App. 450, 456, 698 P.2d 309, 313 (1985), the Intermediate Court of Appeals (ICA) explicitly recognized that parties to a contract have a duty of good faith and fair dealing in performing contractual obligations. We also note that the parties to all commercial contracts in this jurisdiction are subject to a statutory duty to perform in good faith. See HRS § 490:1-203 (1993) (providing that "[e]very contract or duty within this chapter imposes an obligation of good faith in its performance or enforcement.").
We now address the question of whether a breach of this duty in the insurance context gives rise to a bad faith cause of action.
Id. at 123-25, 920 P.2d at 337-39 (emphases added) (brackets in original) (footnotes omitted).
In some respects, this court's recognition of the tort of bad faith was quite broad. Best Place cited with approval the California Supreme Court's decision in Gruenberg v. Aetna Ins. Co., 9 Cal. 3d 566, 108 Cal. Rptr. 480, 510 P.2d 1032 (1973), which
established that the defendant's duty of good faith and fair dealing, implied by law, is unconditional and independent of the performance of plaintiff's contractual obligations. The Gruenberg court explained that, because an insurer's duty is independent of the contract, an insured's non-performance of its contractual duties cannot excuse a breach of the duty of good faith and fair dealing. Id. 108 Cal.Rptr. at 488, *675 510 P.2d at 1040. Therefore, the court concluded that insurance companies owe an absolute duty of good faith and fair dealing to their insureds. Id.
Best Place, 82 Hawai'i at 128, 920 P.2d at 342 (emphases added). This court also "reject[ed] the argument that, absent a fiduciary relationship, an insured can only bring a bad faith cause of action in contract." Id. at 130, 920 P.2d at 344.
Nevertheless, Best Place neither discussed nor contemplated the application of the tort of bad faith settlement practices in the absence of an insurance contract. See id. at 127-30, 920 P.2d at 341-44. This court succinctly stated that "the implied covenant of good faith and fair dealing, implied in all contracts, is the legal principle underlying the adoption of a bad faith tort cause of action in the insurance context[.]" Id. at 131, 920 P.2d at 345 (emphasis added); see also id. at 132, 920 P.2d at 346 (holding "that there is a legal duty, implied in a first- and third-party insurance contract, that the insurer must act in good faith in dealing with its insured, and a breach of that duty of good faith gives rise to an independent cause of action" (emphasis added)). Even in downplaying the necessity of "the fiduciary duty on the part of the insurer in the third-party context ... [as] but one component of a broader duty to act in good faith and deal fairly with its insured[,]" Best Place noted that the raison d'tre of the tort of bad faith was to avoid "depriv[ing] the insured of the benefits for which he or she ha[d] contracted." Id. at 129, 920 P.2d at 343 (emphasis added).
2. Implications of footnote seven in Best Place
Notwithstanding the foregoing, this court observed in Best Place that "Hawai'i might recognize a bad faith cause of action brought by an injured claimant even absent a contractual relationship between the injured claimant and the third-party tortfeasor's insurance company [,]" although this court "expressly decline[d] to rule on the viability of that particular cause of action in this jurisdiction at [that] time." 82 Hawai'i at 125 n. 7, 920 P.2d at 339 n. 7 (emphasis added). The suggestion contained in footnote seven, however, by no means implies that the existence of an insurance contract is not a necessary element of the tort of bad faith settlement practices, a proposition that would render nugatory the analytical underpinning of this court's adoption of the claim for relief in the first place. See supra section III.A.1. Inasmuch as footnote seven in Best Place relied upon this court's decision in Colonial Penn, which concerned a bad faith suit brought by an injured party and her insurer against the insurer of a vehicle involved in the subject accident, an insurance contract must underlie any recognition by this court of "a bad faith cause of action brought by an injured claimant ... [against a] third-party tortfeasor's insurance company." Id.
Other jurisdictions have acknowledged the necessity of an underlying insurance contract in allowing claims by third-party plaintiffs against insurers precisely because the third-party claimants acquired their claims by way of the relevant insureds. In Murphy v. Allstate Insurance Co., 17 Cal. 3d 937, 132 Cal. Rptr. 424, 553 P.2d 584 (1976), for example, the plaintiff recovered a wrongful death judgment in excess of the policy limits against an insured defendant. Id. at 939-40, 132 Cal. Rptr. at 425-26, 553 P.2d at 585-86. The insurer, Allstate Insurance Co., remitted payment to the plaintiff, but only in the amount of policy limits. Id. The plaintiff, without acquiring any assignment of a bad faith claim from Allstate's insured, filed a direct action against Allstate to recover the unsatisfied portion of the judgment. Id.
The California Supreme Court held that, in the absence of any assignment from the insured, the plaintiff could not bring a direct action for bad faith against Allstate to recover the excess amount of the wrongful death judgment, reasoning that the implied covenant of good faith protected the insured, who had the option of assigning his claim for relief against the insurer, in the absence of which the claim could not accrue directly to the benefit of the injured third-party plaintiff. Id. at 941-42, 132 Cal. Rptr. at 426-27, 553 P.2d at 586-87. The Murphy court further noted as follows:
*676 The insurer's duty to settle does not directly benefit the injured claimant. ...
The insurer's duty to settle running to the insured and not to the injured claimant is also demonstrated by Shapero v. Allstate Ins. Co., supra, 14 Cal. App. 3d 433, 92 Cal. Rptr. 244. The insured died leaving no asset other than the insurance policy. Thus, a judgment in excess of policy limits presenting no risk to the insured or to his heirs, the insurer had no duty to settle within policy limits.
....
The insured may assign his cause of action for breach of the duty to settle without consent of the insurance carrier, even when the policy provisions provide the contrary. (Comunale v. Traders & General Ins. Co., supra, 50 Cal.2d at pp. 661-662, 328 P.2d 198.)
Id. (internal footnotes omitted) (emphases added).
Further to the foregoing, the California Supreme Court stated that
[a] third party should not be permitted to enforce covenants made not for his benefit, but rather for others. [The third-party claimant] is not a contracting party; his right to performance is predicated on the contracting parties' intent to benefit him. (Lucas v. Hamm (1961) 56 Cal. 2d 583, 590-591 [15 Cal. Rptr. 821, 364 P.2d 685]; 4 Corbin, Contracts (1951) §§ 775-777, pp. 8-28; 2 Williston, Contracts (1959) § 356A, pp. 835-842.) As to any provision made not for his benefit but for the benefit of the contracting parties or for other third parties, he becomes an intermeddler. Permitting a third party to enforce a covenant made solely to benefit others would lead to the anomaly of granting him a bonus after his receiving all intended benefit. Because, as we have seen, the duty to settle is intended to benefit the insured and not the injured claimant, third party beneficiary doctrine does not furnish a basis for the latter to recover. Moreover, Allstate having paid plaintiff the policy limits, she has already received all benefit contemplated by the policy.
Id. at 944, 132 Cal. Rptr. at 428, 553 P.2d at 588 (emphases added).
Similarly, in Long v. McAllister, 319 N.W.2d 256 (Iowa 1982), the Iowa Supreme Court, in declining to hold that the insurer owes a duty to the third-party claimant to negotiate a settlement in good faith, reasoned as follows:
We ... decline to recognize a duty of the insurer to the victim under general tort concepts. The insurer has a fiduciary duty to the insured but an adversary relationship with the victim. The effect of the policy is to align the insurer's interests with those of the insured. In meeting its duty to the insured, the insurer must give as much consideration to the insured's interests as it does to its own. It has no such relationship with a third party. Instead the insurer stands in the shoes of the insured in dealing with the victim. Because the insured has a right to require liability to be proven as a predicate for payment of the loss, the victim cannot compel the insured to negotiate and settle the loss beforehand. No basis exists for giving the victim a greater right when negotiating with the tortfeasor's insurer than exists when the victim negotiates with the tortfeasor directly.... In either event, the victim has a remedy for his injury through a tort action against the insured. That remedy will permit compensation to be ordered when it is justified.
We are aware of no jurisdiction that has recognized the kind of third party action advocated by plaintiff in this case. The absence of authority was noted in Uebelacker v. Horace Mann Insurance Company, 500 F. Supp. 180, 183 (E.D.Wis.1980). The action has been rejected in Kranzush[ v. Badger State Mutual Casualty Company, 103 Wis. 2d 56, 307 N.W.2d 256 (1981)], Linscott v. State Farm Mutual Automobile Insurance Co., 368 A.2d 1161 (Me.1977), and Bowe v. Eaton, 17 Wash.App. 840, 565 P.2d 826 (1977). We join the courts that have rejected it.
319 N.W.2d at 262-63 (some internal citations omitted) (emphases added).
Several other jurisdictions have employed the assignment theory of common law third-party claims of bad faith settlement practices, *677 inherently requiring the existence of a contractual relationship between an insurer and an insured as predicate to establishing an injured claimant's right to sue a tortfeasor's insurer. See Messina v. Nationwide Mut. Ins. Co., 998 F.2d 2, 5 (D.C.Cir.1993) (holding that "[w]hen there is no contractual relationship between the claimant and the insurer, ... the implied covenant does not exist, and hence there is no doctrinal basis for holding the insurer liable in tort"); Richards v. State Farm Mut. Auto. Ins. Co., 252 Ga.App. 45, 555 S.E.2d 506, 507 (2001) (observing that, "[g]enerally, a party not in privity of contract may not bring a direct action suit against the liability insurer of the party alleged to have caused damage absent an unsatisfied judgment against the insured, legislative mandate, or as permitted by a provision in the insurance policy in issue"); Metropolitan Property & Casualty Ins. Co. v. Crump, 237 Ga.App. 96, 513 S.E.2d 33, 34 (1999) (affirming that, while "an insured may make a claim against his insurer for ... bad faith [,]... it does not follow that a person injured by the insured and who is not a party to the insurance contract may complain of the ... bad faith of the insurer towards its policyholder[,]" inasmuch as "the duty of the insurance company to use ordinary care and good faith ... arises out of ... the contract ... of insurance, and there is no ... privity of contract ... between the insurer and a person injured by one of its policyholders"); Lantier v. Aetna Casualty & Sur. Co., 614 So. 2d 1346, 1359 (La.Ct.App.1993) (noting that "[the] duty to not conduct settlement negotiations in bad faith and to not act arbitrarily and capriciously under the circumstances is owed by the insurer to its insured only"); Dvorak v. American Family Mut. Ins. Co., 508 N.W.2d 329, 331 (N.D.1993) (ruling that" [a]bsent a clause in the insurance contract bestowing the right to bring a direct action against the insurer, an injured party's claim must be asserted against the tortfeasor, not the tortfeasor's insurer"); See v. Nationwide Mut. Ins. Co., No. 00CA007680, 2001 WL 458673, at *2 (Ohio Ct.App. May 2, 2001) (stating that "the insurer's duty to act in good faith only extends to the insured; therefore, a third party cannot bring a claim against a tortfeasor's insurance company for breaching the duty to act in good faith"); Tanoh v. Strawbridge, No. 76094, 2000 WL 640378, at *7 (Ohio Ct.App. May 18, 2000) (observing that, "[w]hile a liability insurance carrier may have a duty outside the terms of its insurance contract to deal in good faith with the public, including those persons injured by the actions of its insured, such duty does not create an independent cause of action that may be enforced by the injured party through a direct action against the insurance carrier"); White v. Averitt Express, Inc., No. 99-CA-104, 2000 WL 543323, at *3 (Ohio Ct.App. May 5, 2000) (noting that "a claim of bad faith cannot be brought against an insurer by a third-party claimant" and that "[t]he duty to act in good faith runs only from the insurer to its own insured" (internal citations omitted)); Bowman v. Charter Gen. Agency, Inc., 799 S.W.2d 377, 380 (Tex.Ct.App.1990) (refusing to "extend[ ] an insurer's duty of good faith and fair dealing to provide a remedy to an injured third-party outside the workers' compensation area" where "[n]o contractual relationship existed between the parties"); Transport Ins. Co. v. Faircloth, 898 S.W.2d 269, 279-280 (Tex.1995) (noting that "[a] third party claimant has no contract with the insurer or the insured, has not paid any premiums, has no legal relationship with the insurer, and in short, has no basis upon which to expect or demand the benefit of ... extra-contractual obligations imposed on insurers" (internal citation and quotation signals omitted)); Planet Ins. Co. v. Wong, 74 Wash.App. 905, 877 P.2d 198, 201 (1994) (observing that, although "[a]n injured third party has no right of action against an insurance company for bad faith[,]" "an insured may assign his or her rights to a bad faith claim to a third party" (internal citations omitted)); and Herrig v. Herrig, 844 P.2d 487, 491-92 (Wyo.1992) (holding that "the duty of good faith and fair dealing runs only from the insurer to the insured" and that "no basis is present for extending an insurers' duty of good faith and fair dealing to third-party claimants, even in the context of intra-family suits").
Thus, based on the foregoing analysis and the overwhelming weight of persuasive extrajurisdictional jurisprudence, we hold that any *678 formal recognition of a claim for relief in favor of an injured claimant against a third-party tortfeasor's insurance company for bad faith settlement practices would require the assignment of the insured tortfeasor's rights arising from an underlying insurance contract to the injured plaintiff.[8]
B. Self-Insurer Liability Generally
Having established that the common law tort of bad faith settlement practices arises only from a contract of insurance, we now address self-insurer liability. This court has previously explained the legislative framework underlying self-insurance as follows:
Since 1974, Hawai'i has operated under a statewide system of mandatory no-fault insurance. The purpose of the Motor Vehicle Insurance Law, HRS Chapter 431, Article 10C (1993), is set out in § 431:10C-102:
(a) The purpose of this article is to:
(1) Create a system of reparations for accidental harm and loss arising from motor vehicle accidents;
(2) Compensate these damages without regard to fault; and
(3) Limit tort liability for these accidents.
(b) To effectuate this system of motor vehicle insurance and to encourage participation by all drivers in the motor vehicle insurance system:
(1) Those uninsured drivers who try to obtain the privilege of driving a motor vehicle without the concomitant responsibility of an ability to compensate adequately those who are injured as a result of a motor vehicle accident are to be dealt with more severely ... [.]
... As expressed in the legislative history, the legislature, in passing this no-fault insurance system into law, was
of the belief that a basic, comprehensive, equitable and reasonably priced auto insurance policy must satisfy each of the following criteria:
(1) Provide for a speedy, adequate and equitable reparation for those injured or otherwise victimized;
(2) Provide for the stabilization and reduction of motor vehicle liability insurance premium rates;
(3) Provide insurance coverage for all who require it, at a cost within the reach of every licensed driver;
(4) Provide for a compulsory insurance system;
*679 (5) Provide for adequate regulatory control.
Hse. Conf. Comm. Rep. No. 13, in 1973 House Journal, at 1219; see also Sen. Conf. Comm. Rep. No. 4, in 1973 Senate Journal, at 635. With this intention, the legislature enacted, inter alia, HRS § 431:10C-104 (1993):
Conditions of operation and registration of motor vehicles. (a)... [N]o person shall operate or use a motor vehicle upon any public street, road or highway of this State at any time unless such motor vehicle is insured at all times under a no-fault policy.
(b) Every owner of a motor vehicle used or operated at any time upon any public street, road or highway of this State shall obtain a no-fault policy upon such vehicle which provides the coverage required by this article and shall maintain the no-fault policy at all times for the entire motor vehicle registration period.
The basic no-fault policy requirement is outlined in HRS § 431:10C-301(a) (1993):
Required motor vehicle policy coverage (a) In order to meet the requirements of a no-fault policy as provided in this article, an insurance policy covering a motor vehicle shall provide:
(1) Coverage specified in section 431:10C-304; and
(2) Insurance to pay on behalf of the owner or any operator of the insured motor vehicle using the motor vehicle with the express or implied permission of the named insured, sums which the owner or operator may legally be obligated to pay for injury, death, or damage to property of others ... which arise out of the ownership, operation, maintenance, or use of the motor vehicle[.]
The operation of a vehicle not covered under either a no-fault policy or an approved certificate of self-insurance can lead to penalties, including fines, suspension of vehicle registration, and imprisonment. See HRS §§ 431:10C-104(c) and 431:10C-117 (1993); Hawai'i Administrative Rules (HAR) § 16-23-2 (1993).
The only exception to this sweeping mandate of a no-fault insurance policy on all vehicles is for qualified self-insurers:
The motor vehicle insurance required by section 431:10C-104 may be satisfied by any owner of a motor vehicle if:
(1) Such owner provides a surety bond, proof of qualifications as self-insurer, or other securities affording security substantially equivalent to that afforded under a no-fault policy, providing coverage at all times for the entire motor vehicle registration period, as determined and approved by the commissioner under regulations; and
(2) The commissioner is satisfied that in case of injury, death or property damage, any claimant would have the same rights against such owner as the claimant would have had if a no-fault policy had been applicable to such vehicle.
HRS § 431:10C-105 (1993)....
A person seeking to qualify as a self-insurer must apply to the insurance commissioner in the state's Department of Commerce and Consumer Affairs (DCCA). HAR § 16-23-20 (1993). The DCCA's regulations seek to implement the legislature's directive that a self-insurer provide identical benefits to those available under the state-wide no-fault policy mandate. See HAR § 16-23-21 (detailing required content for agreement as self-insurer); § 16-23-22 (financial responsibility requirement); § 16-23-24 (proof of ability to process and pay claims promptly); § 16-23-31 (providing for revocation of certification of self-insurance for good cause).
Ricardo, 85 Hawai'i at 245-46, 942 P.2d at 509-10 (emphases omitted).
In addition to complying with the statutory and regulatory scheme noted in Ricardo, Hertz was required to execute and file the following "self-insurer agreement":
MOTOR VEHICLE INSURANCE DIVISION
SELF-INSURER AGREEMENT
This Agreement, made this 1st day of July, 1978, by and between the State of *680 Hawai'i, by its State Commissioner of Motor Vehicle Insurance, hereinafter called the "Commissioner," and ... Hertz
WITNESSETH THAT:
WHEREAS, Chapter 294, Hawai'i Revised Statutes, regulates the reparations for accidental harm and loss arising from motor vehicle accidents; and
WHEREAS, Section 294-8 requires each person to obtain a no-fault policy in order to register and operate a motor vehicle upon a public highway or street; and
WHEREAS, Section 294-8 further provides that if a surety bond in a reasonable amount is secured and proof of qualifications to be a self-insurer is met, said owner need not obtain a no-fault policy; and
WHEREAS, pursuant to Chapter 294, Hawai'i Revised Statutes, Rules and Regulations of the Motor Vehicle Insurance Division were promulgated and adopted, hereinafter "Rules"; and
WHEREAS, Part VI of said Rules and Regulations provides that a person desiring to qualify as a self-insurer shall execute and file an agreement, upon certification as a self-insurer, with the Commissioner;
NOW, THEREFORE, Hertz, in consideration of the aforesaid, shall:
1. In accordance with and to the extent prescribed in Chapter 294, Hawai'i Revised Statutes, and the Rules adopted pursuant to said chapter:
a. In case of injury, arising out of a motor vehicle accident, to a person, including an operator, occupant or user of the self-insured motor vehicle or any pedestrian struck by said vehicle, pay without regard to fault to such person an amount equal to the no-fault benefits payable to such a person as a result of such injury;
b. In case of death, arising out of a motor vehicle accident, of a person, including an operator, occupant, or user of the self-insured motor vehicle, or any pedestrian struck by said vehicle, pay without regard to fault, to the legal representative of such person for the benefit of the surviving spouse and any dependent, as defined in Section 152 of the Internal Revenue Code of 1954, of such person, an amount equal to the no-fault benefits payable to such spouse and dependent as a result of such death; and
c. Pay on behalf of itself or any operator of a self-insured motor vehicle sums which it or the operator may legally be obligated to pay for injury or death or damage to property of others which arise out of the ownership, operation, maintenance, use, loading or unloading of the self-insured motor vehicle.
2. Permit the commissioner or his authorized representative to inspect and copy records and provide him copies of records pertaining to the self-insurer's financial condition, processing and payment of claims and any other matters pertinent to the administration and enforcement of the no-fault law.
3. Comply with all requirements of the no-fault law, regulations, directives or orders of the Commissioner, including those relating to processing and payment of claims and payment of assessments and fees.
4. Designate an officer to accept service of process who resides in this State.
5. Notify the Commissioner and the county director of finance of the county of registration in writing of any change in status of any motor vehicle of which it is self-insurer, such as transfer, sale, removal from the State, or additions, within 10 working days after the change is effected.
6. Pay to the Commissioner, annually, a fee of one dollar per year or part thereof on each motor vehicle which it is self-insuring. The fee will be computed on the basis of one dollar times the total number of insured vehicles reported on the December 31, Insured Vehicle Census Report, MVID 14-2(1). The fee shall be remitted annually with the Census Report, which is due on or before February 15 of each year.
7. Submit the reports prescribed by Part XIII (data for establishment of the *681 90% medical-rehabilitative threshold), and Part XIV (statistical and reporting requirements) as prescribed by the Rules.
This Agreement does not attempt to include all of the requirements of Chapter 294, Hawai'i Revised Statutes, and the Rules adopted thereto. The omission of any legal requirements imposed by statute or Rules in this Agreement shall not be construed as a waiver of such requirement by the Commissioner. Hertz further agrees that any future legal requirements that may be imposed as a result of amendments to Chapter 294, Hawai'i Revised Statutes, or the Rules shall, wherever applicable, automatically be incorporated in to this Agreement.
This Agreement shall remain in full force and effect so long as Hertz has a certificate of self-insurance.
The agreement was signed by the state commissioner of motor vehicle insurance on behalf of the State of Hawai'i, the vice president of Hertz's insurance division, and Hertz's assistant secretary.
The scope of a self-insurer's duties, however, is not coextensive with that of licensed insurance carriers. In Ricardo, this court held that a self-insured rental car company could not be held liable under a statute requiring that insurers pay attorneys fees after unsuccessfully contesting liability, relying in part upon this court's observations in Budget Rent-A-Car Systems v. Coffin, 82 Hawai'i 351, 922 P.2d 964 (1996):
HRS § 431:10C-103(5) defines "insurer" as "every person holding a valid certificate of authority to engage in the business of making contracts of motor vehicle insurance in this State." Budget ... is not "in the business of making contracts of motor vehicle insurance"; to the contrary, Budget is merely the self-insured "owner" of a fleet of motor vehicles that it permits others to use for a fee. To hold otherwise would effectively render all car rental companies doing business in Hawai'i "insurers," regardless of whether they are self-insurers or not, generally subjecting them to the requirements of HRS chapter 431 and to the regulatory control of the insurance commissioner and the Department of Commerce and Consumer Affairs.
Ricardo, 85 Hawai'i at 250, 942 P.2d at 514 (quoting Coffin, 82 Hawai'i at 356-57, 922 P.2d at 969-70 (footnotes omitted)) (emphasis added). Although Ricardo did note that, notwithstanding that self-insurers are not liable under the attorneys fees statute, "self-insurers are in fact subject to the regulatory control of the insurance commissioner and the Department of Commerce and Consumer Affairs," this court made no mention of any duty of good faith settlement practices that would give rise to a common law tort claim for relief. Id. at 250 n. 3, 942 at 514 n. 3 (citing HRS § 431:10C-105(1); HAR §§ 16-23-20 through 16-23-32 (1993)).
Moreover, Coffin noted that
[a self-insured rental car company's] rental agreement is not a contract of insurance and is not the source of the customer's entitlement to insurance coverage; the customer is statutorily entitled to the minimum motor vehicle insurance coverage required by HRS § 431:10C-301. In this light, ... the rental agreement does not independently confer any insurance coverage ... and, most importantly, the rental company is not an "insurer" as defined by HRS § 431:10C-103(5).
82 Hawai'i at 357, 922 P.2d at 970 (emphasis added). Based on the principles articulated in Coffin, this court held in Alzharani that a self-insured car rental company was not an "insurer" required to offer uninsured motorist coverage to its customers, such that the car rental company was entitled to summary judgment against a customer seeking uninsured motorist benefits for injuries resulting from an accident involving two uninsured vehicles. Alzharani, 82 Hawai'i at 472-73, 923 P.2d at 414-15. Inasmuch as Alzharani resolved the matter on the foregoing and other bases, it did not address the customer's claim of bad faith settlement practices, but expressly noted as follows:
We do note, however, relative to Alzharani's bad faith claim, that this court recently expressly acknowledged that an independent cause of action exists in Hawai'i for the breach of an insurer's duty to act in good faith in both first-and third-party *682 contracts of insurance. See The Best Place, Inc. v. Penn America Insurance Co., 82 Hawai'i 120, 132, 920 P.2d 334, 346 (1996), ("[T]here is a legal duty, implied in a first- and third-party insurance contract, that the insurer must act in good faith in dealing with its insured, and a breach of that duty of good faith gives rise to an independent tort cause of action.")
82 Hawai'i at 473 n. 9, 923 P.2d at 414-15 n. 9 (emphases added).
C. Analysis
In addressing the question whether Curtis had a claim for relief against Hertz for bad faith settlement practices, there are three legal principles that guide our analysis: (1) the common law tort of bad faith arises out of an insurer's contractual duty to deal in good faith, see supra section III.A.1; (2) a third-party injured claimant does not have a bad faith claim for relief unless the insured tortfeasor assigns the claim, which, as we have said, arises from an insurance contract, see supra section III.A.2; and (3) self-insurers are not insurers, inasmuch as they are "not `in the business of making contracts of motor vehicle insurance,'" Coffin, 82 Hawai'i at 356, 922 P.2d at 969. See supra section III.B. Notwithstanding the foregoing principles, Curtis maintains that he had a claim for relief for bad faith based upon third-party beneficiary theory, inasmuch as "Hertz's [self-insurer a]greement with the State required that Curtis ... be assured that Hertz as a self-insurer would fairly process and promptly pay his claims." In support of his contention, Curtis cites Hough v. Pacific Ins. Co., Ltd., 83 Hawai'i 457, 927 P.2d 858 (1996), Dawes v. First Ins. Co. of Hawai'i, Ltd., 77 Hawai'i 117, 883 P.2d 38 (1994), and Hunt v. First Ins. Co. of Hawai'i, Ltd., 82 Hawai'i 363, 922 P.2d 976 (App.1996), for the proposition that a party who is not in privity of contract with an insurer may nonetheless assert a claim for relief for bad faith against the insurer by way of such "third party beneficiary theory."
As discussed supra in section III.A.2, the majority of courts that have considered the question have relied upon the "assignment" theory rather than the third-party beneficiary doctrine in addressing the viability of claims by third-party injured plaintiffs against insurers. See, e.g., Murphy, 17 Cal.3d at 944, 132 Cal. Rptr. at 428, 553 P.2d at 588 ("Because... the duty to settle is intended to benefit the insured and not the injured claimant, third party beneficiary doctrine does not furnish a basis for the latter to recover." (Emphasis added.)). Curtis's citation of Hough, Dawes, and Hunt is inapposite to the present matter because each of those cases involved an underlying insurance contract and the liability of the insurer qua insurer, rather than that of a self-insured party. See Hough, 83 Hawai'i at 459-60, 927 P.2d at 860-61; Dawes, 77 Hawai'i at 119-21, 883 P.2d at 40-42; Hunt, 82 Hawai'i at 364-66, 922 P.2d at 977-79.
Furthermore, as discussed supra in note 8, even when courts have "allowed the third party to bring ... [a bad faith] action in his own name without an assignment" based on the "third party beneficiary concept and the right of a real party in interest to maintain a suit[,]" they have expressly declined to "extend the duty of good faith by an insurer to its insured to a duty of an insurer to a third party" and have stated that "[t]he basis for an action remained the damages of an insured from the bad faith action of the insurer which caused its insured to suffer a judgment for damages above his policy limits." See Fidelity & Casualty Co. v. Cope, 462 So. 2d 459, 460-61 (Fla.1985). The Cope court also observed that "[t]he essence of a `bad faith' insurance suit (whether it is brought by the insured or by the injured party standing in his place) is that the insurer breached its duty to its insured[.]" Id. at 460. Thus, even if Curtis could benefit from third-party beneficiary status in a claim for relief against a tortfeasor's liability insurance carrier, there being no underlying insurance contract from which the duty of good faith settlement practices could arise in the present case, Curtis still has no right to sue Hertz a self-insured rental company for such bad faith.
By its plain language, Hertz's self-insurer agreement is not an insurance contract. See Coffin, 82 Hawai'i at 356, 922 P.2d at 969 (ruling that self-insurers are "not `in the business of making contracts of motor vehicle insurance'"). Other jurisdictions that have *683 specifically addressed self-insurer liability to third-party injured claimants have similarly held that no claim for relief may lie without the existence of an underlying insurance contract and that self-insurer agreements are insufficient in themselves. In Southeastern Pennsylvania Transp. Auth. v. Holmes, 835 A.2d 851 (Pa.Cmwlth.2003), appeal denied, 848 A.2d 930 (Pa.2004), the Pennsylvania Commonwealth Court held that injured passengers could not maintain a common law bad faith action against a self-insured transportation authority, reasoning as follows:
[T]he trial court ... reason[ed] that privity of contract can be established under an implied contract theory....
There are several flaws in the trial court's holding. First, there was no contract. [The self-insurer's] liability to [the injured claimants] arose under the Uninsured Motorists provisions of the [Pennsylvania Motor Vehicle Financial Responsibility Law]. Therefore, there can be no privity of contract; [the self-insurer] is the sole party to a self-insurance arrangement....
Id. at 858 n. 24 (emphases added). The Holmes court further stated that
in the absence of a written contract, [the injured claimants] must establish an implied duty to act fairly and in good faith on the claims of its injured passengers. However, [the injured claimants] cannot satisfy the prerequisites for an implied duty because there is no confidential or fiduciary relationship between [the injured claimants] and [the self-insurer].
In the absence of a contractual relationship between [the self-insurer] and [the injured claimants], there is no basis for asserting the breach of good faith and fair dealing doctrine.
Id. at 859 (emphasis added).
Addressing the same issue, the West Virginia Supreme Court of Appeals reasoned as follows:
When asked to consider whether Kentucky's Unfair Claims Settlement Practices Act and the tort of bad faith apply to persons or entities who are self-insured or uninsured, the Supreme Court of Kentucky "conclude[d] that both the statute and the common law tort apply only to persons or entities engaged in the business of insurance [.]" Davidson v. American Freightways, Inc., 25 S.W.3d 94, 95 (Ky.2000). We quote with approval from the court's reasoning:
The gravamen of the UCSPA is that an insurance company is required to deal in good faith with a claimant, whether an insured or a third-party, with respect to a claim which the insurance company is contractually obligated to pay. Absent a contractual obligation, there simply is no bad faith cause of action, either at common law or by statute.
Id. at 100....
In the case at bar, Ford's principal business is the manufacture and sale of automobiles. Ford is not an insurer and is under no contractual obligation to pay the [injured claimants'] claim. Thus, there exists no ... common law basis for a bad faith claim against the company. We hold that ... the tort of bad faith appl[ies] only to those persons or entities and their agents who are engaged in the business of insurance. In other words, absent a contractual obligation to pay a claim, no bad faith cause of action exists, either at common law or by statute. A self-insured entity is not in the business of insurance.
Hawkins v. Ford Motor Co., 211 W.Va. 487, 566 S.E.2d 624, 629 (2002) (some emphases added and some in original).
In Loomis v. Ameritech Corp., 764 N.E.2d 658 (Ind.Ct.App.2002), the Indiana Court of Appeals, in ruling that a self-insured corporation was not subject to the implied covenant of good faith and fair dealing, observed that
[t]here is a legal duty implied in insurance contracts that the insurer deal in good faith with its insured. Erie Ins. Co. v. Hickman, 622 N.E.2d 515, 518 (Ind.1993). However, the duty does not extend to claimants other than the insured. Dimitroff v. State Farm Mut. Auto. Ins. Co., 647 N.E.2d 339, 342 (Ind.Ct.App.1995). Further, "self-insurance" is not insurance at all. Eakin v. Indiana Intergovernmental *684 Risk Mgmt. Auth., 557 N.E.2d 1095, 1098 (Ind.Ct.App.1990).
Id. at 668 (emphases added).
IV. CONCLUSION
In light of the foregoing, we hold, consonant with the great weight of extrajurisdictional authority and the requirement that a contract underlie the tort of bad faith, that an injured third-party claimant does not have a claim for relief for bad faith against a self-insured tortfeasor. Accordingly, we affirm the final judgment of the circuit court, filed on August 2, 2000, as to all claims and parties.
NOTES
[1] As discussed infra in section I, although the plaintiff Cheryl Simmons was one of the parties in the circuit court, her claims were resolved by settlement and stipulation for dismissal with prejudice as to the defendants Gary Puu and the Hertz Corporation, filed on October 24, 1996. Moreover, on December 26, 1996, the circuit court filed its final order of dismissal, dismissing Curtis's claims as to the defendant Wanda Puu for lack of service; the foregoing order was supplemented by another final order of dismissal, filed on July 22, 1998. Thus, neither Cheryl nor Wanda are parties to the present appeal.
[2] In Best Place, Inc. v. Penn America Ins. Co., 82 Hawai'i 120, 920 P.2d 334 (1996), this court explained the distinction between "third-party" and "first-party" claims as follows:
A "third-party claim" is one where the insurer contracts to defend the insured against claims made by third parties against the insured and to pay any resulting liability, up to the specified dollar limit. In contrast, a "first-party claim" refers to an insurance agreement where the insurer agrees to pay claims submitted to it by the insured for losses suffered by the insured.
82 Hawai'i at 124 n. 4, 920 P.2d at 338 n. 4.
[3] HRS § 480-2 provided:
Unfair competition, practices, declared unlawful. (a) Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are unlawful.
(b) In construing this section, the courts and the office of consumer protection shall give due consideration to the rules, regulations, and decisions of the Federal Trade Commission and the federal courts interpreting section 5(a)(1) of the Federal Trade Commission Act (15 U.S.C. 45(a)(1)), as from time to time amended.
(c) No showing that the proceeding or suit would be in the public interest (as these terms are interpreted under section 5(b) of the Federal Trade Commission Act) is necessary in any action brought under this section.
(d) No person other than a consumer, the attorney general or the director of the office of consumer protection may bring an action based upon unfair or deceptive acts or practices declared unlawful by this section.
Effective June 28, 2002, the legislature amended HRS § 480-2 in respects not relevant to the present matter. See 2002 Haw. Sess. L. Act 229, § 2 at 916-17.
[4] HRS § 480-13 provided in relevant part:
(b) Any consumer who is injured by any unfair or deceptive act or practice forbidden or declared unlawful by section 480-2:
(1) May sue for damages sustained by the consumer, and, if the judgment is for the plaintiff, the plaintiff shall be awarded a sum not less than $1,000 or threefold damages by the plaintiff sustained, whichever sum is the greater, and reasonable attorneys fees together with the costs of suit; and
(2) May bring proceedings to enjoin the unlawful practices, and if the decree is for the plaintiff, the plaintiff shall be awarded reasonable attorneys fees together with the cost of suit.
....
(d) The remedies provided in this section are cumulative and may be brought in one action.
Effective July 15, 1998, the legislature amended HRS § 480-13 in respects not pertinent to the present matter. See 1998 Haw. Sess. L. Act 179, § 2 at 668-69. Effective May 2, 2001, the legislature further amended HRS § 480-13 in respects not relevant to the present matter. See 2001 Haw. Sess. L. Act 79, § 1 at 127. Effective June 28, 2002, the legislature again amended HRS § 480-13 in respects not germane to the present matter. See 2002 Haw. Sess. L. Act 229, § 3 at 917-18.
[5] The Appellants' complaint, filed on October 4, 1995, and their first amended complaint, filed on March 5, 1996, did not raise the claim of bad faith settlement practices. Moreover, Curtis's pretrial statement, filed on October 4, 1996, asserted no such claim.
[6] HRS § 431:13-101 (1993) provides:
Purpose. The purpose of this article is to regulate trade practice in the business of insurance in accordance with the intent of the Congress of the United States as expressed in the act of Congress of March 9, 1945 (Public Law 15, 79th Congress), by defining, or providing for the determination of, all acts, methods, and practices which constitute unfair methods of competition or unfair or deceptive acts or practices in this State, and by prohibiting the trade practices so defined or determined.
[7] Because we hold that a third-party claimant may not assert a common law tort claim for relief against a self-insurer for bad faith settlement practices, we do not address Curtis's remaining points of error.
[8] But see Thompson v. Commercial Union Ins. Co., 250 So. 2d 259, 264 (Fla.1971) (holding "that a judgment creditor may maintain suit directly against [a] tortfeasor's liability insurer for recovery of the judgment in excess of the policy limits, based upon the alleged fraud or bad faith of the insurer in the conduct or handling of the suit").
Notwithstanding the Thompson court's approval of a third-party claimant's cause of action against an insurer without an assignment by an insured, the Florida Supreme Court subsequently explained that fundamental tenets of a bad faith suit, including the requirement of an underlying insurance contract, remained intact:
In Thompson this Court, contrary to our prior decision in Sturgis v. Canal Insurance Co., 122 So. 2d 313 (Fla.1960), authorized an injured party to maintain a bad faith claim against an insurer. The Court based Thompson on public policy and justified it on the Shingleton v. Bussey, 223 So. 2d 713 (Fla.1969), third party beneficiary concept and the right of a real party in interest to maintain a suit. Nowhere in Thompson, however, did we change the basis or theory of recovery. We did not extend the duty of good faith by an insurer to its insured to a duty of an insurer to a third party. The basis for an action remained the damages of an insured from the bad faith action of the insurer which caused its insured to suffer a judgment for damages above his policy limits. Thompson merely allowed the third party to bring such an action in his own name without an assignment.
Fidelity & Casualty Co. v. Cope, 462 So. 2d 459, 460-61 (Fla.1985) (emphasis added). The Cope court also noted that
[t]he essence of a "bad faith" insurance suit (whether it is brought by the insured or by the injured party standing in his place), is that the insurer breached its duty to its insured by failing to properly or promptly defend the claim (which may encompass its failure to make a good faith offer of settlement within the policy limits) all of which results in the insured being exposed to an excess judgment.
Id. at 460 (emphasis added) (internal citation and quotation signals omitted).
Thus, even extrajurisdictional authority that allows a direct bad faith claim by an injured third party against an insurer adheres to the principle that the duty of good faith settlement practices arises from an underlying insurance contract.
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01-03-2023
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/2548942/
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79 So.3d 755 (2011)
Frank SPECIAL, as Personal Representative of the Estate of Susan Special, Appellant,
v.
Ivo BAUX, M.D., Ivo Baux, M.D., P.A. Pinnacle Anesthesia, P.L.; and West Boca Medical Center, Inc., Appellees.
No. 4D08-2511.
District Court of Appeal of Florida, Fourth District.
November 16, 2011.
*756 Philip M. Burlington and Andrew A. Harris of Burlington & Rockenbach, P.A., West Palm Beach, and Gary M. Cohen and Andrew B. Yaffa of Grossman Roth, P.A., Boca Raton, for appellant.
Irene Porter and Kathryn L.S. Griswold of Hicks Porter Ebenfeld & Stein, P.A., Miami, and Eugene Ciotoli of Bobo Ciotoli Bocchino Newman Corsini White & Buigas, P.A., North Palm Beach, for appellees Ivo Baux, M.D., Ivo Baux, M.D., P.A., and Pinnacle Anesthesia, P.L.
Michael K. Mittelmark and K. Calvin Asrani of Michaud Mittelmark Antonacci & Marowitz P.A., Boca Raton, for West Boca Medical Center, Inc.
*757 En Banc
GROSS, J.
Frank Special, as the personal representative of his wife's estate, appeals a final judgment in favor of the defendants below, Dr. Ivo Baux, his related corporations, and West Boca Medical Center, Inc. Special raises three claims. We affirm on all three, but write to discuss Special's contention that the trial court erred in limiting the cross-examination of one of the defendants' expert witnesses.
In considering that issue, we take up this case en banc to reconsider other decisions of this court describing the harmless error test in civil cases. We hold that our cases using an outcome determinative, "but-for" test for harmless error are contrary to the Florida Supreme Court's interpretation of the harmless error statute. We recede from those cases and adopt the following standard for harmless error in civil cases: To avoid a new trial, the beneficiary of the error in the trial court must show on appeal that it is more likely than not that the error did not influence the trier of fact and thereby contribute to the verdict. Applying this test, we find that harmless error occurred in the trial court and affirm the judgment.
Facts
Susan Special became pregnant at age 38. Five weeks before her due date, she underwent a cesarean delivery. She was wheeled into the operating room at the Center's labor and delivery suite. Dr. Baux, the anesthesiologist, administered spinal anesthesia. A moment after the placenta was removed, Susan became unresponsive, her blood pressure fell precipitately, and she went into cardiopulmonary arrest. Dr. Baux and hospital staff attempted to revive her. She was temporarily resuscitated and transferred to the Intensive Care Unit, where another cardiopulmonary arrest occurred. Susan died five hours after the delivery.
Susan's estate sued the defendants for negligence. The claim was that Dr. Baux and the hospital were negligent in administering anesthesia, in monitoring her system and controlling her fluids during surgery, and in responding to her cardiopulmonary arrests. The defendants denied the allegations; they alleged instead that Susan's death was caused by amniotic fluid embolus (AFE), an allergic reaction from a mother's blood mixing with amniotic fluid, sometimes causing heart-lung collapse.
At trial, the plaintiff's expert testified that Susan died because of the departures from the requisite standard of care. The AFE diagnosis figured prominently. Most notably, the plaintiff called Dr. Barbara Wolf, the chief medical examiner of Palm Beach County at the time of Susan's death. Dr. Wolf conducted the autopsy on Susan and concluded that there was no evidence of AFE in her body. She explained that in a majority of cases where someone dies from AFE, the autopsy provides evidence of AFE, and that was not the case with Susan.
Special also presented the testimony of Dr. Mark Adelman, a pulmonary specialist, who was called in when Susan went into distress. He diagnosed AFE at the time based upon her clinical signs. Special asked him about the number of patients diagnosed with AFE at West Boca. He testified that he saw all such patients. He estimated that he saw about one or two cases per year at the center. During his testimony, Special was able to elicit national statistics showing incidence of AFE diagnosis at West Boca was about 15 times the rate elsewhere. Dr. Adelman, however, contended in his answers that he was only estimating the number of cases he *758 saw and had no medical records to back up his recollection.
The defendants called Dr. Gary Dildy as their expert. Dr. Dildy opined that Susan died of AFE. He based this on his analysis of the medical records and tests. He explained that AFE is a diagnosis of exclusion. In other words, a doctor will look at all the circumstances and test results to determine likely causes for the patient's condition. Where no other circumstances account for the patient's distress during or after a delivery, a diagnosis of AFE can result.
On cross-examination, the plaintiff elicited from Dr. Dildy that the probability of AFE is approximately 1 in 20,000 births, but can range between 1 in 8,000 and 1 in 80,000. The plaintiff then tried to begin a line of cross-examination of Dr. Dildy about the reliability of the Adelman diagnosis that AFE had actually occurred in Susan, in light of the unusually high incidence of it at the hospital. The defendants' objection on relevancy grounds was sustained.
Special responded that this line of questioning was sought to impeach Dr. Adelman's testimony. The trial court sustained the objection, noting that the plaintiff could inquire about the statistical occurrence of AFE and make argument about disproportionate diagnoses in closing, but could not question Dr. Dildy using the substance of Dr. Adelman's testimony and its reliability to explore the trustworthiness of the AFE diagnosis. The court concluded that doing so would amount to improper collateral impeachment. We understand the trial court's characterization of the proposed impeachment as "collateral" as being merely another way of saying that the line of questioning was irrelevant.[1]
The plaintiff proffered Dr. Dildy's testimony on this issue. The expert stated that, assuming Dr. Adelman's recollection of the incidence of AFE at the hospital was accurate, he would be concerned that AFE was being over-diagnosed at the Center. Yet even when confronted with statistics documenting this possibility, Dr. Dildy persisted in his opinion that Susan presented a case of AFE. He testified, "But this case here, we're talking about, it doesn't matter what all these other cases are, this case is the case, and this case is an amniotic fluid embolism."
In closing argument, the plaintiff vigorously argued that the hospital either had an epidemic of AFE or was over-diagnosing it:
[Dr. Adelman] said, I see one to two a year at West Boca Medical Center. I didn't put the words in his mouth. He said, I see one to two a year at West Boca Medical Center.
....
*759 [I]f you take his numbers, and you believe they have this many amniotic fluid emboluses at West Boca Medical Center every year, it is somewhere between 15 and 80 times the national average they're diagnosing amniotic fluid embolus at West Boca Medical Center, between 15 and 80 times the national average.
So, it was either an epidemic, which there isn't, at West Boca Medical Center, or they're overdiagnosing amniotic fluid embolus. They're calling things that aren't amniotic fluid embolus, like he did in this case, ... because they're not bothering to look at autopsies, they're not bothering to look at other records, they're not bothering to investigate why....
It's not the epidemic, it's that he's overstating the diagnosis, and that's wrong, ladies and gentlemen, that is flat out wrong to do, and that's what they did in this case.
The jury found no negligence by the defendants and the trial court rendered a final judgment in their favor.
The Evidentiary Ruling
Again, the principal dispute at trial was the cause of Susan's death. In response to the plaintiff's claims of negligence, the defendants contended that regardless of their handling of the emergency from cardiopulmonary arrest, it was AFE that caused Susan's death. The presence of AFE was thus the essential issue at trial. The trial court abused its discretion in failing to allow the cross-examination.
Three sections of the evidence code provide the framework for evaluating questions of relevance. The general rule is that "[a]ll relevant evidence is admissible, except as provided by law." § 90.402, Fla. Stat. (2009). "Relevant evidence is [defined as] evidence tending to prove or disprove a material fact." § 90.401, Fla. Stat. (2009). Section 90.403, Florida Statutes (2009), establishes a limitation on the introduction of relevant evidence: "Relevant evidence is inadmissible if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of issues, misleading the jury, or needless presentation of cumulative evidence."
When, on cross-examination, a piece of evidence is offered to attack the credibility of a witness on a material issue, such evidence is "relevant" under section 90.401 because credibility is central to the truth seeking function of a trial. Under subsection 90.608(5), Florida Statutes (2009), any party "may attack the credibility of a witness by ... proof by other witnesses that material facts are not as testified to by the witness being impeached."
The object of the proposed cross-examination of the defense expert was to elicit answers leading to proof of the cause of death, the crux of the lawsuit. Dr. Adelman and Dr. Dildy both testified that the cause of death was AFE. Counsel sought to impeach Dr. Adelman's diagnosis with evidence showing that the incidence of diagnosed AFE at West Boca, all done by Dr. Adelman, was grossly in excess of national statistics, thus impeaching Dr. Adelman. Where the diagnosis is one of exclusion,[2] the frequency with which one comes to that conclusion is a "material fact" bearing upon the credibility of the diagnosis. The cross-examination was also relevant to Dr. Dildy's direct examination where he testified to the incidence of AFE in births and its rarity. The trial judge *760 abused his discretion in refusing to allow the cross-examination.[3]
The central question to this appeal is whether the exclusion of the cross-examination amounted to harmless error. To consider that issue, it is necessary to review the development of the harmless error standard in Florida.
Harmless Error Prior to State v. DiGuilio
We first review the history of the harmless error rule contained in section 59.041, Florida Statutes (2009)the circumstances leading to its enactment and how the interpretation of it has evolved since 1911.[4] The Florida cases describe a general trend away from a "correct result" test, utilized in the earliest common-law decisions and in earlier interpretations of the harmless error statute, and toward an "effect on the fact finder" test, as embodied in the Supreme Court's landmark decision in State v. DiGuilio, 491 So.2d 1129 (Fla.1986).
According to the "orthodox" English rule, an error in admitting or rejecting evidence was not a sufficient ground for a new trial unless it appeared, looking at all the evidence, that the truth had thereby not been reached. 1 Wigmore, Evidence § 21 (3d ed.1940); see also Doe v. Tyler, (1830) 130 Eng. Rep. 1397, 1399 (C.P.) (orthodox rule). In contrast, under the more stringent "Exchequer" rule, which took hold in English and in many American courts after the 1830s, an error at trial created per se a right to reversal. See Crease v. Barrett, (1835) 149 Eng. Rep. 1353, 1360(Ex.).[5] The earliest Florida cases followed the orthodox rule,[6] though *761 by the turn of the century some cases applied the more rigid Exchequer rule in narrow circumstances.[7]
The Exchequer rule and its influence on American courts were widely criticized for making reversal too easy. See, e.g., 1 Wigmore, Evidence § 21. A reform movement in the United States gained steam in the early twentieth century,[8] spurred by an influential address by Roscoe Pound, in which he opined that "the worst feature of American procedure is the lavish granting of new trials." Roscoe Pound, The Causes of Popular Dissatisfaction with the Administration of Justice, 29 A.B.A. Rep. 395, 413 (1906). The American Bar Association studied the problem and suggested statutory reforms, which were adopted at the state and federal levels. See 33 A.B.A. Rep. 542 (1908). Florida's harmless error statute, originally enacted in 1911, see Ch. 6223, Laws of Fla. (1911), was almost identical to the A.B.A.'s proposed statute,[9] and has remained unchanged since:
No judgment shall be set aside or reversed, or new trial granted by any court of the state in any cause, civil or criminal, on the ground of misdirection of the jury or the improper admission or rejection of evidence or for error as to any matter of pleading or procedure, unless in the opinion of the court to which application is made, after an examination of the entire case it shall appear that the error complained of has resulted in a miscarriage of justice. This section shall be liberally construed.
§ 59.041, Fla. Stat. (2010) (formerly § 54.23, Fla. Stat.).
Two aspects in the wording of the statute are significant. First, the statute applies in both civil and criminal cases. Second, the trigger for reversible error is the occurrence of a "miscarriage of justice"; how the courts have defined this term has determined the scope of the statute's application since its enactment.
The 1911 harmless error statute differs in one important respect from the A.B.A. model set forth in footnote 9. The Florida statute adds the last sentence: "This section shall be liberally construed." While a "strict construction" of a statute would consider "only the literal words of [the] writing," a liberal construction is "[a]n interpretation that applies a writing *762 in light of the situation presented and that tends to effectuate the spirit and purpose of the writing." Black's Law Dictionary 332 (8th ed. 2004). The purpose of the harmless error statute is to enhance finality by limiting the granting of new trials. However, by insisting on a liberal construction, the statute allows for discretion and flexibility in its interpretation; the term "miscarriage of justice" should not be construed so narrowly that reversal is a rarity.[10]
In the years following the passage of the harmless error statute in 1911, the Florida Supreme Court used two tests to define a "miscarriage of justice" giving rise to a reversible error: a "but-for," "correct result," test that is oriented on the outcome, and the more forgiving "effect on the fact finder" test that is oriented on the process.
A "correct result" approach asks whether, despite the error, the trial court reached the correct result. It assumes that when the result was correct, there cannot have been a "miscarriage of justice." But see Traynor, supra note 5, at 18-22 (criticizing this approach). The question is, would the result have been the same without the error? Or, but for the error, would the result have been different? An "effect on the fact finder" approach, on the other hand, asks whether the error influenced the trier of fact and contributed to the judgment, not just whether it changed the result. Looking at the record as a whole, did the error mislead the trier of fact? See id. at 22-23 (discussing benefits of this approach). The former approach effectively narrowed the class of cases that could be reversed; the latter broadened it.
The most commonly used test, the "but-for" formulation, focused on whether the result of the trial would have been different but for the error. This outcome oriented approach considered whether the "wrong" result was reached as a result of the error. A typical criminal case, Henderson v. State, 94 Fla. 318, 113 So. 689 (1927), illustrates the Supreme Court's early interpretation of the harmless error statute:
The language of the statute ... makes it clear that it was the purpose of the Legislature that verdicts and judgments of trial courts should not be overturned and set aside by this court on account of mere errors committed in the court below unless it is made to appear to this court, after inspection of the entire record, that the errors complained were prejudicial and injurious in their nature and tendency and resulted in a miscarriage of justice. This statute was, no doubt, based upon the idea that if the result of a trial, the verdict and judgment, was just and right, even though there were technical errors committed by the trial court, no good purpose could be subserved by the labor, expense, and delay of trying the case over again. And to make [this] intention effective, the statute was so framed as to require it to be made to appear to the reviewing court that the error complained of caused, or at least contributed to causing or reasonably tended to cause, the *763 result, and that the result was wronga miscarriage of justice.
Id. at 697-98 (emphasis added). This equation of a "miscarriage of justice" with a "wrongful result" characterizes much of the Supreme Court's early harmless error jurisprudence, and harkens back to Florida's earlier application of the orthodox English rule.[11]
The same outcome oriented analysis also prevailed in some early civil cases. In E.O. Roper, Inc. v. Wilson & Toomer Fertilizer Co., 116 Fla. 796, 156 So. 883 (1934), the Supreme Court held that even if the trial court committed technical errors, under the harmless error statute, its judgment would not be set aside where
the record as a whole shows that the judgment rendered accords with justice in the premises, and that a reversal of the cause for the correction of such technical errors as may have occurred must inevitably lead to the rendition of a new judgment identical with that now appealed from ....
Id. at 884 (emphasis added). This interpretation of the harmless error statute focused on the legislative purpose of conserving judicial resources; because the statute was designed to reduce the waste caused by needless retrials of cases reversed for technical error, it was therefore applied to prevent reversal whenever errors would not have altered the outcome.[12]
Other early civil and criminal cases focus less on the correctness of the outcome and more on whether the decision-making process was compromised; these cases apply an "effect on the fact finder" test for harmless error. For example, Eggers v. Phillips Hardware Co., 88 So.2d 507 (Fla. 1956), involving an action for injuries to a pedestrian caused by a truck driver, held it was error to admit into evidence the testimony of the investigating officers that, following the investigation, they had not arrested the driver for breaking any of the city's traffic ordinances. The Court reversed the trial court's judgment for the defendant and remanded for a new trial on the grounds that the erroneously admitted evidence might have influenced the jury's verdict:
There was a direct conflict in the evidence at the trial on this vital point [whether the defendant ran a red light] and it may well be that the fact of the non-arrest of defendant might have balanced the issue in favor of the defendant. We think that the ends of justice would best be served by submitting this issue to another jury, so that it can be decided without the defendant's having the benefit of the inadmissible evidence in question.
Id. at 508 (emphasis added).
Further, an early criminal case anticipates the DiGuilio test of a "reasonable possibility" of an effect on the verdict. See *764 infra pp. 11-13. In Pearce v. State, 93 Fla. 504, 112 So. 83 (1927), the defendant challenged his conviction for murder on the grounds that improperly excluded evidence of a pair of bloody brass knuckles found at the crime scene, together with evidence of the defendant's head wounds, would have supported his claim of self-defense. The Supreme Court agreed and used an analysis that emphasized the effect that the excluded evidence might have had on the jury:
It is impossible to say with any degree of certainty that, if the evidence of the finding of a `piece of a pair of knucks' [sic] near the scene of the difficulty had been admitted for consideration by the jury ..., the jury would not have accounted for the wounds on the head of the defendant upon the theory that the deceased had attacked him with metallic knuckles.
Id. at 86.
And, fifteen years before DiGuilio, the Supreme Court applied an "effect on the fact finder" harmless error test in a civil case, but without explicitly characterizing its approach. In Stecher v. Pomeroy, 253 So.2d 421 (Fla.1971), a personal injury action, the trial court erroneously admitted evidence about the extent of the defendant's insurance coverage; the Supreme Court held that the error was harmless "in light of the fact that the verdict was $19,000 despite policy limits of $100,000/ $300,000; where there was a disc involvement with serious and prolonged disability, traction and hospitalization; and where the injuries were permanent." Id. at 422. The Supreme Court emphasized that the error was harmless, and not a basis for reversal, when considered in the context of the whole trial, because the record showed that it did not contribute to the judgment.
This recognition of harmless error in these particular circumstances is not to be regarded as approval by this Court of the mention of policy limits to a jury. This should not be done. Nor is it approval of the trial court's refusal to grant the requested instruction to disregard, which should have been given. It is simply held to be harmless error here where an examination of the entire record reflects a tone which indicates in no wise any adverse effect upon the jury's verdict.
Id. (footnote omitted). In essence, the Supreme Court set the defense oriented verdict against the abundant evidence favorable to the plaintiff and concluded that the erroneous admission of the defendant's insurance coverage had little effect on the jury's verdict.
From Eggers and Stecher, we distill two general propositions about harmless error analysis in civil cases: First, to determine whether an error is harmful, the appellate court must examine the entire record. Second, the central issue is whether the error had an adverse effect upon the jury's verdict; in other words, whether the error contributed to the judgment.[13] Such was the state of the law before DiGuilio.[14]
*765 State v. DiGuilio
State v. DiGuilio, 491 So.2d 1129 (Fla. 1986), is the touchstone for harmless error analysis in Florida. In it, the Supreme Court firmly establishes an "effect on the fact finder" harmless error test for criminal cases.
In DiGuilio, testimony from a police officer about his arrest of an alleged cocaine trafficker was interpreted as a comment on the defendant's silence. Id. at 1130-31. The Fifth District ordered a new trial, applying a rule of per se reversal for comments on a defendant's silence. Id. at 1134. The Supreme Court rejected a rule of per se reversal, and instead adopted the harmless error test announced by the U.S. Supreme Court in Chapman v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967). The Court explained the test:
The harmless error test, as set forth in Chapman and progeny, places the burden on the state, as the beneficiary of the error, to prove beyond a reasonable doubt that the error complained of did not contribute to the verdict or, alternatively stated, that there is no reasonable possibility that the error contributed to the conviction.
DiGuilio, 491 So.2d at 1135 (citation omitted). This "effect on the fact finder" test focuses on the likelihood that an error at trial influenced the trier of fact and contributed to the judgment. If it is reasonably possible that the error contributed to the verdict, then the verdict must be set aside, even when, in the reviewing judge's opinion, the verdict would have been the same without the error. The error and its probable effects must be evaluated in light of the other evidence:
Application of the test requires an examination of the entire record by the appellate court including a close examination of the permissible evidence on which the jury could have legitimately relied, and in addition an even closer examination of the impermissible evidence which might have possibly influenced the jury verdict.
Id. Following Chief Justice Traynor,[15] the Supreme Court emphasized that applying the harmless error test is not simply a matter of reviewing the evidence left untainted by error to determine whether it is sufficient to support the judgment. Id. at 1136. Instead, the appellate court places the error in the context of the other evidence to estimate the effect of the error on the trier of fact. The purpose of the analysis, in other words, is not to retry the case without the error, but to reconstruct the original trial to determine what role, if any, the error played in the judgment. As the Court said:
The test is not a sufficiency-of-the-evidence, a correct result, a not clearly wrong, a substantial evidence, a more probable than not, a clear and convincing, or even an overwhelming evidence test. Harmless error is not a device for the appellate court to substitute itself for the trier-of-fact by simply weighing the evidence. The focus is on the effect of the error on the trier-of-fact. The question is whether there is a reasonable possibility that the error affected the verdict.
Id. at 1139. Thus, even abundant evidence in support of a verdict will not prevent reversal when the appellate court cannot say, after reviewing the whole record, that there is no "reasonable possibility that the *766 error affected the verdict." Id. The "burden to show that the error was harmless must remain on the state. If the appellate court cannot say beyond a reasonable doubt that the error did not affect the verdict, then the error is by definition harmful." Id.
The DiGuilio test for harmless error, which draws heavily on Chief Justice Traynor's insights, contrasts sharply with the "correct result" test applied by the Supreme Court in the decades following the enactment of the harmless error statute in 1911. Under the "correct result" test, a judgment generally could not be reversed unless the appellate court concluded that the outcome of the trial would have been different, but for the error. Under the DiGuilio test, a judgment should be reversed, and a new trial granted, whether or not the outcome of that trial is likely to be different whenever the appellate court believes there is a reasonable possibility that the error influenced the trier of fact and contributed to the verdict.
The differences between a "correct result" test and an "effect on the fact finder" test are subtle but important. An "effect on the fact finder" test asks the appellate judge to look closely at the error and estimate its effect on the trier of fact. A "correct result" test asks the judge to look at everything but the error and determine whether the verdict in a trial without it would have been different. In short, one test focuses on process; the other on the end result. Moreover, a "correct result," or "but-for," test asks the judge to exclude the wrongly admitted evidence (or include the wrongly rejected evidence) and weigh the evidence anewprecisely what DiGuilio forbids. See DiGuilio, 491 So.2d at 1136.
Supreme Court Civil Cases After DiGuilio
While the Florida Supreme Court has not explicitly adopted a standard for harmless error in civil cases after DiGuilio, three cases employed an "effect on the fact finder" test akin to the one that the court applied in DiGuilio.
Gormley v. GTE Products Corp., 587 So.2d 455 (Fla.1991), established two things about harmless error analysis. First, the court expressly placed the burden on the beneficiary of an error in the trial court to demonstrate on appeal that the error was harmless. Second, the court used an effect on the verdict analysis to determine whether harmless error had occurred. In Gormley, the Supreme Court ordered a new trial after finding that the introduction of collateral source evidence may have influenced the jury's verdict for a defendant. The court explained why the burden to prove the harmlessness of the error was on the defendant-appellee, which injected the improper evidence into the trial.
Equity and logic demand that the burden of proving such an error harmless must be placed on the party who improperly introduced the evidence. Putting the burden of proof on the party against whom the evidence is used ... would simply encourage the introduction of improper evidence.
Id. at 459. The Court held that the defendant-appellee had failed to meet its burden to establish that the erroneous introduction of the collateral source evidence was harmlessbecause the issue of liability was close, the Supreme Court "[could not] say that the jury's verdict on liability was not improperly influenced by the evidence of the [plaintiffs'] insurance claim." Id.[16]
*767 A second case applying DiGuilio's "effect on the fact finder" analytical framework is Sheffield v. Superior Insurance Co., 800 So.2d 197 (Fla.2000). There, the trial court denied the plaintiff's motion to exclude collateral source evidence, and the plaintiff, after stipulating that she would have a standing objection to the introduction of the evidence, introduced her own rebuttal collateral source evidence. Id. at 199. Although the jury found for the plaintiff, they found no permanent injury and awarded only her past medical expenses and $6,554.61 for future medical expenses. Id. The first district affirmed, holding that Sheffield invited the error by introducing her own collateral source evidence. Id.
The Supreme Court reversed. It held that (1) allowing any collateral source evidence was error because of "the inherently damaging effect of the jury hearing collateral source evidence on the issues of liability and on issues of damages:" and (2) that Sheffield did not waive her objection to that evidence by introducing her own collateral source evidence following the trial court's denial of her motion in limine. Id. at 203 (citing, inter alia, Gormley). The court explained the reversal with language that evaluated the effect of the improper evidence on the jury:
[G]iven the inherently prejudicial effect of such evidence, which is the very reason the collateral evidence rule was first established, we cannot conclude that in this case the introduction of collateral source evidence was harmless. The jury certainly could have concluded that because Sheffield had group insurance available to cover future medical expenses, there would be no need to award substantial damages for the future.
Id. (emphasis added). The italicized language demonstrates the Supreme Court's conclusion that the error was not harmless, because the appellee had failed to demonstrate that it was more likely than not that the error did not contribute to the verdict.
A third post-DiGuilio civil case is Linn v. Fossum, 946 So.2d 1032 (Fla.2006). In that medical malpractice case, the court did not explicitly apply a harmless error test, but held that a trial court's error in allowing an expert witness to testify that she had consulted with colleagues before forming her opinion "was not harmless because the competing expert opinions on the proper standard of care were the focal point of this medical malpractice trial." Id. at 1041. This reasoning is consistent with an "effect on the fact finder" test because it recognizes that in a "battle of the experts" the trier of fact would likely be influenced by the credibility of an expert witness which had been enhanced by the hearsay confirmation of other doctors.
In summary, in civil cases after DiGuilio, the Supreme Court has utilized an "effect on the fact finder" test for harmless error in civil cases, even though it has not explicitly declared so.[17] The court has expressly declared that on appeal the burden of proving the harmlessness of an error is on the beneficiary of the error in the trial court, who improperly introduced the offending evidence.
*768 District Court of Appeal Harmless Error Cases
Without specific guidance from the Supreme Court, the district courts of appeal have drifted in different directions in applying a section 59.041 harmless error test to civil cases.[18] There are three principal lines of cases applying tests for harmless error in the district courts. The most stringent test, occurring primarily in this district, derives from language contained in the earlier Supreme Court cases, and asks whether the result would have been different, but for the error.[19] Another strain of decisions, from the first and third districts, lowers the bar for harmful error, and asks whether the result may have been different had the error not occurred.[20] Finally, a third line of cases, mostly from the second district, asks whether it is reasonably probable that the appellant would have obtained a more favorable verdict without the error.[21] The last two tests are arguably similar to each other, but the test most frequently applied by this court is clearly more stringent.
Under this court's stringent "but-for" formulation, it is difficult for an appellant to establish harmful error, that a "miscarriage of justice" occurred within the meaning of section 59.041. The line of cases applying this "but-for" test began with Anthony v. Douglas, 201 So.2d 917 (Fla. 4th DCA 1967). Though it has often been cited by this court, Anthony rests on shaky footing. Anthony cites two cases in support of its test for harmless error, i.e., "whether, but for the error complained of, a different result would have been reached by the jury." Id. at 919.
The first, Cornelius v. State, 49 So.2d 332, 335 (Fla.1950), is a criminal case that *769 predates DiGuilio. Following other criminal cases from the same period, see supra, Cornelius states the test for harmful error as "whether the result would have been different had the improper evidence been excluded." Id. The persuasiveness of Cornelius has been undercut by the different direction the Supreme Court took in DiGuilio.
The second case cited as authoritative in Anthony, Banco Nacional de Cuba v. Steckel, 134 So.2d 23, 25 (Fla. 3d DCA 1961), does not articulate any test for harmless error, holding only that, "[w]hile the defendant contends the trial court erred in striking his defensive motions, this could constitute no more than harmless error where summary final judgment was properly entered." In fact, the holding in Banco Nacional does not appear to support any one test for harmless error, so it is unclear why we cited it as authoritative in Anthony. This stringent "but for" test, which characterizes almost every error as harmless, encourages evidentiary gambles on questionable evidence in the trial court, placing a premium on winning at all costs, because only the most egregious evidentiary errors will result in reversal.
Like the outcome oriented approach in this district, the second line of cases, from the first and third districts, focuses on the impact of the improperly admitted evidence on the outcome of the trial. These cases appear to have sprung from a footnote in Marks v. Delcastillo, 386 So.2d 1259, 1267 n. 15 (Fla. 3d DCA 1980), which stated, without citation:
We tentatively suggest the following as a shorthand-rule of thumb approach to this and related questions as applied to civil cases: fundamental error occurs when the result would have been different; reversible error, when the result might have been different; harmless error, when it would not have been different.
In Katos v. Cushing, 601 So.2d 612, 613 (Fla. 3d DCA 1992), this "tentative suggestion" morphed into persuasive authority for the proposition that "[t]he test for harmless error is whether, but for the error, a different result may have been reached." Katos in turn has often been cited as stating the proper test for harmless error in civil cases.[22] This test eases the difficulty of the strict "but-for" test by requiring some lesser degree of probability that the result in the case would have been different.[23]
The third line of cases, starting with Damico v. Lundberg, 379 So.2d 964 (Fla. 2d DCA 1979) (on rehearing), uses somewhat different language to put a finer point on the test of the probability of a different result. In Damico, the second district held that an "error is reversible only when, considering all the facts peculiar to the particular case under scrutiny, it is reasonably probable that a result more favorable to the appellant would have been reached if the error had not been committed." Id. at 965 (citing Stecher, 253 So.2d at 422).[24] This test differs from the DiGuilio *770 test for harmless error in two ways. First, it requires a "reasonable probability," rather than a mere "reasonable possibility." Second, it focuses on the probability of a different outcome on retrial rather than the probability that the error contributed to the outcome in the actual trial.
We believe that the district courts of appeal have primarily used a variation of outcome-oriented analysis in approaching the harmless error conundrum instead of employing the process-oriented "effect on the fact finder" approach that the Supreme Court adopted in DiGuilio and reaffirmed in Goodwin v. State, 751 So.2d 537 (Fla. 1999) and Ventura v. State, 29 So.3d 1086 (Fla.2010).
At least one of our civil cases appears however to apply an "effect on the fact finder" test similar to the one applied in DiGuilio. Mattek v. White, 695 So.2d 942 (Fla. 4th DCA 1997) was a personal injury action arising from an auto accident. The trial court allowed a physicist, who was an accident reconstruction and biomechanics specialist, to offer his opinion that the collision could not have caused permanent injury to the plaintiff. Id. at 943. We held it was error to admit the physicist's testimony about permanent injury because the physicist was not a qualified medical expert. Id.
Holding that the error was harmful, we said: "We cannot find the error in admitting this testimony to be harmless because there was ample evidence in this case that plaintiff did have a permanent injury, and the admission of [the physicist's] opinions regarding permanency could well have been what persuaded the jury to find no permanency." Id. at 944 (emphasis added). Here, as in DiGuilio, "[t]he focus [was] on the effect of the error on the trier-of-fact." 491 So.2d at 1139.[25] But Mattek, with its "effect on the fact finder" test, stands as an island in a sea of cases applying outcome-oriented, "but-for" analyses.
Harmless Error in Civil Cases
In formulating a harmless error test in civil cases, it is important to recognize that DiGuilio derived its formulation from the elevated burden of proof in criminal cases:
The harmless error test ... places the burden on the state, as the beneficiary of the error, to prove beyond a reasonable doubt that the error complained of did not contribute to the verdict or, alternatively stated, that there is no reasonable possibility that the error contributed to the conviction.
DiGuilio, 491 So.2d at 1135 (emphasis added) (citation omitted). This elevated test acknowledges (1) the higher burden of proof in criminal cases, which amplifies the potential effect of an evidentiary error on the trier of fact, and (2) the special concern for the legitimacy of criminal convictions expressed in the constitutional and statutory protections accorded to criminal defendants. A harmless error test for civil cases should acknowledge the particular attributes of those cases.
*771 As in a criminal case, the approach to harmless error analysis in a civil case should begin with an examination of the entire record by the appellate court,[26] including a close examination of both the permissible evidence upon which the jury could have relied and the impermissible evidence which may have influenced the verdict. The focus of the analysis is to evaluate the effect of the error on the trier of fact to determine whether or not the error contributed to the judgment. We agree with Chief Justice Traynor that a "reasonableness" standard is inappropriate for a harmless error analytical framework because it does not specify a degree of probability:
The nebulous test of reasonableness is unlikely to foster uniformity either in the application of standards, should there be any, or in the pragmatic exercise of discretion. Discretion is at least under better control within tests that focus on the degree of probability as more probable than not, highly probable, or almost certain.
Traynor, supra note 5, at 34-35.
Just as the Supreme Court used the burden of proof in a criminal case to describe the harmless error standard in DiGuilio, so should the burden of proof in civil cases inform the harmless error standard here: harmless error occurs in a civil case when it is more likely than not that the error did not contribute to the judgment. To avoid a new trial, the beneficiary of the error in the trial court must show on appeal that it is more likely than not that the error did not influence the trier of fact and thereby contribute to the verdict.
This test for harmless error is consistent with the way the Supreme Court approached the issue in DiGuilio, Gormley, Sheffield, and Linn. Because section 59.041 applies to both criminal and civil cases, the same type of "effect on the fact finder" harmless error analysis should be used in both types of cases, with the adjustment in civil cases that takes the lower burden of proof into consideration. The "more likely than not" burden is not insurmountable for an appellee contending that a trial error was harmless; it is consistent with the "liberal construction" of the statute mandated by the legislature.
The lower burden also effectuates the statutory goal of enhancing finality in a way that recognizes the different stakes involved in criminal and civil cases. Criminal cases involve a deprivation of liberty, not merely financial loss, so the procedural and substantive law emphasizes the goal that the end result in a criminal case be just and right. Social policy places a greater premium on finality in civil cases than in criminal cases, a finality that should come sooner rather than later. Put differently, society is willing to tolerate more mistakes in civil cases than it will in criminal ones. This policy preference for a quick finality in civil cases supports our decision to require the appellee to demonstrate not that there was a high probability that the error did not affect the verdict, or that there was a reasonable probability that it did not, but that, more likely than not, the error had no such harmful effect.
We therefore recede from the line of cases in footnote 19, which apply a strict, outcome-determinative "but-for" test for harmless error. We also certify the following question to the Supreme Court as being of great public importance:
IN A CIVIL APPEAL, SHALL ERROR BE HELD HARMLESS WHERE IT IS MORE LIKELY THAN NOT *772 THAT THE ERROR DID NOT CONTRIBUTE TO THE JUDGMENT?
Applying the Harmless Error test in This Case
The question here was whether the trial court's refusal to allow the proposed cross-examination of Dr. Dildy was harmless error. The ultimate purpose of the proposed cross-examination was to call into question the hospital's AFE diagnosis by suggesting that the hospital diagnosed that condition about 15 times more than the rate elsewhere. This issue was presented to the jury through the testimony of Dr. Adelman and in part from Dr. Dildy. This evidence allowed the plaintiff's attorney in closing argument to hammer on the significance of the statistical abnormality. During the proffer of Dr. Dildy, he said that if the incidence of AFE at the hospital were accurate, he would be concerned that AFE was being over-diagnosed. Yet, even when confronted with the statistics documenting this possibility, he persisted in his opinion that Susan presented a special case of AFE. He testified, "But this case here, we're talking about, it doesn't matter what all these other cases are, this is this case, and this case is an amniotic fluid embolism."
Considering all of the testimony, the jury had the full ability to take the statistical anomaly into consideration; the omitted testimony added little to the plaintiff's case. Having reviewed the entire record, we conclude that it is more likely than not that the restriction on the cross-examination of Dr. Dildy did not contribute to the verdict. The error was harmless.
Accordingly, we affirm the judgment entered below. We withdraw the panel opinion previously issued in this case and substitute this opinion in its place.
MAY, C.J., WARNER, POLEN, STEVENSON, TAYLOR, and CIKLIN, JJ., concur.
DAMOORGIAN, J., concurs specially with opinion, in which MAY, C.J., concurs.
CONNER, J., concurs in majority opinion only in result and specially with opinion, in which LEVINE, J., concurs.
HAZOURI and GERBER, JJ., recused.
DAMOORGIAN, J., concurring specially.
We commend Judge Gross for his thorough review of the history of the harmless error test and for his logical formulation of the "more likely than not" harmless error test for civil cases. Given the supreme court precedent upon which Judge Gross bases the majority opinion, we are compelled to concur that this court, going forward, should apply the "more likely than not" harmless error test in civil cases.
However, if we were writing on a clean slate, we would argue that the only harmless error test we should apply in civil cases is the plain language of Florida's harmless error statute.
As the majority opinion points out, before 1911, the common law established two different harmless error rules: (1) the "orthodox" rule by which an error was not a sufficient ground for a new trial unless it appeared, looking at all the evidence, that the truth had not been reached as a result; and (2) the more stringent "Exchequer" rule by which an error at trial created per se a right to reversal. The shift in the early twentieth century from the orthodox rule to the Exchequer rule was widely criticized for making reversal too easy. Therefore, at the suggestion of the American Bar Association, the Florida Legislature, in 1911, enacted Florida's harmless error statute:
*773 No judgment shall be set aside or reversed, or new trial granted by any court of the state in any cause, civil or criminal, on the ground of misdirection of the jury or the improper admission or rejection of evidence or for error as to any matter of pleading or procedure, unless in the opinion of the court to which application is made, after an examination of the entire case it shall appear that the error complained of has resulted in a miscarriage of justice. This section shall be liberally construed.
§ 59.041, Fla. Stat. (2010) (formerly § 54.23, Fla. Stat.).
The harmless error statute, which has remained unchanged in one hundred years, is unambiguous. The legislature has entrusted the courts to set aside or reverse a judgment, or grant a new trial, only when the error complained of has resulted in a miscarriage of justice. Whether a miscarriage of justice has occurred is to be determined on a case-by-case basis after an examination of the entire case. If the determination is a close question, then a liberal construction favors setting aside or reversing the judgment or granting the new trial. In short, the legislature has entrusted the courts to recognize a "miscarriage of justice" as that phrase is commonly used, and "[t]he authority of the legislature to enact harmless error statutes is unquestioned." State v. DiGuilio, 491 So.2d 1129, 1134 (Fla.1986).
As the majority opinion points out, however, over the last hundred years, courts have sought to further interpret the phrase "miscarriage of justice." The majority opinion seeks to justify that exercise by citing to the harmless error statute's last sentence, "This section shall be liberally construed." However, we do not read the statute's last sentence as the legislature's express invitation for the courts to further interpret "miscarriage of justice." Rather, the statute's last sentence merely provides that if the determination of whether a miscarriage of justice has occurred is a close question, then a liberal construction favors setting aside or reversing the judgment or granting the new trial.
Nevertheless, over the last hundred years, courts apparently have treated the phrase "miscarriage of justice" as being ambiguous and therefore have attempted to formulate more specific tests to determine whether a miscarriage of justice has occurred. As the majority opinion points out, courts have formulated two tests: (1) a "but-for," "correct result" test which focuses on the outcome; and (2) the more forgiving "effect on the fact finder" test which focuses on the process.
In our view, these two tests merely have returned us to where we were a century ago when courts debated over whether to apply the "orthodox" rule or the "Exchequer" rule to determine whether error was harmful or not. But today, the harmless error statute already is in effect. The statute is unambiguous. The statute should be applied according to its plain language in civil cases rather than continuing our century-old struggle to further define the phrase "miscarriage of justice." As our supreme court stated in Daniels v. Florida Department of Health, 898 So.2d 61 (Fla.2005):
When the statute is clear and unambiguous, courts will not look behind the statute's plain language for legislative intent or resort to rules of statutory construction to ascertain intent. In such instance, the statute's plain and ordinary meaning must control, unless this leads to an unreasonable result or a result clearly contrary to legislative intent. When the statutory language is clear, courts have no occasion to resort to rules of constructionthey must read the statute as written, for to do otherwise *774 would constitute an abrogation of legislative power.
Id. at 64-65 (internal citations and quotations omitted); see also DiGuilio, 491 So.2d at 1137 ("[O]ur responsibility as an appellate court is to apply the law as the Legislature has so clearly announced it. We are not endowed with the privilege of doing otherwise regardless of the view which we might have as individuals.") (citations omitted).
In defense of our argument to apply the harmless error statute's plain language in civil cases, we foresee two concerns. First, some may be concerned that one judge's subjective view of a "miscarriage of justice" may be different than another judge's subjective view of a "miscarriage of justice." We harbor no such concern. We routinely apply the phrase "miscarriage of justice" in exercising our discretion to grant or deny certiorari review. See Allstate Ins. Co. v. Kaklamanos, 843 So.2d 885, 889 (Fla.2003) ("A district court should exercise its discretion to grant certiorari review only when there has been a violation of a clearly established principle of law resulting in a miscarriage of justice.") (emphasis added; citations omitted). More importantly, we have faith in our colleagues' experience and wisdom to recognize a miscarriage of justice when they see it.
Much more often than not, three judges of this court review the same record and arguments on a given case and reach the same conclusion. On the rare occasions when we disagree as to a conclusion, our judicial system is structured to resolve that disagreement in an orderly waythe majority's conclusion prevails. If the majority of judges on a particular panel conclude that the error complained of has resulted in a miscarriage of justice, then we should set aside or reverse the judgment or grant the new trial. If the majority concludes otherwise, then we should affirm.
Second, some may be concerned that our argument to apply the harmless error statute's plain language in civil cases merely would devolve into the "but for," "correct result" test by another name. We harbor no such concern here either. Certainly situations exist in which a "miscarriage of justice" can occur even though the result would have been the same without the error.
Perhaps the most obvious situation is when a trial court's error violates a party's constitutional rights in a criminal case. In such situations, we are not required to set aside or reverse a judgment or grant a new trial. See Chapman v. California, 386 U.S. 18, 22, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967) ("We conclude that there may be some constitutional errors which in the setting of a particular case are so unimportant and insignificant that they may, consistent with the Federal Constitution, be deemed harmless, not requiring the automatic reversal of the conviction.").
However, we have set aside or reversed judgments or granted new trials because of a constitutional error, even though the result would have been the same without the error. Compare, e.g., Arnold v. State, 807 So.2d 136, 141-42 (Fla. 4th DCA 2002) (trial court's error in admitting DNA evidence at trial without giving the defendant an opportunity to present conflicting evidence constituted a violation of his due process rights, was not harmless, and required the reversal of the defendant's conviction) with Arnold v. State, 53 So.3d 1042 (Table) (Fla. 4th DCA 2011) (indicating the same defendant's ultimate conviction after the reversal).
We recognize that applying the harmless error statute's plain language in civil cases may not be a perfect solution. See Chapman, 386 U.S. at 22-23, 87 S.Ct. 824 *775 ("What harmless-error rules all aim at is a rule that will save the good in harmless-error practices while avoiding the bad, so far as possible.") (emphasis added). But if application of the harmless error statute's plain language is flawed, it is no more flawed than the current two harmless error tests, the latter of which we are compelled to apply to civil cases beginning today.
We say this for two reasons. First, no language exists on the face of the harmless error statute suggesting that the legislature intended for courts to determine whether a miscarriage of justice has occurred based on the error's effect on the trier of fact, be it in the result or the process. Second, the current harmless error tests require appellate judges to speculate on what effect the error may have had on the trier of fact, be it in the result or the process. While our collective experience may allow us to better predict what effect the error may have had on the trier of fact, that prediction is still no more than speculation.
If we were to apply the harmless error statute's plain language to this case, it would not appear that the error complained of resulted in a miscarriage of justice. The plaintiff was able to present evidence of the statistical anomaly and was able to argue its weight to the jury. The omitted testimony added little to the plaintiff's case, and the failure of Dr. Dildy to address the statistical anomaly may have been more damaging than what he would have said if the trial court had allowed the cross examination. Therefore, applying either the harmless error statute's plain language or the majority opinion's "more likely than not" harmless error test, our decision to affirm would be the same.
MAY, C.J., concurs.
CONNER, J., concurring specially.
I concur in the result, but I am unable to agree with receding from the position this court has previously taken on the test for harmless error in civil cases.
I agree that our supreme court has opined harmless error should be based on the effect of the error on the trier of fact. I concede in State v. DiGuilio, 491 So.2d 1129 (Fla.1986), the supreme court established that in criminal cases, the burden of persuasion to obtain the verdict (beyond a reasonable doubt) is the same burden of persuasion in applying a harmless error analysis. I also concede there is an easy logic to the idea that in all cases the burden of persuasion to obtain a judgment should be the same burden of persuasion to reverse a judgment. That necessarily means there are three different tests or standards in determining if an error is harmless.[27]
Judge Damoorgian hits the nail on the head when he points out one of the concerns about the notion of harmless error is the fear that its application will rely on the subjective viewpoint of a panel of appellate judges. I also agree with Judge Damoorgian that appellate judges are periodically called upon to apply the notion of a "miscarriage of justice" in deciding whether to grant or deny certiorari review. However, petitions for certiorari review are not as "routine" (numerically) as direct appeals. I also doubt there is much consensus among appellate judges on how to define or describe a "miscarriage of justice."
*776 My real struggle with the majority opinion is this: identifying the perspective from which harmless error is to be assessed and the burden of persuasion for establishing whether error is harmless does not tell me much about what the actual standard is. The clearest statement in the majority opinion of the harmless error standard for civil cases is: "To avoid a new trial, the beneficiary of the error in the trial court must show on appeal that it is more likely than not that the error did not influence the trier of fact and thereby contribute to the verdict." (Emphasis added.) That articulation suggests to me that the thought process for the appellate panel is to weigh and consider the amount of influence the error may have had on the trier of fact and to assess whether some tipping point was reached in which one can safely conclude "more likely than not" the error "contributed to the verdict." For me, this standard invites too much speculation and subjective analysis. Lawyers will have great difficulty advising clients about the likely outcome of an appeal where such standards are used.
As the majority points out, we are more tolerant of error when the outcome is whether someone should be paid money than when the outcome is whether someone should be deprived of liberty. That is as it should be. Thus, it seems reasonable to assume that in passing a harmless error statute the legislature appreciated the difference in the outcome between a civil case and a criminal case. If I am correct, there is no reason the judiciary needs to measure harmless error the same way for both types of cases. It is appropriate to protect the fairness of the fact-finding process above protecting the finality of a decision in criminal cases. I submit in civil cases it is more appropriate to protect the finality of a decision above protecting the fairness of the fact-finding process.
Focusing on the effect of the error on the trier of fact raises another concern in civil cases. Does the application of the standard differ if the trier of fact is a judge instead of a jury? This concern is enhanced because more civil cases are tried nonjury than criminal cases. Focusing on the effect of the error on the trier of fact is really an exercise in divining whether the error may have influenced the trier of fact; and if so, was there enough influence to affect the trier of fact's decision. It would seem to me that my divining skills will be applied differently when the trier of fact is a jury as opposed to a judge.[28]
Another problem I have with the majority's contention that in this district we have set the bar of harmful error too high for civil cases is that setting the bar too low is an affront to the integrity of the jury process and the decision rendered by six impartial persons selected by both sides to try the case. In civil cases, the appellant is unhappy with a jury decision and seeks a new decision by a new jury. If the rules regarding reversal required that the case be retried with the same evidence and the same arguments, minus the error, it is doubtful we would have as many appeals in civil cases as we do.
Instead, the appellant is seeking a second bite at the apple with a new jury, with the understanding that, having the benefit of a dry-run, the case will be presented in a different fashion. More often than not, the restructuring of evidence and arguments will have little connection to the error that caused the retrial. A "but for" *777 analysis which focuses on whether the outcome would be the same with the original jury, without the error, gives honor to the original jury.
The majority quotes the supreme court in DiGuilio:
The test is not a sufficiency-of-the-evidence, a correct result, a not clearly wrong, a substantial evidence, a more probable than not, a clear and convincing, or even an overwhelming evidence test. Harmless error is not a device for the appellate court to substitute itself for the trier-of-fact by simply weighing the evidence. The focus is on the effect of the error on the trier-of-fact. The question is whether there is a reasonable possibility that the error affected the verdict. [Id. at 1139.]
and a little later goes on to opine:
Under the DiGuilio test, a judgment should be reversed, and a new trial granted, whether or not the outcome of that trial is likely to be different, whenever the appellate court believes there is a reasonable possibility that the error influenced the trier-of-fact and contributed to the verdict.
The differences between a "correct result" ["but for"] test and an "effect on the fact finder" test are subtle but important. An "effect on the fact finder" test asks the appellate judge to look closely at the error and estimate its effect on the trier-of-fact. A "correct result" test asks the judge to look at everything but the error and guess whether the verdict in a trial without it would have been different. In short, one test focuses on process; the other on the end result. Moreover, a "correct result," or "but-for," test asks the judge to exclude the wrongly admitted evidence (or include the wrongly rejected evidence) and weigh the evidence anewprecisely what DiGuilio forbids. See DiGuilio, 491 So.2d at 1136.
I submit the majority has read more into DiGuilio than what our supreme court said. Although the majority equates a "correct result" test with a "but for" test, I am not so sure our supreme court would do the same. What the supreme court made clear in DiGuilio is that the analysis of whether the error affected the verdict is to be conducted from the perspective of the jury (would the jury have reached the same decision without the error), and not from the perspective of the appellate panel (would the appellate panel have reached the same decision the jury reached if the error is excluded). I agree our supreme court has rejected a "correct result" test in DiGuilio; I do not agree it rejected a "but for" test.
A "but for" analysis is consistent with DiGuilio. In DiGuilio, the supreme court said: "If the appellate court cannot say beyond a reasonable doubt that the error did not affect the verdict, then the error is by definition harmful." That is simply another way of saying the error is harmful if the appellate court cannot say beyond a reasonable doubt, "but for" the error, the verdict would not have been the same. Determining whether error "affected the verdict" is no different from determining whether the winning party would have gotten its verdict without the error.
A "but for" analysis of harmless error in civil cases makes the exercise of divining the influence of error on the trier of fact easier, regardless of the burden of persuasion and regardless of whether the trier of fact is a jury or a judge. It also comports more with the history of why the statute was enacted: to curb the application of an overly liberal standard for granting new trials. Also, a "but for" analysis makes it easier for lawyers to predict outcomes and advise clients. I contend that a "but for" *778 analysis of harmless error is less prone to be criticized as too speculative and subjective.
If we are going to allow different standards for the application of harmless error depending on whether the case is criminal or civil, I am more comfortable with the more stringent "but for" test this district has adopted in civil cases because we are more tolerant of error in civil cases and because the stakes are different than criminal cases.[29] If this court is going to reformulate the harmless error test or standard to be applied to civil cases, I submit it should be this: "To avoid a new trial, the beneficiary of the error in the trial court must show on appeal that it is more likely than not that the decision of the trier of fact would have been the same without any influence of the error."[30]
Undoubtedly, the majority will contend my articulation is too "result oriented," whereas the majority's articulation is more "process oriented."[31] The distinction between the two formulations can be described this way: I submit the majority's articulation will lead to more reversals because assessing "influence on the trier of fact" is expressed as establishing a negative ("error did not influence") whereas my articulation focuses on establishing a positive (the result would have been the same). Establishing a negative is always more difficult than establishing a positive. Protecting the fairness of the fact-finding process should prevail over protecting finality of a decision in criminal cases, and the appellee should have to establish a negative to avoid reversal. However, in civil cases, protecting finality of a decision should prevail over protecting the fairness of the fact-finding process, and the appellee should have to establish a positive.
LEVINE, J., concurs.
NOTES
[1] In the field of evidence, another use of the term "collateral" concerns the ability to offer extrinsic evidence to contradict a witness's answer to a question posed on cross examination. As the first district observed in Faucher v. R.C.F. Developers, 569 So.2d 794 (Fla. 1st DCA 1990), overruled on other grounds by Ullman v. City of Tampa Parks Dep't, 625 So.2d 868 (Fla. 1st DCA 1993):
The law is well settled that it is improper to litigate purely collateral matters solely for the purpose of impeaching a party or witness. Once a question is put to the party or witness on a purely collateral matter for the purposes of impeachment, the proponent of the question is bound by the witness's answer; it is inappropriate to then try the truth or falsity of the answer on the collateral matter by adducing independent proof through other witnesses.
Id. at 804. Here, the plaintiff was attempting to ask Dr. Dildy a type of fact that could bear on his opinion under section 90.704, Florida Statutes (2009). The plaintiff's cross examination did not violate the rule stated in Faucher.
[2] Dr. Dildy also referred to this as a "waste-basket" diagnosis.
[3] We also reject the trial court's explanation that the evidence was unfairly prejudicial under section 90.403. This provision is not a general grant of authority to trial judges to bar evidence adversely impacting a party's position at trial; rather the concept of "unfair prejudice" pertains to "evidence which is directed to an improper purpose, such as evidence that inflames the jury or appeals improperly to the jury's emotions." Charles W. Ehrhardt, Florida Evidence § 403.1 (2006 ed.); see also Westley v. State, 416 So.2d 18, 19 (Fla. 1st DCA 1982) (same). Unfair prejudice within the meaning of section 90.403 does not arise from relevant inquiries directed at experts offering contrary opinions relevant to a material issue at trial.
[4] In addition to section 59.041, section 90.104, Florida Statutes (2009) provides that a court may reverse a judgment or grant a new trial on the basis of admitted or excluded evidence "when a substantial right of the party is adversely affected" and the point is properly preserved in the trial court. The primary contribution of the statute to the law is its requirement of preservation. Section 90.104 adds little to harmless error analysis; if admitted or excluded evidence does not adversely affect "a substantial right of a party," its admission cannot be a "miscarriage of justice" under section 59.041
Nonetheless, some cases involving evidentiary errors apply a harmless error test based on "injury to substantial rights." See, e.g., Tormey v. Trout, 748 So.2d 303 (Fla. 4th DCA 1999); Wall v. Alvarez, 742 So.2d 440 (Fla. 4th DCA 1999); Centex-Rooney Constr. Co. v. Martin Cnty., 706 So.2d 20 (Fla. 4th DCA 1997). See also Prince v. Aucilla River Naval Stores Co., 103 Fla. 605, 137 So. 886, 887 (1931) ("A judgment should not be reversed or new trial granted in any case for error in rulings upon the admission or rejection of evidence unless it shall appear to the court from a consideration of the entire case that such errors injuriously affect the substantial rights of the complaining party.") (citations omitted)).
[5] But see Roger J. Traynor, The Riddle of Harmless Error 4-8 (1970) (arguing that later cases applying a rule of per se reversal misinterpreted the Exchequer's decision in Barrett).
[6] O'Steen v. State, 92 Fla. 1062, 111 So. 725, 730 (1926) ("This jurisdiction appears to have followed what is known as the `orthodox English rule,' rather than the rule announced by the Court of Exchequer in 1830 ..."). See also McKay v. Lane, 5 Fla. 268, 276 (1853) ("This court has uniformly proceeded upon the practice not to reverse a judgment, however erroneously an isolated point may have been ruled by the Judge below, when it is clearly apparent that the party complaining has been in no degree injured by the improper ruling."); Hooker v. Johnson, 10 Fla. 198, 203 (1860) (same); Randall v. Parramore, 1 Fla. 409, 486, 1847 WL 1060 (1847) (same).
[7] See, e.g., Mayer v. Wilkins, 37 Fla. 244, 19 So. 632, 637 (1896) (holding with regard to erroneous jury charge that "injury is presumed" and reversal appropriate where Court could not say "that the misdirection of the court did not influence the result of the verdict"); Walker v. Parry, 51 Fla. 344, 40 So. 69, 71 (1906) (reversing for an erroneous jury charge, citing Mayer). See generally Wadsworth v. State, 201 So.2d 836, 841-43 (Fla. 4th DCA 1967) (Willson, Assoc. J., dissenting) (summarizing early history of harmless error in Florida), rev'd, 210 So.2d 4 (Fla. 1968).
[8] See generally Roger A. Fairfax, Jr., A Fair Trial, Not a Perfect One: The Early Twentieth-Century Campaign for the Harmless Error Rule, 93 Marq. L. Rev. 433 (2009) (chronicling the movement to curb excessive reversals by reforming harmless error rules).
[9] That proposed model provided:
No judgment shall be set aside, or new trial granted, by any court of the United States, in any case, civil or criminal, on the ground of misdirection of the jury or the improper admission or rejection of evidence, or for error as to any matter of pleading or procedure, unless, in the opinion of the court to which application is made, after an examination of the entire cause, it shall affirmatively appear that the error complained of has resulted in a miscarriage of justice.
33 A.B.A. Rep. 542, 550 (1908).
[10] There are two plausible explanations for the legislative softening of the language from the model statute. One explanation is that the problem of excessive reversals does not seem to have been as serious in Florida where the infamous Exchequer rule never fully took hold, compared to other jurisdictions. Legislators may have worried that a radical cure would be worse than the mild disease. Another explanation is that in a state like Florida, with a strong tradition of electing state judges, legislators expected that the ballot box would be a more effective check on abuses of judicial discretion than statutory rules, and therefore saw little purpose in tying judges' hands.
[11] See also Johnson v. State, 61 So.2d 179, 179 (Fla.1952) ("[A]ny error in allowing such statements to remain in the confession was harmless when considered in context with the entire record, and we cannot find that it could have had any effect whatsoever in the ultimate outcome of the case."); Cornelius v. State, 49 So.2d 332, 335 (Fla. 1950) ("In determining whether the error ... was harmful or prejudicial, we must decide upon examination of all the evidence whether the result would have been different had the improper evidence been excluded."); Banks v. State, 116 Fla. 834, 156 So. 905, 906 (1934) ("[U]nder the facts shown by the record, the jury should not have returned any other verdict than that which was returned.").
[12] Other civil cases applying the outcome oriented analysis are Rance v. Hutchinson, 131 Fla. 460, 179 So. 777, 780 (1938); Herman v. Peacock, 103 Fla. 438, 137 So. 704 (1931); Routh v. Richards, 103 Fla. 757, 138 So. 72 (1931).
[13] See also Josey v. Futch, 254 So.2d 786, 787 (Fla.1971) (following Stecher) ("[T]he essential consideration is evidence of influence on the jury....").
[14] In 1985, the year before DiGuilio, Justice Overton noted that the Florida Supreme Court had "never expressly set forth a harmless error test for the appellate courts of this state to apply in civil cases." Fla. Patient's Comp. Fund, Inc. v. Von Stetina, 474 So.2d 783, 793-94 (Fla. 1985) (Overton, J., concurring in part and dissenting in part). But Justice Overton added that, in general, "[t]he application of the harmless error statute requires an appellate court to consider the entire record and determine whether the verdict was affected by the error." Id. at 793.
[15] See Traynor, supra note 5, at 18-22 (arguing against a "correct result" test for harmless error); see also People v. Ross, 67 Cal.2d 64, 60 Cal.Rptr. 254, 429 P.2d 606, 620-21 (1967) (Traynor, C.J., dissenting) (same), rev'd, 391 U.S. 470, 88 S.Ct. 1850, 20 L.Ed.2d 750 (1968) (citing, inter alia, Chapman).
[16] See also Flores v. Allstate Ins. Co., 819 So.2d 740, 751 (Fla.2002) ("[I]f there has been error in the admission of evidence, the burden is on the beneficiary of the error to establish that the error was harmless." (citing Sheffield v. Superior Ins. Co., 800 So.2d 197, 203 (Fla.2001)).
[17] See also Tallahassee Mem'l Reg'l Med. Ctr. v. Meeks, 560 So.2d 778, 782 (Fla. 1990) ("Considering the totality of the evidence, we conclude that the introduction of this one privileged statement did not prejudicially affect the jury's determination of negligence and that no reversible error occurred in its admission.").
[18] Recently, now-Chief Justice Canady acknowledged the split in the lower courts over the test for harmless error:
The requisite prejudice to support overturning the judgment based on the jury's verdict can be established neither under a harmless error standard requiring a showing of a reasonable probability of a result more favorable to the appellant if the error had not occurred, see Damico v. Lundberg, 379 So.2d 964, 965 (Fla. 2d DCA 1979), nor under a standard requiring a showing that the appellant might have obtained a more favorable result but for the error, see National Union Fire Ins. Co. of Pittsburgh v. Blackmon, 754 So.2d 840, 843 (Fla. 1st DCA 2000).
Saleeby v. Rocky Elson Constr., Inc., 3 So.3d 1078, 1089 (Fla.2009) (Canady, J., dissenting) (emphasis in original).
[19] See Hayes v. State, 55 So.3d 699 (Fla. 4th DCA 2011) (civil commitment); Petit-Dos v. Sch. Bd. of Broward Cnty., 2 So.3d 1022 (Fla. 4th DCA 2009), rev. denied, 19 So.3d 311 (Fla.2009); Marshall v. State, 915 So.2d 264 (Fla. 4th DCA 2005) (civil commitment); Kammer v. Hurley, 765 So.2d 975 (Fla. 4th DCA 2000); Pascale v. Fed. Exp. Corp., 656 So.2d 1351 (Fla. 4th DCA 1995); Nationwide Mut. Fire Ins. Co. v. Vosburgh, 480 So.2d 140 (Fla. 4th DCA 1985); Aristek Cmtys., Inc. v. Fuller, 453 So.2d 547 (Fla. 4th DCA 1984); Anthony v. Douglas, 201 So.2d 917 (Fla. 4th DCA 1967). See also Dessanti v. Contreras, 695 So.2d 845, 849 (Fla. 4th DCA 1997) (Hauser, Assoc. J., concurring in part and dissenting in part) (citing Pascale, Aristek, and Anthony).
[20] See Witham v. Sheehan Pipeline Constr. Co., 45 So.3d 105 (Fla. 1st DCA 2010); Hogan v. Gable, 30 So.3d 573 (Fla. 1st DCA 2010); Healthcare Staffing Solutions, Inc. v. Wilkinson ex rel. Wilkinson, 5 So.3d 726 (Fla. 1st DCA 2009); Gold v. W. Flagler Assocs., Ltd., 997 So.2d 1129 (Fla. 3d DCA 2008); Jones v. Goodyear Tire & Rubber Co., 871 So.2d 899 (Fla. 3d DCA 2003); Nat'l Union Fire Ins. Co. of Pittsburgh v. Blackmon, 754 So.2d 840 (Fla. 1st DCA 2000); Katos v. Cushing, 601 So.2d 612 (Fla. 3d DCA 1992).
[21] See In re Commitment of DeBolt, 19 So.3d 335 (Fla. 2d DCA 2009); Esaw v. Esaw, 965 So.2d 1261 (Fla. 2d DCA 2007); Fla. Inst. for Neurological Rehab., Inc. v. Marshall, 943 So.2d 976 (Fla. 2d DCA 2006); Damico v. Lundberg, 379 So.2d 964 (Fla. 2d DCA 1979) (citing Stecher) (on rehearing).
[22] See, e.g., Hogan, 30 So.3d at 575; Gold, 997 So.2d at 1130-31 (also citing Marks); Blackmon, 754 So.2d at 843. See also Gencor Indus. Inc. v. Fireman's Fund Ins. Co., 988 So.2d 1206, 1209 (Fla. 5th DCA 2008); USAA Cas. Ins. Co. v. McDermott, 929 So.2d 1114, 1117 (Fla. 2d DCA 2006).
[23] It is unclear exactly what degree of probability the test requires. But we can safely assume that "may" implies a lesser degree of probability than "would," which implies near-certainty.
[24] This interpretation of the harmless error statute accords with the longstanding interpretation of a similar constitutional provision in another jurisdiction. Cf. Cal. Const. art. VI, § 13 (formerly art. VI, § 4 1/2); People v. Watson, 46 Cal.2d 818, 299 P.2d 243, 254 (1956) ("[A] `miscarriage of justice' should be declared only when the court, `after an examination of the entire cause, including the evidence,' is of the `opinion' that it is reasonably probable that a result more favorable to the appealing party would have been reached in the absence of the error." (citation omitted)).
[25] We also looked at the effect of the error on the trier of fact in another recent civil case. See Gen. Motors Corp. v. McGee, 837 So.2d 1010, 1036 (Fla. 4th DCA 2002) ("We agree with GM that two errors occurred during the trial, but we find those errors to be harmless in the context of this case ... The jury was not swept away by the emotions of the attorneys. The jury's verdict separated the issues of liability and damages from that of punitive damages.").
[26] See also Medina v. Peralta, 724 So.2d 1188, 1189-90 (Fla.1999) ("When examining an evidentiary ruling under section 59.041, we are required to look at the entire record.").
[27] In criminal cases, the burden of persuasion is "beyond a reasonable doubt." In civil cases, there are two possible burdens of persuasion, depending on the type of case: "preponderance" (the majority speaks of "more likely than not") and "clear and convincing."
[28] Because judges are trained in the law they are less likely to be affected by error as fact-finders. Also, my assumption is that trial judges are less likely to be swayed by emotion and subjective factors.
[29] I agree that with a more stringent standard, there is the potential that lawyers will engage in "win at all cost" tactics because the likelihood of reversal is less. However, that type of improper lawyer conduct is better addressed by sanctions against the lawyer than by reconvening a new jury to try the case.
[30] For civil cases in which the burden of persuasion is "clear and convincing" (such as Jimmy Ryce cases), my articulation would change the words "more likely than not" to "clear and convincing."
[31] Both DiGuilio and the majority express the harmless error analysis in terms of whether the error "contributed to the verdict." How does one determine that without being "result oriented?"
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01-03-2023
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/4060231/
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U.S. v. Norfleet
IN THE CASE OF
UNITED STATES, Appellee
v.
Donna M. NORFLEET, Staff Sergeant
U.S. Air Force, Appellant
No. 98-1131
Crim. App. No. S29280
United States Court of Appeals for the Armed
Forces
Argued December 8, 1999
Decided August 16, 2000
EFFRON, J., delivered the opinion of the
Court, in which GIERKE, J., and COX, S.J., joined. CRAWFORD, C.J., and
SULLIVAN, J., filed opinions concurring in part and in the result.
Counsel
For Appellant: Major Gilbert J. Andia, Jr,
USAFR (argued); Major Stephen P. Kelly and Captain Karen L. Hecker
(on brief); Colonel Douglas H. Kohrt, Lieutenant Colonel James
R. Wise, Lieutenant Colonel Ray T. Blank, Jr., Major Carol
L. Hubbard, and Major Thomas R. Uiselt.
For Appellee: Captain Christa S. Cothrel
(argued); Colonel Anthony P. Datillo, Lieutenant Colonel Ronald
A. Rodgers, and Captain Mitchel Neurock, USAFR (on brief).
Military Judge: James A. Young III
This opinion is subject
to editorial correction before publication.
Judge EFFRON delivered the opinion of the Court.
At a special court-martial, appellant pleaded
guilty to wrongful use of marijuana, in violation of Article 112a, Uniform
Code of Military Justice, 10 USC § 912a. She was sentenced by officer
members to a bad-conduct discharge and reduction to pay grade E-1. The
convening authority approved the sentence as adjudged, and the Court of
Criminal Appeals affirmed in an unpublished opinion dated July 22, 1998.
On appellants petition, we granted review
of the following issues:
I. WHETHER THE MILITARY JUDGE SHOULD HAVE
RECUSED
HIMSELF IN LIGHT OF THE INVOLVEMENT OF HIS
SUPERIORS IN THE PRETRIAL PROCESSING OF
APPELLANT'S CASE.
II. WHETHER, WITHOUT EXPLANATION,
THE AIR FORCE
PROVIDED LESS DUE PROCESS TO APPELLANT, AN
ENLISTED MEMBER, THAN IT PROVIDED TO AN OFFICER
IN A PREVIOUS COURT-MARTIAL IN THE SAME COMMAND.
III. WHETHER THE MILITARY JUDGE ERRED
BY NOT
REQUIRING THE GOVERNMENT TO SHOW THAT A STATED
REASON FOR A PEREMPTORY CHALLENGE OF A FEMALE
COURT MEMBER WAS NOT MERELY PRETEXTUAL.
For the reasons set forth below, we affirm.
I. THE MILITARY JUDGE
A. The factual setting
At the time the charges were preferred and
referred in this case, appellant was serving as a paralegal in the grade
of Staff Sergeant (E-5). Her duty station was the Area Defense Counsel
Office, RAF Lakenheath, in England. She was assigned for administrative
purposes, including military justice matters, to the Air Force Legal Services
Agency (AFLSA), located at Bolling Air Force Base, Washington, D.C. All
defense paralegals, area defense counsel, circuit counsel, and military
judges were assigned to the AFLSA. The AFLSA was attached to the 11th Wing
at Bolling AFB for host support, and the 11th Wing Commander was the convening
authority for courts-martial involving AFLSA personnel.
Appellant, who had 18 years of active service,
provided a urine sample in the course of a random inspection, and that
sample tested positive for marijuana. Based upon the test results, she
was charged with wrongful use of marijuana. The charge was preferred by
Captain Karyn Wright of the 11th Mission Support Squadron on December 5,
1995. The first indorsement, which was signed by the AFLSA Commander, Colonel
(Col.) William A. Moorman, forwarded the charge to the 11th Support Group.
In the indorsement, Col. Moorman stated:
I am forwarding the charge and specification
preferred against Staff Sergeant Donna M. Norfleet. Staff Sergeant Norfleet's
history of performance on assigned duties has been excellent. Due to my
position as Commander, Air Force Legal Services Agency, it is inappropriate
for me to make a recommendation as to disposition of the charges. I also
decline to make a recommendation as to rehabilitation potential. . . .
Subsequent to referral, but prior to commencement
of trial, Col. Richard Rothenburg replaced Col. Moorman as the AFLSA Commander.
On December 13, the charges were referred to a special court-martial by
Col. Steven A. Roser, the 11th Wing Commander.
The case was tried at RAF Mildenhall, England.
The Chief Judge of the Air Force's European Circuit, Col. James A. Young,
detailed himself to preside. At the outset of the trial, defense counsel
submitted a motion for appropriate relief, requesting (1) that "the military
judge recuse himself," and (2) that "a judge from another military service
. . . be detailed" to preside.
Defense counsel emphasized that the motion
did not constitute a challenge for cause, but focused instead on whether
the military judge should recuse himself under RCM 902(a), Manual for Courts-Martial,
United States (1998 ed.), which states that "a military judge shall disqualify
himself or herself in any proceeding in which that military judge's impartiality
might reasonably be questioned." Defense counsel emphasized that "the defense
does not possess any evidence nor make a claim that this or any Air Force
judge is personally biased against the accused." The motion reflected appellant's
view that "it is the appearance of fairness that should be of paramount
concern here."
In support of the motion, appellant noted that
the charges had been forwarded by the AFLSA Commander, who was in the direct
chain of command for both the accused and the military judge; that the
defense intended to challenge the processing of the case through motions
that "may necessarily call into question the actions of the members of
AFLSA"; and that the motions would "only further bring into light the role
played by AFLSA commanders, who are or may be direct raters and/or indorsers
of the Air Force military judge." In addition, appellant noted that the
AFLSA Commander "received the accused's request for discharge in lieu of
court-martial and (the defense assumes) provided a recommendation to the
Convening Authority, who denied the request." (Parenthetical in original.)
Appellant also took note of the fact that an Army judge had been detailed
to preside in United States v. Nichols, 42 M.J. 715 (AF Ct. Crim App
1995), involving charges against an Air Force defense counsel preferred
by the AFLSA Commander. Appellants motion further stated that if the motion
to recuse was denied, "our hands are going to be tied with regard to election
of our forum. . . . [W]e would be somewhat compelled into a selection of
members which may or may not necessarily be the way we would have proceeded
had a different branch of the service had a military judge sit on this
case."
Appellant followed this with a motion challenging
the processing of the case. In that motion, appellant contended that the
AFLSA Commander's decision to forward the charges without recommendation
was inconsistent with the Discussion accompanying RCM 306(c)(5), which
states that when a "commander . . . lack[s] authority to take action .
. ., the matter should be forwarded to a superior officer with a recommendation
as to disposition." Appellant also alleged that the AFLSA Commander's decision
to not set forth a recommendation violated RCM 401(c)(2)(A), which provides:
"When charges are forwarded to a superior commander for disposition, the
forwarding commander shall make a personal recommendation as to disposition.
If the forwarding commander is disqualified from acting as convening authority
in the case, the basis for the disqualification shall be noted." In addition,
appellant alleged that the AFLSA Commander had failed to refer appellant
for a substance abuse evaluation, as required by Air Force Instruction
36-2701, and that such an evaluation could have provided "important insight
into the nature of the offense and the extenuating and mitigating factors
to be considered." In appellant's view, the omissions of the AFLSA Commanders
constituted an abuse of discretion because "in their desire to appear 'nonconflicted,
they have not carried out their obligations as her commander."
The defense counsel asked for permission to
question the military judge on the issue of disqualification or for the
military judge "to state for the record exactly where you fall within th[e]
chain of command and your relationship to both the past and current Air
Force Legal Services Agency Commander." The military judge responded: "All
right, I'll do that. You may, of course, voir dire me if you'd like; but
I will put that on the record first." He then described his relationship
to the AFLSA by noting that as Chief Military Judge of the European Circuit,
his Officer Performance Report (OPR) was written by Col. James Heupel,
the Chief Air Force Trial Judge. His OPR was indorsed by Col. Rothenburg,
who served both as the Director of the Judiciary and the Commander of the
AFLSA. The military judge subsequently noted that his performance report
was subject to further review by the Judge Advocate General of the Air
Force, Major General Hawley. The defense counsel noted that he had "[n]o
questions with the chain of command as you've outlined it" and did not
voir
dire the military judge.
After considering the arguments of counsel,
the military judge noted that he had taken an oath as an officer "to do
my duty under law" and had also "taken an oath to dispense justice impartially."
He added that Col. Heupel had taken "a similar oath," and that Col. Rothenberg
and Major General Hawley, who previously served as military judges, would
be "familiar with the judge's oath and [would] readily understand the need
for independence of trial judges." He summarized his 6 years of service
as a trial and appellate judge, observing that he had issued a variety
of rulings against the Government and that he had never received "any criticism
of any of my rulings" from his supervisors, from the Judge Advocate General,
or in his performance reports.
With respect to the issues raised by the defense,
he observed that he did not know the accused, that he did not know why
Col. Moorman had "forward[ed] the charges without recommendations," and
that it appeared that neither party had asked Col. Moorman to give his
reasons for that action. He observed that Col. Rothenberg's recommendation
to disapprove the request for discharge in lieu of court-martial had stated
that the charges "involve[d] illegal drugs, a special concern in the Air
Force," that appellant was a noncommissioned officer (NCO) with over 17
years experience, and that appellant "held a special position in the administration
of justice as a defense paralegal when she committed the alleged offense."
He added that the act of forwarding charges or disapproving a discharge
in lieu of court-martial did not represent "a conclusion that the person
is guilty but rather an expression that the issue should be resolved by
a court." He specifically stated that in ruling on the recusal motion he
"consider[ed] the fact that the defense intends to litigate the appropriateness
of the preferral and referral of the charges in this case." He also noted
that Col. Heupel had "appoint[ed] an Army judge to try the Nichols case,"
which "eliminate[d] any appellate issue" in that case, but he was not compelled
to do so in the present case because the Air Force probably had not been
"legally required" to use a judge from another service in Nichols.
The military judge stated, "I feel absolutely
no pressure from anyone to resolve this case or any of the issues involved
in this case in any manner inconsistent with my understanding of the law
and my own conscience." He denied the recusal motion, concluding that "a
reasonable person who knew all these facts would not question my impartiality
in this case."
The military judge then considered appellant's
motion challenging the propriety of the forwarding and referral of charges.
He concluded that relief was not warranted, noting: (1) the Commander of
the AFLSA was not required to provide a recommendation as to disposition
under RCM 401(c)(2)(B); (2) the Commander's rationale -- "that he did not
want to create any appearance" of preferring a "particular disposition"
-- constituted "a good faith basis for declining to provide a recommendation";
(3) even if appellant should have been referred administratively for substance-abuse
evaluation, failure to do so was not "an impediment to the referral of
charges"; and (4) the convening authority considered the particular facts
and circumstances of appellant's case, and the referral did not constitute
an abuse of discretion.1
On review in the court below pursuant to Article
66, UCMJ, 10 USC § 866 (1994), appellant renewed her challenge to
the actions surrounding referral of the charge and the decision of the
military judge to not recuse himself. Appellant again noted that in a separate
case involving charges against an Air Force defense counsel, United
States v. Nichols, 42 M.J. 715, 718 (AF Ct. Crim. App. 1995), the Air
Force had detailed an Army military judge, and she claimed that the failure
to do the same in her case was a denial of due process.
The Court of Criminal Appeals rejected appellant's
claim that it was improper for the AFLSA commander to forward the charge
without recommendation, noting that her guilty plea had waived the issue.
The court added that even if not waived, there was no requirement for the
forwarding commander to submit a recommendation since the case was being
forwarded to a parallel commander rather than a superior commander. See
RCM 401(c)(2)(B). Unpub.op. at 3. With respect to recusal, the court found
that in light of "the disclosures made by the military judge, no reasonable
person aware of th[e] facts would have questioned his fairness or impartiality."
See
RCM 902. The court also held that the Air Force was not bound to take the
same action in appellant's case -- detailing a military judge from another
service -- as it had taken in Nichols. The court noted that in Nichols,
"the AFLSA Commander actually preferred the charges," whereas in the present
case, the commander had simply forwarded the charge without recommendation.
The court also indicated that because the action in Nichols was
based on different facts, it did not bind the Air Force to take the same
action in a separate and different case. Unpub.op. at 4.
B. Background -- The Trial Judiciary
in the Military Justice System
From the Revolutionary War through World War
I, courts-martial consisted of panels of officers in which all questions
-- including interlocutory issues -- were decided by the panel as a whole.
See
W. Winthrop, Military Law and Precedents 172 (2d ed. 1920 Reprint); paras.
89-90, Manual for Courts-Martial, 1917 at 46; §§ 370-71, Naval
Courts and Boards, 1937. In 1920, the Articles of War (AW 8 and 31) were
amended to provide that in Army general courts-martial, the convening authority
would appoint "one of the members" of the panel to serve as the law member.
Normally, the law member was a judge advocate, but a "specially qualified"
officer could be appointed if a judge advocate was not available. Act of
June 4, 1920, 41 Stat. 787. In addition to serving as a voting member of
the court-martial panel on the findings, sentence, and challenges, the
law member of a general court-martial was authorized to rule on interlocutory
matters. Except for certain evidentiary issues, however, the rulings of
the law member could be overruled by a majority of the panel. In the absence
of a law member, and at all special courts-martial, the president of the
court-martial ruled upon all interlocutory matters, including evidentiary
questions, and the rulings of the president were subject to being overruled
by a majority of the panel. AW 31 (1920); para. 51, Manual for Courts-Martial,
United States, 1928.
The substantial criticism of the military justice
system as it operated in World War II led to enactment of the Uniform Code
of Military Justice, which contained a wide variety of reforms designed
to minimize the influence of command over the court-martial process. See
Edmund M. Morgan, The Background of the Uniform Code of Military Justice,
6 Vand. L.Rev. 169 (1953); H.R. Rep. No. 491, 81st Cong., 1st Sess. 6-7
(1949); S. Rep. No. 486, 81st Cong., 1st Sess. 3-4,6 (1949). Among the
most significant changes, Congress required (in Article 26(a), UCMJ2)
the appointment in general courts-martial of a "law officer," an attorney
"certified to be qualified for such duty by the Judge Advocate General"
of the service concerned. Unlike the "law member," the law officer did
not serve as a member of the court-martial panel, but instead was assigned
powers and duties similar to those of a civilian judge. Arts. 26(b) and
51, UCMJ.3 Act of May
5, 1950, ch. 169, 64 Stat. 117, 124. The law officer ruled finally on most
interlocutory questions, and as implemented in the Manual for Courts-Martial,
United States, 1951, and under the decisions of this Court, provided authoritative
instructions to the members on matters of law and assumed general responsibility
"for the fair and orderly conduct of the proceedings." See para.
39(b)(1); see generally paras. 61(c), 70, 73, and 76, 1951
Manual, supra; United States v. Biesak, 3 USCMA 714, 722,
14 CMR 132, 140 (1954) (equating "the status of the law officer, wherever
possible, to that of a civilian judge of the Federal system").
Although the Judge Advocate General certified
the qualifications of law officers under Article 26 of the new Code, the
appointment of a law officer to particular courts-martial was made by the
commander convening the court. There was no provision for appointment of
a law officer to preside over special courts-martial.
Congress further enhanced the role of the trial
judiciary in the Military Justice Act of 1968, 82 Stat. 1336. As noted
in the report of the Senate Armed Services Committee, the legislation was
designed to "streamline court-martial procedures in line with procedures
in U.S. district courts, to redesignate the law officer of a court-martial
as a 'military judge' and give him functions and powers more closely aligned
to those of Federal district judges, . . . [and] to increase the independence
of military judges and members and other officials of courts-martial from
unlawful influence by convening authorities and other commanding officers
. . . ." S. Rep. No. 1601, 90th Cong., 2d Sess. 3 (1968). The Committee
noted that the legislation would "provide for the establishment within
each service of an independent judiciary composed of military judges certified
for duty on general courts-martial who are assigned directly to the Judge
Advocate General of the service and are responsible only to him or his
designees for direction and fitness ratings." Id. at 7. The applicable
legislation has remained unchanged since the 1968 amendments.4
To separate the military judiciary from the
traditional lines of command, Article 26(b) provides that military judges
who preside over general courts-martial must be certified as qualified
by the Judge Advocate General of the service concerned. Under Article 26(c),
the military judge "shall be designated for detail" to preside over specific
courts-martial by "the Judge Advocate General, or his designee," and must
be assigned to an organization "directly responsible to the Judge Advocate
General, or his designee" in which his or her "primary duty" is to serve
as a military judge. To further enhance the independence of judicial decisionmaking
by military judges, Article 26(c) provides that no convening authority
and no member of the convening authority's staff may "prepare or review
any report concerning the effectiveness, fitness, or efficiency of the
military judge ... which relates to his performance of duty as a military
judge."5
Congress has provided that an otherwise properly
certified military judge would be disqualified from presiding in the same
case in which he or she: (1) is an accuser, see Art. 1(9), UCMJ,
10 USC § 801(9); (2) is a witness for the prosecution; (3) acted as
the investigating officer; or (4) acted as counsel for either party. Art.
26(d).
A military judge is not statutorily disqualified
from presiding in a case involving an accused who is superior in rank or
grade to the military judge or who is a member of the same unit as the
military judge, in contrast to the limitations on who may serve as a member
of a court-martial panel. See, e.g., Art. 25(d)(1), UCMJ,
10 USC § 825(d)(1) (the general prohibition against service on a court-martial
panel by a person junior in rank or grade to the accused); Art. 25(c)(1)
(precluding service on a court-martial panel by an enlisted person from
the same unit as the accused).
The legislative history and the structure of
the legislation reflect the fact that Congress established the position
of military judge within the context of the military establishment, rather
than as a separate entity. The position of military judge may be filled
only by a "commissioned officer," not a civilian. Compare Art. 26(b)
with
Art. 66(a). As such, the military officers who serve as military judges
are subject to the personnel practices that apply to military officers
in general, including involuntary assignment to a position outside the
judiciary, involuntary geographic reassignment, review by promotion and
retention boards that are not limited to considering military judges, and
absence of tenure in the position.6
Military judges receive standard officer performance reports, subject to
the limitations in Article 26(c).
Military judges are expected to render decisions
that may adversely impact on their superior officers. When the accused
is a field grade or general officer, it would not be unusual for the presiding
military judge to be an officer of lower grade than the accused. At trial,
actions of an officer superior in grade to the military judge frequently
are at issue, such as search authorizations and matters involving allegations
of command influence. In such cases, the military judge has the authority
to order the superior officer to appear and testify, and may issue rulings
that require the superior to take or withhold certain actions -- including
rulings that reflect adversely on the performance of the superior officer.
In some cases, these judicial rulings also may contradict directly the
legal opinions of judge advocates superior in grade to the military judge,
including opinions of the Judge Advocate General of the military department
concerned. Whatever discomfort these circumstances may have created in
an earlier era, the military establishment has long since accepted these
functions of the military judiciary as essential to the maintenance of
a military justice system that not only is fair, but that also is perceived
to be fair by members of the armed forces and the public.
The tension created by the placement of the
military judiciary within the officer personnel structure requires military
judges to be sensitive to particular circumstances that may require consideration
of recusal. The fact that military judges may issue rulings adverse to
the interests of superior officers, however, does not in itself preclude
those judges from exercising independence in their judicial rulings. We
note that while certain aspects of these concerns reflect particular features
of military personnel practices, any tension between status and independence
is not unique to the military. The circumstances faced by military judges
are not at all dissimilar from those facing judges in those state court
systems that provide for relatively brief terms of office, particularly
those that provide for popular election of judges or retention through
the electoral process.
In Weiss v. United States, 510 U.S.
163, 179 (1994), the Supreme Court concluded that "the applicable provisions
of the UCMJ, and corresponding regulations, by insulating military judges
from the effects of command influence, sufficiently preserve judicial impartiality
so as to satisfy the Due Process Clause" even though military judges do
not have fixed terms of office.7
The Court specifically noted that our Court "has demonstrated its vigilance
in checking any attempts to exert improper influence over military judges."
Id.
at 181, citing United States v. Mabe, 33 M.J. 200 (1991) (the Judge
Advocate General or that officer's designee may not base the periodic rating
of a military judge upon the rater's opinion of appropriateness of the
sentences awarded by the judge), and United States v. Graf, 35 M.J.
450, 465 (1992) (noting that decertification or transfer of a military
judge based upon the Judge Advocate General's opinion of the sentences
awarded by the judge would violate Articles 26 and 37, UCMJ, 10 USC §
837), cert. denied, 510 U.S. 1085 (1994). See also
United States v. Ledbetter, 2 M.J. 37 (disapproving official inquiries
questioning decisions by military judge unless conducted in accordance
with statutory standards, or, in the absence of such standards, under professional
guidelines applicable in the civilian sector).8
Pursuant to the rulemaking authority in Article
36, UCMJ, 10 USC § 836, the President has supplemented Article 26
by prescribing RCM 902, "Disqualification of military judge." RCM 902 is
based on the statute governing disqualification of federal civilian judges,
28 USC § 455. See Analysis of Rules for Courts-Martial, Manual,
supra
(1998 ed.) at 21-49. RCM 902(a) states: "[A] military judge shall disqualify
himself or herself in any proceeding in which that military judges impartiality
might reasonably be questioned." RCM 902(b) details five circumstances
constituting specific grounds for disqualification of a military judge:
(1) "personal bias or prejudice"; (2) acting in specified disqualifying
capacities "as to any offense charged or in the same case generally"; (3)
being a "witness in the same case" or an "accuser," as well as having "forwarded
charges in the case with a personal recommendation as to disposition" or
"expressed an opinion concerning the guilt or innocence of the accused";
(4) disqualification under RCM 502(c) or not being properly detailed under
RCM 503(b); and (5) being related "within the third degree of relationship"
to a party, a person with an interest in the outcome, or a likely material
witness in the case.
We have held that preparation of fitness reports
for appellate military judges by senior judge advocates does not create
a circumstance in which the impartiality of a judge might reasonably be
questioned under RCM 902(a). United States v. Mitchell, 39 M.J. 131,
cert.
denied, 513 U.S. 874 (1994). Where a personnel action involving a military
judge raised a question as to whether the action was taken in response
to complaints about "light" sentences by the judge, we held that the judge's
full disclosure on the record of the reasons for the personnel action,
and his reasonable disavowal of any impact on his decisionmaking, obviated
any requirement for disqualification under RCM 902(a). United States
v. Campos, 42 M.J. 253, 261 (1995). We have noted that "[j]udges have
broad experiences and a wide array of backgrounds that are likely to develop
ties with other attorneys, law firms, and agencies." United States v.
Wright, 52 M.J. 136, 141 (1999). Personal relationships between members
of the judiciary and witnesses or other participants in the court-martial
process do not necessarily require disqualification. See United
States v. Hamilton, 41 M.J. 32, 38-39 (CMA 1994).
Where no actual bias or prejudice is shown,
as in the present case, the issue of disqualification under RCM 902(a)
is considered under an objective standard: "Any conduct that would lead
a reasonable man knowing all the circumstances to the conclusion that the
judges impartiality might reasonable be questioned is a basis for the
judges disqualification." United States v. Kincheloe, 14 M.J. 40,
50 (CMA 1982), quoting E. Thode, Reporters Notes to Code of Judicial
Conduct 60 (1973); see also Wright, 52 MJ at 141.
We have emphasized that "[w]here the military judge makes full disclosure
on the record and affirmatively disclaims any impact on him, where the
defense has full opportunity to voir dire the military judge
and to present evidence on the question, and where such record demonstrates
that appellant obviously was not prejudiced by the military judges not
recusing himself, the concerns of RCM 902(a) are fully met." Campos,
42 MJ at 262; see also United States v. Cornett, 47
M.J. 128, 131 (1997). The decision of a military judge not to recuse himself
or herself is reviewed on appeal for abuse of discretion. Mitchell,
39 MJ at 144 n.7.
B. Discussion
In the present case, appellant has not alleged
that there was any actual conflict, bias, or prejudice that would serve
to disqualify the military judge. The fact that the military judge was
assigned to the same organization and shared a similar professional affiliation
as both appellant and those who processed her case do not constitute factors
that would establish a per se disqualification of a military judge
from sitting on an accuseds case.
In terms of the actions under consideration
at trial, we note that there was nothing unusual or controversial about
the issues raised by the defense concerning the processing of the charges
or the request for discharge in lieu of court-martial by the AFLSA commanders.
Any experienced military judge would be fully aware of the administrative
requirements undertaken by commanders under the UCMJ and Manual for Courts-Martial,
and that such actions would support no inference adverse to an accused
sitting before the military judge. We hold that the fact that those actions
were taken by officers in the chain of command above both the military
judge and this appellant created no risk that the military judge would
fail to perform his normal judicial duties.
Moreover, in the present case, the superiors
took themselves out of the decisionmaking process with respect to referral
of charges. Their decision to do so reflected a desire to avoid any conflict-of-interest
issues. The fact that the military judge had to rule on the propriety of
their doing so did not raise an issue so controversial that an adverse
decision would have had a significant and lasting direct impact on their
professional reputations for competence and integrity. The issues in this
case reflect the type of disagreements as to the meaning of policies and
regulations that military judges decide on a daily basis without concern
for the career impact on themselves, regardless of the role of senior commanders
or judge advocates in crafting those policies or regulations.
Based upon the nature of the issues at stake,
the full disclosure by the military judge on the record of his background
and approach to the case, and the opportunity provided to the defense to
voir
dire the military judge, we are confident that appellant received
a fair trial presided over by an impartial military judge and that a reasonable
observer with knowledge of all the facts would not question the military
judges impartiality.
Each such case must be assessed on its own
merits. Other facts and circumstances might call for a different approach.
We have recognized the possibility that judicial officials may have relationships
which cast suspicion upon their fairness or impartiality, and which provide
a basis to seek that judges disqualification. Compare United
States v. Crider, 21 USCMA 193, 196, 44 CMR 247, 250 (1972), with
United States v. Hurt, 9 USCMA 735, 753, 27 CMR 3, 21 (1958). There
may be cases in which the ruling by a military judge on an issue would
have such a significant and lasting adverse direct impact on the professional
reputation of a superior for competence and integrity that recusal should
be considered. Few disagreements as to an issue of law are likely to fall
in that category.
We hold that appellant was provided her constitutional,
statutory, and regulatory rights to an impartial military judge. There
were neither specific grounds to disqualify this military judge, nor any
other grounds upon which this military judges impartiality might reasonably
be questioned.
We also reject appellants claim that she was
denied due process because she was not tried by a military judge from another
service. She had an impartial judge. The fact that in one other case, an
Air Force supervisory judge decided to use another service military judge
out of an abundance of caution does not establish a legal requirement that
the same be done for appellant; nor does it establish a binding requirement
in all future cases. We would not want to discourage judicial and military
justice officials from taking appropriate action to moot potential appellate
issues. Absent a showing that such action was taken in a manner that created
a pattern of discrimination against enlisted persons or that it was taken
for the purpose of discriminating against a suspect class, we conclude
there is no merit to appellants claim that she was denied due process.
II.PEREMPTORY CHALLENGE
A. The Factual Background
Appellants trial was convened with a panel consisting
of five members. Major Fox was the only female detailed to the court. The
voir
dire did not reveal any grounds to challenge Major Fox for cause. Trial
counsel exercised the Governments peremptory challenge against Major Fox.
Defense counsel requested that trial counsel articulate a gender-neutral
reason for the peremptory challenge. Without prompting from the military
judge, trial counsel offered two reasons for exercising the peremptory
challenge against Major Fox: (1) Major Fox had "far greater court-martial
experience than any other member," and trial counsel "did not want the
possibility of her using that experience to dominate the panel and therefore
having a panel of one instead of five"; and (2) as a commander, Major Fox
recently had disputes with the legal office, and trial counsel was concerned
with potential "animosity" carrying over to the case. Defense counsel requested
specifics on the nature of the disagreements with the legal office. The
military judge, however, stated, "They dont have to. They gave me a neutral
reason. The peremptory challenge is granted."
B.Governing Legal Principles
Both federal civilian trial and court-martial
practices condemn the discriminatory use of peremptory challenges. To ensure
that justice is not tainted by purposeful discrimination, both jurisdictions
have adopted procedures designed to permit challenges to discriminatory
use of peremptory challenges and to make a public record reflecting the
proper, nondiscriminatory use of peremptory challenges. See Purkett
v. Elem, 514 U.S. 765, 115 S. Ct. 1769, 131 L. Ed. 2d 834 (1995); Batson
v. Kentucky, 476 U.S. 79, 106 S. Ct. 1712, 90 L. Ed. 2d 69 (1986); United
States v. Greene, 36 M.J. 274 (CMA 1993); United States v. Santiago-Davila,
26 M.J. 380 (CMA 1988). The right to challenge discriminatory use of peremptory
challenges exists whether or not an accused is of the same race as the
challenged juror; an accused may assert the equal protection rights of
an excluded juror. Powers v. Ohio, 499 U.S. 400, 111 S. Ct. 1364,
113 L. Ed. 2d 411 (1991). Discriminatory use of peremptory challenges is
harmful to justice regardless of which party exercises that challenge.
See
Georgia v. McCollum, 505 U.S. 42, 112 S. Ct. 2348, 120 L. Ed. 2d 33
(1992).
The rationale and procedures developed under
Batson
also are applicable to peremptory challenges based upon gender.
J.E.B.
v. Alabama ex rel T.B., 511 U.S. 127, 114 S. Ct. 1419, 128 L. Ed. 2d 89
(1994). We have specifically extended the holding in J.E.B. to court-martial
procedure. United States v. Witham, 47 M.J. 297 (1997),
cert. denied,
522 U.S. 1115 (1998); see also United States v. Ruiz,
49 M.J. 340 (1998).
In view of the differences between a civilian
jury and a court-martial panel, there are some differences between military
and civilian practice in terms of litigating a Batson issue. In
civilian courts, the objecting party must make "a prima facie case of purposeful
discrimination," Batson 476 U.S. at 93-94, whereas in military courts
no prima facie showing is required where the accused is of the same
racial group or gender as the challenged member. See United States
v. Moore, 28 M.J. 366, 368 (CMA 1989); United States v. Ruiz,
supra.
We have also found that the differences between
civilian trials and courts-martial practice warrant a different standard
for assessing the validity of race-neutral reasons offered in support of
a peremptory challenge. In United States v. Tulloch, 47 M.J. 283 (1997),
we held that in view of the convening authoritys power of selection of
court-martial members on the basis of the criteria in Article 25(d)(2),
UCMJ, 10 USC § 825(d)(1), military counsel must articulate a reasonable
racially neutral explanation that is not "implausible, or that otherwise
makes no sense." Tulloch, supra at 287.
C. Discussion
Trial counsel offered two reasons for striking
Major Fox: (1) her "far greater court-martial experience . . . and the
government did not want the possibility of her using that experience to
dominate the panel," and (2) a dispute with the legal office that trial
counsel did not want to "spill over to this case." Because both reasons
are facially gender neutral, we are not dealing with a situation such as
that presented in Greene, 36 MJ at 282, where one of the explanations
offered by trial counsel revealed patently impermissible discrimination.
Were such a circumstance to exist, we would not shelter purposeful discrimination
under the umbrella of a separate proper basis for a peremptory challenge.
Appellant urges that trial counsels first
asserted reason (prior court-martial experience) for striking Major Fox
was unreasonable. The Court of Criminal Appeals questioned the validity
of this reason, noting that Major Foxs experience as a court member was
"directly related to her experience and judicial temperament, two of
the specific statutory criteria the convening authority must consider when
selecting court members." The court, however, sustained the peremptory
challenge on the basis of the second, separate reason set forth by trial
counsel. Unpub. op. at 5-6.
Because trial counsel's first asserted reason
was not facially discriminatory, we may confine our consideration to trial
counsel's second reason, which referred to a recent dispute between Major
Fox and the legal office. Although it might have been helpful for the military
judge to permit further testimony concerning the details of the underlying
dispute between Major Fox and the legal office, we cannot say that his
failure to do so constituted an abuse of discretion. Trial counsel's reference
to a dispute between the member and the legal office set forth a reasonable,
gender-neutral basis for the peremptory challenge. We find nothing in this
record to undermine trial counsels basic assertion that Major Fox had
had a disagreement with the legal office. That fact, and the articulated
concern that Major Fox might harbor a lingering animosity toward the legal
office, constituted a valid reason for the peremptory challenge.
When the proponent of a peremptory challenge
responds to a Batson objection with (1) a valid reason and (2) a
separate reason that is not inherently discriminatory and on which the
opposing party cannot demonstrate pretext, the denial of the Batson
motion may be upheld on appeal. This is such a case.
III. DECISION
The decision of the United States Air Force
Court of Criminal Appeals is affirmed.
FOOTNOTES:
1 In the appeal
to our Court, appellant has not challenged the propriety of the forwarding
and referral of charges.
2
Current version codified at 10 USC § 826.
3
Current version codified at 10 USC § 851.
4
Other provisions of the 1968 legislation that enhanced the powers of the
trial judiciary, and which remain in effect, included amendments to: Art.
16, UCMJ, 10 USC § 816 (authorizing judge-alone trials in special
and non-capital (Art. 18, UCMJ, 10 USC § 818) general courts-martial);
Art. 19, UCMJ, 10 USC § 819 (precluding adjudication of a bad-conduct
discharge by a special court-martial unless a military judge presided,
with limited exceptions); Art. 39(a), UCMJ, 10 USC 839(a) (authorizing
sessions without the panel members present in which the military judge
may arraign the accused, receive pleas, dispose of motions and other interlocutory
matters, and conduct similar proceedings); Art. 41, UCMJ, 10 USC §
841 (assigning responsibility to the military judge for ruling on challenges
against members or the judge); Art. 49, UCMJ, 10 USC § 849 (authorizing
the military judge to rule on the propriety of depositions); Art. 51 (providing
for the military judge to instruct the court-martial panel on issues of
law and to rule finally on questions of law and virtually all interlocutory
matters); and Art. 54, UCMJ, 10 USC § 854 (assigning responsibility
for authentication of the record to the military judge).
5
This limitation does not apply in the rare instance that either the President
or Service Secretary would serve as the convening authority. Art. 26(c).
6
The Army has recently established a regulatory system of tenure. See
paras. 8-1g and 13-12, Army Regulation 27-10, "Military Justice" (20 August
1999).
7See
n.5, supra.
8
Subsequently, Congress in 1989 enacted Article 6a, UCMJ, 10 USC §
806a, which requires the President to prescribe procedures governing investigation
and disposition of matters concerning the fitness of military judges. The
legislative history notes that the procedures, "to the extent consistent
with the [UCMJ], ... should emulate the standards and procedures that govern
investigation and disposition of allegations concerning judges in the civilian
sector." H.R. Conf. Rep. No. 331, 101st Cong., 1st Sess. 659 (1989).
Chief Judge CRAWFORD (concurring in part and
in the result):
I concur with Part I of the opinion. As my
colleague's excellent historical analysis demonstrates, if there is any
"tension" created by the necessity of placing military judges within an
officer personnel structure, I am fully confident that their judicial independence
will allow them to make any and all rulings that are necessary in the interests
of justice.
As I said in my dissent in United States
v. Tulloch, 47 M.J. 283, 289 (1997), our Court is bound by Supreme Court
precedent. When challenged by defense counsel to articulate a gender-neutral
reason for the peremptory challenge of Major Fox, trial counsel responded
with two gender-neutral reasons. Nothing more was required. See
Purkett v. Elem, 514 U.S. 765 (1995). Trial counsel's explanations,
that Major Fox had "far greater court-martial experience than any other
member" and had been engaged in disputes with the legal office, are attributes
that are not characteristic of either gender. I have also been unable to
discover any differences between civilian trials and courts-martial that
would cause me to eschew the standards set forth by the Supreme Court and
create a new test for assessing the validity of race or gender neutral
reasons offered in support of any peremptory challenge. Accordingly, I
disassociate myself from any test that examines the genuineness of a peremptory
challenge in a manner other than as set forth by the Supreme Court in Purkett
v. Elem, supra.
SULLIVAN, Judge (concurring in part and in
the result):
I join Chief Judge Crawfords separate opinion
in this case. I too would hold that Purkett v. Elem, 514 U.S. 765
(1995), controls the granted issue and that it was satisfied in this case.
See
United States v. Tulloch, 47 M.J. 283, 289 (1997) (Sullivan, J., dissenting).
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78 P.3d 1121 (2003)
Jack LANG; Kenneth Ellis, Sr.; and George Red Pennington, Plaintiffs-Appellants,
v.
BANK OF DURANGO, a Colorado corporation, and Jim Schoen, Defendants-Appellees.
No. 02CA0701.
Colorado Court of Appeals, Div. III.
March 27, 2003.
Certiorari Denied October 20, 2003.
Abadie & Zimsky, LLC, William E. Zimsky, Durango, Colorado, for Plaintiffs-Appellants.
Crane, Leake, Ehlers & Eggleston, P.C., Duke Eggleston, Durango, Colorado, for Defendants-Appellees.
Opinion by Judge ROY.
Plaintiffs, Jack Lang, Kenneth Ellis, Sr., and George Red Pennington, appeal the trial court's judgment dismissing their complaint against defendants, Bank of Durango and Jim Schoen, an officer of the bank. We affirm.
In 1996, the bank made two Small Business Administration (SBA) loans totaling $750,000 to a borrower to finance the construction of a bar and dance hall. Later, when the borrower's needs exceeded the amount of the SBA loans, it applied for a Farmers Home Administration loan (refinance loan). While the refinance loan was pending, the borrower applied for several bridge loans from plaintiffs and others to pay contractors and subcontractors while it got approval and funding of the refinance loan. However, the refinance loan was never approved and funded. The borrower then defaulted on all the bridge loans after filing for bankruptcy.
*1122 Plaintiffs, in their first amended complaint, alleged negligent misrepresentation, fraud, and unjust enrichment. As a factual predicate, they alleged that they made the bridge loans based on the bank's assurances that the permanent refinancing loan had been approved and was to be funded within thirty to sixty days, at which time the bridge loans would be paid off.
Defendants moved to dismiss the claims under C.R.C.P. 12(b)(5), asserting that the credit agreement statute of frauds, § 38-10-124, C.R.S.2002, barred the action because it involved an oral credit agreement.
Shortly before plaintiffs brought this action, another lawsuit, Schoen v. Morris, 15 P.3d 1094 (Colo.2000), was commenced in the trial court against defendants. The case involved virtually identical allegations, but was brought by another lender. In Schoen, the claims for relief were based on oral representations made by defendants to the effect that the refinancing loan had been approved and would be funded within thirty to sixty days. In that case, the trial court dismissed the action based on the credit agreement statute of frauds.
These proceedings here were stayed pending the outcome of the appellate proceedings in Schoen. The supreme court there held that claims based on the oral representations made by defendants were barred by the credit agreement statute of frauds.
Plaintiffs' first amended complaint raised claims that were virtually identical to those raised in Schoen. Therefore, shortly after the supreme court's decision was issued, plaintiffs moved for leave to file a second amended complaint and then a third amended complaint adding additional claims for relief in an obvious effort to avoid the decision in Schoen.
After the parties fully briefed plaintiffs' motion for leave to file a third amended complaint, the trial court denied that motion and granted defendants' motion to dismiss, holding that plaintiffs' complaint was ultimately based on the oral representations from defendants and so was barred by the credit agreement statute of frauds. This appeal followed.
At the outset, we note that the court never granted leave to file the second and third amended complaints pursuant to C.R.C.P. 15(a), and plaintiffs' arguments on appeal center on the allegations in the proposed third amended complaint. However, in oral argument defendants invited us to consider the third amended complaint on appeal even though the trial court did not grant leave to file it. We accept that invitation and agree with defendants that the third amended complaint would not avoid, and would therefore be barred by, the credit agreement statute of frauds.
I.
Plaintiffs first assert that the trial court erred in concluding that the credit agreement statute of frauds, § 38-10-124, bars their claims of negligent misrepresentation and fraud. We disagree.
When reviewing a trial court's dismissal under C.R.C.P. 12(b)(5), we apply the same standards as the trial court and accept all averments of material fact as true in the light most favorable to the plaintiff. Coors Brewing Co. v. Floyd, 978 P.2d 663 (Colo.1999). Rule 12(b)(5) motions are viewed with disfavor and should not be granted unless it appears beyond doubt that the plaintiff cannot prove facts in support of the claim that would entitle the plaintiff to relief. Dunlap v. Colorado Springs Cablevision, Inc., 829 P.2d 1286 (Colo.1992).
The credit agreement statute of frauds provides: "Notwithstanding any statutory or case law to the contrary ... no debtor or creditor may file or maintain an action or a claim relating to a credit agreement involving a principal amount in excess of twenty-five thousand dollars unless the credit agreement is in writing...." Section 38-10-124(2), C.R.S.2002.
As relevant here, a credit agreement is a "contract, promise, undertaking, offer, or commitment to lend, borrow, repay, or forbear repayment of money, to otherwise extend or receive credit, or to make any other financial accommodation." Section 38-10-124(1)(a)(I), C.R.S.2002.
*1123 In their third amended complaint, plaintiffs asserted that the borrower, with the full knowledge of and participation by defendants, submitted a false or misleading financial statement to the SBA in obtaining the original financing through defendants and failed to disclose that fact to them. They asserted that the SBA loan was, therefore, voidable and that had they known this fact, they would not have advanced funds to the borrower. They further asserted that defendants had an interest in misleading or defrauding them in that the funds from the bridge loans were to be used to pay contractors and subcontractors with lien rights and those payments directly improved the value of the defendant bank's position.
In their search for a written instrument to avoid the credit agreement statute of frauds, plaintiffs settled on this false or misleading financial statement. Plaintiffs do not assert that they relied on the false or misleading financial statement in making their loans, but assert only that it jeopardized the underlying permanent financing.
In our view, Schoen v. Morris, supra, is dispositive. The supreme court there held that the credit agreement statute of limitations applied to relationships other than lender-borrower or creditor-debtor and applied to the relationship at issue here. Specifically, it held that the oral representations made by the bank to the bridge lender constituted credit agreements as defined under the credit agreement statute of frauds.
The supreme court concluded that the phrase "credit agreements" should have a broad definition. It applies not only to claims involving transactions, that are characterized exclusively as credit agreements, but also to claims that merely relate to credit agreements. The court held that the plain language of the statute indicates that the bank's assurances constituted a "commitment to lend" money to borrower and thus a "credit agreement" under the credit agreement statute of frauds. Schoen v. Morris, supra.
Here, plaintiffs initially alleged in their first amended complaint that the bank made oral assurances that the refinancing loan had been approved and was to be funded shortly and that it was upon these assurances that plaintiffs made their decision to make the bridge loan. We conclude that Schoen v. Morris is dispositive as to the first amended complaint.
As to the third amended complaint, plaintiffs alleged:
44. [Defendants] intentionally failed to disclose to the Plaintiffs that the financial statement used by [borrower] for [its] two SBA loans contained materially false information that put the viability of those SBA loans and [borrower's] ongoing viability in serious jeopardy.
....
58. The representation made by the Bank through its employee and Bank officer Jim Schoen was made with the intention that it would be acted upon by the Plaintiffs.
59. Plaintiffs acted on the representation that the SBA loans were in good standing
....
It is evident that the third amended complaint suffers from the same infirmities as the first amended complaint, that is, the failure to allege that plaintiffs relied on defendants' alleged oral misrepresentations. Therefore, Schoen is dispositive of the third amended complaint.
Moreover, the credit agreement statute of frauds requires that, to be actionable, the written credit agreement must be "signed by the party against whom enforcement is sought." Section 38-10-124(2). Here, the third amended complaint did not allege that defendants signed the false or misleading financial statement.
Accordingly, we agree with the trial court that the credit agreement statute of frauds bars plaintiffs' claims.
II.
Plaintiffs next contend that the trial court erred in concluding that the credit agreement statute of frauds bars their claim of unjust enrichment. We disagree.
The credit agreement statute of frauds expressly bars all claims relating to a credit agreement unless the credit agreement is in writing. Section 38-10-124(2). Moreover, *1124 the statute expressly bars the equitable claims of part performance and promissory estoppel: "A credit agreement may not be implied under any circumstances, including, without limitation, from the relationship, fiduciary or otherwise, of the creditor and the debtor or from performance or partial performance by or on behalf of the creditor or debtor, or by promissory estoppel." Section 38-10-124(3), C.R.S.2002. In addition, legislative history indicates that the statute is to be broadly applied. See Schoen v. Morris, supra. The general counsel for the Colorado Bankers Association, who sponsored the bill, testified: "[Such claims are barred] to make it absolutely certain that there are no exceptions to the statute of frauds as [it applies] to $25,000 ... loan agreements and above from financial institutions." Hearings on H.B. 1116 before the House Business Affairs Committee, 57th General Assembly, First Session (Jan. 19, 1989); see also Schoen v. Morris, supra. Thus, the legislative history shows an intent to impose a broad ban on claims arising from oral representations made by financial institutions.
We, therefore, conclude that because legislative history and case law strongly disfavor any type of claim involving oral credit agreements, a claim for unjust enrichment that arises from an oral assertion regarding a credit agreement is barred by the credit agreement statute of frauds.
Here, the third amended complaint, as quoted above, directly relates to the oral representations made by the bank, and thus plaintiffs' claim of unjust enrichment is barred by the credit agreement statute of frauds.
Accordingly, the trial court properly concluded that plaintiffs' unjust enrichment claim is barred by the statute of frauds.
The judgment is affirmed.
Judge DAVIDSON and Judge WEBB concur.
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12 A.3d 179 (2011)
197 Md. App. 48
DEPARTMENT OF HUMAN RESOURCES, Montgomery County Office of Child Support Enforcement, ex rel. Andrea Allison
v.
Keith Scott MITCHELL, Sr.
No. 11, September Term, 2008.
Court of Special Appeals of Maryland.
January 27, 2011.
*181 Brady Neitzell (Joseph Spillman, Douglas Gansler, Atty. Gen., on the brief), Baltimore, MD, for appellant.
Sameer Sidh, Ellicott City, MD, for appellee.
Panel: [*]SALMON, MEREDITH, and WOODWARD, JJ.
WOODWARD, J.
Appellants, the Maryland Department of Human Resources and Montgomery County Office of Child Support Enforcement ("MCOCSE")[1], appeal from the decision of the Circuit Court for Montgomery County regarding child support due to Andrea Allison ("Andrea"), a resident of Alabama, for the care of her children, Diana Allison ("Diana")[2] and Keith Scott Mitchell, Jr. ("Keith Jr."). In January 2007, MCOCSE registered with the circuit court a 1992 New York divorce decree that ordered appellee, Keith Scott Mitchell, Sr. ("Keith Sr."), to pay child support for his children, Diana and Keith Jr. Keith Sr. at first contested registration of the order but then withdrew his challenge. Later, Keith Sr. and MCOCSE agreed to a Consent Modified Child Support Order. The consent order provided, inter alia, that Keith Sr. was no longer obligated to support Keith Jr. because Keith Jr. was emancipated and that Keith Sr.'s support obligation for Diana was increased.
At the time of the filing of the consent order, however, Keith Sr. filed a request to set aside the declaration of his paternity of Diana. After a DNA test was conducted, it was revealed that Keith Sr. was not Diana's biological father. Thereafter, over MCOCSE's opposition, the circuit court excluded Keith Sr. as the father of Diana, vacated the registration of the New York decree and the Maryland consent order, and nullified Keith Sr.'s child support arrears relating to Diana. This appeal followed.
MCOCSE presents one question for our review, which we have rephrased as two questions[3]:
I. Did the circuit court err in concluding that the parentage of Diana had not been determined previously by the State of New York?
II. Did the circuit court err in permitting Keith Sr. to utilize the defense of nonparentage in the proceeding to register and enforce the New York divorce decree?
Finding error, we reverse and remand for further proceedings.
BACKGROUND
Keith Sr. and Andrea (then Andrea Mitchell) were granted a Divorce Judgment in New York, on March 18, 1992 (the "New York divorce decree" or the "New York support order"). The New York divorce decree noted that Andrea would have custody "of the child(ren) of the marriage, *182 i.e." Keith Jr., born June 8, 1987, and Diana, born February 17, 1990. The decree further ordered Keith Sr. to pay child support to Andrea in the total amount of $62 per week "for all children."
On January 24, 2007, at the request of Alabama, MCOCSE filed the New York support order in the Circuit Court for Montgomery County, pursuant to the Uniform Interstate Family Support Act ("UIFSA"),[4] along with a request to file a foreign child support order. On February 15, 2007, Keith Sr., acting pro se, filed an answer to the request to file a foreign child support order in which he raised the defense that Keith Jr. was emancipated. In his answer, Keith Sr. made no mention of Diana or his parentage of her. On April 11, 2007, a hearing was held before a Special Master of the Circuit Court for Montgomery County on Keith Sr.'s opposition to MCOCSE's request to file a foreign child support order. At that hearing Keith Sr. withdrew his opposition to the registration of the foreign order. Keith Sr. also signed a Line, filed on April 19, 2007, stating that "[Keith Sr.] withdraws his petition/opposition to registration of the Foreign Support Order."
Meanwhile, on March 6, 2007, MCOCSE filed a Motion for Modification of the foreign support order in which MCOCSE claimed that the "incomes and expenses of the custodial and non-custodial parents have materially changed, warranting an increase/decrease in the amount of support." On April 11, 2007, Keith Sr. filed an answer to MCOCSE's motion for modification denying that there had been a material change in the parties' incomes and expenses warranting an increase in the amount of child support. That same day Keith Sr. also filed a Counter-Petition/Motion to Modify Child Support. In his counter-petition, Keith Sr. alleged that "our eldest child, Keith Jr. is emancipated by age and other factors." Again, Keith Sr. failed to mention Diana or his parentage of her. Indeed, in the request for relief in his counter-petition, Keith Sr. asked the circuit court, among other things, to "reduce the number of minor children from 2 to 1."
On June 21, 2007, a hearing was held on MCOCSE's motion for modification before a Special Master of the circuit court. At that hearing, a Consent Modified Child Support Order between Keith Sr. and MCOCSE was submitted to the court. The consent order increased Keith Sr.'s child support obligation from $62.00 per week for both children to $483.00 per month for Diana and eliminated any ongoing support obligation for Keith Jr. The consent order also set forth Keith Sr.'s total arrears for both children at $41,345.83 as of June 21, 2007.
On June 21, 2007, Keith Sr. also filed a Request to Set Aside Declaration of Paternity and Request for Modification of Child Support. In his request, Keith Sr. stated his belief that he was not Diana's father because, according to Keith Sr., Andrea "admitted I am not the Father and I was in military [sic] when child was conceived." In the request, Keith Sr. asked the court to order the parties and Diana to undergo a DNA test to determine whether Keith Sr. could be excluded as Diana's father. MCOCSE filed no response to Keith Sr.'s request for genetic testing, and on July 12, 2007, the circuit court entered an order granting the requested test. On October 11, 2007, MCOCSE filed the results of a *183 paternity test, which determined that Keith Sr. was not Diana's biological father.
On October 17, 2007, MCOCSE filed a response to Keith Sr.'s Request to Set Aside Declaration of Paternity and Request for Modification of Child Support. In its response, MCOCSE claimed that Keith Sr.'s paternity of Diana had been determined under the law of New York by virtue of the New York divorce decree and that under Maryland Code (1984, 2006 Repl.Vol.), § 10-327 of the Family Law Article ("F.L."), parentage of a child that has been previously determined by or pursuant to law cannot be raised as a defense under a UIFSA action. MCOCSE also asserted that Keith Sr. failed to file a timely challenge to the validity or enforcement of the New York support order, as is required by F.L. § 10-345, and even if he had, non-paternity was not a defense available to Keith Sr. in contesting the validity or enforcement of a registered order under F.L. § 10-346. MCOCSE concluded by asking the circuit court to deny Keith Sr.'s request to set aside the New York paternity determination and to deny Keith Sr.'s request to modify the Consent Modified Child Support Order dated June 21, 2007.
On January 18, 2008, the circuit court held a hearing at which it concluded that there had been no determination of paternity by New York, that the defense of nonparentage was available to Keith Sr. in the instant case, and that it was "kind of a logical absurdity to require him to continue paying and paying for past [sic] for a child that's not his." On February 1, 2008, the circuit court entered an order that, inter alia, excluded Keith Sr. as Diana's father, vacated both the registration of the New York support order and the Consent Modified Child Support Order, and nullified the arrears Keith Sr. owed for Diana. On February 11, 2008, MCOCSE filed a motion for reconsideration, which was denied on February 29, 2008. Thereafter, MCOCSE filed a timely notice of appeal.
DISCUSSION
MCOCSE argues that the circuit court erred when it allowed Keith Sr. to raise a defense of nonparentage of Diana. Specifically, MCOCSE contends that under UIFSA, this defense is barred when parentage has previously been determined. According to MCOCSE, Keith Sr.'s New York divorce decree that referred to Diana and Keith Jr. as "children of the marriage" and set a child support obligation was a determination of parentage.[5]
Keith Sr. responds that the New York divorce decree created only a presumption of parentage, and was not a determination of parentage.[6] According to Keith Sr., under *184 Maryland law, a "properly ordered" paternity test, as here, rebuts the presumption of paternity based on Diana's conception during Keith Sr. and Andrea's marriage. Keith Sr. further contends that UIFSA allowed him to raise the defense of nonparentage as a "defense under the laws of this State." Finally, Keith Sr. argues that, when the circuit court modified the New York support order, it assumed "continuing and exclusive jurisdiction," and thus UIFSA ceased to apply.
Standard of Review
The instant appeal concerns the proper interpretation of the UIFSA statute. Where "the issue is the circuit court's interpretation of [a] statute, and, thus, a question of law, our review of the circuit court's decision is de novo." Hernandez v. Hernandez, 169 Md.App. 679, 688, 906 A.2d 429 (2006).
I.
In rendering its decision, the circuit court below stated: "I don't think there was a determination [as to Keith Sr.'s paternity], as contemplated by the statute[,] in New York." As a result, in its final order, the circuit court directed "that pursuant to genetic testing ordered by this court ... and the results thereof ... [Keith Sr.] be and hereby is excluded as the father of the minor child [Diana], born February 17, 1990." MCOCSE contends that, under New York law, Keith Sr.'s paternity of Diana had been previously determined by the New York court. We agree.
A Determination of Parentage by New York
In Sandra I. v. Harold I., 54 A.D.2d 1040, 388 N.Y.S.2d 376 (N.Y.App. Div.1976), a husband and wife were divorced by a decree that "awarded petitioner, the mother, `sole custody of the infant issue of the marriage of the parties hereto, viz., Bradford * * * age 2 years', and also awarded her $60 weekly for the support and maintenance of herself and the child." Id. at 377. Later, the father sought to terminate the support order and deny his paternity. Id. The mother claimed the issue of paternity was barred by the doctrine of res judicata. Id. The Supreme Court of New York, Appellate Division, determined that res judicata did not apply, but concluded instead that "a question of collateral estoppel rather than res judicata [was] presented." Id. Under that doctrine, however, the Court rejected the father's attempt to challenge paternity. The Court reasoned:
There can be no question that the issue of paternity was decided in the divorce action when the specific finding was made that Bradford "I" * was the "infant issue of the marriage". Such a finding was necessary and was required to be made on the issue of support which was before the Supreme Court for determination in the divorce action. Before an order of support could be made in that action, the court necessarily made a determination of paternity, as only a "parent" may be ordered to support his or her child.
Id. at 378 (emphasis added) (citation omitted).
The Supreme Court of New York, Appellate Division, came to the same conclusion in Jeanne M. v. Richard G., 96 A.D.2d 549, 465 N.Y.S.2d 60 (N.Y.App.Div.1983), a case in which the mother challenged the Family Court's order for a blood test for paternity in the course of a child support modification proceeding. Id. at 61. The Supreme Court reversed the order granting the blood test. Id. The appellate court stated:
*185 There can be no question that the issue of paternity was decided in a prior divorce action and prior child support proceedings. Before an order of support could be made, the court necessarily made a determination of paternity, as only a "parent" may be ordered to support his or her child. We conclude, therefore, that respondent is collaterally estopped from now raising the issue of his paternity and that the Family Court erred in ordering the HLA blood test.
Id. at 61-62 (emphasis added) (citations omitted).
In the instant case, the New York divorce decree stated:
ORDERED AND ADJUDGED that:
1. [Keith Sr.] shall have judgment that the marriage of the parties is dissolved on the evidence found in the Findings of Fact and Conclusions of Law....
2. Andrea ... shall have custody of the child(ren) of the marriage, i.e.
NAME DATE OF BIRTH
[Keith, Jr.] 6/8/87
Diana Sade Mitchell 2/17/90
3. [Keith Sr.] shall have visitation rights with the children of the marriage to be arranged with [Andrea].
* * *
5. Ordered and Adjudged that [Keith Sr.[7]] shall pay to ... Andrea ... by check or money order drawn to that individual's order and forwarded on ... the first day of the month... after the date of this judgment... the sum of $62.00 ... for all children for the support of the children, making a total sum of $62.00 per week; ...
(Emphasis added).
The decree clearly refers to Keith Jr. and Diana as "the children of the marriage." The decree also establishes a support obligation on Keith Sr., "for all children," which means that the court "necessarily made a determination of paternity, as only a `parent' may be ordered to support his or her child." Jeanne M., 465 N.Y.S.2d at 61. Consequently, Keith Sr. would be "collaterally estopped from now raising the issue of his paternity." Id. We therefore conclude that, under New York law, the New York divorce decree did not merely raise a presumption regarding the paternity of Keith Jr. and Diana, but instead, the New York divorce decree constituted a determination of Keith Sr.'s paternity of Keith Jr. and Diana. Accordingly, the circuit court erred by concluding that there was not a "determination, as contemplated by the statute[,] in New York."
II.
The circuit court also ruled that F.L. § 10-346 of UIFSA "does provide an opportunity for [Keith Sr.] ... to challenge [the New York support order], ... under the laws of this state ... based on the paternity test." MCOCSE argues that, under UIFSA, Keith Sr. was barred from raising the defense of nonparentage of Diana in the UIFSA proceeding below. We conclude that, not only was Keith Sr. barred from raising the defense of nonparentage, but, even if he had such right, he waived it.
*186 UIFSA
"UIFSA was originally drafted by the National Conference of Commissioners on Uniform State Laws...." Holbrook v. Cummings, 132 Md.App. 60, 64, 750 A.2d 724, cert. granted, 360 Md. 273, 757 A.2d 809 (2000). Since its revision in 1996, "[m]ost United States jurisdictions have... enacted UIFSA as their local law." Id. at 65, 750 A.2d 724. "Maryland substantially adopted the major provisions of UIFSA effective January 1, 1997, as ... [F.L.] § 10-301 et seq." Id.
Under UIFSA, "[a] support order ... issued by a tribunal of another state may be registered in this State for enforcement." F.L. § 10-340. UIFSA provides a statutory scheme that, among other provisions, establishes jurisdiction in Maryland circuit courts, see F.L. §§ 10-302 and 10-304, and grants the circuit courts power to enforce and modify support orders, see F.L. §§ 10-309 and 10-350. F.L. § 10-341 sets forth the procedure for initiating registration of a foreign order. Under that section, a person or entity seeking registration of a foreign order must send to the appropriate circuit court a letter requesting registration, "two copies, including one certified copy, of the order to be registered," a sworn statement showing the amount of any arrearage, the name and certain information about the obligor, and "the name and address of the obligee and, if applicable, the person to whom support payments are to be remitted."
Upon filing, an order is registered and may be "enforce[d] in the same manner and is subject to the same procedures as an order issued by a tribunal of this State." F.L. § 10-342(b). The circuit court "shall recognize and enforce, but may not modify, a registered order if the issuing tribunal had jurisdiction."[8] F.L. § 10-342(c). Subject to certain exceptions, "the law of the issuing state governs" the order. F.L. § 10-343(a). The circuit court, however, "shall apply the procedures and remedies of [Maryland] to enforce current support and collect arrears and interest due on a support order of another state registered in [Maryland]." F.L. § 10-343(c).
"When a support order ... issued in another state is registered, the registering [circuit court] shall notify the nonregistering party." F.L. § 10-344(a). The notice must include a copy of the order and certain information regarding the rights of the nonregistering party and the implications of registration of the order. F.L. § 10-344. In particular, the nonregistering party must be informed "that a hearing to contest the validity or enforcement of the registered order must be requested within 20 days after the date of mailing or personal service of the notice." F.L. § 10-344(b)(2). If the nonregistering party requests a hearing, then "[t]he nonregistering party may seek to vacate the registration, to assert any defense to an allegation of noncompliance with the registered order, or to contest the remedies being sought or the amount of any alleged arrearages pursuant to § 10-346 of this subtitle." F.L. § 10-345(a). "If the nonregistering party fails to contest the validity or enforcement of the registered order in a timely manner, the order is confirmed by operation of law." F.L. § 10-345(b) (emphasis added).
UIFSA allows "the party contesting enforcement of the registered order, to assert one or more of seven enumerated defenses." Super. Ct. of Ca. v. Ricketts, *187 153 Md.App. 281, 345, 836 A.2d 707 (2003). Those defenses are found in F.L. § 10-346, which provides:
(a) Defenses.A party contesting the validity or enforcement of a registered order or seeking to vacate the registration has the burden of proving one or more of the following defenses:
(1) the issuing tribunal lacked personal jurisdiction over the contesting party;
(2) the order was obtained by fraud;
(3) the order has been vacated, suspended, or modified by a later order;
(4) the issuing tribunal has stayed the order pending appeal;
(5) there is a defense under the law of this State to the remedy sought;
(6) full or partial payment has been made;
(7) the statute of limitation under § 10-343 of this subtitle precludes enforcement of some or all of the alleged arrearages; or
(8) the alleged controlling order is not the controlling order.
(b) Remedies when defense established.If a party presents evidence establishing a full or partial defense under subsection (a) of this section, a tribunal may stay enforcement of the registered order, continue the proceeding to permit production of additional relevant evidence, and issue other appropriate orders. An uncontested portion of the registered order may be enforced by all remedies available under the law of this State.
(c) Failure to establish defense.If the contesting party does not establish a defense under subsection (a) of this section to the validity or enforcement of the order, the registering tribunal shall issue an order confirming the order.
(Emphasis added).
In sum, "[a]fter a foreign judgment has been duly filed, the grounds for reopening or vacating it are limited to lack of personal or subject matter jurisdiction of the rendering court, fraud in procurement (extrinsic), satisfaction, lack of due process, or other grounds that make the judgment invalid or unenforceable." Ricketts, 153 Md.App. at 345, 836 A.2d 707 (emphasis and quotations omitted).
In addition to the limitations on defenses enumerated in F.L. § 10-346, F.L. § 10-327 provides: "A party whose parentage of a child has been previously determined by or pursuant to law may not plead nonparentage as a defense to a proceeding under this subtitle." The Comment to this section in the Interstate Family Support Act (1996) states:
Arguably this section does no more than restate the basic principle of res judicata. However, there is a great variety of state law regarding presumptions of parentage and available defenses after a prior determination of parentage. This section is intended neither to discourage nor encourage collateral attacks in situations in which the law of a foreign jurisdiction is at significant odds with local law. If a collateral attack on a parentage decree is permissible under the law of the issuing jurisdiction, such an action must be pursued in that forum and not in a UIFSA proceeding. In sum, this section mandates that a parentage decree rendered by another tribunal is not subject to collateral attack in a UIFSA proceeding. Of course, an attack on an alleged final order on a fundamental constitutional ground is permissible in the forum state, such as a denial of due process *188 because of a failure of notice and opportunity to be heard or a lack of personal jurisdiction over a party who did not answer or appear.
(Emphasis added).
Keith Sr. contends that under F.L. § 10-346(a)(5), he can raise the defense of nonparentage of Diana, because it is a "defense under the laws of this State." Keith Sr. points to two Maryland statutes for the proposition that "if a child is either born or conceived during a marriage a presumption of parentage is created, not a declaration." According to Keith Sr., those statutes are Maryland Code (1974, 2001 Repl.Vol.), § 1-206 of the Estates & Trusts Article ("E.T."), which provides that "[a] child born or conceived during a marriage is presumed to be the legitimate child of both spouses," and F.L. § 5-1027(c), which provides that, when a child is born during a marriage, it creates a rebuttable presumption that the parties of the marriage are the parents of that child. Keith Sr. concludes that this presumption was "easily" rebutted by the genetic test results showing that he was not the father of Diana and thus is a defense under the laws of Maryland to the New York support order within the meaning of F.L. § 10-346(a)(5). The circuit court agreed with Keith Sr. We do not.
In our view, Keith Sr. overlooks F.L. § 10-327, which expressly prohibits nonparentage as a defense in a UIFSA proceeding. In other words, the Maryland legislature has declared, in no uncertain terms, that nonparentage is not "a defense under the laws of this State" to the validity or enforcement of a registered order under UIFSA. To hold otherwise would render F.L. § 10-327 nugatory and thus violate the tenet of statutory construction that "[a] statute must be read so that no word, clause, sentence, or phrase is rendered superfluous or nugatory." Comptroller of the Treasury v. Sci. Applications Int'l Corp., 405 Md. 185, 198, 950 A.2d 766 (2008). We therefore conclude that the circuit court erred by holding that Keith Sr. could raise the defense of nonparentage under F.L. § 10-346(a)(5).
Waiver
We also conclude that, even if Keith Sr. could have raised the defense of nonparentage under F.L. § 10-346(a)(5), he waived his right to do so under the facts of the instant case. We explain.
In the instant case, MCOCSE filed a Request to File Foreign Child Support Order with the circuit court on January 24, 2007. Included with the filing was a statement of the support amount, arrearages, information about the obligor, and information about the obligee. On January 26, 2007, the clerk of the court sent Keith Sr. a Notice of Filing of Foreign Child Support Order consistent with the provisions of F.L. § 10-344. On February 15, 2007, the twentieth day after notice was sent to Keith Sr., he filed an answer to the Request to File Foreign Child Support Order. In his answer, Keith Sr., acting pro se, stated: "In my defense, I also want the [c]ourt to consider the following facts ... 19 year old son not living with mother supporting himself. Request emancipation from child support payment." The answer did not raise the defense of nonparentage of Diana, nor did it even mention Diana. Shortly thereafter, the clerk set the matter in for a hearing on April 11, 2007.
As previously stated, at the hearing on April 11, 2007, Keith Sr. withdrew his opposition to the registration of the New York support order. Keith Sr. and MCOCSE also signed a Line, filed on April 19, 2007, stating that "[Keith Sr.] withdraws his petition/opposition to registration of the Foreign Support Order." The Line also asked the circuit court to *189 remove the case from the April 11, 2007 hearing calendar. Because Keith Sr. withdrew his opposition to the registration of the New York support order and rescinded his request for a hearing under F.L. § 10-345, he was no longer a "party contesting the validity or enforcement of a registered order or seeking to vacate the registration" under F.L. § 10-346(a), and thus Keith Sr. was not entitled to raise any of the defenses set forth in that section.[9] Moreover, the aforementioned actions of Keith Sr. constituted a failure "to contest the validity or enforcement of the registered order." F.L. § 10-345(b). Consequently, F.L. § 10-345(b) directs that the New York support order be "confirmed by operation of law." Therefore, we hold that Keith Sr. waived his right to raise any defenses, including nonparentage of Diana, to the validity or enforcement of the New York support order under F.L. § 10-346(a).[10]
Modification of a Support Order Under UIFSA
On June 21, 2007, Keith Sr. and MCOCSE signed a Consent Modified Child Support Order that set Keith Sr.'s monthly child support payment for Diana at $483 per month, established his arrearages at $41,345.83, and removed Keith Jr. from further support. The Consent Modified Child Support Order was approved by the circuit court and entered on June 22, 2007. The modification was carried out pursuant to F.L. §§ 10-349 and 10-350, which establish the procedures for modification of a registered foreign support order and the consequences of such modification.
F.L. § 10-349 states that a registered child support order of another state may be modified only if the requirements of F.L. § 10-350 have been met.[11] F.L. § 10-350(a) provides:
(a) When permitted.If § 10-352 of this subtitle does not apply, except as otherwise provided in § 10-353.1 of this subtitle, on the filing of a complaint, a tribunal of this State may modify a child support order issued in another state that is registered in this State if, after notice and hearing, the tribunal finds that:
(1) the following requirements are met:
(i) neither the child, nor the obligee who is an individual, nor the obligor resides in the issuing state;
(ii) a plaintiff who is a nonresident of this State seeks modification; and
(iii) the defendant is subject to the personal jurisdiction of the tribunal of this State; or
(2) this State is the state of residence of the child or a party who is an individual is subject to the personal jurisdiction of the tribunal of this State and all of the parties who are individuals have filed consents in a record in the issuing tribunal for a tribunal of this State to *190 modify the support order and assume continuing, exclusive jurisdiction.
(Emphasis added). The result of modification is that, "[o]n issuance of an order by a tribunal of this State modifying a child support order issued in another state, the tribunal of this State becomes the tribunal of continuing, exclusive jurisdiction." F.L. § 10-350(e) (emphasis added).
Keith Sr. argues that, when the Consent Modified Child Support Order was approved by the circuit court, the circuit court became the tribunal of "continuing and exclusive jurisdiction," and as a result, "the order essentially became a Maryland order, and therefore outside the scope of UIFSA." Because, according to Keith Sr., UIFSA did not apply to the instant case "once the child support order was modified, nonparentage ceased to be barred as a defense by UIFSA under [F.L.] § 10-327." Keith Sr. contends that he was then able to challenge the New York paternity determination by the Maryland presumption of paternity under E.T. § 1-206 and F.L. § 5-1027(c), along with the genetic test results excluding him as the father of Diana. We disagree and explain.
"Jurisdiction is defined as power over the subject matter and parties to suit, from which power the court derives authority to hear the case on the merits." Stewart v. State, 21 Md.App. 346, 348, 319 A.2d 621 (1974), aff'd, 275 Md. 258, 340 A.2d 290 (1975). "The term ... imports not only power over the parties to the action but the right to adjudicate as to the subject matter in a given case." Zouck v. Zouck, 204 Md. 285, 302, 104 A.2d 573 (1954). In the context of UIFSA, granting "continuing, exclusive jurisdiction" is an essential part of effectuating orderly enforcement and modification of child support orders between states. Speaking for this Court in Ricketts, Judge Ellen Hollander elaborated:
UIFSA provides procedural and jurisdictional rules for interstate child support proceedings, including the enforcement of foreign child support orders. Among other things, UIFSA implements the one-order system. This means that only one state's order governs, at any given time. [ ] This necessarily requires all other states to recognize that order and to refrain from modifying it unless the first state has lost jurisdiction. Under this proposition, only one state controls the support obligation, and once that state obtains jurisdiction, it then has continuing exclusive jurisdiction over the parties.
153 Md.App. at 319, 836 A.2d 707 (citations and quotations omitted).
Keith Sr. does not cite, and we have not found, any support for the proposition that, once a circuit court modifies a registered foreign child support order under UIFSA and thereby obtains continuing, exclusive jurisdiction, UIFSA no longer applies. The statutory provisions granting the circuit court the authority to modify a registered order, as well as continuing, exclusive jurisdiction, are part of the UIFSA statute itself. There is simply no language in UIFSA that provides, expressly or impliedly, that UIFSA does not apply upon the entry of an order modifying a registered order. Moreover, Keith Sr.'s interpretation of "continuing, exclusive jurisdiction" under UIFSA would allow the avoidance of an express provision of UIFSA, namely, F.L. § 10-327. To allow Keith Sr. to utilize nonparentage as a defense because the support order was registered and modified in Maryland would not only render F.L. § 10-327 nugatory, but it would frustrate the purpose of UIFSA and the system of interstate cooperation and respect that the uniform law represents by disregarding New York's parentage determination.
*191 We agree with appellee that UIFSA empowered the circuit court to modify the New York support order. The circuit court, however, was not empowered under the facts of the instant case to vacate the New York support order or its registration in Maryland or render a determination of paternity. Nor was the circuit court entitled to vacate the modified order based on the impermissible defense of nonparentage. See F.L. § 10-327. Therefore, we conclude that the circuit court erred by vacating the Notice of Filing of Foreign Support Order and the Consent Modified Child Support Order, determining that Keith Sr. was not the father of Diana, and otherwise modifying Keith Sr.'s support obligation and arrearages regarding Diana.
JUDGMENT OF THE CIRCUIT COURT FOR MONTGOMERY COUNTY REVERSED AND CASE REMANDED TO THAT COURT FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION; COSTS TO BE PAID BY APPELLEE.
NOTES
[*] James P. Salmon, J., participated in the hearing and conference of this case while an active member of this Court; he participated in the adoption of this opinion as a specially assigned member of this Court.
[1] We will refer to appellants simply as "MCOCSE."
[2] Throughout the pleadings and record this child is variably referred to as Deanna and Diana. Because we have been provided no explanation for this inconsistency, we have chosen to utilize the name recorded on the 1992 New York divorce decree, Diana.
[3] MCOCSE's question is: "Did the circuit court err in excluding [Keith Sr.] as the father of his daughter, when it allowed nonparentage as a defense to enforcement of child support, despite a 1992 New York divorce judgment that found him to be the father?"
[4] All references to UIFSA are to the Maryland Code (1984, 2006 Repl.Vol., 2010 Cum. Supp.), Family Law Article.
[5] MCOCSE also argues that the circuit court's judgment also violated the "Full Faith and Credit Clause of the United States Constitution, U.S. Const. art. IV, § 1, and the federal Full Faith and Credit for Child Support Orders Act, 28 U.S.C. § 1738B." Specifically, MCOCSE contends that the New York divorce decree, which determined Keith Sr.'s parentage of Diana, was entitled to full faith and credit, and the circuit court did not accord the New York judgment's finding of paternity such full faith and credit. In light of our determination, discussed infra, that the trial court erred in its interpretation and application of the provisions of UIFSA, we need not address this argument.
[6] As a preliminary argument, Keith Sr. asserts that "whether to grant [Keith Sr.'s] request for a paternity test has been waived by MCOCSE." This argument is inconsequential as MCOCSE appeals the circuit court's final order that excluded Keith Sr. as the father based on the results of the genetic testing and not on the court's decision granting an order to administer the genetic testing. The order granting the genetic testing does not automatically result in an order excluding Keith Sr. as father. Nor does the order granting the genetic testing, and MCOCSE's alleged acquiescence, prevent MCOCSE from setting forth arguments on the legality of the final order.
[7] The New York court here stated "Defendant," which according to the caption of the case would be Andrea; however, the context makes clear that the court was referring to Keith Sr.
[8] The circuit court, however, may modify a registered order if the issuing tribunal loses jurisdiction. See F.L. § 10-350; Super. Ct. of Ca. v. Ricketts, 153 Md.App. 281, 319, 836 A.2d 707 (2003).
[9] Neither could Keith Sr.'s June 21, 2007 Request to Set Aside Declaration of Paternity raise the defenses under F.L. § 10-346(a), because such request was filed 148 days after Keith Sr. was sent notice of the filing of the New York support order, well beyond the 20 day time limit imposed by F.L. § 10-345(a).
[10] Even if Keith Sr. had not withdrawn his opposition to registration of the New York support order, we would conclude that, by not raising the defense of nonparentage in his February 15, 2007 answer to MCOCSE's request to file a foreign child support order, he waived all defenses other than the emancipation of Keith Jr.
[11] F.L. § 10-349 also provides that a registered order may be modified if the requirements of F.L. § 10-352 or 10-353.1 are met. Those sections do not apply to the facts of the case sub judice.
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275 So. 2d 4 (1973)
SOUTHERN BELL TELEPHONE AND TELEGRAPH COMPANY, a New York Corporation, Petitioner,
v.
COUNTY OF DADE, a Political Subdivision, et al., Respondents.
No. 39772.
Supreme Court of Florida.
January 10, 1973.
As Modified on Denial of Rehearing February 28, 1973.
John H. Wahl, Jr., of Walton, Lantaff, Schroeder, Carson & Wahl, Miami, William H. Adams, III of Mahoney, Hadlow, Chambers & Adams, Nathan H. Wilson, Jacksonville and John A. Boykin, Jr., Atlanta, Ga., for petitioner.
*5 Stuart Simon, Dade County Atty., and Robert A. Ginsburg, Asst. County Atty., for respondents.
Robert L. Shevin, Atty. Gen. and Winifred L. Wentworth, Asst. Atty. Gen., for the State of Florida; Rivers H. Buford, Jr., Charles E. Miner, Jr. and Gene T. Sellers, Counsel, State of Florida Board of Education, Tallahassee, for the State of Florida.
Benjamin K. Phipps, for the Tax Assessors Assn. of Florida, as amici curiae.
PER CURIAM.
By petition for certiorari, we have for review a decision of the District Court of Appeal, Third District (234 So. 2d 135) on grounds of conflict with both prior decisions of this Court and different District Courts of Appeal of this State on the same points of law. Fla. Const., Art. V, § 4, F.S.A. Kelly v. Threlkeld, Fla.App. 1966, 193 So. 2d 7. Florida Moss Products Co. v. City of Leesburg, (1927) 93 Fla. 656, 112 So. 572; Walter v. Schuler, Fla. 1965, 176 So. 2d 81; City of Tampa v. Colgan, (1935) 121 Fla. 218, 163 So. 577; Burns v. Butscher, Fla. 1966, 187 So. 2d 594; Dickinson v. Geraci, Fla.App. 1966, 190 So. 2d 368; Camp Phosphate Co. v. Allen, (1919) 77 Fla. 341, 81 So. 503; Dade County v. Salter, Fla. 1967, 194 So. 2d 587.
Petitioner sought relief from the 1967 assessment of its tangible personal property in Dade County, alleging that its property was assesesd at a substantially higher percentage of market value than that which the tax assessor had systematically assessed the property of other taxpayers. Petitioner contended that (1) although its property was assessed at full market value, the assessor had generally assessed real property at a ratio of approximately 80% of its market value, and (2) the assessor's systematic use of net book value to assess tangible personal property resulted in the personal property of other taxpayers being assessed at a level substantially lower than that of the petitioner's property.
Respondents admitted the petitioner's property had been assessed at its full market value thereby reducing the basic issue for trial to the proof and effect of other property in the county being assessed at a lower level.
In a very lengthy opinion detailing the testimony and exhibits received, the trial judge denied petitioner's requested relief. On appeal, the District Court quoted extensively from the judgment, added its own language and affirmed denial of relief. See Foley v. Weaver Drugs, Inc., Fla. 1965, 177 So. 2d 221.
To prove the assessment level of real property in the county, petitioner introduced evidence of three assessment sales ratio studies.
First, assessment sales ratio studies were described by two expert witnesses, Weil and Ekeblad,[1] which established that an assessment sales ratio study is a scientific comparison of the assessments of properties with the sales prices of a statistically reliable sample of properties that are actually sold in the taxing jurisdiction. These experts confirmed that sales ratio studies give as objective measure of the level of assessment as can possibly be obtained, that they are widely used in other states, and that the generally accepted method of conducting them is outlined in a Guide for Assessment-Sales Ratio Studies published by the National Association of Tax Administrators. The sales used for their review, covering July 1, 1966, to June 30, 1967, were conducted under their instruction and supervision. The transactions (totaling 5,559) considered in this study were selected *6 by using a random sampling procedure (every seventh sale listed on the public records), wherein the sales price of each selected property was determined from the documentary stamps on the recorded deed. The amount of the assessment was determined from the tax roll. This information was noted on a separate card prepared for each transaction, together with a notation indicating whether the transaction fell into one or more of 23 special categories such as sheriff's sales, sales by fiduciaries and the like. Transactions which fell in these later categories were disqualified for consideration because it could not be assumed that they were arm's length transactions, thereby casting doubt on use of the sales price as evidence of the market value of the property transferred. Of the 5,550 transactions originally selected, 2,714 were thus disqualified.
The ratio of the assessment to the sales price for each of the 2,845 remaining transactions was then computed and noted on the card for that transaction. The cards were then arranged in ascending order of ratios, and the number of ratios in each range of five percentage points was recorded. The results were furnished to the expert witnesses who made the calculations determining the median level of assessment. They established that this study was conducted according to generally accepted principles for conducting sales ratio studies and specifically that it conformed in all significant respects to the procedure outlined in the Guide for Assessment Sales Ratio Studies.
The experts' actual experience in other states demonstrated that in such a study documentary stamps were reliable evidence of sales prices. Dr. Weil's studies disclosed that understamping was as prevalent as overstamping and that with the relatively large number of transactions utilized in sales ratio studies, any inaccuracies that creep in tend to offset one another with the result that studies based on documentary stamps are quite reliable.
Dr. Ekeblad, who made the statistical computations, demonstrated that in 1967 the best single estimate of the median level of assessment of all real properties was 81.37% of market value, with only 99 chances in 100 that the median level of assessment was no lower than 80.58% or higher than 82.17%.
Second, the next sales ratio study introduced by petitioner covered all Dade County sales transactions handled from July 1, 1966, to June 30, 1967, by the Keyes Company, one of the largest real estate firms in Florida. This study included only transactions in which a sales commission had been paid by one of the parties to Keyes. Therefore, there was no doubt that all of them involved actual sales price. Documentary stamps were not relied on to determine sales prices in this study. The prices were determined from the records of Keyes. As in the first study the tax roll was examined, the actual sales prices were compared with the assessments and a ratio of the sales price to the assessment of each property was computed. The resulting ratios were analyzed by the same process used in the Weil-Ekeblad study and disclosed a median assessment ratio of 82.01%. The similarity in the results of this study with those of the Weil-Ekeblad study supported the conclusions given by Weil and Ekeblad that a detailed investigation of each and every sale of record was unnecessary.
The third, and final study introduced was made by the U.S. Bureau of Census, which considered sales of non-farm residential properties for the last six months of 1966. This study disclosed a median ratio of 83.2%.
Even though the three studies used samples selected in different ways, they reached remarkably similar results, ranging from a low of 81.37% to a high of 83.2%, with a variation of only 1.83%.
To show that the tangible personal property of other taxpayers had been assessed at a substantially lower level than the level *7 at which petitioner's property was assessed, petitioner established (1) that the assessor had generally assessed personal property at its book value, (2) that under regulations of the Florida Public Service Commission and the Federal Communications Commission, petitioner is required to include in the cost of its property for accounting purposes certain items not generally capitalized by unregulated taxpayers, and (3) petitioner is required to use the straight line method of taking depreciation while other taxpayers may use various kinds of accelerated depreciation. On this point petitioner established that if other taxpayers were taking advantage of the accounting options available to them the book value of their property would range from 21% to 61% lower than the book value of similar property owned by petitioner. However, petitioner was unable to establish the extent to which other taxpayers actually were taking advantage of these options.
Respondents did not offer any evidence that sales ratio studies of the type introduced by petitioner are not a reliable and reasonable means of determining the assessment level in a taxing jurisdiction or that the studies introduced by petitioner had not been conducted according to generally accepted standards for conducting sales ratio studies, or that real property in the county was assessed at a level higher than the level disclosed by the studies. Instead, respondents opined that sales price is only one of the eight (formerly seven) factors which must be considered under Section 193.011 (formerly 193.021) Fla. Stat., F.S.A. in arriving at just valuation of property. They further opined that even if the price at which real property is sold is good evidence of its market value, that price may not be inferred from documentary stamps. They contended finally that the court should not accept a sales ratio study as reliable unless an investigation of each transaction is made to determine the sales price, whether the transaction was in fact at arm's length and, if so, whether the parties were fully informed when they agreed on the price.
Confronted with the foregoing, the Circuit Court denied relief, and the Third District Court of Appeal affirmed, holding that sales prices in the context of the studies introduced were not prima facie evidence of market value. Quoting in pertinent part from the judgment and opinion under review, we find these statements:
"In spite of the fact that the Telephone Company's personal property was admittedly assessed at full market value, the Telephone Company would be entitled to relief if it could prove that the County systematically assessed real property at some lesser percentage of fair market value ...
"... Assuming that a random sales method is satisfactory to establish a level it would appear that the method in this study was satisfactory ...
"... To reach the result desired by the Telephone Company, it would then be necessary to again infer that the true consideration represents the true market value. This does not necessarily follow. The sale price of property does not even in itself conclusively or even prima facia reflect true market value ..."
In Dade County v. Salter, Fla. 1966, 194 So. 2d 587, we recognized that the constitutional rights of a taxpayer are infringed if his property is assessed at a percentage of value substantially higher than the percentage at which other property in the county is generally assessed even though his assessment is not above fair market value. Cf. Sioux City Bridge Co. v. Dakota County, 260 U.S. 441, 43 S. Ct. 190, 67 L. Ed. 340; Township of Hillsborough v. Cromwell, 326 U.S. 620, 66 S. Ct. 445, 90 L. Ed. 358. Since the tax base includes both real and personal property and the total base largely determines the millage rate, it makes no difference whether it is real or personal property that is undervalued. See Graham v. City of West Tampa, 1916, *8 71 Fla. 605, 71 So. 926; City of Tampa v. Colgan, 1933, 111 Fla. 538, 149 So. 587; Coombes v. City of Coral Gables, 1936, 124 Fla. 374, 168 So. 524.
The Salter case was decided on the pleadings. It held simply that the allegations of discrimination in the complaint stated a cause of action. It did not consider all the factual circumstances that may give a right to relief or how those facts must be proved. It did, however, establish one overriding principle: a taxpayer is entitled to a practical means of obtaining relief from discrimination. This case must be considered in light of that principle. In Salter, we held:
"... A taxpayer ... should not be precluded from relief because the sworn official has not performed the duty requiring him to assess all property at its full cash value. Nor does the granting of relief to these taxpayers in any respect affect or impair or be in any way inconsistent with the recent decisions of this Court holding that all real property in this State should be assessed at its full cash value.... The Supreme Court of the United States many years ago dealt with the identical problems in Sioux City Bridge Co. v. Dakota County, 260 U.S. 441, 43 S. Ct. 190, 67 L. Ed. 340, where Mr. Chief Justice Taft, speaking for the Court said:
"`... This Court holds that the right of the taxpayer whose property alone is taxed at 100 per cent of its true value is to have his assessment reduced to the percentage of that value at which others are taxed even though this is a departure from the requirement of statute. The conclusion is based on the principle that where it it impossible to secure both the standards of the true value, and the uniformity and equality required by law, the latter requirement is to be preferred as the just and ultimate purpose of the law.'
"The Court then observed that to deny relief to the taxpayer would uphold the violation of the Fourteenth Amendment to the injury of the taxpayer in that litigation... .
"To adhere to the opinion which has been filed would require these taxpayers, and other taxpayers who might find themselves in the same position in any of the sixty-seven counties in this State, to successfully institute and prosecute proceedings to require the assessor to raise all other properties in the county to the statutory valuation, a burden which in most instances would amount to depriving the taxpayer of any remedy whatever, in order to obtain relief. This question was also considered by the Supreme Court of the United States in Sioux City Bridge Co. v. Dakota County, supra, where Mr. Chief Justice Taft, again speaking for the Court, said:
"`... The conclusion in these and other federal authorities is that such a result as that reached by the Supreme Court of Nebraska is to deny the injured taxpayer any remedy at all because it is utterly impossible for him by any judicial proceeding to secure an increase in the assessment of the great mass of underassessed property in the taxing district.'"
The "just valuation" at which property must be assessed under the Constitution and Section 193.011 (formerly 193.021) Fla. Stat. is synonymous with fair market value, i.e., the amount a purchaser willing but not obliged to buy would pay to a seller who is willing but not obliged to sell. Walter v. Schuler, Fla. 1965, 176 So. 2d 81. When no actual sale has occurred, Section 193.011 Fla. Stat., F.S.A. requires the assessor to place himself in the position of the parties to a hypothetical sale of the property, to consider all of the factors they would regard as important in fixing the price of the property and to arrive at an opinion of value.
*9 When a sale has actually occurred each party to the transaction has prima facie made his own appraisal of the individual property based on his needs, his ability to pay, the price at which like properties are offered and other relevant factors. Each party has backed up his appraisal by paying or receiving the price finally negotiated. In reaching an agreement the parties influence the price negotiations of later buyers and sellers of similar properties. Therefore, in this context the price at which property is sold as indicated by documentary stamps on the instrument is prima facie evidence of its value. See Fla. Stat., §§ 201.01 and 201.02, F.S.A.
In Kelly v. Threlkeld, supra, citing Florida Moss Products Co. v. City of Leesburg, supra, the Fourth District Court of Appeal held that documentary stamps can be prima facie evidence of consideration paid. The only distinction, without significance, is that Kelly involved a single transaction whereas the case sub judice involved multiple transactions.
In City of Tampa v. Colgan, supra, our Court stated, among other things:
"... If similar property is commonly bought and sold, the price which it brings is the best test of the value of the land under consideration and the assessors need look no further ..."
The Second District Court of Appeal in Osborn v. Yeager, Fla.App. 1963, 155 So. 2d 742, quoted 31 Fla.Jur., § 265:
"... If similar property is commonly bought and sold, the price which it brings is the best test of value ..."
Of course, sale price is not conclusive evidence of value in every case. The sale may not have been at arm's length. The parties may not have been fully informed. One party may have taken unfair advantage of the other. A full investigation of every sale might well reveal that many took place under other than ideal conditions, and departures from the ideal exist in any market, even the stock market. However, unusual transactions do not prevent the market as a whole from being good evidence of value.
Sub judice it is clear that, although in a limited number of cases where factors may exist that detract from the reliability of an individual transaction as evidence, taken as a whole, sales prices are acceptable indicators of value. Certainly, when a large number of sales are considered, the factors which detract from the reliability of individual sales tend to offset one another, and the overall result is highly dependable. This is especially true when steps have been taken to eliminate transactions which appear on their face not to be at arm's length.
Sales ratio studies are intended to provide a statistically reliable method of relating assessments to sales prices. They have been recognized and accepted by the courts of our state, Burns v. Butscher, supra, and Dickinson v. Geraci, supra, as well as having been recognized by the courts of other states as a reliable means of determining an assessment level. See People ex rel. Wenzel v. Chicago & North Western Railway Company, 1963, 28 Ill. 2d 205, 190 N.E.2d 780 and In re Appeals of Kents, 1961, 34 N.J. 21, 166 A.2d 763.
Whether a particular study has been properly designed and conducted is a question of fact to be determined in each case on the basis of evidence received. In this case the evidence as established by the judgment's findings was uncontradicted that at least the Weil-Ekeblad study was conducted according to generally accepted principles for conducting sales ratio studies. In holding that the studies were not reliable, the courts below substituted their own views for the undisputed evidence.
Although the sales ratio studies in this case revealed the median assessment level of real property to be approximately 82% they also disclosed that the property of other taxpayers had not been assessed at any particular uniform level. A graph of *10 the ratios reveals a bell-shaped curve with a few assessments at very low levels, the largest in the five percentage point range between 80% and 85%, and a few assessments at very high levels. The Courts below held that because the percentage range from 80% to 85% contained less than 50% of the ratios, petitioner was not entitled to relief. This holding runs contrary to the decisions of all the other courts that have considered this question. These decisions recognize that a taxpayer whose property is assessed at a level substantially higher than the average level of assessment suffers the same injury as he would suffer (1) if the property of every other taxpayer were assessed at a uniform level, and (2) if a taxpayer is denied relief either because other taxpayers are not treated uniformly or because they also suffer from discrimination, the assessor can make himself immune from suit by his discriminatory conduct. In re Appeals of Kents, 1961, 34 N.J. 21, 166 A.2d 763; In re Brooks Building, 1958, 391 Pa. 94, 137 A.2d 273; Deitch Co. v. Board of Property, etc., 1965, 417 Pa. 213, 209 A.2d 397; Grainger Bros. Co. v. County Board of Equalization, 1966, 180 Neb. 571, 144 N.W.2d 161.
The decisions below are also inconsistent with our admonition expressed in Camp Phosphate v. Allen, 1919, 77 Fla. 341, 81 So. 503.
There we recognized that the provisions of the Florida Constitution relating to ad valorem taxation are intended to "adjust the burden of taxation so that every taxpayer may be required to contribute no more and no less than his share of taxes in proportion to the value of his property." A taxpayer whose property is assessed at a level substantially higher than the average level is required to contribute substantially more than his proportionate share of the tax burden. Therefore, the fact that other taxpayers are not assessed at a uniform level or that a few of them are also discriminated against does not bar a taxpayer from obtaining relief.
The courts below, having held that petitioner was not entitled to any relief, did not have occasion to consider how relief should be measured. This question is admittedly complicated, i.e., determining petitioner's fair share of the tax burden based upon a calculation of the ad valorem taxes petitioner would have been required to pay if the tax roll had been at full value, considering the established level of real property assessment and considehing the level at which personal property had been assessed. Since the trial court did not consider or pass on this issue, the case should be remanded for an opportunity to do so.
For the reasons outlined above, the decision below is reversed and the cause remanded for further proceedings consistent herewith.
It is so ordered.
CARLTON, C.J., and ROBERTS, ADKINS and McCAIN, JJ., concur.
ERVIN, J., dissents.
ERVIN, Judge (dissenting):
I feel I would be remiss if I did not briefly discuss why I think the petition for rehearing should be granted. The County points out in its petition that the Court majority herein at the appellate level has factually used sales ratio statistics of real property transactions in Dade County as the basis for a factual finding concluding Southern Bell is entitled to assessment over-valuation relief, while Southern Bell's suit for relief is for alleged discriminatory overassessment of its tangible personal property above the assessment of the property of other Dade County taxpayers.
The County points out in its petition for rehearing that
"the record indicates ... that the County assessed tangible personal property in 1967 on the basis of its net book value, which was its original cost less depreciation... . Personalty valuations *11 which were based on net book values that began with original costs, rather than present day replacement costs, did not take increasing values produced by inflationary trends into account... ."
The majority opinion uses an improper yardstick to compare the alleged systematic assessment discrimination between Southern Bell's tangible personal property assessment and other Dade County taxpayers' tangible personal property assessments. It used sales ratio statistics of real estate transactions to factually determine there existed discrimination in tangible personal property tax assessments.
It is quite apparent the majority predicates its decision on F.S. Section 193.011, F.S.A., which has primary reference to real property assessments under Section 4, Article VII of the State Constitution, F.S.A. Tangible personal property valuation obviously does not include many of the eight factors of F.S. Section 193.011, F.S.A., therefore it follows sales ratio statistics of real estate transactions (market value) are inapplicable as a basis for comparison in order to determine if there was a systematic discrimination.
It is obvious that the majority decision with its patently incorrect criterion for determinig systematic discrimination plays havoc with Petitioner's admitted tax liability of $5,080,571.91, less the statutory discount. This disturbing result allows a basis for an even greater tax reduction than Southern Bell claimed in its complaint.
I fail to see any basis for conflict with the decisions of the trial court or District Court of Appeal. Those decisions represent findings of fact based upon evidentiary considerations. There is no departure by these lower courts from any rule of decisional law in the area of tax assessment. I think the majority has merely substituted its evidentiary findings for those of the lower tribunals in a conflict case.
I would have discharged the writ.
NOTES
[1] Dr. Rolf A. Weil, President of Roosevelt University and Dr. Frederick A. Ekeblad, Dean of the College of Business Administration at the University of Bridgeport, who were both conceded to be eminent authorities in property tax administration and statistics with considerable experience in conducting sales ratio studies.
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81 So.3d 415 (2012)
NICOLAS
v.
STATE.
No. SC11-1974.
Supreme Court of Florida.
January 23, 2012.
DECISION WITHOUT PUBLISHED OPINION
All writs dismissed.
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78 P.3d 600 (2003)
2003 UT 37
James D. NIELSEN, Plaintiff and Appellant,
v.
GOLD'S GYM and Troy Peterson & Associates, Defendants and Appellees.
No. 20010510.
Supreme Court of Utah.
September 16, 2003.
Don R. Petersen and Leslie W. Slaugh, Provo, for plaintiff.
Brian C. Harrison, Provo, for defendants.
WILKINS, Justice:
¶ 1 James Nielsen, owner and lessor of commercial real estate in Spanish Fork, Utah, appeals the trial court's dismissal of his complaint against Troy Peterson, a Gold's Gym manager, for breach of a commercial lease agreement. We affirm.
*601 FACTUAL AND PROCEDURAL HISTORY
¶ 2 Peterson signed a standard, pre-printed commercial lease agreement with Nielsen on August 18, 1997. The property in question was described in the lease as a "premises" located at "A Strip Mall at 1341 E Center Spanish Fork, UT," to be used solely as a "Health Club & Gym." The lease term was three years, commencing on November 1, 1997, at an annual rate of $0.85 per square foot.
¶ 3 When the lease was signed by the parties, the building in question was still under construction, and the land was not zoned for a health club. The lease contained an addendum stating, among other things, that the lease was subject to Peterson obtaining a zoning change. The requisite zoning change was obtained in October. After signing the lease, Nielsen referred Peterson to a contractor, who in turn recommended an architect for preparation of interior improvement plans. The contractor prepared an estimate, based on the architectural plans, of approximately $168,000 for tenant improvements to the building shell. After receiving this estimate, Peterson returned to Nielsen to discuss payment for the improvements. The parties failed to reach agreement, no improvements were ever initiated, and Peterson never made any lease payments. After unsuccessfully attempting to re-negotiate with Peterson, Nielsen eventually rented to another tenant and allegedly suffered over $112,000 in damages from the breach.
¶ 4 Nielsen brought suit for breach of contract. At trial, Nielsen testified that he believed the lease obligated him to deliver a building shell. Peterson testified that he believed Nielsen was obligated to pay for tenant improvements and provide a completed building under the lease. Both parties testified that the first discussion about who would pay for tenant improvements did not occur until after the cost estimates were received.
¶ 5 After a bench trial, the trial court ruled that the lease agreement was unenforceable for lack of mutual assent as to the nature and extent of the property to be leased. Specifically, the court ruled that Nielsen failed to establish that there was a meeting of the minds as to which party was to pay for the tenant improvements. Nielsen appeals.
STANDARD OF REVIEW
¶ 6 We review for correctness the trial court's legal conclusion that the contract is ambiguous. Parduhn v. Bennett, 2002 UT 93, ¶ 5, 61 P.3d 982. If a contract is deemed ambiguous, and the trial court allows extrinsic evidence of intent, interpretation of the contract becomes a factual matter and our review is strictly limited. Kimball v. Campbell, 699 P.2d 714, 716 (Utah 1985).
ANALYSIS
¶ 7 The trial court held that the lease agreement in this case is ambiguous because certain essential terms, namely, terms governing the payment for tenant improvements, were missing. A lease agreement, like any contract, "is ambiguous if it is capable of more than one reasonable interpretation because of `uncertain meanings of terms, missing terms, or other facial deficiencies.'" Winegar v. Froerer Corp., 813 P.2d 104, 108 (Utah 1991) (quoting Faulkner v. Farnsworth, 665 P.2d 1292, 1293 (Utah 1983)). When determining whether a contract term is ambiguous, the court is not limited to the contract itself. Peterson v. Sunrider Corp., 2002 UT 43, ¶ 19, 48 P.3d 918; Ward v. Intermountain Farmers Ass'n, 907 P.2d 264, 268 (Utah 1995). Relevant, extrinsic evidence "of the facts known to the parties at the time they entered the [contract]" is admissible to assist the court in determining whether the contract is ambiguous. Yeargin, Inc. v. Auditing Div. of Utah State Tax Comm'n, 2001 UT 11, ¶ 39, 20 P.3d 287.
¶ 8 The trial court allowed extrinsic evidence to assist it in the task of determining ambiguity. At the time the parties signed the lease agreement, the building shell was still under construction. Both parties understood that Peterson intended to operate a health club on the premises and that the property would require significant interior improvements before it could be used for the stated purpose. The trial court concluded *602 that "the lease document itself is utterly silent on the topic of payment for the improvements." It further found that the subject of improvements was not addressed by the parties, orally or otherwise, prior to or contemporaneously with the signing of the lease agreement. In fact, the trial court noted that the issue of who was to pay for improvements was not even raised until "well after" the lease was signed.
¶ 9 Nielsen argues on appeal that payment of tenant improvements is implicitly addressed in his definition of the term "premises," which he asserts refers only to the building shell that was already planned and under construction at the time the lease was signed. According to Nielsen, the premises could not reasonably consist of both a building shell already planned and any additional, unknown (at the time) tenant improvements. Thus, according to Nielsen, the lease is unambiguous, the duty to pay for tenant improvements lies with Peterson, and the trial court should have enforced the lease according to its terms.
¶ 10 We agree with the trial court's conclusion that this lease agreement is ambiguous. Nielsen's arguments serve only to reinforce the absence of mutual assent as to the one issue that eventually terminated this relationship. While the parties on appeal focus on the term "premises" as a source of contractual ambiguity, our reading of the trial court's ruling reveals that it believed the ambiguity is found in the absence of any contractual language addressing payment for the improvements. Thus, this is more a case about missing terms than indefinite terms.
¶ 11 On appeal, Nielsen's only argument was that the trial court erred when it ruled that the contract was ambiguous. Since we agree with the trial court's conclusion of ambiguity, we will only briefly note the ultimate basis for the court's dismissal of Nielsen's action; namely, that there was no meeting of the minds on the essential terms of the lease. "It is fundamental that a meeting of the minds on the integral features of an agreement is essential to the formation of a contract. An agreement cannot be enforced if its terms are indefinite." Richard Barton Enters. v. Tsern, 928 P.2d 368, 373 (Utah 1996) (citing Pingree v. Cont'l Group of Utah, Inc., 558 P.2d 1317, 1321 (Utah 1976)); (Valcarce v. Bitters, 12 Utah 2d 61, 63, 362 P.2d 427, 428 (1961)) (additional citations omitted); see also Candland v. Oldroyd, 67 Utah 605, 608, 248 P. 1101, 1102 (1926) ("So long as there is any uncertainty or indefiniteness, or future negotiations or considerations to be had between the parties, there is not a completed contract. In fact, there is no contract at all.").
¶ 12 In this case, the trial court found that the obligation to pay for tenant improvements is not addressed in the lease itself and cannot be established through any extrinsic evidence. The court must be able to enforce the contract according to the parties' intentions; if those intentions are impenetrable, or never actually existed, there can be no contract to enforce. "A contract may be enforced even though some contract terms may be missing or left to be agreed upon, but if the essential terms are so uncertain that there is no basis for deciding whether the agreement has been kept or broken, there is no contract." Acad. Chicago Publishers v. Cheever, 144 Ill.2d 24, 161 Ill.Dec. 335, 578 N.E.2d 981, 984 (1991) (citations omitted). Here, the trial court could not discern any basis for deciding whether the lease had been breached and, therefore, could not enforce the contract.
¶ 13 Implicit in the trial court's ruling is the conclusion that terms governing payment of tenant improvements are essential to the lease agreement in this case. "Whether or not the [missing term] was essential to the contract requires an examination of the entire agreement and the circumstances under which the agreement was entered into." Cessna Fin. Corp. v. Meyer, 575 P.2d 1048, 1050 (Utah 1978). Merely satisfying the minimum requirements for the statute of frauds does not automatically render all contracts sufficiently definite to be enforced by the courts. In this case, the building shell itself was still under construction when the lease was signed. Uncontroverted trial testimony establishes that the contractor had not completed the floor of the building shell because he anticipated *603 that tenant improvements would require modification to the original building plans for plumbing and electrical configurations. Nor were the roof and walls completed. This renders the question of payment even more important, because it is not clear from the lease who was required to pay for those tenant-based modifications to the building shell. Furthermore, there was no evidence at trial concerning industry customs or standards, or any other extrinsic evidence, that would aid the court in determining responsibility for payment. Finally, even Nielsen notes that the cost of improvements "would have consumed more than half of the total rents over the three-year term of the lease," constituting a significant portion of the overall costs associated with the lease. While payment for tenant improvements is by no means an essential term in every commercial lease agreement, the facts of this case persuade us that it was an essential part of the bargain to be reached here.
CONCLUSION
¶ 14 We uphold the trial court's legal determination that the lease agreement was ambiguous due to missing terms, specifically, those terms governing payment of tenant improvements. The trial court's interpretation of the contract after finding ambiguity was not challenged on appeal; thus, we also uphold the trial court's ruling that the contract was unenforceable for lack of mutual assent as to the essential terms governing which party was to pay for tenant improvements. The judgment of dismissal is affirmed.
¶ 15 Chief Justice DURHAM, Associate Chief Justice DURRANT, Justice PARRISH, and Justice NEHRING concur in Justice WILKINS' opinion.
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Petition for Writ of Mandamus Denied and Memorandum Opinion filed
September 21, 2006
Petition
for Writ of Mandamus Denied and Memorandum Opinion filed September 21, 2006.
In The
Fourteenth Court of
Appeals
____________
NO. 14-06-00699-CV
____________
IN RE DAWN JOHNSON WHATLEY, Relator
ORIGINAL
PROCEEDING
WRIT OF MANDAMUS
M E M O R
A N D U M O P I N I O N
On
August 16, 2006, relator filed a petition for writ of mandamus
in this court. See Tex. Gov=t Code Ann. ' 22.221 (Vernon 2004); see also Tex. R. App. P. 52. In the petition,
relator asked this court to compel the Honorable Mike Woods, presiding judge of
Probate Court No. 2, to set aside his ruling of August 3, 2006, appointing
Mylus James Walker as temporary guardian for Perry Whatley.
Relator
has not established that she is entitled to mandamus relief. Accordingly, we
deny relator=s petition for writ of mandamus.
PER CURIAM
Petition Denied and Memorandum
Opinion filed September 21, 2006.
Panel consists of Justices Hudson,
Frost, and Seymore.
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726 S.E.2d 836 (2012)
STATE
v.
DONG JIN KIM.
No. 171P12-1.
Supreme Court of North Carolina.
June 13, 2012.
Matthew G. Pruden, Charlotte, for Kim, Dong Jin.
Phillip T. Reynolds, Assistant Attorney General, for State of North Carolina.
Peter S. Gilchrist, III, District Attorney, for State of North Carolina.
The following order has been entered on the motion filed on the 30th of April 2012 by Defendant to Amend Petition for Discretionary Review:
"Motion Allowed by order of the Court in conference, this the 13th of June 2012."
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16 A.3d 384 (2011)
205 N.J. 518
MILLER
v.
TAFARO.
C-817 September Term 2010, 067562
Supreme Court of New Jersey.
April 7, 2011.
Petition for Certification Denied.
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122 F. Supp. 2d 495 (2000)
SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
v.
DCI TELECOMMUNICATIONS, INC., Joseph J. Murphy, and Russell B. Hintz, Defendants.
and
Grace P. Murphy, Relief Defendant.
No. 00 Civ. 4664 (RWS).
United States District Court, S.D. New York.
December 5, 2000.
*496 *497 Securities and Exchange Commission, Washington, DC, Debra Patalkis, Reid A. Muoio, William R. Baker, III, Lawrence A. West, Russell G. Ryan, of counsel, for Plaintiff.
Greenberg Traurig, New York City, Robert A. Horowitz, of counsel, for Defendants.
OPINION
SWEET, District Judge.
Defendants DCI Telecommunications, Inc. ("DCI"), Joseph J. Murphy ("Murphy"), Russell B. Hintz ("Hintz"), and relief defendant Grace P. Murphy (collectively "Defendants") have moved to dismiss the First, Second, and Sixth Claims of the complaint in their entirety and the Fifth and Seventh Claims in part, pursuant to Rule 12(b)(6), Fed.R.Civ.P. For the reasons set forth below, the motion is denied.
The Parties
Plaintiff Securities and Exchange Commission ("SEC") is a governmental agency charged with the task of ensuring compliance with federal securities laws.
DCI is a Colorado corporation head-quartered in Stratford, Connecticut.
Murphy, a Connecticut resident, is the Chairman of the Board, Chief Executive Officer, President, and a major shareholder of DCI.
Hintz, a Connecticut resident, is the Chief Financial Officer of DCI.
Grace Murphy resides in Connecticut with her husband, Joseph Murphy.
Background
This case involves alleged violations of Generally Acceptable Accounting Principles ("GAAP") which, if true, may constitute violations of the books and records provisions and the reporting provisions of the Securities and Exchange Act of 1934, 15 U.S.C. §§ 78j(b), 78t(a), (the "Exchange Act"), as well as the anti-fraud provisions of the Securities Act of 1933, 15 U.S.C. §§ 77q(a)(2) & (3), (the "Securities Act").
Specifically, the complaint alleges that the Defendants improperly accounted for seven acquisitions and grossly overvalued a purported $15 million contract and $5 million promissory note, which caused the financial statements in five Forms 10-K and twelve Forms 10-Q that DCI filed with the SEC over a five-year period to be materially false and misleading. DCI's SEC filings allegedly overstated their assets by 40% to 1408% during this period. In addition, the complaint alleges that DCI unlawfully raised additional funds by causing its employees to sell S-8 stock to the public and then "kick back" sales proceeds to DCI.
On August 18, 2000, Defendants moved to dismiss the First, Second, and Sixth Claims in the Complaint in their entirety, and to dismiss the control person elements of the Fifth and Seventh Claims. In brief, the defendants contend that because the Complaint fails to aver that the alleged GAAP violations were intended to, or did, have any impact on DCI's stock price, the fraud allegations fail to state a claim as a matter of law. With regard to the sale of unregistered securities claim, Defendants contend that the SEC has failed to allege the necessary element of a preexisting plan to ensure DCI received the benefit of its employees' sale of S-8 stock to the public.
The SEC filed a memorandum in response on September 19, 2000, and the motion was deemed fully submitted upon the filing of the Defendants' reply memorandum on September 27, 2000.
*498 Discussion
I. Motion to Dismiss
In reviewing a motion to dismiss under Rule 12(b)(6), a court must "accept as true the factual allegations of the complaint, and draw all inferences in favor of the pleader." Mills v. Polar Molecular Corp., 12 F.3d 1170, 1174 (2d Cir.1993) (citing IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1052 (2d Cir.1993)). Dismissal is warranted only when "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 2 L. Ed. 2d 80 (1957) (footnote omitted). See also Bass v. Jackson, 790 F.2d 260, 262 (2d Cir.1986).
A. Claims 1 and 2 State Claims for Violations of the Anti-Fraud Provisions of the Securities Act and Exchange Act, and Claim 5 States A Control Person Claim Based on the Acts Alleged in Claims 1 and 2
Claims 1 and 2 allege that the Defendants violated Section 17 of the Securities Act and Rule 10b-5 of the Exchange Act.[1] Section 10(b) was designed to protect investors involved in the purchase and sale of securities by requiring full disclosure. Santa Fe Indus., Inc. v. Green, 430 U.S. 462, 477-78, 97 S. Ct. 1292, 1303-04, 51 L. Ed. 2d 480 (1977).
Violation of the anti-fraud statutes requires proof that the Defendants used interstate commerce, and made material false or misleading misrepresentations and omissions in connection with the offer, purchase or sale of securities, with scienter. Aaron v. SEC, 446 U.S. 680, 697, 100 S. Ct. 1945, 1955, 64 L. Ed. 2d 611 (1980); Ernst & Ernst v. Hochfelder, 425 U.S. 185, 195, 96 S. Ct. 1375, 1382, 47 L. Ed. 2d 668 (1976); SEC v. First Jersey Secs., Inc., 101 F.3d 1450, 1466-67 (2d Cir.1996). However, neither section 17(a)(2) nor section 17(a)(3) of the Securities Act requires scienter. The Defendants argue that in order to make out the requisite materiality, scienter and "in connection with" elements of a securities fraud claim, a complaint must allege that the price manipulations were intended to, and in fact did, have some impact on stock prices. Def. Mem. at 3-4. Both parties agree that, if true, the violations of GAAP meet the element of misrepresentations or omissions. See Def. Mem. at 3.
1. Materiality
A statement or omission is material if "there is a substantial likelihood that a reasonable shareholder would consider it important" or, in other words, "there [is] a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable shareholder as having significantly altered the `total mix' of information available." Basic, Inc. v. Levinson, 485 U.S. 224, 232, 108 S. Ct. 978, 983, 99 L. Ed. 2d 194 (1988) (adopting standard of TSC Indus., Inc. v. Northway, Inc., 426 U.S. 438, 449, 96 S. Ct. 2126, 2132, 48 L. Ed. 2d 757 (1976)). "When presented with a Rule 12(b)(6) motion, `a complaint may not properly be dismissed ... on the ground that the alleged misstatements or omissions are not material unless they are so obviously unimportant to a reasonable investor that reasonable minds could not differ on the question of their importance.'" *499 Ganino v. Citizens Utilities Co., 228 F.3d 154, 162 (2d Cir.2000) (quoting Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir.1985)).
The Defendants argue that the accounting irregularities were not material because there is no allegation that DCI stock price was affected by the overvaluation of assets in the SEC filings. However, the Supreme Court has warned against "confining materiality to a rigid formula." Basic, 485 U.S. at 236, 108 S. Ct. at 986. There is no requirement that stock prices fluctuate as a result of a defendant's misstatements or omissions in order for them to be material. See United States v. Bilzerian, 926 F.2d 1285, 1298 (2d Cir.1991) ("whether a public company's stock price moves up or down or stays the same after [filing] does not establish the materiality of the statements made, though stock movement is a factor the jury may consider relevant.").
In this case, DCI allegedly overvalued its assets by 40% to 1408% each year over a five-year period in five Forms 10-K and twelve Forms 10-Q, and then advertised "record breaking" revenues in the company's annual reports, press releases, and on its website. Compl. ¶¶ 1-3, 16-17, 29, 31, 36, 47-51, 55-60, 65, 70-75, 80-85, 90, 102-11. Because the complaint alleges that the Defendants emphasized their false earnings to potential investors, and because "earnings reports are among the pieces of data that investors find most relevant to their investment decisions," Ganino, 228 F.3d at 164 (citations omitted), it is reasonable to infer that the misstatements or omissions were not "obviously unimportant" to the investing public. Therefore, the materiality element has been adequately pled.
2. Misleading Misrepresentations "In Connection With" the Offer, Purchase, or Sale of Securities
Defendants advance essentially the same argument with respect to the "in connection with" element of securities fraud. This element requires a plaintiff to allege that false financial information was disseminated into the marketplace in a manner reasonably calculated to influence the investing public. See Ames Department Stores, Inc. Stock Litig., 991 F.2d 953, 962, 966 (2d Cir.1993) (finding "in connection with" element satisfied by allegation that corporation and its officers disseminated false financial information into the marketplace through press releases, annual report, Form 10-K and two forms 10-Q); see generally Superintendent of Ins. v. Bankers Life & Cas. Co., 404 U.S. 6, 11-12, 92 S. Ct. 165, 169, 30 L. Ed. 2d 128 (1971) (holding that deceptive practices "touching" upon the sale of securities fulfills the "in connection with" requirement).
As with the materiality element, the Second Circuit has specifically held that there is no requirement that a complaint must allege stock fluctuation in order to plead adequately the "in connection with" element. See Heit v. Weitzen, 402 F.2d 909, 913 (2d Cir.1968) (finding "in connection with" element met because "[i]t is reasonable to assume that investors may very well rely on the material contained in false corporate financial statements which have been disseminated in the market place, and in so relying may subsequently purchase securities of the corporation."), cert. denied, 395 U.S. 903, 89 S. Ct. 1740, 23 L. Ed. 2d 217 (1969); SEC v. Texas Gulf Sulphur Co., ("TGS"), 401 F.2d 833, 860 (2d Cir.1968) (en banc) (construing "in connection with" requirement to require "that the device employed, whatever it might be, be of a sort that would cause reasonable investors to rely thereon, and, in connection therewith, so relying, cause them to purchase or sell a corporation's securities.").
If true, the facts that the Defendants filed false financial statements with the SEC, hyped them in annual reports, press releases and on DCI's website, and used them to obtain financing, adequately raise the inference that the accounting irregularities *500 were disseminated in a manner that was "reasonably calculated" to influence the investing public. The SEC has adequately pled the "in connection with" element.
3. Scienter
In order to raise the inference of scienter sufficiently to withstand a motion to dismiss, a plaintiff must allege either (a) facts to show that defendants had both motive and opportunity to commit fraud; or (b) facts that constitute strong circumstantial evidence of conscious misbehavior or recklessness. See In re Carter-Wallace Securities Litigation, 220 F.3d 36, 39 (2d Cir.2000) ("Carter-Wallace II"); In re Livent, Inc. Secs. Litig., 78 F. Supp. 2d 194 (S.D.N.Y.1999) (quoting Press v. Chemical Investment Svcs. Corp., 166 F.3d 529, 537-38 (2d Cir.1999)). GAAP violations, when coupled with evidence of fraudulent intent, make out this element. Novak v. Kasaks, 216 F.3d 300, 309 (2d Cir.2000).
The complaint repeatedly alleges that, as "lifelong accounting professionals," the Defendants "knew or were reckless in not knowing," that DCI's accounting violated GAAP and grossly overrepresented DCI's value. Compl. ¶¶ 6, 35, 40, 46, 54, 57-59, 63, 69, 72-74, 78-79, 82-84, 89, 95-96, 100-01, 104-06. In addition to ten major GAAP violations, Compl. ¶¶ 34-35, 39-40, 45-46, 54, 63, 69, 78-79, 95-96, 100-01, the complaint alleges other acts designed to deceive, namely that the Defendants hyped the false accounting statements in annual reports, press releases and on DCI's website, and used them to obtain financing. See Livent, 78 F.Supp.2d at 215-16.
The facts alleged in the complaint, if true, do not present a case of "misguided optimism," Shields v. Citytrust Bancorp, 25 F.3d 1124, 1129 (2d Cir.1994), but rather show a pattern of knowingly misleading practices that overwhelmingly overstated revenues, made with an intent to defraud. See Novak, 216 F.3d at 311 (finding that allegations of materially misleading public statements regarding knowingly inflated financial information met scienter requirement); In re MicroStrategy, Inc., No. Civ.A. 00-473-A, 2000 WL 1370410 (E.D.Va. Sept.15, 2000) (noting relevance of magnitude of financial overstatements, the pervasiveness and repetitiveness of the alleged GAAP violations, and relative simplicity of the accounting principles violated to inference of scienter); In re Livent, 78 F.Supp.2d at 215-16. The scienter element has been adequately pled.[2]
Claims One and Two state claims for violations of the anti-fraud provisions of the Securities Act and Exchange Act.
As Defendants' challenge to Claim 5 pertains only to the element of fraud as alleged in Claims 1 and 2, Claim 5 also withstands the motion to dismiss.
B. Claim 6 States a Claim for Violation of Registration Provisions of the Securities Act
In Claim 6, the complaint alleges that, at Murphy's directions, the Defendants caused DCI employees to sell S-8 stock to the public and then "kick back" the sales proceeds to DCI in what was in effect a disguised public offering during 1995 and 1996, see Compl. ¶¶ 5, 9, 112, 135, *501 thereby circumventing the registration provisions of the Securities Act, sections 5(a) and 5(c), 15 U.S.C. §§ 77e(a), 77e(c). See SEC v. Cavanagh, 155 F.3d 129, 133 (2d Cir.1998) (holding that company's employees must register stock before selling to the public despite company's previous registration of stock before issuing it to the employees, because § 5 requirement is transaction-specific). The Defendants contend that no such claim may lie where a complaint fails to allege that there was a preconceived plan to obtain financing for DCI in this manner, or that the stock was issued to employees on the condition that they sell it to the public and turn the proceeds over to DCI. Def. Mem. at 9.
In support of their position, Defendants cite the SEC Releases regarding the adoption of amendments to Form S-8, which described the amendments as an attempt to halt abuse of the registration provisions by companies "nominally" offering or selling registered shares to the employee pursuant to a "prearranged plan" whereby the employee would sell the stock and remit the proceeds to the issuer. However, the Releases state that, in order to counter the abuse of companies' offering stock to employees, who would then sell it publicly and remit the proceeds to the company:
Following adoption of these amendments, we will continue to take the view that Form S-8 is not available to register offers and sales of securities to either traditional employees or consultants and advisors where:
! by prearrangement or otherwise, the issuer or a promoter controls or directs the resale of the securities in the public market; or
! the issuer or its affiliates directly or indirectly receive a percentage of the proceeds from such resales.
Registration of Securities on Form S-8, SEC Releases No. 33-7646, 34-41009, 1999 WL 95488, *6 (S.E.C. Feb. 25, 1999) (footnotes omitted). A violation of the registration provisions exists where the issuing company raises capital via its employees' sale of stock, regardless of the existence a preconceived plan.
Caselaw bears out the view that section 5 is violated when a company reaps proceeds from its employees' sale of stock, even without any other evidence of an intentional plan to elude the registration provisions. See, e.g., Aaron, 446 U.S. at 713 n.5, 100 S. Ct. at 1965 ("[t]he prohibition in § 5 of the 1933 Act [ ] against selling securities without an effective registration statement has been interpreted to require no showing of scienter") (citing cases). Regardless of intent, a public company and its officers violate the registration provisions by using employees as conduits for the sale of S-8 stock to the public because the true transaction the distribution of securities to the public is not registered. See SEC v. North Am. Research and Dev. Corp., 424 F.2d 63, 71 (2d Cir. 1970) (Sections 5 and 5(a) are "so designed as to prevent any circumvention of the registration requirement by devious and sundry means."); Matter of Sky Scientific, Inc., No. 3-9201, 1999 WL 114405,*31 (S.E.C. March 5, 1999) (finding prima facie case for violation of § 5 where company sold registered securities to employees, who then sold stock to the public without re-registering and then remitted proceeds to the company); SEC v. Hollywood Trenz, Inc., Nos. 3-9597, 3-9598, 1998 WL 214285, *1 (S.E.C. March 4, 1998) (finding that employees had acted as conduits for company's issuing stock to outside investors, in violation of § 5); Registration of Securities on Form S-8, 1999 WL 95488.
As the Second Circuit has recognized in a case where the defense suggested section 5 required proof that the transactions were a part of an "integrated offering," the "relevant inquiry in such cases is not so much upon the nature of the offering as upon the need for protection of the class of offerees; i.e., whether they have the information which a registration would disclose, or have access to it." SEC v. Universal Major Industries Corp., 546 F.2d 1044, 1047 (2d Cir.1976). Thus, although the complaint *502 does not allege the existence of a preconceived plan, Count Six adequately pleads a violation of section 5 because it alleges that the company received profits from its employees' sale of unregistered stock to the public.
C. Claim 7 States a Control Person Claim against Defendant Grace Murphy
In passing, Defendants contend that Claim 7 should be dismissed solely because they correspond to the fraud alleged in Claims 1 and 2. As the complaint properly states a claim for violations of the anti-fraud provisions, this argument fails.
Moreover, the SEC may seek disgorgement from "nominal" or "relief" defendants who are not themselves accused of wrongdoing in a securities enforcement action where those persons or entities (1) have received ill-gotten funds, and (2) do not have a legitimate claim to those funds. See Cavanagh, 155 F.3d at 136. The complaint alleges that Grace Murphy was unjustly enriched through the sale of DCI common stock, DCI's payment of her personal expenses, and the transfer to her of assets obtained as a result of defendant Murphy's allegedly unlawful conduct. Compl. ¶¶ 11, 113, 114. In addition, the complaint alleges that Grace Murphy did not provide value for such assets and has no just claim to them. Id. ¶ 139. Therefore, the complaint states a claim against Grace Murphy.
Conclusion
For the foregoing reasons, the Defendants' motion is denied.
It is so ordered.
NOTES
[1] Rule 10b-5 provides:
It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,
(a) To employ any device, scheme, or artifice to defraud,
(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security.
17 C.F.R. § 240.10b-5 (1990).
[2] Defendants suggest that the Court take judicial notice of the Order Instituting Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings and Imposing Remedial Sanctions entitled In the Matter of Richard S. Kondub, CPA, et al., No. 3-10242 (S.E.C. June 23, 2000), which found that DCI's accountants had violated GAAP in preparing the SEC filings. However, although good faith reliance on outside auditors is a defense to securities fraud, see Markowski v. SEC, 34 F.3d 99, 104-05 (2d Cir.1994), the facts set forth in the Order do not negate the inference of scienter raised by the pleadings. See S.E.C. v. Caserta, 75 F. Supp. 2d 79, 95 (E.D.N.Y.1999) (citing United States v. Erickson, 601 F.2d 296, 305 (7th Cir.1979) ("If a company officer knows that the financial statements are false or misleading and yet proceeds to file them, the willingness of an accountant to give an unqualified opinion with respect to them does not negate the existence of the requisite intent or establish good faith reliance.")).
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80 So. 3d 469 (2012)
STATE of Louisiana
v.
Wayne WILSON.
No. 2011-K-1978.
Supreme Court of Louisiana.
February 10, 2012.
Denied.
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13 A.3d 905 (2011)
418 N.J. Super. 396
C.M.F., Plaintiff-Respondent,
v.
R.G.F., Defendant-Appellant.
A-4826-08T2
Superior Court of New Jersey, Appellate Division.
Argued telephonically February 3, 2011.
Decided February 25, 2011.
*906 Timothy J. Dey, Clark, argued the cause for appellant.
Respondent has not filed a brief.
Before Judges PARRILLO, ESPINOSA and SKILLMAN.
The opinion of the court was delivered by
ESPINOSA, J.A.D.
Defendant appeals from a final restraining order entered against him on the ground of harassment. We affirm.
Plaintiff filed for and obtained a temporary restraining order based upon allegations of harassment and criminal mischief on January 19, 2009, based upon events of the preceding weekend. By way of background to those events, the parties were engaged in what can fairly be described as protracted and acrimonious matrimonial litigation. However, in November 2007, they agreed to share custody of their children and possession of the former marital residence on a fifty/fifty basis. Pursuant to this arrangement, each lived at the house for three and one-half days of the week with their children, and then left one hour before the arrival of the other to assume residence. In this way, they existed, without incident or seeing each other, for a substantial period of time.
On Friday, January 16, 2009, plaintiff received a copy of an order in response to motions each party had filed to change the *907 fifty/fifty arrangement.[1] The order granted plaintiff exclusive possession of the residence and directed defendant to pay the carrying costs. Plaintiff testified that she sent defendant a text message to inform him about the order and that she would have their twin sons ready to be picked up at eight or nine that evening. She then picked up the boys from basketball practice and also told them that the judge had decided that she would stay in the house full-time; that they would still see both parents the same amount of time but they would spend their time with their father away from the home. She dropped the boys off at a basketball game after dinner and again sent a text message to defendant to let him know that the boys were at the game, would call him when it was over, and that she would leave their bags on the front porch.
At approximately 9:00 p.m., defendant arrived at the house; the parties' older son arrived in a separate car with the younger twin boys. One of the younger boys called plaintiff on the phone and accused her of lying to them, which she denied. Plaintiff testified that the boys returned to the car before she could open the door; defendant testified that she refused to open the door. Defendant called the Woodbridge police. Plaintiff showed the police officer the court order. He in turn showed the order to defendant. Plaintiff testified that defendant was "very enraged . . . very angry and he screamed right away" that he wanted to see the judge's signature. She stated further that he started to scream that he would take her back to court and not return the boys home on Sunday night. Plaintiff got upset, started to cry and turned to the police officer for help. The officer told her to go into another room while he spoke to defendant. He remained at the home for approximately twenty minutes after defendant left with the boys.
On the following day, defendant was present at their twin boys' afternoon basketball game. Plaintiff gave the following account of what transpired. She testified that she asked a friend to go with her to the game because she was frightened to go alone; that she knew defendant's state of mind and that he was very angry. When they arrived at the gym, it was quite crowded; everyone was sitting in one set of bleachers. They found a spot in front of two women that plaintiff knew. One of the women moved her handbag to give them a seat. Plaintiff stated that, just as she was sitting down, she heard defendant "screaming down verbally abusive words from the stands at [her] immediately."
[T]he first thing he screamed down was pig, real loud, pig. And I, I was uh, shocked and stunned as everyone else in the stands, these are all people that we have been going, these are all parents around us that we have beenour children have been playing basketball with since like fifth grade you know, it was quite alarming. So he screamed down pig and then he screamed down, you're a whore, you're a slut, and you're a f___ing bitch, he just kept going. It washe was not stopping. He was enraged. He was furious. He was not stopping.
Plaintiff did not stay at the marital residence that evening. When she returned on the following day, there was a dead cat, its head smashed, lying on the trunk of her car, and the front picture window of the house was shattered.
*908 Defendant testified that he called the police on January 16 when plaintiff would not open the door and that the first he heard of the order granting her exclusive possession of the home was that evening when the police officer showed it to him. He had neither asked for nor agreed to such an arrangement. He agreed that he demanded to see the judge's signature but, in contrast to plaintiff's description of his behavior, he testified that, after seeing the judge's signature, he said there is nothing that he can do and that he just left. Regarding the basketball game, he said that the gym was three-quarters empty when plaintiff chose to sit a short distance away from him. He admitted calling her "some bad names" but maintained that he was not angry, despite the fact that he had said so in an earlier certification. He said that he "was just very upset and concerned for [his] children." Defendant also denied putting the dead cat on plaintiff's car or breaking the window.
Plaintiff also testified about prior incidents of domestic violence. She described an incident in July 2007 in which she arrived at home, defendant opened the car door and repeatedly kicked her in the thigh and shoved her back in the car when she tried to get out. The police were called. She filed a complaint and, according to the records submitted in court, defendant pled guilty to violating a township ordinance.
Plaintiff also filed an application for a temporary restraining order based upon harassment in November 2007 "because he was carrying around a club around the house intimidating me and the children, carrying around a weapon." She stated that he was constantly cursing at her and calling her names such as a pig and a whore. She filed the application after he took the children away from her. This complaint, along with a complaint defendant had filed against her, was dismissed by the court after a hearing.
Plaintiff testified about other occasions in which defendant called her similar namesat least once in public and on another occasion, breaking into her locked bedroom at 12:30 a.m., waking her up to scream at her. She also stated that, prior to filing the complaint for divorce, defendant had destroyed her cell phone and disabled her car by detaching wires.
After a hearing, the trial court found that the allegation of criminal mischief had not been proven by a preponderance of the evidence. The court also stated the view that the words spoken at the basketball game, alone, were insufficient to warrant a final restraining order. However, the court concluded that, when the conduct was viewed within the context of the prior incident of physical abuse in 2007, defendant's breaking her cell phone and pulling out wires from her car, the elements of harassment were proven.
In his appeal, defendant presents the following issues for our consideration:
POINT I
[DEFENDANT'S] CONDUCT WAS NOT HARASSMENT AS PER NEW JERSEY LAW
POINT II
[DEFENDANT] DID NOT HAVE THE PURPOSE TO HARASS REQUIRED UNDER THE STATUTE
POINT III
THE TOTALITY OF THE CIRCUMSTANCES DOES NOT SUPPORT A FINAL RESTRAINING ORDER
In reviewing a decision of a family court, we "defer to the factual findings of the trial court," N.J. Div. of Youth and Family Servs. v. E.P., 196 N.J. 88, 104, *909 952 A.2d 436 (2008), in recognition of the "family courts' special jurisdiction and expertise in family matters . . . ." N.J. Div. of Youth and Family Servs. v. M.C. III, 201 N.J. 328, 343, 990 A.2d 1097 (2010); Cesare v. Cesare, 154 N.J. 394, 413, 713 A.2d 390 (1998). It is only "when the trial court's conclusions are so `clearly mistaken' or `wide of the mark'" that we will intervene and make our own findings "to ensure that there is not a denial of justice." E.P., supra, 196 N.J. at 104, 952 A.2d 436.
In this case, the factual findings of the family court regarding defendant's conduct on January 17, his prior acts in disabling plaintiff's car and destroying her cell phone and a prior incident in 2007 are supported by the credible evidence. We also agree that defendant's conduct on January 17 supported a finding of harassment, although we reach that conclusion through a somewhat different path.
The final restraining order was based upon a finding that defendant had committed an act of harassment. N.J.S.A. 2C:33-4 states, in pertinent part:
[A] person commits a petty disorderly persons offense if, with purpose to harass another, he:
a. Makes, or causes to be made, a communication or communications anonymously or at extremely inconvenient hours, or in offensively coarse language, or any other manner likely to cause annoyance or alarm;
. . . .
c. Engages in any other course of alarming conduct or of repeatedly committed acts with purpose to alarm or seriously annoy such other person.
(Emphasis added.)
In State v. Hoffman, 149 N.J. 564, 695 A.2d 236 (1997), our Supreme Court addressed the question whether the act of mailing a torn-up support order on two occasions by one former spouse to the other constituted a violation of the harassment statute, N.J.S.A. 2C:33-4(a). The Court stated that the following elements were required to establish such a violation:
(1) defendant made or caused to be made a communication;
(2) defendant's purpose in making or causing the communication to be made was to harass another person; and
(3) the communication was in one of the specified manners or any other manner similarly likely to cause annoyance or alarm to its intended recipient.
[149 N.J. at 576, 695 A.2d 236]
Defendant conceded that he engaged in offensively coarse language. He therefore conceded that the first and third elements identified by the Court were satisfied. However, he disputed that he engaged in such conduct with the requisite intent to harass. In discussing the evidence necessary to establish such intent, the trial court relied upon cases in which a single outburst was deemed to be the product of transitory anger and insufficient to establish the requisite intent. See State v. L.C., 283 N.J.Super. 441, 662 A.2d 577 (App.Div. 1995), certif. denied, 143 N.J. 325, 670 A.2d 1066 (1996); Peranio v. Peranio, 280 N.J.Super. 47, 654 A.2d 495 (App.Div. 1995); see also J.N.S. v. D.B.S., 302 N.J.Super. 525, 695 A.2d 730 (App.Div. 1997). However, we note that each of these cases was decided prior to the Supreme Court's decision in Hoffman, which clarified that "the `serious annoyance' required by subsection (c) [should not] be engrafted into the `annoyance' required under subsection (a)."
We are satisfied that the Legislature intended that the term "annoyance" should derive its meaning from the conduct *910 being scrutinized. . . . [S]ubsection (a) proscribes a single act of communicative conduct when its purpose is to harass. Under that subsection, annoyance means to disturb, irritate, or bother.
[Id. at 580, 695 A.2d 236]
Moreover, the Court observed that, "in enforcing subsection (a) of the harassment statute, we must focus on the mode of speech employed." Id. at 583, 695 A.2d 236. The statute criminalizes speech that invades one's privacy by "its anonymity, offensive coarseness, or extreme inconvenience" because it is "aimed, not at the content of the offending statements but rather at the manner in which they were communicated." Id. at 583-84, 695 A.2d 236 (quoting State v. Finance Am. Corp., 182 N.J.Super. 33, 39-40, 440 A.2d 28 (App.Div.1981)).
As noted, defendant conceded that his speech was offensively coarse. His mode of speech thus fell within one of the enumerated categories that is targeted by the statute as invading one's privacy. The next question is whether he engaged in such conduct with the intent "to disturb, irritate, or bother" plaintiff.
Defendant now contends that he was angered by "an admittedly mistaken court order . . . that turned [him] out of his own home." He has also testified that he was not motivated by anger but has offered no other motivation for making the offensive statements to plaintiff.
Even if defendant's anger over a court order is deemed to be the catalyst for his outburst, that will not shield his conduct from the reach of N.J.S.A. 2C:33-4(a). Defendant seems to suggest anger somehow negates an intent to harass and therefore could serve to excuse his behavior in this case. We do not view these mental states as mutually exclusive. On the contrary, there is sufficient evidence from which to infer that defendant acted with the requisite state of mind to constitute harassment. Indeed, the very nature of the verbal attack, the manner of its delivery and the attendant circumstances all strongly suggest a purpose to harass. Defendant was fully aware that his outburst of profanity occurred not only in public but in front of the parties' children and the parents of their children's classmates with whom plaintiff would have to interact in the future. Surely, he knew that his offensively coarse language would disturb, irritate and annoy plaintiff under these circumstances and, therefore, acted with the intent to cause that result. Simply put, defendant cannot escape the consequences of his conduct by contending that he was merely angry.
Further, because the totality of the circumstances are to be considered in evaluating the defendant's manner of speech, it was entirely appropriate for the trial court to consider prior conduct of his that reflected an intent to disturb, irritate or bother plaintiff, i.e., defendant disabling her car, destroying her cell phone and his guilty plea to violating a township ordinance related to an assault upon her. As the trial court observed, the evidence regarding defendant's prior acts supported the conclusion that defendant's purpose in directing the offensively coarse language at plaintiff was to harass her.
Affirmed.
NOTES
[1] In his brief, defendant states that each had moved for exclusive possession of the marital home and that defendant had indicated his consent to plaintiff having exclusive possession on the condition that she be responsible for all carrying costs.
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20 A.3d 780 (2011)
419 Md. 674
Steven HILL, Terri Alston & Charles Yates
v.
STATE of Maryland.
No. 93, September Term, 2010.
Court of Appeals of Maryland.
May 23, 2011.
Peter F. Rose, Assistant Public Defender (Paul B. DeWolfe, Public Defender, Baltimore, MD), on brief, for Petitioners.
Mary Ann Ince, Asst. Atty. Gen. (Douglas F. Gansler, Atty. Gen. of Maryland, Baltimore, MD), on brief, for Respondent.
Argued before BELL, C.J., HARRELL, BATTAGLIA, GREENE, MURPHY, ADKINS and BARBERA, JJ.
*781 ADKINS, J.
The Petitioners in this caseSteven Hill, Terri Alston, and Charles Yates[1] were sentenced to terms of imprisonment with a deferred, or "springing," start date. Under these sentences, their jail terms were scheduled to begin three to five years after the sentencing date. The sentencing judge informed Petitioners that if they stayed out of further legal trouble during that time, they could return to court before the start date and have their sentences vacated. Petitioners, however, did not return to court, and later failed to report on the respective start dates, and each was charged and pled guilty to second degree escape.
After the escape convictions, this Court decided Montgomery v. State, 405 Md. 67, 950 A.2d 77 (2008), and invalidated a "springing sentence" similar to the underlying sentences here. After that decision, Petitioners attempted to vacate their escape convictions, arguing that they could not be criminally responsible for failure to report for the now-invalid sentences. The Circuit Court denied the motions to vacate the convictions, and the Court of Special Appeals affirmed in an unreported opinion. We granted certiorari to determine the following question:
Whether a conviction and/or sentence for second degree escape is legally []valid if it is predicated on the failure "to obey a court order to report to a place of confinement," where that court order was legally invalid.
We shall answer this question affirmatively and uphold the trial court's denial of motions to vacate the convictions.
FACTS AND LEGAL PROCEEDINGS
The facts in this case are not disputed by either party, and were summarized by the Court of Special Appeals as follows:
Hill v. State
On March 12, 2002, Mr. Hill pled guilty to possession of cocaine, and the court sentenced him to two years of incarceration, to begin five years later, on March 12, 2007. On March 12, 2007, Mr. Hill failed to report to the Charles County Detention Center to begin his sentence. Mr. Hill was indicted on one count of second degree escape, alleging that he "did unlawfully and knowingly fail to obey a court order to report to the Charles County Detention Center." On February 1, 2008, Mr. Hill pled guilty to second degree escape, and the circuit court sentenced Mr. Hill to a period of incarceration for one year and one day.
On July 2, 2008, and October 16, 2008, Mr. Hill filed, respectively, a "Motion to Vacate Illegal Sentence" and a "Motion to Vacation Conviction." In both motions, he argued that the Court of Appeals decision in Montgomery rendered his conviction for second degree escape "void ab initio and a legal nullity."
On October 16, 2008, the circuit court held a hearing. With respect to the conviction and sentence for second degree escape, the court denied Mr. Hill's "motion to vacate the sentence and set aside the conviction." The court stayed execution of the sentence pending appeal. Mr. Hill noted a timely appeal.
Alston v. State
On October 2, 2002, Ms. Alston pled guilty to a probation violation for failing to pay restitution. The court sentenced Ms. Alston to three years of incarceration, to begin approximately three years later, on October 31, 2005. The court *782 advised Ms. Alston that "[i]f I am advised that the restitution has been paid in full between now and that date I will grant a Motion to Reconsider, vacate the sentence; you won't have to serve any of it." The court added, however, that if "it hasn't been paid as of that date or the date hasn't been extended at your request beyond thatif you don't show up at the sheriff's front desk at 9:00 that morning, there'll be a warrant out for you."
Ms. Alston subsequently was indicted on one count of second degree escape, alleging that she "did unlawfully and knowingly fail to obey a court order to report to the Charles County Detention Center." On May 12, 2006, Ms. Alston pled guilty to the escape charge, and the circuit court sentenced Ms. Alston to a period of incarceration for one year and one day.
On July 24 and October 16, 2008, Ms. Alston filed, respectively, a "Motion to Vacate Illegal Sentence" and a "Motion to Vacate Conviction." She argued that the Court of Appeals decision in Montgomery rendered her conviction and sentence for second degree escape void.
On October 16, 2008, the court held a hearing on Ms. Alston's motions. The court denied the motion to vacate the escape conviction and sentence. The court stayed execution of the sentence pending appeal, releasing Ms. Alston on her own recognizance. Ms. Alston noted a timely appeal.
Yates v. State
On February 10, 2004, Mr. Yates pled guilty to second degree burglary, and the court imposed a five-year sentence, to begin three years later, on February 14, 2007. On February 14, 2007, Mr. Yates failed to report to the Charles County Detention Center to begin his sentence. On April 30, 2007, Mr. Yates was indicted on one count of second degree escape. On May 21, 2008, Mr. Yates pled guilty to the charge, and the court imposed a sentence of one year and one day.
On July 2 and October 15, 2008, Mr. Yates filed motions similar to those of the other appellants, asking the court to vacate the conviction and sentence for second degree escape. On November 13, 2008, the court denied "the motion." Mr. Yates noted a timely appeal.
(Footnotes omitted).
As the intermediate appellate court's summary reveals, the relevant facts of each case are the same: Petitioners were convicted of second degree escape for failing to report to prison on a so-called "springing sentence," and later challenged the escape conviction based on the decision by this Court in Montgomery v. Maryland, 405 Md. 67, 950 A.2d 77 (2008).
The Montgomery decision, issued by this court on June 11, 2008, invalidated certain "springing sentences." See 405 Md. at 81, 950 A.2d at 85-86. There, a criminal defendant admitted to violating his probation, and was ordered to serve the remaining ten years of his sentence with a deferred start date of three years after the sentencing hearing. Id. at 69-70, 950 A.2d at 79. In ordering the deferred start date, the trial court reasoned "if you are of good behavior between now and three years from now I will reconsider it and vacate it and not make you serve another day." Id. The defendant challenged this "springing sentence" as being unauthorized by statute and being illegal, and the issue eventually reached this Court.
We first concluded that, although a deferred sentence was allowed at common law, it would not be allowed for the reasons stated by the trial judge; i.e. to monitor *783 good behavior and give the defendant an opportunity to avoid imprisonment. See Montgomery, 405 Md. at 79, 950 A.2d at 84.[2] We next analyzed Maryland Rule 4-348(d), which states that a sentence "may be stayed upon terms the court deems proper." After reviewing the development of that rule, we concluded that a stay was intended to allow the defendant "take care of his or her personal, financial or other commitments[,] [including] such things as winding up business affairs [and] making arrangements for the care of children or other dependents[.]" Id. at 81, 950 A.2d at 85. We thus held that "[t]he purpose of the provision was not to allow a trial judge to monitor the defendant's behavior for several years[,]" and that the sentence was illegal. Id. at 81, 950 A.2d at 86.
The State has conceded that the underlying, springing, sentences are illegal under Montgomery. The single issue in this Court, then, is whether Petitioners' failure to report for their sentences, which were later invalidated, supports a conviction for second degree escape.
DISCUSSION
The Petitioners each pled guilty to second degree escape under Maryland Code (2002, 2005 Supp.), § 9-405 of the Criminal Law Article ("CL"), which provides in pertinent part:
(a) Prohibited(1) A person who has been lawfully arrested may not knowingly depart from custody without the authorization of a law enforcement or judicial officer.
(2) A person may not knowingly fail to obey a court order to report to a place of confinement.
* * *
(c) Penalty.A person who violates this section is guilty of the misdemeanor of escape in the second degree and on conviction is subject to imprisonment not exceeding 3 years or a fine not exceeding $5,000 or both.
(Emphasis added).
The current form of the escape statute is the result of amendments in 1999, in which the Legislature included, among other things, a "fail[ure] to obey a court order" as an "escape."[3] The Legislature described the purpose of these revisions, contained in Senate Bill 355, and its companion House Bill 463, as follows:
This bill [makes] one uniform provision applicable to temporary leave and home detention in all counties[, and] mak[es] the failure to report to a correctional facility as required by a court order an escape.
* * *
[House Bill 463] further codifies existing law concerning escape while on leave or otherwise not in a correctional facility. Although the current statute only refers to escape from a correctional facility, case law has adopted the concept of constructive custody to apply this statute to persons who escape while on leave *784 or are otherwise outside of the correctional facility (e.g., in a hospital).
* * *
This bill explicitly covers persons on leave. By defining escape to retain its judicially determined meaning, it also includes those taken out of a correctional facility for other reasons, such as to a hospital or court.
Floor Report to Senate Bill 355, quoted in Boffen v. State, 372 Md. 724, 742-43, 816 A.2d 88, 98-99 (2003).[4] As this history demonstrates, the Legislature intended to treat a failure to report for imprisonment identically to an active escape from confinement.
Thus, we turn to case law regarding escape from physical confinement. The Court of Special Appeals has previously upheld an escape conviction despite the defendant's claims that the underlying conviction was illegal. See, e.g., Vucci v. State, 18 Md.App. 157, 160, 305 A.2d 483 (1973). In Vucci the defendant attempted to escape from prison by cutting a hole through a perimeter fence, and was charged with escape. On appeal, the defendant argued he was being illegally detained because of a procedural defect; "he had not been examined for the purpose of determining his status as a defective delinquent within six months from the date he was received by the [prison], as required by" statute. Id. at 159, 305 A.2d at 483. This illegality, he argued, gave him "the absolute right to depart from the confines of [imprisonment.]" Id. The Court of Special Appeals disagreed:
[I]t is clear in Maryland that even if a person is illegally confined because of defects in the procedure by which he was arrested and imprisoned, he is not entitled to resort to self-help but must apply for his release through regular legal channels. We think it is equally clear that even if a person, confined under color of law, is illegally confined because of violations of statutory procedures required with respect to his continued confinement, he is similarly not entitled to resort to self-help but must apply for his release through regular legal channels.
Id. at 159, 305 A.2d at 484. The Vucci decision is representative of Maryland's strong prohibition against self-help. See also Jennings v. State, 8 Md.App. 321, 325, 259 A.2d 547, 550 (1969) (escape convictions are valid "even though [the defendant] might be able to show such defects in the procedure by which he was arrested and imprisoned as would justify his release.").
Maryland's approach to the crime of escape is consistent with a vast majority of courts that have rejected the alleged illegality of the underlying conviction as a defense to escape. See United States v. Pereira, 574 F.2d 103, 106 n. 6 (2nd Cir. 1978), cert. denied, 439 U.S. 847, 99 S.Ct. 145, 58 L.Ed.2d 148 (1978) (illegality of arrest or detention is not a defense to charge of escape); United States v. Haley, 417 F.2d 625, 626 (4th Cir.1969) ("A prisoner's complaints concerning the legality *785 of his conviction or of his imprisonment should be addressed to proper administrative body or to the courts. Self help in the form of escape or assault on a prison guard is indefensible."); United States v. Smith, 534 F.2d 74, 75 (5th Cir.1976) ("[V]alidity of conviction under which an escapee is confined is not an element of the offense of unlawful[] escap[e.]"); Petition of Lynch, 379 Mass. 757, 400 N.E.2d 854, 857 n. 2 (1980) (When "imprisonment is under color of law, the prisoner is not entitled to resort to self-help, but must apply for his release through regular legal channels[.]"); Brown v. State, 552 So.2d 109, 110 (Miss.1989) ("[W]here one is imprisoned under some color of law, he is not entitled to resort to self-help but must apply for release through regular legal channels.") (citation omitted); but see State ex rel. Robison v. Boles, 149 W.Va. 516, 142 S.E.2d 55, 57 (1965) (accused was not guilty of escape from imprisonment because he was denied assistance of counsel at his previous trial, and the prior conviction was therefore void).
Under existing Maryland law, there is a narrow exception to its general prohibition against self-help for criminal defendants. Maryland has recognized that "one illegally arrested may use any reasonable means to effect his escape, even to the extent of using such force as is reasonably necessary." Polk v. State, 378 Md. 1, 41, 835 A.2d 575, 599 (2003) (quoting Diehl v. State, 294 Md. 466, 451 A.2d 115 (1982), cert. denied, 460 U.S. 1098, 103 S.Ct. 1798, 76 L.Ed.2d 363(1983)) (emphasis added) (citations omitted).[5] Maryland thus allows a defendant to argue, as a defense to certain criminal charges arising from his resistance to an arrest, that the arrest was illegal.
This limited allowance for self-help, however, does not extend to facially valid court orders. For example, a person may not resist an arrest carried out pursuant to a court-issued warrant. See Rodgers v. State, 280 Md. 406, 421, 373 A.2d 944, 952 (1977) cert. denied, 434 U.S. 928, 98 S.Ct. 412, 54 L.Ed.2d 287 (1977) (A person may not resist "an arrest [] made by a peace officer on a warrant duly issued by a judicial officer."). This distinction makes clear that Maryland law requires compliance with court orders, even if there are serious questions about the validity of the order. Cf. United States v. United Mine Workers, 330 U.S. 258, 67 S.Ct. 677, 91 L.Ed. 884 (1947) (even where the court's jurisdiction is subject to serious doubt, violation of the court order is subject to sanction); United States v. Petrella, 707 F.2d 64 (2nd Cir.1983) (alleged invalidity of deportation order no defense to charge of illegal re-entry).
Under these standards, Petitioners were properly convicted of escape. They were under a court order to report for a term of imprisonment, and failed to comply with these court orders, a clear violation of CL Section 9-405. A prisoner with an invalid sentence may not engage in self-help, and defy a court order of imprisonment, any more than a prisoner with a potentially invalid conviction. See Jennings, 8 Md. *786 App. at 325, 259 A.2d at 550 (escape convictions are valid "even though [the defendant] might be able to show such defects in the procedure by which he was arrested and imprisoned as would justify his release."). Although Petitioners may have grounds to challenge their underlying, springing sentence, that challenge must be made through the appropriate channels.
Petitioners' argument to the contrary falls short. They argue that illegality of the underlying court order is a defense to escape because the escape statute, CL Section 9-405(b), requires the underlying court order to be lawful. In support of this point, Petitioners cite language from Boffen v. State, 372 Md. 724, 816 A.2d 88 (2003). The Boffen Court reversed a first degree escape conviction, explaining that for a valid escape conviction "the escapee must have been legally detained[,]" and that "escape is the unauthorized departure from lawful custody." Id. at 733, 816 A.2d at 93 (emphasis added) (citations omitted).
Petitioners, however, take the Boffen language out of context. Boffen had been convicted of certain credit card offenses, and appeared in court for a sentencing hearing. Id. at 727, 816 A.2d at 89. When the judge stated that "the sentence under count number one is fifteen years to the Division of Correction . . . [,]" Boffen "interrupted him, bolted from the courtroom, and ran out onto the street where he was eventually arrested." Id. He was later tried and convicted for escape. His appeal to the Court of Special Appeals, on grounds that he was not yet in police custody when he fled, proved unsuccessful.
We granted certiorari to define the boundaries of "custody." We reviewed State ex rel. Johnson v. Warden, 196 Md. 672, 674, 75 A.2d 843, 844 (1950), where we held:
[A] prisoner was legally confined in the State Reformatory . . . even though he was allowed to work outside, unguarded, on a private farm, and that, when he escaped from the farm, he was subject to punishment for escape from the Reformatory.
(Emphasis added). We also considered Ford v. State, 237 Md. 266, 205 A.2d 809 (1965), where we held that a prisoner was in constructive custody of the State while being transported from a prison, and stated:
Maryland draws no distinction between an escape from within the prison walls and one effected when the prisoner, while still in legal custody, was physically outside the prison area.
Id. at 270, 205 A.2d at 812. (emphasis added). We then distinguished Johnson and Ford, because, unlike those cases, Boffen had not yet entered custody of law enforcement, constructive or otherwise, at the time he fled. See Boffen, 372 Md. at 747, 816 A.2d at 101-02. We therefore reversed his conviction.
In this line of cases, we referred to "lawful custody" to signify that the defendant was "within the actual or constructive custody of a place of confinement within the meaning of the statute." See Boffen, 372 Md. at 733, 816 A.2d at 93 (emphasis added). Contrary to Petitioners' allegation, these cases do not distinguish between lawful and unlawful official custody.[6] Indeed, those defendants did not allege that their underlying conviction or sentence was invalid. Clearly, the Boffen decision did not transform Maryland law so as to allow criminal defendants, seeking relief from their sentences, to engage *787 in self-help instead of filing an appropriate motion or pleading in court.[7]
CONCLUSION
Petitioners' failure to report for imprisonment was sufficient to support their escape convictions. The subsequent ruling in Montgomery v. State allowed Petitioners to challenge, in the appropriate venue, the validity of their "springing" sentences. It did not, however, allow them to engage in self-help. Maryland law has clearly foreclosed, as a defense to escape, a challenge to the validity of the underlying conviction or sentence.
JUDGMENT OF THE COURT OF SPECIAL APPEALS AFFIRMED. COSTS IN THIS COURT AND THE COURT OF SPECIAL APPEALS TO BE PAID BY PETITIONERS.
NOTES
[1] Jason Hernandez, one of the original Petitioners, withdrew from this appeal.
[2] Acceptable reasons for a deferred start date included "when a female defendant was pregnant or when a defendant desired an opportunity to apply for executive clemency." See Montgomery v. State, 405 Md. 67, 79, 950 A.2d 77, 84 (2008), and sources cited therein.
[3] At that time, the escape statute was contained in Maryland Code (1957, 1996 Repl. Vol., 1997 Supp.), Article 27, Section 137(a). This article was recodified as the Criminal Law article in HB 11 of the 2002 session, enrolled as Chapter 26 of the Maryland Laws 2002. The new second degree escape statute, located in Criminal Law Section 9-405, contained "new language derived without substantive change from former Art. 27, Section 137A." Revisor's Note to Chapter 26. (emphasis added).
[4] The catalyst for these amendments was this Court's decision in Farris v. State, 351 Md. 24, 716 A.2d 237 (1998). There, a defendant was convicted of first degree escape, under the old version of the escape statute, for failing to report for a weekend imprisonment. On appeal, we held that the escape statute did not apply for failure to report, because at that time the defendant was not in "constructive custody" of law enforcement while free during the week. Thus, "he did not leave or physically depart from any place of confinement" when he failed to report. Id. at 35, 716 A.2d at 243. Although Farris may have involved first degree escape, the Legislative response included the current form of the second degree escape statute.
[5] In addition, we allow self-help when a defendant escapes in response to threats to his life, and immediately reports to the proper authorities upon reaching a position of safety. See Robinson v. State, 42 Md.App. 617, 620, 402 A.2d 115, 116-17 (1979) (citing People v. Lovercamp, 43 Cal.App.3d 823, 118 Cal.Rptr. 110 (Ca.App.1975) (describing a narrow duress defense to escape)); see also United States v. Bailey, 444 U.S. 394, 411, 100 S.Ct. 624, 62 L.Ed.2d 575 (1980) ("[T]he escapee is not entitled to claim a defense of duress or necessity unless and until he demonstrates that, given the imminence of the threat, [escape] was his only reasonable alternative."). This potential defense is clearly not applicable to the facts here.
[6] Cf. Vucci, 18 Md.App. at 160, 305 A.2d at 484 (rejecting defense that detention was "illegal," to charges under escape statute which applied to "persons legally detained and confined") (emphasis added).
[7] We need not reach the State's alternative argument that the Montgomery decision was not retroactive.
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20 A.3d 669 (2011)
301 Conn. 163
STATE of Connecticut
v.
VICTOR O.[*]
No. 17983.
Supreme Court of Connecticut.
Argued December 6, 2010.
Decided June 7, 2011.
*673 Elizabeth M. Inkster, senior assistant public defender, with whom, on the brief, was Kent Drager, former senior assistant public defender, for the appellant (defendant).
Leon F. Dalbec, Jr., senior assistant state's attorney, with whom, on the brief, were David I. Cohen, state's attorney, and Paul J. Ferencek and Maureen Ornousky, senior assistant state's attorneys, for the appellee (state).
ROGERS, C.J., and NORCOTT, PALMER, ZARELLA, McLACHLAN and EVELEIGH, Js.
PALMER, J.
A jury found the defendant, Victor O., guilty of one count of sexual assault in the first degree in violation of General Statutes § 53a-70 (a)(2), and two counts of risk of injury to a child in violation of General Statutes (Rev. to 2001) § 53-21(a)(2), as amended by Public Acts 2002, No. 02-138, § 4, arising out of the defendant's sexual abuse of C, the son of the *674 defendant's wife.[1] The trial court rendered judgment in accordance with the jury verdict and sentenced the defendant to a term of thirty years imprisonment, execution suspended after fifteen years, and twenty years of probation. On appeal,[2] the defendant claims that the trial court improperly (1) excluded expert scientific testimony that he contends was relevant to show his lack of sexual interest in prepubescent males, (2) excluded evidence that C's mother had viewed pornographic and adult dating websites on the family computer, (3) permitted the state to elicit testimony from its expert regarding the purpose of forensic interviews of child abuse victims, and (4) allowed the state to refer to C as the "victim" in the jury's presence. The defendant also claims that he was deprived of his right to a fair trial as a result of numerous instances of prosecutorial impropriety during closing argument and, finally, that the trial court improperly sentenced him to a term of probation rather than to a term of special parole in connection with his conviction of first degree sexual assault. Although we agree that the trial court imposed an improper sentence in connection with the defendant's conviction of first degree sexual assault and reverse the trial court's judgment with respect to that sentence, we reject the defendant's other claims and, accordingly, affirm the trial court's judgment in all other respects.
The jury reasonably could have found the following facts. The defendant married C's mother in September, 2000, when C was six years old. The couple subsequently had a daughter together, C's half sister, who was born in June, 2002. At that time, the family was living in an apartment in the town of Greenwich. In December, 2002, however, they purchased a home in the town of Shelton. The night before they were scheduled to move, C's mother stayed in the Greenwich apartment so that she could supervise the movers the next day, and C spent the night alone with the defendant in the Shelton residence. That evening, while C was watching television, the defendant touched C's "private parts" with his hands and put "his penis in [C's] butt" but did not ejaculate. C, who was nine years old at the time, did not tell his mother what the defendant had done because he was afraid and embarrassed.
Additional incidents of sexual abuse and misconduct occurred after the move to Shelton. On several occasions, the defendant touched C in an inappropriate manner and showed him pornographic images on the family computer from a certain pornographic website (website X). On one occasion, the defendant called C into a room, masturbated and ejaculated in C's presence. On two other occasions, the defendant showed C a "dildo" sex toy that the defendant had purchased online. On at least one occasion, the defendant asked C to hold it; when C refused, the defendant penetrated his own anus with it in C's presence.
In February, 2003, C told his mother for the first time that the defendant had touched him inappropriately. C's mother immediately confronted the defendant, who claimed that he and C "were just fooling around" and that any touching that might have occurred was unintentional or *675 had been misunderstood by C. That night, C slept with his mother in her bedroom while the defendant slept downstairs. The next morning, C left to spend the weekend with his biological father. While he was gone, the defendant continued to sleep downstairs. During the course of the weekend, C's mother told the defendant that she did not understand why C would say what he had said about the defendant if it were not true. The defendant replied that he and C "must have been wrestling and fooling around, and, maybe, I accidentally touched him."
The following week, C's mother called the defendant at work and told him that she wanted him to move out of the house because she was uncomfortable with him being around C. The defendant agreed and later returned home to pick up some of his belongings. Over the next few days, C's mother and the defendant spoke several times on the telephone. During those conversations, the defendant insisted that he and C only had been "fooling around," that C "might have taken something the wrong way," and that he "could have touched [C] by accident." Five days after the defendant left the house, C's mother relented and allowed the defendant to return home. At that time, she, the defendant and C held a family meeting at which the defendant told C "that he loved him [that] he would never hurt him and [that] ... he cared very much about [him]...." During that meeting, C sat with his head down and said nothing. The incidents of abuse resumed shortly thereafter, but C did not report them to his mother.
Several months later, on September 26, 2003, C was sitting on the defendant's lap in front of the family computer, looking at photographs of dogs to adopt, when the defendant placed his hand inside C's pants and began to touch C's penis. While this was happening, C's mother walked into the room, saw the defendant with his hand in C's pants and exclaimed, "what are you doing?" The defendant replied, "nothing." She then turned to C and asked him whether the defendant had been touching him, to which C replied, with a scared look on his face, "no." When C's mother began yelling at the defendant, the defendant left the room and went outside to smoke a cigarette. While the defendant was outside, C's mother again asked C whether the defendant had been touching him. C answered "yes" and stated that the defendant had "been doing it for a long time." C's mother then went upstairs and locked the defendant out of the house. Twenty minutes later, however, she allowed him to reenter, but only to gather his belongings and to leave, which he did. The defendant never returned to live with C and his mother, and he and C's mother divorced soon thereafter.
At trial, the defendant testified that he never had touched C inappropriately or shown him pornography on the Internet. He also denied that C's mother ever had confronted him about inappropriate sexual conduct toward C before the defendant and C's mother permanently separated. He claimed that, contrary to the testimony of C's mother, he had moved out of the family residence for five days in February, 2003, as a result of marital problems unrelated to C. He also claimed that he had left the house on September 26, 2003, not because C's mother had seen him with his hand inside C's pants but, rather, because she became furious with him over his plans to adopt a dog. The defendant testified that his relationship with C's mother had deteriorated after their move to Shelton, that she had grown unhappy with his long work hours and the fact that he spent more time with his daughter than with C. During closing argument to the jury, defense counsel argued that C's mother had fabricated the allegations of *676 sexual abuse simply as a way of ending her marriage to the defendant. Ultimately, the jury was not persuaded by these claims and found the defendant guilty of one count of sexual assault in the first degree and one count of risk of injury to a child in connection with the defendant's sexual assault of C on the night that he and C had stayed alone in Shelton. The jury also found the defendant guilty of one count of risk of injury to a child in connection with the incident in which C's mother discovered the defendant with his hand inside C's pants. Additional facts and procedural history will be set forth as necessary.
I
The defendant first claims that the trial court abused its discretion in excluding expert testimony regarding psychological testing that had been performed on him, in particular, the Abel Assessment of Sexual Interest (Abel test), which indicated that, at the time of testing, the defendant had no sexual interest in males or prepubescent males.[3] Specifically, the defendant contends that the trial court improperly concluded that the results of the Abel test were not relevant to his motive to commit the charged offenses and were not sufficiently reliable to satisfy the standard for the admission of scientific evidence set forth in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), and adopted by this court in State v. Porter, 241 Conn. 57, 698 A.2d 739 (1997), cert. denied, 523 U.S. 1058, 118 S.Ct. 1384, 140 L.Ed.2d 645 (1998).
Prior to the commencement of trial, the state filed a motion in limine to exclude evidence and testimony about a sexual evaluation report, prepared by Andrew Kass, a clinical psychologist, in which Kass concluded, on the basis of the Abel test, that the defendant lacked a sexual interest in prepubescent males. In support of its motion, the state maintained that the conclusions of the report were not relevant to the charged offenses and that the Abel test is not a scientifically valid tool for diagnosing the absence of sexual interest in children.
At an evidentiary hearing on the state's motion, Kass, whose credentials as an expert were not challenged, testified about the Abel test as follows: "Essentially, the Abel ... test is a visual reaction time test. We show the individual a number of slides, of pictures of men and women, boys and girls, of different ages and in different situations. The images are all clothed and considered appropriate and not obscene. We ask the individual to look at each of these slides on the slide projector ... [and] to rate them in terms of how sexually arousing or disgusting the thought of engaging in sexual behavior with the person ... in that image is." Kass also testified that the Abel test is based on "the notion that we tend to look at images of people longer that we like or we find attractive than we would look at something that we [do] not like or [do] not find attractive. The test ... measur[es]... how long a person views a slide.... There is no time frame ... [s]o [the test subjects are] pretty much on their own in terms of how long they wish to look at each of the images." Kass indicated that the test subject's level of interest or arousal *677 and viewing times associated with each slide are used to determine the test subject's sexual interest in various people of different ages and genders. A computer analyzes the data and generates a chart, which, according to Kass, "shows the degree to which the person is interested in various individuals, by age and by gender.... Essentially ... we're trying to... see whether ... [the test subject has] indicated any interest in minors, in children.... The primary idea is to see whether ... the [test subject] had indicated any inappropriate interest in minors." Kass testified that he had administered the Abel test, as well as other related tests,[4] to the defendant and that the test results did not indicate that the defendant had a sexual interest in male children.
Additionally, Kass testified that there "has been a lot of peer review and a lot of acceptance" of the Abel test by the Association for the Treatment of Sexual Abusers, of which he is a clinical member, and that the accepted error rate of the test is approximately 20 percent. He further testified that the test is generally accepted among psychologists who treat sexual offenders but that, outside of the field of clinical treatment, "there have been challenges to it." Specifically, he explained that, although the test often is included as part of a full evaluation of the treatment needs of convicted sex offenders, there is controversy within the field of clinical psychology as to whether the test is a valid tool for diagnosing, as opposed to treating, inappropriate sexual interest. Kass also acknowledged that the test had been devised as a tool to help with the treatment of known sex offenders, not as a diagnostic tool, and that the person who had developed the test, namely, Gene G. Abel, previously had stated that the test should not be used to screen pedophiles from the normal population. Kass further conceded that the guidelines of the Association for the Treatment of Sexual Abusers expressly provide that "viewing time test results [such as the results of the Abel test] ... are never to be used to make inferences about whether an individual has or has not committed a specific sexual crime,"[5] because a person accused of a sexual crime against a child is unlikely to report his or her sexual interest in children. Indeed, Kass explained that "there's ... no test that can be put together in a situation like this that would be able to verify whether a person did or did not commit a crime. What [the Abel test] does is ... give some patterns, personality profiles, of the [test subject], which can be used in ... working with [the test subject in treatment]."
In granting the state's motion in limine, the trial court concluded that the defense had failed to make a sufficient showing of relevancy or reliability with respect to Kass' testimony concerning the Abel test. Specifically, the court explained that, among the test's many shortcomings, it has an error rate of approximately 20 percent, it is predicated largely on self reporting by the test taker, and there is a significant question in the scientific community as to whether it has any viability as a screening or diagnostic tool rather than a treatment tool. Contrary to the defendant's claim, the record fully supports the trial court's conclusion.
"Because a trial court's ruling under Porter involves the admissibility of *678 evidence, we review that ruling on appeal for an abuse of discretion." (Internal quotation marks omitted.) State v. Sorabella, 277 Conn. 155, 214, 891 A.2d 897, cert. denied, 549 U.S. 821, 127 S.Ct. 131, 166 L.Ed.2d 36 (2006). "The trial court's ruling on evidentiary matters will be overturned only upon a showing of a clear abuse of the court's discretion.... We will make every reasonable presumption in favor of upholding the trial court's ruling ... [and] upset it [only] for a manifest abuse of discretion." (Internal quotation marks omitted.) State v. Martinez, 295 Conn. 758, 769-70, 991 A.2d 1086 (2010).
"Once the party opposing the [admission of scientific] evidence objects, the proponent [of the evidence] bears the burden of demonstrating its admissibility." (Internal quotation marks omitted.) State v. Porter, supra, 241 Conn. at 87, 698 A.2d 739. "Generally, [a] witness qualified as an expert by knowledge, skill, experience, training, education or otherwise may testify in the form of an opinion or otherwise concerning scientific ... knowledge, if the testimony will assist the trier of fact in understanding the evidence or in determining a fact in issue.... In order to determine whether an expert witness' testimony concerning scientific evidence will assist the trier of fact, the trial judge must undertake a two part inquiry [in accordance with Porter]: [1] whether the reasoning or methodology underlying the [scientific theory or technique in question] is scientifically valid and ... [2] whether that reasoning or methodology properly can be applied to the facts in issue.... In other words, before it may be admitted, the trial [court] must find that the proffered scientific evidence is both reliable and relevant....
"With regard to the reliability prong of the inquiry, the court in Porter identified four nonexclusive factors for [courts] to consider in determining whether a particular theory or technique is based on scientific knowledge: (1) whether it can be, and has been, tested; (2) whether the theory or technique has been subjected to peer review and publication; (3) the known or potential rate of error, including the existence and maintenance of standards controlling the technique's operation; and (4) whether the technique is, in fact, generally accepted in the relevant scientific community.... We further noted that [s]everal other factors may properly play a role in a court's assessment of the validity of a scientific methodology ... [including] whether the scientific technique underlying the proffered expert testimony was developed and implemented solely to develop evidence for in-court use, or whether the technique has been developed or used for extrajudicial purposes.... Recognizing the indefiniteness inherent in applying this multifactor approach, we observed that [t]he actual operation of each factor, as is the determination of which factors should be considered at all, depends greatly on the specific context of each case...." (Citations omitted; internal quotation marks omitted.) State v. Griffin, 273 Conn. 266, 282-84, 869 A.2d 640 (2005).
Applying these principles to the present case, we conclude that the trial court reasonably determined that the results of the Abel test administered to the defendant were not sufficiently reliable for admission into evidence. Although Kass testified that the Abel test had been subject to peer review and was widely accepted for treatment purposes, his testimony about the test's reliability as a diagnostic tool was far more equivocal. Indeed, Kass acknowledged that the Abel test was developed to aid in the treatment of known sex offenders, that it is primarily used for such purposes, that there is disagreement *679 in the scientific community as to whether it is a valid tool for diagnosing pedophiles, and that the person who created the Abel test has himself cautioned against the use of the test to screen pedophiles from the normal population. Kass also testified that a significant component of the Abel test depends on self reporting and that a person accused of a sexual crime is unlikely to report inappropriate sexual interests. Furthermore, although Kass stated that the accepted error rate for the Abel test is approximately 20 percent when the test is used for the treatment of known sex offenders, at least one case cited by the defendant indicates that the error rate in detecting pedophiles who attempt to conceal their sexual interests is as high as 64 percent. See Ready v. Commonwealth, Superior Court, Docket No. 00-10390 SDP, 2002 WL 1255800, *10, 2002 Mass.Super. LEXIS 557, *27 (Mass.Super. May 17, 2002), aff'd sub nom. In re Ready, 63 Mass.App. 171, 824 N.E.2d 474, cert. denied, 444 Mass. 1106, 830 N.E.2d 1088 (2005).
Finally, as the state notes, the vast majority of courts that have considered the admissibility of Abel test results have concluded that such results are not sufficiently reliable to be admitted in the guilt phase of a criminal trial. See, e.g., United States v. Birdsbill, 243 F.Supp.2d 1128, 1136 (D.Mont.2003) (Abel test results not admissible on ground that test is "not reliable for the purpose of characterizing the [d]efendant as being sexually interested or uninterested in boys under the age of [twelve] years"), aff'd, 97 Fed.Appx. 721 (9th Cir.2004); United States v. White Horse, 177 F.Supp.2d 973, 975-77 (D.S.D. 2001) (Abel test did not meet standards for admission of scientific evidence), aff'd, 316 F.3d 769 (8th Cir.), cert. denied, 540 U.S. 844, 124 S.Ct. 116, 157 L.Ed.2d 80 (2003); see also Ready v. Commonwealth, supra, 2002 WL 1255800, at *15, 2002 Mass.Super. LEXIS 557, at *42 ("anyone with a moderate level of intelligence could fake his [Abel test] results"); State v. Spencer, 339 Mont. 227, 239, 169 P.3d 384 (2007) (expert acknowledged that Abel test "could be `beaten'"). Indeed, the defendant cites only one case in which a court had concluded that the results of the Abel test were admissible as evidence relevant to the determination of guilt. See United States v. Robinson, 94 F.Supp.2d 751, 753-54 (W.D.La.2000) (concluding that Abel test, which was relatively new at time of court's decision, was reliable because it had been found to be valid in four, "independent" research studies). Other courts, however, have declined to follow Robinson, concluding that it is not persuasive authority. See, e.g., United States v. Birdsbill, supra, at 1133 (following Ready, rather than Robinson, in concluding that Abel test results inadmissible under Daubert); Ready v. Commonwealth, supra, at *5-*18, 2002 Mass.Super. LEXIS 557, at *14-*49 (performing detailed analysis of numerous studies concerning Abel test, including those referred to in Robinson, and concluding that they did not establish that Abel test was valid tool for diagnosing inappropriate sexual interest). In light of the foregoing, the defendant cannot prevail on his claim that the trial court abused its discretion in excluding evidence of his Abel test results.
II
The defendant next claims that the trial court violated his rights to confrontation and to present a defense when it precluded the defense from presenting evidence that C's mother had viewed pornographic and adult dating websites on the family computer before and after he moved out of the family residence. The defendant contends that this evidence was relevant to establish an alternative source for C's sexual knowledge. *680 He further contends that the evidence, most especially the evidence relating to adult dating websites, demonstrated the extent to which his marriage to C's mother had deteriorated and, therefore, was probative of her motive for fabricating the allegations against the defendant.
Prior to trial, the state filed a motion in limine to preclude the defendant from presenting evidence or adducing testimony that C's mother had viewed pornographic websites during or after her marriage to the defendant because such evidence was irrelevant to the issue of whether the defendant had sexually abused C. In response to the state's motion, the defendant filed a written offer of proof detailing the evidence that it intended to present at trial to impeach the testimony of C's mother with respect to her interest, motive and bias, and to establish an alternative source of C's sexual knowledge. The offer of proof consisted, in part, of allegations that the mother frequently viewed pornography on the family computer, both before and after the defendant moved out of the family residence, and that she had visited adult dating websites in that same time frame.
C was the first witness to testify at trial. During direct examination, C testified that the defendant had shown him pornographic images on the family computer from website X, a pornographic website that the defendant had bookmarked on his web browser. During cross-examination, C testified that he knew how to use the computer and how to access the Internet and the links that the defendant had bookmarked, and that he did not need permission to use the computer. C denied, however, ever having viewed that pornographic website, either on his own or with anyone other than the defendant.
The next witness for the state was C's mother. During direct examination, C's mother testified that she, the defendant and C all had access to the family computer and that C had used the computer by himself on several occasions. During cross-examination, defense counsel attempted to impeach her credibility by probing her biases and potential motive for fabricating the charges against the defendant. In response to defense counsel's questions, C's mother acknowledged, inter alia, that (1) she and the defendant had gone to see a marriage counselor to discuss problems in their marriage, (2) she had ordered the defendant out of the family residence for five days in February, 2003, (3) she had injured the defendant during an argument in August, 2003, and then destroyed a video recording that the defendant had made to document his injury, and (4) she had received one half of the proceeds of the sale of the family residence and one half of the defendant's retirement savings as a result of their divorce.
At the conclusion of his cross-examination of C's mother, defense counsel sought to examine C's mother outside the presence of the jury for the purpose of making an offer of proof with respect to her use of the family computer to access pornographic and adult dating websites on that computer both before and after the defendant moved out of the family residence. The trial court granted defense counsel's request, and C's mother testified that, during their marriage, she and the defendant had used the family computer together to access pornographic websites. She further testified that, after the defendant moved out of the house, she had used the computer to access pornographic websites that previously had been accessed on the computer for the purpose of determining what images the defendant may have shown C. According to her testimony, the websites that she visited were either bookmarked on the web browser or appeared *681 when she accessed the history stored in the browser.
In response to questions about adult dating websites, C's mother testified that, after the defendant had moved out of the family residence, she accessed the defendant's e-mail account and discovered a message from a certain adult dating website. She testified that she subsequently logged onto that website using the defendant's username and password to ascertain the extent of his involvement in adult online dating. She denied, however, ever visiting that website or any other adult dating website for any other purpose.
Following the voir dire testimony of C's mother, defense counsel argued that the proffered evidence was relevant to establishing an alternative source of C's sexual knowledge because it demonstrated that someone other than the defendant had accessed pornographic websites on the family computer. Defense counsel maintained that, because C had been allowed to use the computer alone and knew how to access the Internet, it was possible that C had accessed pornographic websites on his own and, as a result, had gained the sexual knowledge necessary to fabricate his detailed allegations of sexual abuse against the defendant. Defense counsel also contended that the adult online dating evidence was relevant to show C's mother's motive for fabricating the allegations against the defendant because it suggested that she might have been looking for new sexual partners, which, according to defense counsel, bolstered the defendant's claim that she wanted to end the marriage.
The trial court rejected defense counsel's claims and granted the state's motion to preclude the admission of the challenged evidence. With respect to the adult online dating evidence, the trial court concluded that the connection between that evidence and the motive of C's mother for fabrication was "tenuous" at best and, therefore, lacking in relevance. The trial court further concluded that evidence that C's mother had accessed pornographic websites was inadmissible under State v. Rolon, 257 Conn. 156, 184, 777 A.2d 604 (2001), in which this court concluded that, for purposes of demonstrating the admissibility of evidence of a child victim's prior sexual experience to show an alternative source of the child's sexual knowledge, the proffered evidence must demonstrate that (1) the prior act or acts clearly occurred, (2) the prior act or acts closely resemble the act or acts that are the subject of the criminal charges, (3) the prior act or acts are clearly relevant to a material issue, (4) the evidence is necessary to the defendant's case, and (5) the probative value of the evidence outweighs its prejudicial effect. The trial court found that the evidence that defense counsel proffered failed to satisfy the first and second prongs of Rolon. In addition, the court stated that the evidence had "no probative" value and that "[i]ts prejudicial effect against the state would be substantial."[6]
On appeal, the defendant renews the claims that defense counsel raised in the trial court with respect to the admissibility of the proffered evidence concerning the use of the family computer by C's mother to access adult dating and pornographic websites. We reject the defendant's claims.
*682 With respect to the defendant's claim regarding the adult online dating evidence, the trial court did not abuse its discretion in excluding evidence that C's mother had visited an adult dating website after the defendant had moved out of the family residence because that evidence was not probative of her alleged motive to fabricate the allegations of sexual abuse. The trial court reasonably concluded that any nexus between that evidence and the mother's purported motive to fabricate, namely, that she wanted to end the marriage so that she would be free to pursue new sexual partners, simply was too attenuated to warrant the admission of that evidence. Experience and common sense dictate that there are far easier and less traumatic ways to end a marriage, and there is nothing in the record to suggest that C's mother had any reason to resort to false allegations of child sexual abuse to achieve that end. Moreover, in her voir dire testimony, C's mother explained that she had accessed the adult dating website only after the defendant had left the family residence and only to ascertain the nature and extent of the defendant's online activities.[7] Accordingly, in the absence of any logical connection between C's mother's use of the computer to view an adult dating website and her testimony corroborating C's allegations of sexual abuse by the defendant, the trial court correctly concluded that the defendant was not entitled to present evidence to the jury concerning the fact that C's mother had accessed an adult dating website.[8]
The defendant also cannot prevail on his claim that the trial court improperly precluded him from adducing evidence concerning the fact that C's mother viewed pornographic websites on the family computer. It is true, as the defendant maintains, that evidence of an alternative source of a child's sexual knowledge may be material in a case of alleged child sexual abuse to rebut the presumption that the child could not have fabricated a claim of abuse because a person of such tender years would not otherwise have knowledge about matters pertaining to sexual conduct. "Without that evidence, [t]he inference that [a child] could not possess the sexual knowledge he [or she] does unless [a defendant] sexually assaulted [him or her] greatly bolsters [the child's] allegations." (Internal quotation marks omitted.) State v. Rolon, supra, 257 Conn. at 185-86, 777 A.2d 604; see also Oatts v. State, 899 N.E.2d 714, 724 (Ind.App.2009) ("The [sexual innocence inference] theory *683 is based on the premise that because most children of tender years are ignorant of matters relating to sexual conduct, a child [victim's] ability to describe such conduct may persuade the jury that the charged conduct in fact occurred. To demonstrate that the child had acquired sufficient knowledge to fabricate a charge against the defendant, the theory reasons, the court should allow the defense to offer evidence that the child acquired sexual [knowledge from some other source] before he or she accused the defendant." [Internal quotation marks omitted.]). The evidence proffered for that purpose, however, must be probative of the existence of that alternative source of sexual knowledge.
In the present case, the evidence failed to satisfy that threshold requirement. As the trial court explained, although the evidence clearly established that C's mother had accessed pornographic websites, it by no means established that C had accessed such websites. In fact, C indicated in his testimony that he did not access pornographic websites on his own or with anyone other than the defendant. At most, the evidence supported an inference that C could have used the family computer to access pornography on his own. As the trial court noted, however, even if the jury reasonably could draw such an inference, defense counsel adduced no evidence indicating that the images that C saw when he visited those websites in any way resembled the acts that he later claimed to have been perpetrated on him by the defendant. Because the evidence that defense counsel proffered provided no basis on which the jury reasonably could have concluded either that C had visited pornographic websites on his own or that he had viewed images of conduct similar to the conduct attributed to the defendant, the trial court properly excluded the evidence.[9]
Finally, as we previously indicated, C testified regarding his use of the family computer. In particular, he stated that he knew how to use the computer, that he did not need permission to use it, and that he knew how to access the Internet and websites that were bookmarked on the web browser. He also testified that website X, a pornographic website, was bookmarked on the web browser. In light of this testimony, we agree with the state that, to the extent that C's mother's computer use was proffered to establish that the Internet was a possible alternative source of C's sexual knowledge, that evidence was unnecessary because C's own testimony more *684 than adequately established this point to the jury.
III
We next address the defendant's claim that the trial court improperly permitted the state to elicit testimony from Larry Rosenberg, an expert on the reporting of sexual abuse by child victims, that the primary purpose of the forensic interview of an alleged child victim of sexual abuse is to determine whether the child's allegations are credible. The defendant contends that this testimony, which the state elicited during its redirect examination of Rosenberg, constituted improper opinion testimony regarding the credibility of C in that it allowed the jury to infer, albeit indirectly, that, because charges ultimately were brought against the defendant, the forensic interviewers must have determined that C's claims were credible. We conclude that the defense opened the door to the challenged testimony and, therefore, that the trial court did not abuse its discretion in permitting the state to elicit the challenged testimony.
Rosenberg, the clinical director of the Child Guidance Center of Southern Connecticut, testified as an expert for the state on the reporting of sexual abuse by child victims. Although he never had interviewed C, Rosenberg testified about various factors that can contribute to inaccuracies in a child's report of abuse and about certain features of a forensic interview that are designed to reduce the risk of inaccuracies. He explained the forensic interview process as follows: "What we do is we interview children in front of ... a one-way mirror with ... [a] representative of the police department and a representative of protective services [who observe] that interview so that the child is only interviewed one time by a professional [who is] trained to do these sorts of interviews and is sensitive to the child as well....
"[The child is interviewed only once because] children are prone to change things from time to time when they are asked questions repeatedly, and they can be susceptible to that, forgetting exactly what they said the time before. They may alter their story inadvertently ... as we all do when we recount stories of things that have happened to us in the past. But [it is] particularly more the case ... the younger the child is. And [it is] important, too, that somebody [who is] trained and understands children from the developmental perspective is conducting the interview as opposed to a police officer or other protective service worker...."
During cross-examination, defense counsel, who previously had used the forensic interview of C to impeach C on the basis of inconsistencies and omissions in his testimony, asked Rosenberg several questions about the purpose of a forensic interview and the wisdom of conducting the interview only once:
"[Defense Counsel]: ... [I]n terms of dealing with the child, in terms of your counseling of the child, ultimately, you want to get to the truth, right?
"[Rosenberg]: In counseling, sure.
"[Defense Counsel]: And sobut wouldn't it be better, then, for you to talk to the child more than one time about the details of the offense that is supposed to have occurred ... if you can get to the truth?
"[Rosenberg]: ... There's a distinction between ... [counseling and] a forensic evaluation of [a] child.
* * *
"[Defense Counsel]: Okay. So, the most important thing in dealing forensically *685 with a child on a claim of child sex abuse is to get to the truth, correct?
"[Rosenberg]: That's correct.
* * *
"[Defense Counsel]: So ... I take it whatever the child says the first time [in a forensic interview], you assume to be true?
"[Rosenberg]: No.
* * *
"[Defense Counsel]: You just take the [forensic] interview as it is and go from there for counseling purposes?
"[Rosenberg]: The purpose of [the] forensic interview and counseling are two separate experiences, if I may. The forensic interview is for the purpose of ... hearing a child's disclosure for determining whether that disclosure is credible or not. A therapeutic relationship is for the purpose of helping a child to deal with whatever has occurred to them and the symptoms that might have resulted from it.
"[Defense Counsel]: Okay. And so in a counseling situation, you would talk to the child many times?
"[Rosenberg]: Sure.
"[Defense Counsel]: And in the forensic interview ... you would talk to the child once?
"[Rosenberg]: ... [Y]es. But let me be clear about it.... [A forensic interview and therapeutic counseling establish] two different relationships.
"[Defense Counsel]: Fair enough. But the forensic interview is a one-time interview?
"[Rosenberg]: That's correct." (Emphasis added.)
During redirect examination, the senior assistant state's attorney (state's attorney) followed up on the distinction between therapeutic counseling and a forensic interview:
"[State's Attorney]: ... [Y]ou testified... [that you perform a forensic interview only] once so that the child [does not] have to constantly relate to strangers his or her experiences of being sexually abused?
"[Rosenberg]: That's true.
* * *
"[State's Attorney]: ... And is it typical that, after a child submits to a forensic interview ... if the complaint is deemed credible ... the child normally [will] go for therapeutic counseling?
"[Rosenberg]: That ... happens a fair amount of the time....
"[State's Attorney]: [Then] [t]he typical procedure is you have the child go in for the [forensic] interview, and [he or she] recount[s], to the best of [his or her] ability, the incidents of child sex abuse. Fair statement? ...
"[Rosenberg]: Fair statement.
"[State's Attorney]: And, basically, what they say [during] the interview is recorded and ... is given to the authorities to deem, or rather people at child guidance or Yale Sex Abuse Clinic ... to deem whether or not the allegation is credible ... ?"
Defense counsel objected at this point, claiming that the question "usurp[s] the jury's function to determine in this case if the complaint is credible." The state's attorney responded that the defense had opened the door to the question during cross-examination, but he agreed to rephrase the question, asking instead, "after you do the forensic interview, that interview is used to determine whether the allegation is credible?" The court overruled defense counsel's objection, and Rosenberg answered that "[the forensic interview is] used by the interviewer to determine the credibility of the child in the *686 opinion of the person [who is] conduct[ing] the interview."
As the defendant contends, "[t]he determination of the credibility of a witness is solely the function of the jury.... [Accordingly] [i]t is the trier of fact [that] determines the credibility of witnesses and the weight to be accorded their testimony.... Expert witnesses [therefore] cannot be permitted to invade the province of the jury by testifying as to the credibility of a particular witness or the truthfulness of a particular witness' claims....
"Additionally, in cases that involve allegations of sexual abuse of children, we have held that expert testimony of reactions and behaviors common to victims of sexual abuse is admissible.... Such evidence assists a jury in its determination of the victim's credibility by explaining the typical consequences of the trauma of sexual abuse on a child.... It is not permissible, however, for an expert to testify as to his opinion of whether a victim in a particular case is credible or whether a particular victim's claims are truthful.... In this regard, we have found expert testimony stating that a victim's behavior was generally consistent with that of a victim of sexual or physical abuse to be admissible, and have distinguished such statements from expert testimony providing an opinion as to whether a particular victim had in fact suffered sexual abuse....
"Moreover, we have noted that even indirect assertions by an expert witness regarding the ultimate issue in a case can serve inappropriately to validate the truthfulness of a victim's testimony." (Citations omitted; emphasis in original; internal quotation marks omitted.) State v. Iban C., 275 Conn. 624, 634-35, 881 A.2d 1005 (2005).
It also is well established, however, that, as a general matter, "a party who delves into a particular subject during the examination of a witness cannot object if the opposing party later questions the witness on the same subject.... The party who initiates discussion on the issue is said to have opened the door to rebuttal by the opposing party. Even though the rebuttal evidence would ordinarily be inadmissible on other grounds, the court may, in its discretion, allow it [when] the party initiating inquiry has made unfair use of the evidence.... [T]his rule operates to prevent a defendant from successfully excluding inadmissible prosecution evidence and then selectively introducing pieces of this evidence for his own advantage, without allowing the prosecution to place the evidence in its proper context....
"In determining whether otherwise inadmissible evidence should be admitted to rebut evidence offered by an opposing party, the trial court must carefully consider whether the circumstances of the case warrant further inquiry into the subject matter ... and should permit it only to the extent necessary to remove any unfair prejudice which might otherwise have ensued from the original evidence.... Accordingly, the trial court should balance the harm to the state in restricting the inquiry with the prejudice suffered by the defendant in allowing the rebuttal.... We will not overturn the trial court's decision unless the trial court has abused its discretion." (Internal quotation marks omitted.) State v. Carpenter, 275 Conn. 785, 822, 882 A.2d 604 (2005), cert. denied, 547 U.S. 1025, 126 S.Ct. 1578, 164 L.Ed.2d 309 (2006).
In the present case, defense counsel questioned Rosenberg extensively as to why a forensic interview, in contrast to an interview conducted for the purpose *687 of counseling, is performed only once. In questioning Rosenberg in this manner, defense counsel sought to highlight the distinction between the two types of interviews, apparently for the purpose of demonstrating that forensic interviews may be less likely to uncover the truth than interviews conducted in a counseling setting. Having questioned Rosenberg about the purposes of the two different kinds of interviews, defense counsel opened the door to redirect examination on this subject. Indeed, the question that the state's attorney ultimately posed to Rosenberg during redirect examination, that is, "is... the forensic interview ... used to determine whether the allegation is credible," was substantively identical to defense counsel's questioning of Rosenberg as to whether the purpose of the forensic interview "is to get to the truth...." Moreover, Rosenberg's response to the inquiry of the state's attorney during redirect examination was not materially different from his response to the questions that defense counsel had posed to him during cross-examination. Accordingly, the defendant cannot prevail on his claim that the trial court abused its discretion in permitting the state's attorney to adduce this testimony from Rosenberg.
IV
We next address the defendant's claim that the state's attorney improperly used the term "victim" in referring to C because that reference represented an improper expression of the state's attorney's personal belief that C, in fact, had been victimized sexually by the defendant. The defendant refers to only one occasion during the course of the entire trial when the state's attorney made such a reference.[10]
This claim requires little discussion because it is governed by our decision in State v. Warholic, 278 Conn. 354, 369-70 and n. 7, 897 A.2d 569 (2006), in which we rejected a claim that the prosecutor's use of the term "victim" on two occasions during trial was improper. Although, in Warholic, we cautioned the state "against making excessive use of the term `victim' to describe a complainant when the commission of a crime is at issue because prevalent use of the term may cause the jury to draw an improper inference that the defendant committed a crime against the complainant"; id., at 370 n. 7, 897 A.2d 569; we nevertheless observed that, in contrast to the trial court's identification of the complainant as the victim; see State v. Cortes, 276 Conn. 241, 249 n. 4, 885 A.2d 153 (2005) (trial court's repeated use of term "victim" in jury charge was improper); the "jury was likely to understand that the [prosecutor's] identification of the complainant as the victim reflected the [prosecutor's] contention that, based on the ... evidence, the complainant was the victim of the alleged crimes." (Emphasis added.) State v. Warholic, supra, at 370, 897 A.2d 569. As in Warholic, the state's attorney's isolated use of the term "victim" in the present case was neither improper nor prejudicial, and, consequently, the defendant's claim is without merit.[11]
V
The defendant also claims that certain of the state's attorney's remarks *688 during closing argument deprived the defendant of a fair trial. Specifically, the defendant contends that the state's attorney improperly (1) expressed his personal opinion regarding the credibility of witnesses by making statements such as, "I think if you [look at the evidence objectively] you'll find that ... the evidence shows that [C's] testimony was credible, it was definitive, and it supports the claim that he has made of sexual abuse," (2) argued that the defendant's interest in avoiding punishment was relevant to his motive to testify falsely, (3) appealed to the jurors' emotions by asking them to imagine how C felt while testifying and to consider how those feelings may have affected his demeanor during that testimony, (4) disparaged the theory of the defense that C's mother had thrown the defendant out of the family residence over a dispute about the possible purchase of a dog, (5) maintained that the defendant's trial testimony was inconsistent with testimony that the defendant had given during a deposition taken in connection with his divorce from C's mother, (6) argued that certain of the defendant's conduct demonstrated consciousness of guilt, (7) treated the defendant's prior felony conviction for operating a motor vehicle under the influence of alcohol, which had been admitted solely for impeachment purposes, as substantive evidence, (8) attacked the defendant's character by ridiculing his testimony that, in his divorce proceeding, he had downplayed some of the difficulties in his marriage to C's mother so as not to embarrass her, and (9) diluted the state's burden of proof by characterizing the jury's task as determining whether the defendant, on the one hand, or C and his mother, on the other, had testified truthfully.
"It is well settled that, in addressing the jury, [c]ounsel must be allowed a generous latitude in argument, as the limits of legitimate argument and fair comment cannot be determined precisely by rule and line, and something must be allowed for the zeal of counsel in the heat of the argument.... Moreover, [i]t does not follow ... that every use of rhetorical language or device is improper.... The occasional use of rhetorical devices is simply fair argument." (Internal quotation marks omitted.) State v. Warholic, supra, 278 Conn. at 362-63, 897 A.2d 569.
Upon careful review of the record, we agree with the state that each of the challenged statements, when considered in the context in which they were made and in light of the evidence adduced at trial, fell well within the limits of fair argument. Because the comments of the state's attorney were based on the evidence and were neither inflammatory nor inaccurate, the defendant's claim of prosecutorial impropriety must fail.
VI
Finally, the defendant claims that the sentence that the trial court imposed for his conviction of sexual assault in the first degree, that is, a term of imprisonment of twenty years, execution suspended after twelve years, and twenty years probation, was illegal. General Statutes § 53a-70 (b)(3) provides: "Any person found guilty [of sexual assault in the first degree] shall be sentenced to a term of imprisonment and a period of special parole pursuant to subsection (b) of section 53a-28 which together constitute a sentence of at least ten years." (Emphasis added.) As the state concedes, the sentence that the trial court imposed does not comply with § 53a-70 (b)(3) because it includes a period of probation rather than a period of special parole. Accordingly, the case must be remanded to the trial court *689 for resentencing on the defendant's conviction of sexual assault in the first degree.[12]
The judgment is reversed only as to the sentence imposed for the defendant's conviction of sexual assault in the first degree and the case is remanded for resentencing on that count; the judgment is affirmed in all other respects.
In this opinion the other justices concurred.
NOTES
[*] In accordance with the policy of protecting the privacy interests of victims of sexual abuse and the crime of risk of injury to a child, we decline to identify the victim or others through whom the victim's identity may be ascertained. See General Statutes § 54-86e.
[1] C was nine years old at the time of the alleged abuse. C's mother was the defendant's wife at the time of the alleged abuse but is no longer married to the defendant.
[2] The defendant appealed to the Appellate Court from the judgment of the trial court, and we transferred the appeal to this court pursuant to General Statutes § 51-199(c) and Practice Book § 65-4.
[3] Two other tests, namely, the Bumby Cognitive Distortions Scale and the Abel and Becker Cognition Scale, were performed on the defendant for purposes of his sexual evaluation. These tests are used to help verify the results of the Abel test. For purposes of this appeal, however, they have no significance independent of the Abel test. Accordingly, we refer only to the Abel test.
[4] See footnote 3 of this opinion.
[5] See Association for Treatment of Sexual Abusers, Practice Standards and Guidelines, Standard 9.02 (2001) ("[m]embers shall not knowingly provide court testimony during the guilt phase of a criminal trial from which a reasonable person would draw inferences about whether the client did or did not commit a specific sexual crime").
[6] See Conn.Code Evid. § 4-3 ("[r]elevant evidence may be excluded if its probative value is outweighed by the danger of unfair prejudice or surprise, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time or needless presentation of cumulative evidence").
[7] Indeed, defense counsel offered no other evidence to support the theory of the mother's motive, such as evidence that she actually had corresponded with someone through an adult dating website, that she had posted personal information about herself or advertisements online, that she had responded to personal advertisements online, or that she had created an account for herself on an adult dating website.
[8] The defendant also contends that, because the state introduced evidence of his online pornography use through C's testimony that the defendant had bookmarked website X, a pornographic website, "fundamental fairness and evenhandedness required that [the defense] be allowed to present evidence ... that others in the [family residence] ... were accessing such websites." The defendant, however, does not claim any impropriety with respect to the admission of C's testimony regarding the aforementioned website and bookmark evidence. He contends, rather, that, because he was prejudiced by this evidence, the trial court was obligated to balance this prejudice by admitting evidence that C's mother also viewed pornography. The defendant cites no authority, however, and we are aware of none, for the proposition that a trial court must allow the admission of irrelevant and prejudicial evidence solely for the purpose of balancing the potentially prejudicial effect of properly admitted evidence.
[9] For the first time on appeal, the defendant contends that Rolon does not govern the admissibility of the testimony of C's mother in the present case because Rolon involved the sexual knowledge of a child victim that was based on that child's previous sexual conduct, conduct that otherwise would have been protected from disclosure by General Statutes § 54-86f. See, e.g., State v. Cecil J., 291 Conn. 813, 825, 970 A.2d 710 (2009) (explaining that, in Rolon, this court adopted test that defendant must satisfy "in order for evidence of a victim's prior sexual conduct to be admissible under § 54-86f to show a source for the victim's sexual knowledge"). The defendant maintains that, because viewing pornography is not the kind of prior sexual conduct that is protected by § 54-86f, the considerations underlying our decision in Rolon and, in particular, the test that we adopted in that case, are not applicable to the present case. We need not decide whether the trial court properly determined that the Rolon test is applicable in the present context because the trial court reasonably concluded that any possible connection between the proffered evidence and the alleged, alternative source of C's sexual knowledge was so remote that the jury would be required to speculate as to any such relationship. Thus, the trial court's decision to bar the evidence was proper irrespective of whether the test for admissibility that we recognized in Rolon applies in the circumstances of the present case.
[10] The state's attorney used the term "victim" in responding to a hearsay objection that defense counsel had made during the state's attorney's examination of C's mother.
[11] We note that, although the trial court had denied the defendant's motion in limine to preclude the state from using the term "victim" when referring to C, the state's attorney prudently avoided the use of that term except on the one occasion that the defendant has identified.
[12] Although the defendant did not raise this claim in the trial court, this court is authorized to correct an illegal sentence at any time pursuant to Practice Book § 43-22. See, e.g., State v. Tabone, 279 Conn. 527, 534, 902 A.2d 1058 (2006).
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84 So. 3d 472 (2012)
Felipe ROSA, Appellant,
v.
PROGRESSIVE EMPLOYER SERVICES/SUNZ INSURANCE COMPANY/USIS, Appellees.
No. 1D11-4373.
District Court of Appeal of Florida, First District.
April 12, 2012.
*473 Harold E. Barker of DiCesare, Davidson & Barker, P.A., Lakeland, for Appellant.
Ben H. Cristal of the Cristal Law Group, Tampa, for Appellees.
LEWIS, J.
In this workers' compensation appeal, Felipe Rosa, Claimant, challenges an order of the Judge of Compensation Claims (JCC) denying his claim for temporary indemnity benefits and ruling on Claimant's permanent impairment rating (PIR). Claimant argues, and the employer/carrier (E/C) concedes, the JCC erred in making a finding on Claimant's PIR because that issue was beyond the scope of the hearing. Claimant also argues the JCC erred in finding that Claimant had reached maximum medical improvement (MMI) and further erred in relying upon that erroneous determination to deny Claimant's claims for temporary indemnity benefits. We agree on both points. Therefore, for the reasons that follow, we reverse and remand for further proceedings consistent with this opinion.
Claimant suffered an industrial accident on June 15, 2009, while mounting a truck tire on a rim. Between July 2010 and March 2011, Claimant filed four petitions for benefits seeking both temporary total and temporary partial disability benefits from January 26, 2011, through the date of the final hearing, authorization for a C-7 nerve block, and other medical benefits.
As the JCC indicated during the hearing, the issue of Claimant's PIR was not before the JCC. This claim had not been mediated, listed in the Uniform Pretrial Stipulation, or addressed by either party, and was not ripe for adjudication. Consequently, the JCC erred in making a finding on the issue of PIR. See Lawrence v. Aquarius Sales & Serv., Inc., 30 So. 3d 690 (Fla. 1st DCA 2010) (holding that the JCC erred in making a finding on PIR because Claimant's PIR was not at issue). Ruling on an issue that is not properly before the JCC is a violation of a party's due process rights. See Isaac v. Green Iguana, Inc., 871 So. 2d 1004 (Fla. 1st DCA 2004). Accordingly, we reverse that portion of the order, and remand with directions to strike such findings and conclusions.
Additionally, the JCC found Claimant reached MMI based on the opinions of Claimant's various treating specialists and, given that finding, the JCC denied Claimant's claims for temporary indemnity benefits. The JCC then awarded the requested treatment based on the opinion of the expert medical advisor that the procedure was medically necessary because it could bring about some degree of improvement in Claimant's condition. However, the JCC's finding that Claimant had reached overall MMI is by its very nature inconsistent with the JCC's award of the requested treatment.
This Court has held that an award of medical care and treatment is inconsistent with a denial of temporary indemnity benefits for the same time period, and is reversible error. See Delgado v. Omni Hotel, 643 So. 2d 1185, 1186 (Fla. 1st DCA 1994); Rolle v. Picadilly Cafeteria, 573 So. 2d 94, 97 (Fla. 1st DCA 1991); Utley-James, Inc. v. Lady, 448 So. 2d 1191, 1193 (Fla. 1st DCA 1984); but cf. Old Cove Condo v. Curry, 511 So. 2d 666 (Fla. 1st DCA 1987) (explaining that medical care in the form of palliative treatment may be awarded after the claimant reaches MMI).[1] In Delgado, this Court explained:
*474 It is well-established that the date of MMI "marks the point after which no further recovery or improvement from an injury or disease can be reasonably anticipated." Rolle v. Picadilly Cafeteria, 573 So. 2d 94, 96 (Fla. 1st DCA 1991), citing Kirkland v. Harold Pratt Paving, Inc., 518 So. 2d 1320, 1323 (Fla. 1st DCA 1987), rev. denied, 525 So. 2d 878 (Fla.1988). A finding of MMI "is precluded where treatment is being provided with a reasonable expectation that it will bring about some degree of recovery, even if that treatment ultimately proves ineffective." Rolle, 573 So.2d at 97.
. . .
The nature of medical treatment is not to be determined by the ultimate success or failure of the treatments. Treatments are curative in nature if administered or prescribed by a qualified physician with a reasonable expectation that they will bring about some degree of recovery. . . . Temporary disability continues as long as recovery or lasting improvement in the injured person's condition can reasonably be expected. . . .
Id., 643 So.2d at 1186 (quoting Utley-James, Inc., 448 So.2d at 1193).
Thus, an award of medical treatment believed likely to improve Claimant's condition means Claimant has not yet reached MMI, and is potentially entitled to temporary indemnity benefits. Given the JCC awarded such treatment, the JCC's finding that Claimant reached MMI is by its very nature inconsistent and is reversible error. Delgado, 643 So.2d at 1186; Rolle, 573 So.2d at 97. We, therefore, reverse that portion of the order, and remand for further findings concerning Claimant's entitlement to temporary indemnity benefits.
REVERSED and REMANDED for further proceedings consistent with this opinion.
PADOVANO and WETHERELL, JJ., concur.
NOTES
[1] To the extent the award of the C-7 nerve block in this case was based on the JCC's finding that the procedure is "palliative in nature," the finding is not supported by competent substantial evidence. All of the medical evidence, including the testimony of the expert medical advisor and the physician whose opinion prompted the appointment of the EMA, indicates that the nerve block was not ordered as palliative care, but rather as a diagnostic tool to isolate the cause of Claimant's residual neck and shoulder pain and to help determine the future course of treatment.
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84 So.3d 169 (2010)
JENNIFER PITTS CHRISTIAN
v.
CASEY WAYNE CHRISTIAN.
No. 2090408.
Court of Civil Appeals of Alabama.
September 17, 2010.
DECISION WITHOUT PUBLISHED OPINION
Affirmed.
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275 So. 2d 14 (1973)
RAILWAY EXPRESS AGENCY, INC., Petitioner,
v.
Betty Jo GARLAND, Widow of Lige Garland, Deceased, Respondent.
No. 43273.
Supreme Court of Florida.
March 7, 1973.
Certiorari denied. 269 So. 2d 708.
ERVIN, Acting C.J., and ADKINS, McCAIN and DEKLE, JJ., concur.
BOYD, J., dissents.
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79 So. 3d 230 (2012)
Gerald HAYES, Appellant,
v.
STATE of Florida, Appellee.
No. 2D11-2067.
District Court of Appeal of Florida, Second District.
February 15, 2012.
CRENSHAW, Judge.
Gerald Hayes appeals the summary denial of his motion for postconviction relief, wherein he raised three grounds of ineffective assistance of counsel pursuant to Florida Rule of Criminal Procedure 3.850. We affirm the postconviction court's denial of grounds one and three without further discussion. However, we conclude that ground two was facially insufficient, and therefore the postconviction court should have struck the claim with leave to amend pursuant to Spera v. State, 971 So. 2d 754 (Fla.2007), rather than entering a summary denial.
Hayes, who was convicted of sale of cocaine and possession of cocaine, presented a defense of misidentification at trial. He alleged in ground two of his motion that his trial counsel was ineffective for misadvising him not to testify in his own defense. Although Hayes claimed that he was prejudiced by his counsel's actions, he did not allege what he would have testified to or how his testimony would have affected *231 the result of the proceeding. The postconviction court summarily denied this claim by citing to portions of the trial transcript in which Hayes stated in a colloquy to the court that he felt it was in his best interest not to testify and that he was satisfied with trial counsel's help and advice.
The first step in determining whether there was ineffective assistance of counsel where defendant claims he would have testified is to determine whether the defendant voluntarily agreed with counsel not to take the stand. If that is established, then the trial court must answer the separate and second question which is whether counsel's advice to defendant "even if voluntarily followed, was nevertheless deficient because no reasonable attorney would have discouraged [defendant] from testifying."
Simon v. State, 47 So. 3d 883, 885 (Fla. 3d DCA 2010) (quoting Lott v. State, 931 So. 2d 807, 819 (Fla.2006)).
In Simon, the defendant maintained that his counsel misadvised him about testifying at trial and alleged what he would have testified to but for counsel's misadvice. The postconviction court summarily denied the defendant's motion upon finding that the defendant voluntarily chose not to testify. However, the Third District determined that while the colloquy established that the defendant voluntarily agreed with counsel's recommendation not to take the stand, an evidentiary hearing was still necessary to determine the second question of whether counsel's advice was deficient. Id. at 886. Similarly, although the record is clear in this case that Hayes voluntarily agreed with counsel not to take the stand, the postconviction court failed to address the second question discussed in Simon and Lott. But unlike in Simon, the court did not have the benefit of what Hayes would have said to determine any alleged deficiency. Hence, the second part of Hayes' claim was facially insufficient and could not be conclusively refuted by the record. Therefore, the postconviction court should have struck the claim with leave to amend pursuant to Spera, 971 So.2d at 761-62.
Accordingly, we reverse the denial of ground two and remand for the court to strike the claim with leave to amend within a period of time not to exceed thirty days. If Hayes files an amended motion on this ground, "the postconviction court may again summarily deny the claim if it is once again facially insufficient or if the court attaches portions of the record conclusively refuting his allegations." Philip v. State, 14 So. 3d 1243, 1244 (Fla. 2d DCA 2009).
Affirmed in part, reversed in part, and remanded.
ALTENBERND and WHATLEY, JJ., Concur.
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79 So. 3d 134 (2012)
STATE of Florida, Appellant,
v.
Paul BROSKY, Appellee.
No. 3D10-1503.
District Court of Appeal of Florida, Third District.
February 1, 2012.
*135 Pamela Jo Bondi, Attorney General, and Ansley B. Peacock, Assistant Attorney General, and Douglas Glaid, Senior Assistant Attorney General, for appellant.
Carlos J. Martinez, Public Defender, and Stephen J. Weinbaum, Assistant Public Defender, for appellee.
Before SHEPHERD, SUAREZ, and SALTER, JJ.
SUAREZ, J.
The State of Florida seeks to reverse a trial court order dismissing charges against Paul Brosky. We reverse and remand for reinstatement of those charges.
The trial court's sua sponte dismissal of the charges was an abuse of discretion, no matter how frustrated (and rightly so) the trial judge was with both sides over the progress of this matter. Florida case law clearly provides that, in the absence of statute or motion to dismiss, the decision whether to prosecute or to dismiss charges is a determination to be made by solely the State. State v. Bonnett, 985 So. 2d 1194 (Fla. 3d DCA 2008) (finding dismissal of charges as sanction for State's behavior was reversible error); State v. Leon, 967 So. 2d 437, 437 (Fla. 4th DCA 2007) ("[W]e agree that reversal is required because the trial court's action in dismissing the case was an abuse of discretion and constituted an improper infringement upon the State's discretion to prosecute."); Dawson v. State, 951 So. 2d 931, 933 (Fla. 4th DCA 2007) ("This court has previously held that the dismissal of an information is `an action of such magnitude that resort to such a sanction should only be had when no viable alternative exists."); State v. L.E., 754 So. 2d 60, 61 (Fla. 3d DCA 2000) ("This court has repeatedly stated that the dismissal of criminal charges is an extreme sanction reserved solely for those instances where no feasible alternative exists."); State v. Bryant, 549 So. 2d 1155, 1155 (Fla. 3d DCA 1989); State v. Brown, 416 So. 2d 1258 (Fla. 4th DCA 1982); see also State v. J.G., 740 So. 2d 84, 85 (Fla. 3d DCA 1999); State v. Cohen, 662 So. 2d 430 (Fla. 3d DCA 1995); State v. S.M.F., 546 So. 2d 20, 21 (Fla. 3d DCA 1989).
The reason that dismissal of criminal charges should be used as a last resort is that this sanction punishes the public, not the State or the witness who fails to appear, and results in a windfall to the appellee. See, e.g., State v. L.E., 754 So. 2d 60, 61 (Fla. 3d DCA 2000); State v. T.H., 592 So. 2d 759, 760 (Fla. 5th DCA 1992); State v. Lowe, 398 So. 2d 962, 963 (Fla. 4th DCA 1981).
The prosecutor has the sole discretion to charge and prosecute criminal acts. McArthur v. State, 597 So. 2d 406, 408 (Fla. 1st DCA 1992). This discretion is not affected by a victim's change in desire to prosecute. Id.; State v. Greaux, 977 So. 2d 614, 615 (Fla. 4th DCA 2008). It is not altered by a victim's refusal to testify. State v. Bryant, 549 So. 2d 1155, 1155 (Fla. 3d DCA 1989). This discretion is inviolate "notwithstanding the court's belief that the best interests of the public and the parties would be served by dismissal." State v. Cleveland, 390 So. 2d 364, 367 (Fla. 4th DCA 1980), approved, 417 So. 2d 653 (Fla.1982); State v. Wheeler, 745 So. 2d 1094, 1096 (Fla. 4th DCA 1999). Similarly, the decision to prosecute does not lie with the victim of a crime. McArthur, 597 So.2d at 408; Bryant, 549 So.2d at 1155; Brown, 416 So.2d at 1259.
*136 Further, Florida Rule of Criminal Procedure 3.190(c)(4) enumerates the grounds upon which the court may entertain a motion to dismiss. None of these grounds are present in this matter. Without a motion to dismiss the charges, the decision to nolle pros an information is vested solely in the discretion of the State. See In the Interest of S.R.P., 397 So. 2d 1052 (Fla. 4th DCA 1981); State v. Braden, 375 So. 2d 49 (Fla. 2d DCA 1979). There was no motion to dismiss the pending charges. We therefore reverse the order of dismissal and remand for reinstatement of the charges against the defendant.
Reversed and remanded.
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22 A.3d 671 (2011)
130 Conn.App. 280
Julio FLAMENCO
v.
INDEPENDENT REFUSE SERVICE, INC., et al.
No. 32881.
Appellate Court of Connecticut.
Argued May 19, 2011.
Decided July 19, 2011.
*672 Alan Scott Pickel, Stamford, for the appellant (plaintiff).
*673 GRUENDEL, ESPINOSA and LAVERY, Js.
GRUENDEL, J.
The plaintiff, Julio Flamenco, appeals from the decision of the workers' compensation review board (board), which dismissed his petition for review of the decision of the workers' compensation commissioner for the seventh district (commissioner) imposing a sanction of $100 following his counsel's late appearance at an informal hearing. The plaintiff contends that the commissioner improperly imposed the sanction in violation of his right to fundamental fairness in administrative proceedings. We reverse the decision of the board.
The undisputed facts, gleaned from the record before us, are as follows. The plaintiff sustained an injury on December 17, 2007, and thereafter instituted a claim for workers' compensation benefits against the defendant Independent Refuse Service, Inc.[1] An informal hearing before the commissioner was scheduled for 9 o'clock in the morning of September 28, 2010. The plaintiff's counsel, attorney Alan Scott Pickel, arrived for that hearing at 9:55 a.m. Without conducting an evidentiary hearing or affording Pickel an opportunity to be heard, the commissioner on that date imposed a sanction, pursuant to General Statutes §§ 31-288 and 31-300, of $100 "for [his] late appearance at a duly noticed hearing resulting in undue delay."
From that decision, the plaintiff appealed to the board, which dismissed the plaintiff's petition for review. In its order, the board stated: "No record exists. Absent a record, this board cannot properly consider an appeal under [General Statutes §] 31-301." The board thus dismissed the appeal and remanded the matter to the commissioner "for a formal hearing or other appropriate proceedings." This appeal followed.[2]
At the outset, we note the standard under which we review the plaintiff's claim. "The board sits as an appellate tribunal reviewing the decision of the commissioner.. . . [T]he power and duty of determining the facts rests on the commissioner. . . . The conclusions drawn by [the commissioner] from the facts found must stand unless they result from an incorrect application of the law to the subordinate facts or from an inference illegally or unreasonably drawn from them. . . . Once the commissioner makes a factual finding, [we are] bound by that finding if there is evidence in the record to support it." (Citations omitted; internal quotation marks omitted.) Williams v. State, 124 Conn. App. 759, 763-64, 7 A.3d 385 (2010).
On appeal, the plaintiff claims that the commissioner imposed the sanction in violation of his right to fundamental *674 fairness.[3] As this court has observed, "[a]dministrative hearings, including those held before workers' compensation commissioners, are informal and governed without necessarily adhering to the rules of evidence or procedure. . . . Nonetheless, administrative hearings must be conducted in a fundamentally fair manner so as not to violate the rules of due process. . . . A fundamental principle of due process is that each party has the right to receive notice of a hearing, and the opportunity to be heard at a meaningful time and in a meaningful manner." (Citations omitted.) Bryan v. Sheraton-Hartford Hotel, 62 Conn.App. 733, 740, 774 A.2d 1009 (2001); see also Huck v. Inland Wetlands & Watercourses Agency, 203 Conn. 525, 536, 525 A.2d 940 (1987) (administrative due process requires due notice and right to produce relevant evidence). That precept applies with equal force in attorney discipline proceedings. See, e.g., CFM of Connecticut, Inc. v. Chowdhury, 239 Conn. 375, 393, 685 A.2d 1108 (1996) ("As a procedural matter, before imposing . . . sanctions, the court must afford . . . a proper hearing on the . . . [proposed] sanctions.. . . There must be fair notice and an opportunity for a hearing on the record. [Citation omitted; i]nternal quotation marks omitted."), overruled in part on other grounds, State v. Salmon, 250 Conn. 147, 154-55, 735 A.2d 333 (1999); Statewide Grievance Committee v. Botwick, 226 Conn. 299, 308, 627 A.2d 901 (1993) (attorney entitled to notice of charges, fair hearing and appeal to court for determination of whether he was deprived of due process before discipline may be imposed); In the Matter of Presnick, 19 Conn.App. 340, 351, 563 A.2d 299 (holding that "due process must be afforded" before court may sanction attorney), cert. denied, 213 Conn. 801, 567 A.2d 833 (1989).
Section 31-288 (b)(2) provides: "Whenever either party to a claim under this chapter has unreasonably, and without good cause, delayed the completion of the hearings on such claim, the delaying party or parties may be assessed a civil penalty of not more than five hundred dollars by the commissioner hearing the claim for each such case of delay. Any appeal of a penalty assessed pursuant to this subsection shall be taken in accordance with the provisions of section 31-301." In the present case, the commissioner pursuant to that statute issued a sanction by letter to the plaintiff's counsel. In her September 28, 2010 letter, the commissioner stated: "The above file was scheduled for an informal hearing at 9:00 a.m. on September 28, 2010, and notice of same was sent to your company. Your office appeared at 9:55 a.m. Pursuant to [§§] 31-288 [and] 31-300 of the Workers' Compensation Act, the following sanction is imposed against your company[4] for failure to appear on time at the September 28, 2010 hearing: one hundred dollars for your late appearance at a duly noticed hearing resulting in undue delay." The commissioner's letter was received by the board on October 12, 2010. On January 10, 2011, the board certified it as part of the record for this appeal.
*675 The necessary predicate to imposition of a sanction under the plain language of § 31-288(b)(2) is a finding that the offending party "unreasonably, and without good cause, delayed the completion of the hearings. . . ." General Statutes § 31-288(b)(2). The record before us contains no finding by the commissioner that the tardiness of the plaintiff's counsel was unreasonable and without good cause. Even if we were to presume such an implicit finding on the part of the commissioner, the record is bereft of any evidence to support that finding. The commissioner did not conduct a hearing on the matter, nor did she provide the plaintiff with a meaningful opportunity to be heard thereon. Imposing the sanction in such an instance violated the plaintiff's right to fundamental fairness. See Bryan v. Sheraton-Hartford Hotel, supra, 62 Conn.App. at 740, 774 A.2d 1009.
Section § 31-288(b)(2) explicitly provides that "any appeal" by a party sanctioned thereunder "shall be taken" to the board. The plaintiff complied with that statutory mandate by appealing the sanction imposed by the commissioner to the board via his October 1, 2010 petition for review. In dismissing that appeal, the order of the board stated that because "[n]o record exists" the board "cannot properly consider an appeal. . . ." We disagree. It is well established that the board, in sitting as an appellate tribunal reviewing the decision of the commissioner, must examine the record before it to determine whether it contains evidence to support the facts found by the commissioner. See Williams v. State, supra, 124 Conn.App. at 763-64, 7 A.3d 385. As the certified record for this appeal submitted by the board exemplifies, a record does indeed exist. The board had before it copies of the commissioner's September 28, 2010 letter imposing the sanction, the plaintiff's October 1, 2010 petition for review and the plaintiff's October 1, 2010 letter titled "Reasons for Appeal," in which the plaintiff alleged, inter alia, that "§ 31-288 provides that a penalty may be assessed only where a party has `unreasonably, and without good cause' delayed completion of hearings on a claim. The commissioner took no evidence and thus could not have made any such finding."
The board correctly observed that it was presented with no record to substantiate a determination that the tardiness of the plaintiff's counsel was either unreasonable or without good cause, resulting in undue delay to the completion of the hearings at issue. In the face of such evidential paucity, the commissioner's finding cannot stand. Accordingly, we conclude that the board improperly dismissed the plaintiff's appeal.
The decision of the workers' compensation review board is reversed and the case is remanded to the board with direction to order the workers' compensation commissioner to vacate the $100 sanction.
In this opinion the other judges concurred.
NOTES
[1] By motion dated February 9, 2011, the defendant employer notified this court that it had no interest in the present appeal. We then ordered that the appeal would be considered on the basis of the record and the plaintiff's brief alone. The third party administrator of the defendant's workers' compensation plan, The Hartford, was also a defendant in the proceedings before the commissioner and the board, but has not participated in this appeal.
[2] We note that the board's order dismissing the plaintiff's petition for review is appealable pursuant to General Statutes § 31-301b, which provides: "Any party aggrieved by the decision of the Compensation Review Board upon any question or questions of law arising in the proceedings may appeal the decision of the Compensation Review Board to the Appellate Court, whether or not the decision is a final decision within the meaning of section 4-183 or a final judgment within the meaning of section 52-263."
[3] Although the plaintiff alleges a due process violation, his claim more properly is described as a violation of the right to fundamental fairness. See Grimes v. Conservation Commission, 243 Conn. 266, 273 n. 11, 703 A.2d 101 (1997); Megin v. Zoning Board of Appeals, 106 Conn.App. 602, 607 n. 6, 942 A.2d 511, cert. denied, 289 Conn. 901, 957 A.2d 871 (2008).
[4] We note that § 31-288(b)(2) authorizes the commissioner to levy a civil penalty against "the delaying party or parties." The plaintiff in this appeal raises no claim regarding the propriety of a sanction against a party's counsel, rather than the party itself, pursuant to that statute.
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78 P.3d 103 (2003)
190 Or. App. 120
LANDSEM FARMS, LP, Petitioner,
v.
MARION COUNTY, Respondent.
2002-160; A121871.
Court of Appeals of Oregon.
Argued and Submitted August 18, 2003.
Decided October 15, 2003.
*104 Donald M. Kelley, Silverton, argued the cause for petitioner. With him on the brief were Patrick E. Doyle and Kelley & Kelley.
Jane Ellen Stonecipher, Salem, argued the cause and filed the brief for respondent.
Before WOLLHEIM, Presiding Judge, and BREWER and SCHUMAN, Judges.
BREWER, J.
Petitioner Landsem Farms, LP, seeks review of a Land Use Board of Appeals (LUBA) order remanding Marion County's dismissal of an application for a conditional use permit to hold gatherings on a private airfield. Petitioner contends, among other arguments, that ORS 197.015(10)(d), which exempts certain gatherings from land use regulation, applies to its conditional use application. We affirm.
The subject property is a 20-acre parcel of land that is presently zoned Exclusive Farm Use (EFU) under Chapter 136 of the Marion County Zoning Ordinance (MCZO). The property carries the additional designation of "high-value farmland." EFU zones permit farm use and certain other uses. See ORS 215.283. A high value farmland designation further limits possible uses of EFU-zoned property, and it subjects the use of such property to additional scrutiny under Land Conservation and Development Commission (LCDC) rules. See OAR XXX-XXX-XXXX; OAR XXX-XXX-XXXX. A "personal use airport" is a conditional use within an EFU zone under MCZO 136.230(3)(i) (2002), renumbered as MCZO 136.050(h) (2003). See also ORS 215.283(2)(h).
The property previously was zoned for "Residential Agricultural" use. In 1972, when the property was zoned for that use, the county issued a conditional use permit for a private airfield on the property. As developed, the property contains a dwelling, barn, four hangars, a hangar under construction, and an airstrip. In August 2001, petitioner sought an administrative determination from the county that it could expand its airport operation. Petitioner proposed to conduct "fly-ins" and "bag drop" activities on the property.[1] A hearing officer issued an order denying that request on March 1, 2002. In the order, the hearing officer reviewed the historical use of the property and concluded that the airfield operation could not be expanded beyond the scope authorized under the 1972 conditional use permit. The hearing officer determined that the proposed activities were not incidental to the normal operation of the airport and were not otherwise permitted under ORS 836.616(2), which authorizes certain uses, including "aviation recreational and sporting activities" within airport boundaries.[2]
Petitioner then submitted an application for a conditional use to the county, "under protest," in which it proposed to "hold up to twenty-five (25) social gatherings per year." The application described the gatherings as follows:
"(1) Except for those uses which would require the landing strip, e.g., fly-ins, bag drops, etc., the social gatherings would be limited to the area immediately surrounding the private residence, *105 the hangers and the parking area.
"(2) These gatherings would not be open to the general public.
"(3) There would be no more than twenty-five (25) gatherings per year [later reduced to 15].
"(4) The maximum number of people allowed to attend any gathering would be two hundred fifty (250).
"(5) Gatherings would be limited to the hours of 8:00 a.m. until 10:00 p.m. in the evening."
Petitioner asserted that the proposed events were exempt from land use regulation under ORS 197.015(10)(d) and that they were authorized under airport planning statutes. See ORS 836.600 to 836.630.
ORS 197.015(10)(d) exempts from the definition of "land use decision" authorization of "an outdoor mass gathering as defined in ORS 433.735, or other gathering of fewer than 3,000 persons that is not anticipated to continue for more than 120 hours in any three-month period[.]" ORS 433.735(1), in turn, provides:
"`Outdoor mass gathering,' unless otherwise defined by county ordinance, means an actual or reasonably anticipated assembly of more than 3,000 persons which continues or can reasonably be expected to continue for more than 24 consecutive hours but less than 120 hours within any three-month period and which is held primarily in open spaces and not in any permanent structure."
In support of its conditional use application, petitioner argued that, under ORS 197.015(10)(d), any number of gatherings of fewer than 3,000 people lasting for a cumulative total of up to 120 hours in a three-month period were exempt from land use regulation. The county hearing officer rejected that interpretation of the statute. The hearing officer concluded that the statute allows only one unregulated gathering within a three-month period. She opined that the petitioner's interpretation "ignores the three month period part of the regulation." (Emphasis in original.) The hearing officer also rejected petitioner's argument that the proposed activities are authorized under ORS 836.616(2)(a). She characterized the activities as social events, not activities incidental to the normal operation of an airport. She concluded that "[t]he social gatherings, as described by applicant, are not allowed, conditionally permitted or exempt uses under land use, mass gathering or airport planning laws."
Petitioner appealed the county's decision to LUBA, before which it renewed its statutory arguments. LUBA also rejected petitioner's interpretation of ORS 197.015(10)(d). It concluded that, in order to give effect to the phrase "in any three-month period," the statutory exemption must be deemed to apply to a single gathering on the property in any three-month period. LUBA also rejected petitioner's contention that ORS 836.616(3) authorized the county to approve commercial uses at airports on a case-by-case basis where, as here, applicable county land use regulations do not authorize such uses.[3] In so concluding, LUBA relied on the county's interpretation of its ordinance as prohibiting the operation of a special events business at an airport within the EFU zone.
LUBA accepted the county's concession that the proposed fly-in and bag drop events were authorized as conditional airport uses under ORS 836.616(2)(j) and OAR XXX-XXX-XXXX(8). *106 However, it stated that it was unclear whether some of the social gatherings that petitioner proposed to hold "might be accurately described as `incidental' to the other activities specified at ORS 836.616(2)(a)." Because, in its view, petitioner had not described the nature of the social gatherings in sufficient detail, LUBA concluded that it could not "resolve the parties' largely hypothetical dispute over the degree of incidental social activity that might be permissible on the subject property in conjunction with any particular activity that the county must authorize under ORS 836.616(2)." Accordingly, LUBA sustained in part petitioner's assignment of error based on ORS 836.616 and remanded to the county the issue whether the proposed social events were "incidental to the normal operation of an airport."
We affirm without discussion all but one of LUBA's conclusions. We write only to address petitioner's argument that LUBA erred in concluding that its proposed activities were not exempt from land use regulation under ORS 197.015(10)(d). We address that issue now because it would be unnecessary to remand the case to the county to determine whether petitioner's proposed activities were incidental to normal airport operations under ORS 836.616, if those activities were wholly exempt from land use regulation under ORS 197.015(10)(d).
LUBA summarized its understanding of ORS 197.015(10)(d) as follows:
"1. Outdoor mass gatherings ((1) 3,000 or more people, (2) lasting between 24 and 120 hours, (3) occurring no more frequently than once every three months, (4) held in open spaces) are not subject to county land use regulations. Moreover, county decisions on applications for permits for outdoor mass gatherings are not land use decisions subject to LUBA review.
"2. Extended mass gatherings ((1) 3,000 or more people, (2) lasting more than 120 hours, (3) occurring no more frequently than once every three months, (4) held in open spaces) are subject to county land use regulations. County decisions on permit applications for extended mass gatherings are land use decisions subject to LUBA review.
"3. Small gatherings ((1) attracting fewer than 3,000 persons, (2) lasting fewer than 120 hours, (3) occurring no more frequently than once every three months) are not subject to county land use regulations. Any county decisions regarding such small gatherings are not land use decisions subject to LUBA review."
On review, petitioners again assert that ORS 197.015(10)(d) exempts from land use regulation gatherings of fewer than 3,000 people that do not cumulatively exceed 120 hours in any three-month period. Petitioner argues the "120 hours in any three-month period" is a limit on the cumulative hours of multiple gatherings during a three-month period, rather than a limit on the hours of a single gathering held within that period. Petitioner explains:
"Indeed, the text of ORS 197.015(10)(d) demonstrates that the legislature did not intend to limit landowners to only one gathering in any three month period. While the statute provides clear limits on the number of attendees and the duration of a gathering, it is silent as to frequency. If the legislature had meant to limit landowners to one gathering it would have said so explicitly. LUBA erred by inserting what had been clearly omitted by the legislature."
Alternatively, petitioner argues that the statute authorizes an unlimited number of events, provided that no one event exceeds 3,000 people and 120 consecutive hours in any three-month period. According to petitioner, "if the legislature had intended to limit the mass gatherings to one gathering not to exceed 120 hours every three months, as LUBA found, there would be no need for a reference to a three-month period."
Petitioner asserts that, if the statute is ambiguous, its legislative history shows that it was intended to permit multiple gatherings. According to petitioner, "The legislature was not focused on frequency but was instead seeking to free up outdoor gatherings *107 from burdensome (and likely unconstitutional) regulation from the counties."
The county responds that only one interpretation of the statute gives meaning to its entire text, namely, that the phrase "within any three-month period" must modify the subject of the sentence, "gathering." According to the county, because "gathering" is singular, and not plural, the remainder of the statute merely elucidates the nature of that single gathering. In order to be exempt, the county argues, a gathering either must be "an outdoor mass gathering as defined in ORS 433.735, or other gathering of fewer than 3,000 persons that is not anticipated to continue for more than 120 hours in any three-month period."
In construing the statute, we follow the methodology prescribed by PGE v. Bureau of Labor and Industries, 317 Or. 606, 610-12, 859 P.2d 1143 (1993). Our beginning point, the statutory text, is not a model of clarity. The primary difficulty lies in ascertaining the meaning of the phrase "not anticipated to continue for more than 120 hours in any three-month period[.]" ORS 197.015(10)(d). Petitioner asserts that that phrase refers to multiple events with a total accumulated hour limit, whereas the county contends that it refers to a single event of not more than 120 hours. Neither interpretation meshes seamlessly with the statute's wording. We conclude, on balance, however, that the legislature intended, in enacting ORS 197.015(10)(d), to exempt from land use regulation a single gathering within a three-month period, subject to the size and durational limitations provided.
We first examine textual clues to the statute's meaning. It is significant that the legislature used a singular noun as the subject of the provision. The exemption is authorized for a "mass gathering as defined in ORS 433.735 or other gathering * * *." ORS 197.015(10)(d) (emphasis added). Given that singular subject, the conditions that follow, that is, the limits on the number of persons who may attend and duration of the gathering, more likely than not are intended to apply to a single gathering, rather than to constitute a cumulative restriction on multiple gatherings.
Moreover, that construction is consistent with the context in which the statute appears. The related statutes governing mass gatherings use the same construction, that is, a singular subject ("an assembly" or "a gathering"), followed by a reference to the size and duration of the gathering. See ORS 433.735(1); ORS 433.763(1). More generally, ORS chapter 197 establishes Oregon's comprehensive land use regulatory scheme from which ORS 197.015(10)(d) grants an exemption for certain gatherings. Petitioner's construction would create a broad exemption indeed, irrespective of the zoning of the subject property; for example, it would allow, within a three-month period, ten twelve-hour gatherings or twenty six-hour gatherings of up to 3,000 people each. It seems unlikely that the legislature intended to create such a broad exemption for multiple gatherings, regardless of their nature, to be held on land zoned for other purposes, such as exclusive farm use.[4]
To the extent that resort to it is necessary, the relevant legislative history supports our construction of the statute. ORS 197.015(10)(d) was enacted in 1999. Or Laws 1999, ch. 866, § 1. Nothing in the legislative record specifically addresses the 120-hour limit. Nor is there any evidence as to the significance, if any, of the use of the singular subject, "gathering." However, a statement made by a representative of the Department of Land Conservation and Development is marginally helpful. That representative, Ron Eber, told the Senate Rules and Elections Committee that the statute would not "authorize anything * * * that should normally *108 come within the land use statutes," and that the bill would "make it clear that those activities, the short duration, temporary kind of activities, are not subject to the zoning regulations." That statement suggests that ORS 197.015(10)(d) properly is understood as creating a narrow exemption from land use regulation. Petitioner's proposed construction is inconsistent with that understanding.[5]
In sum, the text, context, and legislative history of ORS 197.015(10)(d) indicate that it exempts from land use regulation only a single gathering of the described size and duration within any three-month period. LUBA correctly concluded that ORS 197.015(10)(d) did not exempt petitioner's proposed activities from county land use regulation.
Affirmed.
NOTES
[1] Although the terms are not described in detail in the record, we understand "fly-in" to refer to a gathering of persons who travel by aircraft to the gathering. A "bag drop" is described as a "competition" in the hearing officer's order, and we understand it to refer to a contest involving dropping objects from aircraft with the intent of striking a target on the ground.
[2] ORS 836.625(1) provides that "limitations on uses made of land in exclusive farm use zones described in ORS 215.213 and 215.283 do not apply to the provisions of ORS 836.600 to 836.630 regarding airport use."
[3] ORS 836.616(1) requires LCDC to adopt rules for uses and activities allowed within airports and airport boundaries as identified in ORS 836.608(2) and ORS 836.610(1). ORS 836.616(2) lists uses that local government land use regulations "shall authorize" within airport boundaries. The uses include "customary and usual aviation-related activities," aircraft service, maintenance and training, aircraft sales, air passenger and freight services, and, under ORS 836.616(2)(j), "[a]viation recreational and sporting activities." ORS 836.616(3), in part, lists usesincluding commercial and industrial usesthat local governments may authorize in addition to those airport related uses in subsection (2) "where such uses are consistent with applicable provisions of the acknowledged comprehensive plan, statewide land use planning goals and commission rules and where the uses do not create a safety hazard or limit approved airport uses." As noted, ORS 836.625(1) provides that "limitations on uses made of land in exclusive farm use zones described in ORS 215.213 and 215.283 do not apply to the provisions of ORS 836.600 to 836.630 regarding airport uses."
[4] Petitioner remonstrates that, under LUBA's interpretation of ORS 197.015(10)(d), a landowner is limited to one gathering in any 120-day period, whether social, political, or religious in nature. Petitioner argues that "[w]here ORS 197.015(10)(d) prohibits the holding of a second rally or ceremony (as under LUBA's interpretation) it would be deemed unconstitutional." However, petitioner offers no authority for the proposition that a statute exempting certain gatherings from land use regulation under limited circumstances that do not discriminate with respect to the character of the gathering somehow impairs a constitutionally protected right. We decline to further consider that undeveloped argument.
[5] Petitioner argues that ORS 197.015(10)(d) codified this court's opinion in Fence v. Jackson County, 135 Or.App. 574, 900 P.2d 524 (1995). Petitioner's purpose in citing the case is somewhat unclear because nothing in our opinion in Fence suggests that we construed any statute to authorize multiple gatherings within the statutorily prescribed three-month period. The question of how many gatherings might be held under the disputed language was not at issue in Fence.
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82 So.3d 22 (2010)
SERPETER MOLLETTE
v.
STATE.
No. 2090446.
Court of Civil Appeals of Alabama.
April 20, 2010.
DECISION WITHOUT PUBLISHED OPINION
Dismissed for lack of prosecution.
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22 A.3d 1179 (2011)
VanZILE
v.
DOL.
No. 10-367.
Supreme Court of Vermont.
April 21, 2011.
Reversed.
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80 So.3d 1024 (2012)
DE HOYOS
v.
DE HOYOS.
No. 1D11-65.
District Court of Appeal of Florida, First District.
February 24, 2012.
DECISION WITHOUT PUBLISHED OPINION
Affirmed.
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21 A.3d 1063 (2011)
420 Md. 81
KIMBERLY JONES
v.
STATE.
Pet. Docket No. 76.
Court of Appeals of Maryland.
June 17, 2011.
Petition for writ of certiorari granted.
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21 A.3d 1190 (2011)
COM.
v.
CLAUDE.
No. 951 MAL (2010).
Supreme Court of Pennsylvania.
May 5, 2011.
Disposition of Petition for Allowance of Appeal Denied.
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83 So.3d 924 (2012)
Alvin GENTRY, Appellant,
v.
Emma MORGAN, Appellee.
No. 3D11-1897.
District Court of Appeal of Florida, Third District.
March 7, 2012.
*925 James D. Tittle, Hiawassee, Ga., for appellant.
Kieran P. Fallon and Rae Shearn, Miami, for appellee.
Before RAMIREZ, SHEPHERD, and SUAREZ, JJ.
RAMIREZ, J.
Alvin Gentry appeals the trial court's decision to vacate an agreement and judgment establishing the amount of support for his minor child. Because the parties' agreement is unambiguous and not against public policy, we reverse and remand for the trial court to reinstate the previous judgment.
In 1995, Emma Morgan sued Gentry for paternity, and Gentry and Morgan settled the case. Pursuant to the settlement, child support was set at $1285 per month, but that amount was modified in 1999 after Morgan petitioned the court to increase the amount Gentry was required to pay. After the 1999 modification proceeding, *926 Gentry and Morgan entered into a court-approved agreement that set child support at $2500 per month. Under the agreement, the amount was not to be modified unless certain conditions were met. Upward modification required proof that Gentry's salary increased to $2.5 million per year, and downward modification required that Gentry's salary drop below $500,000 per year. Gentry's profession involves fluctuations in income. Although Gentry has enjoyed professional success since 1999, it is undisputed that during the relevant time, Gentry's salary has not exceeded the $2.5 million per year threshold.
In 2010 Morgan petitioned the trial court to modify the child support. Although the conditions set in the agreement have not been met, Morgan contends that the circumstances have changed, in a manner that could not have been foreseen, and consequently the amount of support should be modified. In particular, Morgan contends that increases in the ordinary cost of living for the child, such as educational and transportation expenses, have occurred since 1999, which justify modifying the agreed-upon terms. For example, at oral argument, Morgan's counsel stated that additional funds from Gentry would facilitate the child's attendance at rigorous and challenging schools which he has the opportunity to attend, but for which the cost of attendance is high.
Gentry answered the complaint, asserting the agreement and earlier judgment as a defense to modification. Gentry then moved for summary judgment on this defense. In response, pursuant to Florida Rule of Civil Procedure 1.540 and Florida Family Law Rule of Procedure 12.540, Morgan requested the trial court vacate the 1999 judgment and re-open the issue of the appropriate amount of support, because she contended the judgment was void as a matter of Florida public policy. The trial court agreed, vacated the judgment as void against public policy for failure to account for changes in circumstances, and denied summary judgment because there were issues of fact regarding the appropriate amount of support. Gentry timely appealed the trial court's order.
Florida law does not, as a matter of public policy, preclude agreements between parents establishing the terms of child support. "The fact that parents may not waive or `contract away' their child's right to support does not preclude them from making contracts or agreements concerning their child's support so long as the best interests of the child are served." Lester v. Lester, 736 So.2d 1257, 1259 (Fla. 4th DCA 1999) (citations omitted); see also Laussermair v. Laussermair, 55 So.3d 705, 706 (Fla. 4th DCA 2011); Schmachtenberg v. Schmachtenberg, 34 So.3d 28, 33 (Fla. 3d DCA 2010). "Where, however, the trial court has approved the parents' agreement, including its child support provision, then the court is presumed to have determined that the amount of child support agreed upon was, as of that moment, in the best interests of the child," and consequently, any later modification must be predicated upon a change of circumstances. Essex v. Ayres, 503 So.2d 1365, 1367 (Fla. 3d DCA 1987); see also Rose v. Rose, 8 So.3d 1251, 1252 (Fla. 4th DCA 2009).
Here, the trial court erred by nullifying the 1999 agreement rather than enforcing it according to its terms. In entering into the 1999 agreement, the parties considered the child's current and prospective needs, and possible changes in Gentry's income. The trial court approved the agreement submitted by the parties. Absent proof of a substantial change in circumstances, the court may not modify the support order in this case. While there may be moral deficiencies in Gentry's *927 refusal to facilitate his child's academic achievement, we cannot say these deficiencies require overriding an agreement that is legally valid. As a result, the trial court erred in ordering the agreement must be modified.
Accordingly, we reverse the order entered below, and remand for the trial court to reinstate the 1999 court-approved agreement.
Reversed.
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78 P.3d 766 (2003)
139 Idaho 330
Mark George MURPHY and Jannett Marie Murphy, Plaintiffs-Respondents,
v.
MID-WEST NATIONAL LIFE INSURANCE COMPANY OF TENNESSEE, a UICI company, Defendant-Appellant, and
James Parish, individually and as agent; John Doe and Jane Doe, individually and/or as husband and wife; Does I through X; and Business Entities, Does I through X, Defendants.
No. 28510.
Supreme Court of Idaho, Boise, May 2003 Term.
October 9, 2003.
Elam & Burke, P.A., Boise, for appellants. Jeffrey A. Thomson argued.
Pedersen and Jackson, Twin Falls, for respondents. Jarom A. Whitehead argued.
SCHROEDER, Justice.
Mid-West National Life Insurance Company of Tennessee (Mid-West) appeals the district court's ruling that the provision in the insurance policy it sold to Mark and Jannett Murphy (Murphys) that compels arbitration in disputes over policy coverage is unenforceable.
I.
BACKGROUND AND PRIOR PROCEEDINGS
In April of 2000 Mid-West issued a health insurance policy to the Murphys. The policy was acquired through an independent sales agent, James Parish, and covered Mark Murphy as the insured and Jannett, Cody, Lexa, *767 and Tayla Murphy as his dependents. In December of 2000, Mark Murphy was diagnosed with multiple sclerosis and submitted a claim to Mid-West for the treatment of his illness. Mid-West refused to pay the claim, and the Murphys filed suit against Mid-West.
Mid-West moved to stay the proceedings and to compel arbitration pursuant to a clause in the insurance policy which provides that "if the claim is $10,000 or less, the dispute shall be settled by arbitration if either one of us demands arbitration." The Murphys unpaid medical expenses were less than $10,000.
The district court denied Mid-West's motions on the grounds that the provision in the policy allocating the costs of arbitration was unconscionable and thus revocable under I.C. § 7-901. The relevant provision in the policy states:
Each party shall pay the costs of its arbitrator. The parties shall bear equally the expenses of the third arbiter and all other expenses of arbitration. Attorney fees and expenses for witnesses, will not be deemed to be expenses of arbitration, but will be borne by the party incurring them.
I.C. § 7-901 states:
Validity of arbitration agreement
A written agreement to submit any existing controversy to arbitration or a provision in a written contract to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable and irrevocable, save upon such grounds as exist at law or in equity for the revocation of any contract. This act does not apply to arbitration agreements between employers and employees or between their respective representatives (unless otherwise provided in the agreement).
(emphasis added). The district court determined that the arbitration provision was procedurally unconscionable because insurance contracts by their nature are contracts of adhesion giving rise to an automatic disparity in the bargaining positions between the insurer and the insured. Further, the provision was substantively unconscionable because the costs of arbitration would be so prohibitively expensive that the Murphys would have to forgo some or all of their claims. Specifically, the district court noted that even while Mid-West had agreed to use only one non-doctor arbitrator, the cost of that arbitrator plus the costs of witnesses and attorney fees was at a minimum $2,500, more than the Murphys could afford. Based upon these determinations the district court ruled the arbitration clause was unenforceable. Mid-West appealed.
II.
STANDARD OF REVIEW
In disputes involving arbitration, this court has stated:
"The question of arbitrability is a question of law properly decided by the court." Local 2-652 v. EG & G Idaho, Inc., 115 Idaho 671, 674, 769 P.2d 548, 551 (1989), citing AT & T Technologies, Inc. v. Communications Workers, 475 U.S. 643, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986). When questions of law are presented, this court exercises free review and is not bound by findings of the district court, but is free to draw its own conclusions from the evidence presented. Mutual of Enumclaw v. Box, 127 Idaho 851, 852, 908 P.2d 153, 154 (1995), citing Automobile Club Ins. Co. v. Jackson, 124 Idaho 874, 876, 865 P.2d 965, 967 (1993).
Lewis v. CEDU Educational Services, Inc., 135 Idaho 139, 142, 15 P.3d 1147, 1150 (2000). As for the review of factual findings by the district court, namely that arbitration as set forth by Appellant's policy was prohibitively expensive for the Murphys, this Court has stated, "[o]ur rule has been that on appeal district court findings of fact will not be overturned unless clearly erroneous." Loomis, Inc. v. Cudahy, 104 Idaho 106, 110, 656 P.2d 1359, 1365 (citing I.R.C.P 52(a)).
III
THE REVOCATION EXCEPTION IN I.C. SECTION 7-901 INCLUDES UNCONSCIONABILITY AS A BASIS FOR REVOCATION OF AN ARBITRATION AGREEMENT, BUT THE ARBITRATION PROVISION IN THIS CASE IS NOT UNCONSCIONABLE
In Lovey v. Regence Blue Shield of Idaho, 03.14 ISCR 585, 139 Idaho 37, 72 P.3d *768 877 (2003), this Court determined that unconscionability is a ground for invalidating an arbitration agreement. However, "[f]or a contract or contractual provision to be voided as unconscionable, it must be both procedurally and substantively unconscionable." Id. at 586, 72 P.3d at 882. Lovey established the requirements to find unconscionability. As in Lovey, there is no showing of procedural or substantive unconscionability in this case.
IV.
THE PROHIBITIVE COSTS OF ARBITRATION IN THIS CASE RENDERS THE ARBITRATION PROVISION UNENFORCEABLE
While there is no showing of procedural or substantive unconscionability the prohibitive costs of arbitration in this case renders the arbitration provision unenforceable. Lovey noted that in Green Tree Financial Corp.-Alabama v. Randolph, 531 U.S. 79, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000), "the United States Supreme Court recognized that an agreement to arbitrate may be unenforceable if large arbitration costs precluded the party from effectively vindicating the party's federal statutory rights in the arbitral forum." This concept is related to but independent of the concept of unconscionability. It is viable when the circumstances of the case defeat the salutary purposes usually associated with arbitration which is supposed to be an inexpensive and rapid alternative to prolonged litigation. The factual record was insufficient in Lovey to warrant consideration of the Green Tree approach. That is not the case here.
The threshold concern in considering the arbitration agreement is that it is applicable to claims of $10,000 or less. This relatively small amount is burdened with extensive costs more appropriate for large value claims. Each party is to pay its own arbitrator and share equally the expenses of a third arbiter and all other expenses of arbitration. The agreement provides that attorney fees and expenses for witnesses will be borne by the party incurring them. On its face this is a hefty load for a medical claim of less than $10,000. Perhaps in recognition of this, Mid-West agreed to use only one non-doctor arbitrator. Despite this reduction, the district court found that the cost of the arbitrator, plus the costs of witnesses and attorney fees was at a minimum $2,500 and that the Murphys could not afford that amount. That determination is supported by the record. Effectively the arbitration agreement in this case turns the purposes of arbitration upside down. It is an expensive alternative to litigation that precludes the Murphys from pursuing the claim.
V.
CONCLUSION
The decision of the district court declaring the arbitration provision unenforceable is affirmed. The Murphys are awarded costs.
Chief Justice TROUT, Justices WALTERS, KIDWELL and EISMANN concur.
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01-03-2023
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/2549322/
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20 A.3d 1211 (2011)
COM.
v.
YOUNGER.
No. 654 EAL (2010).
Supreme Court of Pennsylvania.
April 7, 2011.
Disposition of Petition for Allowance of Appeal Denied.
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01-03-2023
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/1478831/
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(2008)
BIRMINGHAM ASSOCIATES LTD., Plaintiff,
v.
ABBOTT LABORATORIES, Defendant.
No. 07 Civ. 11332(SAS).
United States District Court, S.D. New York.
April 14, 2008.
OPINION & ORDER
SHIRA A. SCHEINDLIN, District Judge.
I. INTRODUCTION
Birmingham Associates Ltd. ("Birmingham") has brought this action against Abbott Laboratories ("Abbott") to resolve a dispute regarding Abbott's decision to terminate the development of a stent product in which Birmingham invested. Abbott now moves to compel arbitration and dismiss or stay this litigation pending resolution of an arbitration between Abbott Laboratories Vascular Enterprises Limited ("ALVE") and Birmingham, resulting from a January 4, 2008 arbitration notice by Birmingham. ALVE moves to intervene and compel arbitration between Abbott and Birmingham. Birmingham crossmoves to enjoin ALVE from pursuing issues relating to Abbott's termination of the stent development program in the pending arbitration proceeding. For the following reasons, Abbott's motion to compel arbitration is granted and this action is dismissed.
II. BACKGROUND
A. The Parties
Abbott, an Illinois corporation with its principal place of business in Abbott Park, Illinois, is engaged in the research and development of, inter alia, cardiovascular and endovascular medical device products.[1] ALVE is an indirect, wholly-owned subsidiary of Abbott organized under the laws of Ireland, which serves as Abbott's holding company for intellectual property.[2] It owns the intellectual property associated with the ZoMaxx Drug Eluting Coronary Stent System ("ZoMaxx Stent").[3]
Birmingham, a Cayman Islands corporation organized and existing under the laws of the Cayman Islands, is an investment company.[4] It is managed by Elliott International Capital Advisors, Inc., a Delaware corporation with its principal place of business in New York.[5]
B. The Agreements
1. The Funding Agreement
A group of investors (the "Investors"), including Birmingham, entered into a funding agreement, dated May 2, 2005, with ALVE relating to the development of the ZoMaxx Stent (the "Funding Agreement").[6] Pursuant to the Funding Agreement, ALVE and its affiliates, including Abbott, were to use "commercially reasonable efforts" to obtain regulatory approval of the ZoMaxx Stent and a contemplated successor product, referred to in the Funding Agreement as the "Drug-Eluting Stent 2nd Generation."[7] Under the Funding Agreement, ALVE had the right to terminate any program covered by the Agreement "based upon its reasonable commercial judgment without giving consideration to its obligations under this Agreement."[8] In exchange for their investment in the development program, the Investors were to receive royalty and milestone payments relating to the ZoMaxx Stent and the second generation stent if and when those products achieved certain regulatory approvals and commercial benchmarks.[9]
Abbott negotiated the Funding Agreement with the Investors on behalf of ALVE.[10] In addition, Abbott retained certain powers and responsibilities under the Funding Agreement as an "Affiliate" of ALVE.[11]
Most relevant to this motion, the Funding Agreement also contains a broad arbitration clause.[12] The only exception to the arbitration clause is an action for injunctive relief to compel compliance with the confidentiality obligations of the Funding Agreement.[13]
2. The Keep Well Agreement
On May 2, 2005, simultaneous with the execution of the Funding Agreement, Abbott entered into an agreement with ALVE obligating it to guarantee ALVE's performance under the Funding Agreement (the "Keep Well Agreement").[14] It also obligated Abbott to provide sufficient equity capital to ALVE so that ALVE could "meet its obligations to its creditors and to the Investors."[15] Finally, the Keep Well Agreement provided that "Abbott will use Commercially Reasonable Efforts to further the commercial interests and success of ALVE, including providing research and development, clinical trial and sales and marketing support for cardiovascular and endovascular medical device products produced by ALVE."[16]
The Keep Well Agreement identifies the Investors as its intended beneficiaries.[17] It repeatedly refers to, and incorporates provisions of the Funding Agreement.[18] The purpose of the Keep Well Agreement is as follows: "The Investors, as a condition to their willingness to contribute the additional funding, require assurances that Abbott will take all such action as may be necessary to assure that ALVE will be able to comply with all of its obligations, including its obligations to make payments to the Investors pursuant to the Funding Agreement."[19]
C. The Events Leading to This Suit
The ZoMaxx Stent went through a rigorous research and development process. Based upon its assessment of the clinical data, Abbott decided on October 3, 2006 to no longer pursue the commercial development of the ZoMaxx Stent.[20] On October 20, 2006, Abbott sent a letter to Birmingham stating that, based in part on "its assessment" of certain data, "Abbott has concluded that it will discontinue" the Zo-Maxx program.[21] The letter also stated that the remaining funds contributed by the Investors for the development of the ZoMaxx Stent roughly nineteen percent of the investment would be refunded in accordance with a section of the Funding Agreement that conferred a termination right on ALVE.[22]
Birmingham believed that the termination of the development of the ZoMaxx Stent was improper, and that the ZoMaxx Stent had significant commercial potent.[23] Birmingham initially focused on attempting to reach an amicable resolution and obtain compensation for the lost opportunity to develop the ZoMaxx Stent.[24] One of Birmingham's affiliates proposed purchasing the rights to develop the Zo-Maxx Stent, along with other investors.[25] The proposal failed when Abbott refused to produce documents for due diligence review and Birmingham's affiliate concluded that acquisition of the ZoMaxx Stent was no longer possible.[26]
On December 17, 2007, Birmingham filed this action against Abbott alleging that Abbott abandoned the ZoMaxx Stent because it wished to focus on the "Xience" stent, another Abbott product, thereby breaching the Keep Well Agreement.[27] Subsequently, Abbott wrote to Birmingham on January 3, 2008, demanding that this action be stayed or dismissed in favor of arbitration.[28] In a letter dated January 4, 2008, Birmingham denied that request and the instant motion practice followed.[29]
Also on January 3, 2008, ALVE gave notice to Birmingham of its intention to resolve the dispute regarding the same issues raised in this action pursuant to the ADR provision of the Funding Agreement, thus triggering a twenty-eight day period for good faith negotiation.[30] Birmingham responded on January 4, 2008 to ALVE's notice of dispute by claiming that the notice was deficient because it did not identify the nature of the dispute with adequate specificity and that the issues raised in this litigation were not arbitrable.[31] At the same time, Birmingham provided its own notice of dispute under the same ADR provision relating to ALVE's failure to make royalty and milestone payments to which Birmingham claims it is entitled.[32] In that notice, Birmingham alleged that the Xience Stent essentially equated to the Drug E luting Stent 2nd Generation described in the Funding Agreement.[33]
ALVE responded to Birmingham's arbitration demand in a January 15, 2008 letter, disputing Birmingham's allegations, but agreeing that the dispute regarding the Xience stent should be resolved pursuant to the ADR provision of the Funding Agreement.[34] ALVE also provided additional specificity regarding the nature of its dispute against Birmingham relating to the ZoMaxx Stent.[35] ALVE specified that it sought a determination by an arbitrator that neither ALVE nor its affiliates, including Abbott, violated any duty to Birmingham under the Funding Agreement by terminating the ZoMaxx development program.[36] By letter dated January 18, 2008, Birmingham responded to ALVE's more specific demand for arbitration by reiterating its view that the dispute regarding the ZoMaxx Stent was not arbitrable.[37]
III. LEGAL STANDARD
A. Arbitrability
The determination of whether a dispute is arbitrable under the Federal Arbitration Act ("FAA") consists of two prongs: "(1) whether there exists a valid agreement to arbitrate at all under the contract in question ... and if so, (2) whether the particular dispute sought to be arbitrated falls within the scope of the arbitration agreement."[38] To find a valid agreement to arbitrate, a court must apply the "generally accepted principles of contract law."[39] "[A] party is bound by the provisions of a contract that [it] signs, unless [it] can show special circumstances that would relieve [it] of such obligation."[40] It is well-established that "arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which [it] has not agreed to so submit."[41] A court should consider only "whether there was an objective agreement with respect to the entire contract."[42]
Because there is "a strong federal policy favoring arbitration ... where [ ] the existence of an arbitration agreement is undisputed, doubts as to whether a claim falls within the scope of that agreement should be resolved in favor of arbitrability."[43] Thus, the Second Circuit has emphasized that
any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration. Accordingly, [f]ederal policy requires us to construe arbitration clauses as broadly as possible. We will compel arbitration unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.[44]
However, although federal policy favors arbitration, it is a matter of consent under the FAA, and "a party cannot be required to submit to arbitration any dispute which [it] has not agreed so to submit."[45]
B. Estoppel Doctrine
Section 3 of the FAA requires a court to enter a stay in a case where the asserted claims are "referable to arbitration" by written agreement.[46] "`Because arbitration is a matter of contract, exceptional circumstances must apply'" before a court will allow a non-contracting party to impose a contractual agreement to arbitrate.[47] A non-signatory may compel arbitration on an estoppel theory, where (i) there is a close relationship between the parties and controversies involved and (ii) the signatory's claims against the non-signatory are "`intimately founded in and intertwined with the underlying'" agreement containing the arbitration clause.[48] Claims are intertwined "where the merits of an issue between the parties [i]s bound up with a contract binding one party and containing an arbitration clause."[49]
The Second Circuit has been hesitant to set rigid rules for the estoppel inquiry, holding that it "is fact-specific" and requires "careful review of `the relationship among the parties, the contracts they signed ... and the issues that had arisen' among them."[50] Courts have found claims to be intertwined with an agreement containing an arbitration clause in which the non-signatory had no obligations under that agreement,'[51] the claims at issue did not require interpretation of the agreement,[52] the signatory's claims did not exclusively rely on the agreement,[53] and the claims may not have been meritorious.[54] At a minimum, the signatory's claims must "`make [] reference to or presume[] the existence of the written agreement.'"[55]
The purpose of the doctrine of equitable estoppel "is to prevent a plaintiff from, in effect, trying to have [its] cake and eat it too; that is, from `reiy[ing] on the contract when it works to its advantage [by establishing the claim], and repudiat[ing] it when it works to its disadvantage [by requiring arbitration].'"[56] "`The plaintiffs actual dependence on the underlying contract in making out the claim against the nonsignatory defendant is therefore always the sine qua non of an appropriate situation for applying equitable estoppel.'"[57] Although the Second Circuit has not expressly adopted this rule, in those instances when it has held that a plaintiff is estopped from avoiding arbitration, the plaintiffs claims depended in substantial part on the existence of an agreement containing an arbitration clause.[58]
C. Stay of Litigation Pending Arbitration
The Court has the power to grant a stay "pursuant to the power inherent in every court `to control the disposition of the cases on its docket with economy of time and effort for itself, for counsel, and for litigants.'"[59] The movant bears the burden of demonstrating that a stay is justified.[60]
The movant must first establish that "there are issues common to the arbitration and the court, and that those issues will finally be determined by arbitration."[61] If this test is met, the movant has the burden of showing that it will not hinder arbitration, that the arbitration will be resolved within a reasonable time, and that any delay that may occur will not cause undue hardship to the nonmoving party.[62] Stays are particularly appropriate where they "`promote judicial economy avoidance of confusion and possible inconsistent results.'"[63]
IV. DISCUSSION
A. Arbitrability
The Keep Well Agreement the contract at the heart of this litigation does not contain an arbitration clause. Indeed, the Keep Well Agreement explicitly provides that Birmingham may seek recourse in an "action or actions," which implies a judicial forum, for any claim that Abbott breached its obligation under the Agreement.[64]
B. Abbott's Estoppel Claim
Nonetheless, Abbott argues that the nature of the relationships among the parties, and between the Funding Agreement and the Keep Well Agreement, require that the dispute between Abbott and Birmingham be resolved through arbitration. Abbott, a non-signatory to the Funding Agreement, invokes the equitable doctrine of estoppel pursuant to which it seeks to compel Birmingham, a signatory to the Funding Agreement, to arbitrate. This Court must determine whether Birmingham's claims against Abbott are intimately founded in or intertwined with the obligations found in the Funding Agreement.[65]
Abbott has satisfied the first prong of the estoppel doctrine, because there is a close relationship between Abbott and ALVE and the controversy at issue. The parent-subsidiary relationship between Abbott and ALVE, satisfies the definition of "Affiliate"[66] under the Funding Agreement.[67]
The second prong of the estoppel doctrine is also satisfied. The issues raised in this litigation are intimately founded in and intertwined with the underlying obligations of the Funding Agreement. The dispute between Birmingham and Abbott in this litigation is directly related to the terms of the Funding Agreement. Birmingham's claims are "integrally related to the contract containing the arbitration clause."[68] While Birmingham brought an action solely relating to Abbott's obligations under the Keep Well Agreement, that Agreement is dependent upon the Funding Agreement. It is the Funding Agreement that governs the ZoMaxx Stent development program and the royalties and payments to which the Investors are entitled. The Keep Well Agreement is merely Abbott's guaranty that ALVE and its Affiliates will perform and uphold the Funding Agreement.[69]
Indeed, the Keep Well Agreement only becomes operative if and when ALVE fails to fulfill its obligations under the Funding Agreement to use commercially reasonable efforts to develop the ZoMaxx Stent.[70] ALVE's and Abbott's conduct under the Funding Agreement will be crucial to deciding the claims asserted by Birmingham in this case. If ALVE fulfilled its obligations under the Funding Agreement and it is determined that the termination of the ZoMaxx Stent development program was commercially reasonable, then the Keep Well Agreement could not have been breached. Birmingham's complaint under the Keep Well Agreement depends on an analysis of Birmingham, Abbott and ALVE's performance under the Funding Agreement. Alternatively, should the Funding Agreement be found to be void, invalid, or unenforceable, Birmingham would have no cause of action against Abbott under the Keep Well Agreement. The Funding Agreement is a necessary predicate to Birmingham's claims under the Keep Well Agreement.
Most importantly, Birmingham could reasonably expect to be required to arbitrate its disputes with Abbott and ALVE. Abbott was directly involved in negotiating the Funding Agreement with the Investors and participated in the ZoMaxx Stent development program.[71] Birmingham could have foreseen that by entering into the Funding Agreement, which had an arbitration clause, it might be required to arbitrate any disputes with Abbott, the parent of ALVE. Notably, the only agreement signed by Birmingham is the Funding Agreement, which undisputedly requires the arbitration of "any dispute" relating to that Agreement. Given its unambiguous and broad arbitration clause, ALVE and Abbott's close relationship, and the significance of the Funding Agreement to the resolution of Birmingham's claims, the arbitration required by the Funding Agreement is the proper forum to resolve the instant dispute. Moreover, compelling Abbott and Birmingham to arbitrate this dispute will result in a preservation of judicial resources and avoid the possibility of inconsistent results.
The purpose of the doctrine of equitable estoppel "is to prevent a plaintiff from, in effect, trying to have [its] cake and eat it too."[72] Birmingham cannot rely upon the Funding Agreement to enforce its rights as an Investor in the ZoMaxx Stent development program, and then avoid its arbitration clause by asserting that the agreement is not inextricably intertwined with the guaranty of the Keep Well Agreement. By initiating its own arbitration against ALVE, Birmingham has implicitly acknowledged the validity of the arbitration clause with regard to disputes arising under the Funding Agreement. The same proceeding is the appropriate forum to resolve this dispute. Because Birmingham is estopped from refusing to arbitrate the ZoMaxx dispute with Abbott, the motion to compel arbitration is granted and this action is dismissed.[73]
V. CONCLUSION
For the foregoing reasons, Abbott's motion to compel arbitration is granted. The Clerk of the Court is directed to close these motions [Nos. 5, 7, and 10 on the docket] and this case.
SO ORDERED.
NOTES
[1] See Complaint ("Compl.") ¶ 4.
[2] See 1/29/08 Declaration of Michele Bonke in Support of Defendant Abbott Laboratories Motion to Compel Arbitration and to Dismiss or Stay this Litigation, and in Support of Proposed-Intervenor Abbott Laboratories Vascular Enterprises Inc.'s Motion to Intervene, and to Compel Arbitration ("Bonke Decl."), ¶ 12.
[3] See id.
[4] See Compl. ¶ 3.
[5] See id.
[6] See Memorandum of Law in Support of Defendant Abbott Laboratories' Motion to Compel Arbitration and to Dismiss or Stay this Litigation ("Def. Mem.") at 2. The Zo-Maxx Stent is a "drug eluting stent" or "DES." Id. The ZoMaxx Stent, like all drug eluting stents, consists of three parts: (i) the stent body, which is a metal mesh tubular scaffold; (ii) a drug compound that is eluted from the stent; and (iii) a polymer that holds the drug compound onto the stent and controls the release of the drug over time. See id. The drug compound is intended to inhibit the growth of scar tissue within the stented area, which can otherwise result in renewed blockage of the stented artery. See id.
[7] Sec id.
[8] Research and Development Funding Agreement ("Funding Agreement"), Ex. A to 1/25/08 Declaration of Steven T. Kipperman, Director, Licensing and Business Development for Defendant Abbott Laboratories ("Kipperman Decl."), ¶ 10.3. See also Def. Mem. at 3.
[9] See Def. Mem. at 3.
[10] See id.
[11] See id. The Funding Agreement defines "Affiliate" to include "any Party, any corporation or other form of business organization, which directly or indirectly owns, controls, is controlled by, or is under common control with, such Party. Funding Agreement ¶ 1.1. The Funding Agreement also requires "ALVE or its Affiliates and Subcontractor's [sic] shall use Commercially Reasonable Efforts to conduct the Development Program in good scientific manner and using good laboratory, manufacturing, and clinical practices, to achieve the objectives of the Development Program efficiently and expeditious and to comply with all applicable laws and regulations." Id. ¶ 2.1.
[12] See id. ¶ 15.6 ("The Parties recognize that bona fide disputes may arise which relate to the Parties' rights and obligations under this Agreement. The Parties agree that any such dispute shall be resolved by Alternative Dispute Resolution ("ADR") in accordance with the procedures set forth in Exhibit 15.6.").
[13] See id.
[14] See Keep Well Agreement, Ex. B to Kipperman Decl., ¶¶ C-D.
[15] Id. ¶ E.
[16] Id.§ 1(c).
[17] See id. § 8 ("The undertakings herein of Abbott are for the benefit of the Investors and their assignees or successors as provided in the Funding Agreement.").
[18] See id. ¶ C.
[19] Id. ¶ D.
[20] See Def. Mem. at 5.
[21] See Birmingham's Memorandum of Law in Opposition to Abbott's Motion to Compel Alternative Dispute Resolution and to Dismiss or Stay ("Pi. Mem.") at 5.
[22] See id.
[23] See PI. Mem. at 6.
[24] See id.
[25] See id.
[26] See id.
[27] See Compl. ¶ 47-48.
[28] See Def. Mem. at 5.
[29] See id.
[30] See id. at 6.
[31] See id.
[32] See id.
[33] See id.
[34] See id.
[35] See id.
[36] See id.
[37] See id.
[38] Hartford Acc. & Indem. Co. v. Swiss Reinsurance Am. Corp., 246 F.3d 219, 226 (2d Cir.2001) (quotation marks omitted).
[39] Genesco, Inc. v. T. Kakiuchi & Co., 815 F.2d 840, 845 (2d Cir. 1987).
[40] Id.
[41] AT & T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 648, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986) (quotation marks omitted).
[42] Genesco, 815 F.2d at 846.
[43] ACE Capital Re Overseas Ltd. v. Central United Life Ins. Co., 307 F.3d 24, 28 (2d Cir.2002) (quotation marks and citations omitted).
[44] Collins & Aikman Prods. Co. v. Building Sys., Inc., 58 F.3d 16, 19 (2d Cir.1995) (quotation marks and citations omitted). Accord WorldCrisa Corp. v. Armstrong, 129 F.3d 71, 74 (2d Cir. 1997).
[45] Louis Dreyfus Negoce S.A. v. Blystad Shipping & Trading, Inc., 252 F.3d 218, 224 (2d Cir.2001) (quotation marks omitted).
[46] 9 U.S.C. § 3.
[47] Denney v. Jenkens & Gilchrist, 412 F.Supp.2d 293, 297 (S.D.N.Y.2005) (quoting Miron v. BDO Seidman, L.L.P., 342 F.Supp.2d 324 (E.D.Pa.2004)).
[48] JLM Indus, v. Stolt-Nielsen SA, 387 F.3d 163, 177 (2d Cir.2004) (quoting Thomson-CSF, S.A. v. American Arbitration Ass'n, 64 F.3d 773, 779 (2d Cir. 1995)). Accord Camferdam v. Ernst & Young Int'l. Inc., No. 02 Civ. 10100, 2004 WL 307292, at *6 (S.D.N.Y. Feb. 13, 2004) (describing inquiry as a two prong test).
[49] JLM Indus., 387 F.3d at 178 n. 7 (citing Choctaw Generation Ltd. v. American Home Assurance Co., 271 F.3d 403, 406 (2d Cir. 2001)).
[50] Id. at 177-78 (quoting Choctaw Generation Ltd., 271 F.3d at 406).
[51] See Chase Mortgage Co.-West v. Bankers Trust Co., No. 00 Civ. 8150, 2001 WL 547224, at *2 (S.D.N.Y. May 23, 2001) (citing Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753, 757 (11th Cir. 1993)).
[52] See JLM Indus., 387 F.3d at 178 (alleged antitrust violation required no contract interpretation).
[53] See Sunkist Soft Drinks, Inc., 10 F.3d at 758 (although plaintiff did not "rely exclusively on the [underlying] agreement to support its claims, each claim presum[ed] the existence of such an agreement").
[54] See Astra Oil Co. v. Rover Navigation, Ltd., 344 F.3d 276, 281 (2d Cir.2003) (courts need not evaluate the "ultimate merit" of the claims).
[55] JLM Indus., 387 F.3d at 178 (quoting MS Dealer Serv. Corp. v. Franklin, 177 F.3d 942, 947 (11th Cir.1999)). Accord Sunkist Soft Drinks, Inc., 10 F.3d at 758 ("each party must rely on the terms of the written agreement in asserting their claims").
[56] Denney, Ail F.Supp.2d at 298 (quoting In re Humana Inc. Managed Care Litig., 285 F.3d 971. 976 (11th Cir.2002)).
[57] Miron, 342 F.Supp.2d at 333 (quoting In re Humana, 285 F.3d at 976). Accord Massen v. Cliff No. 02 Civ. 9282, 2003 WL 2012404, at *4 (S.D.N.Y. May 1. 2003).
[58] See, e.g., JLM Indus., 387 F.3d at 178 (signatory alleged antitrust injury stemming from price terms of agreements containing arbitration clauses signed by subsidiary of non-signatory defendant); Astra Oil Co., 344 F.3d at 280-81 (non-signatory alleged breach of duties under agreement containing arbitration clause signed by defendant and non-signatory's affiliate); Choctaw Generation Ltd., 271 F.3d at 407 (controversy between signatory and non-signatory required interpretation of liquidated damages provision of contract containing arbitration clause); Smith/Enron Cogeneration Ltd., 198 F.3d at 98 (signatory claimed that non-signatories, inter alia, fraudulently induced agreement containing an arbitration clause).
[59] WorldCrisa Corp. v. Armstrong, 129 F.3d 71, 76 (2d Cir. 1997) (quoting Landis v. North American Co., 299 U.S. 248, 254, 57 S.Ct. 163, 81 L.Ed. 153 (1936)).
[60] See id.
[61] American Shipping Line, Inc. v. Massan Shipping Indus., Inc., 885 F.Supp. 499, 502 (S.D.N.Y.1995).
[62] See id.
[63] Orange Chicken, L.L.C. v. Nambe Mills, Inc., No. 00 Civ. 4730, 2000 WL 1858556, at *9 (S.D.N.Y. Dec. 19, 2000) (quoting Acquaire v. Canada Dry Bottling, 906 F.Supp. 819, 838 (E.D.N.Y.1995)).
[64] See Keep Well Agreement § 2(b).
[65] See Stechler v. Sidley Austin Brown & Wood LLP, 382 F.Supp.2d 580, 591 (S.D.N.Y. 2005)
[66] The Funding Agreement provides that an "`Affiliate' shall mean, with respect to any Party, any corporation or other form of business organization, which directly or indirectly owns, controls, is controlled by, or is under common control with, such party." Funding Agreement ¶ 1.1.
[67] Courts have found that the parent-subsidiary relationship satisfies the close relationship criteria under estoppel theory. See, e.g., Fraternity Fund Ltd. v. Beacon Hill Asset Mgmt. LLC, 371 F.Supp.2d 571 (S.D.N.Y. 2005) (dismissing plaintiff's security fraud action in favor of arbitration with a non-signatory parent pursuant to an arbitration clause in the partnership agreement between plaintiff and investment advisor, which was ninetynine percent owned by the parent); Fluor Daniel Intercontinental, Inc. v. General Elec. Co., No. 98 Civ. 7181, 1999 WL 637236, at *6 (S.D.N.Y. Aug. 20, 1999) (granting motion to compel arbitration under an estoppel theory where a non-signatory defendant owned fifty percent of entity that was signatory to an agreement with plaintiff that contained an arbitration clause).
[68] Choctaw Generation Ltd., 271 F.3d at 406. Courts have defined "intertwined" broadly enough to encompass situations in which plaintiff's claims were integrally related to the agreements containing the arbitration clauses. See, e.g., Chase Mortgage Co.-West. 2001 WL 547224, at *2 (claims against non-signatory were dependent on claims against signatory based on signatorv's servicing of loans under agreement containing arbitration clause); In re Currency Conversion Fee Antitrust Litig., 265 F.Supp.2d 385, 402 (S.D.N.Y. 2003) (claims against non-signatory parents were dependent on claims against signatory subsidiaries for price fixing ol currency fees on credit cards issued under cardholder agreements containing arbitration clauses).
[69] The Keep Well Agreement provides:
D The Investors, as a condition to their willingness to contribute the additional funding require assurances that Abbott will take all such actions as may be necessary to assure thai ALVE will be able to comply with all of its obligations, including it obligations to make payments to Investors pursuant to the Funding Agreement. E Abbott has agreed with ALVE, for the benefit of the Investors, that it will make funding available to ALVE, from Abbott and its subsidiaries and affiliates, as necessary to assure theat ALVE will be able to meet its obligations to its creditors and to the Investors.
¶¶ D, E.
[70] See id. § 1(c) ("Abbott will use Commercially Reasonable Efforts to further the commercial interests and success of ALVE, including providing research and development, clinical trial and sales and marketing support for cardiovascular and endovascular medical device products produced by ALVE and AVDL, as provided under appropriate contractual arrangements among Abbott, ALVE and AVDL.").
[71] See Kipperman Decl. ¶ 5.
[72] Denney, 412 F.Supp.2d at 298.
[73] Even if I had not granted Abbott's motion to compel arbitration, I would have granted Abbott's motion to stay this litigation pending resolution of the arbitration between ALVE and Birmingham. As a result, Birmingham's cross-motion enjoining ADR is denied. In addition, ALVE has moved to intervene in this action for the purpose of compelling arbitration of the ZoMaxx dispute under the Funding Agreement. The Court need not address this
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84 So.3d 1238 (2012)
George JYUROVAT, individually and for the use and benefit of George A. Jyurovat Living Trust, Appellant,
v.
UNIVERSAL PROPERTY AND CASUALTY INSURANCE COMPANY, a domestic insurance corporation, Appellee.
No. 2D11-712.
District Court of Appeal of Florida, Second District.
April 13, 2012.
*1239 Ty Tyler of Tyler & Hamilton, P.A., Jacksonville, for Appellant.
Richard B. Doyle, Jr., of Loughren & Doyle, P.A., Fort Lauderdale, for Appellee.
LaROSE, Judge.
George Jyurovat appeals a final summary judgment in favor of Universal Property and Casualty Insurance Company. The trial court concluded that he breached an insurance policy by terminating an appraisal umpire and by filing suit before completing the appraisal process. Thus, according to the trial court, Mr. Jyurovat's actions rendered the insurance policy ineffective and relieved Universal of its contractual obligations. The trial court erred in entering the summary judgment. Genuine issues of material fact remained as to whether Mr. Jyurovat materially breached the policy. We reverse.
In January 2008, fire damaged Mr. Jyurovat's house. He submitted a claim to Universal. Aplin Peer & Associates, Universal's adjuster, estimated the cost of structural repair at $119,444.88. Universal obtained a second estimate from Hammer Construction for $144,866.62. Mr. Jyurovat obtained a $617,226 estimate to tear down and rebuild the structure; he secured an estimate of $311,760 to repair the damage without razing. In April 2008, the City of Naples advised Mr. Jyurovat that if structural repairs exceeded $121,046, the house would have to meet current flood elevation codes. The insurance policy provided for payment of ordinance or law expenses of up to fifty percent of the structure's $400,000 insured value *1240 $200,000. Universal concluded that the damage amount was $119,444.88. This amount did not include overhead and profittwo components of loss routinely included in estimates of structural damage severe enough to require repair by a contractor. See Goff v. State Farm Fla. Ins. Co., 999 So.2d 684, 689-90 (Fla. 2d DCA 2008). Mr. Jyurovat contended that adding ten percent for each would have raised the estimate to $143,333.86, above the City's maximum repair amount, and might have resulted in a constructive total loss if the repaired structure would not meet flood elevation codes. Unable to reach a resolution with Universal, Mr. Jyurovat disagreed and demanded appraisal.
The insurance policy contains the following pertinent provisions:
Section IConditions
. . . .
6. Appraisal. If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss. In this event, each party will choose a competent appraiser within 20 days after receiving a written request from the other. The two appraisers will choose an umpire. If they cannot agree upon an umpire within 15 days, you or we may request that the choice be made by a judge of a court of record in a state where the "residence premises" is located. The appraisers will separately set the amount of loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon will be the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will set the amount of loss.
Each party will:
a. Pay its own appraiser; and
b. Bear the other expenses of the appraisal and umpire equally.
. . . .
8. Suit Against Us. No action can be brought unless the policy provisions have been complied with and the action is started within one year after the date of loss.
Mr. Jyurovat appointed Brad Bateman as his appraiser; Universal appointed Warren Aplin. Those two appraisers selected Robert Dawson as the umpire. The appraisers inspected the structure in September 2008, and Mr. Dawson promised a decision within three weeks. No decision issued. In early November 2008, Mr. Dawson promised a decision within the next week. Nothing came. Two weeks later, Mr. Dawson informed the appraisers that he was having difficulty "tracking down the information for the code issues." Apparently, the City of Naples did not have an elevation certificate on file. On December 5, 2008, Mr. Dawson advised the appraisers that he would have a decision by December 8. Again, nothing. We can only assume that Mr. Dawson encountered problems getting flood elevation information from the City of Naples. Be that as it may, at the end of the day on December 8, Mr. Bateman, over Mr. Aplin's objection, purported to unilaterally terminate Mr. Dawson as umpire. Mr. Bateman wrote to Mr. Aplin and advised him that Mr. Jyurovat would retain counsel and petition the court to appoint a new umpire.
On December 29, Mr. Jyurovat sued Universal. In Count I, he sought declaratory relief to determine whether the structure was a total loss, whether Universal could withhold overhead and profit, whether the dismissal of the umpire was proper, whether the loss payable under the ordinance or law provision was ripe for appraisal, and he sought damages. Count II sought the appointment of a new umpire.
*1241 As an affirmative defense, Universal asserted that Mr. Jyurovat obstructed and failed to complete the appraisal process by terminating the umpire without just cause. Universal also counterclaimed for breach of contract. Mr. Jyurovat denied terminating the umpire without just cause. He argued that he tried to comply with the appraisal provision but that, after he moved to replace the umpire, Universal raised coverage issues not subject to appraisal. Mr. Jyurovat filed an amended complaint seeking damages for breach of contract.
After some discovery, Universal moved for summary judgment on its claim that Mr. Jyurovat improperly terminated the umpire and filed the lawsuit before completing the appraisal. Mr. Jyurovat argued that his declaratory judgment action did not violate the "no suit" clause in the insurance policy. He conceded that the termination was technically improper but argued that Universal then effectively denied coverage by alleging breach of contract by Mr. Jyurovat. He argued that the policy did not allow Universal to both deny a claim and require appraisal and that the denial of his claim waived any condition precedent to suit. The trial court granted summary judgment for Universal, ruling that Mr. Jyurovat breached the policy by unilaterally terminating the umpire and failing to complete the appraisal before filing suit.
We review an order granting summary judgment de novo. Am. Strategic Ins. Co. v. Lucas-Solomon, 927 So.2d 184, 186 (Fla. 2d DCA 2006). The interpretation of an insurance policy is also subject to de novo review. Id.
Mr. Bateman, whether or not he was acting for Mr. Jyurovat, lacked authority to fire the umpire. If he was dissatisfied with the pace of the umpire's efforts, the law provided alternatives. See, e.g., State Farm Fla. Ins. Co. v. Seville Place Condo. Ass'n, 74 So.3d 105, 107 (Fla. 3d DCA 2011) (insurer filed "emergency motion and affidavit seeking removal of the neutral umpire previously appointed by the court"); Preferred Nat'l Ins. Co. v. Miami Springs Golf Villas, Inc., 789 So.2d 1156, 1157 (Fla. 3d DCA 2001) (insurer moved the trial court to interview or replace allegedly partisan umpire); Weinger v. State Farm Fire & Cas. Co., 620 So.2d 1298, 1299 (Fla. 4th DCA 1993) (insureds moved to recuse umpire selected by parties' appraisers).
An insured's refusal to comply with a presuit condition may be a willful and material breach of an insurance contract that precludes recovery as a matter of law. Goldman v. State Farm Fire Gen. Ins. Co., 660 So.2d 300, 303, 306 (Fla. 4th DCA 1995). However, if the insured cooperates to some degree or explains his failure to comply, whether the insured materially breached the policy remains a question for the fact finder. Starling v. Allstate Floridian Ins. Co., 956 So.2d 511, 513 (Fla. 5th DCA 2007) (citing Haiman v. Fed. Ins. Co., 798 So.2d 811, 812 (Fla. 4th DCA 2001)); Schnagel v. State Farm Mut. Auto. Ins. Co., 843 So.2d 1037, 1038 (Fla. 4th DCA 2003); El-Ad Enclave at Miramar Condo. Ass'n v. Mt. Hawley Ins. Co., 752 F.Supp.2d 1282, 1286-87 (S.D.Fla.2010). "[I]f an insured has not demonstrated willful disregard of the policy preconditions, courts have either stayed the action or dismissed the suit without prejudice in order to allow belated compliance." Mt. Hawley, 752 F.Supp.2d at 1287 (citing Cent. Metal Fabricators v. Travelers Indem. Co. of Am., 703 So.2d 1251, 1251 (Fla. 3d DCA 1998); Southgate Gardens Condo. Ass'n v. Aspen Specialty Ins. Co., 622 F.Supp.2d 1332, 1337 (S.D.Fla.2008)).
*1242 Mr. Jyurovat cooperated in the appraisal process from May 2008 until December 2008. He did not end the appraisal process. He just wanted a new umpire. The insurance policy does not address a breakdown in the appraisal process. We can discern from our record no basis on which Mr. Jyurovat's appraiser could remove the umpire. Universal made no effort to appoint a new appraiser but asked that the current appraiser stay in place.
The sole basis for the summary judgment was the purported termination of the umpire and the filing of a declaratory judgment action. The issue of whether this constituted a material breach, if at all, of the policy is a question for resolution by the fact finder. Summary judgment was improper. Accordingly, we reverse and remand for further proceedings.
Reversed and remanded.
SILBERMAN, C.J., and DAVIS, J., Concur.
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82 So.3d 17 (2010)
BOBBY DARRELL FUNK
v.
RHETA MARY FUNK.
No. 2080985.
Court of Civil Appeals of Alabama.
June 11, 2010.
DECISION WITHOUT PUBLISHED OPINION
Affirmed.
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78 P.3d 1076 (2003)
206 Ariz. 355
In re the COMMITMENT OF Olin Gene TAYLOR
No. 2CA-MH2003-0002-SP.
Court of Appeals of Arizona, Division 2, Department A.
November 10, 2003.
*1077 Barbara LaWall, Pima County Attorney, By Amy Pignatella Cain, Tucson, for Appellant.
Barton & Storts, P.C., By Brick P. Storts, III, Tucson, for Appellee.
OPINION
FLÓREZ, J.
¶ 1 The state appeals from the trial court's order of December 24, 2002, dismissing civil commitment proceedings brought against Olin Gene Taylor pursuant to Arizona's Sexually Violent Persons (SVP) Act, A.R.S. §§ 36-3701 through 36-3717, and ordering his immediate release from the Arizona State Hospital. At issue in this appeal is the meaning of the term "civil commitment proceedings" as used in § 36-3701(6)(b). Interpreting the statute de novo, see State v. Hoggatt, 199 Ariz. 440, 18 P.3d 1239 (App. 2001), we hold that the term includes commitment proceedings under the SVP Act and that the trial court erred in concluding otherwise.
Factual and Procedural Background
¶ 2 Taylor was accused of sexually molesting an eight-year-old girl as she slept in a home where Taylor had been drinking with her father. After a jury found Taylor guilty of child molestation and the trial court sentenced him in 1998 to a twenty-year prison term, we reversed his conviction based on the improper admission at trial of the victim's videotaped, out-of-court statement, which was consistent with her in-court testimony. State v. Taylor, 196 Ariz. 584, 2 P.3d 674 (App.1999).
¶ 3 On remand, Taylor entered into a plea agreement, under which he agreed to plead no contest to a reduced charge of attempted kidnapping, admitted "that the offense charged in this plea agreement was committed for the purpose of sexual gratification pursuant to A.R.S. § 13-118," and agreed to register as a sex offender pursuant to A.R.S. § 13-3821. The trial court accepted his guilty plea, found him guilty, and sentenced him to five years in prison. Before his scheduled release, the state instituted these SVP proceedings by petitioning for his detention and evaluation pursuant to §§ 36-3704 and 36-3705.
¶ 4 Taylor moved to dismiss the proceedings in August 2002 based on § 36-3701(6)(b), which, in combination with § 36-3701(6)(c), defines a sexually violent offense to include attempted kidnapping, provided "the court at the time of sentencing or civil commitment proceedings determines beyond a reasonable doubt that the act was sexually motivated pursuant to § 13-118."[1] Ignoring the "or civil commitment proceedings" language of § 36-3701(6)(b), Taylor argued that his attempted kidnapping conviction did not qualify as a sexually violent offense because the trial court had not made an explicit finding on the record at sentencing that the *1078 offense had been sexually motivated. Rejecting that argument, the trial court ruled that the sentencing court's reference to § 13-118 in the sentencing minute entry "serve[d] as that court's finding, beyond a reasonable doubt, that the instant offense was committed for the purpose of respondent's sexual motivation."
¶ 5 We accepted jurisdiction of Taylor's petition seeking special action relief from the denial of his motion to dismiss. With only selected excerpts from the trial court record before usnotably not including Taylor's written plea agreement, the minute entry of the change-of-plea hearing, or the reporter's transcriptwe granted partial relief. Taylor v. Tang, No. 2 CA-SA XXXX-XXXX (decision order filed Nov. 26, 2002). Our specific, narrow holding was that, by itself, "the mere, unexplained reference to § 13-118 in a sentencing minute entry does not constitute" or necessarily reflect a finding by the trial court, beyond a reasonable doubt, that the underlying act was sexually motivated.
¶ 6 In the trial court, Taylor again moved to dismiss the SVP proceedings. He argued the state was unable to establish the predicate conviction for a sexually violent offense required by § 36-3701(7)(a) because the trial court had not formally determined at sentencing that Taylor's criminal acts had been sexually motivated and because, he contends, § 36-3701(6)(b) does not allow the court to make the finding later during the SVP proceedings.
¶ 7 Agreeing with Taylor, the trial court granted his motion and dismissed the SVP proceeding. The court reasoned that, if our legislature had intended to permit the determination to be made either at the time of sentencing or during subsequent civil commitment proceedings under the Act, the statute would have said literally that, as its counterpart in the prototype Kansas statute does. See Kan. Stat. Ann. § 59-29a02(e)(13). Thus, the trial court concluded, the term "civil commitment proceedings" in § 36-3701(6)(b) refers to actions commenced either "under Rule 11, [Ariz. R.Crim. P.,] where a determination is made by the court as to whether an accused should be civilly committed in lieu of being criminally incarcerated, or under the involuntary commitment statutes of Title 36."
Meaning of "Civil Commitment Proceedings" in § 36-3701(6)(b)
¶ 8 Our primary goal in construing a statute is to discern and give effect to the intent of the legislature. Zamora v. Reinstein, 185 Ariz. 272, 915 P.2d 1227 (1996). We look first to its language as "the best and most reliable index of a statute's meaning." Janson v. Christensen, 167 Ariz. 470, 471, 808 P.2d 1222, 1223 (1991). If its meaning is not apparent from the language itself, we "then consider other factors such as the statute's context, history, subject matter, effects and consequences, spirit, and purpose. We also seek to harmonize related statutes and `aim to achieve consistency among them' within the context of the overall statutory scheme." State v. Fell, 203 Ariz. 186, ¶ 6, 52 P.3d 218, ¶ 6 (App.2002) (citation omitted), quoting Bills v. Ariz. Prop. & Cas. Ins. Guar. Fund, 194 Ariz. 488, ¶ 18, 984 P.2d 574, ¶ 18 (App. 1999).
¶ 9 For a number of reasons, we conclude the trial court misinterpreted § 36-3701(6)(b). First, although the specific language used in the Kansas statute ("or subsequently during civil commitment proceedings pursuant to this act," Kan. Stat. Ann. § 59-29a02) might be preferable to the more succinct "civil commitment proceedings" in our statute, the wording of § 36-3701(6)(b) by no means precludes the same interpretation, nor does it compel a different one. We believe that the Arizona legislature intended our statute to operate the same as its Kansas counterpart and, hence, that a trial court may make the determination contemplated by § 36-3701(6)(b) during civil commitment proceedings under the SVP Act if the sentencing court did not previously do so.
¶ 10 Second, this is the most logical and likely construction of § 36-3701(6)(b). See Janson, 167 Ariz. at 472, 808 P.2d at 1224 ("We must read the statute ... to give it a fair and sensible meaning."). Indeed, the Act elsewhere explicitly provides for this procedure. Section 36-3707(A) states:
*1079 A. The court or jury shall determine beyond a reasonable doubt if the person named in the petition is a sexually violent person. If the state alleges that the sexually violent offense on which the petition for commitment is based was sexually motivated, the state shall prove beyond a reasonable doubt that the alleged sexually violent act was sexually motivated.
A parallel provision, subsection (D) of § 36-3707, pertains to those allegedly sexually violent persons found incompetent to stand trial on the criminal offense with which they were charged. Subsection (D) permits the court hearing an SVP petition to "hear evidence and determine if the person committed the act or acts charged if the court did not enter a finding before the charges were dismissed." It is plain from § 36-3707 that the determination that an offense was sexually motivated need not be made before or outside SVP proceedings themselves.
¶ 11 Third, the trial court's conclusion that "`civil commitment proceedings' refers to actions commenced under Rule 11" does not withstand close scrutiny. Rule 11 is a rule of criminal, not civil, procedure. See Ariz. R.Crim. P. 11, 16A A.R.S.; A.R.S. §§ 13-4501 through 13-4517. Rule 11 competency proceedings themselves and the "competency restoration treatment" that a court may order for a defendant found to be incompetent are not civil commitment proceedings. See Ariz. R.Crim. P. 11.5; § 13-4512. Rule 11.5(b)(2)(I) provides, if the court determines "there is no substantial probability that [an incompetent] defendant will become competent within 21 months of the date found incompetent, it may ... [r]emand [the] defendant to [the] Department of Health Services to begin civil commitment proceedings pursuant to Title 36, Chapter 5." (Emphasis added.) Likewise, Rule 11.6(e) provides that, upon the discretionary dismissal of criminal charges against an incompetent defendant, "the defendant shall be released from custody unless the court finds that the defendant's condition warrants a civil commitment hearing pursuant to A.R.S. § 36-501." (Emphasis added.) See also § 13-4517(1). Simply stated, proceedings under Rule 11 are not "civil commitment proceedings."
¶ 12 Nor is it plausible that "civil commitment proceedings" in § 36-3701(6)(b) refers to the procedures in chapter 5 of Title 36, A.R.S., for the involuntary commitment of mentally ill persons. In involuntary commitment proceedings under §§ 36-533 through 36-540, the issue for decision is whether there is clear and convincing evidence that "the proposed patient, as a result of mental disorder, is a danger to self, is a danger to others, is persistently or acutely disabled or is gravely disabled and in need of treatment, and is either unwilling or unable to accept voluntary treatment." § 36-540(A). Nowhere in chapter 5 is there any reference either to the proposed patient's having committed a sexually motivated criminal act or to the SVP statutes.
¶ 13 In fact, there is no connection, either inherent or express, between the general mental health commitment procedures in chapter 5 of Title 36 and either the criminal code in Title 13, A.R.S., or the SVP Act in chapter 37 of Title 36. Whether a mentally ill person in need of court-ordered treatment might also have committed a criminal offense is irrelevant in involuntary commitment proceedings under chapter 5. Consequently, there is no reason, requirement, or statutory mechanism for a court conducting proceedings under chapter 5 to formally determine whether a proposed patient has committed any of the offenses itemized in § 36-3701(6)(b), much less to determine, beyond a reasonable doubt, "that [any such] act was sexually motivated pursuant to § 13-118."[2]
¶ 14 Our interpretation of § 36-3701(6)(b) receives further support in the *1080 legislative history of the SVP Act. In 1998, the legislature changed the definition of a sexually violent person[3] in § 36-3701(7)(a) from one who "[h]as been convicted of ... a sexually violent offense" to one who "[h]as ever been convicted of" such an offense. 1998 Ariz. Sess. Laws, ch. 136, § 7 (emphasis added). A concurrent, parallel change added the phrase "at any time" to all three subsections of § 36-3702(A). 1998 Ariz. Sess. Laws, ch. 136, § 8. Taken together with the statement of legislative intent that "protecting the public from sex offenders is a paramount governmental interest," 1995 Ariz. Sess. Laws, ch. 257, § 10, these changes manifest an unmistakable intention to view persons who have committed a predicate offense as potential sexually violent persons, regardless of whether they committed the qualifying offense before or after June 30, 1996, the effective date of the Act.1995 Ariz. Sess. Laws, ch. 257, § 11(B).
¶ 15 Given that clear intent, it is evident that the inclusion of "civil commitment proceedings" in § 36-3701(6)(b) supplies the mechanism for bringing within the Act those persons whose sexually violent conduct led to a conviction for one of the offenses listed in § 36-3701(6)(b) before the Act's effective date. If the finding of underlying sexual motivation in those offenses could not be made during the SVP proceedings, the result would be truly anomalous: persons convicted of an offense listed in § 36-3701(6)(a) could be civilly committed as sexually violent persons regardless of when they committed their crimes, while persons convicted of an offense listed in § 36-3701(6)(b) would only be subject to the Act if they were sentenced for an offense committed after June 30, 1996, by a court that expressly determined, beyond a reasonable doubt, that the underlying criminal conduct had been "sexually motivated pursuant to § 13-118."[4] § 36-3701(6)(b). We can find no rational basis for such differentiation nor for the disparate treatment it would produce. We do not believe our legislature intended such paradoxical results, particularly given its "paramount" goal of protecting the public from sexually dangerous persons. 1995 Ariz. Sess. Laws, ch. 257, § 10.
¶ 16 Our conclusion that the SVP Act applies equally to persons who committed qualifying offenses both before and after its enactment requires that we construe the phrase "pursuant to section 13-118" in § 36-3701(6)(b) as logically susceptible to more than one meaning. For cases after June 1996 in which the state has elected to file a special allegation of sexual motivation under § 13-118(A), the phrase "pursuant to" may denote adherence to the procedures specified in subsections (A) and (B) of § 13-118. For all other cases, in which § 13-118(A) and (B) either did not yet exist or, for whatever reason, have not been followed, the phrase "sexually motivated pursuant to § 13-118" can and should reasonably be interpreted to mean "sexually motivated as defined in § 13-118(C)."
¶ 17 To ascribe a more restrictive meaning to the phrase "pursuant to" in this specific context would eliminate as qualifying predicate offenses all crimes listed in § 36-3701(6)(b) that were prosecuted before the SVP Act and § 13-118 were enacted. Such an interpretation would run counter to the 1998 amendments previously discussed, whose obvious purpose was to broaden the scope of the Act to include all potentially dangerous persons who have ever committed a sexually violent act, regardless of when the crime or crimes occurred. The alternative construction of "pursuant to" that we adopt instead is consistent with the legislature's clear intent and with the following well-established rules of statutory construction:
"Statutory provisions are to be read in the context of related provisions and of the overall statutory scheme. The goal is to achieve consistency among the related *1081 statutes." Enactments which deal with the same class of things and have a common purpose are in pari materia and must be read and construed together in order to give full effect to each statute, if possible.
Prudential v. Estate of Rojo-Pacheco, 192 Ariz. 139, 148-49, 962 P.2d 213, 222-23 (App. 1997) (citations omitted), quoting Goulder v. Ariz. Dep't of Transp., 177 Ariz. 414, 416, 868 P.2d 997, 999 (App.1993), aff'd 179 Ariz. 181, 877 P.2d 280 (1994).
¶ 18 In sum, we believe our legislature intended to permit the determination of sexual motivation referred to in § 36-3701(6)(b) to be made either by the court at the time of sentencing or by the trier of fact during subsequent civil commitment proceedings pursuant to the SVP Act. See § 36-3707(A). Accordingly, we hold that the term "civil commitment proceedings" in § 36-3701(6)(b) specifically includes commitment proceedings pursuant to the SVP Act. The trial court thus erred in granting Taylor's motion to dismiss.
¶ 19 In remanding the case for trial pursuant to §§ 36-3706 and 36-3707, we note that the record on appeal contains documents and information that the record previously before us on Taylor's petition for special action did not. Noting in our decision order in the special action that our ruling was necessarily constrained by the incomplete record provided us, we expressly left open the possibility that additional information might lead to other findings. Further, we stated: "We see no bar to a pleading defendant's similarly admitting that a crime was sexually motivated. Without a copy of the plea agreement or the minute entry or transcript of the change-of-plea proceeding, however, we have no way of knowing whether that might have happened in this case."
¶ 20 What we now know is that Taylor's written plea agreement did indeed contain an express proviso that the attempted kidnapping charge he admitted had been "committed for the purpose of sexual gratification pursuant to A.R.S. § 13-118." This admission is, of course, highly material to the question of sexual motivation for purposes of § 36-3701(6)(b), that the trier of fact must determine at trial. See §§ 36-3707(A), 36-3701(7)(a).
¶ 21 The trial court's order of December 24, 2002, is vacated, and we remand the case for further proceedings consistent with this decision.
BRAMMER, P.J. and HOWARD, J., concurring.
NOTES
[1] In its entirety, A.R.S. § 36-3701(6) provides:
6. "Sexually violent offense" means any of the following:
(a) Sexual conduct with a minor pursuant to § 13-1405, sexual assault pursuant to § 13-1406, sexual assault of a spouse pursuant to § 13-1406.01, molestation of a child pursuant to § 13-1410 or continuous sexual abuse of a child pursuant to § 13-1417.
(b) Second degree murder pursuant to § 13-1104, first degree murder pursuant to § 13-1105, assault pursuant to § 13-1203, aggravated assault pursuant to § 13-1204, unlawful imprisonment pursuant to § 13-1303, kidnaping pursuant to § 13-1304 or burglary in the first degree pursuant to § 13-1508 if the court at the time of sentencing or civil commitment proceedings determines beyond a reasonable doubt that the act was sexually motivated pursuant to § 13-118.
(c) An attempt, a solicitation, a facilitation or a conspiracy to commit an offense listed in subdivision (a) or (b) of this paragraph.
(d) An act committed in another jurisdiction that if committed in this state would be a sexually violent offense listed in subdivision (a) or (b) of this paragraph.
(e) A conviction for a felony offense that was in effect before September 1, 1978, that if committed on or after September 1, 1978 would be comparable to a sexually violent offense listed in subdivision (a) or (b) of this paragraph.
[2] Indeed, in the statement of legislative intent accompanying the SVP Act, the legislature took pains to distinguish sexually violent persons from other persons suffering from mental illness. Noting that sexually violent persons normally are not "appropriate candidates for existing involuntary commitment procedures," the legislature observed that "the treatment modalities for sexually violent offenders are very different than the traditional treatment modalities for persons who are appropriate candidates for involuntary commitment." 1995 Ariz. Sess. Laws, ch. 257, § 10. Civil commitment proceedings under chapters 5 and 37 of Title 36, A.R.S., then, are independent, unrelated proceedings.
[3] Initially, the Act used the term "sexually violent predator," which was changed in 1997 to "sexually violent person." 1997 Ariz. Sess. Laws, ch. 136, § 30.
[4] Section 13-118, A.R.S., defines the term "sexual motivation" and creates the procedure by which a prosecutor may allege and prove a defendant's sexual motivation in a "criminal case involving an offense other than a sexual offense." Section 13-118 and the SVP Act were contemporaneously enacted in 1995. 1995 Ariz. Sess. Laws, ch. 257, § 1.
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78 P.3d 197 (2003)
118 Wash.App. 846
Keith Anton MORTELL, Respondent,
v.
STATE of Washington/Clark County Sheriff, Appellants.
No. 29451-6-II.
Court of Appeals of Washington, Division 2.
October 21, 2003.
Richard Alan Melnick, Attorney, Vancouver, WA, for appellants.
Edward L. Dunkerly, Attorney at Law, Vancouver, WA, for respondent.
BRIDGEWATER, J.
Keith Anton Mortell pleaded guilty to three counts of second degree vehicle prowl and three counts of third degree theft. Upon conviction, the district court ordered the sentences on all counts to run consecutively for a total of 585 days in county jail. The State appeals the granting of a writ of habeas corpus releasing Mortell from custody and voiding the portion of his sentence that exceeded one year. We hold that RCW *198 3.66.060, which provides for the criminal jurisdiction of district court, is ambiguous as to whether the district court can impose a sentence for longer than one year at a single sentencing. But we interpret RCW 3.66.060 in conjunction with several other statutes, i.e., RCW 9A.20.021, 9.92.020, 9.92.080, and 70.48.020, and hold that in order to harmonize the statutory scheme and avoid absurd results, RCW 3.66.060 permits the district court to sentence for each count, regardless of whether the total sentence exceeds one year. We reverse.
This case was heard on stipulated facts. During the early morning of September 2, 2001, Keith Anton Mortell entered three vehicles, without permission, and stole several items from each. Each of the three vehicles belonged to different victims. Mortell was charged in Clark County District Court with second degree vehicle prowl and third degree theft for each incident, for a total of six counts.
Mortell pleaded guilty to all six counts. He received 365 days in jail with 185 days suspended on each of the vehicle prowls. He also received 365 days in jail with 350 days suspended for each of the theft charges. The court ordered that all counts run consecutive to each other. Mortell was ordered to serve 585 days in jail before being placed on probation for two years. Mortell was in continuous custody of the Clark County Sheriff from September 2, 2001, until his temporary release on June 11, 2002. At all times, he was held in jail as defined in RCW 70.48.020.
Mortell filed a writ of habeas corpus in Clark County Superior Court for the State to show cause why his custody should not be terminated. The writ was granted, and the court voided the portion of Mortell's sentence imposing more than one year in jail.
RCW 3.66.060 governs criminal jurisdiction of district courts. The following language is in dispute:
The district court shall have jurisdiction: (1) concurrent with the superior court of all misdemeanor and gross misdemeanors committed in their respective counties and of all violations of city ordinances. It shall in no event impose a greater punishment than a fine of five thousand dollars, or imprisonment for one year in the county or city jail as the case may be, or both such fine and imprisonment, unless otherwise expressly provided by statute.
RCW 3.66.060 (emphasis added).
The issue lies in the word "event": that is, the district court "shall in no event impose a greater punishment than a fine of five thousand dollars, or imprisonment for one year in the county or city jail." RCW 3.66.060 (emphasis added). The State defines the relevant "event" as referring to any individual charge or individual commission of crime; Mortell defines "event" more broadly, covering the current sentence imposed on one individual defendant, likening "event" to "never." Thus, the statute is unclear as to whether the district court can levy an aggregate sentence of more than one year, consisting of multiple consecutive sentences of less than one year each; hence, it is ambiguous.
In interpreting a statute, the court seeks to ascertain the legislature's intent. State v. J.M., 144 Wash.2d 472, 480, 28 P.3d 720 (2001). Such intent is discovered through principles of statutory construction and relevant case law. Kilian v. Atkinson, 147 Wash.2d 16, 21, 50 P.3d 638 (2002). Courts do not construe an unambiguous statute because plain words do not require construction, Davis v. Dep't of Licensing, 137 Wash.2d 957, 963, 977 P.2d 554 (1999), and meaning must be derived from the wording of the statute itself. State v. Tili, 139 Wash.2d 107, 115, 985 P.2d 365 (1999). All language within the statute must be given effect so that no portion is rendered meaningless or superfluous. Davis, 137 Wash.2d at 963, 977 P.2d 554. Related statutory provisions must be harmonized to effectuate a consistent statutory scheme that maintains the integrity of the respective statutes. State v. Chapman, 140 Wash.2d 436, 448, 998 P.2d 282, cert. denied, 531 U.S. 984, 121 S.Ct. 438, 148 L.Ed.2d 444 (2000). Statutes relating to the same subject matter will be read as complimentary. State v. Wright, 84 Wash.2d 645, 650, 529 P.2d 453 (1974). Furthermore, statutes should be construed to avoid unlikely, absurd, or strained consequences. *199 State v. Fjermestad, 114 Wash.2d 828, 835, 791 P.2d 897 (1990).
Analyzing the language of RCW 3.66.060 as a whole supports the conclusion that aggregate consecutive sentences can exceed one year as long as the underlying sentences are less than one year. The first sentence explicitly states that the district court shall have concurrent jurisdiction with the superior court of all gross misdemeanors. "Concurrent jurisdiction" is defined as "[j]urisdiction exercised simultaneously by more than one court over the same subject matter and within the same territory." BLACK'S LAW DICTIONARY 855 (7th ed.1999). As part of concurrent jurisdiction, district and superior courts are subject to the same statutory sentencing scheme.
Several provisions comprise this sentencing scheme. RCW 9.92.020 reads, in part, "Every person convicted of a gross misdemeanor shall be punished by imprisonment in the county jail for a maximum term fixed by the court of not more than one year." (Emphasis added.) Similarly, RCW 9A.20.021(2) reads, "Every person convicted of a gross misdemeanor defined in Title 9A RCW shall be punished by imprisonment in the county jail for a maximum term fixed by the court of not more than one year." (Emphasis added.) RCW 9.92.080(3) provides that "whenever a person is convicted of two or more offenses arising from separate and distinct acts or omissions, ... the sentences imposed therefor shall run consecutively, unless the court, in pronouncing the second or other subsequent sentences, expressly orders concurrent service thereof." (Emphasis added.) And RCW 70.48.020 defines a "correctional facility," such as the Clark County jail, as a facility used for housing adult persons serving "terms not exceeding one year for the purposes of punishment, correction, and rehabilitation following conviction of a criminal offense." (Emphasis added).
RCW 9.92.020 and 9A.20.021(2) both contain the language "convicted of a gross misdemeanor." The word "a" denotes one specific, discrete crime. Both statutes also contain the language "a maximum term fixed by the court of not more than one year." (Emphasis added.) RCW 70.48.020 also contains the wording for "a criminal offense." (Emphasis added.) The use of "a" denotes a discrete sentence term. Therefore, the statutes refer to punishment of specific, discrete crimes that will not exceed one year imprisonment. And RCW 9.92.080(3) mandates that sentences run consecutively unless expressly ordered to run concurrently. As a whole, the scheme mandates that individual sentences be limited to one year or less and run consecutively.
According to Mortell's argument, district courts would frequently be unable to comply with RCW 9.92.080(3) when confronted with multiple gross misdemeanors in one information. District courts would be limited to resolving only those cases in which gross misdemeanor sentences aggregate less than one year. Mortell's argument creates the strained and unlikely consequence of precluding district courts from deciding every case involving aggregate consecutive sentences of more than one year. This consequence contradicts the legislative mandate in RCW 3.66.060 that district and superior courts have concurrent jurisdiction over gross misdemeanors. To maintain harmony within the gross misdemeanor sentencing scheme, we construe RCW 3.66.060 to limit only individual sentences and not aggregate consecutive sentences.
Courts seek to avoid unlikely, absurd, or strained consequences. State v. Fjermestad, 114 Wash.2d at 835, 791 P.2d 897. Mortell argues that it is impossible to be sentenced to county jail for more than one year. Mortell's reasoning would create the absurd consequence of numerous gross misdemeanor convictions brought in one action to be limited to an aggregate sentence of one year. Ad infinitum a defendant could be convicted on dozens of discrete, severable gross misdemeanor counts and receive no greater jail time than one year in county jail. The statute requires that any person convicted of a gross misdemeanor must be punished in county jail. RCW 9.92.020 and 9A.020.021(2). The law provides a place of imprisonment and the court cannot direct a different place. State v. Christopher, 20 Wash.App. 755, 763, 583 P.2d 638 (1978). Mortell's argument would cap all aggregate *200 punishments for misdemeanors at one year imprisonment in county jail regardless of number and degree. Incongruently, a misdemeanant sentenced on one count could serve the same amount of time as a misdemeanant sentenced on 40 counts. Prosecutors would be unable to seek suitable sentences without bringing numerous counts in individual actions. This does not accord with CrR 4.3 which provides for permissive joinder of offenses. It would be detrimental to court efficiency and state resource conservation if cases that could be joined under CrR 4.3 had to be severed to get around the sentencing restrictions Mortell proposes. The legislature could not have intended such absurd results when providing for the sentencing of gross misdemeanors.
The Washington Practice Series comports with the above discussion. "The sentence for a misdemeanor or gross misdemeanor must be served in the county jail. This remains true even if the defendant receives consecutive sentences exceeding 1 year." 13B SETH A. FINE AND DOUGLAS J. ENDE, WASHINGTON PRACTICE: CRIMINAL LAW § 4201 (2d ed.1998) (citing State v. Besio, 80 Wash.App. 426, 907 P.2d 1220 (1995); State v. Linnemeyer, 54 Wash.App. 767, 776 P.2d 151 (1989)). California has reached the same understanding.
A person who commits two or more misdemeanors is subject to the possible imposition of two or more separate punishments. He may be tried separately and sentenced separately on each, or he may be charged with a number of crimes in separate counts in one information. The use of a single information is sanctioned by law and is a decided convenience, but in no way does it change the separable character of the offenses charged, nor does it alter the rules governing punishment.
People v. Carr, 6 Cal.2d 227, 57 P.2d 489, 489 (1936). It is clear that sentence restrictions for gross misdemeanors apply to discrete and severable crimes rather than aggregate consecutive sentences. Thus, we interpret the languages "[i]t shall in no event" to mean that the punishment for a specific charge shall not exceed one year.[1]
Reversed.
We concur: ARMSTRONG, J., and QUINN-BRINTNALL, A.C.J.
NOTES
[1] Because both courts are authorized to impose the same maximum sentence, RCW 3.66.065 is inapplicable to this determination.
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19 A.3d 592 (2011)
2011 VT 8
Dawn ARNOLD, Individually and as Executor of the Estate of Steven Arnold, Owen Arnold and Ivy Arnold,
v.
Raymond E. PALMER and Charles T. Shea, Co-Trustees, Gertrude M. Palmer and Charles T. Shea, Co-Trustees, Pamela P. Hanley, and C-P Burlington Properties, LLC.
No. 09-430.
Supreme Court of Vermont.
January 31, 2011.
Motion for Reargument Denied February 28, 2011.
*593 Present: REIBER, C.J., JOHNSON, SKOGLUND, BURGESS, JJ. and MORSE, Associate Justice (Ret.), Specially Assigned.
ENTRY ORDER
¶ 1. This case arises from a wrongful death and survival action brought by the estate and survivors of Steven Arnold. Mr. Arnold died from cancer after exposure to formaldehyde in defendant landowners' building. He collected workers' compensation benefits for this injury from his employer, Corbin & Palmer, Inc. His estate and survivors subsequently brought the present action against defendant landowners. The trial court granted summary judgment for the defendant landowners, holding that plaintiffs' exclusive remedy was Mr. Arnold's workers' compensation award because landowners were "statutory employers" under 21 V.S.A. § 601(3) and thus immune from suit. Because we find that landowners are not "statutory employers," we reverse the trial court's judgment and reinstate plaintiffs' action.
¶ 2. In reviewing the superior court's order granting defendants' motions for summary judgment, we apply the same Rule 56 standard as the trial court, viewing the facts in the light most favorable to plaintiffs, the nonmoving parties. See Robertson v. Mylan Labs., Inc., 2004 VT 15, ¶ 15, 176 Vt. 356, 848 A.2d 310; see also V.R.C.P. 56.
¶ 3. Mr. Arnold was employed as a funeral director at Corbin & Palmer, Inc., which conducts its business on leased property. During the relevant time period, the property was owned and leased by three successive entities that collectively make up the defendants in this suit. From 1992 to 2001, it was owned by two trusts, The Raymond E. Palmer Trust and The Gertrude M. Palmer Trust (Palmer Trusts). The Palmer Trusts leased the property to Corbin & Palmer throughout this time. Raymond Palmer was an employee of Corbin & Palmer until 2002. In January 2002, the Palmer Trusts conveyed the property to Pamela Hanley. Ms. Hanley, in turn, conveyed the property to a single-member limited liability corporation, C-P Burlington Properties, LLC, of which she was the sole member. Ms. Hanley has worked as a licensed funeral director for Corbin & Palmer since 1982. She was president of Corbin & Palmer for several years in the 1980s and has been president and treasurer since January 2002. As of 2003, Ms. Hanley owned 95% of the shares of Corbin & Palmer.
¶ 4. A large part of Mr. Arnold's work involved embalming bodies, which entailed exposure to many chemicals, including formaldehyde. The embalming room also served as Mr. Arnold's de facto office, where he would perform wax work, cosmetology, dressing and casketing, and make phone calls. The sole window in the embalming room was sealed and never opened.
¶ 5. When Mr. Arnold began working at the property, the embalming room was ventilated by a fan in the ceiling. At some point, this system was reconfigured so that the vent was on the floor. After this modification, the fan often failed to work, being out of commission as much as half of the time.
¶ 6. On more than one occasion, Mr. Arnold gave written notice to Ms. Hanley that the ventilation system was broken and needed to be fixed. Stephen Gregory, who worked in the embalming room, also complained several times to Ms. Hanley about *594 the ventilation system and requested it be fixed. Ms. Hanley had been personally present in the embalming room during periods when the system was not working.
¶ 7. From around 2000 to 2003, Mr. Arnold experienced watery eyes, a burning throat, and a runny nose from the smell of the embalming fluids. He began a course of diagnosis and treatment, starting with his primary care physician and progressing to an ear, nose, and throat specialist. Ultimately, his physicians identified a cancerous tumor as the cause of his discomfort. This tumor was most likely caused by his exposure to formaldehyde and other embalming fluids at landowners' property.
¶ 8. On the basis of these facts, Mr. Arnold pursued a workers' compensation claim against his employer, Corbin & Palmer, for his work-related injury. That claim was settled in July 2006. Mr. Arnold succumbed to his cancer in November 2006. His surviving family and his estate then filed a separate premises liability claim against the various landlords who leased the subject property to Corbin & Palmer.
¶ 9. Plaintiffs have sued defendants in their capacity as landlords only. Despite this fact, defendants argue that plaintiffs' premises liability claims are barred by the exclusivity provisions of the Vermont Workers' Compensation Act, 21 V.S.A. § 622, and claim that they were Arnold's "statutory employers" as defined in 21 V.S.A. § 601(3). Under the Act, a workers' compensation award excludes all other rights and remedies for an employee's work-related personal injuries against his employer, 21 V.S.A. § 622 (emphasis added), but an employee may bring suit against a "person other than the employer." 21 V.S.A. § 624(a) (emphasis added). A "statutory employer" is one who, although not the direct employer, is nevertheless the "virtual proprietor or operator of the business there carried on." Vella v. Hartford Vt. Acquisitions, Inc., 2003 VT 108, ¶ 5, 176 Vt. 151, 838 A.2d 126 (quotation omitted). Thus, the pertinent question is whether defendants, acting in their capacity as landlords, were the virtual proprietors of the Corbin & Palmer funeral home business such that they should be exempt from tort liability under the workers' compensation statutes.
¶ 10. We addressed this same question in Vella. In that case, an employee of a bus company was injured when he slipped and fell on ice in a leased bus garage. The employee collected workers' compensation benefits from his employer for his injuries and then brought a tort suit against the owner of the commercial garage, who leased the space to his employer. The landlord argued it was immune from tort liability as a statutory employer under 21 V.S.A. § 601(3). We explained that the
critical inquiry in determining whether an indirect employer is a "statutory employer" as defined by § 601(3) is whether the type of work being carried out by the direct employer is the type of work that could have been carried out by the indirect employer's employees as part of the regular course of the business
Vella, 2003 VT 108, ¶ 7, 176 Vt. 151, 838 A.2d 126 (quotations omitted). This reasoning is correct because the goal of the statute is "to prevent indirect employers from avoiding workers' compensation liability by hiring out work that they would have otherwise done themselves." Id. ¶ 10. We held that because the landlord was not in the busing business, but rather was "a distinct, separately owned corporation" engaged in the business of leasing property, it was not a "statutory employer." Id. ¶ 8.
*595 ¶ 11. The situation here is similar. Defendant CP-Burlington Properties is a separate entity from Corbin & Palmer and is sued solely in its capacity as a landowner in the business of leasing this property. Similarly, the remaining defendants are sued solely in their capacities as owners and lessors of the property. Nothing in the record demonstrates that defendants, in their capacity as property owners, were ever engaged in the funeral home business. While Ms. Hanley and Mr. Palmer also served as employees of the funeral home business, they were sued only in their capacities as owners and operators of a wholly separate commercial leasing business. The fact that the landlord entities and the funeral home business had overlapping personnel is not dispositive. Because defendants, in their capacities as landowners, were in no way engaged in the funeral home business, we find they are not the virtual proprietors of Corbin & Palmer, Inc., and thus not statutory employers.
¶ 12. Landowners argue that even if plaintiffs' suit is not exempt under the workers' compensation laws, landowners nevertheless lacked any duty to maintain or repair the ventilation system because they had no control over the system. Further, they argue that it was Corbin & Palmer's duty to provide a safe workplace for its employees. We have held that Vermont landlords "may be held liable for exposing their tenants to unreasonable risks of harm in the leased premises, whether or not they retain `control' of the dangerous condition." Favreau v. Miller, 156 Vt. 222, 228, 591 A.2d 68, 72 (1991). We also explicitly held in Vella that "[w]hile there certainly is overlap," a landlord's duty to maintain the premises is not the same as an employer's duty to provide a safe workplace for its employees. 2003 VT 108, ¶ 14, 176 Vt. 151, 838 A.2d 126. A landlord's duty to maintain the premises is an "independent, personal duty." Id.
¶ 13. Because we conclude that landowners were not the virtual proprietors or operators of Corbin & Palmer, Inc., and thus not statutory employers, we reverse the superior court's order.
Reversed and remanded.
MORSE, J. (Ret.), Specially Assigned, dissenting.
¶ 14. To exist in "virtual" form means "in effect or essence though not in actual fact, form or name." Webster's II New Riverside University Dictionary 1290 (1984).
¶ 15. Although defendant landowners in this casetwo trusts and a limited liability corporationhave separate legal identities from the employers that created them, they are separate in "form or name" only. Hence, they fall squarely within the statutory definition of "employer" under the Workers' Compensation Act, as the
owner ... of premises ... who is virtually the proprietor or operator of the business there carried on, but who, by reason of there being an independent contractor or for any other reason, is not the direct employer of the workers there employed.
21 V.S.A. § 601(3) (Emphasis added.) Defendants here were decedent's employer in all but name, and as such should be immune from suit under the exclusive remedy provision of the Act for injuries he sustained in the course of employment. Accordingly, I would affirm the judgment of the trial court, which reached the same conclusion in a thorough and persuasive decision.
¶ 16. The material facts are undisputed. Raymond Palmer and several family members owned a funeral home business, and the property where it operated, for over *596 sixty years. In 1992, Raymond and his wife Gertrude transferred ownership of the property to two truststhe Raymond Palmer Trust and the Gertrude Palmer Trustwhich leased the property back to the business. In January 2002, Raymond's daughter, defendant Pamela Hanley, acquired the business and property and continued the same lease arrangement. Later that year, Hanley conveyed the property to a separate entity, defendant C-P Burlington Properties, LLC, a single member limited liability corporation of which Hanley is the sole member, which maintained the same lease agreement.
¶ 17. The record thus leaves no doubt that the owners of the funeral home business and the owners of the funeral home property are "virtually" the same. Indeed, if these circumstances do not establish "virtual" employer status for workers' compensation purposes, it is difficult to imagine what would.
¶ 18. The Court holds otherwise based on a line of decisions, culminating with Vella v. Hartford Vermont Acquisitions, Inc., 2003 VT 108, 176 Vt. 151, 838 A.2d 126, that is simply inapposite. These cases instruct that the critical inquiry in determining whether a defendant meets the definition of a "virtual" employer is whether the work carried out by the direct employer is the kind that would have been performed by the defendant but for the fact that the work was subcontracted out. See Edson v. State, 2003 VT 32, ¶ 6, 175 Vt. 330, 830 A.2d 671 (observing that "virtual employer" statute generally applies where business owners "hire[] independent contractors to do what they would otherwise have done themselves"). Thus, Edson held that the State Department of Liquor Control was the "virtual" employer of a driver employed by a trucking company that contracted with the State because the driver was injured "while engaged in the State's business of distributing liquor to its local agencies." Id. ¶ 9; see also In re Chatham Woods Holdings, LLC, 2008 VT 70, ¶ 12, 184 Vt. 163, 955 A.2d 1183 (holding that real estate development company that also engaged in construction and sale of residential units was statutory employer of construction subcontractor's employees because "services contracted for were plainly a part of ... its business" (quotation omitted)); Frazier v. Preferred Operators, Inc., 2004 VT 95, ¶ 10, 177 Vt. 571, 861 A.2d 1130 (mem.) (holding that owner of lumber yard was statutory employer of truck driver injured on its premises where trucking-company employer was performing various phases of lumber yard's normal business).
¶ 19. In Vella, the Court applied these principles to hold that a commercial landlord which leased a garage to the direct employera bus company called Premier Coach was not the statutory employer of a bus driver injured on the premises. 2003 VT 108, ¶ 15, 176 Vt. 151, 838 A.2d 126. Although the defendant in Vella like defendants hereowned the property and leased it to the direct employer, there any similarity to this case ends. As Vella cogently explained, the "defendant [was] not in the busing business" but instead was "a commercial landlord and a distinct, separately owned corporation that leases space to Premier, but otherwise has no ties to Premier and no supervisory control or authority over Premier or its employees." Id. ¶ 8. The facts here are entirely different. Defendants are not "distinct, separately owned" entities with "no ties" to the funeral-home employer, but are indistinguishable from, and intertwined with, the funeral home in every respect save for their legal forms. Unlike Vella, moreover, where the defendant landlord operated a commercial-leasing business entirely independent of its bus-company tenant, nothing in the record here suggests that defendants *597 operated anything; they are simply legal shells established by the funeral-home employer to collect rent and provide certain tax advantages. The same trustees and principals that formed and comprise defendants also run the funeral-home business and exercise complete control and authority over its operations. They are identical in all but form and thus fully meet the definition of virtual employer.[*]
¶ 20. This Court has held that the purpose of workers' compensation "is to provide employees with a remedy independent of proof of fault, and employers with a limited and determinate liability," and "[t]o effectuate this purpose we favor an `all embracing' definition of employee and employer where such a construction is reasonable." In re Chatham Woods, 2008 VT 70, ¶ 9, 184 Vt. 163, 955 A.2d 1183 (quoting Fotinopoulos v. Dep't of Corr., 174 Vt. 510, 512, 811 A.2d 1227, 1229 (2002) (mem.)). In applying this policy, furthermore, the Court has been careful to recognize "the realities of running a small business," Gerrish v. Savard, 169 Vt. 468, 473, 739 A.2d 1195, 1199 (1999), realities which frequently result in precisely the sort of dual-entity employer presented here, where one owns the business and the other the land on which it operates, but with no substantive difference. In looking solely to the legal form of ownership and ignoring the substance of authority and control, the Court here departs from these sound policies. The legal effect of the Court's holding is to eliminate the fact-based test for determining virtual-employer status set forth in Vella and to substitute instead a shortcut to tort liability by label. The practical effect is to create a real risk of double recovery against the employer, a result this Court has in the past scrupulously sought to avoid. See, e.g., Garrity v. Manning, 164 Vt. 507, 510, 671 A.2d 808, 810 (1996) (citing the policy of avoiding "double recovery against the employer" in holding that corporation's principal officer and stockholder was immune from suit under the workers' compensation statute). I discern no sound reason to reach such a result and therefore respectfully dissent.
¶ 21. I am authorized to state that Justice BURGESS joins this dissent.
NOTES
[*] Other courts have similarly concluded that legal form must yield to practical substance in such circumstances. See, e.g., Jackson v. Gibson, 409 N.E.2d 1236, 1238-39 (Ind.Ct. App.1980) (holding that workers' compensation statute barred plaintiff's negligence action against property owner who was also the principal owner of plaintiff's employer); Heritage v. Van Patten, 59 N.Y.2d 1017, 466 N.Y.S.2d 958, 453 N.E.2d 1247, 1248 (1983) (concluding that exclusive remedy provision of workers' compensation act barred injured employee from suing owner of building who was also plaintiff's employer, since "[r]egardless of his status as owner of the premises where the injury occurred," in reality the owner's status remained unchanged "in his relations with plaintiff in all matters arising from and connected with their employment"); Braham v. Country Life Realty Co., 9 Misc.3d 88, 801 N.Y.S.2d 110, 112 (App.Term 2005) (holding that "the employee is precluded from bringing an action against the employer in its capacity as a property owner for job-related injuries sustained while working on the employer's premises, since the obligation to provide a safe workplace simply cannot be separated in a logical and orderly fashion from the duties owed by the employer to his employees" (quotation omitted)).
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13 A.3d 364 (2011)
205 N.J. 96
STATE
v.
RAMOS.
C-636 September Term 2010, 067077
Supreme Court of New Jersey.
February 15, 2011.
Petition for Certification Denied.
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80 So.3d 25 (2011)
STATE of Louisiana
v.
Robert HART, Jr.
No. 2010-KA-1614.
Court of Appeal of Louisiana, Fourth Circuit.
November 2, 2011.
*27 Leon A. Cannizzaro, Jr., District Attorney, Matthew C. Kirkham, Assistant District Attorney, New Orleans, LA, for State of Louisiana.
Edward R. Greenlee, Louisiana Appellate Project, LaPlace, LA, for Defendant/Appellant.
(Court composed of Judge CHARLES R. JONES, Judge ROLAND L. BELSOME, and Judge DANIEL L. DYSART).
CHARLES R. JONES, Judge.
The Appellant, Robert Hart, Jr., appeals his conviction and sentence for home invasion. Finding that the district court erred in part, we remand this matter for imposition of the mandatory fine as required by La. R.S. 14:62.8. We affirm the conviction of Hart, but we vacate the multiple bill adjudication and sentence, and we remand for Hart, to be sentenced as a first offender. We deny the motion to supplement by the State.
The State filed a bill of information charging Hart with home invasion, to which he entered a not guilty plea. The district court subsequently found probable cause. Following a jury trial, Hart was found guilty as charged. The defense filed motions for post-verdict judgment of acquittal and for a new trial that were denied by the district court.
Subsequently, we denied the pro se writ application of Hart seeking a ruling on his motions for new trial and for post-verdict judgment of acquittal.[1] He was later adjudicated a fourth felony offender. The district court imposed a twenty-year sentence at hard labor without benefit of parole on his conviction for home invasion before the Court then sentenced him as a fourth felony offender to serve life imprisonment at hard labor without benefit of parole. Hart's motion to reconsider sentence was denied, and his motion for appeal was granted. Hart's pro se motion to quash the multiple bill of information was denied. This timely appeal followed.
Ronald Forbes testified that he owns the home in Orleans Parish where the invasion was alleged to have occurred. The home was gutted at the time of the incident from the damage it sustained during Hurricane Katrina. Despite being gutted, Mr. Forbes testified that he was living there *28 because the home had running water and electricity. The victim, Shannon Doucet, was staying with him.
Mr. Forbes testified that at approximately 9:00 a.m., Hart came to the home asking to talk to Ms. Doucet. Mr. Forbes testified that he told Hart that she was not there even though she was asleep in Mr. Forbes' bedroom. Mr. Forbes testified that later that day he left the house for a half-hour, and he locked the front door when he left. He testified that when he returned, Hart was in the home and was coming from his (Forbes') bedroom. He further testified that Hart passed him on his way out the door and Ms. Doucet came out of the bedroom crying. Mr. Forbes testified that he noticed that cereal had been thrown on the floor; that the window unit had been pushed into the house, and that a board had also been removed from the window. Mr. Forbes testified that he chased after Hart, but he was unable to catch him. Lastly, Mr. Forbes testified that he did not give Hart permission to be in his home. He also identified Hart in court.
Portions of the 911 call made by Ms. Doucet were played for the jury. The tape was first authenticated by a New Orleans Police Department Officer who was the custodian of the 911 tape.
Officer Brittany Marigny and her partner responded to the dispatch of a simple battery at the home of Mr. Forbes. She testified that once there, she met with Ms. Doucet, who had a contusion on the left side of her forehead that was bruised and swollen. Off. Marigny identified photographs of the victim's injuries, which were published to the jury. The Officer testified that she saw the inside of the residence from the front door and that she determined that the point of entry was a side window that was once boarded. She further testified that a board was on the ground near the window, and the window was open.
Portions of a phone call that Hart received in prison were played for the jury. The parties stipulated that it was Hart's voice on the tape recording of the phone call.[2]
A review for patent errors reveals that the bill of information is missing from the record. In State v. Mitchell, 553 So.2d 915 (La.App. 4 Cir.1989), we found that a record lacking a bill of information was harmless error, where, as in the instant case, the defendant made no complaint that he was unable to properly defend himself, and the docket master indicated that the bill of information had been filed.
In this case, although the bill of information is not included in the record, the minute entry of arraignment shows that Hart waived a formal reading of the bill of information. Additionally, the trial transcript reveals that at the beginning of trial, the trial judge read the bill of information to the jury in Hart's presence. There is no indication that defendant was unaware of the charges against him, and he has not alleged any prejudice. Therefore, the error is deemed harmless.
The record also reflects an error patent as to Hart's sentence. Louisiana R.S. 14:62.8[3] requires imposition of a fine *29 of not more than $5000. This court has determined that the failure to impose a mandatory fine requires that the matter be remanded for the imposition of that fine. State v. Williams, 2003-0302, pp. 3-4 (La. App. 4 Cir. 10/6/03), 859 So.2d 751, 753. Therefore, we remand this matter for the imposition of the mandatory fine.
No other errors patent were found.
By his first assignment of error, Hart argues that his right to confront the witnesses against him was violated when the district court permitted the 911 call made by Ms. Doucet to be played to the jury when Ms. Doucet did not testify at trial.
The Confrontation Clause of the Sixth Amendment to the U.S. Constitution bars "admission of testimonial statements of a witness who did not appear at trial unless he was unavailable to testify, and the defendant had had a prior opportunity for cross-examination." Crawford v. Washington, 541 U.S. 36, 53-54, 124 S.Ct. 1354, 1365, 158 L.Ed.2d 177 (2004). In Davis v. Washington, 547 U.S. 813, 822, 126 S.Ct. 2266, 2273, 165 L.Ed.2d 224 (2006), the U.S. Supreme Court declared that "[s]tatements are nontestimonial when made in the course of police interrogation under circumstances objectively indicating that the primary purpose of the interrogation is to enable police assistance to meet an ongoing emergency." Conversely, statements are "testimonial when the circumstances objectively indicate there is no such ongoing emergency, and that the primary purpose of the interrogation is to establish or prove past events potentially relevant to later criminal prosecutions." Id., 547 U.S at 822, 126 S.Ct. at 2273-4.
The Court in Davis acknowledged that "a conversation which begins ... to determine the need for emergency assistance... [can] evolve into testimonial statements,..." Id., 547 U.S at 828, 126 S.Ct. at 2278. In Davis, the Court used this test to hold that statements made to a 911 operator were non-testimonial because they constituted a call for help during an ongoing threat by a caller, and the questions asked were for information necessary to resolve the present emergency. The victim was being beaten at the time the call was made. After Davis left the premises, which the victim told the operator he had done, the 911 operator then gathered more information from the victim. The Court reasoned that the statements made by a battered wifewho initially claimed that she was fine and nothing had happened, to an officer responding to a domestic disturbance callwere testimonial because "there was no emergency in progress." Id., 547 U.S. at 829, 126 S.Ct. at 2278. The officer did not hear any arguments or things breaking, and there was *30 no immediate threat to the victim. Id., 547 U.S. at 830, 126 S.Ct. at 2278.
Even assuming that the portions of the 911 recording played to the jury in the instant case were inadmissible, confrontation errors, including Crawford violations, are subject to a Chapman v. State of California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967), harmless error analysis. The proper standard of review is as follows:
The correct inquiry is whether the reviewing court, assuming that the damaging potential of the cross-examination were fully realized, is nonetheless convinced that the error was harmless beyond a reasonable doubt.... Factors to be considered by the reviewing court include "the importance of the witness' testimony in the prosecution's case, whether the testimony was cumulative, the presence or absence of evidence corroborating or contradicting the testimony of the witness on material points, the extent of cross-examination otherwise permitted, and, of course, the overall strength of the prosecution's case."
State v. Wille, 559 So.2d 1321, 1332 (La. 1990).
Though Hart urges that the error was not harmless because he was convicted based solely upon the inadmissible hearsay contained in the 911 call, the State produced other evidence inculpating Hart.
The evidence presented at trial established that Hart broke into Mr. Forbes' home through a side window, pushing the window unit inside the home. He was inside the house without permission. Mr. Forbes observed Hart exit the bedroom followed by Ms. Doucet, who was crying. Officer Marigny met with Ms. Doucet and observed a contusion to Ms. Doucet's forehead, and photographs of the injury were published to the jury. Also, Hart apparently confessed to hitting Ms. Doucet in the phone call he received in prison. Thus, it appears the error, if any, was harmless, as the playing of the redacted portion of the 911 recording did not contribute to the guilty verdict.
To convict Hart of home invasion pursuant to La. R.S.14:62.8, the State had to show that he entered a dwelling owned by another without permission, that the dwelling was used in whole or in part as a home, that a person was present when he made the unauthorized entry, and that he had the intent to use force or violence upon the person or to vandalize, deface or damage the property. Here, the admission of the 911 tape, even if erroneous, did not contribute to the verdict. This assignment of error is without merit.
Furthermore, we note that Hart has opposed the State's motion seeking to supplement the record on appeal with a copy of the 911 recording that it located in its own file, arguing as to its authenticity. Also, the trial transcript reflects that only a redacted portion of the recording was allowed into evidence. In its brief, the State refers to what it represents is the redacted portion of the recording that was played for the jury;[4] however, because *31 the veracity of the State's representation has not been shown, we deny the motion to supplement the record.
In his second assignment of error, Hart asserts that the evidence is insufficient to prove beyond a reasonable doubt that he was the person convicted of armed robbery in 1983 as alleged in the multiple bill.
To prove that a defendant is a multiple offender, the State must establish by competent evidence that there is a prior felony and that the defendant is the same person who was convicted of the prior felony. State v. Chaney, 423 So.2d 1092, 1103 (La.1982). Where the prior conviction resulted from a plea of guilty, the State must show that the defendant was advised of his constitutional rights and that he knowingly waived those rights prior to his plea of guilty, as required by Boykin v. Alabama, 395 U.S. 238, 89 S.Ct. 1709, 23 L.Ed.2d 274 (1969).
Hart specifically urges that there were no fingerprints on the bill of information or arrest register from his 1983 conviction for armed robbery. Instead, the State used the multiple bill of information and arrest register from S-3, his 1996 convictions, as evidence of his identity as the person previously convicted in 1983 of armed robbery. Counsel argued that the proof was insufficient to prove Hart's identity as the same person previously convicted in 1983, thereby preserving the issue for review.
In the multiple bill of information filed against Hart, the State averred that in addition to having been convicted of home invasion on April 29, 2010, he had three prior convictions. The predicate convictions listed in the multiple bill were a 1983 guilty plea to armed robbery (case # 295-415), 1996 convictions for attempted simple burglary and unauthorized entry of an inhabited dwelling (case # 383-513), and a 2005 guilty plea to simple burglary (case # 454-439).
Again, it should be noted that the supporting documentation concerning Hart's prior conviction for armed robbery is not included in the appeal record, nor was it found in the property room of the criminal district court. Despite this, the State argues that the evidence is sufficient, noting that the multiple bill filed in case number 383-513, S-3, listed Hart's 1983 conviction for armed robbery. The fingerprints from the multiple bill of information were then compared by the expert to the fingerprints on the bill of information from the case herein, and to the fingerprint card of Hart's prints taken by the expert, who found all of the fingerprints to have come from the same person.
Various methods are available to prove that the defendant is the same person convicted of the prior felony offense, including testimony from witnesses, expert opinion regarding the fingerprints of the defendant when compared with those in the prior record, or photographs in the duly authenticated record. State v. Henry, 96-1280, p. 7 (La.App. 4 Cir. 3/11/98), 709 So.2d 322, 326. However, here, the exhibits to which the State refers are not part of the record, and defense counsel adamantly opposed the State's proof of Hart's identity as the person previously convicted of armed robbery in 1983.
In State v. Santee, 2002-0693 (La.App. 4 Cir. 12/4/02), 834 So.2d 533, we held that the defendant was denied a meaningful appeal from his multiple offender adjudication because the exhibits introduced at the *32 hearing were unavailable. The record before the court in Santee showed that defense counsel "focused on the fact that one of the arrest registers was missing, and part of the identification could not be matched by fingerprints . . ." Santee, p. 5, 834 So.2d at 536. Without the exhibits, this court could not review the specific issue preserved for review and assigned as error; therefore, the court vacated the multiple offender adjudication and sentence and remanded for a new hearing. Santee, p. 6, 834 So.2d at 536.
As in Santee, the certified copies of the prior convictions are not available in the matter sub judice, and counsel herein focused on the insufficiency of the State's proof of Hart's identity as to the 1983 conviction. Thus, finding that this assignment of error has merit, we vacate the adjudication and sentence of Hart under the multiple offender statute. See also State v. McGhee, 96-1656 (La.App. 4 Cir. 3/24/99), 739 So.2d 222, where this court vacated the defendant's multiple offender adjudication and sentence because the exhibits were not available for review.
Lastly, Hart asserts that the district court failed to inform him of the time limitations to file for post-conviction relief. Though the minute entry of sentencing reflects that he was provided with this information, the transcript does not reflect that he was informed of the limitations.
In State ex rel. Glover v. State, 93-2330 (La.9/5/95), 660 So.2d 1189, the Louisiana Supreme Court held that La.C.Cr.P. art. 930.8(C), which requires the district court to inform the defendant of the limitation period for filing an application for post-conviction relief, is supplicatory language which does not bestow an enforceable right on an individual defendant. As decided in State v. McDonald, 2002-2347 (La.App. 4 Cir. 2/19/03), 841 So.2d 38, this court favors notifying a defendant of his rights under La.C.Cr.P. art. 930.8, when the district court failed to do so, by advising the defendant of such right in its written appellate opinion. Therefore, in the interest of judicial economy, we hereby advise Hart that La.C.Cr.P. art. 930.8 generally requires that applications for post-conviction relief be filed within two years of the finality of a conviction.
DECREE
For the foregoing reasons, the conviction of Robert Hart, Jr., is affirmed. However, this matter is remanded for imposition of the mandatory fine required by La. R.S. 14:62.8. Additionally, the multiple bill adjudication and sentence is vacated, and we remand for Hart to be sentenced as a first offender. Lastly, the motion to supplement the record of the State is denied.
AFFIRMED IN PART; VACATED IN PART AND REMANDED IN PART; MOTION TO SUPPLEMENT RECORD DENIED
NOTES
[1] 2010-K-0823.
[2] The tape is not part of the record before this court. However, the State indicated during its closing argument without objection that Hart admitted that he "went in the house and slapped the [expletive] out of her, and I went up there and I [expletive] her up a little bit."
[3] La. R.S.14:62.8 provides:
A. Home invasion is the unauthorized entering of any inhabited dwelling, or other structure belonging to another and used in whole or in part as a home or place of abode by a person, where a person is present, with the intent to use force or violence upon the person of another or to vandalize, deface, or damage the property of another.
B. (1) Except as provided in Paragraph (2) of this Subsection, whoever commits the crime of home invasion shall be fined not more than five thousand dollars and shall be imprisoned at hard labor for not less than five nor more than twenty years; at least five years of the sentence imposed shall be served without benefit of parole, probation, or suspension of sentence.
(2) Whoever commits the crime of home invasion when, at the time of the unauthorized entering, there is present in the dwelling or structure any person who is under the age of twelve years, is sixty-five years of age or older, or who has a developmental disability as defined in R.S. 28:451.2, shall be fined not more than ten thousand dollars and shall be imprisoned at hard labor for not less than ten nor more than twenty-five years. At least ten years of the sentence imposed shall be served without benefit of parole, probation, or suspension of sentence.
[4] In its brief, the State represents that only the following portions of the 911 recording were played to the jury:
CALLER: I need a[sic] officer at 1240 Tennessee Street. My ex-old man just broke into my friend's house and beat mybeat me up.
OPERATOR: Okay. What's the address?
CALLER: 1240 Tennessee Street. I need `em like now cuz [sic] he's runnin' up the street.
OPERATOR: OKAY. Whthis your boyfriend?
CALLER: My ex-boyfriend. We've been broke [sic] up for the past three weeks and somebody told him I was down here, so he just jumped through the window. You can see everything all over the floor. (unintelligible)
OPERATOR: Is he black, white, or
CALLER: He's black.
OPERATOR: What's his name?
CALLER: Robert Hart, Junior.
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01-03-2023
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10-30-2013
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https://www.courtlistener.com/api/rest/v3/opinions/2549356/
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13 A.3d 186 (2011)
Appeal of CITY OF CONCORD (New Hampshire Board of Tax and Land Appeals).
No. 2009-491.
Supreme Court of New Hampshire.
Argued: June 10, 2010.
Opinion Issued: January 13, 2011.
*187 Rath, Young & Pignatelli, P.C., of Concord (Christopher J. Sullivan and Jason M. Tanguay on the brief, and Mr. Sullivan orally), for Home Care Association of New Hampshire.
Gardner Fulton & Waugh, P.L.L.C., of Lebanon (Adele M. Fulton on the brief and orally), for the City of Concord.
HICKS, J.
The City of Concord (City) appeals orders of the board of tax and land appeals (BTLA) ruling that the taxpayer, Home Care Association of New Hampshire (HCA), is entitled to a charitable tax exemption under RSA 72:23 (Supp.2010) and denying the City's motion to have an attorney sit as a board member. We vacate and remand.
The following facts were found by the BTLA or appear in the record. HCA is a voluntary corporation organized under RSA chapter 292 and is a tax exempt organization under section 501(c)(3) of the Internal Revenue Code. See 26 U.S.C. § 501(c)(3) (2006). According to its articles of association, HCA's objectives are:
1. To promote not-for-profit home health care and related services.
2. To promote programs and services directed toward the prevention of illness, the encouragement of good health practices and the overall protection of the public's health.
3. To work with other groups, associations, agencies and individuals toward coordination, increased effectiveness and availability of human services for all residents of the State of New Hampshire.
HCA describes itself in its mission statement as "a membership organization." Its bylaws provide for three categories of membership: (1) provider membership, which is open to New Hampshire licensed "providers of home health, homemaker, hospice, or other home care services exclusive of home medical equipment providers"; (2) affiliate membership, which is open to "home medical equipment providers; case management providers; organizations providing products and/or services to home care providers; non-licensed providers of home care products and/or services and other organizations doing business with home care providers or interested in [HCA's] mission ..., such as insurers, intermediaries and other trade and membership associations"; and (3) individual membership, which is open to any person, not associated with an agency eligible under another membership category, "who subscribes to the stated purpose and objectives of" HCA and pays the prescribed membership dues. The BTLA found that "[a]pproximately one-quarter of the members of HCA are for-profit agencies."
*188 HCA's mission statement states that HCA is an "organization which enhances the ability of agencies providing home health care to deliver quality services to New Hampshire residents." The statement further provides that HCA performs its "mission through education, networking, research, leadership, and public policy advocacy." The BTLA found that HCA "provides home health care related education and training programs, which are open to the general public, that are intended to further [HCA's] stated objectives." The BTLA also found that HCA maintains a website through which users, including the general public, can obtain "information about home care and its role in health care delivery, ... search for home care providers, and ... learn about education programs designed to further [HCA's] objectives." The website lists only home care providers that are members of HCA. In addition, HCA maintains a toll free telephone number for inquiries from the general public about home health care.
HCA has a wholly-owned subsidiary, Granite State Home Health Association (GSHHA), that lobbies the state legislature on behalf of HCA's members. The BTLA found that "[t]he governance, staffing and activities of HCA and GSHHA, as well as their use of ... [office space], are interdependent and inextricably intertwined."
HCA owns a building at 8 Green Street in Concord, which it uses as its only office. It shares that office space with GSHHA. It leases the second floor, or approximately half of the space, to a third party not eligible for a tax exemption. From 1984 to 2005, HCA was given a property tax exemption for the half of the property that it uses.
In 2006, however, the City denied HCA's request for tax exemption. HCA unsuccessfully sought an abatement from the Concord Board of Assessors, and then appealed to the BTLA. See RSA 72:34-a (Supp.2010). The BTLA concluded that HCA "met its burden to prove it satisfies the requirements for and is entitled to receive a charitable tax exemption for that portion of the Property it occupies pursuant to RSA 72:23, V and RSA 72:23-1."
During the course of the appeal before the BTLA, the City filed a motion requesting that an attorney sit as a board member. The City believed that the only attorney member of the BTLA "ha[d] been recusing himself ... based on his residency in Concord." The City offered that if residency were the sole reason for the attorney's recusal, it would waive that cause. Otherwise, the City requested that the BTLA appoint another attorney as a temporary member to sit on cases involving the City. The BTLA denied the motion, noting that the attorney member was involved as a plaintiff in litigation against the City. The City unsuccessfully moved for reconsideration of the BTLA's decisions, and then brought this appeal.
On appeal, the City "has the burden of showing that the ... decision is clearly unreasonable or unlawful, and all findings of the [BTLA] upon all questions of fact shall be deemed to be prima facie lawful and reasonable." Appeal of Kiwanis Club of Hudson, 140 N.H. 92, 93, 663 A.2d 90 (1995) (quotation and ellipsis omitted); RSA 541:13 (2007); see RSA 71-B:12 (2003) (providing BTLA decisions may be appealed in accordance with RSA chapter 541). We will not set aside or vacate a BTLA decision "except for errors of law, unless [we are] satisfied, by a clear preponderance of the evidence before [us], that such order is unjust or unreasonable." RSA 541:13. "The interpretation of a statute is to be decided ultimately by this court. Therefore, if we find that the board misapprehended or misapplied the law, its *189 order will be set aside." Appeal of Town of Wolfeboro, 152 N.H. 455, 458, 879 A.2d 1137 (2005).
The City first challenges the BTLA's conclusion that HCA satisfies the requirements for a charitable tax exemption. We begin by reviewing those requirements. RSA 72:23, V provides that the following property is exempt from taxation:
The buildings, lands and personal property of charitable organizations and societies organized, incorporated, or legally doing business in this state, owned, used and occupied by them directly for the purposes for which they are established, provided that none of the income or profits thereof is used for any other purpose than the purpose for which they are established.
RSA 72:23, V. The term "charitable" as used to describe a corporation, society or other organization within the scope of RSA 72:23 is defined to mean:
a corporation, society or organization established and administered for the purpose of performing, and obligated, by its charter or otherwise, to perform some service of public good or welfare advancing the spiritual, physical, intellectual, social or economic well-being of the general public or a substantial and indefinite segment of the general public that includes residents of the state of New Hampshire, with no pecuniary profit or benefit to its officers or members, or any restrictions which confine its benefits or services to such officers or members, or those of any related organization. The fact that an organization's activities are not conducted for profit shall not in itself be sufficient to render the organization "charitable" for purposes of this chapter....
RSA 72:23-l (2003).
In ElderTrust of Florida, Inc. v. Town of Epsom, 154 N.H. 693, 919 A.2d 776 (2007), we set forth four factors that an organization seeking a charitable tax exemption under RSA 72:23, V and RSA 72:23-l must satisfy; namely, whether:
(1) the institution or organization was established and is administered for a charitable purpose; (2) an obligation exists to perform the organization's stated purpose to the public rather than simply to members of the organization; (3) the land, in addition to being owned by the organization, is occupied by it and used directly for the stated charitable purposes; and (4) any of the organization's income or profits are used for any purpose other than the purpose for which the organization was established. Under the fourth factor, the organization's officers or members may not derive any pecuniary profit or benefit.
ElderTrust, 154 N.H. at 697-98, 919 A.2d 776.
The City contends that in finding the first factor satisfied, the BTLA erred "when it decided that HCA has charitable goals but ignored how those goals are administered." The City argues that the evidence fails to support a finding that HCA operates in a manner that bestows a public benefit. For example, the City challenges the BTLA's specific finding of fact that "[t]he general public benefits through the education and training of home health care providers who are responsible for serving those who use or who may use home care services." Citing program materials contained in the record, the City argues:
The average individual in the general public providing care to a family member would not have any reason to take a seminar entitled "ICD-9 CM Coding: Update and Review" for "diagnosis coding" which is "a key element in determining accurate payments and driving *190 outcome improvement"; "HCS-D Certification Examination"; "Introducing Financial Thinking to Clinical Minds"; "PPS Billing Bootcamp" which is a "step by step process to ensure an agency is properly reimbursed"; or "Marketing Home Care, HME and Hospice Services". These topics were obviously designed to directly assist and benefit only agencies in the business of home health care and not the needs of the general public.
(Citation and ellipsis omitted.)
As framed, the City's argument is closely related to its challenge to the BTLA's finding on the second factor, that "an obligation exists to perform the organization's stated purpose to the public rather than simply to members of the organization." ElderTrust, 154 N.H. at 697-98, 919 A.2d 776. The City contends that "[t]he [BTLA's] errors in failing to examine the administration of HCA's objects are seen more readily in light of this second factor." We accordingly address the City's arguments on both factors together, as the arguments are interrelated and ultimately urge a single conclusion; namely, that "HCA is, in fact, a trade association" with its primary focus on advancing "the common interests of its members," rather than the interests of the general public.
"The purpose of the obligation requirement is to prevent organizations, even if they operate for charitable purposes, from obtaining the benefits of a tax exemption without providing some service of public good." Eldertrust, 154 N.H. at 699, 919 A.2d 776. The City argues that "[t]he obligation to provide services directly to the general public has always been the touchstone of being `charitable.'" We disagree. In Town of Peterborough v. MacDowell Colony, 157 N.H. 1, 943 A.2d 768 (2008), we stated that the "obligatory service requirement relates not to whom the service is provided but to whether the organization is required to provide the service at all." MacDowell, 157 N.H. at 8, 943 A.2d 768. Thus, direct service to the public is not required for a charitable tax exemption. As MacDowell demonstrates, an organization can indirectly provide a benefit to the public (there, the promotion of art) by means of a service (there, the artist-in-residence program) that is provided to certain individuals (there, the Colony fellows). See MacDowell, 157 N.H. at 6, 943 A.2d 768. The obligation to provide the service by which the public benefits indirectly satisfies the requirement that the organization must be obligated to "perform [its] stated purpose to the public" and "provid[e] some service of public good." Eldertrust, 154 N.H. at 697, 699, 919 A.2d 776.
Nevertheless, the City's contention that HCA primarily benefits its members and "[a]ny benefit to the public is incidental to that primary purpose" must be examined. We noted in Society of Cincinnati v. Exeter, 92 N.H. 348, 31 A.2d 52 (1943), that "[a] group of persons selecting their membership and combining in self-interest for their own betterment lacks the altruistic spirit inherent in a legal charity." Society of Cincinnati, 92 N.H. at 356, 31 A.2d 52; see Nature Conservancy v. Nelson, 107 N.H. 316, 319, 221 A.2d 776 (1966) (stating taxpayer "cannot be considered a charitable organization if its purposes are confined mostly to benefiting its own members").
Here, the BTLA found that "the general public is the beneficiary of [HCA's] activities" and concluded that "[t]he fact that [HCA] provides this benefit to the public primarily through its members is not a disqualifying feature of [its] practice but rather a pragmatic approach to accomplishing its mission." The BTLA relied heavily on MacDowell, stating:
*191 The board sees [HCA's] situation as analogous to the questions raised by the Town of Peterborough and answered by the court in MacDowell where the town, in that case, argued the resident artists benefited from their stay at the colony rather than the general public. As the court found in MacDowell, the board finds the ultimate beneficiary of [HCA's] activities is the general public. Working with and through its members, [HCA] is able, in an efficient manner, to provide home health care services to the general public.
The City contends that "[t]he indirect public benefits that HCA argued it gave... [are] too attenuated, speculative and incidental to qualify for the charitable tax exemption." The City cites Nature Conservancy, 107 N.H. at 320, 221 A.2d 776, in which we noted that to qualify for a charitable tax exemption, the "property must be occupied and used by [the organization] for its public charitable purposes" and that "[t]his occupation and use cannot be slight, negligible or insignificant." We reached similar conclusions in other cases. For instance, in The Housing Partnership v. Town of Rollinsford, 141 N.H. 239, 683 A.2d 189 (1996), we determined that an "indefinite and prospective benefit," in the form of rent stability, "is not the direct use and occupation of the property that RSA 72:23, V requires in order for a charitable organization to receive a tax exemption." Housing Partnership, 141 N.H. at 244, 683 A.2d 189. In Appeal of Town of Wolfeboro, we concluded that "a theoretical future use of the charitable services available," namely, financial assistance to those residents of the taxpayer's elderly housing complex who "might develop the need for [such] assistance, should they enter nursing care," was insufficient to show "use and occupation [of the property] directly for the charitable purposes of the organization." Appeal of Town of Wolfeboro, 152 N.H. at 461, 879 A.2d 1137.
Although these cases dealt with the requirement that the property be "occupied... and used directly for the stated charitable purposes," Eldertrust, 154 N.H. at 698, 919 A.2d 776, we believe they more broadly express the principle that a tax exemption is not warranted when the asserted compliance with any of the requirements therefor is no more than "slight, negligible or insignificant," Nature Conservancy, 107 N.H. at 320, 221 A.2d 776, "indefinite and prospective," Housing Partnership, 141 N.H. at 244, 683 A.2d 189, or "theoretical," Appeal of Town of Wolfeboro, 152 N.H. at 461, 879 A.2d 1137. To apply this principle in terms of the organization's charitable purpose or the provision of benefits to the public as opposed to its members, we find instructive the Massachusetts Supreme Judicial Court's statement in Massachusetts Medical Society v. Assessors of Boston, 340 Mass. 327, 164 N.E.2d 325 (1960):
Whether an institution is in its character literary, benevolent, charitable or scientific will depend upon the declared purposes and the actual work performed. An institution will be classed as charitable if the dominant purpose of its work is for the public good and the work done for its members is but the means adopted for this purpose. But if the dominant purpose of its work is to benefit its members or a limited class of persons it will not be so classed, even though the public will derive an incidental benefit from such work.
Massachusetts Medical Soc., 164 N.E.2d at 328 (citations omitted); cf. Society of Cincinnati, 92 N.H. at 356, 31 A.2d 52 ("If there may be additions in broadening the definition of a charitable institution that it is one dispensing public charity as its sole *192 or primary engagement, the Society does not qualify.").
Accordingly, we conclude that for an institution or organization to meet the requirement that it was "established and is administered for a charitable purpose," ElderTrust, 154 N.H. at 697, 919 A.2d 776, that charitable mission must be its dominant or primary purpose; if the dominant or primary "purpose of its work is to benefit its members or a limited class of persons," the organization will not meet this requirement "even though the public will derive an incidental benefit from such work." Massachusetts Medical Soc., 164 N.E.2d at 328. As with the obligation requirement, to determine whether an organization meets the "established and ... administered" requirement, ElderTrust, 154 N.H. at 697, 919 A.2d 776, we "look to both its charter or organizational statements and its actions taken pursuant to those statements." E. Coast Conf. of the Evangelical Covenant Church of America v. Town of Swanzey, 146 N.H. 658, 662, 786 A.2d 88 (2001); see Massachusetts Medical Soc., 164 N.E.2d at 328 ("Whether an institution is in its character literary, benevolent, charitable or scientific will depend upon the declared purposes and the actual work performed."). Thus, notwithstanding that an organization's stated purpose is to primarily benefit the public, if the organization is actually administered so that any public benefit is "slight, negligible or insignificant," Nature Conservancy, 107 N.H. at 320, 221 A.2d 776, when compared to the benefit derived by the organization's members, the organization is not entitled to a charitable tax exemption. We note that the principles we enunciate herein are entirely consistent with MacDowell, in which we agreed with the trial court's conclusion that MacDowell's artist-in-residence program did, in fact, "primarily benefit[] society as a whole." MacDowell, 157 N.H. at 6, 943 A.2d 768 (quotation omitted; emphasis added).
Here the BTLA denied the City's proposed factual finding that "HCA's corporate purpose is to promote the common interests of its members who are involved in the home health care industry." The BTLA acknowledged that HCA's activities "benefit [its] members directly," but found that the general public is "the ultimate beneficiary of [HCA's] activities." Specifically, the BTLA found that HCA's services benefit the general public: (1) "through the education and training of home health care providers who are responsible for serving those who use or who may use home care services"; (2) "from the promotion of programs and services directed toward the prevention of illness, the encouragement of good health practices and the overall protection of the public's health"; and (3) "from increased effectiveness and availability of human services." We accept these finding as prima facie lawful. See Appeal of Kiwanis Club, 140 N.H. at 93, 663 A.2d 90; RSA 541:13. The BTLA did not determine, however, whether these benefits are merely incidental to a dominant or primary purpose (as opposed to the sole purpose as intimated in the rejected finding of fact) of benefiting HCA's members, or whether these benefits to the public are slight, negligible or insignificant when compared to the benefit derived by HCA's members. Nor did it determine, more specifically, whether HCA is, in fact, in the manner in which it is operated, more akin to a trade or professional association. See Massachusetts Medical Soc., 164 N.E.2d at 328. Accordingly, we vacate the BTLA's decision and remand for further proceedings consistent with this opinion.
The City next argues that the BTLA erred in failing to find that GSHAA is not a charitable organization, having *193 disposed of the City's request for that finding by neither granting nor denying it. The City argued before the BTLA that "HCA and GSHHA are, for all intents and purposes, one and the same organization for purposes of analyzing the use of the real estate." The BTLA noted, however, that it could find no support in New Hampshire law for "the City's premise that GSHHA's lobbying efforts overshadowed or negatively impacted" HCA's mission and thereby disqualified HCA for a tax exemption.
The City changes tack somewhat on appeal, asserting that "GSHHA is in fact a separate corporation," and arguing that it was erroneous for the BTLA "to ignore its use and occupancy of the real estate." We agree that GSHHA's use and occupancy of the property is relevant to determining the extent, if any, to which HCA is entitled to a tax exemption for the property. If GSHHA uses the property for non-exempt purposes, "[a] division of value between the two uses should be made if such exist." Alton Bay Camp Meeting Asso. v. Alton, 109 N.H. 44, 50, 242 A.2d 80 (1968).
We need not determine whether, as HCA contends, the City failed to develop before the BTLA its argument based upon RSA 72:23, V-a. That statute is not necessary to the City's argument, as it deals with the converse proposition: that real estate owned but not occupied by an organization eligible for an RSA 72:23 tax exemption may still be exempt if the occupying organization is also eligible for the exemption. See RSA 72:23, V-a. Here, the issue is use of the property by an organization (GSHHA) that the City claims is not eligible for a charitable tax exemption. The BTLA had before it evidence of GSHHA's activities and use of the property. Accordingly, on remand, the BTLA should examine whether any allocation of exempt and non-exempt use must be made in accordance with Alton Bay Camp Meeting Asso., 109 N.H. at 50, 242 A.2d 80.
Finally, the City challenges the BTLA's denial of its motion to have an attorney sit as a board member. The City states:
[T]he City does not challenge the Board's decision as to [the attorney member's] recusal so long as he is personally involved in litigation against the City. However, as the recusal has continued for many years (even to date), the City and its taxpayers have beenand will continue to bedenied the opportunity to have all skills and resources available for appeals that were intended by the legislature.
HCA argues that the City has not shown that the BTLA's order was clearly unreasonable or unlawful, particularly where the City does not challenge the recusal in this case but "[i]nstead ... appears to focus on perceived continued or future unfairness." We agree, and decline to address the City's broader challenge because the issue as raised is not ripe for review.
In part, "ripeness relates to the degree to which the defined issues in a case are based on actual facts and are capable of being adjudicated on an adequately developed record." Appeal of State Employees' Assoc., 142 N.H. 874, 878, 714 A.2d 218 (1998) (quotation, brackets and ellipsis omitted). As HCA notes, even if the City's allegations of a recusal policy that has continued for many years and will continue are true, such facts are simply not in the record before this court. Accordingly, we decline to address the City's claim.
Vacated and remanded.
DALIANIS, C.J., and DUGGAN and CONBOY, JJ., concurred.
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57 S.E.2d 305 (1950)
231 N.C. 425
ELLIOTT et al.
v.
SWARTZ INDUSTRIES, Inc.
No. 744.
Supreme Court of North Carolina.
February 3, 1950.
Victor S. Bryant, Robert I. Lipton, Durham, for defendant, appellant.
Fuller, Reade, Umstead & Fuller, James R. Patton, Jr., James L. Newsom, John E. Markham, Durham, for plaintiffs, appellees.
PER CURIAM.
The plaintiffs brought this action to restrain the defendant from maintaining a nuisance from which they allege they sustained a special damage or injury to their health and discomfort in enjoyment of their home. The nuisance complained of was the operation of a rendering and processing plant in which dismembered portions of animals in various stages of decomposition and putrefaction were steamed in a cooker or digester, thereby causing the fats to collect or rise to the top, the "greaves" falling to the bottom and oils and by-products thus recovered. It is alleged that "offensive, foul, sickening, and noxious odors, gasses and vapors are emitted to such extent that they infilitrate and contaminate the atmosphere for a distance of one or two miles," and that by reason thereof the plaintiffs are forced to inhale the offensive odors to their great damage.
After the filing of plaintiffs' complaint the defendant, as it contends as a matter of right, moved to strike out certain portions of the complaint as irrelevant and prejudicial. While this motion was pending the defendant was served with an order to show cause why a temporary restraining order should not issue against it to continue to the hearing on the merits.
At the time and place set for a hearing of the order to show cause the defendant moved for a continuance, stating as a ground therefor that defendant intended to demur to the complaint on the ground that it failed to state a cause of action entitling the plaintiff to equitable relief, and this could not be done until the complaint was in final form.
The motion for continuance was overruled and defendant appealed. The court thereupon proceeded to hear the order to show cause upon the evidence introduced, and made an order restraining the defendant from the continued operation of the plant so as "to emit foul, sickening, noxious and offensive odors until a final determination of this cause." The defendant excepted *306 to the signing of the order and gave notice of appeal.
The defendant contends that the appeal from denial of his motion for continuance took the case out of the jurisdiction of the court, and that subsequent orders therein were coram non judice and should be so declared by this Court. With this the Court cannot agree.
The want of logical connection between defendant's motion to strike and the motion to continue the case seems to be apparent. If it was necessary to trim down the complaint in order to support the demurrer to the cause of action contained in it, the deletion of such matter would have been improper.
The continuance of the case was within the discretion of the court, and so also was the temporary restraining order giving relief from the condition complained of until the hearing. McIntosh, Practice and Procedure, p. 801; Sykes v. Blakey, 215 N.C. 61, 200 S.E.2d 910; Dunn v. Marks, 141 N.C. 232, 53 S.E. 845; State v. Dewey, 139 N.C. 556, 51 S.E. 937; Green v. Griffin, 95 N.C. 50; Carleton v. Byers, 71 N.C. 331; Johnson v. Pilot Life Ins. Co., 215 N.C. 120, 1 S.E.2d 381; and there was no abuse of that discretion in either phase of the matter. "Abuse of discretion is more apt to be shown in granting continuances, and in thte dilatory administration of justice." State v. Sultan, 142 N.C. 569, 54 S.E. 841, 842, 9 Ann.Cas. 310. And from Green v. Griffin, 95 N.C. 50, 52, we find applicable precedent: "The defendant insists that the appeal, when perfected, annulled the order for all purposes, and left the parties against whom it was directed as free to act as before it was made. If this were so, it is manifest that the right to arrest the action of one, committing irreparable damages by a restraining order, could be easily defeated by taking an appeal, and consummating what was intended, before it could be acted upon in the higher court. * * * The remedy sought by the process might thus become illusory, and success in the suit followed by no benefit to the aggrieved party."
The temporary restraining order does not prohibit any act except that which would be in any case a violation of legal duty.
The orders appealed from must be affirmed. The appeal is dismissed.
Appeal dismissed.
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Opinion by
Judge Crumlish, Jr.,
The Workmen’s Compensation Appeal Board (Board) dismissed an appeal from a decision of the referee denying a petition to terminate compensation benefits to Claimant, John J. Fitzmaurice. Peoples Gas Heating Company and American Financial Insurance Group (Appellants) take this appeal.
The petition sought to terminate workmen’s. compensation benefits, alleging that Claimant was no longer totally disabled from a job-related injury. Following a hearing, at which evidence was proffered, the referee made the following findings of fact: (1) that Claimant suffered an injury to his back in the course and scope of his employment as a salesman for Appellant, Peoples Gas Heating Company; (2) that Claimant received disability compensation for approximately one year pursuant to a Notice of Compensation Payable; (3) that Claimant was hospitalized and treated on several occasions for his back injury; (4) that *532the injury rendered Claimant totally disabled and precluded him from returning to his usual and customary employment; (5) that Claimant suffers from various other physical problems which are not associated with his job-related disability; and (6) that Claimant’s total disability continues to the present and will continue indefinitely. In making these findings, the referee relied upon Claimant’s testimony and that of his physicians, electing not to accept the contradicted testimony of Appellants’ physicians as to the nature of Claimant’s disability, or that of two lay witnesses regarding the circumstances of Claimant’s injury. No rationale was given by the referee in support of his decision to disregard this testimony.
In a proceeding to terminate payments under a Notice of' Compensation Payable, the burden is upon the employer to prove that the disability of the claimant has terminated. See Shoup v. The Allegheny Lutheran Home, 25 Pa. Commonwealth Ct. 528, 360 A.2d 278 (1976). We view the evidence in the light most favorable to the party who prevailed below. See Hiram Wible & Son v. Keith, 8 Pa. Commonwealth Ct. 196, 302 A.2d 517 (1973). Questions of credibility and the resolution of conflicting testimony are for the fact-finder, and findings of fact sufficiently supported by the evidence will not be disturbed, although evidence to the contrary was also presented. See Padilla v. Chain Bike Corp., 27 Pa. Commonwealth Ct. 190, 365 A.2d 903 (1976).
Appellants set forth several arguments alleging error and pray for a remand. These arguments are without merit. We affirm.
Appellants first argue that the referee erred by failing to make findings of fact that are comprehensive and explicit so as to disclose the complete posture of the case. It is Appellants’ contention that a thorough discussion of each of Claimant’s hospitalizations, *533each diagnosis made, and each of Claimant’s debilitating ailments would serve to make the referee’s decision more intelligible and would assure the Board and the court that the referee has weighed the conflicting evidence and properly and adequately met the duty of his fact-finding function. While we may agree that this procedure would assure a more thorough explanation of the referee’s thought processes, we are unable to find the lack of substantial evidence to support his decision. Although the referee’s findings and conclusions are not as artfully drafted as they could be, they are, together with the record, sufficient for him and for us to support his decision.1
Appellants next contend that the referee erred when he relied on the medical opinions of Claimant’s physicians because these opinions were based on Claimant’s representations and the referee failed to explicitly make a finding relative to the veracity of the witnesses. Appellants rely on Workmen’s Compensation Appeal Board v. Czepurnyj, 20 Pa. Commonwealth Ct. 305, 340 A.2d 915 (1975), for the proposition that a physician’s conclusion based upon the history of the accident as related by Claimant is incompetent unless the facts which were the basis of his diagnosis and determination of causal nexus to the accident are proven by competent evidence to which the referee *534gives credence. This is inapposite to the case at hand. In Czepurnyj, supra, we were dealing with an appeal from a decision of the Board reversing a referee’s award of compensation for total disability. Here, we are dealing with an appeal from a decision of the referee and Board refusing to terminate total disability payments to Claimant. "We therefore are not concerned with the history of the accident or the causal nexus between the injury and Claimant’s employment. Those issues were resolved at the time of the initial award and the only issue before us is whether there is substantial evidence to support the referee’s finding that Claimant’s total disability has not ceased. In making findings of fact on that issue, the referee chose to assign greater credibility to the testimony of Claimant’s medical experts than to that of Appellants’ witnesses; and it is not within our province to disturb these findings when they are supported by substantial evidence. See Padilla, supra. That the opinions of Claimant’s- medical experts are not supported by objective evidence is not determinative. See Pomeroy’s Inc. v. Workmen’s Compensation Appeal Board, 15 Pa. Commonwealth Ct. 270, 325 A.2d 349 (1974).
Finally, Appellants argue that the referee capriciously disregarded evidence by making his decision before he received a copy of the transcribed testimony of Appellants’ lay witnesses. The record shows that during a twelve-month .period, the referee presided over several depositions and hearings on Appellants’ petition.' The last hearing was held on January 5, 1976, when Claimant and Appellants’ lay witnesses testified. The ten-page transcript of that hearing was not received until approximately five weeks after the referee rendered his decision, and Appellants would have us infer that the referee capriciously disregarded relevant testimony' and that his decision, therefore, Avas not supported by substantial evidence. We reject *535this contention. When he made his decision, the referee had heard Claimant’s testimony and the medical testimony of each party’s physician, and had in his possession a complete transcript of the hearings and depositions which preceded the January 5, 1976 hearing. This dilutes the value of the final transcript.
Accordingly, we
Order
And Now, this 8th day of February, 1978, the decision of the Workmen’s Compensation Appeal Board affirming a decision of the referee denying Appellants’ petition for termination is affirmed.
Our scope of review in workmen’s compensation cases is to determine whether the Board’s adjudication is supported by substantial evidence. See Workmen’s Compensation Appeal Board v. Ira Berger & Sons, 470 Pa. 239, 368 A.2d 282 (1977). Substantial evidence is that evidence, including the inferences therefrom, which a reasonable man acting reasonably, might use in reaching a decision; but, if a reasonable man, acting reasonably, could not have reached the decision from the evidence and its inferences, then the decision is not supported by substantial evidence and it should be set aside. See A. P. Weaver and Sons v. Sanitary Water Board, 3 Pa. Commonwealth Ct. 499, 284 A.2d 515 (1974).
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11 N.Y.3d 791 (2008)
PEOPLE
v.
MINTON.
Court of Appeals of the State of New York.
September 11, 2008.
Application in criminal case for leave to appeal denied. (Kaye, Ch.J.)
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164 So. 2d 858 (1964)
William Stephen PHILLIPS, Appellant,
v.
STATE of Florida, Appellee.
No. 4599.
District Court of Appeal of Florida. Second District.
May 29, 1964.
Walter R. Talley, Public Defender, Bradenton, for appellant.
James W. Kynes, Atty. Gen., Tallahassee, and Robert R. Crittenden, Asst. Atty. Gen., Lakeland, for appellee.
PER CURIAM.
William Stephen Phillips appeals an order denying his motion for post conviction relief filed pursuant to Criminal Procedure Rule No. 1, F.S.A. ch. 924 Appendix. In denying the motion the court stated:
"THIS CAUSE coming on before the Court upon the Motion of the above named for a new trial, the record affirmatively shows that Petitioner waived counsel * * *"
No further reason was given for denying the motion. The pertinent portion of the record, however, reads as follows:
"Case of
STATE OF FLORIDA
vs. No. 1630
MARTIN ELLIS BRUMIT and ROBBERY
WILLIAM STEPHEN PHILLIPS
was called and the defendants being present and the Information charging them with ROBBERY being read to them by the State Attorney, and each of them being asked whether they plead guilty or not guilty, they and each of them plead guilty to said charge. At this time Martin Ellis Brumit stated to the Court that his parents were informed of the charge pending against him and that they had visited him in jail. Upon being asked by the Court if either of them desired counsel to represent them, they each stated that they did not, whereupon the Court adjudged each of them to be guilty of Robbery and imposed the following Judgments and Sentences:" (emphasis supplied)
Petitioner's motion alleged that he is currently in custody of the department of corrections; that he entered a plea of guilty without the advice of counsel; that he was without funds to employ counsel at the time of entering his plea; and that in accepting the guilty plea without appointing counsel to represent him, the *859 Court denied him the fundamental rights due him under the laws of the United States as set forth in Gideon v. Wainwright, 372 U.S. 335, 83 S. Ct. 792, 9 L. Ed. 2d 799. In reply to petitioner's assertion that the court erred in summarily denying the motion, the State answers only that the motion was insufficient in that it alleged neither expressly nor implicitly that the Petitioner did not competently and intelligently waive his right to counsel. Therefore the State concludes that the petition was properly denied.
That point was recently discussed by this court in Dixon v. State, 163 So. 2d 771, Case No. 4354, opinion filed May 6, 1964:
"Directing attention to the specific alleged insufficiency in appellant Dixon's motion, a failure to negate waiver of the right to counsel, we find neither allegation of conclusion or of fact negating waiver. The motion does not contain allegations that appellant was neither advised of his right to counsel nor offered counsel. Accordingly, the motion does not raise the presumption against intelligent waiver indulged under those circumstances. King v. State [Fla.App., 157 So. 2d 440], supra. Cf. Carnley v. Cochran, 369 U.S. 506, 82 S. Ct. 884, 8 L. Ed. 2d 70. The motion contains no other allegations of fact which might be deemed to have expressly precluded `intelligent and understanding waiver.' See Mullins v. State, Fla.App. 1963, 157 So. 2d 701. Cf. Gideon v. Wainwright, 372 U.S. 335, 83 S. Ct. 792, 9 L. Ed. 2d 799 (1963). The motion contains no allegations of fact, nor even conclusory allegations, that imply negation of waiver. See Sampson v. State, [Fla.App., 158 So. 2d 771], supra. In fine, upon the most liberal reading of the motion it fails to demonstrate that appellant's case `was one in which the assistance of counsel, unless intelligently and understandingly waived by him, was a right guaranteed him by the Fourteenth Amendment.' Carnley v. Cochran, 369 U.S. at 512, 82 S.Ct. [884] at 888 [8 L. Ed. 2d 70] (1962).
"Conceding that failure to state a prima facie case would have justified a summary denial of the motion without reference to the `files and records,' and conceding that this court would have affirmed such a denial, the question remains as to whether the present posture of the cause still impels an affirmance.
"As indicated above, a movant's failure to allege that the right to counsel was not waived does not preclude the trial court, in the exercise of its discretion, consulting the `files and records' to ascertain if waiver occurred. Neither does it preclude a hearing if the `files and records' are inconclusive. See Wilson v. State, supra [Fla.App., 164 So. 2d 43]. Should the court, in its discretion, not choose to proceed beyond the determination that the motion is insufficient, this determination must be affirmed. However, when, as in the instant case, the lower court goes beyond consideration of the allegations of the motion in denying it, this may, in appropriate circumstances, remedy the initial insufficiency of the motion and preclude a disposition which would otherwise have been proper.
* * * * * *
"In the case sub judice, appellant's motion could have been summarily denied for failure to negate waiver of the right to counsel. The lower court did not, however, summarily deny the motion; rather, it made further inquiry, consulting the files and records of the original proceeding. These were silent as to appellant ever having been advised of the right to counsel or having been offered counsel but affirmatively revealed the absence of counsel at the entry of his plea of guilty and at sentencing. Under those *860 circumstances, a continued presumption which includes a presumption of waiver cannot be indulged. Cf. Carnley v. Cochran, supra. The record sufficed to remedy the initial insufficiency of the motion to state a prima facie claim." (emphasis supplied)
The lower court here elected not to deny the motion on insufficiency of petitioner's allegations but went into the record. We must do the same. The record before us fails to disclose conclusively that there was an intelligent waiver of a known right to free counsel, and therefore the petition should not have been summarily denied. This court has recently held that an indigent's failure to request counsel, absent a finding that he was aware of the right to court appointed counsel, does not constitute an affirmative waiver of the right. See Beadles v. State, Fla.App. 1964, 162 So. 2d 4.
We are mindful that the First District Court of Appeal has had the identical question before it on at least three occasions and in each instance has affirmed the order denying post conviction relief. Thus that court apparently has adopted a less liberal view than has this court. See Dykes v. State, Fla.App. 1964, 162 So. 2d 675; Hale v. State, Fla.App. 1964, 162 So. 2d 5; Mankus v. State, Fla.App. 1964, 161 So. 2d 547. We cannot follow those decisions but hold contrarily that summary denial of such a motion is error unless the record conclusively discloses that the insolvent petitioner was fully aware that he had an absolute right to court appointed counsel without cost to him. Compare the dissenting opinion of Judge Donald K. Carroll in Dykes v. State, Fla.App. 1964, 162 So. 2d 675, 678.
We have held that in proceedings of this nature, absent a wholly insufficient petition, a record should be made available so that on appeal representatives of the petitioner may furnish the appellate court with a record of the plenary hearing on which the trial court concluded that the insolvent prisoner was entitled to no relief. See e.g. Caminita v. State, Fla.App. 1964, 159 So. 2d 921; Williams v. State, 163 So. 2d 767, Second District Court of Appeal, Case No. 4428, opinion filed May 13, 1964. As stated previously, no such hearing was held in the instant case. The cause is reversed and remanded for plenary hearing on the motion as outlined in King v. State, Fla. App. 1963, 157 So. 2d 440.
Reversed.
SMITH, C.J., and SHANNON and WHITE, JJ., concur.
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960 A.2d 454 (2008)
COM.
v.
BENNETT.
No. 169 EAL (2008).
Supreme Court of Pennsylvania.
October 23, 2008.
Disposition of petition for allowance of appeal. Denied.
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616 So. 2d 251 (1993)
MARTIN FOREST PRODUCTS, Plaintiff-Appellant,
v.
Russell P. GRANTADAMS, et al., Defendant-Appellee.
No. 24621-CA.
Court of Appeal of Louisiana, Second Circuit.
March 31, 1993.
Writ Denied June 18, 1993.
*252 Kelly, Townsend & Thomas by T. Taylor Townsend, Natchitoches, for plaintiff-appellant.
Simmons & Derr by Jacque D. Derr, Winnfield, for defendant-appellee.
Before VICTORY, BROWN and WILLIAMS, JJ.
BROWN, Judge.
Martin Forest Products (Martin) agreed to an adverse judgment awarding $25,000 and injunctive relief to Russell and Katherine Grantadams (Grantadams). Thereafter, Martin instituted a separate action against the Grantadams to set aside the injunction ordered by the consent decree. When the trial court denied the requested relief, Martin appealed. For the following reasons, we affirm.
FACTS AND PROCEDURAL HISTORY
In May 1985, Martin built a chip mill adjacent to a residential area in southeast Winnfield near the intersection of U.S. Highway 167 and U.S. Highway 84.[1] The mill processes and converts pulpwood into wood chips for use in making paper. The Grantadams had built their home approximately sixteen years before the construction of the mill. The mill was located 100 to 150 yards from the Grantadams' residence.
In April 1987, the Grantadams filed suit against Martin seeking both monetary damages and injunctive relief arising out of Martin's operation of the mill. At this time the mill was operating 24 hours a day. The Grantadams claimed that the noise, vibrations *253 and airborne debris made the mill a nuisance and caused physical, medical and emotional injury. Trial was set for December 1, 1988.
On the day of trial the parties entered into a consent judgment and read a stipulation (which was later reduced to writing) into the record. The judgment was signed on December 30, 1988. The stipulation contained an admission by Martin that "its chip mill operation constitutes a nuisance in fact and that plaintiff [Grantadams] is entitled to the abatement thereof by injunction." (emphasis added). Under the terms of the consent judgment, Martin was enjoined from "causing noises to emanate from its property which at any time exceed 45 dBA at the Grantadams' south property line as measured on a sound level meter with an accuracy of no less than ANSI type 2 set on dBA slow setting." Martin's insurers also paid $25,000.00 to the Grantadams pursuant to the settlement. No appeal was taken from the consent judgment.
The injunction against Martin was suspended until July 1, 1989. Martin was ordered to submit to the court by December 30, 1988, a detailed plan for complying with the terms of the injunction. A plan was prepared and timely submitted to the court by Martin's sound expert, Richard Lofton. Although Martin began efforts to reduce the noise level, it deviated from the Lofton plan. Martin requested and received an extension until July 10, 1989. Eventually a rule for contempt was filed by the Grantadams. At the conclusion of the hearing on the contempt rule, the trial court appointed an expert to take noise level readings. The readings taken by the court's expert exceeded 60 dBA.
Shortly thereafter, Martin unilaterally determined that it could not meet the sound restrictions imposed under the consent judgment. Martin claimed that it had spent $270,361.36 attempting to reduce the noise level. On October 12, 1989, Martin filed a petition to set aside the consent judgment. Trial was held on August 21, 1991. The trial court filed written reasons for rejecting Martin's demands. Judgment was signed on May 8, 1992, and from that judgment Martin suspensively appealed.
CONSENT JUDGMENT
Martin attacked only that portion of the consent judgment granting the Grantadams injunctive relief. Martin did not attempt to set aside the $25,000 payment made on its behalf to the Grantadams.
A consent judgment is a bilateral contract wherein the parties adjust their differences by mutual consent and thereby put an end to a law suit with each party balancing the hope of gain against the fear of loss. Williams v. Williams, 586 So. 2d 658, 661 (La.App.2d Cir.1991). A consent judgment has binding force from the presumed voluntary acquiescence of the parties, not from adjudication by the court. Black Collegiate Services, Inc. v. Ajubita, 600 So. 2d 761, 764 (La.App. 4th Cir.1992), writ denied, 606 So. 2d 544 (La.1992). Thus, consent judgments, as opposed to contested judgments, may be invalidated for unilateral error as to a fact which was a principal cause for making the contract, where the other party knew or should have known it was the principal cause. However, a consent judgment needs no cause or consideration other than an adjustment of differences and a desire to set at rest all possibility of litigation. Williams, 586 So.2d at 661; Succession of Simmons, 527 So. 2d 323, 325 (La.App. 4th Cir.1988), writ denied, 529 So. 2d 12 (La.1988).
In its reasons for judgment, the trial court stated:
Martin's primary motive was to put an end to the litigation so that the chip mill might continue to operate. It had access to experts of its own choosing and was represented by counsel. The negotiations that took place on December 1, 1988, were intense and for the primary purpose of reaching a settlement that would continue operations.
After the rendition of the consent judgment, Martin chose not to follow its own expert's plan and the court can only speculate whether the intended result could have ultimately been achieved. Significantly, Richard Lofton was not called to *254 testify by Martin, and both of the experts who did testify performed no tests to verify impossibility of compliance until long after this petition was filed. Thus, the court can only conclude that Martin Forest Products, Inc., made a unilateral decision not to comply with the terms of the judgment.
As pointed out in the brief of counsel for Mr. and Mrs. Grantadams, there is no evidence of deceit or ill practice, nor is there evidence of physical impossibility, nor of a fortuitous event which rendered performance impossible. Martin Forest Products, Inc. made a decision based on advice of its attorneys and experts with the primary intention of ending the pending litigation. Since that time Martin has not followed any plan and has not made an adequate showing to suggest that the judgment should be set aside.
Like the trial court, we find that Martin's principal cause or motive for entering into the consent judgment was to put an end to the litigation in the most advantageous manner possible. The language of the agreement is plain and unambiguous and provides that the consent judgment was entered to end the litigation. The facts clearly indicate that Martin retained and was advised by an expert prior to and during the negotiations leading up to the confection of the consent judgment and was fully aware of the ramifications of the consent agreement. (emphasis added).
The Grantadams went to court to abate a nuisance. Martin agreed that the operation of its mill was in fact a nuisance and that the Grantadams were entitled to its abatement by injunction. (emphasis added). Martin was given six months to reduce the noise level at its mill as opposed to the mill being closed. Martin's expert, Richard Lofton, advised that the noise level could be reduced to the agreed range. Martin chose not to follow Lofton's plan and did not seek Lofton's testimony at trial.
In preparation for the original lawsuit filed by the Grantadams, Lofton took noise level readings and found that for full operation they were in the 60s dBA range and in the 40s dBA range "at idle." Lofton's proposal stated "ideally the mill noise should be reduced to the point where the noise is the same at the property line when the mill is idle." Both Martin and the Grantadams agreed to Lofton's plan.
The trial court was not clearly wrong in rejecting Martin's general allegation that it cannot comply with the consent agreement as written because of the noise level restrictions. Martin hired Lofton for expert guidance in negotiating a settlement. Lofton drafted a plan approved by the court. Martin, however, deviated from that plan and significantly did not seek Lofton's testimony. The trial court correctly noted that the other experts later hired by Martin to verify impossibility performed no tests until long after the petition to set aside the injunction was filed. Thus, Martin failed to prove an error in fact.
Additionally, Martin's claim of error is based on an error in judgment. The Grantadams sought the closure of the mill but settled for a change in its operation. Martin evaluated its choices and agreed to the compromise. Our Civil Code provides that consent may be vitiated because of error as to a fact but only when it concerns the principal cause or motive and that cause or motive was known or should have been known to the other party. LSA-C.C. Arts. 1948 and 1949. We cannot remedy Martin's entering into a bad bargain. Commercial National Bank in Shreveport v. Keene, 561 So. 2d 813, 815 (La.App.2d Cir.1990). A court cannot undermine a contract simply because it was a bad deal for one of the parties. Bergquist v. Fernandez, 535 So. 2d 827, 829 (La.App.2d Cir.1988).
COMMERCIAL IMPRACTICALITY
Martin also argues that it is commercially impractical to comply with the consent judgment as written. However, we cannot accept this argument. The fact that compliance with a contract or agreement may be more expensive than originally anticipated is no defense. See Hanover Petroleum Corporation v. Tenneco, Inc., 521 So. 2d 1234, 1240 (La.App.3d Cir.1988), writ denied, 526 So. 2d 800 (La.1988), holding *255 that commercial impracticability is not a ground for relief from a contract.
For the foregoing reasons, we affirm the trial court's judgment.
AFFIRMED.
VICTORY, J., concurs in result.
NOTES
[1] The residential area was within the city limits while the mill was in the parish bordering on the city boundary. The city, however, was responsible for bringing the mill to the area.
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78 P.3d 125 (2003)
190 Or. App. 202
In the Matter of Mary Cunningham, Alleged to be a Mentally Ill Person.
STATE of Oregon, Respondent,
v.
Mary CUNNINGHAM, Appellant.
020868606; A119327.
Court of Appeals of Oregon.
Argued and Submitted August 18, 2003.
Decided October 22, 2003.
*126 Thomas A. Coleman, Portland, argued the cause and filed the brief for appellant.
Celeste Mountain, Certified Law Student, argued the cause for respondent. On the brief were Hardy Myers, Attorney General, Mary H. Williams, Solicitor General, and Denise G. Fjordbeck, Assistant Attorney General.
Before LANDAU, Presiding Judge, and DEITS, Chief Judge, and SCHUMAN, Judge.
LANDAU, P.J.
The trial court committed appellant to the custody of the Mental Health Division on the ground that, because of a mental disorder, she was unable to provide for her basic personal needs and was not receiving the care necessary for her health or safety. ORS 426.005(1)(d)(B); ORS 426.130. On appeal, appellant argues that the state failed to carry its burden for committing her against her will. On de novo review, State v. O'Neill, 274 Or. 59, 61, 545 P.2d 97 (1976), we affirm.
The relevant facts are undisputed. Appellant was diagnosed with bipolar disorder and placed on a hospital hold due to her purported inability to meet her basic needs. Pursuant to ORS 426.070, Greg Monaco conducted a precommitment investigation several days after appellant was placed on hospital hold. During that investigation, appellant showed Monaco a copy of a restraining order that *127 her son had filed against her, acknowledged a 40-pound weight loss over the preceding "couple of months," and indicated that glass was cutting into her and that she was frustrated with the hospital staff for their refusal to give her vitamin E to treat it. Appellant further indicated that she had been staying in a battered women's shelter to which she would return if discharged and that, in addition to monthly benefits, she would have additional income from "widening * * * the transmission lines at the PacifiCorp tower." Appellant denied any need for psychiatric medications.
Monaco's report stated that, while appellant was alert and oriented, she lacked judgment and insight and expressed delusional fears and beliefs regarding her family. Monaco's diagnostic impression was that appellant suffered from bipolar disorder, was manic, and also suffered from hypertension and a heart murmur. As evidence that appellant was unable to provide for her basic needs, Monaco noted, among other things, that she was "disconnected" from her monthly benefits, had lost 40 pounds, and was unable to care for her hypertension or heart murmur. Monaco concluded that appellant seemed "to be spinning out of control and without stabilization [would] probably * * * be increasingly unable to care for herself."
A commitment hearing was conducted two days after that investigation. The court held a colloquy with appellant pursuant to ORS 426.100. During the course of the judge's efforts to inform appellant of her rights, appellant repeatedly interrupted to inform him that, among other things, she was taking "vitamin E for bleeding arteries" and Ativan because "it relaxes my arteries so the blood doesn't come up so much." Appellant denied having heart murmurs, claiming that "[t]hose are valves that are dead and cut into by the glass." Appellant indicated that she wished to return to the hospital to be "looked at in surgery" but that she did not need to be placed in the "psych ward."
At the hearing, Dr. Sue Beattie and Dr. Jerry McCubbin, both certified examiners, questioned appellant regarding her ability and plans to meet her basic needs. The transcript of the proceeding indicates that appellant's thought processes were disjointed. She rarely answered a question directly and responded to many questions with rambling, apparently delusional monologues.
When McCubbin asked appellant whether she thought she had a mental disorder, appellant responded that she had "post-traumatic stress syndrome" but that she was "over it now" because she had been prescribed "3,000 * * * I.U. * * * of vitamin E." When asked whether she had ever been diagnosed with bipolar disorder, appellant responded, "I have had a bad psychiatrist who is going to lose his license. I have a psychiatrist. I have been gone through psychologically like you wouldn't believe in Waynesburg, Pennsylvania. If I ever go over, I'll go catatonic. * * * I'll shut this damn world out. * * * I'm not bipolar." When asked about the medications she was taking, appellant again stated that she was taking vitamin E and that she was also taking Ativan because "it relaxes my veins so that the glass doesn't cut so badly at me." After McCubbin asked where the glass came from, appellant responded with a lengthy and disjointed description of the perceived misdeeds of various relatives and acquaintances.
Beattie also questioned appellant regarding her plans for obtaining housing and financial support. She began by asking where appellant was living and what she intended to do if she were discharged from the hospital. Appellant stated, "Well, I'm buying a houseI'm going to buy the PacifiCorp's towers so that they don't go sidewards." When Beattie pressed appellant to be specific about where she would stay that evening, appellant stated, "Probably back over whereat the starting point." The following exchange occurred between Beattie and appellant:
"Q What is the starting point?
"A It's in Columbia County. It's quiet. It's a batteredwell, it's not a battered women's shelter. It's actually kind of a neat place because you have the Job Corp[s] and things right across the street, free stuff.
"Q Have you stayed there before?
*128 "A Yeah, when Dugin didn't show up here and went to Coos Bay instead. He's psychotic. I wouldn't have put my body in danger.
"Q Are you in danger?
"A Heno. I've already talked to the U.S. Attorney General. I don't think so, unless it's from Turley and her crowd.
"Q When is the last timewhen were you last at Starting Point?
"A Oh, a week or so ago.
"Q A week or so ago?
"A Yeah. I was meeting with Greg Landers, my accountant, so I stayed at the Salvation Army, the notell Motel.
"Q Okay. Where do you get your income?
"A My daughter owes me a lot of money. I've spent every dime I made
"Q Okay.
"A(inaudible) and my daughter, every penny of it. My income will come from a contract with PacifiCorp to widen the large lines
"Q Uh-huh.
"Aso that they don't kill birds. Because the environmentalists don't like it when the eagles and the hawks flock together. And I have a (inaudible) from PacifiCorp saying, `Please do it. Help us out.'
"Q Okay.
"A I am willing to take the contract because I do real estate title. That's what I was doing with PacifiCorp. You can't just walk out here
"Q Okay.
"Aand widen
"Q Okay.
"Aa line because you don't have the air rights over their property.
"Q Well, and that's income that I am assuming (inaudible)?
"A That's going to be my conas soon as I can get to it.
"* * * * *
"Q How do you afford to live right now, given that you don't have that contract?
"A Well, my daughter said she'd wire me some andonce Terry Dugin quits beating up on her.
"Q Okay. Do you
"A She owes me a lot of money.
"* * * * *
"Q Okay. Have you recently lost a bunch of weight?
"A Oh, I took Jamba Juice. I've got a great naturopath.
"Q Okay.
"A When I left PacifiCorp I was, like, 40 pounds overweight. But I was learning all kinds of new technology and law out here. And so I walked seven or eight miles a day and I drank Jamba Juice and [took] all the supplements normally that Dan Sims has. He looked
"Q How can you afford to do that?
"A I work for a living.
"Q Okay. But right now you don't have any income and you don't have a place
"A Right now I don't have a cent in income.
"Q Okay.
"A I had to send the Washington County Sheriff in to get PacifiCorp's last check and my Social Security check. He's got
"Q You're on Social Security?
"A I get $540 in Social Security.
"Q Every month? Okay.
"A Yeah."
The court also questioned appellant in an effort to determine how she felt about returning to the psychiatric unit. Appellant again insisted that she needed surgical attention, that she did not suffer from a heart murmur but, rather, from glass cutting into her, and that she was receiving the vitamin E she needed for her ailments. Appellant's responses again devolved into another disjointed and apparently delusional monologue. When the court again attempted to determine appellant's position on being returned to the care of psychiatrists, appellant stated, "They are not surgeon[s], Sir."
"THE COURT: No, they're not.
"[APPELLANT]: Okay. Wouldif you'd like to see my toe, I'll be happy to *129 show it to you. It's got red blood underneath it, as well as old blood from all this nonsense between
"If my children would quit marrying, I'd get on with my companies. In fact, here'sI'm supposed to teach at PSU in November. I haven't even had time to make that out.
"THE COURT: Well, what would you be teaching at PSU?
"[APPELLANT]: 1 and 1 are 2. It's not Enron.
"THE COURT: That's what you would be teaching?
"[APPELLANT]: Don't cook the books. Yes. I've got all my credentials with me if you want to see them. I've gotI'm a geologist. I've worked with psychiatrists and psychologists. * * * I've got mymy CPA is with me. I've got a resume with me, if you want to see it, in terms of energy."
McCubbin and Beattie submitted reports based on their observations of appellant during the hearing. Both concluded that appellant suffered from a mental disorder, that she was unable to provide for her basic needs, and that she would not cooperate with and benefit from voluntary treatment. Both examiners recommended that appellant be committed to the Mental Health Division. Beattie's diagnostic impressions of appellant were that she was overproductive verbally, delusional and tangential, and that there was "no question that [appellant was] currently manic." Her report noted that appellant was fixated on delusional material with paranoid and persecutory themes. The report also noted that appellant was both verbally out of control and unable to organize her thoughts: "In [her] current condition [it is] hard to imagine she could focus long enough to attend [to] her basic needs." Beattie's report concluded that appellant's "[t]houghts are so disorganized and verbalizations so out of control that it is impossible to imagine that she could manage to stay in a shelter. Mania [is] so acute it is untreatable out of [a] hospital."
McCubbin's report stated that appellant's responses were so tangential that it was difficult to interview her and that she appeared to be suffering from a mania typical of bipolar disorder. He also stated that she was unable to form a reasonable plan for obtaining shelter and sustenance and that she appeared unable to manage her affairs due to her condition. McCubbin's diagnostic impressions were that appellant suffered from bipolar disorder with delusions, as well as a schizoaffective disorder, concluding that she was unable to care for her basic needs as a result of her mania and disorganized thinking.
The trial court adopted the findings and conclusions of the examiners and incorporated them into its decision. The court concluded that appellant was so preoccupied with thoughts over which she had no control that she would be unable to seek shelter or food. It found by clear and convincing evidence that appellant suffered from a mental disorder, was unable to provide for her basic personal needs, and was not receiving the care necessary for health or safety. The court further found that appellant was unable, unwilling, or unlikely to participate in treatment on a voluntary basis and that a conditional release was either unavailable or not in her best interest. The court ordered appellant committed to the Mental Health Division for a period not to exceed 180 days.
On appeal, appellant concedes that there was sufficient evidence to prove that she suffered from a mental disorder, but contends that the evidence was insufficient to establish that she was unable to meet her basic needs. Appellant argues that the nexus between her mental disorder and an inability to provide for her basic needs was not adequately established and that, in any event, there was no evidence in the record indicating that she could not provide for her basic needs.
The state responds that the evidence presented at the hearing was sufficiently clear and convincing to establish that, due to a mental disorder, appellant was unable to provide for her basic needs at the time of the hearing. The state points to appellant's refusal to take the medication that would ameliorate her condition as direct evidence that she was not receiving appropriate levels of care and was unable to provide for her basic *130 needs. The state also points to appellant's homelessness and her inability to formulate a reasonable plan for providing for shelter and income, her denial of any mental health issues combined with her efforts to treat an imaginary illness, and her recent loss of 40 pounds. The state further notes that there were no friends or family able to provide appellant the resources needed for survival.
A person is subject to a basic needs commitment if the state proves by clear and convincing evidence that the person would likely not survive in the near future because that person is unable to provide for their basic needs due to a mental disorder and that person is not otherwise receiving the care necessary for health and safety. State v. Nguyen, 180 Or.App. 541, 546-47, 43 P.3d 1218 (2002). Basic needs are those things necessary for survival such as food, shelter, and life-saving medical care. Id. "`Clear and convincing evidence' means that the `truth of the facts asserted is highly probable.'" State v. Stephens, 178 Or.App. 31, 38, 35 P.3d 1061 (2001) (citation omitted). However, "the state need not postpone action until the individual is on the brink of death. The goal of the commitment statute is safe survival, not merely the avoidance of immediate death." State v. Bunting, 112 Or.App. 143, 145, 826 P.2d 1060 (1992).
In this case, the evidence demonstrates that it is highly probable that, as a result of a mental disorder, appellant would likely not survive safely in the near future. Appellant concedes that she suffers from a mental disorder. That mental disorder generates mania, disorganized thinking, and delusional fixations that make it impossible for appellant to focus on her immediate situation long enough to formulate and execute a plan for survival. It is, therefore, highly probable that appellant, if left to her own devices, would be unable to provide for her basic needs, such as shelter and food, in order to ensure her safe survival in the near future. Furthermore, appellant had no alternative resources available to provide the care necessary for health and safety.
Appellant's testimony at trial indicated that she was only momentarily able to focus on her immediate situation before becoming sidetracked by her delusions. The examiners' reports and precommitment investigation indicate that appellant's disorganized and delusional thought processes, brought on by the mania that resulted from her bipolar disorder, rendered her incapable of providing for her needs. Appellant refused to recognize that she was suffering from any mental disorder and refused to take the medication that would alleviate her mania. The record includes a "Notice of Treatment Prior to Hearing" that indicated that appellant had been ordered to take Zyprexa, an antipsychotic drug, and Ativan, an antianxiety agent. According to the notice, appellant had refused to take the Zyprexa as ordered but had taken the Ativan for sleep.
The refusal to take medication is not sufficient, by itself, to prove an inability to provide for basic personal needs if it produces only a speculative threat. State v. Baxter, 138 Or.App. 94, 98, 906 P.2d 849 (1995). However, when an individual cannot function without medications, refusal to take them is evidence of such an inability. State v. Woods, 119 Or.App. 502, 503, 850 P.2d 1172 (1993).
In this case, while appellant's bipolar disorder alone was not life threatening, the mania that it induced at the time of trial interfered with her ability to provide for her needs to the degree that she could not function without medication to treat it. As shown by appellant's testimony and the conclusions of the mental health professionals who questioned her, appellant's disorder led to a genuineas opposed to speculative threat that she would be unable to provide for her needs.
In that regard, it is important to note the apparent degeneration of appellant's cognitive faculties between the time of the precommitment investigation and the commitment hearing. According to the precommitment investigator, appellant had indicated that she would return to a battered women's shelter if released from the hospital and that she received Social Security income as well as income from "widening the transmission lines at PacifiCorp's towers." By the time of the hearing, appellant could *131 not identify where she would stay if released from the Mental Health Division and claimed a number of apparently imaginary sources of income, admitting at the same time that she actually had no income. When asked where she would stay, appellant first indicated her intention to purchase the PacifiCorp towers so that "they don't go sidewards." When pressed for a more definite answer, appellant mentioned a shelter"the starting place"but was unable to describe what sort of shelter it was or where precisely it was located. When asked whether she had stayed there before, appellant described a different location altogether.
As to providing herself an income, appellant claimed a number of apparently imaginary occupations and potential sources of income. At one point, appellant indicated that she received a retirement benefit from Social Security, but the precommitment investigation indicated that she had been cut off from her benefits. At another point, appellant admitted that she had no source of income whatsoever. Further proof of appellant's inability to provide for her basic needs was the fact that she had lost 40 pounds in the preceding "couple of months." See State v. Jayne, 174 Or.App. 74, 82, 23 P.3d 990, rev. den., 332 Or. 316, 28 P.3d 1176 (2001) (evidence that the appellant had lost 25 pounds over a period of one year indicated that she was not eating properly, which was one consequence of the appellant's untreated bipolar disorder and supported the conclusion that the appellant was "mentally ill").
Generally, when an individual can articulate a reasonable plan for obtaining the necessities of life and has a demonstrable ability to support himself or herself, a civil commitment is inappropriate because there is no clear and convincing evidence that the individual cannot provide for his or her basic needs. See, e.g., State v. North, 189 Or.App. 518, 524-25, 76 P.3d 685 (2003) (reversal of basic needs commitment based, in part, on the appellant's testimony indicating "that he understood the need for shelter, as well as the intricacies of obtaining it"). But, where a person is incapable of articulating a reasonable and credible plan for providing for the person's needs, we have upheld the trial court's order of civil commitment. See, e.g., Jayne, 174 Or.App. at 82, 23 P.3d 990 (basic needs commitment affirmed in part because mental disorder rendered appellant unable to manage her finances in order to provide for housing); State v. Johnson, 117 Or.App. 237, 240-41, 843 P.2d 985 (1992) (basic needs commitment affirmed because appellant had no credible plan to provide for her basic needs, had demonstrated a history of failing to provide for herself, minimized the danger from malnutrition, and had no friends or family willing to assist her in meeting her needs). In this case, appellant is unable to articulate any realistic plan to provide for her housing and sustenance.
Finally, there is no evidence that appellant had any friends or family willing or able to assist her in providing for her basic needs. The record shows that appellant's son had obtained a restraining order to prevent her from contacting him. Appellant also stated that her daughter, who the record shows lives in Kansas, owed her a lot of money and had promised to wire her some "once Terry Dugin quits beating up on her," but she was not capable of assisting her mother at the time of the hearing. Finally, in the course of her testimony, appellant referred to numerous acquaintances, but the descriptions of her relationships with those people were so disjointed that it is impossible to say with any certainty whether any of those people actually exist, much less whether they could assist appellant.
In sum, we find by clear and convincing evidence that appellant was unable to meet her basic personal needs due to a mental disorder and was not otherwise receiving such care as is necessary for health or safety. As such, she was mentally ill under ORS 426.005(1)(d)(B) and was properly committed to the Mental Health Division. ORS 426.130.
Affirmed.
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01-03-2023
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10-30-2013
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