url
stringlengths 57
59
| text
stringlengths 0
696k
| downloaded_timestamp
stringclasses 2
values | created_timestamp
stringlengths 10
10
|
|---|---|---|---|
https://www.courtlistener.com/api/rest/v3/opinions/2432752/
|
608 S.W.2d 230 (1980)
Wilbert LINDSEY, Appellant,
v.
The STATE of Texas, Appellee.
No. 59128.
Court of Criminal Appeals of Texas, Panel No. 2.
October 22, 1980.
Rehearing Denied December 23, 1980.
*231 Ronald E. Lanier, Houston, for appellant.
Carol S. Vance, Dist. Atty., Michael C. Kuhn and Fred E. Reynolds, Jr., Asst. Dist. Attys., Houston, Robert Huttash, State's Atty., Austin, for the State.
Before DOUGLAS, PHILLIPS and W. C. DAVIS, JJ.
OPINION
DOUGLAS, Judge.
The conviction is for the burglary of a building; the punishment was assessed by the court at twenty years.
Vera Williams, the owner of a small grocery store in the east part of Houston, was informed that it was being burglarized. She carried a pistol to the store and observed appellant at the back door of the store. He ran. She fired a shot but not at him. She followed him to his home and discovered several cases of beer in the yard, some receipts for which he had paid for bread and beer, and other items which had been taken from the store at his residence.
Officers E. D. Draper and G. B. Heerlein investigated and discovered that the door had been broken in and that the items taken from appellant's yard were returned to Mrs. Williams. Darrell Angel testified that he observed appellant carrying four quarts of beer from the store.
Appellant's mother testified that she observed three others breaking into the store, and she instructed her son to stop the burglary.
His defense shows that all his efforts were to stop the burglary being committed by three others.
The only contention to be discussed is that the court erred in not submitting a charge on criminal trespass. The court did not deny or refuse to give such a charge.
The court agreed that the requested charge on criminal trespass should be included. The requested charge and the ruling of the court are as follows:
"MR. LANIER: (Defense Counsel) Comes Now Wilbert Lindsey by and through his attorney of record and we would ask the Court in his charge, we are requesting a charge on criminal trespass and we would ask a charge be submitted as follows:
"A person commits an offense if he intentionally enters a habitation of another or enters property of another, without effective consent, and he had notice that entry was forbidden.
"So that you may better understand the nature of the offense with which the defendant is charged, I now define certain terms and words. `Entry' means the intrusion of the entire body.
"`Habitation' means a structure or vehicle that is adapted for the overnight accommodation of persons and includes:
A. Each separately secured or occupied portions of the structure or vehicle: and
"THE COURT: Is that it?
"MR. LANIER: May I show the Court Reporter so she can put [it] in?
*232 "THE COURT: That's alright with me."
Counsel took it upon himself to show the court reporter where to include the requested charge. The judge granted the request. If it did not get to the jury, it was not the court's fault.
Even though there is nothing presented for review, there are other reasons that such a charge was not required.
For there to be a charge on a lesser included offense, there should be an offense. No lesser included offense of criminal trespass was proved. The only testimony that would tend to show an offense of criminal trespass was that appellant entered the building to stop a burglary that was being committed by others.
It would be nonsense that an owner of a building would not give a neighbor consent to enter and order burglars out of the building. Under such evidence there would be no culpable mental state on the part of appellant.
Appellant was a neighbor to the victim. His defense was, that as a neighbor and a good samaritan, he was attempting to stop the burglary.
Following the reasoning advanced by the appellant, a law enforcement officer would be guilty of criminal trespass if he went into a building to stop a burglary and he did not have prior express consent of the owner to enter the building.
No reversible error has been shown. The judgment is affirmed.[1]
PHILLIPS, Judge, dissenting.
I must object to the refusal of the majority to adequately address all the grounds of error raised on appeal.
Article 44.24(c), V.A.C.C.P. provides:
The Court of Criminal Appeals, in each case decided by it, shall deliver a written opinion, setting forth in intelligible language the reason for such decision; or where precedent exists, in its discretion may decide the same by a certificate of affirmance or reversal with citation of supporting authorities. In either event, any judge may file an opinion dissenting from or concurring in the action of the court. (emphasis added)
The language of this provision allows certification as the only alternative to a full written opinion.
The only substantial precedent for the delivery of an abbreviated opinion is Fox v. State, 145 Tex. Crim. 71, 165 S.W.2d 733 (1942), decided under Article 847 of the former code of criminal procedure.[1]
This Court stated in Fox, at 734:
In his motion for rehearing appellant complains, with much emphasis, because the court did not consider, pass upon and adjudicate each assignment presented, and to give their reasons for such holding in a written opinion." Appellant has a right to have this court consider every question raised by him and such was done in the original opinion and, likewise, each and every question is reconsidered on the motion, but it is not mandatory, practical or advisable to discuss in written opinions each and every question raised in all cases, especially when they have heretofore been definitely decided in the opinions of the court.
The legislature certainly was aware of Fox when it enacted Article 44.24(c), supra, as it provided that an abbreviated opinion may be written only "where precedent exists." Fox suggested that discussion of a ground of error was not necessary where *233 the question raised had been "definitely decided" by prior cases.
In enacting Article 44.24(c), the legislature in its wisdom imposed specific restrictions on decisions by certificate: (1) controlling precedent for disposing of each ground of error must exist; (2) the supporting authority must be cited, whether the certified decision is an affirmance or reversal; and, (3) each member of the court must examine the briefs of the parties. Concerning the last requirement, see Article 44.24(d), V.A. C.C.P.
The majority in this case has complied with none of these restrictions. It has wholly failed to give adequate treatment to four of appellant's five grounds of error. I dissent to the refusal of the majority to carry out its statutory duty.
NOTES
[1] The other contentions have been considered. They do not merit discussion and they are overruled. If the dissenter thinks that a discussion would add to the jurisprudence of the State, he is invited to write on each contention separately. Apparently he would reach the same result, because he does not dissent on the merits.
Including useless material in opinions hinders research and adds to the expense of attorneys and others who must purchase law books. Deciding what should be written in an opinion is within the province of the Court. It is not a legislative function.
[1] Article 847 stated in pertinent part:
In each case by it decided, the Court of Criminal Appeals shall deliver a written opinion, setting forth the reason for such decision.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2432764/
|
608 S.W.2d 229 (1980)
Benny Frank HARRIS, Appellant,
v.
The STATE of Texas, Appellee.
No. 65159.
Court of Criminal Appeals of Texas, Panel No. 3.
October 8, 1980.
Rehearing Denied December 10, 1980.
Charles F. McNabb, El Paso, for appellant.
Steve W. Simmons, Dist. Atty., and R. Bradford Stiles, Asst. Dist. Atty., El Paso, Robert Huttash, State's Atty., Austin, for the State.
Before ROBERTS, TOM G. DAVIS and W. C. DAVIS, JJ.
*230 OPINION
W. C. DAVIS, Judge.
This is an appeal from an order revoking probation. On March 28, 1978, the appellant was convicted for the offense of rape. Punishment was assessed at ten years confinement. The trial court, on the recommendation of the jury, placed the appellant on probation.
The State alleged in its Motion to Revoke Probation that the appellant violated the terms and conditions of his probation in that,
"On or about the 17th day of July, 1979, in the County of El Paso and the State of Texas, the said defendant, BENNY FRANK HARRIS, did then and there (unlawfully), with intent to avoid payment for Automobile rental service that he knew was provided by RUBEN CARRILLO only for compensation, and having control of a 1979 Ford Automobile under a written rental agreement, did intentionally and knowingly hold said 1979 Ford Automobile beyond the expiration of the rental period without the effective consent of the owner, RUBEN CARRILLO, thereby depriving said owner of the said 1979 Ford Automobile of its use in further rentals of the value of over $200.00 and less than $10,000.
Thereafter, to-wit: on or about the months of August, September, October and November, 1979, in the aforementioned County and State, the said defendant, BENNY FRANK HARRIS, did fail to report as required by his Probation Officer, each instance of failure to report being a separate and a distinct violation of his terms and conditions of probation." (Emphasis added)
After a hearing on the Motion to Revoke on February 7, 1980, the court entered an order revoking appellant's probation. The order recited that the appellant had violated the terms of the probation in the manner which was set out in the Motion to revoke adult probation. Sentence was imposed that same day.
In three grounds of error, the appellant complains that the trial court abused its discretion in revoking his probation on the ground that he violated condition number six of his probation, "6. Report to the Probation officer as required." We agree. The order to revoke probation for violation of this condition cannot be sustained because this condition is so vague and indefinite that it cannot be enforced; it does not inform the probationer with sufficient certainty of what he is to do. See Curtis v. State, 548 S.W.2d 57 (Tex.Cr.App.1977); Aguilar v. State, 542 S.W.2d 871 (Tex.Cr. App.1976); Parsons v. State, 513 S.W.2d 554 (Tex.Cr.App.1974). See also, Jones v. State, 571 S.W.2d 191 (Tex.Cr.App.1978). As was the case in Curtis v. State, supra, if the court's order revoking probation is to be sustained in this case, it must be on the evidence offered to prove the allegation that the appellant violated the condition of probation that he would commit the offense against the laws of this state. The evidence is utterly insufficient to support this allegation, as absolutely no mention was made at the hearing on the motion to revoke probation concerning the allegation. We find therefore that the trial court abused its discretion in revoking appellant's probation.
The judgment is reversed and the cause remanded.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2432765/
|
655 F. Supp. 2d 1368 (2009)
In re: CHEERIOS MARKETING & SALES PRACTICES LITIGATION.
MDL No. 2094.
United States Judicial Panel on Multidistrict Litigation.
October 9, 2009.
Before JOHN G. HEYBURN II, Chairman, ROBERT L. MILLER, JR., KATHRYN H. VRATIL, DAVID R. HANSEN, W. ROYAL FURGESON, JR. and FRANK C. DAMRELL, JR., Judges of the Panel.
TRANSFER ORDER
JOHN G. HEYBURN II, Chairman.
Before the entire Panel:[*] Plaintiffs in one action pending in the Central District of California and one action pending in the Eastern District of California have moved, pursuant to 28 U.S.C. § 1407, for centralization of this litigation in the latter district. This litigation currently consists of those two actions and three other actions pending in the Central District of California, District of New Jersey, and Eastern District of New York, respectively, as listed on Schedule A.
All responding parties support centralization, but there is some disagreement as to an appropriate transferee district. Plaintiff in the other action pending in the Central District of California joins movants in supporting selection of the Eastern District of California. Plaintiff in the action *1369 pending in the Eastern District of New York, however, favors selection of that district, while common defendant General Mills, Inc., favors selection of the District of New Jersey.
On the basis of the papers filed and the hearing session held, we find that these five actions involve common questions of fact, and that centralization under Section 1407 in the District of New Jersey will serve the convenience of the parties and witnesses and promote the just and efficient conduct of the litigation. All five actions involve allegations concerning General Mills's labeling of its Cheerios cereals, and, specifically, claims that eating Cheerios can lower a person's cholesterol. Centralization under Section 1407 will eliminate duplicative discovery, prevent inconsistent pretrial rulings (including with respect to class certification), and conserve the resources of the parties, their counsel and the judiciary.
We are persuaded that the District of New Jersey is an appropriate transferee district for pretrial proceedings in this litigation. One of the five constituent actions is already pending in that district, and Judge Peter G. Sheridan, who is presiding over that action, has the time and experience to steer this litigation on a prudent course.
IT IS THEREFORE ORDERED that, pursuant to 28 U.S.C. § 1407, the actions listed on Schedule A and pending outside the District of New Jersey are transferred to the District of New Jersey, and, with the consent of that court, assigned to the Honorable Peter G. Sheridan for coordinated or consolidated pretrial proceedings with the action pending in that district and listed on Schedule A.
SCHEDULE A
MDL No. 2094IN RE: CHEERIOS MARKETING & SALES PRACTICES LITIGATION
Central District of California
Hobin Choi v. General Mills, Inc., C.A. No. 2:09-3940
Claire M. Theodore v. General Mills, Inc., C.A. No. 2:09-4620
Eastern District of California
Charity E. Huey v. General Mills, Inc., C.A. No. 2:09-1368
District of New Jersey
Edward Myers, et al. v. General Mills, Inc., C.A. No. 2:09-2413
Eastern District of New York
Jeffrey Stevens v. General Mills, Inc., C.A. No. 1:09-2289
NOTES
[*] Panel members who potentially are members of a yet-to-be certified class in this litigation have renounced their participation in any such class and have participated in this decision. To the extent that such an interest is later determined for any reason to survive the renunciation, the Panel invokes the "rule of necessity" in order to provide the forum created by the governing statute, 28 U.S.C. § 1407. See In re Wireless Telephone Radio Frequency Emissions Products Liability Litigation, 170 F. Supp. 2d 1356, 1357-58 (J.P.M.L.2001).
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2432907/
|
713 S.W.2d 396 (1986)
David Wayne HARE, Appellant,
v.
The STATE of Texas, Appellee.
No. 08-85-00212-CR.
Court of Appeals of Texas, El Paso.
July 9, 1986.
Rehearing Denied August 13, 1986.
Stephen Spurgin, Richard Barajas, Barajas & Spurgin, Fort Stockton, for appellant.
J.W. Johnson, Jr., Dist. Atty., Sonora, Steven E. Rogers, Austin, for appellee.
Before STEPHEN F. PRESLAR, C.J., and OSBORN and SCHULTE, JJ.
OPINION
SCHULTE, Justice.
This is an appeal from a conviction founded upon a plea of guilty to aggravated assault. The court assessed punishment at three years imprisonment and granted probation. We affirm.
*397 Appellant's first ground of error complains that there was insufficient evidence to support the plea. Tex.Code Crim.Pro. Ann. art. 1.15 (Vernon 1977). Appellant entered his plea on August 2, 1985, pursuant to a plea bargain for probation. Courtesy supervision in Florida had already been arranged and Appellant waived extradition in relation to a Florida warrant. Two other aggravated assault indictments in Crockett and Sutton Counties, Texas, were dismissed. We can only surmise that the haste to amicably resolve all of these matters and get Appellant on his way to Florida provided the framework for this ground of error.
It is conceded that all necessary admonishments were administered and that all requisite waivers were obtained prior to acceptance of the plea. The sole alleged deficiency is with regard to the supporting evidence. Under Article 1.15:
The evidence may be stipulated if the defendant in such case consents in writing, in open court, to waive the appearance, confrontation, and cross-examination of witnesses, and further consents either to an oral stipulation of the evidence and testimony or to the introduction of testimony by affidavits, written statements of witnesses, and any other documentary evidence in support of the judgment of the court. [Emphasis added.]
At the plea hearing, Appellant executed a document entitled "Representations; Waivers; and, Plea of Guilty of Defendant." In the document, Appellant did "voluntarily and freely confess and admit I am one and the same David Wayne Hare who committed on or about the 11th day of May, 1985, in Pecos County, Texas, the following crime viz.; Aggravated Assault, as charged in the indictment...." The document was signed and sworn to by Appellant, the oath having been administered by the clerk of the court. It was also signed by counsel for the Appellant and the prosecutor. It was tendered to the court and signed by the judge. The court ordered the document filed "with all such evidence with the papers of this case."
The State contends that this amounts to a judicial confession sufficient to support a plea. One year ago, this Court would have unhesitatingly accepted such an argument. We do so now with greater caution and only on the procedural facts of this particular case. In an unpublished opinion dated August 24, 1983, this Court affirmed a guilty plea conviction in Juan Jimenez v. State, cause no. 08-82-00122-CR, in the face of the same type of appellate complaint and a similar record. Our decision was reversed by a seven-to-two decision of the Court of Criminal Appeals in an unpublished opinion dated July 10, 1985. Since neither opinion was published, they cannot serve as precedential authority. We can and do, however, take this opportunity to publish certain aspects of the issues involved in that case, as well as the reasoning of the Court of Criminal Appeals as an aid in explaining our resolution of the present appeal.
Jimenez was charged in a two-count indictment with two burglary of vehicle offenses. He appeared in court, was properly admonished and executed a waiver of adversarial trial rights. He executed two documents which the Court of Criminal Appeals referred to as untitled. These were in fact the waiver forms, foregoing the rights of the accused incident to trial. They bore signatures of the defendant, defense counsel, prosecutor, clerk of the court and trial judge. The defendant waived his rights of confrontation and agreed to stipulated evidence with a summary of evidence by the prosecutor. The waiver further recited:
I do hereby in open court admit all the allegations in the (indictment) ... in the case and I confess that I committed the offense charged in the (indictment), ....
The trial court accepted the waiver in consent forms and ordered them filed in the papers of the cause. Thereafter, the prosecutor offered a verbal summary of the State's case. As found by this Court and the Court of Criminal Appeals, the prosecutor's summary was totally inaccurate in *398 comparison to witness statements also offered in evidence. The witness statements themselves failed to identify the defendant. This left only the purported "judicial confession." We incorrectly concluded that the admission of guilt contained within the waiver forms sufficed as a judicial confession. We were disabused of this notion by the Court of Criminal Appeals. That court noted that Jimenez was never sworn as a live witness, the waiver documents were not sworn to by him, the waiver documents were never offered into evidence and were never referred to by the parties or trial judge. Consequently, there was no evidence to support the plea.
We do perceive a distinction between the Jiminez record and that presently before us. In this case, the waiver document contained in the confession was sworn to in court. While the statement of facts does not reflect that it was ever formally proffered to the court as "exhibit such and such," it was tendered to the court and referred to by both parties and the judge. The court asked if they were "ready to proceed to offer testimony in support of the plea." The prosecutor responded in the affirmative and referred to Appellant's "signed ... judicial confession." Defense counsel responded, "[w]e will stipulate, Your Honor." In Jimenez, it is apparent that neither side nor the court was relying upon the purported confession in the waiver document to satisfy the evidentiary requirement of Article 1.15. Instead, the State attempted a summary of evidence and introduction of witness statements. Exactly the opposite is true here. All participants were aware of the evidentiary requirement. Proof by summary, witness statements or affidavits was conscientiously avoided and reference was instead made to the sworn judicial confession tendered to the court. Comparing with Jimenez, we conclude that the instant case is distinguishable, that the admission of guilt in the sworn waiver document was a judicial confession, that it was properly before the trial court as evidence, and that it was sufficient to support the plea. Ground of Error No. One is overruled.
In Ground of Error No. Two, Appellant contends that the court erred in denying his pretrial motion to quash the indictment. The indictment alleged that Appellant did:
[I]ntentionally and knowingly threaten Larry Jackson with imminent bodily injury and did then and there use a deadly weapon, to-wit; a 1984 Chrysler automobile that in the manner of its use and intended use was capable of causing death and serious bodily injury, ....
Appellant contends that the indictment fails to adequately allege the manner and means by which the crime was committed, specifically with regard to the word "threaten" and the specific acts performed with the alleged vehicle.
We first note that this indictment charged an intentional or knowing assault by threat, not a reckless assault by bodily injury. Tex.Penal Code Ann. secs. 22.01(a)(1) and (2) (Vernon Supp.1986). Consequently, the manner and means specificity required by Tex.Code Crim.Pro.Ann. art. 21.15 (Vernon Supp.1986) is not applicable. An indictment is sufficient if it sets forth the alleged offense in plain, intelligible language sufficient to enable the accused to prepare a defense. The indictment should be read as a whole and viewed in light of common understanding. Tex.Code Crim. Pro.Ann. art 21.11 (Vernon 1966). We find that the instrumentality alleged in this indictment, an automobile, is not susceptible to widely varied manners of use in an intentionally assaultive manner such as to preclude preparation of a defense. The only common sense meaning of the indictment is that the vehicle was intentionally or knowingly driven in an assaultive manner threatening imminent serious bodily injury or death to the complainant. We find the indictment sufficient. See: Preston v. State, 675 S.W.2d 598, 601 (Tex.App.Dallas 1984, PDRR), cert. denied, ___ U.S. ___, 106 S. Ct. 389, 88 L. Ed. 2d 341 (1985); Pass v. State, 634 S.W.2d 857 (Tex.App. San Antonio 1982, PDRR). Ground of Error No. Two is overruled.
The judgment is affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2432857/
|
206 F. Supp. 2d 1021 (2002)
Michael AMBUR and Nola Ambur, Plaintiffs,
v.
UNITED STATES of America, Defendant.
No. Civ. 01-3015.
United States District Court, D. South Dakota, Central Division.
June 17, 2002.
*1022 *1023 Michael Mitchell Billion, Myers, Peters, Hoffman & Billion, Sioux Falls, South Dakota, for plaintiffs.
Bonnie P. Ulrich, Michelle G. Tapken, U.S. Attorney's Office, Sioux Falls, South Dakota, Donald N. Dowie, U.S. Department of Justice, Special Litigation/Tax Division, Washington, DC, for defendant.
ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT
KORNMANN, District Judge.
BACKGROUND
[¶ 1.] Plaintiffs instituted this action pursuant to 28 U.S.C. § 1346(a)(1), seeking to collect $16,062.00 in claimed overpaid federal income taxes, self-employment taxes and interest assessed and collected in 2000 for the tax years 1994, 1995, and 1996. Plaintiffs have filed a motion for partial summary judgment, contending that the assessments for self-employment taxes are time barred and a refund is due from defendant. The United States filed a cross-motion for partial summary judgment[1], contesting plaintiffs' statute of limitations defense as to the self-employment taxes.
DECISION
[¶ 2.] Summary judgment is proper where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c) and Donaho v. FMC Corporation, 74 F.3d 894, 898 (8th Cir.1996). The United States Supreme Court has held that:
The plain language of Rule 56(c) mandates the entry of summary judgment ... against a party who fails 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. In such a situation, there can be "no genuine issue as to any material fact", since a complete failure of proof concerning an essential element of the non-moving party's case necessarily renders all other facts immaterial.
Celotex Corp. v. Catrett, 477 U.S. 317, 322-323, 106 S. Ct. 2548, 2552, 91 L. Ed. 2d 265 (1986). "A material fact dispute is genuine if the evidence is sufficient to allow a reasonable jury to return a verdict for the non-moving party." Landon v. Northwest Airlines, Inc., 72 F.3d 620, 624 (8th Cir. *1024 1995). As already noted, the parties have, in effect, filed cross-motions for partial summary judgment as to the collection of self-employment taxes. Where the parties file such cross-motions, the standards by which the Court decides the motions do not change. Each motion must be evaluated independently, "taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration." Heublein Inc. v. United States, 996 F.2d 1455, 1461 (2nd Cir.1993). See also Bakery and Confectionery Union and Industry International Health Benefits and Pension Funds v. New Bakery Co. of Ohio, 133 F.3d 955, 958 (6th Cir. 1998).
[¶ 3.] Generally, any unpaid tax imposed by Title 26 must be assessed by the Internal Revenue Service ("IRS") within three years after the return has been filed. 26 U.S.C. § 6501(a). The three year limitations period may be extended by consent of the taxpayer and the Secretary of the Treasury. 26 U.S.C. § 6501(c)(4). That section provides, in part:
Where, before the expiration of the time prescribed in this section for the assessment of any tax imposed by this title ... both the Secretary and the taxpayer have consented in writing to its assessment after such time, the tax may be assessed at any time prior to the expiration of the period agreed upon.
[¶ 4.] On February 2, 1998, plaintiffs executed IRS Form 872 (Rev. June 1996) wherein they agreed, in part:
The amount of any Federal income tax due on any return(s) made by or for the above taxpayer(s) for the period(s) ended December 31, 1994 may be assessed at any time on or before April 15, 1999. However, if a notice of deficiency in tax for any such period(s) is sent to the taxpayer(s) on or before that date, then the time for assessing the tax will be further extended by the number of days the assessment was previously prohibited, plus 60 days.
[¶ 5.] On November 25, 1998, the plaintiffs executed Internal Revenue Service Form 872-A (Rev. October 1987) wherein they agreed, in part:
(1) The amount(s) of any Federal Income tax due on any return(s) made by or for the above taxpayer(s) for the period(s) ended December 31, 1994 & December 31, 1995 may be assessed on or before the 90th (ninetieth) day after ... (2) This agreement ends on the earlier of the above expiration date or the assessment date of an increase in the above tax or the overassessment (sic) date of a decrease in the above tax that reflects the final determination of tax and the final administrative appeals consideration ...
[¶ 6.] On December 20, 1999, the plaintiffs executed a largely identical IRS Form 872A for the period ending December 31, 1996.
[¶ 7.] As to each of the consent forms, no employee of the IRS signed until after plaintiffs had signed and submitted the forms to the IRS.
[¶ 8.] The instructions for who must sign a particular form are substantially similar and are part of the forms, not a separate publication. The instructions provide, in part:
If this consent is for income tax, self-employment tax, or FICA tax on tips ...
If this consent is for gift tax ...
If this consent is for Chapter 41, 42, or 43 taxes ...
If this consent is for Chapter 42 taxes ...
[¶ 9.] In June of 2000, the IRS assessed plaintiffs additional income tax and selfemployment *1025 tax for the 1994, 1995, and 1996 tax years. Plaintiffs filed amended returns (noting their disagreement with the assessments), paid the assessments and sought a refund. On March 19, 2001, the IRS rejected the request for a refund or credit, describing in the letter the "kind of tax" at issue as "income." Plaintiffs then filed the present action, seeking a refund of the additional income tax assessed and paid for those three tax years (Counts I, II and III) and of the additional self-employment tax assessed and paid for those three tax years (Counts IV, V, and VI).
[¶ 10.] Only the Counts concerning the self-employment taxes are at issue in the motions for partial summary judgment. All parties are seeking a determination whether the consents to extend the limitations period to assess federal income tax applied to also extend the time to assess federal self-employment taxes.
The bar of the statute of limitations is an affirmative defense, and the party raising it must specifically plead it and carry the burden of proof. Rule 142(a); Adler v. Commissioner, 85 T.C. 535, 540, 1985 WL 15397 (1985). A party pleading the statute of limitations as a bar to assessment establishes a prima facie case by showing that the statutory notice was mailed beyond the normally applicable period provided by the statute of limitations. The burden of going forward then shifts to the other side to show that the bar of the statute of limitations is not applicable. Adler v. Commissioner, supra at 540, 1985 WL 15397. See Concrete Engineering Co. v. Commissioner, 58 F.2d 566 (8th Cir.1932), affg. 19 B.T.A. 212, 1930 WL 505 (1930); Stern Bros. & Co. v. Burnet, 51 F.2d 1042 (8th Cir.1931), affg. 17 B.T.A. 848, 1929 WL 271 (1929).
Woods v. C.I.R., 92 T.C. 776, 779, 1989 WL 32907 (1989).
[¶ 11.] The respective statements of material facts submitted by the parties in support of or in resistance to the motions show that the assessments issued in June of 2000 for additional taxes were issued beyond three years from the date the 1994 and 1995 tax returns were filed. The defendant contends that the 1996 tax return was not filed until June 30, 1997, less than three years before the assessment for additional taxes for the 1996 tax year. However, the assessment clearly shows that the 1996 tax return was received on or before April 15, 1997. The assessment shows that the IRS did not process the return until June 30, 1997. The plaintiffs have met their burden of showing that the June 2000 assessments were issued in excess of three years after the 1994, 1995, and 1996 returns were filed. The burden shifts to the defendant to show that the bar of the statute of limitations is not applicable because the plaintiffs waived that bar. There is no dispute, of course, that waivers were timely executed and filed to "overcome" the statute of limitations. The dispute lies with what the waivers cover.
[¶ 12.] Plaintiffs contend that, applying principles of contract construction, the parties clearly only extended the time within which federal income taxes could be assessed and did not consent to extend the time within which federal self-employment taxes could be assessed. "A consent to extend the statute of limitations is essentially a unilateral waiver of the taxpayer's defense rather than a contract; contract principles are important, however, because section 6401(c)(4) requires an agreement between the parties." Camara v. C.I.R., 91 T.C. 957, 959, 1988 WL 123886 (1988) (citing Kovens v. Commissioner, 90 T.C. 452, 457, 1988 WL 21858 (1988)). See also *1026 Grunwald v. Commissioner, 86 T.C. 85, 88-90, 1986 WL 22077 (1986), and Woods v. C.I.R., 92 T.C. 776, 780, 1989 WL 32907 (1989).
[¶ 13.] "When the United States enters into contract relations, its rights and duties therein are governed generally by the law applicable to contracts between private individuals." Mobil Oil Exploration and Producing Southeast, Inc. v. United States, 530 U.S. 604, 607-08, 120 S. Ct. 2423, 2429, 147 L. Ed. 2d 528 (2000) (quoting United States v. Winstar Corp., 518 U.S. 839, 895, 116 S. Ct. 2432, 135 L. Ed. 2d 964 (1996)). "[T]he contract we are interpreting is one in which the United States is a party, and one which is entered into pursuant to authority conferred by federal statute. The necessity of uniformity of decision demands that federal common law, rather than state law, control the contract's interpretation." Miree v. DeKalb County, Ga., 433 U.S. 25, 28, 97 S. Ct. 2490, 2493, 53 L. Ed. 2d 557 (1977). Accord United States v. Seckinger, 397 U.S. 203, 209-10, 90 S. Ct. 880, 884, 25 L. Ed. 2d 224 (1970). See also Audio Odyssey, Ltd. v. United States, 255 F.3d 512, 520 (8th Cir. 2001), rehg. den. (Oct 05, 2001), rehg. den. (Nov 01, 2001) (federal common law applies when a federal agency is a party and the outcome of the case will directly affect substantial financial obligations of the United States).
[¶ 14.] There is no precise source of federal common law. However, "[t]here is a general uniformity of the contract principles applied throughout the country in state and federal courts alike." Southwestern Bell Telephone Co. v. Connect Communications Corp., 225 F.3d 942, 949 (8th Cir.2000) (Morris Sheppard Arnold, J, dissenting). In crafting the federal common law of contract interpretation, the court looks to the body of state law, searching for common rules. Linear Technology Corp. v. Micrel, Inc., 275 F.3d 1040, 1048 (Fed.Cir.2001). The principles of general contract law have become the federal common law of contract construction. Fomby-Denson v. Dept. of Army, 247 F.3d 1366, 1373-74 (Fed.Cir.2001). "When applying the `federal common law' of contracts, `that law must take into account the best in modern decision and discussion.'" United States v. Basin Elec. Power Co-op., 248 F.3d 781, 796 (8th Cir. 2001) (quoting Montana Power Co. v. United States, 8 Cl.Ct. 730, 735 (Cl.Ct. 1985)). "We look to state as well as federal case law as a source for federal common law on applicable principles of construction." A.W.G. Farms, Inc. v. Federal Crop Ins. Corp., 757 F.2d 720, 726 (8th Cir.1985).
[¶ 15.] This court can discern no difference between federal common law and South Dakota law on the matters of construction and interpretation of a contract. There is no reason to believe that South Dakota law would be inconsistent with federal interests or frustrate the objectives of the IRS in the contract at issue here. See United States v. Applied Pharmacy Consultants, Inc., 182 F.3d 603, 606 (8th Cir. 1999).
[¶ 16.] The United States Court of Appeals for the Seventh Circuit has suggested a format for interpreting contracts:
When applying the federal common law rules of contract interpretation we must first determine whether the clause of the contract at issue is ambiguous. Grun v. Pneumo Abex Corp., 163 F.3d 411, 420 (7th Cir.1998) (citing Ryan v. Chromalloy American Corp., 877 F.2d 598, 602 (7th Cir.1989)). The language of a contract is ambiguous if a section of that contract "is subject to reasonable alternative interpretations." Id. (citing Hickey v. A.E. Staley Mfg., 995 F.2d 1385, 1389 (7th Cir.1993)). In reviewing *1027 contract language for other possible interpretations, we are required to interpret the language "`in an ordinary and popular sense as would a person of average intelligence and experience.'" Id. (quoting Pitcher, 93 F.3d at 411). If a contract is not open to any other reasonable interpretations, and is therefore unambiguous, then the written words of the contract must dictate the disposition of a dispute involving that contract. Central States, Southeast and Southwest Areas Pension Fund v. Kroger Co., 226 F.3d 903, 911 (7th Cir.2000). Furthermore, except for the highly unusual instance "where literal application of a text would lead to absurd results or thwart the obvious intentions of its drafters," if a contract is found to be unambiguous, then we are not to examine any extrinsic evidence. Grun, 163 F.3d at 420 (internal quotation marks and citations omitted). When the language of an unambiguous contract "provides an answer, then the inquiry is over." Id. (citing Wikoff v. Vanderveld, 897 F.2d 232, 238 (7th Cir.1990)).
Funeral Financial Systems v. U.S., 234 F.3d 1015, 1018 (7th Cir.2000).
[¶ 17.] "A contract is ambiguous when application of rules of interpretation leave a genuine uncertainty as to which of two or more meanings is correct." City of Watertown v. Dakota, Minnesota & Eastern Railroad Co., 551 N.W.2d 571, 1996 SD 82, (¶ 13), 551 N.W.2d 571, 574 (1996). Plaintiffs contend that the consents cover only federal income taxes and do not cover self-employment taxes. The defendant acknowledges the language used in the consents but asserts that the term "income tax" includes self-employment taxes under federal law. If there is any ambiguity, the drafter of a contract bears the responsibility of preventing ambiguity, Ahlers Building Supply, Inc. v. Larsen, 535 N.W.2d 431, 434 (S.D.1995), and any ambiguities in a contract are interpreted and construed against the drafter, Production Credit Assoc. of Midlands v. Wynne, 474 N.W.2d 735, 740 (S.D.1991). That general rule applies equally to the United States. United States v. Seckinger, 397 U.S. 203, 210, 90 S. Ct. 880, 884, 25 L. Ed. 2d 224 (1970). We do not know at this stage of the record who inserted the word "income" between the word "Federal" and the word "tax" in the blank on the line in each consent. We therefore do not know who the drafter of the language is. This is of no import, of course, if the words "Federal income tax" are not ambiguous. We do know that plaintiffs testified at their depositions that, when they signed the forms, they intended to include self-employment taxes in the consents that they signed. The IRS obviously intended to include self-employment taxes as covered by "income tax." It would have been impossible to compute the amount of self-employment taxes owed until the audits had been completed and the amount of self-employment income had been determined for each year in question. The amounts of self-employment income for each year would obviously impact the amount of income taxes due for each year.
[¶ 18.] The instructions as to who is to sign the consent agreement speak of "income tax, self-employment tax, or FICA tax on tips." This is of little, if any, significance, the reason being that the plaintiffs did not ever read the instructions. They signed what was given to them by their accountant.
[¶ 19.] We know also that federal law specifically includes self-employment tax as part of the income tax. Defendant cites 26 C.F.R. § 1.1401-1(a) which provides, in part:
There is imposed, in addition to other taxes, a tax upon the self-employment *1028 income of every individual at the rates prescribed in section 1401(a) (old-age, survivors and disability insurance) and (b) (hospital insurance) ... This tax shall be levied, assessed, and collected as part of the income tax imposed by subtitle A of the Code and, except as otherwise expressly provided, will be included with the tax imposed by section 1 or 3 in computing any deficiency or overpayment and in computing the interest and additions to any deficiency, overpayment, or tax. Since the tax on self-employment income is part of the income tax ... Furthermore, with respect to taxable years beginning after December 31, 1966, this tax must be taken into account in computing any estimate of the taxes required to be declared under section 6015.
A clearer statement could hardly be found, namely that "the tax on self-employment income is part of the income tax." A person with no income obviously pays no self-employment taxes. As the income earned by virtue of self-employment goes up, the total federal tax on income increases and the tax on self-employment income also increases. The taxpayer with income derived from self-employment or other sources not subject to withholding (e.g. dividends, capital gains, and interest) pays estimated income taxes based upon the total anticipated income not subject to withholding and the quarterly payments must include anticipated self-employment tax. It is levied, assessed, and collected as part of the income tax for administrative convenience. Messner v. Dorgan, 228 N.W.2d 311, 318 (N.D.1974). It is nevertheless a tax on income.
In view of the close connection between the self-employment tax and the present income tax, and in the interest of simplicity for taxpayers and economy in administration, your conferees believe that it is preferable to have the tax on self-employment income handled in all particulars as an integral part of the income tax.
1950 U.S.C.C.A.N. 3482, 3502-03.
[¶ 20.] A question exists whether the court should give deference to the interpretation by the IRS. See Chevron, U.S.A., Inc. v. Natural Resources Defense Council. Inc., 467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984). Chevron held that:
"The power of an administrative agency to administer a congressionally created ... program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress." Morton v. Ruiz, 415 U.S. 199, 231, 94 S. Ct. 1055, 1072, 39 L. Ed. 2d 270 (1974). If Congress has explicitly left a gap for the agency to fill, there is an express delegation of authority to the agency to elucidate a specific provision of the statute by regulation. Such legislative regulations are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute. Sometimes the legislative delegation to an agency on a particular question is implicit rather than explicit. In such a case, a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency.
We have long recognized that considerable weight should be accorded to an executive department's construction of a statutory scheme it is entrusted to administer, and the principle of deference to administrative interpretations.
Id. at 843-44, 104 S. Ct. at 2782.
[¶ 21.] "Chevron deference applies when Congress has, either explicitly or implicitly, left a gap in a statute to be filled by a particular agency." TeamBank v. McClure, 279 F.3d 614, 618 (8th Cir. *1029 2002). There is no gap in the law to be filled in this case. The law is clear and unambiguous. Further, "Chevron deference is generally reserved for interpretations reached through `relatively formal' administrative procedures, such as `notice-and-comment rulemaking or formal adjudication.'" Id. at 619. There is really no opinion issued by the agency here. The defendant simply advances a legal argument in the course of this litigation. There is therefore no official action by the agency which is thorough and well enough reasoned to merit deference under Chevron. Chevron deference to the agency interpretation of the statutes and regulations is not necessary here.
[¶ 22.] The question remains whether such deference should be given to the agency's interpretation of the words "income tax" as used in the consent agreements. There is a split of authority whether the courts should give Chevron deference to an agency's interpretation of a contract in which the agency has a financial interest. The Federal Circuit holds that such deference is inappropriate. Southern California Edison Co. v. United States, 226 F.3d 1349, 1357 (Fed.Cir.2000).
When a party enters into a contract with the government, that party should reasonably expect to be on equal legal footing with the government should a dispute over the contract arise. If courts were generally to adopt a principle of deference to an agency's contract interpretation, such deference could lead the courts to endorse self-serving post-hoc reinterpretations of contracts that an agency might offer in the context of a litigation.
Id. This is so even when regulations are essentially incorporated into contracts. Id. at 1358. The First Circuit has also held that Chevron does not dictate the deference to be given to an agency's interpretation of a contract. Meadow Green-Wildcat Corp. v. Hathaway, 936 F.2d 601, 605 (1st Cir.1991).
[¶ 23.] The Tenth Circuit held:
The principles underlying Chevron that a reviewing court should defer to agency expertise on questions within the scope of the agency's Congressionally delegated powersclearly dictate that we defer to the Commission's interpretation of such language.
Northwest Pipeline Corp. v. Fed. Energy Reg. Comm., 61 F.3d 1479, 1486 (10th Cir. 1995). The D.C. Circuit likewise holds that Chevron "implicitly modified earlier cases that adhered to the traditional rule of withholding deference on questions of contract interpretation." Williams Natural Gas Co. v. Fed. Energy Reg. Comm., 3 F.3d 1544, 1549 (D.C.Cir.1993). The Eleventh Circuit has concluded that the Tenth and D.C. Circuit holdings reflect that majority view:
Chevron suggests that "the institutional advantages of agencies apply to a broad range of administrative activities," and "contract interpretation ... is sufficiently similar to statutory interpretation [that it] warrant[s] deferenceespecially when the interpretation involves a policy determination within the agency's statutory domain."
Muratore v. U.S. Office of Personnel Management, 222 F.3d 918, 922 (11th Cir.2000) (quoting Phillip G. Oldham, Comment, Regulatory Consent Decrees: An Argument for Deference to Agency Interpretations, 62 U.Chi.L.Rev. 393, 399-400 (1995)).
[¶ 24.] Having said all this, I decline to grant Chevron deference because I believe that the words "income tax" in the context of these consent agreements are clear and not ambiguous. The Random House Unabridged Dictionary (Second *1030 Edition) defines "income tax" as "a tax levied on incomes, esp. an annual government tax on personal incomes." Income tax is imposed on all income, whether it be from salary, wages and tips, farm income, interest, dividends, capital gains from the sale of property, or income from a trade or business. All these forms of income are reported on the federal income tax return to compute adjusted gross income and then taxable income. The self-employment tax is imposed only on those who showed net farm profit on Schedule F or net profit from a non-farm business on Schedule C to Form 1040.
[¶ 25.] The Court has looked at Jefferson County v. Acker, 527 U.S. 423, 119 S. Ct. 2069, 144 L. Ed. 2d 408 (1999), a case holding that a county could impose a franchise tax on federal judges (and others, of course) which franchise tax was as a matter of law based on income. "In Howard v. Commissioners of Sinking Fund of Louisville, 344 U.S. 624, 73 S. Ct. 465, 97 L. Ed. 617 (1953), the Court held that a `license fee' similar in relevant respects to Jefferson County's was an `income tax' for purposes of a federal statute that defines `income tax' as `any tax levied on, with respect to, or measured by, net income, gross income, or gross receipts,' 4 U.S.C. § 110(c)." 527 U.S. at 438, 119 S. Ct. 2069. The result reached in the present case is at least consistent with Jefferson County and Howard. Self-employment taxes clearly constitute a tax on income, i.e. an income tax. The words "federal income tax" include as a matter of law the federal self-employment tax.
[¶ 26.] Assuming, however, that the words "income tax" as used in the consent forms are ambiguous, the court would look to the intentions of the parties at the time the consent forms were executed. That mutual intention was clearly to the effect that the periods of assessment for self-employment taxes were also being extended. Any other interpretation would lead to absurd results and would defeat the intentions of the parties who executed the consents.
[¶ 27.] "The pleadings, depositions ... on file ... show that there is no genuine issue as to any material fact" as to whether or not the signed consent forms extended the period in which the defendant could legally act. The plaintiffs are not entitled to a partial summary judgment on Counts IV, V, and VI. The defendant is entitled to a partial summary judgment to the effect that the words "federal income tax" as used in the consent forms and as understood by all parties at that time include federal self-employment taxes.
[¶ 28.] Based upon the foregoing,
[¶ 29.] IT IS ORDERED:
(1) Plaintiffs' motion for partial summary judgment, Doc. 14, is denied.
(2) Defendant's motion for partial summary judgment, Doc. 17, is granted as set forth above.
[¶ 30.] Dated this 13th day of June, 2002.
NOTES
[1] The motion is captioned as an alternative motion to dismiss. The defendant filed a statement of material facts in support of the motion and the motion will be considered a motion for partial summary judgment.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2432881/
|
206 F. Supp. 2d 627 (2002)
Donald SMITH, et al., Plaintiffs,
v.
SUPREMA SPECIALTIES, INC., et al., Defendants.
Judith Graham, et al., Plaintiffs,
v.
Suprema Specialties, Inc., et al., Defendants.
David Green, et al., Plaintiffs,
v.
Suprema Specialties, Inc., et al., Defendants.
Gregory Harris, et al., Plaintiffs,
v.
Suprema Specialties, Inc., et al., Defendants.
Murray Notkin, et al., Plaintiffs,
v.
Suprema Specialties, Inc., et al., Defendants.
Teachers' Retirement System of Louisiana, et al., Plaintiffs,
v.
Suprema Specialties, Inc., et al., Defendants.
Ronald Oliver, et al., Plaintiffs,
v.
Suprema Specialties, Inc., et al., Defendants.
Stoneridge Investment Partners, et al., Plaintiffs,
v.
Suprema Specialties, Inc., et al., Defendants.
Rena Nadoff, et al., Plaintiffs,
v.
Suprema Specialties, Inc., et al., Defendants.
Stanley Sved, et al., Plaintiffs,
v.
Suprema Specialties, Inc., et al., Defendants.
Scott Walls, et al., Plaintiffs,
v.
Suprema Specialties, Inc., et al., Defendants.
Civ. Action Nos. 02-CV-168 (WHW), 02-CV-201 (DRD), 02-CV-329 (WHW), 02-CV-334 (WHW), 02-CV-335 (WHW), 02-CV-499 (WHW), 02-CV-550 (WHW), 02-CV-661 (WHW), 02-CV-672(WHW), 02-CV-697 (WHW), 02-CV-766 (WHW).
United States District Court, D. New Jersey.
July 1, 2002.
*628 *629 Andrew Eckstein, Michael Z. Brownstein, Kathryn (Katy) L. Saurack, Blank Rome Tenzer Greenblatt LLP, New York, NY, Counsel for Suprema Specialties, Inc. (by First Class Mail).
A. Ross Pearison, Sills Cummis Radin Tischman Epstein & Gross, Newark, NJ, Counsel for Defendant Mark Cocchiola (by First Class Mail).
Nancy E. Delaney, Pamela J. Labaj, Curtis, Mallet-Prevost, Colt & Mosle LLP, Newark, NJ, Counsel for Defendant Venechanos (by First Class Mail).
Edward T. Kole, Wilentz, Goldman & Spitzer, Woodbridge, NJ, Counsel for Defendant Estate of Paul Lauriero (by First Class Mail).
Michael J. Canavan, Pepper Hamilton LLP, Princeton, NJ, Counsel for Janney Montgomery Scott, Pacific Growth Equities, and Roth Capital Partners (by First Class Mail).
Joseph J. DePalma, Allyn Zissel Lite, Lite DePalma Greenberg & Rivas, Newark, NJ, Counsel for Plaintiffs Donald Smith, Ronald Oliver, Rena Nadoff, Gregory Harris, Judith Graham, David Green, Wyper Capital Management, Ascend Capital, the Hitel Group Inc. (by Federal Express).
Stuart L. Berman, Schiffrin & Barroway, LLP Bala, Cynwyd, PA, Samuel H. Rudman, Milberg Weiss Bershad Hynes & Lerach LLP, New York, NY, Counsel for Plaintiffs Wyper Capital Management, Ascend Capital (by Federal Express).
James A. Harrod, Wolf Popper LLP, New York, NY, Counsel for Plaintiff The Hitel Group Inc. (by Federal Express).
Marvin Frank, Rabin & Peckel LLP, New York, NY, Counsel for Plaintiff Garden State Securities Group (by Federal Express).
*630 Leo W. Desmond, Sparta, NJ, Counsel for Plaintiffs Scott Walls, Garden State Securities Group (by Federal Express).
Gary S. Graifman, Kantrowitz, Goldhammer & Graifman, Montvale, NJ, Counsel for Plaintiff Stoneridge Investment Partners LLC (by Federal Express).
Harvey Greenfield, Law Firm of Harvey Greenfield, New York, NY, Counsel for Plaintiff Stoneridge Investment Partners LLC (by Federal Express).
Andrew Robert Jacobs, Epstein Fitzsimmons Brown Ringle Gioia & Jacobs PC, Chatham Township, NJ, Counsel for Plaintiff Stanley Sved (by First Class Mail).
Fred T. Isquith, Wolf Haldenstein Adler Freeman & Herz LLP, New York, NY, Counsel for Plaintiff Stanley Sved (by First Class Mail).
William J. Pinilis, Kaplan, Kilsheimer & Fox LLP, Morristown, NJ, Counsel for Plaintiff Murray Notkin (by First Class Mail).
Harold G. Levison, Jonathan Minsker, Kasowitz Benson Torres & Friedman LLP, New York, NY, Seth R. Lesser, Bernstein Litowitz Berger & Grossman LLP, Lead Counsel, Hackensack, NJ, Counsel for Lead Plaintiff Teachers' Retirement.
Arthur S. Goldstein, Wolf & Samson, Roseland, NJ, Counsel for Defendants.
Diane J. O'Neil, Mendes & Mount, Esqs. Newark, NJ, Counsel for Defendants.
OPINION
WALLS, District Judge.
The matter before this Court is the appointment of lead plaintiff and lead counsel in this securities class action against Suprema Specialties, Inc. ("Suprema" or the "Company") pursuant to Section 21D(a)(3)(B) of the Securities Exchange Act of 1934 (the "Exchange Act") and Section 27(a)(3) of the Securities Act of 1933 (the "Securities Act"), each as amended by the Private Securities Litigation Reform Act of 1995 (the "PSLRA" or the "Reform Act"). The following parties move for lead plaintiff and counsel, respectively (1) StoneRidge Investment Partners, LLC ("StoneRidge Investment"), and the Law Firm of Harvey Greenfield with the Law Office of Kantrowitz, Goldhamer & Graifman as co-lead counsel, (2) the Garden State Securities Group ("Garden State") and Rabin & Peckel, LLP, (3) Teachers' Retirement System of Louisiana ("Louisiana Teachers") and Bernstein Litowitz, Berger & Grossman, LLP ("Bernstein Litowitz"), (4) The Hitel Group Inc. ("Hitel Group") and Wolf Popper, LLP with Lite DePalma Greenberg & Rivas, LLC as liason counsel, and (5) Wyper Capital Management, LP and Ascend Capital who withdrew their motion in support of StoneRidge Investment. After considering the factual and legal arguments raised in the parties' papers and hearing oral argument, this Court appoints Louisiana Teachers as Lead Plaintiff and Bernstein Litowitz as Lead Counsel.
FACTUAL AND PROCEDURAL BACKGROUND
This action was brought on behalf of a class consisting of all persons and entities who purchased the common stock of Suprema in the open market and/or traceable to a prospectus and offering during the period of August 15, 2001 through December 21, 2001 (the "Class Period"). Currently pending before this Court are eleven related class action complaints[1] alleging *631 violations of Sections 10(b) and 20(a) of the Exchange Act, 15 U.S.C. §§ 78j(b) and 78t(a), and the rules promulgated thereunder, including Rule 10b-5, 17 C.F.R. § 240.10b-5. Some complaints also allege violations of Sections 11, 12(a) and 15 of the Securities Act, 15 U.S.C. §§ 77k, 77(a)(2) and 77(o).
On August 15, 2001, Suprema issued a press release wherein the Company announced consolidated new sales, net income, and earnings per share for the year ended June 30, 2001, and made numerous positive statements concerning its net sales and net income. On or about September 23, 2001, Suprema filed its Annual Report (Form 10-K) for the year ended June 30, 2001 which contained similar positive statements. On November 14, 2001, Suprema filed its Quarterly Report (Form 10-Q) for the first quarter of 2001, ending on September 30, 2001 which reflected corporate growth. In each of these filings, Suprema assured the public and the Securities Exchange Commission ("SEC") that the financial statements were in conformance with Generally Accepted Accounting Principles ("GAAP"). However, the positive statements in each of the filings allegedly were materially false and misleading because they failed to truthfully and accurately disclose Suprema's net sales, net income, gross margins and working capital. As a result of these statements, the market price of Suprema's common stock was inflated.
On November 6, 2001, the Company filed a registration statement and prospectus with the SEC seeking the issuance of 4.05 million shares of common stock, of which 3.5 million shares were to be sold by the Company and 550,000 by certain selling shareholders. The offering would nearly double the number of outstanding shares of Suprema common stock from 5.7 million shares to 9.75 million shares. The Secondary Offering commenced on or about November 8, 2001. During the course of the Secondary Offering, Suprema raised in excess of $41 million. In addition, the following defendants sold stock in the Secondary Offering: Mark Cocchiola, Steven Venechanoa, and the Estate of Lauriero.
On Friday, December 21, 2001, just before the close of the market, Suprema issued a press release which revealed the resignations of its Chief Financial Officer and its Controller. The Company also announced that it "has initiated an internal investigation of its prior financial results and has instructed its auditors to review the Company's financial records." (Decl. of Erik Sandstedt, Ex. 4). Immediately thereafter, the National Association of Securities Dealers Automated Quotation System ("NASDAQ") halted trading of Suprema common stock, which was trading at $13, until Suprema satisfied their request to provide information concerning the internal investigation. On January 8, 2002, Suprema revealed the existence of material accounting irregularities. Subsequent reports indicated that substantial accounts receivable reported by the Company were false and illusory. In late February, Suprema announced that it had filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code, 11 U.S.C. § 1101 et. seq., in the United States Bankruptcy Court of the Southern District of New York. The Company also announced that its stock would be de-listed by NASDAQ. On or about March 1, 2002, Suprema was de-listed and since that time the Company's stock has been trading on the pink sheets for less than pennies per share.
DISCUSSION
I. Appointment of Lead Plaintiff
The Reform Act established new standards and procedures for selecting lead *632 plaintiffs in securities fraud class actions.[2] Under the Reform Act, courts are required to appoint a "lead plaintiff" at the initial stages of litigation. Specifically, the Reform Act instructs the court to "appoint as plaintiff the member or members of the purported plaintiff class that the court determines to be most capable of adequately representing the interests of the class members." 15 U.S.C. § 78u-4(a)(3)(B)(i). The Reform Act then creates a rebuttable presumption that the most adequate plaintiff is the person or group of persons that:
(aa) has either filed the complaint or made a motion in response to a notice . . .;
(bb) in the determination of the court, has the largest financial interest in the relief sought by the class; and
(cc) otherwise satisfies the requirements of Rule 23 of the Federal Rules of Civil Procedure.[3]
15 U.S.C. § 78u-4(a)(3)(B)(iii)(I).
This presumption may be "rebutted only upon proof by a member of the purported plaintiff class that the presumptively most adequate plaintiff(aa) will not fairly and adequately protect the interests of the class; or (bb) is subject to unique defenses that render such plaintiff incapable of adequately representing the class." Id. § 78u-4(a)(3)(B)(iii)(II). The Third Circuit has explained that in reviewing rebuttal evidence, courts should only consider whether anyone can prove that the presumptive lead will not fairly and adequately represent the interests of the class and not whether another movant is preferable. In re Cendant Corp. Litig., 264 F.3d 201, 268 (3d Cir.2001).
To become the presumptive lead plaintiff, the movant need only make a prima facie showing that he satisfies the typicality and adequacy requirements of Rule 23. See Hoxworth v. Blinder, Robinson & Co., Inc., 980 F.2d 912, 924 (3d Cir.1992). To rebut the presumption, however, members of the putative class must submit proof that the presumptive lead plaintiff does not meet the requirements. In re Cendant Corp. Litig., 264 F.3d at 263.
The typicality requirement is satisfied when the named plaintiff has (1) suffered the same injuries as the absent class members, (2) as a result of the same course of conduct by defendants, and (3) their claims are based on the same legal issues. Weiss v. York Hosp., 745 F.2d 786, 809 & n. 36 (3d Cir.1984). Where the claims asserted by the movant are based on the same legal theories and arise from the "same event or practice or course of conduct that gives rise to the claims of the class members," the typicality requirement is satisfied. Grasty v. Amalgamated Clothing and Textile Workers Union, AFL-CIO, CLC, 828 F.2d 123, 130 (3d Cir.1987).
*633 The "fairly and adequately" representing the class prong is modified by Section 21D of the Reform Act which directs the Court to limit its inquiry to the existence of any conflict with the interests of the other members of the class. This prong is satisfied when both the class representative and its attorney are capable of satisfying their obligations, and neither has interests conflicting with those of other Class members. See Sosna v. Iowa, 419 U.S. 393, 403, 95 S. Ct. 553, 559, 42 L. Ed. 2d 532 (1975); see also Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 625, 117 S. Ct. 2231, 2250, 138 L. Ed. 2d 689 (1997). The Third Circuit explained that when assessing adequacy of representation, courts should consider whether the proposed lead plaintiff "has the ability and incentive to represent the claims of the class vigorously, [whether it] has obtained adequate counsel, and [whether] there is [a] conflict between [the movant's] claims and those asserted on behalf of the class." In re Cendant Corp. Litig., 264 F.3d at 265 (quoting Hassine v. Jeffes, 846 F.2d 169, 179 (3d Cir.1988)).
Further, the Third Circuit instructs courts to consider two additional factors in making its initial adequacy assessment. First, the court should consider "whether the movant has demonstrated a willingness and ability to select competent class counsel and to negotiate a reasonable retainer agreement with that counsel." Id. at 265-66. The second consideration is only applicable when the movant is a group, rather than an individual. Specifically, "[i]f the court determines that the way in which a group seeking to become lead plaintiff was formed or the manner in which it is constituted would preclude it from fulfilling the tasks assigned to a lead plaintiff, the court should disqualify that movant on the grounds that it will not fairly and adequately represent the interests of the class." Id. at 266. Courts should also consider whether a movant group is too large to adequately represent the class. Id. Finally, the Third Circuit recognizes that there may be other reasons to justify a court's decision that the adequacy or typicality requirement has not been satisfied. See id. at 268.
In this case, as mentioned above, four plaintiffs or groups of plaintiffs move for lead plaintiff status. The first is StoneRidge Investment, an investment advisor and a group consisting of 22 unaffiliated organizations, that collectively held approximately 170,000 shares of Suprema stock and allegedly suffered losses of approximately $2,100,000 during the Class Period. The second is Garden State, a group of five individuals, that collectively held approximately 61,500 shares and allegedly suffered losses of $709,173. The third is Louisiana Teachers, an institutional investor, that owned 47,200 shares and allegedly suffered losses of $600,000. The final movant is the Hitel Group that held approximately 10,000 shares and allegedly suffered losses of $127,500.
A. StoneRidge Investment
StoneRidge Investment, an investment advisor and investment management company focusing on institutional clients, seeks to be named sole lead plaintiff on behalf of the 22 entities for which it makes investment decisions, or alternatively as a lead plaintiff group with those entities. Although on the surface it appears that StoneRidge Investment has suffered the greatest financial loss,[4] it is not entitled to *634 presumptive lead plaintiff status under the Reform Act because it may not aggregate its losses with the 22 entities it represents. This Court finds that StoneRidge Investment may not bring the action on behalf of its clients because it did not function as a "single investor" and it has not submitted any evidence that it received permission to move on its clients' behalf. Further, this Court finds that StoneRidge Investment may not move as a "group" with its clients because it has not submitted a certification from any of the entities it represents and a group consisting of 22 independent entities is too large to work effectively.
StoneRidge Investment argues that as an investment manager it can represent the interests of the other 22 members of its group. This Court disagrees with StoneRidge Investment and finds that it is not a "single investor" and as such cannot bring the claim on behalf of its clients who were the actual owners of the stock. See In re Bank One Shareholders Class Actions, 96 F. Supp. 2d 780, 783-84 (N.D.Ill. 2000) (holding that an investment manager, a hedge fund, with the largest aggregate losses was not the most adequate plaintiff because, among other things, it was not buying the stock in question for its own account, but rather for investors who were participants in the managers' funds).
While some courts have permitted "investment managers" to serve as lead plaintiffs, those courts generally have required showings that such money managers qualify as a "single person" under the Reform Act. See e.g., In re Waste Mgmt., Inc., 128 F. Supp. 2d 401 (S.D.Tex.2000) (holding that account manager may serve as lead plaintiff because it demonstrated that it functioned as a single investor); Sakhrani v. Brightpoint, Inc., 78 F. Supp. 2d 845, 846-47 (S.D.Ind.1999) (stating that a group of "affiliated pension funds or mutual funds under common management" would satisfy requirements of PSLRA). In In re Waste Mgmt. Inc., the institutional investor was under the direction of a single individual, the Treasurer of the State of Connecticut who was also the sole custodian and trustee for Connecticut. Also, neither Connecticut nor the underlying funds had its own board of trustees. The Court therefore determined that the institutional investor was "one person" under the Reform Act and as such was capable of adequate monitoring, coordination, and accountability in the litigation. 128 F. Supp. at 432.
Here StoneRidge Investment provided separate account management for individual investors, pension funds and profit sharing plans, who were the actual purchasers of Suprema stock. (Cert. of Gary S. Graifman, Ex. 3.) The 22 members of the StoneRidge Group are unaffiliated organizations who undoubtedly have their own boards of trustees, and are subject to varying laws, rules and regulations. Furthermore, StoneRidge Investment's clients are under the control of many different management structures. As such, StoneRidge Investment's various institutional clients can not be viewed as a "single person" under the Reform Act.
Further, where a court appoints an asset manager as lead plaintiff, the plaintiff should provide evidence that it "acts as attorney-in-fact for its clients and is authorized to bring suit to recover for, among other things, investment losses." EZRA Charitable Trust v. Rent-Way Inc., 136 F. Supp. 2d 435, 441 (W.D.Pa.2001). The clients' mere grant of authority to an investment manager to invest on its behalf *635 does not confer authority to initiate suit on its behalf. StoneRidge Investment has not provided the Court any indication that its members have given it authority to file lawsuits on its behalf. In fact, nothing before the Court even indicates that the members know that this action has commenced. There is little precedent on which this Court could rely to support the appointment of an asset manager as sole lead plaintiff without proper authorization.
In the alternative, StoneRidge Investment argues that it should be named lead plaintiff as a "group" with the entities it represents. Under Section 21D(a)(3)(B)(i) of the Exchange Act, the court may appoint an individual or group of individuals as lead plaintiff. Although the Reform Act does not limit the total number of proposed lead plaintiffs, the "rule of reason prevails." In re Milestone Scientific Sec. Litig., 183 F.R.D. 404, 417 (D.N.J.1998)(quoting Chill v. Green Tree Fin. Corp., 181 F.R.D. 398, 409 (D.Minn. 1998)). In a brief amicus curiae, the SEC issued the following interpretation:
Construing the term "group of persons" in light of the language and purposes of the Act, a court generally should only approve a group that is small enough to be capable of effectively managing the litigation and the lawyers. The commission believes that ordinarily this should not be more than three to five persons, a number that will facilitate joint decision making and also help to assure that each group member has a sufficiently large stake in the litigation.
In re Baan Co. Sec. Litig., 186 F.R.D. 214, 217 (D.D.C.1999) (quoting attached SEC brief amicus curiae at 16-17). Courts have also interpreted the Reform Act to limit the size of groups that may apply for lead plaintiff. Id. (refusing to appoint group of 20 investors as lead plaintiff). The Third Circuit has determined that although there is no "hard-and-fast rule," courts should "generally presume that groups with more than five members are too large to work effectively," and therefore are not adequate lead plaintiffs. In re Cendant Corp. Litig., 264 F.3d 201, 267 (3d Cir.2001).
Here, as discussed, the 22 organizational investors are not affiliates with one another and they are under the control of many different management structures, none of which will monitor, coordinate, or be accountable for the instant litigation. Therefore, it would be impossible for such a group to speak with one voice and to effectively manage a litigation such as the instant action.
Further, to sustain a group of proposed lead plaintiffs, courts have established protocols to insure that the group will be effective. Such protocols include requiring declarations or affidavits to demonstrate that the proposed lead plaintiffs can work effectively as a group. See Local 144 Nursing Home Pension Fund v. Honeywell Int'l Inc., No. 00-3605, 2000 U.S. Dist. LEXIS 16712, at *13, 2000 WL 33173017, at *4-5 (D.N.J. Nov. 16, 2000)(appointing as lead plaintiff a group of five investors who submitted declarations describing past and continuing meetings between them and their counsel, and their involvement in the litigation so far); In re Lernout & Hauspie Sec. Litig., 138 F. Supp. 2d 39, 45 (D.Mass.2001)(appointing three lead plaintiffs where group submitted affidavits to show their ability to work together effectively). StoneRidge Investment's papers do not mention any contact between StoneRidge Investment and any of the 22 entities or contact among any of the 22 entities. Nor is there evidence that any of the entities are willing to accept the substantial obligations associated with being named lead plaintiff.
*636 Additionally, the 22 entities did not satisfy the procedural requirements of the Reform Act because they neither submitted certifications nor moved individually for lead plaintiff status. The only certification submitted was from Joseph E. Stocke, Managing Director and Chief Investment Officer of StoneRidge Investment. (Cert. of Gary S. Graifman, Ex. 3.)
This Court concludes that StoneRidge Investment is not entitled to aggregate its claims with those of the 22 entities it represents because it may not bring suit on behalf of those 22 entities, and because it may not move as a "group". Without such aggregation, it does not have the largest financial interest. The greatest financial loss suffered by any individual member of its group is $325,000 and StoneRidge Investment itself only suffered a loss of $310,000. StoneRidge Investment is not entitled to lead plaintiff status. This Court now turns to Garden State's request to serve as lead plaintiff.
B. Garden State Securities
Garden State, a "group" of five individuals[5] who purchased Suprema stock through the same broker at Garden State Securities, Inc., seek to aggregate their losses and be appointed lead plaintiff. This Court finds that Garden State will not adequately represent the Class because it has not demonstrated that it can work effectively as a group, it has not indicated that it negotiated attorneys fees on behalf of the class, and it does not assert any claims under the Securities Act, as do other proposed class members.
First, Garden State has not demonstrated that it can adequately function as a "group" to represent the interests of the class. The Third Circuit has indicated its disagreement with cases that have held that the statute invariably precludes a group of unrelated individuals from serving as lead plaintiff. In re Cendant Corp. Litig., 264 F.3d 201, 266 (3d Cir.2001) (citing Sakhrani v. Brightpoint, Inc., 78 F. Supp. 2d 845, 853 (S.D.Ind.1999); In re Telxon Corp. Sec. Litig., 67 F. Supp. 2d 803, 811-16 (N.D.Ohio 1999); In re Donnkenny Inc. Sec. Litig., 171 F.R.D. 156, 157-58 (S.D.N.Y.1997)). As the Third Circuit explained:
The statute contains no requirement mandating that the members of a proper group be "related" in some manner; it requires only that any such group "fairly and adequately protect the interests of the class." We do not intimate that the extent of the prior relationship and/or connection between the members of a movant group should not properly enter into the calculus of whether that group would "fairly and adequately protect the interests of the class," but it is this test, not one of relatedness, with which courts should be concerned.
In re Cendant Corp. Litig., 264 F.3d at 266-67.
Among the factors to consider in determining whether the movant will "fairly and adequately" represent the interests of the class are: (I) whether the individuals in question had a pre-existing relationship, (ii) the extent of that relationship, (iii) whether the group was created by the efforts of lawyers for the purpose of obtaining lead plaintiff status, and (iv) whether the group is too large to adequately *637 represent the Class. Id. As example, the Circuit explained that if a movant "group" was created by the efforts of lawyers for the purpose of ensuring that it is named lead counsel, the "group" should not be named lead plaintiff. Id. (citing In re Razorfish, Inc. Sec. Litig., 143 F. Supp. 2d 304, 308 (S.D.N.Y.2001) (holding that to allow lawyers to designate unrelated plaintiffs as a "group" and aggregate their financial stakes would allow and encourage lawyers to direct the litigation and would defeat the purpose of the Reform Act)).
Here each of the five plaintiffs submitted an affidavit that, among other things, declares that they agree to serve as lead plaintiff and "will be able to exercise joint decision-making and work together in this case to actively and efficiently supervise counsel and monitor the litigation." (Decl. of Leo W. Desmond, Ex. 1-5). They also acknowledged that as lead plaintiff they are fiduciaries to the class and as such should act in the best interests of the class. (Id.) Accordingly, they agreed to have meetings, monitor the litigation, and maintain regular contact with their counsel. (Id.) Finally, they explained that they retained their counsel because of counsel's substantial experience litigating securities class actions on behalf of shareholders and because they are located in New York. (Id.)
These affidavits notwithstanding, this Court is constrained to find that Garden State can not work effectively to adequately represent the interests of the class. Garden State Securities concedes that the only pre-existing relationship among the various proposed individuals is the fact that they all invested through the same broker at Garden State Securities. Further, it appears that these unrelated individuals amalgamated together for the sole purpose of obtaining lead plaintiff status. The extent of the pre-existing relationship is therefore minimal and it does not appear that there is a sufficient connection to bind them together as a unit. Also, although each plaintiff submitted an affidavit acknowledging the duty to represent the class, there is no evidence to suggest that they have the background or investment experience to effectively monitor the litigation.
Second, Garden State has not demonstrated that it has negotiated a retainer with its counsel on behalf of the Class. The Third Circuit has explained that "one of the best ways for a court to ensure that it will fairly and adequately represent the interests of the class is to inquire whether the movant has demonstrated a willingness and ability to . . . negotiate a reasonable retainer agreement with . . . counsel." In re Cendant Corp. Litig., 264 F.3d at 265-66 (citing Raftery v. Mercury Fin. Co., No. 97 C 624, 1997 WL 529553, at *2 (N.D.Ill. Aug.15, 1997)(holding that movant was not entitled to presumptive lead plaintiff status because the retainer agreement, which capped attorney's fees at 33 1/3% of the total class recovery was not the result of hard bargaining)). Here, unlike Louisiana Teachers, Garden State has not submitted any evidence that it negotiated counsel's fees with their proposed lead counsel. The only documentation provided refers to the competency of the proposed lead counsel. (Desmond Decl., Ex. 4). Even after this Court questioned all movants for lead counsel about fees, Garden State, unlike StoneRidge Investment, did not submit evidence of fee negotiations.
Finally, Garden State has not demonstrated that it will adequately represent the interests of the class members who suffered losses in the Secondary Offering. Although Garden State has made a prima facie showing that it meets the typicality requirement of Rule 23,[6] it does not assert *638 all of the claims or legal theories of the purported class. Garden State only alleges violations under the Exchange Act and none under the Securities Act because it only participated in the primary offering and not the Secondary Offering conducted on November 8, 2001.
Garden State asserts that it satisfies the typicality requirement because, as all other class members, it engaged in purchase transactions of Suprema during the Class Period, and was thereby subjected to the improper and illegal acts and practices complained of, and consequently suffered damages. Garden State argues that the Securities Act allegations are synonymous with the Exchange Act allegations and, such satisfies the typicality requirement. The Securities Act allegations arise from the same course of conduct alleged by the remainder of the Class (i.e. that defendants made false and misleading material misstatements or omissions as to the Suprema's financial condition.).
Although this Court agrees that Garden State meets the typicality requirement, this Court finds that it may not adequately represent the interests of those plaintiffs who suffered harm in the Secondary Offering. The proof required to succeed under the Securities Act claims differs from that required under the Exchange Act claims. As example, under the Securities Act, purchasers are not required to prove scienter. Further, only secondary purchasers have standing to prosecute claims against the underwriters of the secondary. It may well be that Garden State does not have the same qualitative incentive to pursue the Securities Act claims as those who were directly injured in the Secondary Offering because only the secondary purchasers will benefit from any recovery from the underwriters.
Accordingly, this Court concludes that Garden State is not entitled to lead plaintiff status: First, it did not suffer the greatest financial loss because unlike a proper "group" under the Reform Act, its losses cannot be aggregated. The greatest loss suffered by an individual of the proposed group is $247,680. Second, Garden State has not asserted that it negotiated a retainer with its proposed counsel. Finally, Garden State has not demonstrated that it can adequately represent the interests of those class members who suffered losses in the Secondary Offering. The Court now considers whether Louisiana Teachers satisfies the requirements of the Reform Act.
C. Louisiana Teachers
Louisiana Teachers, a large institutional investor, moves for appointment as lead plaintiff. It is undisputed that Louisiana Teachers has satisfied the procedural requirements of the Reform Act. However, StoneRidge Investment, Garden State and the Hitel Group contend that Louisiana Teachers is not entitled to presumptive lead plaintiff status because it has already served as lead plaintiff in at least five securities fraud class actions within the past three years.[7] This Court finds that *639 Louisiana Teachers may serve as lead plaintiff despite the Reform Act restriction and that it otherwise satisfies the Reform Act requirements because of its size of loss, its status as a public pension fund, the typicality of its claims and the adequacy of its representation.
Louisiana Teachers satisfies each prong of the most adequate plaintiff test. First, Louisiana Teachers filed a complaint on February 4, 2002 alleging that Suprema and its officers, directors and underwriters were liable for false and misleading statements made during the Class Period. Louisiana Teachers also filed an order to show cause to protect the right of the Class to rescind its stock purchases from Suprema and certain controlling shareholders during the Secondary Offering.
Second, Louisiana Teachers has suffered more than $600,000 in losses as a result of its purchase of Suprema common stock during the Class Period-the most economic loss of the parties qualified to serve as lead plaintiff.[8] The purpose of appointing a lead plaintiff on the basis of financial interest is to "ensure that institutional plaintiffs with expertise in the securities market and real financial interests in the integrity of the market control the litigation, not lawyers." In re Donnkenny, Inc. Sec. Litig., 171 F.R.D. 156, 157 (S.D.N.Y.1997). In addition to the severe monetary loss, Louisiana Teachers, a public pension fund with assets over $10 billion, possesses the financial sophistication and expertise to ensure that the litigation will proceed in the best interests of the Class.
Finally, Louisiana Teachers is qualified to serve as lead plaintiff under Rule 23. See 15 U.S.C. § 78u-4(a)(3)(B)(iii)(I)(cc). The typicality prong is met because all of the claims at issue arise from the false and misleading statements and omissions made by Suprema and others during the Class Period.
Furthermore, Louisiana Teachers will fairly and adequately represent the interests of the Class. Louisiana Teachers' and their counsels' interests are clearly aligned with those of the Class; there is no evidence of any conflict between it and other Class members. As demonstrated, Louisiana Teachers and the rest of the Class share substantially similar questions of law and fact, and Louisiana Teachers' claims are typical of the Class. Also, Louisiana Teachers will adequately represent the interests of the class members who suffered losses in the Secondary Offering because it has brought claims under the Securities Act and the Exchange Act.
Garden State, StoneRidge Investment and the Hitel Group assert that Louisiana Teachers exceeded the so-called "professional plaintiff" bar imposed by the Reform Act because it is serving as lead plaintiff in five securities class actions initiated in the past three years. Section 27(a)(3)(B)(vi) of the Reform Act reads:
Restrictions on professional plaintiffs Except as the court may otherwise permit, consistent with the purposes of this section, a person may be a lead plaintiff, or an officer, director, or fiduciary of a *640 lead plaintiff, in no more than 5 securities class actions brought as plaintiff class actions pursuant to the Federal Rules of Civil Procedure during any 3-year period.
15 U.S.C. § 78u-4 (a)(3)(B)(vi). The purpose of the Reform Act is to eliminate manipulation in securities class actions by lawyers and their seasoned, well-experienced plaintiffs. According to the Reform Act, Louisiana Teachers is prima facie statutorily disqualified from serving as lead plaintiff. The other movants assert that because the plain meaning of the statute is entirely clear, the Court should not look toward legislative intent.
Garden State and StoneRidge Investment charge that Louisiana Teachers' participation as lead plaintiff in five securities actions presents a potential obstacle to providing the most adequate representation to the Class. See In re Enron Corp. Sec. Litig., 206 F.R.D. 427, 444 (2002). Finally, Garden State says that Louisiana Teachers has not satisfied the rebuttable presumption under the Reform Act that the most adequate class representative is the one who has suffered the greatest financial loss.
This Court finds that the fact that Louisiana Teachers served as lead Plaintiff five times in the past three years does not automatically preclude it from serving as lead plaintiff here. The restriction in the Reform Act is not absolute. Rather, the language "clearly grants the Court the power to appoint a lead plaintiff despite its having served as lead plaintiff in five other suits in the past three years." Piven v. Sykes Enters., Inc., 137 F. Supp. 2d 1295, 1304 (M.D.Fla.2000). This Court looks toward the legislative intent to determine when it is appropriate to exercise such discretion. The legislative history clearly indicates that Congress specifically sought to exempt from the limitation institutional investors such as Louisiana Teachers:
The Conference Report seeks to restrict professional plaintiffs from serving as lead plaintiff by limiting a person from serving in that capacity more than five times in three years. Institutional investors seeking to serve as lead plaintiff may need to exceed this limitation and do not represent the type of professional plaintiff this legislation seeks to restrict.
H.R. Conf. Rep. No. 104-369. Accordingly, the Reform Act "grants courts discretion to avoid the unintended consequences of disqualifying institutional investors from serving more than five times in three years." Id.; 15 U.S.C. 78u-4(a)(3)(B)(vi).
In enacting the most adequate plaintiff requirement, Congress demonstrated its preference for institutional investors to have control over securities fraud litigations because they would "represent the interests of the plaintiff class more effectively than class members with small amounts at stake." H.R. Conf. Rep. No. 104-369, at 31-35 (1995), reprinted in 1995 U.S.C.C.A.N. 679, 730-34; In re Cendant Corp. Litig., 264 F.3d at 264; see also In re Razorfish, Inc. Sec. Litig., 143 F. Supp. 2d 304, 309 (S.D.N.Y.2001)(institutional investors are in the best position to prosecute securities fraud claims and to negotiate with and supervise counsel). The legislative history of the Reform Act is "replete with statements of Congress' desire to put control of such litigation in the hands of large, institutional investors." Gluck v. CellStar Corp., 976 F. Supp. 542, 548 (N.D.Tex.1997). Similarly, the Senate Report on the Reform Act emphasizes that "increasing the role of institutional investors in class actions w[ould] ultimately benefit the class and assist the courts." S.Rep.No. 104-98, at 11 (1995), reprinted in 1995 U.S.C.C.A.N. 679, 690.
*641 The majority of courts that have considered this issue have determined that the limitation does not apply to institutional investors. See e.g., In re Critical Path, Inc., 156 F. Supp. 2d 1102, 1112 (N.D.Cal. 2001) ("institutional investors do not represent the type of professional plaintiff [the Reform Act] seeks to restrict"); Piven, 137 F.Supp.2d at 1295 (permitting institutional investor to exceed limit). In re Network Assoc., Inc. Sec. Litig., 76 F. Supp. 2d 1017, 1030 (N.D.Cal.1999)(same); Blaich v. Employee Solutions, Inc., No. 97-545-PHX-RGS, 1997 WL 842417, at *2 (D.Ariz. Nov.21, 1997)("the general restriction of serving in more than five cases as a lead plaintiff was not intended to apply to institutional investors."). As the Southern District of California noted:
when Congress determined to impose "restrictions on professional plaintiffs," it knew precisely whom it intended to restrict. The Conference Report for the [Reform Act] defines "professional plaintiffs" as those who "own a nominal number of shares in a wide array of public companies [and who] permit lawyers readily to file abusive securities class action lawsuits." Clearly, these are not institutions. In fact, the Conference Report could not have been more explicit in stating that institutions, as opposed to professional plaintiffs, are not subject to the [Reform Act's] general limit on serving a lead plaintiff.
Naiditch v. Applied Micro Circuits Corp., No. 01-CV-0649 K-AJB, 2001 WL 1659115, at *7 (S.D.Cal. Nov.5, 2001)(internal citations omitted).
Other courts which have recognized that the bar applies to institutional investors have held that the bar should be lifted where the other movants are not adequate candidates. Aronson v. McKesson HBOC, Inc., 79 F. Supp. 2d 1146 (N.D.Cal.1999). As example, in In re Enron Corp. Sec. Litig., the Court declined to appoint the Florida State Board of Administration as lead plaintiff, because of the unusual complexity of the Enron case and the fact that there were other qualified institutional investors seeking to lead that action. 206 F.R.D. at 456-57. Similarly, in In re Telxon Corp. Sec. Litig., 67 F. Supp. 2d 803 (N.D.Ohio 1999), the court rejected the Florida State Board Administration because it was already lead plaintiff in more than five actions and because it was not the most adequate lead plaintiff. Id. at 822. Nevertheless, the court recognized that the Reform Act "grants courts discretion to ignore the prohibition in some instances." Id. at 820.
Here not only is Louisiana Teachers the only institutional investor that has moved for lead plaintiff, its extensive experience in acting as a fiduciary will benefit the Class. Louisiana Teachers is currently involved in only a few other litigations which will not impede its ability to oversee this case. In fact, Louisiana Teachers, unlike the other movants, has already demonstrated its desire to vigorously prosecute this action by taking steps to protect the interests of the Class: Louisiana Teachers has filed an order to show cause to freeze Suprema's assets, entered an appearance in the Suprema bankruptcy action and filed a proof of claim to ensure that the Class rights are preserved. Louisiana Teachers is the only movant who submitted a declaration from its general counsel demonstrating that it had negotiated the level of attorneys' fees with its proposed counsel. (Decl. Erik Sandsedt, Ex 15, ¶ 8).[9] This Court has reviewed the fee *642 agreement in camera and finds it in conformity with recent Third Circuit decisions.
As such, this Court finds that Louisiana Teachers is entitled to presumptive lead plaintiff status and because no movant has submitted adequate evidence to rebut that presumption, it is named lead plaintiff. It is unnecessary to discuss the qualifications of the Hitel Group because this Court has already determined that Louisiana Teachers meets the requirements of the Reform Act and its losses of $600,000 are far in excess of the $127,500 suffered by the Hitel Group. However, this Court will briefly consider the Hitel Group's request to be appointed co-lead plaintiff.
D. Hitel Group
This Court rejects Hitel Group's request to be appointed co-lead plaintiff to represent the interests of those plaintiffs who have suffered losses in the Secondary Offering. Such application is moot because Louisiana Teachers, the named lead plaintiff, has suffered injuries in the Secondary Offering. Unlike Garden State, Louisiana Teachers brought claims under both the Securities Act and the Exchange Act. It follows then that the Hitel Group's interests are adequately protected.
II. Appointment of Lead Counsel
Under the Reform Act "[t]he most adequate lead plaintiff shall, subject to the approval of the court, select and retain counsel to represent the class." 15 U.S.C. § 78u-4(a)(3)(B)(v). This language makes clear that the lead plaintiff's "power to `select and retain' lead counsel belongs, at least in the first instance, to the lead plaintiff, and the court's role is confined to deciding whether to `approv[e]' that choice." In re Cendant Corp. Litig., 264 F.3d 201, 274 (3d Cir.2001). Both the Conference Committee Report and the Senate Report indicate that the court should not interfere with lead plaintiff's choice of counsel, unless such intervention is necessary to "protect the interests of the plaintiff class." H.R. Conf. Rep. No. 104-369, at 35 (1995), reprinted in 1995 U.S.C.C.A.N. 730, 734; S.Rep. No. 104-98 at 11-12 (1995) reprinted in 1995 U.S.C.C.A.N. 679, 690.
Here, Louisiana Teachers has selected Bernstein Litowitz to serve as lead counsel to the Class. Bernstein Litowitz is a reputable law firm with a long track record of successful prosecutions in securities fraud actions. As stated, Louisiana Teachers has negotiated a fee schedule with Bernstein Litowitz which, from in camera review, the Court finds compatible with recent Third Circuit decisions. Because Bernstein Litowitz appears to have the requisite ability and expertise to manage this litigation, and no reason has been presented why they should not be appointed, this Court approves Louisiana Teachers' selection of Bernstein Litowitz as lead counsel.
CONCLUSION
This Court grants Louisiana Teachers' motion, and it is hereby appointed lead plaintiff. In addition, its selection of Bernstein Litowitz as lead counsel is approved. The motions of StoneRidge Investment, Garden State and the Hitel Group are denied.
NOTES
[1] On February 27, 2002, these actions were consolidated sua sponte, by Order of the Court.
[2] Under the Reform Act, a plaintiff filing a new putative class action must provide notice to the class within 20 days of filing the action, informing class members of their right to file a motion for appointment as lead plaintiff. 15 U.S.C. § 78u-4(a)(3)(A)(i). Within 60 days of publishing the notice, any member(s) of the group may apply to the Court to be appointed as lead plaintiff. 15 U.S.C. § 78u-4(a)(3)(A) and (B). Finally, within 90 days after the publication of the notice the Court shall appoint as lead plaintiff the member(s) of the class that the Court determines to be the most capable of adequately representing the interests of class members. 15 U.S.C. § 78u-4(a)(3)(B).
[3] Federal Rule of Civil Procedure 23(a) sets forth the following prerequisites for a class action: (1) numerosity, (2) common questions of law or fact, (3) typicality of claims or defenses, and (4) fair and adequate representation of the class by the representative parties. Fed. R. Civ.P. 23(a).
[4] It should be noted that Garden State objects to StoneRidge Investment's loss calculation alleging that it only sets forth the transactions of the 22 entities with which it was involved, and not all of the transactions involving Suprema stock. Although this Court recognizes that it is permitted to require StoneRidge Investment to submit additional documentation as to their clients' holdings in Suprema, it does not request such materials because it is not entitled to lead plaintiff status on other grounds. See In re Cendant Corp. Litig., 264 F.3d 201 (3d Cir.2001).
[5] These five individuals are: (1) Keith C. Valentine who purchased 22,000 shares and suffered damages of $247,680; (2) Joseph Federici who purchased 11,500 shares and suffered damages of $142,375; (3) David B. Vafiades who purchased 10,000 shares and suffered damages $113,950; (4) William McEntee who purchased 9,000 shares and suffered damages of $105,750; and (5) Theodore I. Wishousky who purchased, with his family, 9,000 shares and suffered damages of $99,418.20.
[6] This Court recognizes that the typicality requirement of Rule 23(a)(3) merely requires "the same or similar grievances" and does not require identity of claims. Phillips v. Joint Legislative Comm. on Performance & Expenditure Review, 637 F.2d 1014, 1024 (5th Cir.1981); Alpern v. UtiliCorp United, 84 F.3d 1525, 1540 (8th Cir.1996). Typicality is satisfied when the claims of the representative plaintiffs stem from the same practice or course of conduct and are based on the same legal theory as the claims of class members. Hoxworth v. Blinder, Robinson & Co., 980 F.2d 912 (3d Cir.1992); see also Eisenberg v. Gagnon, 766 F.2d 770, 784 (3d Cir.) cert. denied, 474 U.S. 946, 106 S. Ct. 342, 88 L. Ed. 2d 290 (1985).
[7] According to the Amended Certification, during the past three years, Louisiana Teachers has served as a lead plaintiff in the following securities fraud class actions: (1) In re Total Renal Care Sec. Litig.; (2) In re Summit Tech., Inc. Sec. Litig.; (3) In re Gateway Sec. Litig.; (4) In re Network Assoc. (II) Sec. Litig.; (4) In re Dollar General Sec. Litig. and (5) In re Rambus Corp. Sec. Litig. Also, Louisiana Teachers has outstanding motions to serve as lead plaintiff in the following securities fraud class actions: (1) In re Xerox Corp. Sec. Litig. and (2) In re A.C.I.N. Ltd. Sec. Litig.
[8] This Court has found that the two movants who allegedly had greater financial losses, Suprema Specialties and Garden State, are not qualified to serve as lead plaintiff in this action.
[9] StoneRidge Investment submitted a letter explaining that it had negotiated counsels' fees, but only after this Court requested information of such negotiations during oral arguments.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2432911/
|
713 S.W.2d 425 (1986)
William GAYLE, a/k/a William Marvin Gaye, Appellant,
v.
The STATE of Texas, Appellee.
No. 01-85-0890-CR.
Court of Appeals of Texas, Houston (1st Dist.).
July 24, 1986.
*426 Roland B. Moore, III, Houston, for appellant.
John B. Holmes, Jr., Harris Co. Dist. Atty., David E. Brothers, Gladys Aguero, Harris Co. Asst. Dist. Attys., Houston, for appellee.
Before SAM BASS, COHEN and DUNN, JJ.
OPINION
SAM BASS, Justice.
A jury found appellant guilty of burglary of a habitation with intent to commit theft, enhanced by one prior conviction, and assessed his punishment at 75 years in prison. In three grounds of error, appellant contends that the evidence was insufficient, that the prosecutor made an impermissible comment on his failure to testify, and that the court was not authorized to enter a finding in the judgment as to the date of the commission of the offense. We affirm.
*427 Clarence Robertson, his wife, and J.P. Moye arrived at the Robertsons' apartment about 11:00 a.m. on May 10, 1984. Moye emptied some trash at the dumpster while Mr. and Mrs. Robertson went to their second floor apartment. The apartment door was locked. Robertson unlocked and opened his apartment door and found appellant standing inside his living room. Appellant tried to walk out past Robertson, but Robertson tackled him on the landing. Moye heard the commotion, came upstairs, and held appellant's arm while Robertson searched him for weapons. None were found. Appellant told his captors that his partner was inside the apartment with Robertson's gun. Robertson released his hold on appellant, and Moye tried to drag appellant down the stairs, but appellant broke loose on the stairs and ran past Moye. Moye caught appellant on the other side of the parking lot and held him till Robertson came to help. Two unidentified people appeared and gave Robertson and Moye a knife and a cord with which to tie appellant until the police arrived.
Robertson testified that when he left his apartment at 7:00 that morning, everything had been in its proper place, but when he opened the door at 11:00, the place had been ransacked, with drawers pulled out and his belongings strewn about. When he left that morning, his stereo was in the far corner of the living room towards the kitchen, and his computer was in his bedroom. When he returned, his stereo had been broken down into individual component parts and both the stereo and the computer had been moved to the front door.
Robertson testified that a watch, a gold chain, his old driver's license, and some old bank statements or books were missing from a dresser drawer in his bedroom. Robertson testified that a police officer returned these items and that the officer got the items from "the gentleman," but he did not see the police officer search appellant. On cross-examination, Robertson admitted that he did not really know from whom or where the police obtained the items and that the items were handed to him upstairs in his apartment.
Moye testified that he saw the officers search appellant and pull a chain and several other items out of appellant's left pants pocket. Moye said that Robertson also saw the police search appellant, and that Robertson was asked at that time whether these things belonged to him and his wife.
Houston police patrolman Pardue testified that he searched appellant and took from appellant's pocket a 16-inch chain with a locket, a lady's watch, a bank savings book, five old driver's licenses with Robertson's name on them, and a small silky bag with some change in it. The patrolman testified that Robertson identified the items as being his property, and the items were returned to him. The patrolman also testified that a window of the apartment had been pried or raised open.
The indictment alleged that appellant entered Robertson's habitation with intent to commit theft. In his first ground of error, appellant contends that the evidence was insufficient to show that he had the intent to commit theft at the time he entered the complainant's apartment. He argues that the destruction caused to the apartment showed that his intent was to commit criminal mischief, not theft.
Evidence that a defendant was found in recent, unexplained, personal possession of any items taken in a burglary is sufficient to convict for the burglary. Jackson v. State, 645 S.W.2d 303, 306 (Tex. Crim.App.1983). Appellant argues on appeal that this theory may not be used to affirm his conviction, because the evidence showing such possession was inadmissible hearsay. No objection was made at trial to this testimony. The general rule in Texas has been that hearsay evidence, even admitted without objection, may not be considered in determining the sufficiency of the evidence. See Gardner v. State, 699 S.W.2d 831, 834-35 (Tex.Crim.App.1985). This rule has now been overruled by Chambers v. State, 711 S.W.2d 240 (Tex. Crim.App.1986). A reviewing court considering sufficiency of the evidence questions *428 will now consider all the evidence, including unobjected to hearsay. Id. at 247.
Evidence that the complainant's property was found in appellant's pocket; that appellant was inside the complainant's apartment without permission; that entry was through a window; that appellant attempted to flee; that the apartment had been ransacked; that many of the complainant's possessions had been moved from their accustomed place; and that the complainant's stereo and computer had been moved to a spot near the front door is sufficient to infer intent to commit theft. See Draper v. State, 681 S.W.2d 175, 177 (Tex.App.Houston [14th Dist.] 1984, pet. ref'd).
The first ground of error is overruled.
Appellant next contends that, during argument on guilt, the prosecutor commented on appellant's failure to testify. The federal and Texas constitutions, as well as Texas statutory law, prohibit a prosecutor from commenting on a defendant's failure to testify. Short v. State, 671 S.W.2d 888, 890 (Tex.Crim.App.1984); U.S. Const. amend. V; Tex. Const. art. I. § 10; Tex.Code Crim.P.Ann. art. 38.08 (Vernon 1979). To constitute a comment on the failure to testify, the language of a prosecutor's statement must be either manifestly intended to be, or be of such character that the jury would naturally and necessarily take it to be a comment on the defendant's failure to testify. To constitute reversible error, an indirect comment on the failure to testify must call for a denial of an assertion of fact or contradictory evidence that only the defendant is in a position to offer. Short, 671 S.W.2d at 890.
Appellant contends that the following argument necessarily referred to appellant's failure to testify, because the appellant was the only witness the defense could have called to rebut the State's case. The prosecutor argued, "And where, ladies and gentlemen, did you hear from anyone on this witness stand that there was a conflict that this happened on May the 10th of 1984? Who told you that." The prosecutor was interrupted by defense counsel's objection that the prosecutor was commenting on the defendant's failure to testify. The court told the jury to go by the court's charge, but did not rule on the objection.
Generally, an objection to jury argument is waived if no ruling is obtained thereon. Medrano v. State, 658 S.W.2d 787, 792-93 (Tex.App.Houston [1st Dist.] 1983, pet. ref'd). No objection is required, however, if the argument is so prejudicial that no instruction could cure the harm. Green v. State, 682 S.W.2d 271, 295 (Tex.Crim.App. 1984). A comment on a defendant's failure to testify is considered so inflamatory that an instruction to disregard is not sufficient to cure the error. Johnson v. State, 611 S.W.2d 649, 650-51 (Tex.Crim.App.1981). Appellant's objection was not waived.
Defense counsel argued to the jury that the evidence was in conflict, because complaining witness Robertson testified that appellant ran down the stairs past Moye, and Moye testified that he reached the top of the stairs and held appellant while Robertson searched for a weapon. A review of the statement of facts shows little conflict between the accounts given by Moye and Robertson, though each adds details not mentioned by the other. Nevertheless, the defense argued that both accounts could not be true. The defense also emphasized other alleged inconsistencies in the testimony. Defense counsel argued that the conflicts in the testimony of the three State's witnesses showed that the testimony of Robertson and Moye was fabricated or at least created reasonable doubt of appellant's guilt.
When the prosecutor made her closing argument in response to the defense argument, she attempted to persuade the jury that the State's witnesses were not lying, and began to point out the lack of conflict in the important particulars of the case. It was at this point that she made the complained of comment. The implication was not that appellant failed to testify, but that there was no conflict among the State's witnesses regarding the fact that the burglary took place on May 10, 1984. *429 The jury would have neither naturally nor necessarily taken the comment to refer to appellant's failure to testify.
The second ground of error is overruled.
Finally, appellant contends that the trial court was not authorized to enter a finding in the judgment as to the date of the commission of the offense where appellant's guilt and punishment were determined by a jury. Appellant requests this Court to delete the finding from the judgment, and argues that this situation is analogous to the finding of use of a deadly weapon pursuant to Tex.Code Crim.P.Ann. art. 42.12, § 3g(a)(2) (Vernon Supp.1986). When the jury is the trier of fact at both the guilt and punishment stages of trial, the trial judge has no authority to enter in the judgment a finding on the use of a deadly weapon unless the jury has answered affirmatively a special issue on the question or has impliedly found the use of a deadly weapon by finding the defendant "guilty as charged in the indictment." In the latter instance, the finding may be implied if the indictment specifically alleged the use of a "deadly weapon" or the weapon pled is per se a deadly weapon. Fann v. State, 702 S.W.2d 602, 604-05 (Tex.Crim.App.1985) (op. on reh'g); Polk v. State, 693 S.W.2d 391, 396 (Tex.Crim.App.1985).
Appellant argues that no special issue on the date of the offense was submitted to the jury, and the date could not be implied from the jury's finding of guilt "as charged in the indictment," because the indictment alleged the date of the offense as "on or about May 10, 1984."
Effective January 1, 1986, Tex.Code Crim.P.Ann. art. 42.01, § 1(14) (Vernon Supp.1986) provides, "The judgment should reflect ... the date of the offense...." There is no directive regarding an "affirmative finding" on the date of the offense, as found in article 42.12, § 3g(a)(2) regarding use of a deadly weapon. The evidence as to the date of the offense was not in conflict.
We hold that the trial court has authority to enter the date of the offense on the judgment when the indictment alleges that the offense was committed "on or about" a certain date, and the evidence undisputedly shows that the offense was committed on that date. See Latson v. State, 713 S.W.2d 137 (Tex.App.Houston [1st Dist.] 1986) (holding that the trial court has authority to enter in the judgment the date of the offense when the trial judge is the trier of fact on punishment).
The third ground of error is overruled.
The judgment is affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2432913/
|
713 S.W.2d 164 (1986)
Edward J. YEVAK and Gene Yevak, Appellants,
v.
Mark YEVAK and Stacy Yevak, Appellees.
No. 9463.
Court of Appeals of Texas, Texarkana.
June 17, 1986.
Rehearing Denied July 22, 1986.
Kirk Patterson, Stewart, Hemmi & Pennypacker, San Antonio, for appellants.
Jerry N. Dennard, James G. Murry, Howard G. Baldwin, Jr., San Antonio, for appellees.
BLEIL, Justice.
Edward Yevak, and his wife, Gene, appeal from the judgment granting a divorce *165 between their son, Mark, and Stacy Yevak. They complain that the trial court erred in dismissing their plea in intervention. We agree and reverse.
Mark and Stacy Yevak married in November, 1980. One child was born of this marriage. On January 11, 1984, Mark and Stacy Yevak filed for divorce. Mark's parents, Edward and Gene Yevak, filed a plea in intervention and on February 25, 1985, the trial court appointed them temporary managing conservators of the child. On March 18, the trial court dismissed the plea in intervention and vacated the order appointing the grandparents temporary managing conservators. On March 20, the trial court divorced Mark and Stacy Yevak and named them joint managing conservators of the child.
The grandparents complain that the trial court erred in dismissing their plea in intervention because grandparents do have standing to intervene in suits concerning managing conservatorship of their grandchildren. They claim that the trial court erred in applying Tex.Fam.Code Ann. § 11.03 (Vernon 1975) to intervenors, instead of limiting it to persons initiating suits affecting the parent-child relationship. During the time relevant to this suit, Section 11.03 provided:
A suit affecting the parent-child relationship may be brought by any person with an interest in the child, including the child (through a representative authorized by the court), any agency of the state or of a political subdivision of the state, and any authorized agency. A person has an interest in a child if the person has had possession and control of the child for at least six months immediately preceding the filing of the petition or is named in Section 11.09(a) of this code as being entitled to service by citation.
Tex.Fam.Code Ann. § 11.09(a) (Vernon Supp.1986) provided:
Except as provided in Subsection (b) of this section, the following persons are entitled to service of citation on the filing of a petition in a suit affecting the parent-child relationship:
(1) the managing conservator, if any;
(2) possessory conservators, if any;
(3) persons, if any, having access to the child under an order of the court;
(4) persons, if any, required by law or by order of a court to provide for the support of a child;
(5) the guardian of the person of the child, if any;
(6) the guardian of the estate of the child, if any;
(7) each parent as to whom the parent-child relationship has not been terminated or process has not been waived under Section 15.03(c)(2) of this code;
(8) in a suit in which termination of the parent-child relationship between an illegitimate child and its mother is sought, the alleged father or probable father, unless there is attached to the petition an affidavit of waiver of interest in a child executed by the alleged father or probable father as provided in Section 15.041 of this code or unless the petition states that the identity of the father is unknown; and
(9) in a suit to determine the paternity of a child, the alleged father, unless the alleged father is a petitioner.
In the order dismissing the grandparents' plea in intervention, the trial court found:
[T]hat the Intervenors, Edwin J. Yevak and Gene Yevak, had not had possession of the minor child, Shawn Christopher Yevak, for six (6) months prior to the time of the filing of their unverified intervention herein, and were not persons who have an interest in such child as set out in Sec. 11.03 of the Family Code of the State of Texas, and have no standing to maintain an intervention herein, ....
There is a significant distinction between someone who initiates a suit and someone who intervenes in a suit. Young v. Young, 693 S.W.2d 696 (Tex.App.-Houston [14th Dist.] 1985, writ dism'd). The grandparents do not fit into any category of persons entitled to bring or initiate a suit affecting the parent-child relationship under Tex. Fam.Code Ann. § 11.03 (Vernon 1975), and *166 § 11.09(a) (Vernon Supp.1986). However, a grandparent may intervene in this type of action, once the lawsuit has been initiated by a person authorized to do so under Sections 11.03 and 11.09(a).
A grandparent's intervention may enhance the trial court's ability to adjudicate the cause in the best interests of the child. This intervention is subject to the court's discretion as to whether they may remain in the case because of a justiciable interest in the child. Young v. Young, supra. Tex.R.Civ.P. 60 provides that any party may intervene, subject to being stricken by the court for sufficient cause on the motion of the opposite party. In her special exceptions to the plea in intervention, Stacy Yevak asked that the plea in intervention be stricken. So, while the grandparents could intervene in the suit, the trial court had the discretion to strike their plea in intervention. However, we conclude that," having allowed the intervention, the court abused its discretion in not allowing evidence to be presented so that the question of whether sufficient cause to strike the intervention could be determined from the evidence.
The grandparents further maintain that the trial court erred in dismissing their plea in intervention because Sections 11.03 and 11.09(a) recognize the standing of persons who have been appointed temporary managing conservators, and the grandparents had been appointed temporary managing conservators. The petition was filed January 11, 1985, the grandparents filed their plea in intervention on October 23, 1984, and the grandparents were named as managing conservators of the child on February 25, 1985. At either the date the petition was filed or the date the plea in intervention was filed, the grandparents did not meet the requirements of Sections 11.03 and 11.09(a), because they were not at those times temporary managing conservators of the child.
We reverse the trial court's judgment and remand the cause for a determination of whether sufficient cause exists to strike the petition in intervention.
GRANT, Justice, partially concurring and partially dissenting.
I concur with the majority that this case should be reversed and remanded to the trial court; however, I dissent on the majority ruling that the purpose for remanding the cause is for a determination of whether sufficient cause exists to strike the plea in intervention.
With careful ambiguities, the majority has avoided addressing the issues in the case and has reached an enigmatic conclusion. The majority opinion requires a hearing to allow the introduction of evidence on the question of whether sufficient cause to strike the intervention exists. Yet, the majority leaves to obscurity as to what this evidence might pertain. Without guidance, the trial court and the litigants must conduct a proceeding to ascertain what is already undisputed in the record.
The majority cites no case, statute or rule requiring such a hearing.
Pursuant to Tex.R.Civ.P. 60, a motion was made by the party opposing the intervention. The gist of this motion is that the intervenors lack standing or lacked a justiciable interest. The trial judge is allowed under Rule 60 to determine the justiciable interest on the basis of the sufficiency of the petition in intervention. The sufficiency of the petition is tested by its allegations of fact on which the right to intervene depends. Rogers v. Searle, 533 S.W.2d 440 (Tex.Civ.App.-Corpus Christi 1976, no writ); Wilson v. County of Calhoun, 489 S.W.2d 393 (Tex.Civ.App.-Corpus Christi 1972, writ ref'd n.r.e.). The petition in intervention will fail if no right to intervene is shown because no sufficient interest is alleged by the party seeking to intervene. Mulcahy v. Houston Steel Drum Co., 402 S.W.2d 817 (Tex.Civ.App.-Austin 1966, no writ).
The trial judge is specific in his reason for dismissing the plea of intervention. The order states that the intervenors had not had the child for six months prior to the time of filing of their intervention, that they were not persons who have an interest *167 in such child as set out in Section 11.03 of the Family Code, and that they have no standing to maintain the intervention. The majority has not demonstrated why the trial judge could not base his conclusion on the undisputed facts alleged in the pleadings.
No point of error is made on appeal concerning the need for a hearing for the presentation of evidence. It is undisputed by the parties that the intervenors were the grandparents of the child and that they had possession of the child beginning July 15, 1984 until March 18, 1985.[1] (The beginning date of possession was agreed to be counsel in a hearing before the court on March 18, 1985.)
It should also be pointed out that the failure of the trial court to conduct an evidentiary hearing on the intervention was not a point raised by the appellants on the appeal of this case.
There are three grounds which are undisputed in the record which give the intervenors standing or a justiciable interest in this case.
The first ground is established by the case of Young v. Young, 693 S.W.2d 696 (Tex.App.-Houston [14th Dist.] 1985, writ dism'd). The majority opinion relies strongly on the dicta in the Young case, but ignores the ratio decidendi of that case. In Young v. Young, supra, the appellants challenged the standing of the intervenors and the court held as a matter of law that grandparents have a justiciable interest in a proceeding to name the managing conservator of their grandchild.
In the case of Watts v. Watts, 573 S.W.2d 864 (Tex.Civ.App.-Fort Worth 1978, no writ), the court held that grandparents have the type of interest in their grandchildren which gives them standing to seek modification of conservatorship through their appointment as managing conservator.
The second ground establishing a justiciable interest involves the possession of the child for more than six months. Section 11.03 of the Family Code at the time of the dismissal of the intervenors provided that a person has an interest in a child if the person has had possession and control of the child for at least six months immediately preceding the filing of the petition. Although the six months time period had not elapsed at the time of the filing of the original petition, approximately eight months of possession had occurred at the time of the filing of the amended petition. This seems to be analogous to the six months residential requirements for which the courts have repeatedly held that the time of the filing of the amended petition should be considered as the filing of the suit. Perusse v. Perusse, 402 S.W.2d 931 (Tex.Civ.App.-El Paso 1966, no writ); Whitsett v. Whitsett, 201 S.W.2d 114 (Tex.Civ. App.-Fort Worth 1947, writ ref'd n.r.e.); Coleman v. Coleman, 20 S.W.2d 813 (Tex. Civ.App.-Eastland 1929, no writ). Under this line of cases, the courts have held that even though the party had not established the six months residency in the county at the time of the filing of the original petition, the courts would look to the residential requirements at the time of the filing of the amended petition. This same reasoning should apply to requirements of six months for possession of a child.
Section 11.03 of the Family Code deals with who may bring a suit affecting the parent-child relationship. A person or entity has a right to intervene if the intervenor could have brought the same action or any part thereof in his own name. Brewer v. Mendez, 620 S.W.2d 709 (Tex.Civ.App.-Dallas 1981), rev'd on other grounds, 626 S.W.2d 498 (Tex.1982).
The third established ground which gave the parents standing is under Section 11.09(a) of the Family Code which provides that a managing conservator, among others, is entitled to service of citation on the *168 filing of a petition in a suit affecting the parent-child relationship. The intervenors were appointed temporary managing conservators on February 25, 1985. This list of persons entitled to service of citation on commencement of the suit affecting parent-child relationship is a legislative determination of persons who have a relationship with the child of sufficient legal dignity to be entitled to participate in an action involving the child. Pratt v. Texas Department of Human Resources, 614 S.W.2d 490 (Tex.Civ.App.-Amarillo 1981, writ ref'd n.r.e.). The persons so listed are persons who have "an interest in the child" giving them standing to bring suit affecting the parent-child relationship. Again, the standing to bring suit is the equivalent of standing to intervene. This temporary managing conservatorship was set aside on March 18, 1985, being the same date that the plea of intervention was dismissed and the final decree of divorce was granted.
By ignoring precedents and sidestepping the issue, the majority opinion leaves the salient question unanswered: What constitutes standing to maintain an intervention? This is the only issue raised by the motion to dismiss, the order of dismissal and the appeal.
What is accomplished by the trial court conducting an evidentiary hearing? No doubt, the intervenors will still be the grandparents of the child; the intervenors will still be shown to have been in possession of the child for eight months at the time of the filing of the amended motion to intervene; and they will still be the persons shown by the record to have been appointed temporary managing conservators.
And the prayer of the ancient Greek Ajax is still to be heard: "Reverse our judgment if it pleases you, but at least say something clear to help us in the future."
For the foregoing reasons, the order dismissing the intervenor should be set aside, and the grandparents having established a justiciable interest should be permitted to present their case on its merits.
NOTES
[1] If the time of possession was in dispute, then the standing would become a factual question to be decided by the court. Cruz v. Scanlan, 682 S.W.2d 422 (Tex.App.-Houston [1st Dist.] 1984, no writ).
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2432922/
|
713 S.W.2d 621 (1986)
STATE BOARD OF CHIROPRACTIC EXAMINERS, Appellant,
v.
David C. CLARK, D.C., Respondent.
No. WD 37718.
Missouri Court of Appeals, Western District.
July 22, 1986.
*622 William L. Webster, Atty. Gen. and Sara Rittman, Asst. Atty. Gen., Jefferson City, for appellant.
Roger W. Calton and Judith Emick DuChateau, Independence, for respondent.
Before TURNAGE, P.J., and SHANGLER and MANFORD, JJ.
*623 MANFORD, Judge.
This is a disciplinary action against a licensee pursuant to § 331.060, RSMo Supp. 1983. The Administrative Hearing Commission dismissed said cause. The circuit court entered its judgment affirming the Commission's decision and this appeal followed. The judgment is affirmed.
Appellant presents two points which, in summary, charge the trial court erred in affirming the decision of the Administrative Hearing Commission because (1) the evidence was sufficient to establish that respondent's conduct constituted the practice of medicine, and (2) the evidence was sufficient to establish that he engaged in fraud, deception or misrepresentation in his practice.
Appellant filed a formal complaint against respondent, alleging that certain activities of respondent were beyond the practice of Chiropratic and that said activities were within the practice of medicine, physical therapy and cosmetology. In addition, appellant alleged that respondent had engaged in fraud, deception, or misrepresentation to the public in the practice of chiropractic by advertising said activities.
Appellant's evidence consisted of the deposition of respondent, a copy of the advertisement, and a "Talk Paper" issued by the Food and Drug Administration. Respondent's evidence consisted of his own testimony, minutes of the Board of Chiropractic Examiners, and the deposition of Kay Sale, Executive Director of the Board of Chiropractic Examiners.
The complaint filed by appellant, and indeed the entire proceedings herein, deal directly with respondent's use of and the advertisement of the use of a device called a helium neon laser. This device concentrates a beam of light and when directed toward human skin, produces no perceptible hot or cold sensation. The laser beam was directed to certain points of the human body described as acupuncture points. According to the evidence, the human body has twelve energy channels, along which the acupuncture points are located. As described, the laser makes no puncture of the skin but causes the light beam to enter the skin just below the surface. This procedure was described as Meridian Therapy.
Respondent made use of the laser in such manner as to effect a change in musculture and to tonify the muscles. The laser and method were used to perform nonsurgical face lifts, habit control, and bust rejuvenation. The habit control was the smoking habit. Bust rejuvenation was aimed at increasing the female breast size, but respondent testified that he performed the same only once and that was upon a former employee who volunteered herself to the procedure. Respondent testified that he was not satisfied with the results and abandoned the procedure after the initial effort. Concerning the habit control, respondent testified as to mixed results in its success and that he later abandoned that procedure. He further described the use of the laser regarding face lifts.
Throughout the evidence, respondent introduced, through his testimony, uncontradicted claims and descriptions of the use of the laser in conjunction with the manipulation of the patient's body by hand and that such use of the laser was a reflex-type treatment of acupressure.
Through respondent's testimony, it was disclosed that the use of the laser in conjunction with special manipulation was a reflex-type treatment of acupressure points and that such procedures are taught and approved by Missouri Chiropractic colleges. Respondent further testified that such procedures are within sound principles of chiropractic and in his opinion, fully within the scope of chiropractic practice.
The evidence revealed that respondent placed an advertisement in the Yellow Pages, the pertinent part of which read:
* Specializing in chronic health problems
* Non-force adjusting procedures
* Laser bio-stimulation (Non-surgical face lift, bust rejuvenation, habit control)
* We also offer health care plans designed to insure the health of the entire family at a price you can afford.
*624 Also in evidence was the fact that 4 CSR 70-2.030 was in effect. That state regulation reads:
4 CSR 70-2.030 Adjunctive Procedures
PURPOSE: This rule outlines adjunctive procedures that may be used by doctors of chiropractic.
(1) Those adjunctive chiropractic procedures presently approved by the board include, but are not limited to:
(A) Heat and heat producing devices;
(B) Ice and cooling packs;
(C) Extension therapy; or
(D) Therapeutic exercise, muscle therapy, reflex techniques, postural and structural supports.
Appellant initiated these proceedings under and pursuant to Chapter 331, RSMo 1978 et seq. The complaint alleged that the use of the laser by respondent, which in the complaint, the advertisement, and the evidence was referred to as "laser bio-stimulation", was outside the scope of the practice of chiropractic as defined by § 331.010, RSMo Supp. 1982. In addition, the complaint alleged that such practice by respondent was in fact within the practice of medicine as defined within § 334.010, RSMo 1978.
Section 331.010, RSMo Supp. 1982 reads: 331.010. Definitions.
1. The "practice of chiropractic" is defined as the science and art of examination, diagnosis, adjustment, manipulation and treatment of malpositioned articulations and structures of the body. The adjustment, manipulation, or treatment shall be directed toward restoring and maintaining the normal neuromuscular and musculoskeletal function and health. It shall not include the use of operative surgery, obstetrics, osteopathy, podiatry, nor the administration or prescribing of any drug or medicine nor the practice of medicine. The practice of chiropractic is declared not to be the practice of medicine and operative surgery or osteopathy within the meaning of chapter 334, RSMo, and not subject to the provisions of the chapter.
2. A licensed chiropractor may practice chiropractic as defined in subsection 1 of this section by those methods commonly taught in any chiropractic college recognized and approved by the board.
3. Chiropractors may advise and instruct patients in all matters pertaining to hygiene, nutrition, and sanitary measures as taught in any chiropractic college recognized and approved by the board.
Section 334.010, RSMo 1978 reads:
334.010. Unauthorized practice of medicine and surgery, prohibitedIt shall be unlawful for any person not now a registered physician within the meaning of the law to practice medicine or surgery in any of its departments, or to profess to cure and attempt to treat the sick and others afflicted with bodily or mental infirmities, or engage in the practice of midwifery in this state, except as herein provided.
Further, appellant charged that respondent's practice was within the practice of cosmetology, as defined in § 329.020, RSMo 1978, and the practice of physical therapy, as defined by § 334.500(3), RSMo 1978. Those sections read:
329.020. Classification of practitioners
The following classifications of practices shall be adopted and understood to define practitioners within the meaning of this chapter:
(1) Class AAny person who engages for compensation in any one or any combination of the following practices, to wit: Arranging, dressing, curling, singeing, waving, permanent waving, cleansing, cutting, bleaching, tinting, coloring or similar work upon the hair of any person by any means shall be construed to be practicing the occupation of a hairdresser. Any person who with hands or mechanical or electrical apparatuses or appliances, or by the use of cosmetic preparations, antiseptics, tonics, lotions or creams engages for compensation in any one or any combination of the following practices, to wit: Massaging, cleaning, stimulating, manipulating, exercising, *625 beautifying or similar work, upon the scalp, face, neck, arms, or bust or removing superfluous hair by means other than electricity about the body of any person shall be construed to be practicing the occupation of a cosmetologist or cosmetician;
(2) Class BAny person who engages for compensation in the manicuring of nails shall be construed to be practicing the occupation of a manicurist.
334.500. Definitions
As used in sections 334.500 to 334.620
* * * * * *
(3) "Professional physical therapy" means the specialized treatment of a human being by the use of exercise, massage, heat or cold, air, light, water, electricity, or sound, for the purpose of correcting or alleviating any physical or mental condition or preventing the development of any physical or mental disability, or the performance of tests of neuromuscular function as an aid to the diagnosis or treatment of any human condition, but does not include the use of surgery or obstetrics nor the administration, prescribing or dispensing of any drug or medicine, X-radiation, radioactive substance, diagnostic X-ray, electrocautery or electrosurgery.
The complaint then charged that such practice by appellant was both an illegal and criminal act, as defined by § 334.250, RSMo Supp. 1982, § 329.250, RSMo Supp. 1982, and § 334.610, RSMo Supp. 1982, all of which read:
334.250. Unlawful practice, fraudulent filing of license or identification, penalties.
1. Any person who violates section 334.010 shall, upon conviction, be adjudged guilty of a class A misdemeanor for each and every offense; and treating each patient is considered a separate offense.
2. Any person filing or attempting to file as his own a license of another, or forged affidavit of identification, shall be guilty of a class C felony and upon conviction thereof shall be subjected to such fine and imprisonment as is provided by the statutes of this state for the crime of forgery.
329.250. Violation of lawpenalty
Any person who shall act in any capacity other than by demonstration to or before license cosmetologists, or maintain any business wherein a certificate of registration is required pursuant to this chapter, without a certificate of registration, or any person who shall violate any provision of this chapter is guilty of a class C misdemeanor.
334.610. License to practice required, exceptionsunauthorized use of titles prohibited.
Any person who holds himself out to be a professional physical therapist or a licensed physical therapist within this state and who, in fact, does not hold such license is guilty of a class B misdemeanor and, upon conviction, shall be punished as provided by law. Any person who, in any manner, represents himself as a physical therapist, or who uses in connection with his name the words or letters "physical therapist", "physiotherapist", "registered physical therapist", "P.T.", "Ph.T.", "P.T.T.", "R.P.T.", or any other letters, words, abbreviations or insignia, indicating or implying that he is a physical therapist without a valid existing license as a physical therapist issued to him pursuant to the provisions of this chapter, is guilty of a class B misdemeanor. Nothing in this chapter shall prohibit any person licensed or registered in this state under chapter 331, RSMo, or any other law from carrying out the practice for which he is duly licensed or registered; nor shall it prevent professional and semiprofessional teams, schools, YMCA clubs, athletic clubs and similar organizations from furnishing therapy services to their players and members. This section, also, shall not be construed so as to prohibit masseurs and masseuses from engaging in their practice not otherwise prohibited by law and provided they do not represent themselves as physical therapists.
*626 The F.D.A. "Talk Paper" referenced above was a cautionary bulletin concerning the use of the neon laser which the evidence revealed respondent used in his practice.
In its complaint, appellant alleged that the "use of bio-stimulation" is not approved by the State Board of Chiropractic Examiners pursuant to 4 CSR 70-2.030. The reading of 4 CSR 70-2.030 and the further reference to all evidence upon the record simply does not support the foregoing conclusion of appellant. It is noted that 4 CSR 70-2.030 contains the following language: "(D) Therapeutic exercise, muscle therapy, reflex techniques, postural and structural supports." (emphasis added)
Throughout the whole of the evidence, respondent described his use of the laser in conjunction with spinal manipulation and that the use of the laser was a reflex technique. This evidence was not refuted by appellant.
It is also noted that the evidence revealed that the use of the laser is a technique or procedure taught and approved by schools of chiropractic. This evidence also was not refuted by appellant.
The simple fact is that upon the whole of the evidence in this proceeding, appellant failed to sustain its burden of proof. Under the evidence, the use of the laser was described as reflex technique. The state regulation authorizes such procedure by chiropractors.
When § 331.010 is reviewed, it appears to limit the practice of chiropractic to "the science and art of examination, diagnosis, adjustment, manipulation and treatment of malpositioned articulations and structures of the body ..." §331.010, RSMo Supp. 1982.
Appellant asserts that the practice of chiropractic is limited to, or is defined as, the "science and art of palpating and adjusting by hand the movable articulations of the human spinal column ..." as defined under § 331.010, RSMo 1978, and before amendment of § 331.010.
While appellant's assertion might be, in regard to human benefit and health, the safer and more appropriate limitation to be imposed upon the practice of chiropractic, appellant, in its urging of such a limitation, ignores its own state regulation which seemingly expands the practice of chiropractic well beyond both the 1978 statute and the 1982 amended version.
It is noted that rules duly promulgated pursuant to properly delegated authority have the force and effect of law. Page Western, Inc. v. Community Fire Protection District of St. Louis County, 636 S.W.2d 65, 68 (Mo. banc 1982); Macalco, Inc. v. Gulf Insurance Co., 550 S.W.2d 883, 887 (Mo.App.1977). Four CSR 70-2.030 supra is not challenged in this proceeding by either party so the reasonableness of said rule is not in issue. If it were in dispute, this court would then have to sustain said rule if it were found to be reasonable. Garner v. Missouri Division of Family Services, 591 S.W.2d 27, 28 (Mo. App.1979).
In addition, while appellant argues for the more limited definition of chiropractic, it acknowledges and supposedly supports additional and expanded techniques including the use of lasers being taught and developed in schools of chiropractic. So, in addition to having failed to carry its burden of proof that respondent, by his activities, engaged in the practice of medicine, appellant presents a paradoxical argument upon the entire issue of limitation as to the definition of the practice of chiropractic.
It should be noted that appellant offered absolutely no evidence to support its allegations that respondent engaged in the practice of cosmetology and/or physical therapy.
A word of caution is necessary at this point to prevent a misunderstanding of this court's opinion. This court, by its decision herein, does not pass upon the question of whether respondent's use of "laser bio-stimulation" is or should be an accepted procedure or technique utilized by chiropractors or anyone else. This decision simply *627 turns upon appellant's failure to carry its burden of proof under its allegation that such technique is, under our statutory law, the practice of medicine, cosmetology, or physical therapy. This court does not endorse, and indeed is prohibited from endorsement of this procedure or technique or any other. It is not the role of this court to evaluate or endorse any such procedure or technique, but rather, this court's function is but to rule upon the legal issues which might arise relative to any dispute concerning any such techniques or procedures.
Appellant further contends that such activities engaged in by respondent were tantamount to illegal or criminal acts under § 334.250, RSMo Supp. 1982, § 334.610, RSMo Supp. 1982, and § 329.250, RSMo Supp. 1982.
It suffices to say that since appellant has failed to carry its burden of proof that respondent's activities constituted the practice of medicine, cosmetology, and/or physical therapy, respondent, under the evidence upon this record, could not be held criminally responsible under § 334.250, § 334.610, and/or § 329.250 supra.
Appellant further charged that respondent is guilty of fraud, deception, or misrepresentation to the public by the placement and continuation of the above advertisement in the Yellow Pages. There is simply no evidence which reveals that respondent intentionally sought to defraud, deceive, or misrepresent the techniques and procedures he employed to the general public. The advertisement itself is self-explanatory. The only evidence upon the record concerning the advertisement was supplied by respondent. There is no need to restate in detail the evidence, but rather, it suffices to state that respondent had been trained in the use of the laser by a recognized chiropractic authority, such technique is taught in chiropractic schools, appellant admits that such technique is taught in chiropractic schools, and respondent testified that such technique is a reflex technique used by him in conjunction with spinal manipulation.
The placement of the advertisement, as the evidence reveals, simply followed respondent's training in the technique, its adoption within his practice as a chiropractor, and his notice to the general public that he engaged in such technique and practice. There is no evidence upon the record to even suggest, let alone establish, any intent to defraud, deceive, or misrepresent anything to the general public by respondent. Appellant's argument that fraud, deception, and/or misrepresentation is revealed or can be inferred from the continuation of the advertisement after respondent discontinued this technique proves absolutely nothing as regards the elements of fraud, deception, or misrepresentation. Respondent testified that although the advertisement continued in the Yellow Pages, he did inquire in 1982 as to changing the advertisement and was advised that the advertisement could not be changed during the period in question. Respondent further testified that although requested to do so by patients, he did not perform any bust rejuvenation following the one occasion where he did so upon a former employee who volunteered to participate. The evidence further revealed that respondent ultimately discontinued the use of the laser entirely.
Under the facts and circumstances herein, and particularly upon the failure of appellant to introduce evidence of any intent to defraud, deceive, and/or misrepresent to the general public by respondent, it must be concluded that respondent did not intend or attempt to defraud, deceive, or misrepresent anything to anyone.
As noted above, it is not the prerogrative of this court to comment or pass upon the value or the validity of the "laser biostimulation" technique, or any other technique for that matter, and such determination as to value, validity, and/or acceptability is, in fact, within the purview of appellant. Thus, if appellant seeks a greater limitation or more precise definition of any technique or procedure, then appellant should do so by and through proper legislative channels and/or promulgate and seek adoption of *628 more precise and definitive state regulations to implement our statutes. To be sure, it is perhaps an impossible task to adopt either statutes or rules which would cover every possible situation, but if appellant desires specificity regarding chiropractic procedures and practices, then appellant bears the responsibility to insure that both the statutes and rules pertaining thereto are of that caliber. In any instance, where, as herein, appellant seeks the discipline of any licensee or the interpretation of any rule and/or regulation, appellant, just as any other litigant in our courts, must carry its burden of proof upon the issues.
Two additional matters need to be discussed. Both direct themselves to the decision entered by the Administrative Hearing Commission, but neither affect the result reached by the Administrative Hearing Commission or this court.
First, the Commission concludes:
Assuming for the moment that Respondent's actions were outside the scope of chiropractic, that point is insufficient under the pleaded provision to render Respondent or his license subject to discipline. Rather, Petitioner must prove its allegation that Respondent "is guilty of any criminal action," meaning in this case practice of one or more of the three aforementioned professions. Only after such a finding could we consider whether Respondent's actions were outside the scope of the practice of chiropractic.
The foregoing conclusion is in error. It is not the burden of appellant herein to prove a licensee "is guilty of any criminal action." Rather, appellant must prove, upon sufficient evidence, that a licensee, by his conduct, has performed beyond the permissible scope of chiropractic and by virtue of such proof, thereby establish the fact that a licensee has engaged in the practice of medicine, cosmetology, and/or physical therapy or some other prohibited area from which criminal penalty as prescribed by our statutes follows. Appellant is not put upon any burden of proof to show a licensee has committed a criminal or illegal act, but rather, actions by a licensee which show the licensee to have engaged in any prohibited practice by statute is defined as illegal or criminal and by statute, carries the applicable penalty upon a conviction therefor. The appellant's task is, upon its proof, to establish that a licensee has engaged in prohibited acts which fall outside the scope of chiropractic and perhaps by virtue thereof, fall into some other category of defined practice such as medicine, cosmetology, and/or physical therapy. The Commission then, as fact finder, must rule whether the evidence of appellant proves a licensee has, in fact, committed some act outside the scope of chiropractic.
On another note, the conclusions of the Commission appear to suggest that in the determination of issues such as are presented herein, that medical testimony is required. Such is not the case. There is nothing that prohibits the Commission from receiving expert testimony, but also there is nothing which requires such testimony. The Commission, as the trier of fact, bears the responsibility of determining issues presented to it. In the case of whether the actions of a licensee fall outside the scope of chiropractic, such a matter is one of law to be determined by the Commission and while expert testimony, in the judgment of the Commission, might be helpful, it is not in any case required. The conclusion that the Commission was "unable to conclude that respondent's actions violated § 331.060, RSMo 1978 by falling within the scope of the professions of medicine, physical therapy or cosmetology," having been premised upon the necessity that expert testimony was required, is an erroneous conclusion.
The instant case simply reveals that appellant failed to establish by its proof that respondent's actions fell outside the scope of chiropractic and the Commission, under the facts and circumstances, could have herein based its ruling upon that alone. Indeed, such is the finding of this court. It was, however, error for the Commission to conclude further its inability to determine whether respondent herein engaged in the *629 practice of medicine, cosmetology, and/or physical therapy because the Commission erroneously concluded that expert testimony was requisite. Such testimony is not required and the Commission is in error in so deciding. The Commission is charged with deciding the issues involving licensees upon the evidence presented to it and in the particular or instant case was required to determine the scope of respondent's activities as a matter of law and not to prescribe the type or form of evidence (i.e., expert testimony) to be introduced. As noted previously, the Commission is at liberty to receive expert testimony but is not at liberty to avoid its responsibility in rendering its decisions in the absence of such evidence, nor to prescribe that such evidence be introduced. The consideration of respondent's activities as to whether they were within or beyond the scope of chiropractic is a question of law which is the task of the Commission to determine. See Sermchief v. Gonzales, 660 S.W.2d 683 (Mo. banc 1983).
The judgment of the circuit court previously affirming the decision of the Administrative Hearing Commission is, upon and for the reasons set forth herein, affirmed.
All concur.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433117/
|
206 F. Supp. 2d 870 (2002)
Donald ARMBRUSTER, et al., Plaintiffs,
v.
K-H CORPORATION, Defendant.
No. 97-CV-75792-DT.
United States District Court, E.D. Michigan, Southern Division.
June 17, 2002.
*871 *872 *873 Charles Gottlieb, Esq., Bingham Farms, MI, for Plaintiffs.
Scott A. MacGriff, Esq., Francis R. Ortiz, Esq., Detroit, MI, for Defendant.
OPINION AND ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
ROSEN, District Judge.
I. INTRODUCTION
The above-captioned ERISA action is presently before the Court on Defendant K-H Corporation's Motion for Summary Judgment.[1] Plaintiffs have responded to Defendant's Motion to which response Defendant has replied. Supplemental briefs have also been filed by both parties. Having reviewed and considered the parties' briefs and supporting documents and the Court's entire record of this matter, the Court has determined that oral argument is not necessary. Therefore, pursuant to Eastern District of Michigan Local Rule 7.1(e)(2), this matter will be decided "on *874 the briefs." This Opinion and Order sets forth the Court's ruling.
II. PROCEDURAL AND FACTUAL BACKGROUND
A. THE PARTIES
Plaintiffs Donald Armbruster, John Gustke, Robert Rawlings, William Varney, Robert Butler, Maynard Brandt and Harold Messacar are former salaried employees of the Fruehauf Corporation, the predecessor-in-interest of Defendant K-H Corporation. All seven of the named Plaintiffs retired from Fruehauf before July 14, 1989. Plaintiffs Armbruster, Gustke, Rawlings, Varney and Butler retired under Special Early Retirement Plans offered by Fruehauf in 1982, 1987 and 1988.[2] Plaintiffs Brandt and Messacar retired under the company's standard retirement plan in October 1981 and February 1985, respectively.
Defendant K-H Corporation is the successor-in-interest of the business entity formerly known as Fruehauf Corporation.[3] Fruehauf was, at one time, one of the world's largest manufacturers of truck trailers and shipping containers. Plaintiffs worked in Fruehauf's trailer operations. On July 14, 1989, Fruehauf sold its trailer operations, along with its maritime operations, to a subsidiary of Terex Corporation known as FRH Acquisition Corporation ("FRH"), pursuant to a purchase agreement dated as of March 27, 1989. FRH subsequently changed its name to "Terex Trailer Corporation" and was later renamed "Fruehauf Trailer Corporation." As required by the terms of the purchase agreement, the former Fruehauf Corporation, now divested of its trailer and maritime businesses, changed its corporate name to "K-H Corporation." The change of corporate name occurred on August 4, 1989.
Although Plaintiffs had retired from the old Fruehauf Corporation prior to July 14, 1989, the date of the sale of the company's trailer operations to the Terex subsidiary now known as Fruehauf Trailer Corporation, pursuant to the terms of the March 27, 1989 purchase agreement, the new Fruehauf Trailer Corporation assumed "all debts, liabilities, and obligations" of old Fruehauf [now known as K-H Corporation], including all liabilities to former employees of the transferred Fruehauf trailer and maritime businesses under Fruehauf's employee benefit and pension plans. See Defendant's Ex. A.[4]
*875 B. MEDICAL INSURANCE COVERAGE PROVIDED TO FRUEHAUF RETIREES
Beginning in 1979 through the closing of the sale of the trailer business, the cost of retiree medical insurance for salaried retirees had been borne entirely by Fruehauf Corporation. Not long after the sale of the trailer and maritime businesses, salaried retirees of the former Fruehauf Corporation were advised in writing by the new Fruehauf Trailer Corporation that effective January 1, 1990, each retiree would be required to contribute to the cost of his or her retiree medical coverage, and were advised of their required annual contribution amount. See Defendant's Ex. B and B1 through B4.[5] Then, in April 1994, Fruehauf Trailer announced that effective June 1, 1994 medical coverage for retirees and spouses of retirees age 65 or older would only be offered through a "Medi-Gap" medical insurance program offered as part of the American Association of Retired Persons ("AARP") Group Health Insurance Program. See Defendant's Ex. B5. Retirees and spouses under age 65 continued to be covered under the Fruehauf program until they reached age 65. Id. Under both the AARP and the Fruehauf program for under 65-year-old dependents, retirees remained responsible for paying a portion of their medical coverage. Id.
On June 15, 1994, Plaintiffs instituted an action against Fruehauf Trailer Corporation challenging the company's decision effective January 1, 1990 requiring them to pay a portion of their medical insurance costs. See Fuller, et al. v. Fruehauf Trailer Corp., 94-CV-72333-DT. (the "Fuller action").[6] All of the Plaintiffs in the instant action were also Plaintiffs in the Fuller action.[7] The Plaintiffs alleged the very same claims in the Fuller action that they allege now in the instant action.
In Fuller, the Plaintiffs sued Fruehauf Trailer Corporation, i.e., the company that assumed the liabilities of their former employer, alleging that they had been promised fully-paid health care benefits "for life," and that by failing to continue to provide post-retirement medical benefits at company expense after January 1, 1990, Fruehauf Trailer violated the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq. and the Racketeer Influenced and Corrupt Organizations *876 Act ("RICO"), 18 U.S.C. § 1961, et seq.
In September 1996, this Court certified the action as class action, the class being "all persons who as of July 14, 1989 were participants or beneficiaries of Defendant's medical plan for salaried employees and who retired between January 1, 1979 and October 31, 1989," dividing this class into two sub-classes: (1) those persons who retired under one of the Special Early Retirement Programs between 1982 and 1988 and (2) those persons who retired pursuant to a standard retirement. See Fuller v. Fruehauf Trailer Corp., 168 F.R.D. 588, 605 (E.D.Mich.1996).[8]
Less than a month after the Court issued its class certification decision, on October 7, 1996, Fruehauf Trailer Corporation filed for Chapter 11 bankruptcy. As a consequence, the Fuller case was automatically stayed, and then on December 20, 1996, the case was administratively closed.
The Fruehauf Trailer bankruptcy proceedings revealed that the company would not emerge from Chapter 11 and would be liquidated. Fruehauf Trailer advised retirees in the spring of 1997 that it would cease providing them with medical insurance coverage effective April 15, 1997. See Defendant's Ex. E. (The bankruptcy was closed on April 15, 1997.) However, on May 27, 1997, K-H Corporation sent letters to Fruehauf retirees, advising them that K-H was "the successor to FTC" and would continue to provide them with medical insurance coverage "on the same terms and conditions that FTC provided coverage on April 15, 1997." See Defendant's Ex. F.[9]
The Plaintiffs were not satisfied with being provided with medical insurance coverage on the same terms and conditions that Fruehauf Trailer had provided them coverage, i.e., on a shared-cost basis. Therefore, on November 21, 1997, Plaintiffs filed the instant action alleging the very same ERISA and RICO claims they alleged in the pre-bankruptcy lawsuit challenging the decision to require retirees pay for a portion of the cost of medical insurance coverage, only this time they asserted these claims against K-H Corporation.[10]
*877 1. THE FRUEHAUF RETIRED SALARIED EMPLOYEES MEDICAL INSURANCE PLAN
The Fruehauf Corporation medical insurance plan at issue in this case is part of a Group Insurance Plan for life insurance, accidental death and dismemberment insurance, and medical and dental benefits provided to Fruehauf salaried employees and retirees through a policy issued by Connecticut General Life Insurance Company. During the 1979-1989 time period of relevance to this action, Fruehauf issued several booklets summarizing the Plan (referred to herein as "plan descriptions," "summary plan descriptions" or "SPDs"). Pertinent portions of seven such SPDs have been submitted by the parties here for the Court's consideration.
Two of the plan descriptions, i.e., the SPDs issued in 1979 and in 1986, expressly state that they describe Fruehauf Corporation's "Group Insurance Plan for Salaried Retired Employees." The other plan descriptions, i.e., those issued in 1981, 1983, 1984, 1985, and 1987 are not expressly limited to retirees. These are captioned as Fruehauf Corporation's "Group Insurance Plan for Salaried Employees." However, each of the SPDs that are not specifically designated as summary descriptions of salaried retirees' plans contain specific provisions which state that medical insurance coverage provided under the Salaried Employees' Group Insurance Plan to salaried employees will be continued for any salaried employee (and the employee's eligible dependents) if he or she retires from active service under the Salaried Retirement Plan on or after January 1, 1979. [See e.g., Plaintiffs' Ex. 29, 1981 Group Insurance Plan booklet, p. 41.]
The SPD issued in January 1979 provided in pertinent part as follows:
Any permanent full-time Salaried Employee... who is covered under the Salaried Retirement Plan on or after June 1, 1976 will be eligible for the insurance on his retirement date.
* * * * * *
The insurance will be continued for a surviving spouse, but coverage will terminate if that spouse remarries.
* * * * * *
The insurance on the surviving spouse of a deceased Retired Employee will be continued without cost until the surviving spouse remarries.
* * * * * *
The cost of the plan is paid by the company.
[See Plaintiffs' Ex. 28]
The 1981 summary plan description provided:
If you retire from Active Service under the Salaried Retirement Plan on or after January 1, 1979, your Medical Insurance will be continued for you and your eligible dependents.
In addition, Medical Insurance will be continued for your surviving spouse if you are an insured retiree who retires from Active Service on or after January 1, 1979, or if your spouse is the recipient of a Pre-Retirement Death Benefit and your death occurs while in Active Service on or after January 1, 1979. This coverage includes eligible dependents and will continue for life unless your surviving spouse remarries....
[See Plaintiff's Ex. 29]
The SPD issued in 1983 provided:
If you retire from Active Service while your insurance is still in effect and [you retire] on or after January 1, 1979 under the Salaried Retirement Plan, your Medical Insurance will continue for the rest of your life. Insurance for your dependents will also continue as long as *878 they remain eligible. The company pays the full costs of this insurance.
* * * * * *
This coverage [for your spouse] will continue for the rest of your surviving spouse's lifetime unless he or she remarries.
[See Defendant's Ex. 3.]
The 1984 plan description stated as follows:
If you retire from Active Service while your insurance is still in effect and on or after January 1, 1979 under the Salaried Retirement Plan, your Medical Insurance will continue for the rest of your life. Insurance for your dependents will also continue as long as they remain eligible. The company pays the full cost of this insurance.
Medical insurance will be continued for you surviving spouse... for the rest of your surviving spouse's lifetime unless he or she remarries....
[See Plaintiffs' Ex. 32.]
The 1985 SPD provided:
If you retire from Active Service while your insurance is still in effect and on or after January 1, 1979 under the Salaried Retirement Plan, your Medical Insurance will continue pursuant to the terms of the plan. Insurance for your dependents will also continue as long as they remain eligible. The company pays the full costs of this insurance.
* * * * * *
The [Surviving Spouse] coverage will continue pursuant to the terms of the plan unless he or she remarries.
[See Plaintiffs' Ex. 34.]
The 1986 Retired Salaried Medical Plan summary plan document provided:
You're eligible to become a member of the Group Insurance Plan if:
you are a salaried retiree.
you retire under the Salaried Retirement Plan while your insurance is still in effect.
Your Group Insurance starts on the day you retire.
Your eligible dependents automatically become insured for Medical benefits on the same day you do.
* * * * * *
In general, your Group Insurance ends on the date:
you are no longer eligible for membership in the Plan; or
the date the Group Insurance policy terminates.
* * * * * *
The insurance on a Surviving Spouse of a deceased Retired Employee will be continued pursuant to the terms of the Plan.
[See Plaintiffs' Ex. 36.]
The SPD issued in 1987 provided, in pertinent part:
If you retire from Active Service and your insurance is still in effect and on or after January 1, 1979 under the Salaried Retirement Plan, your Medical Insurance will continue pursuant to the terms of the plan. Insurance for your dependents will also continue as long as they remain eligible. The company pays the full cost of this insurance.
Medical Insurance will be continued for you r surviving spouse and his or her eligible dependents... unless he or she remarries....
See Plaintiffs' Ex. 35.
Plaintiffs rely upon these various provisions in the summary booklets in support of their claims that as Fruehauf retirees, they are entitled to company-paid medical insurance coverage for life.
*879 However, each of the various plan summaries issued by Fruehauf during the 1979-89 time period including the above-quoted SPDS also contained explicit language reserving Fruehauf's right to modify or terminate the Plan at any time. For example, the 1979 and 1981 SPDs stated, "The Plan Administrator may change or eliminate benefits under the plan and may terminate the entire plan or any portion of it...." The 1983 summary plan description provided, "The Company intends to continue the Plan indefinitely. However, the Company reserves the right to change the Plan, and if necessary, to discontinue it." The 1985, 1986 and 1987 summaries stated, "The Company has the right to change or discontinue the Plan at any time...." [See Plaintiffs' Ex. 28, 29, 34, 35, 36 and Defendant's Ex. 3.]
As further support of their view that they are entitled to life-time paid medical insurance, Plaintiffs point to annual statements of benefits provided to salaried employees. Such benefits statements advised the employee, "If you retire from active service as a salaried employee, the Company will pay the cost of the group retiree medical insurance plan for you and your eligible dependents." [See Plaintiffs' Ex. 31, document 002140.][11] Plaintiffs also rely upon the Fruehauf Industrial Relations Manual [Plaintiffs' Ex. 30]. This internal Industrial Relations Manual, was issued in 1981 and used from April 1, 1981, forward. The section of this manual captioned "Continuation of Group Medical Insurance For Salaried Employees Upon Retirement" provides that "[i]f you retire from Active Service under the Salaried Retirement Plan on or after January 1, 1979, your Medical Insurance will be continued for you and your eligible dependents." That same section later discusses medical benefits for surviving spouses of deceased retirees, stating that "[t]his coverage includes eligible dependents and will continue for life unless your surviving spouse remarries."
Further, with respect to those particular Plaintiffs who retired under a Special Early Retirement Program ("SERP"), Plaintiffs point to the SERP memoranda announcing the program. The SERP memoranda issued in 1982, 1986, and 1987 all stated that "Special Early retirees and their eligible dependents are entitled to Company paid Group Medical Insurance." [See Plaintiffs' Ex. 39-41.] The SERP memorandum issued in 1988 provided that "[a]s with other types of retirement, participants retiring under the Accrued Retirement Program and their eligible dependents are entitled to the Retiree Medical Insurance." [See Plaintiffs' Ex. 41-43.]
2. ORAL REPRESENTATIONS ALLEGEDLY MADE TO PLAINTIFFS BY FRUEHAUF OFFICIALS CONCERNING MEDICAL BENEFITS
In addition to the written materials described above, Plaintiffs contend that certain oral representations made to them by Fruehauf officials in positions of authority also bear upon the terms of the Plan. In essence, Plaintiffs claim that statements made to them evidence a practice by Fruehauf of assuring its employees that they *880 would be provided medical benefits for life at company expense.
Plaintiff, Robert Butler, Fruehauf's former Director of Insurance and Risk Management, retired from Fruehauf in 1988. He testified at his deposition that various high-ranking Fruehauf employees represented to him on several occasions while he was still working for Fruehauf that the company intended to continue retiree medical benefits for life. Butler testified that he was told by Richard Helwig, former VicePresident for Industrial Relations,[12] that human relations counselors should be instructed to advise employees that their health insurance would be provided for life at company expense. [Butler Dep., Plaintiffs' Ex. 4, p. 92.] Butler further stated that, consistent with these instructions, he advised retirees at their exit interviews that company-paid medical insurance would be provided for life. Id. at 87-88.
Butler also said that Richard Hale, Director of Employee Benefits in the Industrial Relations Department told him in an October 1988 conversation that retiree medical benefits were provided for life. Id. at 18-19, 90. Butler said he also had conversations from 1981 through 1988 with Howard Emorey, Fruehauf's Vice-President and Treasurer, in which Mr. Emorey advised that retiree medical benefits were for life. Id. at 95-96. (During this period, Butler was reporting to Emorey. Id. at 10-11.)
Butler further testified that his own decision to retire under the 1988 SERP followed a conversation with Richard Darke, Fruehauf's Vice-President and General Counsel. According to Butler, he was advised by Darke that his medical insurance could never be taken away from him. Id. at 102-05.
Plaintiff Donald Armbruster also testified that he accepted early retirement pursuant to the October 1988 SERP based in part upon his understanding that medical benefits would be for life. He testified that he had a discussion he had with Thomas Nanos, Fruehauf's Vice-President of Sales and Marketing, in which he indicated that he was going to accept early retirement explaining "how can I turn this down, lifetime medical benefits which give me security in this area," and Nanos never contested Armbruster's understanding of his retirement benefits. [See Armbruster Dep., Plaintiffs' Ex. 2, pp. 44-45].
Armbruster stated that while he was employed at Fruehauf, his supervisor, Bob Hawkins, had assigned him the responsibility of explaining the SERP retirement program to certain designated employees who qualified for early retirement.[13] He testified that Hawkins instructed him to tell prospective early retirees that they would be provided medical insurance for life at company expense. Id., p. 40. Armbruster further testified that he was given a "green slip," which included names of employees to whom Armbruster was supposed to speak and instructed him as to what he was supposed to say. Id. at 41. According to Armbruster, the green slip said that benefits were for life. Id.[14] Armbruster said that he, accordingly, told potential early retirees that their medical benefits would be continued for life. Id. at 43.
*881 Plaintiff Maynard Brandt retired under Fruehauf's regular retirement plan. Brandt testified in his deposition that, in September 1981, shortly before his retirement, Don Small, Fruehauf's Akron branch manager,[15] advised him that his Fruehauf medical benefits would be continued after he retired. [See Brandt 8/20/98 Dep., Defendant's Ex. J, pp. 13-19.][16] After Brandt left Fruehauf, he went to work for another company which also had a health care plan, but he testified that he elected not to participate in it, "Because I had one with Fruehauf." [See Brandt 2/23/95 Dep., Plaintiffs' Ex. 3, p. 40.]
Plaintiff John Gustke took early retirement from Fruehauf pursuant to the SERP offered by the company in 1982. He testified that he was told by Robert Butler that he would receive medical benefits for life. [See Gustke Dep., Plaintiffs' Ex. 6, pp. 37-38.] Gustke said he also talked with his supervisor, Mr. Neumann, who had decided to retire at the same time, about the lifetime nature of benefits. Id. at 42. Gustke said he and Neumann "both took early retirement because we were reasonably sure that we were covered for life with the insurance." Id.
Plaintiff William Varney retired pursuant to Fruehauf's 1988 Special Early Retirement Plan. Varney testified that he was initially reluctant to accept the SERP offer, but he later spoke with his supervisor, George Walker, who explained that, although the company could not offer him additional money, it was offering free medical insurance for Varney and his wife. See Varney Dep., Plaintiffs' Ex. 13, pp. 22, 24. Based upon that conversation with George Walker, Varney decided to accept the early retirement offer. Id. at 22.[17]
III. PROCEDURAL HISTORY OF THE INSTANT ACTION
As indicated, the instant action is Plaintiffs' second attempt to recover life-time, paid medical insurance benefits which they claim they were promised by their former employer. This second action was filed after their first action was administratively dismissed without prejudice as a result of Fruehauf Trailer Company's filing for bankruptcy. As indicated above, FTC did not emerge from Chapter 11 bankruptcy and the company was ultimately liquidated. With the liquidation of the company imminent, on January 31, 1997, FTC notified Fruehauf retirees that it would cease providing them with medical insurance coverage effective April 15, 1997. *882 However, in early April 1997, K-H Corporation, Fruehauf's successor-in-interest after the sale of its trailer and maritime divisions, notified Fruehauf retirees that, effective April 15, 1997 it would provide Fruehauf retirees with medical insurance coverage upon the cessation of their coverage by FTC. Seven months later, on November 21, 1997, Plaintiffs initiated the instant action against K-H Corporation asserting essentially verbatim the same ERISA and RICO claims they had asserted in their 1994 action against FTC. See Complaint, ¶ 8.
Discovery in the instant action proceeded through August 1998 and in February 1999, following a status conference with counsel for the parties, the parties' motions for summary judgment and for class certification were dismissed without prejudice and the case closed subject to reinstatement if the parties' attempts to resolve the matter through extra-judicial facilitation proved unsuccessful. In January 2001, after having been advised by the parties that they could not reach an extra-judicial resolution of their dispute, the Court reinstated the case and the pending motions for summary judgment and class certification to the Court's docket. Following their notification of their inability to resolve the case extra-judicially, the parties filed supplemental briefs in support of their respective summary judgment arguments.
IV. DEFENDANT'S SUMMARY JUDGMENT ARGUMENTS
Defendant K-H has moved for summary judgment and dismissal of Plaintiffs' three-count ERISA and RICO Complaint in its entirety. First, Defendant argues that Plaintiffs' ERISA claims in Count I are either barred by the applicable statute of limitations or are without legal merit under the Sixth Circuit's 1998 en banc decision in Sprague v. General Motors Corp., 133 F.3d 388 (6th Cir.1998), cert. denied, 524 U.S. 923, 118 S. Ct. 2312, 141 L. Ed. 2d 170 (1998). Additionally, Defendant argues that because it did not make any of the alleged fraudulent statements upon which Plaintiffs rely in Counts I and II of their Complaint, Plaintiffs' Count I claims of estoppel and breach of fiduciary duty and their RICO claims in Count II should be dismissed. Defendant also argues that Plaintiffs' RICO claim in Count II should be dismissed because Plaintiffs have failed to establish the requisite elements of a § 1962(c) RICO and have failed to show a pattern of racketeering activity. Finally, Defendant contends that it is entitled to summary judgment on Plaintiffs' additional ERISA claim in Count III because it did not make any of the alleged misrepresentations regarding Plan costs.
V. DISCUSSION
A. STANDARDS APPLICABLE TO MOTIONS FOR SUMMARY JUDGMENT
Summary judgment is proper "`if the pleadings, depositions, answer 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 judgment as a matter of law.'" Fed. R.Civ.P. 56(c).
Three 1986 Supreme Court cases Matsushita Electrical Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986); and Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986) ushered in a "new era" in the standards of review for a summary judgment motion. These cases, in the aggregate, lowered the movant's *883 burden on a summary judgment motion.[18] According to the Celotex Court,
In our view, the plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails 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.
Celotex, 477 U.S. at 322, 106 S. Ct. 2548.
After reviewing the above trilogy, the Sixth Circuit established a series of principles to be applied to motions for summary judgment. They are summarized as follows:
* The movant must meet the initial burden of showing "the absence of a genuine issue of material fact" as to an essential element of the non-movant's case. This burden may be met by pointing out to the court that the respondent, having had sufficient opportunity for discovery, has no evidence to support an essential element of his or her case.
* The respondent cannot rely on the hope that the trier of fact will disbelieve the movant's denial of a disputed fact, but must "present affirmative evidence in order to defeat a properly supported motion for summary judgment."
* The trial court no longer has the duty to search the entire record to establish that it is bereft of a genuine issue of material fact.
* The trial court has more discretion than in the "old era" in evaluating the respondent's evidence. The respondent must "do more than simply show that there is some metaphysical doubt as to the material facts." Further, "[w]here the record taken as a whole could not lead a rational trier of fact to find" for the respondent, the motion should be granted. The trial court has at least some discretion to determine whether the respondent's claim is plausible.
Betkerur v. Aultman Hospital Association, 78 F.3d 1079, 1087 (6th Cir.1996). See also, Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479-80 (6th Cir.1989). The Court will apply the foregoing standards in deciding Defendant's Motion for Summary Judgment in this case.
B. PLAINTIFFS' CLAIMS IN COUNT I OF THEIR COMPLAINT ARE TIME-BARRED
Defendant K-H first argues that Plaintiffs' ERISA claims in Count I of their Complaint are time-barred. Count I of the Complaint has two components: a denial of benefits component under 29 U.S.C. § 1132(a)(1)(B) and a breach of fiduciary duty component under 29 U.S.C. §§ 1109 and 1132(a)(3). Plaintiffs admit that "the claims alleged in this Complaint also were alleged in the action formerly pending in this Court [against Fruehauf Trailer]." See Complaint ¶ 8. The new Complaint merely re-alleges the claims Plaintiffs previously asserted against FTC by now alleging them against K-H Corporation.
With respect to the pertinent factual allegations, while in the previous action Plaintiffs alleged that Fruehauf Trailer violated ERISA by modifying its Salaried Retiree Medical Benefits Plan in 1990 so that retirees were no longer provided health insurance at company expense, see Fuller v. Fruehauf Trailer Corp., 168 F.R.D. 588, 593-94 (E.D.Mich.1996), in the *884 Complaint presently before the Court, Plaintiffs allege that Fruehauf Trailer "act[ed] in concert with defendant K-H and as its agent" when it "announced that effective January 1, 1990, all retirees, their spouses and dependents would be required to pay a portion of the monthly cost of the retiree medical benefit plan," see Complaint ¶¶ 18, 19, 28A-E, 29, and that these "acts of defendant K-H and Fruehauf Trailer Corporation... were wrongful and violated ERISA." Complaint ¶ 20.
1. BREACH OF FIDUCIARY CLAIMS
With respect to breach of fiduciary claims, ERISA provides a three-year statute of limitations. See 29 U.S.C. § 1113; Farrell v. Automobile Club of Michigan, 870 F.2d 1129, 1131 (6th Cir.1989). 29 U.S.C. § 1113 provides as follows:
§ 1113. Limitation of actions
No action may be commenced under this subchapter with respect to a fiduciary's breach of any responsibility, duty, or obligation under this part, or with respect to a violation of this part, after the earlier of
(1) six years after (A) the date of the last action which constituted a part of the breach or violation, or (B) in the case of an omission, the latest date on which the fiduciary could have cured the breach or violation, or
(2) three years after the earliest date on which the plaintiff had actual knowledge of the breach or violation;
except that in the case of fraud or concealment, such action may be commenced not later than six years after the date of discovery of such breach or violation.
Plaintiffs do not dispute that they had actual knowledge that the alleged promises of life time medical benefits made to them prior to their retirement were breached as of January 1, 1990 when retiree contributions were first mandated. They argue, however, that they did not know that they had a cause of action against K-H until they received the correspondence from K-H on May 27, 1997, after FTC stopped providing them medical coverage, advising them that "K-H is a successor to FTC" and that "K-H will continue to provide you with coverage, on the same terms and conditions that FTC provided coverage to you on April 15, 1997." [See Plaintiffs' Ex. 26.] Plaintiffs maintain that prior to that time, K-H concealed its identity as a liable party with respect to providing Fruehauf retiree medical insurance.
However, the evidence shows that what Plaintiffs rely upon in support of their "fraudulent concealment" argument is merely evidence that K-H did not disclose until discovery in this action which shows that K-H was aware during the pendency of FTC's bankruptcy that, if FTC failed to perform the obligation it had assumed with respect to old Fruehauf employee benefits under the Assumption Agreement, K-H might be a potential target for suit by Fruehauf retirees. [See Plaintiffs' Ex. 16-23.] This is not fraudulent concealment. "There must be actual concealment i.e., some trick or contrivance intended to exclude suspicion and prevent inquiry.... Concealment by mere silence is not enough." Larson v. Northrop Corp., 21 F.3d 1164, 1173 (D.C.Cir. 1994). See also, In re Unisys Retiree Medical Benefit "ERISA" Litigation, 242 F.3d 497, 502 (3rd Cir.2001), cert. denied, ___ U.S. ___, 122 S. Ct. 542, 151 L. Ed. 2d 420 (2001) (the "fraud or concealment" provision in Section 1113 codifies the common law equitable estoppel fraudulent concealment doctrine and requires "affirmative steps by the fiduciary to hide *885 the breach of fiduciary duty.") Accord, Adams v. City of Detroit, 232 Mich.App. 701, 707, 591 N.W.2d 67, 70 (1998), lv. denied, 461 Mich. 949, 607 N.W.2d 721 (2000) (to bar use of statute of limitations under an equitable estoppel theory based upon fraudulent concealment, plaintiff must produce evidence of "conduct clearly designed to induce the plaintiff to refrain from bringing action within the period fixed by statute." Id., quoting Lothian v. Detroit, 414 Mich. 160, 177, 324 N.W.2d 9 (1982)).
In this case, Plaintiffs' "evidence" amounts to nothing more than "mere silence," which, as noted above is insufficient to establish fraudulent concealment. Evidence that Defendant K-H was aware that it might be sued does not show that Defendant took affirmative steps to hide any alleged breach of fiduciary duty. Defendant was under no obligation to invite Plaintiffs to sue. In short, nothing was "concealed."
Further, to the extent that Plaintiffs contend that, prior to May 1997, they had no reason to doubt that all liabilities relating to retiree medical benefits were transferred to FTC/Terex as part of the sale of Fruehauf's trailer division to Terex, it is black letter law that
Unless the obligee agrees otherwise, neither delegation of performance nor a contract to assume the duty made with the obligor by the person delegated discharges any duty or liability of the delegating obligor.
Restatement 2d Contracts, § 318(3). See also, Davidson v. Madison Corp., 257 N.Y. 120, 125, 177 N.E. 393, 394 (1931) (the act of delegation does not relieve the delegant of the ultimate responsibility to see that the obligation is performed. If the delegate fails to perform, the delegant remains liable.)[19]
Here, there is nothing to indicate that Fruehauf retirees (i.e., the "obligees") ever agreed to discharge K-H [old Fruehauf Corporation] (the "obligor") with respect to its duties and liabilities relating to retiree medical benefits. Therefore, through the exercise of due diligence, Plaintiffs should have known that they could have joined K-H in the suit they filed suit against FTC in 1994.
For the foregoing reasons, the Court finds that Plaintiffs are not entitled to the extended fraudulent concealment "six-years-from-date-of-discovery" limitations period. Applying the provisions of Section 1113 to Plaintiffs' breach of fiduciary duties claims in Count I, which are predicated upon Defendant's alleged misrepresentations made to Plaintiffs by Fruehauf that the they would be provided companypaid medical benefits for life, the Court finds that these claims are time-barred.
As indicated, Section 1113 requires that ERISA actions for breach of fiduciary duties be brought by the earlier of (1) six years after the date of the last action which constituted a part of the breach or violation, or (2) three years after the earliest date on which the plaintiff had actual knowledge of the breach or violation. Here, Plaintiffs all admitted in their depositions that they had actual knowledge of Defendant's alleged breach of fiduciary duties as of January 1, 1990 when retiree contributions were first mandated. Therefore, to have been timely filed pursuant to 29 U.S.C. § 1113(2), Plaintiffs would have had to have filed their Complaint by January *886 1, 1993. However, Their Complaint was not filed until November 21, 1997, i.e., more than four years after the Section 1113(2) period of limitations had expired.[20]
For the foregoing reasons, the Court finds that Defendant is entitled to summary judgment on Plaintiffs' Count I breach of fiduciary claims.
*887 2. DENIAL OF BENEFITS CLAIMS
Plaintiffs' denial of benefits claims in Count I are similarly time-barred. With respect to claims to recover benefits under § 1132(a)(1)(B), ERISA does not provide a statute of limitations. Such claims are governed by the most analogous state statute of limitations, which is that for breach of contract. Meade v. Pension Appeals & Review Comm., 966 F.2d 190, 194-95 (6th Cir.1992); Santino v. Provident Life and Acc. Ins. Co., 276 F.3d 772, 776 (6th Cir.2001); Shofer v. Hack Co., 970 F.2d 1316, 1319 (4th Cir.1992); Lang v. Aetna Life Ins. Co., 196 F.3d 1102, 1104-05 (10th Cir.1999). The Michigan breach of contract statute of limitations is six years. See M.C.L. § 600.5807(8) (2000).
Although the statute of limitations may be borrowed from state law, federal law establishes when an ERISA claim "accrues," i.e., begins to run. Michigan United Food and Commercial Workers Unions and Drug and Mercantile Employees Joint Health and Welfare Fund v. Muir Co., Inc., 992 F.2d 594, 598 (6th Cir.1993); Connors v. Hallmark & Son Coal Co., 935 F.2d 336, 341 (D.C.Cir.1991); Northern Cal. Retail Clerks Unions & Food Employers Joint Pension Trust Fund v. Jumbo Markets, Inc., 906 F.2d 1371, 1372 (9th Cir.1990).[21] The "discovery rule" is the general rule of accrual in federal question cases, see Cada v. Baxter Healthcare Corp., 920 F.2d 446, 450 (7th Cir.1990), cert. denied, 501 U.S. 1261, 111 S. Ct. 2916, 115 L. Ed. 2d 1079 (1991), and as such, is applied in ERISA actions. See Michigan United Food and Commercial Workers Unions, et al. v. Muir Co., Inc., supra; Northern Cal. Retail Clerks Unions & Food Employers Joint Pension Trust Fund v. Jumbo Markets, Inc., supra. Under the discovery rule, an ERISA claim accrues and the limitations period begins to run when the "plaintiff discovers, or with due diligence should have discovered, `the injury that is the basis of the action.'" Commercial Workers Unions, supra, 992 F.2d at 597(quoting Connors v. Hallmark & Son Coal Co., supra). See also, Union Pacific Railroad Co. v. Beckham, 138 F.3d 325 (8th Cir.1998), cert. denied, 525 U.S. 817, 119 S. Ct. 56, 142 L. Ed. 2d 43 (1998) (consistent with the discovery rule, the general rule in an ERISA action is that a cause of action accrues after a claim for benefits has been made and denied.)
As indicated, Plaintiffs admit that they understood as of January 1, 1990 that any promise of lifetime retiree medical benefits had been breached when, in their words, FTC as agent of K-H, announced that effective January 1, 1990, all retirees, their spouses, and dependents would be required to pay a portion of the retiree medical benefit plan. See Complaint, ¶ 18. Notwithstanding their admitted knowledge of Defendant's alleged breach in 1990, Plaintiffs argue that their denial of benefits claims are not time-barred.
Relying upon a Michigan Court of Appeals decision, Adams v. City of Detroit, 232 Mich.App. 701, 591 N.W.2d 67 (1998), lv. denied, 461 Mich. 949, 607 N.W.2d 721 (2000), Plaintiffs argue that their claims here should be likened to installment contracts, such that the deficient provision of *888 medical benefits each month gave rise to a new claim, and that, at a minimum, they should be entitled to recover for all deficient benefits that were payable during the period beginning six years before suit was filed.
In Adams, early retirees from the City of Detroit sued the city for failure to provide them with health insurance benefits which, pursuant to city council resolution, the City was obligated to provide.[22] the Michigan Court of Appeals reversed the trial court's grant of summary disposition in favor of the City of Detroit, finding that the plaintiffs' state law breach of contract claims were barred by the statute of limitations. The appellate court determined that the trial court erred in ruling the plaintiffs' claims were entirely barred by the statute of limitations holding that, like an installment contract, each deficient payment of benefits marked the time from which a separate breach of contract accrues. 232 Mich.App. at 709, 591 N.W.2d at 71. Therefore, the court reversed and remanded the case to the trial court instructing that "plaintiffs may pursue their claims for any unprovided benefits dating from six years before plaintiffs filed suit." Id.
Adams, however, represents Michigan state law regarding the accrual of a state law breach of contract claim based upon an installment contract theory. See M.C.L. § 600.5836 which provides that "claims on an installment contract accrue as each installment falls due." As indicated above, it is federal law, not state law, that establishes when an ERISA claim "accrues." See Michigan United Food and Commercial Workers Unions and Drug and Mercantile Employees Joint Health and Welfare Fund v. Muir Co., Inc., supra; Northern Cal. Retail Clerks Unions & Food Employers Joint Pension Trust Fund v. Jumbo Markets, Inc., supra.
Although the Sixth Circuit has not been called upon to consider an installment contract theory of accrual of an ERISA denial of benefits claim, the Tenth Circuit squarely addressed this issue in Lang v. Aetna Life Ins. Co., 196 F.3d 1102 (10th Cir. 1999). In Lang, the plaintiff brought an ERISA action to recover disability benefits. The court determined that the applicable "most analogous" state statute of limitations (Utah's three-year statute of limitations for breach of insurance contracts) was triggered by the defendant's 1991 determination that Ms. Lang was no longer entitled to total disability benefits. Because this was more than three years before Lang filed her complaint, the district court found that her action was timebarred. However, like the Plaintiffs here and the plaintiffs in Adams, the plaintiff in Lang attempted to characterize her denial of disability benefits as an action on an installment contract. She claimed that her suit was timely because a separate statute of limitations ran against each unpaid monthly benefit. The Tenth Circuit rejected Lang's argument stating:
Under plaintiff's characterization, her claim would have an indefinite lifespan. Such a result would undermine the overriding purpose of a statute of limitations. Time limits are essential to promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared. Since the three-year *889 limitation applies to this suit, and inception of the loss occurred in 1991, we affirm.
196 F.3d at 1105 (citations and internal quotation marks omitted).
The Court finds the Tenth Circuit's reasoning persuasive. The Sixth Circuit has recognized the same policies underlying statutes of limitations which persuaded the Lang court to reject the plaintiff's installment contract accrual theory. See, e.g., Garden City Osteopathic Hosp. v. HBE Corp., 55 F.3d 1126, 1135 (6th Cir. 1995) (policies furthered by statutes of limitations include encouraging plaintiffs to pursue claims diligently and protecting defendants from stale claims); Campbell v. Upjohn Co., 676 F.2d 1122, 1128 (6th Cir.1982) ("Statutes of limitations are vital to the welfare of society and are favored in the law. Stale conflicts should be allowed to rest undisturbed after the passage of time has made their origins obscure and the evidence uncertain." Id. (citations omitted)).
By application of the foregoing federal law, the Court finds that Plaintiffs' denial of benefits claims in this case are time-barred. There is no question that Plaintiffs discovered in January 1990 "the injury that is the basis of their action" when they were first required to pay for a portion of the cost of their retiree medical benefits.[23] Accordingly, the six-year statute of limitations began to run at that time. To accept Plaintiffs' characterization of their denial of benefits claim as an "installment contract" would give their claim "an indefinite lifespan" and run contrary to the policies underlying statutes of limitations.
Plaintiffs did not file their Complaint in this action until November 21, 1997. This was more than a year and a half after the six-year period of limitations had expired. Therefore, the Court finds that, like Plaintiffs' Count I breach of fiduciary duties claims, Plaintiffs' denial of benefits claims are also time-barred. Accordingly, Defendant's motion for summary judgment will be granted on Count I.
C. THE SIXTH CIRCUIT'S EN BANC DECISION IN SPRAGUE V. GENERAL MOTORS ESTABLISHES THAT PLAINTIFFS' DENIAL OF BENEFITS CLAIMS IN THIS ACTION ARE NOT LEGALLY COGNIZABLE
Even assuming arguendo that Plaintiffs' denial of benefits and breach of fiduciary duty claims are timely, the Court finds that Defendant is entitled to summary judgment on the merits of these claims under the Sixth Circuit's en banc decision in Sprague v. General Motors, 133 F.3d 388 (6th Cir.1998), cert. denied, 524 U.S. 923, 118 S. Ct. 2312, 141 L. Ed. 2d 170 (1998). Sprague is factually similar to this case.
In Sprague, salaried General Motors retirees sued GM under ERISA claiming that when they retired, they had been promised company-paid health care coverage for life, and that when GM began requiring retirees to pay for a portion of that coverage in 1988, GM violated ERISA. The plaintiffs in Sprague advanced the same theories of recovery advanced *890 by Plaintiffs here. The Sprague plaintiffs argued that GM (1) committed a breach of the terms of the plan when it implemented the changes in 1988; (2) GM bilaterally contracted with each retiree to vest benefits; (3) was estopped from enforcing the terms of the written plan against them; and (4) committed a breach of fiduciary duty in explaining its retirement program to retirees. The Court of Appeals rejected each of these theories finding no legal merit in any of them. Because of the factual similarity between Sprague and the instant action, the Court will address each of these theories in the context of the facts of this case.
1. THE FRUEHAUF PLAN SUMMARY PLAN DESCRIPTIONS CONTAIN AN EXPRESS RESERVATION OF RIGHTS CLAUSE
In Count I of their Complaint, Plaintiffs claim that Defendant breached the "express terms of the plan that provided for defendant to provide medical benefits for life." Complaint ¶ 20(A). They further claim that Defendant "failed to unambiguously reserve a right to terminate or amend the plan, id. at 20(B), and, therefore, such medical benefits are vested and cannot be terminated or modified by Defendant." Id. at 20(C). These claims are identical to the claims made by the plaintiffs in Sprague. See Sprague, 133 F.3d at 399-402.
As in Sprague, the summary plan documents that have been placed in the evidentiary record in this case all contain explicit language reserving Fruehauf's right to modify or terminate the Plan at any time. For example, the 1979 and 1981 SPDs stated, "The Plan Administrator may change or eliminate benefits under the plan and may terminate the entire plan or any portion of it...." The 1983 summary plan description provided, "The Company intends to continue the Plan indefinitely. However, the Company reserves the right to change the Plan, and if necessary, to discontinue it." The 1985, 1986 and 1987 summaries stated, "The Company has the right to change or discontinue the Plan at any time...." [See Plaintiffs' Ex. 28, 29, 34, 35, 36 and Defendant's Ex. 3.]
Plaintiffs argue, however, that because the summaries also told them that their medical insurance would by fully paid by the company for their lifetimes, an ambiguity exists within the summaries that must be resolved by extrinsic evidence.
The Sixth Circuit squarely rejected this argument in Sprague: "We see no ambiguity in a summary plan description that tells participants both that terms of the current plan entitle them to health insurance at no cost throughout retirement and that the terms of the current plan are subject to change." 133 F.3d at 401.
Sprague was not the first case in which the Sixth Circuit reached this conclusion. In Musto v. American General Corp., 861 F.2d 897 (6th Cir.1988), cert. denied, 490 U.S. 1020, 109 S. Ct. 1745, 104 L. Ed. 2d 182 (1989), the appellate court reversed a grant of preliminary injunction entered in favor of a group of retirees in an ERISA action. The plaintiffs in Musto were retirees of National Life and Accident Insurance Company. National Life was subsequently acquired by American General. After the acquisition, National Life retirees were required to pay a portion of their medical benefits. The retirees subsequently brought suit under ERISA to block American General's retiree contribution requirement.
As in this case, the National Life SPDs in Musto contained both a promise of company-paid retiree medical insurance and a termination/modification clause expressly reserving the employer's right to amend *891 and terminate the medical benefit plan.[24] The district court found that these provisions conflicted and, therefore, construed them so as to avoid the negative impact of the termination/modification clause. ("To read the plan as providing lifetime paid up medical insurance and, at the same time, reserving the right to terminate the benefits at any time constitutes an illusory promise an express unqualified grant of a right negated by an express unqualified reservation of the right to terminate the grant." Musto, 861 F.2d at 905, quoting the district court's decision, Musto v. American General Corp., 615 F. Supp. 1483, 1499 (M.D.Tenn.1985).) Based upon that construction, the lower court held that the plaintiff-retirees had sustained their burden of showing the requisite likelihood of success on the merits of their claim that the changes made by their employer by requiring them to pay a portion of their retiree medical insurance coverage was impermissible.
The Court of Appeals reversed the district court's decision, explaining:
[I]t seems to us that the district court erred, as a matter of law, in determining that the provisions of the plan summaries cannot be reconciled with one another. Our understanding of what the summary plan descriptions say is this:
1. Here is a plain-English summary of the group insurance plan for employees of National Life.
2. The plan provides medical insurance coverage for eligible employees.
3. The plan provides for continuation of medical coverage after retirement.
4. The plan does not require contributions for continued medical coverage after retirement.
5. The company reserves the right to change the plan.
To read this summary as saying that the plan can never be changed in such a way as to mandate retiree contributions for continued medical coverage is to read into the summary something its authors did not put there (a promise to provide lifetime "paid up" medical insurance), while reading out of the summary something that clearly was put there (an express reservation of the right to change the plan). Such a reading violates the basic principle that each provision of a contract should be interpreted as part of an integrated whole, to the end that all of the provisions may be given effect if possible.
Wherein lies the supposed conflict in the summary plan description booklets?
Each booklet, as far as we can see, did accurately summarize the main features of the group insurance policy as in effect at the time the booklet was issued;
The group insurance policy did, at all times, provide medical coverage for eligible employees;
The policy did, at all times, provide for continuation of medical coverage after retirement;
Medical coverage was in fact continued for each retiree, regardless of insurability, as long as the retiree complied with the conditions of the policy;
When the policy called for contributions from certain retirees, as it did in the 1960s, the booklets said so. When the policy did not call for contributions from any retiree, the booklets said that too. No booklet ever said that the policy would not be changed in the future to *892 require contributions for continued coverage,
and when the company made such a change in 1984, it was doing something that the booklets had said all along it had the right to do.
861 F.2d at 906 (footnote and citations omitted).
Virtually every circuit has reached the same conclusion. See e.g., In re Unisys Corp. Retiree Medical Benefit "ERISA" Litigation, 58 F.3d 896, 904 n. 12 (3rd Cir.1995) (court determined that the promise made to retirees was a qualified one: the promise was that retiree medical benefits were for life provided the company chose not to terminate or amend the plans pursuant to the company's reservation of rights); DeGeare v. Alpha Portland Indus., Inc., 652 F. Supp. 946, 961 (E.D.Mo. 1986), aff'd, 837 F.2d 812 (8th Cir.1988), vacated and remanded on other grounds, 489 U.S. 1049, 109 S. Ct. 1305, 103 L. Ed. 2d 575 (1989), (interpretation of plan documents to provide lifetime benefits subject to the employer's reserved right to amend was "harmonious and reasonable"); Anderson v. Alpha Portland Indus., Inc., 836 F.2d 1512, 1518 (8th Cir.1988), cert. denied, 489 U.S. 1051, 109 S. Ct. 1310, 103 L. Ed. 2d 579 (1989) (plaintiffs did not meet their burden of proving vested welfare benefits where an employer promised to provide welfare benefits "until death of retiree" where the employer had expressly reserved the right to terminate or amend the plan); Alday v. Container Corp. of America, 906 F.2d 660 (11th Cir.1990), cert. denied, 498 U.S. 1026, 111 S. Ct. 675, 112 L. Ed. 2d 668 (1991) (where summary plan description also clearly provided that retiree health insurance could be terminated or modified, these terms of description were controlling); Gable v. Sweetheart Cup Co., Inc., 35 F.3d 851, 856 (4th Cir. 1994), cert. denied, 514 U.S. 1057, 115 S. Ct. 1442, 131 L. Ed. 2d 321 (1995) (same).
Based upon for the foregoing authorities, the Court finds that no ambiguity exists in the SPDs by virtue of the inclusion of both promises of company-paid medical benefits for life and a clear, unambiguous reservation of right to modify or terminate the plan including the payment of medical benefits at any time.
Plaintiffs further argue that because not all of the SPDs specifically spoke to a retiree medical plan, an ambiguity exists as to whether the modification/termination provisions were sufficient to terminate promised retiree benefits. Plaintiffs suggest that while the modification/termination provisions may be effective to terminate active employee medical benefits, they are not effective as to retirees. Therefore, they maintain that summary judgment in favor of Defendant on this claim would inappropriate.
As an initial matter, the Court notes the factual deficiency in this argument. As indicated, the SPDs in the evidentiary record include both summary descriptions specifically designated as "retiree medical plan" descriptions and SPDs not so specifically designated. However, both the SPDs captioned as descriptions of the medical plan for salaried employees, and the SPDs specifically designated as covering retired salaried employees contain explicit modification/termination provisions. For example, the 1979 SPD is specifically designated as a description of the "Fruehauf Corporation Retired Salaried Employees Medical Plan." It contains the following reservation of rights provision: "The Plan Administrator may change or eliminate benefits under the plan and may terminate the entire plan or any portion of it. . . ." [See Plaintiffs' Ex. 28.] The 1986 SPD is also specifically designated as the "Fruehauf Corporation Retired Salaried Employees Medical *893 Plan." It contains a provision which states, "The Company has the right to change or discontinue the Plan at any time. . . ." [See Plaintiffs' Ex. 36.] Thus, there is no factual merit in Plaintiffs' suggestion that no reservation of rights was effective as against retirees.
Furthermore, with respect to applicability of the reservation of rights provisions contained in the SPDs of the medical plan for "active" salaried employees, each of those SPDs specifically include retirees within the class of "employees" covered thereunder. They all provide for the continuation of medical benefits for active employees who "retire from Active Service under the Salaried Retirement Plan on or after January 1, 1979."
Numerous courts, including the Sixth Circuit, have considered and rejected arguments similar to Plaintiffs' argument here. See e.g., Musto, supra, 861 F.2d at 902 (holding that a modification clause in an active employee benefit plan applies to retirees as well as to employees where the plan indicates that retirees will be considered employees for the purposes of the plan); Gable, supra, 35 F.3d at 856 (terms of plan established that retirees were within the class of employees covered by the plan). This is particularly true, where as here, the modification clauses contain no language limiting their applicability to only "active" employees. Id.
In sum, the Court finds no merit in Plaintiffs' claim that, under the terms of the plan, they had a "vested" right to company-paid medical benefits and that Defendant violated the terms of plan by requiring Plaintiffs to pay for a portion of their medical coverage. Accordingly, summary judgment will be entered in favor of Defendant on this claim.
2. BILATERAL CONTRACT THEORY
Plaintiffs also alleged in their Complaint a "bilateral contract theory" claiming that statements, promises and representations made to them by Fruehauf officials in connection with the company's retirement programs, created binding bilateral contracts which provided for vesting of company-paid medical benefits for life. Adhering to the well-established principle that "clear terms of a written employee benefit plan may not be modified or superseded by oral undertakings on the part of the employer", this bilateral contract theory was also expressly rejected in Sprague. 133 F.3d at 402-403 (citing Musto, supra.) In light of Sprague's holding on this issue, Plaintiffs here concede that the bilateral contract theory pled in their Complaint is no longer viable. See Plaintiffs' Response Brief, p. 31. Therefore, the Court will grant Defendants' motion for summary judgment on this claim.
3. PLAINTIFFS' ESTOPPEL ARGUMENT IS NOT VIABLE
Plaintiffs' third theory alleged in Count I of their Complaint is that K-H is barred by promissory or equitable estoppel from requiring them to pay for medical benefits. They argue that Fruehauf misrepresented the medical plan's terms to them, i.e., that they would have fully-paid medical benefits for life, and that they relied upon those alleged misrepresentations in deciding to retire.
The Sixth Circuit has held that equitable estoppel may be a viable theory in ERISA welfare benefit plan cases. See Armistead v. Vernitron Corp., 944 F.2d 1287, 1298 (6th Cir.1991). The elements of equitable estoppel in an ERISA action are as follows: 1) conduct or language amounting to a representation of material fact; 2) awareness of the true facts by the party to be estopped; 3) an intention on the part of the party to be estopped that the representation be acted on, or conduct towards *894 the party asserting the estoppel such that the latter has a right to believe that the former's conduct be so intended; 4) unawareness of the true facts by the party asserting the estoppel; and 5) detrimental and justifiable reliance by the party asserting estoppel on the representation Sprague, supra, 133 F.3d at 403, citing Armistead, supra. Promissory estoppel requires similar proof. To establish a claim under a promissory estoppel theory requires proof that 1) the promisor made a specific, clear, and unambiguous promise; 2) the promisor should reasonably have foreseen that his promise would induce reliance by the promisee; 3) the promisee acted or refrained from action to his detriment in actual and reasonable reliance upon the promise at issue; and 4) injustice will result if the promise is not enforced. See, e.g., Humphreys v. Bellaire Corp., 966 F.2d 1037, 1041 (6th Cir.1992); Cincinnati Fluid Power. Inc. v. Rexnord, Inc., 797 F.2d 1386, 1391 (6th Cir.1986); Motobecane America. Ltd. v. Patrick Petroleum Co., 791 F.2d 1248, 1251 (6th Cir.1986).
However, as the court in Sprague held, "[p]rinciples of estoppel cannot be applied to vary the terms of unambiguous plan documents; estoppel can only be invoked in the context of ambiguous plan provisions." 133 F.3d at 404. As the Sprague court explained,
There are at least two reasons for this [rule]. First, as we have seen estoppel requires reasonable or justifiable reliance by the party asserting the estoppel. That party's reliance can seldom, if ever, be reasonable or justifiable if it is inconsistent with the clear and unambiguous terms of plan documents available or furnished to the party. Second, to allow estoppel to override the clear terms of plan documents would be to enforce something other than the plan documents themselves. That would not be consistent with ERISA.
Id.
As was the case in Sprague, the summary plan descriptions issued to the Plaintiffs over the years unambiguously reserved to Fruehauf the right to amend or terminate the plan. As the Sprague court found, in the face of this clearly stated right to amend, "reliance on statements allegedly suggesting the contrary, was not, and could not be, reasonable or justifiable," as a matter of law. Id. This is particularly true, where, as here, Fruehauf never told the Plaintiffs that the plan would never be changed or that their benefits were fully paid-up. See Musto, supra, 861 F.2d at 909 (in absence of evidence that plaintiffs were told by their employer that their post-retirement benefits would never be changed, no estoppel claim could be maintained.)[25]
*895 4. THERE WAS NO BREACH OF FIDUCIARY DUTY
Finally, with respect to Plaintiffs' last theory of recovery in Count I, i.e., that K-H is liable to them for breach of fiduciary duty based upon Fruehauf representations to them in discussing the company's retirement plans that retiree medical benefits would be for life and at no cost to them, Sprague establishes as a matter of law that there was no breach of fiduciary duty in these alleged representations.
A fundamental requirement for Plaintiffs to establish an ERISA breach of fiduciary duty is that they show that the fiduciary made a mis representation to its employees about their benefit plan. See Varity Corp. v. Howe, 516 U.S. 489, 495, 504, 116 S. Ct. 1065, 1071-73, 134 L. Ed. 2d 130 (1996). As indicated, there is no evidence that Fruehauf ever told any of the Plaintiffs that their retiree health care benefits were "vested" or that the health care plan would never be changed. Accepting the Plaintiffs' own sworn testimony about what they were told, all that Fruehauf told them was that their medical insurance would be fully paid by the company for their lifetimes. This was true under the terms of Fruehauf's then-existing plan. As the Sprague court observed with respect to identical representations made by GM,
Explanations of benefits,
"tend to sound promissory by their very nature. While these explanations may state a company's current intentions with respect to the plan, they cannot be expected to foreclose the possibility that changing financial conditions will require a company to modify welfare plan provisions at some point in the future." Gable, 35 F.3d at 857.
GM's failure, if it may properly be called such, amounted to this: the company did not tell the early retirees at every possible opportunity that which it had told them many times before namely, that the terms of the plan were subject to change. There is, in our view, a world of difference between the employer's deliberate misleading of employees in Varity Corp. [telling them specifically that the employee benefit plan would not change] and GM's failure to begin every communication to plan participants with a caveat.
* * * * * *
We are not aware of any court of appeals decision imposing fiduciary liability for a failure to disclose information that is not required to be disclosed. At least three circuits have held that there is no fiduciary duty to disclose planned changes in benefits or even the termination of the plan before those actions become official. [Citations omitted.] A fortiori, there can be no fiduciary obligation to disclose the possibility of future changes in benefits....
Had an early retiree asked about the possibility of the plan changing, and he received a misleading answer, or had GM on its own initiative provided misleading information about the future of the plan... a different case would have been presented. But we do not think that GM's accurate representations of its current program can reasonably be deemed misleading. GM having given out no inaccurate information, there was no breach of fiduciary duty.
133 F.3d at 405-406 (citations omitted).
The foregoing authority establishes that Plaintiffs' Count I breach of *896 fiduciary claim in this case is without merit. As was the case with GM in Sprague, Fruehauf did not give Plaintiffs inaccurate information concerning retiree medical benefits when they were considering retirement. The information they were given was, at the time it was given, accurate. Fruehauf not having given out inaccurate information, there was no breach of fiduciary duty.[26]
D. PLAINTIFFS' HAVE FAILED TO ESTABLISH A RICO CLAIM
In Count II of their Complaint, Plaintiffs allege that the letters sent to salaried retirees by FTC [Defendants' Ex. B] advising them that, due to increased health care costs, they would be required to pay a portion of the monthly cost for medical coverage, were fraudulent in that they falsely inflated the projected costs of the plan and as a result retirees were induced to pay higher premiums than necessary. Plaintiffs contend that Defendant K-H is responsible for the statements made in these letters because FTC was acting as its agent when it made these statements and sent these letters to retirees and that, as a consequence, K-H violated the Racketeering Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(c) and (d).
To establish a private RICO action under Section 1962, Plaintiffs must establish that (1) the defendant (2) through the commission of two or more acts, (3) constituting a "pattern" (4) of "racketeering activity", (5) directly or indirectly invests in, or maintains an interest in, or participates in (6) an "enterprise" (7) the activities of which affect interstate commerce. 18 U.S.C. § 1962(a)-(c). See Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496, 105 S. Ct. 3275, 87 L. Ed. 2d 346 (1985). "Racketeering activity" is defined in the statute as including any act "indictable" under certain specifically enumerated federal criminal statutes, including the mail fraud statute, 18 U.S.C. § 1341.
It is mail fraud that Plaintiffs here purport to use to support their RICO claim. Mail fraud has two elements: a scheme or artifice to defraud and a mailing for the purpose of executing the scheme. Bender v. Southland Corp., 749 F.2d 1205, 1215 (6th Cir.1984). The "scheme to defraud" must involve "intentional fraud, consisting in deception intentionally practiced to induce another to part with property or to surrender some legal right, and which accomplishes the end designed." Id. See also, Epstein v. United States, 174 F.2d 754, 765 (6th Cir.1949) (scheme to defraud requires intent to deceive or defraud.)
Plaintiffs here, however, have not alleged any acts committed by Defendant K-H. Rather, Plaintiffs base their RICO claim against K-H on allegedly fraudulent letters sent by FTC contending FTC was acting "as agent for K-H" when it sent the complained of letters. The sole basis Plaintiffs' agency theory is the following *897 language in the Assumption Agreement executed by FTC at the time of its purchase of Fruehauf Company's trailer operations:
The Purchaser [Terex a/k/a FTC] hereby covenants and agrees that, any time and from time to time following the date hereof, at the request of the Seller [Fruehauf, a/k/a K-H], the Purchaser will promptly execute and deliver, or cause to be executed and delivered to the Seller all such further instruments and take all such further action as may be reasonably necessary or appropriate to more effectively assume the Assumed Liabilities or otherwise to confirm or carry out the provisions and intent of this Assumption Agreement.
Plaintiffs contend that this language "vested in Defendant the absolute right to control the performance of the assumed liabilities." [See Plaintiffs' Brief, p. 35].
While it is true that "the person delegated may be an agent... of the delegating obligor," Restatement 2d Contracts, § 318, comment (b), the delegatee only becomes an agent when the delegating obligor and delegatee agree that the delegatee (agent) will act for the delegator (principal) with the understanding that the principal will "be in control of the undertaking." Restatement 2d Agency, § 1. It is the right to control that is the basis for the agency relationship. See Martin v. Thrifty Rent A Car, 145 F.3d 1332, 1998 WL 211786 (6th Cir.1998) (unpublished opinion; text available on WESTLAW). It is not necessary that the principal actually exercise its right to control; it suffices that such a right exist. General Acquisition, Inc. v. GenCorp, Inc., 766 F. Supp. 1460, 1471 (S.D.Ohio 1990), app. dismissed on other grounds, 23 F.3d 1022 (6th Cir. 1994).
Contrary to Plaintiffs' contention, the language of the Assumption Agreement that they rely upon does not, as they contend, establish that Defendant-K-H was given the "absolute right to control the performance of the assumed liabilities." The plain language of the provision which states that "at the request of Seller [K-H], Purchase [FTC] will promptly execute and deliver, or cause to be executed and delivered to the Seller all such further instruments and take all such further action as may be reasonably necessary or appropriate to more effectively assume the Assumed Liabilities," merely addresses FTC's obligation to execute any additional documents and to take additional actions, such as recording or registering appropriate documents with the appropriate agencies, to complete and perfect the assumption transaction. This provision says nothing about monitoring, directing or controlling FTC's performance after the assumption transaction is completed. With respect to FTC's performance of its obligations under the Assumption Agreement, if FTC does not honor its obligations under the Agreement, K-H has no right to step in and direct compliance. K-H's only remedy is a breach of contract action against FTC. See Kelly v. Diesel Construction Division of Carl A. Morse, Inc., 35 N.Y.2d 1, 358 N.Y.S.2d 685, 315 N.E.2d 751, 754 (N.Y.App.1974) (one who delegated duty to another is entitled to recover from the delegate for harm sustained by him because of the delegate's breach of duty).
In sum, the Assumption Agreement is insufficient evidence of the existence of an "agency" relationship between FTC and K-H. The Assumption Agreement provides no evidence of K-H's right to control FTC's performance of its obligations with respect to the assumed liabilities. Therefore, it fails to establish that FTC was acting as K-H's agent when it informed Plaintiffs that increased costs of medical *898 insurance required that retirees pay a portion of the insurance premiums and provided them with an allegedly inaccurate formula pursuant to which it calculated the amount that retirees would be required to pay.[27]
As the Sixth Circuit observed in Blount Financial Service v. Walter F. Heller & Co., 819 F.2d 151, 152 (6th Cir. 1987), "fraud alleged in a RICO civil complaint for mail fraud must state with particularity the false statement of fact made by the defendant which the plaintiff has relied on and the facts showing the plaintiff's reliance on the defendant's false statement." (emphasis added). See also, Bender v. Southland Corp., 749 F.2d 1205, 1215 (6th Cir.1984) (complaint properly dismissed where RICO allegations are inadequate); De Jesus v. Sears, Roebuck & Co., Inc., 87 F.3d 65, 67 (2nd Cir.1996), cert. denied, 519 U.S. 1007, 117 S. Ct. 509, 136 L. Ed. 2d 399 (1996) (RICO claim properly dismissed for failure to plead fraud with particularity.)
Plaintiffs here cannot maintain their RICO claim against K-H absent allegations and proof that K-H made the misrepresentations of which the complain. It is not enough that FTC sent them allegedly fraudulent letters; Plaintiffs must prove that Defendant K-H made, or directed FTC to make, the fraudulent statements contained therein. Plaintiffs have failed to meet this burden.
For these reasons, the Court finds that Plaintiffs have failed to establish the requisite predicate acts of "racketeering activity" needed to support their RICO claim. Unable to establish this necessary element, Plaintiffs' RICO claim will be dismissed.
E. PLAINTIFFS' FAILURE TO ESTABLISH THAT FTC ACTED AS AGENT FOR K-H ALSO REQUIRES DISMISSAL OF PLAINTIFFS' COUNT III BREACH OF FIDUCIARY DUTY CLAIM
Finally, in Count III of their Complaint, Plaintiffs allege an "additional violation of ERISA" contending therein that "in misrepresenting the costs of the Plan and retiree premiums during the period of the fall of 1990 through May 1994, and in collecting inflated premiums from retirees, Defendant K-H breached the strict fiduciary duties it owed to Plaintiffs... as a plan administrator and fiduciary under 29 U.S.C. § 1104(a)." [See Complaint, ¶ 33.] However, as shown above in Section (D), Plaintiffs have failed to show that any misrepresentations were ever made by Defendant K-H and they have to establish that FTC was acting as K-H's agent at the time that FTC made the allegedly false and misleading statements. Since it is only through their agency argument that Plaintiffs attempt to attach liability to Defendant K-H for their claim in Count III of their Complaint, this claim will also be dismissed.
CONCLUSION
For all of the reasons stated above in this Opinion and Order,
IT IS HEREBY ORDERED that Defendant's Motion for Summary Judgment *899 be, and hereby is, GRANTED. Accordingly,
IT IS FURTHER ORDERED that Plaintiffs' Complaint be DISMISSED with prejudice.
IT IS FURTHER ORDERED that Plaintiffs' Motion for Class Certification is DENIED as moot.
Let Judgment be entered accordingly.
NOTES
[1] There is also currently pending Plaintiffs' Motion for Class Certification. However, the Sixth Circuit has held that a district court is not required to determine whether a complaint could be properly maintained as class action before ruling on the merits of the case. See Jibson v. Michigan Educ. Association-NEA, 30 F.3d 723, 734 (6th Cir.1994); Marx v. Centran Corp., 747 F.2d 1536, 1552 (6th Cir.1984) cert. denied, 471 U.S. 1125, 105 S. Ct. 2656, 86 L. Ed. 2d 273 (1985). See also, Wright v. Schock, 742 F.2d 541, 544 (9th Cir.1984) ("It is reasonable for a district court to consider a motion for summary judgment before reaching a motion for class certification when resolution of the former is likely to prevent `needless and costly further litigation.'") Therefore, the Court has decided to address the pending motion for summary judgment in this case before ruling on Plaintiffs' motion for class certification.
[2] Plaintiff Gustke retired under the early retirement plan offered in August 1982; Plaintiff Rawlings retired under the early retirement plan offered in September 1987; and Plaintiffs Armbruster, Varney and Butler retired under the early retirement plan offered in October 1988.
[3] K-H Corporation is a holding company with no operations; substantially all of its assets are the capital stock of Kelsey-Hayes Corporation and substantially all of its revenues are generated by Kelsey-Hayes and its subsidiaries.
[4] The Assumption Agreement provided in pertinent part as follows:
[I]n consideration of the execution by the Seller of the [Purchase] Agreement and the execution by the Seller of the Bill of Sale and for other good and valuable consideration receipt of which is hereby acknowledged the Purchaser [Terex Trailer Corporation, now known as Fruehauf Trailer Corporation] by these presents does assume and agree to pay, perform and discharge, and to defend and indemnify and hold harmless from, any and all debts, liabilities and obligations, whether fixed or contingent, or mature or unmatured, including without limitation... those arising under any contract, commitment or undertaking of the Seller, on or prior to the date hereof...
* * * * * *
(ii) owing or relating to... any and all Liabilities of the Seller to Former Employees of the Transferred Businesses, including, without limitation, all Liabilities to such former employees under any employee benefit plan of the Seller (including all Liabilities under the Assumed Severance Agreements and all Liabilities and benefits payable to Transferred Employees and Former Employees under the employee related plans and arrangements set forth on Schedule A hereto)....
See Assumption Agreement, Defendant's Ex. A.
[5] The structure of Fruehauf's cost-sharing program in 1990, 1991, 1992, and 1993 was that in each year the company paid the increase in the health care costs up to the rate of increase based upon the Cost of Living Adjustment for Social Security Benefits as determined by the Department of Labor in the third quarter of each year (COLA) and the retiree being responsible for any additional amount by which medical claims costs exceeded Social Security COLA. See Defendant's Ex. B1-B4.
[6] All of the Plaintiffs in the instant action were plaintiffs in the 1994 action. One other individual, Earl Fuller, was also named as a party-plaintiff in the 1994 action. Mr. Fuller is the only named plaintiff in the 1994 action who is not also a named party in this case.
[7] Earl Fuller, the first named plaintiff in the 1994 action, is the only plaintiff in the prior action who is not a party-plaintiff in the present action.
[8] The Court's decision granting class certification in Fuller was decided prior to the Sixth Circuit's en banc decision reversing the district court's grant of the plaintiffs' motion for class certification in Sprague v. General Motors, 133 F.3d 388 (6th Cir.1998) (en banc). This Court's Fuller decision was based in large part on the district court's decision in Sprague which, at the time of this Court's ruling had just been affirmed by a three-judge panel of the appellate court. See Fuller, 168 F.R.D. at 596-597 & n. 14, citing Sprague v. General Motors, 843 F. Supp. 266 (E.D.Mich. 1994), aff'd, 92 F.3d 1425 (6th Cir.1996). The three-judge panel's affirmance was subsequently vacated on rehearing en banc, 102 F.3d 204 (6th Cir.1996), and ultimately reversed in relevant part, in the appellate court's en banc decision. 133 F.3d 388.
[9] Although it was in bankruptcy, Fruehauf Trailer had continued to provide retirees with medical insurance coverage. In January 1997, however, Fruehauf Trailer requested K-H Corporation to assist with the payment of salaried retiree medical benefits. K-H agreed to do so on an interim basis, i.e., from January 15, 1997 through April 15, 1997, while it gathered information and determined whether to allow the Bankruptcy Trustee to terminate retiree medical benefits. See Defendant's Ex. G. Ultimately, K-H decided not to terminate the salaried retiree medical benefits and agreed to assume prospective responsibility for existing benefit levels beginning April 16, 1997. See Defendant's Ex. H.
[10] The Plaintiffs had filed individual and class proofs of claim in the bankruptcy court, but they decided to proceed with this action against K-H because the bankrupt Fruehauf Trailer did not have "assets available to pay such claims and apparently no relief [would] be forthcoming from the bankruptcy." See Complaint, ¶ 8.
[11] Although Plaintiffs also claim that these benefits statements also advised the recipient that their medical benefits were "fully vested," Plaintiffs misread the statements. The notification that "Our records indicate that you are fully vested in this benefit" relates only to monthly retirement income (i.e., a vested pension). No such vesting notation follows the separately captioned portions of the benefits statements addressing Hospital and Medical Benefits, Major Medical Plan, Dental Benefits, Disability Income Benefits, Death Benefits, or Paid Vacation and Holiday Benefits. See Ex. 31.
[12] Helwig left Fruehauf in 1986.
[13] The record does not indicate precisely what position Armbruster held, but only that he was provided information about benefits that he was expected to pass along to other employees.
[14] Armbruster has not produced this "green slip"; he testified at his deposition that he threw it away.
[15] Brandt worked at the Akron branch of the company.
[16] Although in his 1998 deposition Brandt did not testify that he was told that he would be provided lifetime company-paid medical, in his previous February 23, 1995 deposition in the Fuller action, Brandt testified that Small told him that Fruehauf would pay for his health insurance for "the rest of your life." [See Brandt Dep., Plaintiffs' Ex. 3, pp. 22, 25-27.] Brandt has submitted a Declaration stating that if he is called to testify at trial in this action, he would testify as he testified in my February 23, 1995 deposition taken in the Fuller case. [See Plaintiffs' Ex. 3, p. 1.]
[17] There is no evidence of record concerning any oral representations made to the remaining two named Plaintiffs Robert Rawlings, who retired under the 1987 SERP and Harold Messacar, who retired under Fruehauf's standard retirement program. Rawlings admitted in his deposition that he had no conversations with any company representatives concerning the benefits he would receive after he retired. See Rawlings Dep., Plaintiffs' Ex. 11, p. 28. Neither party has submitted any testimony by Harold Messacar. However, in his deposition taken in the Fuller case, Messacar was unable to cite to any particular statement that led him to believe that he would be provided medical benefits for life upon his retirement. See Fuller, supra, 168 F.R.D. at 592 n. 6.
[18] "Taken together the three cases signal to the lower courts that summary judgment can be relied upon more so than in the past to weed out frivolous lawsuits and avoid wasteful trials." 10A Charles A. Wright, Arthur R. Miller, Mary Kay Kane, Federal Practice & Procedure, § 2727, at 35 (1996 Supp.).
[19] The Assumption Agreement provides that it is to be governed by, and construed in accordance with, the laws of the State of New York.
[20] Even if the Court were to apply the six-year period "from the date of the last action which constituted the breach" of fiduciary duty provided in subsection (1) of Section 1113, Plaintiffs breach of fiduciary claims would still be time-barred. The "last action" addressed in Section 1113(1) focuses on the last action of the fiduciary which was in violation of its fiduciary duty. In re Unisys Retiree Medical Benefit "ERISA" Litigation, supra, 242 F.3d at 505-506. In this case, the breach of fiduciary duty complained of by Plaintiffs in Count I of their Complaint occurred when Fruehauf allegedly misrepresented to them that "retiree medical benefits would be for life [and] at no cost in order to induce their retirement." See Complaint, ¶ 20(E)-(F).
As the court explained in In re Unisys Retiree Medical Benefit "ERISA" Litigation, supra, given that
[a]n employee may recover for a breach of fiduciary duty if he or she proves that an employer, acting as a fiduciary, made a material misrepresentation... about his or her benefits, and the beneficiary acted thereupon to his or her detriment[,] ...
... it necessarily follows that any breach that may have occurred and was completed, and a claim based thereon accrued, no later than the date upon which the employee relied to his detriment on the misrepresentations.
242 F.3d at 505-506 (citations omitted).
Accordingly, the Unisys court determined for the plaintiffs who had purportedly retired based upon Unisys' alleged express assurances that they would have guaranteed company-paid lifetime healthcare, the six-year period of limitations commenced no later than the dates upon which they retired. Id.
As noted, Plaintiffs here testified that their decisions to retire were based, at least in part, upon representations made by Fruehauf that they would be provided company-paid medical benefits for life. Plaintiff Brandt retired in 1981; Plaintiff Gustke retired in 1982; Plaintiff Messacar retired in 1985; Plaintiff Rawlings retired in 1987; and Plaintiffs Armbruster, Varney and Butler retired in October 1988. Applying Section 1113(1)'s six-year period of limitations to the claims of these Plaintiffs, to have been timely filed, Plaintiffs' Complaint would have had to have been filed no later than October 1994.
To the extent that Plaintiffs argue that the Court should construe the "last action" addressed in Section 1113(1) as encompassing the last of the 1990-1994 changes to the medical benefit plan such that their breach of fiduciary claim did not accrue under this six-year period of limitations until the Fruehauf medical insurance plan was last changed, any such claim would be entirely without merit. As the Supreme Court has repeatedly emphasized, an employer does not act as a fiduciary when it adopts, modifies or terminates an employee benefit plan. See Lockheed Corp. v. Spink, 517 U.S. 882, 889, 116 S. Ct. 1783, 1789, 135 L. Ed. 2d 153 (1996); Varity Corp. v. Howe, 516 U.S. 489, 505, 116 S. Ct. 1065, 1074, 134 L. Ed. 2d 130 (1996); Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 78, 115 S. Ct. 1223, 1228, 131 L. Ed. 2d 94 (1995). As the Lockheed Court explained:
This rule is rooted in the text of ERISA's definition of fiduciary. See 29 U.S.C. § 1002(21)(A).... [O]nly when fulfilling certain defined functions, including the exercise of discretionary authority or control over plan management or administration, does a person become a fiduciary under § 3(21)(A). Because the defined functions in the definition of fiduciary do not include plan design, an employer may decide to amend an employee benefit plan without being subject to fiduciary review.
517 U.S. at 890, 116 S. Ct. at 1789 (citations and some punctuation omitted; emphasis added). See also, Sprague v. General Motors Corp., 133 F.3d 388, 404 (6th Cir.1998) (affirming district court's dismissal of the plaintiffs' breach of fiduciary claims predicated upon GM's decision to change its health insurance plan because GM did not act as a fiduciary in making that decision).
Since the various 1990-1994 amendments of the Fruehauf medical benefits plan here were non-fiduciary acts, they cannot constitute the "last action" that gives rise to breach of fiduciary cause of action.
[21] In Michigan United Food and Commercial Workers Unions, et al. v. Muir Co., Inc., supra, the Sixth Circuit noted that this does not appear to be the rule in the Third Circuit where courts appear to apply both state statutes of limitations and state accrual and tolling principles. 992 F.2d at 598 (citing Sheet Metal Workers Local 19 v. 2300 Group, Inc., 949 F.2d 1274 (3d Cir.1991); Connors v. Beth Energy Mines, Inc., 920 F.2d 205 (3d Cir. 1990); and Vernau v. Vic's Market, Inc., 896 F.2d 43 (3d Cir.1990).) The Muir court expressly refused to follow Third Circuit in this regard.
[22] The city had initially regarded the resolutions as applying only to conventional retirees, not those taking advantage of the city's "40 & 8" early retirement program. In 1989, the Michigan Court of Appeals ruled that retirees under the "40 & 8" plan were fully entitled to the health insurance benefits. See Clexton v. Detroit, 179 Mich.App. 209, 445 N.W.2d 201 (1989). The Adams suit followed the Clexton decision.
[23] Plaintiffs were subsequently notified of four more changes to the medical benefits plan i.e., in 1991 they were notified of a change in insurance carriers; in 1992 and 1993 the amounts retirees were required to contribute were increased; and in 1994, they were notified of the change to AARP medi-gap insurance for retirees over age 65. Although some of these subsequent changes, such as the medi-gap change, were perhaps different in kind from the 1990 change, they do not change the fact that Plaintiffs had notice of the fundamental substantive change in the terms of the plan as of January 1990.
[24] The American General medical insurance plan had originally required employee and retiree contributions. The contribution requirement was subsequently eliminated. However, after National Life was acquired by American General in 1984, National Life employees and retirees were again required to pay a portion of their medical insurance.
[25] To the extent that Plaintiffs' rely upon certain annual statements they received from their employer prior to their retirement summarizing the total annual cost of their welfare and pension benefits and the statement at the end of those benefit summaries that "Our records indicate that you are fully vested in this benefit," [see Plaintiffs' Ex. 31], it is clear from the face of these documents that the statement regarding being "fully vested in this benefit" refers only to the discussion of "Your Pension Benefits at Retirement" which immediately precedes it, not to all of the other benefits summarized in the separately-headed categories of benefits listed above that section, i.e., "Your Hospital and Medical Benefits," "Your Major Medical Plan," "Your Dental Benefits," "Your Disability Income Benefits," "Your Death Benefits," and "Your Paid Vacation and Holiday Benefits." As the Sixth Circuit noted in Musto, supra, "[T]he fact that an employee acquires a vested, non-terminable right to pension benefits... does not in any way suggest that the employee acquires a comparable vested right to medical insurance benefits under a welfare plan that does not provide for the vesting of such benefits." 861 F.2d at 909. Furthermore, "references to lifetime benefits contained in nonplan documents cannot override an explicit reservation of the right to modify contained in the plan documents themselves." Gable v. Sweetheart Cup Co., Inc., supra, 35 F.3d at 857.
[26] To the extent that Plaintiffs' breach of fiduciary claim is predicated upon the decision to amend the plan to require employee contributions for health care insurance coverage, as noted above, both the U.S. Supreme Court and the Sixth Circuit have expressly held that a company does not act in a fiduciary capacity when deciding to amend or terminate a welfare benefits plan. See note 20, supra, and cases discussed therein. See also, Sutter v. BASF Corp., 964 F.2d 556, 562 (1992) (quoting Adams v. Avondale Industries, Inc., 905 F.2d 943, 947 (6th Cir.), cert. denied, 498 U.S. 984, 111 S. Ct. 517, 112 L. Ed. 2d 529 (1990)); Sengpiel v. B.F.Goodrich Co., 156 F.3d 660, 665 (6th Cir.1998), cert. denied, 526 U.S. 1016, 119 S. Ct. 1249, 143 L. Ed. 2d 347 (1999). Therefore, the decision to require employees to pay for a portion of their health care coverage did not constitute the breach of any fiduciary duty. Id. at 666.
[27] Plaintiffs also attempt to rely upon internal K-H documents dating after 1993, i.e., after FTC filed for bankruptcy, which show that K-H was considering how to handle its potential liability for Fruehauf retiree medical benefits in the event that FTC terminated the benefits, and K-H's ultimate decision in April 1997 to continue to provide retirees medical insurance coverage upon cessation of coverage by FTC. None of this evidence, however, establishes that K-H ever had the right to control FTC's actions prior to FTC's cessation of coverage in 1997.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433137/
|
206 F. Supp. 2d 742 (2002)
COLONY APARTMENTS-CHAPEL HILL LIMITED PARTNERSHIP, Plaintiff,
v.
ABACUS PROJECT MANAGEMENT, INC., Defendants.
No. Civ.A. AW-00-1514.
United States District Court, D. Maryland, Southern Division.
June 27, 2002.
*743 James D. Dalrymple, Law Office, Gaithersburg, MD, for Plaintiff.
Cynthia J. Morris, Cathy A. Hinger, Piper Rudnick LLP, Sheila C. Stark, Law Office, Washington, DC, Henry Mark Stichel, Gohn Hankey and Stichel LLP, Baltimore, MD, William C. Edgar, Angela F. Williams, Bryan Cave LLP, Washington, DC, Henry Mark Stichel, Gohn Hankey and Stichel LLP, Baltimore, MD, Michael Peter Gurdak, Jonathan Berman, Jones Day Reavis and Pogue, Washington, DC, for Defendants.
MEMORANDUM OPINION
WILLIAMS, District Judge.
This case arises out of Plaintiff's claims of professional negligence, negligent misrepresentation, *744 detrimental reliance, respondeat superior, and fraudulent misrepresentation against Defendants Abacus Project Management and AIMCO Residential Group, L.P. in connection with Plaintiff's purchase of apartment buildings in North Carolina. Pending before the Court are seven motions: (1) Defendant Abacus's Motion for Summary Judgment [44-1]; (2) Defendant Abacus's Motion to Strike [45-1]; (3) Defendant Abacus's Motion to Exclude Testimony of Plaintiff's Experts [45-2]; (4) Plaintiff's Motion for Partial Summary Judgment [50-1]; (5) Defendant Abacus's Second Motion for Summary Judgment [54-1]; (6) Defendant AIMCO's Motion for Summary Judgment [55-1]; (7) Defendant AIMCO's Motion to Strike Designation and Testimony of Plaintiff's Proposed Experts [59-1].
The Court has reviewed the pleadings and applicable law. A bench hearing was held on June 21, 2002. See D.Md.R. 105(6). For the reasons stated below, the Court will GRANT Defendant Abacus's Second Motion for Summary Judgment [55-1], and will DENY AS MOOT all remaining claims. Likewise, the Court will dismiss and close this case.
BACKGROUND
Plaintiff Colony Apartments-Chapel Hill, L.P. ("Colony") is a Maryland limited partnership with its principal place of business in Bethesda, Maryland. Defendant Abacus Project Management ("Abacus") is an Arizona corporation with its principal place of business in Arizona. Defendant AIMCO Residential Group, L.P. ("AIMCO" or "Insignia") is a South Carolina corporation.
Colony Apartments (the "Apartments") is a 15 building, 198 unit apartment complex in Chapel Hill, North Carolina. From July 17, 1990, to November 26, 1996, the Apartments were owned by Colony Limited Partnership, a Balcor Company ("Balcor"). Under Balcor's ownership, the Apartments were managed by Allegiance Realty ("Allegiance") until November 4, 1994. At that time, Insignia Residential Group (now AIMCO) purchased Allegiance and assumed all of Allegiance's property management contracts. In July 1995, William Peebles became the Resident Manager of the Apartments and remained so for the remainder of AIMCO's management period.
In November 1996 Plaintiff purchased the Apartments from Colony Limited Partnership for $7,100,000.00. The sale contract provided the property was purchased "AS IS" and "WITH ALL FAULTS." Eichler, Fayne & Associates ("EF & A") [1] provided partial funds for the closing and hired Defendant Abacus, an Arizona corporation, to provide an engineering report on the property.
In November 1996 Plaintiff engaged Pinnacle Realty Management Company ("Pinnacle") to function as Plaintiff's manager and agent at the Apartments. Pinnacle, through its officer and representative, Brenda Measamer, undertook its management function on November 26, 1996, and concluded on August 7, 2000.
Plaintiff claims that Defendant Abacus's engineering report was inaccurate because it failed to specify the existence of certain defects in the property. Plaintiff further alleges that prior to the closing one of its representatives spoke with Mr. Peebles, a representative of Defendant AIMCO, the property manager, about the condition of the property and that AIMCO expressly stated that there were no defects in the property. Colony allegedly relied on the *745 inaccurate representations made by Defendants Abacus and AIMCO in deciding whether to purchase the property.
In 1999, three years after purchasing the Apartments and after receiving numerous complaints from tenants, Colony undertook a new engineering report to assess the structural integrity of the entire apartment complex. The new report revealed that the entire complex suffered from structural deficiencies that were readily discernible when the first engineering report was conducted in 1996. Colony claims that the repairs will cost at least $1,000,000, plus prejudgment and post-judgment interest and costs, and seeks to impose liability on Defendants based on diversity of jurisdiction. 28 U.S.C. § 1332.
Currently there are six Counts remaining in the case. Plaintiff alleges claims of professional negligence, negligent misrepresentation, detrimental reliance, and respondeat superior against Defendant Abacus (Counts I through IV, respectively). In addition, Plaintiff alleges negligent misrepresentation and fraudulent misrepresentation against Defendant AIMCO (Counts V and VI, respectively).
Defendant Abacus has submitted two Motions for Summary Judgment. The first motion seeks summary judgment on grounds that Abacus owes no legal duty to Plaintiff on the facts on this case. The second motion seeks summary judgment on grounds that Plaintiff's claims with regards to the structural deficiencies are barred by the statute of limitations. Defendant AIMCO has submitted a Motion for Summary Judgment on grounds that Plaintiff cannot show either justifiable reliance or an applicable duty of care. Both Defendants Abacus and AIMCO have moved to Strike and Exclude the Testimony of Plaintiff's Experts on grounds that they are not qualified as experts and because their opinions fail to meet the necessary standards of relevance and reliability. Because Abacus's Motion for Summary Judgment based on statute of limitations is dispositive, the Court will address that issue first.
DISCUSSION
1. Applicable Legal Principles
a. Motion for Summary Judgment
Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment will be granted when no genuine dispute of material fact exists and the moving party is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). While the evidence of the non-movant is to be believed and all justifiable inferences drawn in his or her favor, a party cannot create a genuine dispute of material fact through mere speculation or compilation of inferences. Runnebaum v. NationsBank of Md., N.A., 123 F.3d 156, 164 (4th Cir.1997) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986); Beale v. Hardy, 769 F.2d 213, 214 (4th Cir.1985)). To defeat such a motion, the party opposing summary judgment must present evidence of specific facts from which the finder of fact could reasonably find for him or her. Anderson, 477 U.S. at 252, 106 S. Ct. 2505; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). "Summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed `to secure the just, speedy and inexpensive determination of every action.'" Celotex, 477 U.S. at 327, 106 S. Ct. 2548 (citations omitted).
*746 b. Controlling Law
A federal court sitting in diversity must apply the choice of law of the forum state. See Riesett v. W.B. Doner & Co., 293 F.3d 164 (4th Cir.2002). "In situations when a cause of action accrues in one state and the adjudicatory forum of the action lies in another state, Maryland follows the conflict of laws principle of lex loci delicti." Naughton v. Bankier, 114 Md.App. 641, 649, 691 A.2d 712 (1997). This means that in Maryland, federal courts apply the procedural law of the forum state and the substantive law of the place or state of the wrong. Id.; see also White v. King, 244 Md. 348, 223 A.2d 763 (1966). As a result, the Court will apply the procedural laws of Maryland and the substantive laws of North Carolina, as the cause of action accrued in that state.
2. Analysis
a. Statute of Limitations
Defendant Abacus argues that Plaintiff, via agent and property manager Brenda Measamer, was notified or otherwise became aware of the existence of (a) rotten or wet flooring or (b) rotten or wet structural materials within the apartment buildings at Colony Apartments from a variety of sources before May 24, 1997, when the statute of limitations began to run.
Maryland Code Annotated, Courts and Judicial Proceedings, § 5-101 (1998) provides that "[a] civil action at law shall be filed within three years from the date it accrues unless another provision of the Code provides a different period of time within which an action shall be commenced." The meaning of "accrues" is not defined statutorily, however, and Maryland courts have interpreted the term most recently under the "discovery rule." See Poffenberger v. Risser, et al., 290 Md. 631, 431 A.2d 677, 680 (1981). In Poffenberger, the Maryland Court of Appeals held that the discovery rule was "applicable generally in all actions and the cause of action accrues when the claimant in fact knew or reasonably should have known about the wrong." Id. The court went on to explain that the discovery rule contemplates actual knowledge that is express cognition, or awareness implied from
"knowledge of circumstances which ought to have put a person of ordinary prudence on inquiry (thus charging the individual) with notice of all facts which such an investigation would in all probability have disclosed if it had been properly pursued. Id. at 681. In other words, a purchaser cannot fail to investigate when the propriety of the investigation is naturally suggested by circumstances known to him; and if he neglects to make such inquiry, he will be held guilty of bad faith and must suffer form his neglect."
Id. at 681 (quotations omitted).
In the case at hand, Defendant Abacus contends that the cause of action began to accrue more than three years prior to May 24, 2000, the date that Plaintiff filed its Complaint. Specifically, Abacus argues that Plaintiff received inquiry notice between November 26, 1996 (the date upon which Plaintiff purchased Colony Apartments), and May 24, 1997, via its authorized agent. Abacus posits that Pinnacle was "made aware of at least fifteen (15) separate examples of wet, rotten flooring or wet, rotten structural members within the Colony Apartments complex." Def. Abacus's Second Mot. for Summ.J. at 9.
Abacus bases its argument partially on tenant surveys conducted by Pinnacle, Plaintiff's property manager and agent in March 1997. When asked whether she remembered seeing the results of the tenant surveys, Ms. Measamer, Pinnacle's officer and representative, responded that *747 she did, and that she did not make the owners of the property aware of the surveys. See Dep.Test. of Brenda Measamer, 77-78, Ex. 1, Def. Abacus's Second Mot. for Summ.J. In addition, Ms. Measamer testified that she received the surveys on April 29-30, 1997, and that she "probably would have given [William Peebles] a list of items that needed to be repaired" based on the surveys. Id.
The tenant surveys from March 1997 contain various tenant complaints relating to necessary repairs. Some of the comments appear to be typical tenant complaints: "The day I moved it [sic], there was 1/4 inch of water on the bathroom floorit took 5 days to get it fixed." Another tenant reported, "Dishwasher still leaks, repair of acces [sic] over tub marginal."
On the other hand, several tenant complaints appear suggest structural deficiencies of the Apartments. For example, one survey said, "The dampness that is under our 1st floor aptit makes our carpet smell musty & moldywe have allergies this isn't good for our healthwe've told the staffthey didn't seem to believe us ... ✓ into the dampness under building L. A phone repairmen said there is water under our apt." Another survey noted, "Since the way to the front of main entrance N1, 2, 3, 4 is lower than the surround [sic] area, there is a lot of water when it rains. So please fix it." A third survey stated, "Mildew odor difficult to tolerate. Entrance ways (carpet, smell) are unsightly." Another tenant complained that "There was a lot of insulation that fell which I had to clean up ... Turning on the hot water, I have a rush of orange/brown water which eventually cleared but this is absurd! ... I have water stains all over my ceiling. Repainting doesn't solve the problem. The wood in the roof is probably rotten or at least has holes in it." Finally, another tenant reported, "Drainage for all those beautiful new machines is inadequate, hencewet and dirty floors." Def. Abacus's Mot. for Summ.J., Ex. 8.
In addition to the tenant surveys, Defendant Abacus also relies on deposition testimony of Ms. Measamer, in which she testified that on January 7, 1997, she received her first tenant complaint regarding water leaks or wetness within apartment walls or bathrooms, i.e., that "[Apartment] L-13 bathroom ceiling is coming down." Id. at 75.
Although a few of the above complaints seem to be typical tenant complaints, other comments suggest that as the property manager, Ms. Measamer was on notice of facts which would lead an ordinary prudent person to investigate the structural soundness of the buildings.
Maryland law provides that "notice to an agent, who has actual or apparent authority to receive it, is binding on his principal." Mass Transit Admin. v. Granite Constr. Co., 57 Md.App. 766, 471 A.2d 1121, 1128 (1984). That is, notice to an agent is "notice to the corporation `where the ... agent in the line of his duty "ought, and could reasonably be expected, to act upon or communicate the knowledge to the corporation."'" Hecht v. Resolution Trust, 333 Md. 324, 345-46, 635 A.2d 394 (Md.App.1994) (quoting Int'l Bankers Life Ins. Co. v. Holloway, 368 S.W.2d 567, 580 (Tex.1963)). In this case, the Property Management Agreement between Colony Apartments and Pinnacle that set forth terms of the appointment of Pinnacle as Plaintiff's "sole and exclusive property manager to lease and manage the property," see Def. Abacus's Mot. for SummJ., Ex. 2. Furthermore, the contract provided that Pinnacle would act "in a fiduciary capacity with respect to the protection of and accounting for" Colony's property. The terms of the agency relationship between Pinnacle and Plaintiff seem clear.
*748 Ms. Measamer issued the surveys and reviewed the complaints as they came in. In addition, Ms. Measamer testified that she was aware of all aspects of the operation and management of the Apartments; that she learned of all aspects of Plaintiff's operations through her regular visits to the Apartments, supervision of the day-to-day physical operation of the Apartments through by employees located on the premises, and her supervision of business operations of the Apartments. See Dep. Test. of Brenda Measamer, Def. Abacus's Second Mot. for Summ.J., Ex. 1, at 45. Based on Ms. Measamer's intimate involvement in the operations of the Apartments, as well as her agency relationship with Plaintiff, the Court finds that Plaintiff had implied knowledge of the structural deficiencies before May 24, 1997.
Plaintiff's Opposition repeatedly argues that the various tenant complaints have nothing to do with "rotten joists in crawlspaces." Plaintiff's counsel reiterated this argument at the hearing. However, Plaintiff's Amended Complaint does not deal specifically with rotten joists in crawlspaces, but speaks to the "entire apartment complex suffer[ing] from major structural problems." Pl.'s Second Am.Compl. ¶ 10. Thus, Plaintiff's argument that the tenant surveys do not speak to the Complaint is misplaced. Plaintiff relies on Pennwalt Corp. v. Nasios, 314 Md. 433, 550 A.2d 1155 (1988), for the proposition that "[a] plaintiff who cannot gain knowledge of a defendants' breach of duty is in the same position as one who cannot discover injury because both are `blamelessly ignorant' and cannot be said to have slept on their rights." Id. at 1166. However, Pennwalt dealt with the discovery rule in a products liability case and is not dispositive of the facts of this case. In sum, Plaintiff argues that it did not receive notice of the structural deficiencies until 1998. This actual knowledge is supported in the deposition testimony of Ms. Measamer. See Dep. Test. of Brenda Measamer, Def. Abacus's Second Mot. for Summ.J., Ex. 1 at 23. Because the issue here relates to implied knowledge, however, Ms. Measamer's actual knowledge is not conclusive as to when the statute of limitations began to run.
Finally, in its Opposition Plaintiff references an "Affidavit of Brenda Measamer attached hereto" that rebuts Abacus's contention that Plaintiff was made aware of tenant complaints in March and April of 1997. However, the affidavit was not attached to the Opposition, and Plaintiff has not proferred any other evidence to rebut the contention that Ms. Measamer was on inquiry notice as to the structural deficiencies as early as April 1997. Therefore, Plaintiff has failed to show that there is a genuine dispute as to a material fact with regards to Plaintiff's implied knowledge. It is difficult to believe that a ordinary prudent person who reviewed the tenant surveys and discussed them with another manager would not have investigated further into the tenants' complaints. This omission seems particularly egregious in that Pinnacle took management over the property in November 1996 and complaints began shortly thereafter.
Based on the tenant surveys and complaints in which Ms. Measamer was involved, it appears that she was put on inquiry notice as to some structural problems, such as water under Building L, rotten wood in the ceiling of Building L, and mildew and drainage problems in Building O. Given that Ms. Measamer's agency relationship with Plaintiff, the Court attributes Ms. Measamer's notice to her principal, Plaintiff, and finds that Plaintiff had implied knowledge as to the structural deficiencies several months before May 24, 1997. Thus, the Court grants summary judgment to Defendant Abacus on all counts. Although Defendant AIMCO *749 did not move for summary judgment based on statute of limitations, the Court also grants, sua sponte, summary judgment to AIMCO, as Plaintiff's claims with respect to AIMCO arise out of the same set of circumstances.
CONCLUSION
Based on the foregoing, the Court grants summary judgment to Defendants on the statute of limitations issue. Therefore, the Court need not reach the remaining motions and will deny as moot Defendants Abacus's and AIMCO's remaining motions for summary judgment, Defendants Abacus's and AIMCO's Motions to strike and exclude experts, and Plaintiff's partial motion for summary judgment. The Court likewise will close this case. An Order consistent with this Memorandum Opinion will follow.
ORDER
For the reasons stated in the accompanying Memorandum Opinion, IT IS this ____ day of June, 2002, in the United States District Court for the District of Maryland, ORDERED THAT:
1. Defendant Abacus's Second Motion for Summary Judgment [54-1] BE, and the same hereby IS, GRANTED;
2. Defendant Abacus's Motion for Summary Judgment [44-1] BE, and the same hereby IS, DENIED AS MOOT;
3. Defendant Abacus's Motion to Strike [45-1] BE, and the same hereby IS, DENIED AS MOOT;
4. Defendant Abacus's Motion to Exclude Testimony of Plaintiff's Experts [45-2] BE, and the same hereby IS, DENIED AS MOOT;
5. Plaintiff's Motion for Partial Summary Judgment [50-1] BE, and the same hereby IS, DENIED AS MOOT;
6. Defendant AIMCO's Motion for Summary Judgment [55-1] BE, and the same hereby IS, DENIED AS MOOT;
7. Defendant AIMCO's Motion to Strike Designation and Testimony of Plaintiff's Proposed Experts [59-1] BE, and the same hereby IS, DENIED AS MOOT;
8. The Clerk of the Court CLOSE this case;
9. The Clerk of the Court transmit copies of this Memorandum Opinion and Order to all counsel of record.
NOTES
[1] Eichler, Fayne & Associates, previously a co-defendant, was dismissed with prejudice by stipulation of the parties on February 22, 2002.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433142/
|
206 F. Supp. 2d 1119 (2002)
Merrily C. COBURN, Plaintiff,
v.
Roger A. NORDEEN, Defendant.
No. 01-2562-JAR.
United States District Court, D. Kansas.
June 6, 2002.
*1120 Merrily C. Coburn, Goddard, KS, Pro se.
M. J. Willoughby, Office of Attorney General, Topeka, KS, for Defendant.
MEMORANDUM AND ORDER GRANTING DEFENDANT'S MOTION TO DISMISS
ROBINSON, District Judge.
This matter comes before the Court on Defendant Roger A. Nordeen's Motion to Dismiss (Doc. 7) Plaintiff's Complaint. In her Complaint, Plaintiff alleges that Nordeen violated 42 U.S.C. § 1983, when he
[A]cting under the color of law, did then and there knowingly or recklessly swear to a false and deceptive complaint and supporting affidavit of probable cause, and did thereby directly and proximately cause the false and unlawful arrest, seizure, and detention of Merrily Coburn ....
The asserted bases for the motion to dismiss are: (1) that the Complaint is barred by Eleventh Amendment, prosecutorial and qualified immunity;[1] and (2) that the Complaint fails to state a claim under 42 U.S.C. § 1983. Because the Court finds that Nordeen's actions in filing a sworn criminal complaint and affidavit against Plaintiff were objectively reasonable, the Court concludes that Nordeen is protected by qualified immunity.
Background
Plaintiff's son has been charged in a juvenile action with possession of marijuana with intent to sell. Debbie and Tim Conely's juvenile son has been endorsed as a witness in that case. The court entered a "no contact order" mandating that Plaintiff's son not contact, among others, the Conely's son, either directly or indirectly (via phone, mail, letters, and or third parties). *1121 At some point, a contempt motion was filed in state district court against Robert Coburn, Plaintiff's husband, for alleged intimidation of a witness after he attempted to contact the Conely's son.
On or about April 22, 2001, the Coburns made a police report about a truck that had almost hit their daughter. Merrily Coburn told the officers that her daughter recognized the driver, a juvenile male, who she identified to police. When police interviewed this juvenile male, he denied any knowledge of the truck and the near collision with the Coburn girl. Apparently unsatisfied with the police investigation, Merrily Coburn alleges that on May 6, she was taking her daughter to look for the suspect truck. She admits that she did "incidentally" drive past the Conelys' residence.
On May 6, 2001, Debbie Conely made a police report to the Johnson County Sheriff's Department. The report states that Debbie Conely was driving home when she noticed a green GMC "Jimmy" truck, which she believed was occupied by the Coburns, and that they were following her to find out where she lived. During that same time frame, Tim Conely noticed a green GMC truck pass the Conelys' house at least twice. He said he realized it was the Coburns' after he noticed the truck sitting at the stop sign across the street for an abnormally long time. He believed this was the same vehicle he had earlier seen pass by his house. As Debbie Conely pulled into her driveway, Merrily and Robert Coburn allegedly stopped in front of the Conelys' house. Debbie Conely alleges that she saw Robert Coburn grin at her, implying to her that he now knew where she lived.
The Conelys promptly called the police. A Johnson County sheriff's deputy responded and completed an offense report and memorandum,[2] which related the substance of his interviews with Debbie and Tim Conely about the incident. Among the details provided by Debbie Conely, were that the Coburns were driving a green GMC "Jimmy" truck, with a Kansas license tag bearing letters QAI.
The deputy's report further relates the substance of his interviews of Robert and Merrily Coburn. Robert Coburn denied being present during the incident. Merrily Coburn stated that she and her daughter and son, but not her husband, were in the area at the time, looking for a truck which she believed had almost struck her daughter on an earlier occasion. Merrily Coburn admitted driving by the Conely house by accident. She further admitted that she owned a green GMC "Jimmy" truck with a Kansas license tag bearing letters QAI.
On May 14, 2001, Roger A. Nordeen, Assistant District Attorney, filed a criminal complaint[3] against Merrily C. Coburn, which stated in pertinent part:
I, Roger A. Nordeen, Assistant District Attorney of said County, being duly sworn on oath state to the Court that
MERRILY C. COBURN
did the following:
Count IThat on or about the 6th day of May 2001, in the County of Johnson, State of Kansas, Merrily C. Coburn did then and there unlawfully, willfully, maliciously and feloniously attempt to prevent or attempt to dissuade a witness ... who was under 18 years of age, from a[sic] causing a complaint, indictment or information to be sought and prosecuted *1122 and assisting its prosecution or from a[sic] causing a civil action to be filed and prosecuted and assisting its prosecution, a severity level 6 person felony, in violation of K.S.A. 21-3833, K.S.A. 21-4704 and K.S.A. 21-4707.
Nordeen also filed a sworn affidavit, in which he recounted information from the reports of the Johnson County Sheriff's Department. In this affidavit,[4] Nordeen provided additional information, that the Conelys' son had been endorsed as a witness in a juvenile case in which the Coburns' son had been charged with possession of marijuana with intent to sell.
In this action, Plaintiff contends that Nordeen "did then and there knowingly or recklessly swear to a false and deceptive complaint and supporting affidavit of probable cause." Plaintiff alleges that Nordeen falsely stated that: (1) Merrily Coburn was in Edgerton Kans. on May 6th, 2001, by her own admission and/or by the admission of anyone else, looking for a vehicle driven by the Conelys' son;[5] and (2) Merrily Coburn followed Debbie Conely to find out where she lived. Plaintiff further alleges that Nordeen omitted exculpatory information, in failing to state that Conely's son was not home or in Edgerton, Kansas, at the time of the incident on May 6. Plaintiff alleges that these false statements and omission deceived a magistrate into finding probable cause to issue an arrest warrant. On May 14, 2001, Plaintiff was arrested on the warrant.
Motion to Dismiss
Dismissal for failure to state a claim upon which relief can be granted is appropriate "only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations."[6] A Rule 12(b)(6) motion allows a defendant to test whether, as a matter of law, the plaintiff is entitled to legal relief even if everything alleged in the complaint is true.[7] The Court accepts as true the well-pleaded factual allegations and draws all reasonable inferences in favor of the plaintiff.[8]
Discussion
In his individual capacity, Nordeen is a person who can be sued under 42 U.S.C. § 1983 for his actions under color of law.[9] But, if his action under color of law is "prosecutorial action," he is protected by absolute prosecutorial immunity.[10] So long as the prosecutor is performing functions "associated with the judicial phase of the criminal process,"[11] he or she is protected from suits for civil damages. To ensure "... the vigorous and fearless performance of the prosecutor's duty that is essential to the proper functioning of the criminal justice system,"[12] this absolute immunity covers such actions as initiating, *1123 building or prosecuting a criminal case.[13] This immunity extends to civil rights litigation brought under 42 U.S.C. § 1983;[14] and this immunity applies even when there is evidence of improper motivation or malice.[15]
The initiation of criminal charges is generally considered a prosecutorial function, so closely aligned with the judicial process as to accord the prosecutor absolute immunity. But investigative acts performed by a prosecutor are accorded only qualified immunity. In Burns v. Reed,[16] the Supreme Court distinguished the prosecutor's misleading presentation of evidence at the probable cause hearing (absolute immunity) from the prosecutor's providing legal advice to the police (qualified immunity). The key to absolute immunity, as the Court had noted in Buckley v. Fitzsimmons,[17] is whether the challenged action is linked to the judicial process; and further, whether at common law, such action was accorded immunity.
Using this analysis, in Kalina v. Fletcher,[18] the Supreme Court drew a bright line between sworn and unsworn pleadings filed by a prosecutor. The Court held that the prosecutor had absolute immunity for filing an unsworn information and motion for arrest warrant; but the prosecutor had only qualified immunity for filing and personally vouching for the truthfulness of facts in a certificate for determination of probable cause. Common law had not protected prosecutors from this type of action; traditionally law enforcement officers serve as affiants or attest to the truthfulness of statements made in support of probable cause.
Thus, Nordeen's conduct, in filing a sworn complaint and sworn affidavit stating the facts purporting to establish probable cause, is entitled to qualified, not absolute immunity. A prosecutor's qualified immunity from Section 1983 claims that he filed a false affidavit or vouched for false statements in a criminal complaint, is examined using an objective reasonableness standard. In Malley v. Briggs, the Supreme Court articulated this standard as "[o]nly where the warrant application is so lacking in indicia of probable cause as to render official belief in its existence unreasonable ... [citation omitted] ... will the shield of immunity be lost."[19] Where officers of reasonable competence could disagree on the existence of probable cause and whether a warrant should issue, the actor is entitled to qualified immunity.[20]
In the context of a Rule 12(b)(6) motion to dismiss, "the qualified immunity defense is limited to the pleadings," and "the allegations in the complaint and any reasonable inferences ... from them" are drawn in plaintiff's favor.[21] In this context, the *1124 court applies "a heightened pleading standard ... requiring the complaint to contain `specific, non-conclusory allegations of fact sufficient to allow the district court to determine that those facts, if proved, demonstrate that the actions taken were not objectively reasonable in light of clearly established law.'"[22] "At the Rule 12(b)(6) stage, qualified immunity protects defendants performing discretionary functions from individual liability unless, on the face of the complaint, the plaintiff alleges the violation of `clearly established statutory or constitutional rights of which a reasonable person would have known.'"[23]
Plaintiff's argument that Nordeen is not entitled to qualified immunity is based on three premises: (1) that the judge ultimately found no probable cause; (2) that her version of the incident on May 6 is true and the Conelys' version is false; and (3) that Nordeen's affidavit is based on speculation, wild inferences and reckless assumptions drawn from Merrily Coburn's innocuous conduct: accidentally driving by the Conelys' house; and stopping briefly in front of the Conelys' house.
But, the fact that after the preliminary hearing, the judge found no probable cause supporting the charge against Plaintiff, does not establish that no reasonable officer would have found indicia of probable cause supporting the complaint and warrant. Nordeen found indicia of probable cause in the statements of the Conelys and the Coburns, Merrily Coburn's admission that she had "accidentally" driven by the Conelys' house, and in the history of acrimony and/or suspicion between these two families. The judge's contrary conclusion may well have been based on additional evidence presented at the preliminary hearing, evidence that was more exculpatory of Merrily Coburn.
Moreover, Plaintiff is misguided in attacking the reasonableness of Nordeen's actions with her self serving statements in defense of her own actions. A reasonable officer need not ignore indicia of probable cause merely because the alleged violator denies the conduct. Clearly the Coburns' and the Conelys' versions of what transpired on May 6 were radically different. However, there was sufficient information to establish that there had been contact between Merrily Coburn and Mr. and Mrs. Conely, this after a no contact order prohibited the Coburns' son from contacting the Conelys' son.
Furthermore, Nordeen's affidavit sets forth sufficient facts to overcome Plaintiff's argument that her conduct could only be viewed as innocuous. Again, given the circumstances and history of these two families, driving past the Conelys' house and then stopping in front of it could be reasonably viewed as attempted intimidation.
Although Plaintiff has acknowledged that Nordeen's affidavit corrected various inaccuracies in the sheriff's report, she complains of two false statements in the affidavit. She argues that Nordeen falsely stated that she was looking for a vehicle driven by the Conelys' son, when the truth is that she never believed it was the Conelys' son who was driving the vehicle that almost struck her daughter. Rather, it was another witness that was listed in the no contact order. Of course, Plaintiff's self serving statement concerning her state of mind does not demonstrate that Nordeen's statement was reckless or falsely made. Nothing suggests that Nordeen knew that Plaintiff was looking for the truck of another witness, who the Coburns' son was prohibited from contacting. It was reasonable *1125 for Nordeen to conclude that Debbie Conely was looking for the Coburns' son's truck, since Conely stopped in front of the Coburns' home.
Plaintiff further argues that Nordeen falsely stated that Debbie Conely believed the Coburns were following her to discover where she lived. Plaintiff notes that the police report states that Conely said she "turned down a side street to let the Jimmy go by;" which Nordeen changed in his affidavit to "turned down a side street and observed in [sic] the GMC Jimmy vehicle drive past her." Plaintiff alleges that Nordeen changed this language to cover up the inconsistency between Debbie Conely's two statements, because if Conely in fact intentionally let the truck go by, it is not possible that Coburn followed Conely to find out where she lived. Yet, this change in the language of the affidavit does not demonstrate reckless or intentional misconduct by Nordeen. Whether Conely let the truck go by, or saw it go by, it is undisputed that Coburn managed to drive to, and allegedly stop in front of, the Conelys' home.
Plaintiff also complains of an exculpatory omission from Nordeen's affidavit, that the Conelys' son, the subject of the no contact order, was not at home at the time of the May 6 incident. This omission was neither material or exculpatory. Plaintiff was not charged with intimidating the Conelys' son; she was charged with attempting to do this. It does not matter whether the boy was at home, one can attempt to intimidate someone in ways other than direct contact with the person. As related by the Conelys', they believed the smile on Robert Coburn's face signified a non verbal statement that the Coburns now knew where the Conelys lived.
In short, none of the statements or omissions that Plaintiff perceives as actionable, establishes a violation of the Fourth Amendment, for the "warrant requirement is violated when `a false statement knowingly and intentionally, or with reckless disregard for the truth, was included by the affiant in the warrant affidavit' if the false statement is necessary to a finding of probable cause."[24] Plaintiff's complaint does not contain specific, non-conclusory factual allegations sufficient to demonstrate a Fourth Amendment violation. And, there is nothing to support Plaintiff's allegation that Nordeen knowingly or recklessly made false statements or omissions in his affidavit.
Finally, Plaintiff argues that no one could reasonably conclude that she acted with malice or intent toward the Conelys or their son. While the facts asserted in her Complaint and in the documents attached to her Complaint and the other pleadings merely suggest that there is some history between the Coburns, Conelys and the boy allegedly driving the suspect truck, Plaintiff's response to the motion to dismiss paints a vivid picture of this history, acrimony and more. Given the statements in Nordeen's affidavit, the history between the Coburns and Conelys, the no contact order, and the unsupported diatribe of factual assertions in Plaintiff's response, the Court cannot conclude that no reasonably competent prosecutor in Nordeen's position would have made the sworn statement that there was probable cause justifying an arrest warrant.
IT IS THEREFORE ORDERED BY THE COURT that Defendant Roger A. Nordeen's Motion to Dismiss (Doc. 7) Plaintiff's Complaint shall be GRANTED.
IT IS SO ORDERED.
NOTES
[1] Plaintiff brings this suit against Nordeen in his individual capacity, not in his official capacity as an Assistant District Attorney. Although there is language in her complaint by which one could infer this is a suit against Nordeen in his individual capacity, Plaintiff clarified this in her response to Defendant's motion to dismiss. Accordingly, the Court need not address Defendant's argument that Plaintiff's suit against him in his official capacity is barred by the Eleventh Amendment. The Eleventh Amendment bars suits filed in federal court for damages against states and state officials. See generally, Seminole Tribe of Florida v. Florida, 517 U.S. 44, 116 S. Ct. 1114, 134 L. Ed. 2d 252 (1996). Eleventh Amendment immunity applies to actions under 42 U.S.C. § 1983. Klein v. University of Kansas Medical Center, 975 F. Supp. 1408, 1415 (D.Kan.1997). Suits against state officials in their official capacity are generally barred, as tantamount to suits directly against the state, because in either instance, when plaintiff seeks monetary damages they would be paid out of the state's treasury. Kentucky v. Graham, 473 U.S. 159, 165, 105 S. Ct. 3099, 87 L. Ed. 2d 114 (1985).
[2] Attached to Plaintiff's Complaint in this case.
[3] Attached to Plaintiff's Complaint in the instant action.
[4] Attached to Defendant's Memorandum in Support of Motion to Dismiss.
[5] This Court declines to identify the Coburns' son or the Conelys' son by name, as both are juveniles.
[6] Van Deelen v. City of Eudora, Kansas, 53 F. Supp. 2d 1223, 1226 (D.Kan.1999) (citations omitted).
[7] Id. (citations omitted).
[8] Id. (citation omitted).
[9] See generally, Will v. Michigan Department of State Police, 491 U.S. 58, 109 S. Ct. 2304, 105 L. Ed. 2d 45 (1989).
[10] Imbler v. Pachtman, 424 U.S. 409, 427, 96 S. Ct. 984, 47 L. Ed. 2d 128 (1976); Atkins v. Lanning, 556 F.2d 485, 488 (10th Cir.1977).
[11] Dees v. Vendel, 856 F. Supp. 1531, 1536-37 (D.Kan.1994) (citation omitted).
[12] Imbler, 424 U.S. at 427-28, 96 S. Ct. 984.
[13] Buckley v. Fitzsimmons, 509 U.S. 259, 269-70, 113 S. Ct. 2606, 125 L. Ed. 2d 209 (1993); Dohaish v. Tooley, 670 F.2d 934, 938 (10th Cir.1982), cert. denied, 459 U.S. 826, 103 S. Ct. 60, 74 L. Ed. 2d 63 (1982).
[14] Van Deelen v. City of Eudora, Kansas, 53 F. Supp. 2d 1223, 1227-32 (D.Kan.1999).
[15] Lerwill v. Joslin, 712 F.2d 435, 441 (10th Cir.1983).
[16] 500 U.S. 478, 111 S. Ct. 1934, 114 L. Ed. 2d 547 (1991).
[17] 509 U.S. 259, 113 S. Ct. 2606, 2614-15, 125 L. Ed. 2d 209 (1993).
[18] 522 U.S. 118, 118 S. Ct. 502, 139 L. Ed. 2d 471 (1997).
[19] 475 U.S. 335, 344-45, 106 S. Ct. 1092, 89 L. Ed. 2d 271.
[20] Id.
[21] Van Deelen, 53 F.Supp.2d at 1232 (citation omitted).
[22] Id. (citation omitted).
[23] Id. at 1233 (citations omitted).
[24] Id. at 1234 (citations omitted).
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433145/
|
206 F. Supp. 2d 257 (2002)
Wanda GONZALEZ-MERCADO, et al., Plaintiffs,
v.
MUNICIPALITY OF GUAYNABO, et al., Defendants.
Civil No. 99-1639(JAG).
United States District Court, D. Puerto Rico.
May 22, 2002.
*258 *259 Adrian Mercado, Francisco J. Amundaray-Rodriguez, Mercado & Soto, San Juan, PR, for Plaintiffs.
Eliezer Aldarondo-Ortiz, Pablo Landrau-Pirazzi, Aldarondo & Lopez Bras, Hato Rey, PR, Maria L. Cortes-Cortes, Dept. of Justice of PR, Fed. Litigation Div., San Juan, PR, for Defendants.
OPINION AND ORDER
GARCIA-GREGORY, District Judge.
Plaintiff Wanda Gonzalez-Mercado ("Gonzalez") brought suit pursuant to 42 U.S.C. § 1983 (for violation of her First Amendment right to freedom of expression, her Fourth Amendment right to be free from unlawful seizure of her person, her Fifth and Fourteenth amendment rights to due process of law, including the right to be free from excessive force in her arrest and detention, and her Eighth Amendment right to be free from cruel and unusual punishment), and 42 U.S.C. § 1988. The named defendants are: Hector O'Neill, Mayor of the Municipality of Guaynabo ("Mayor O'Neill"), the Municipality of Guaynabo ("Municipality"), Wilfredo Castillo-Alicea, Commissioner of Police of the Municipality of Guaynabo ("Commissioner Castillo"), Hector Brunet-Amador ("Brunet"), and Gualbert Gonzalez ("Gualbert"), police officers of the Municipality. Defendants moved for dismissal of the Amended Complaint pursuant to Fed. R.Civ.P. Rule 12(b)(6) alleging that Gonzalez failed to state a claim upon which relief can be granted (Docket No. 12, 20, 29). For the reasons discussed below, co-defendants' motion is DENIED.
PLAINTIFF'S ALLEGATIONS[1]
On March 24, 1998, at approximately 12:15 p.m., Gonzalez was driving in her automobile. She encountered a traffic jam, where co-defendants Gualbert and Brunet were directing traffic. Gualbert made signals to the driver of a vehicle located in front of Gonzalez's car ordering him to move. Gonzalez pressed her horn inasmuch as the driver of the mentioned vehicle did not respond to Gualbert's command. Suddenly, an unidentified individual approached Gonzalez's vehicle shouting offensive language and began to hit the door and window of Gonzalez's vehicle, breaking the rearview mirror on the driver's side.
As a result, Gonzalez requested the assistance of Gualbert, but Gualbert responded that he was outside of his jurisdiction. Gonzalez continued her plea for assistance and Gualbert ordered her to move on. Then Gualbert introduced his hands through Gonzalez's window and assaulted her.
Gonzalez quickly drove off deeply fearing for her life and physical integrity. Immediately, *260 Gualbert and Brunet pursued detained, arrested and handcuffed Gonzalez. After her arrest, Brunet subdued her, absent any conduct from Gonzalez that could provoke such assault. All these events occurred in the presence and with the acquiescence of other police officers of the Municipality.
Gualbert, Brunet, and the other officers took Gonzalez to the Municipality's Police Station, where Gualbert continued to harass, intimidate and insult Gonzalez. Gonzalez's underwear and shoes were removed and she was incarcerated for more than 7 hours. Around 6:00 p.m. co-defendants Gualbert and Brunet called State Police Officer, Luis Ramos Candelario, who after hearing Gualbert's and Brunet's allegations, proceeded to file an indictment with three (3) counts of attempted murder against Gonzalez. At 10:00 p.m., Gonzalez was brought before a magistrate. On March 25, 1998, Gonzalez was released after posting bail. On March 3, 1999, the indictment pending against Gonzalez was dismissed by a judgment of the Honorable Carmen Dolores Ruiz Lopez, Superior Judge of the Puerto Rico Court of First Instance, San Juan Part.
DISCUSSION
A. Motion to Dismiss Standard.
Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, a complaint may not be dismissed unless it appears beyond doubt that plaintiffs can prove no set of facts in support of her claim which would entitle her to relief. See Brown v. Hot, Sexy and Safer Prods., Inc., 68 F.3d 525, 530 (1st Cir.1995). The Court accepts all well-pleaded factual allegations as true, and draws all reasonable inferences in plaintiff's favor. See Correa-Martinez v. Arrillaga-Belendez, 903 F.2d 49, 51 (1st Cir.1990). The Court need not credit, however, "bald assertions, unsupportable conclusions, periphrastic circumlocutions, and the like" when evaluating the Complaint's allegations. Aulson v. Blanchard, 83 F.3d 1, 3 (1st Cir.1996). When opposing a Rule 12(b)(6) motion, "a plaintiff cannot expect a trial court to do his homework for him." McCoy v. Massachusetts Institute of Tech., 950 F.2d 13, 22 (1st Cir.1991). Plaintiff is responsible for putting her best foot forward in an effort to present a legal theory that will support her claim. Id., at 23 (citing Correa-Martinez, 903 F.2d at 52). Plaintiff must set forth "factual allegations, either direct or inferential, regarding each material element necessary to sustain recovery under some actionable theory." Gooley v. Mobil Oil Corp., 851 F.2d 513, 514 (1st Cir.1988).
B. 42 U.S.C. § 1983 claims against defendants.
1. Excessive Force.
Gonzalez claims that Brunet and Gualbert's actions in the course of her arrest and detention amounted to excessive force in violation of her Fourth Amendment right to be free from unreasonable seizure and her Eighth Amendment right to be free from cruel and unusual punishment. (Amended Complaint at 9). The Eighth Amendment to the Constitution prohibits states from inflicting "cruel and unusual punishment" on the prisoners it confines. Wilson v. Seiter, 501 U.S. 294, 297, 111 S. Ct. 2321, 115 L.Ed.2d 271(1991). The State, however, does not acquire the power to punish with which the Eighth Amendment is concerned until after a formal adjudication of guilt in accordance with due process of law is made. Thus, excessive force claims arising out of arrests are analyzed under the Fourth Amendment's protection against unreasonable seizures. See Graham v. Connor, 490 U.S. 386, 394-395, 109 S.Ct. *261 1865, 104 L. Ed. 2d 443 (1989). Accordingly, Gonzalez's claims of excessive force under the Eighth Amendment must be dismissed. Furthermore, the Court holds that Gonzalez, in alleging an unprovoked use of force during her arrest and detention, has validly stated an excessive force claim under the Fourth Amendment, applicable to Puerto Rico through the due process clause of the Fifth and Fourteenth Amendments.
2. Failure to Provide Medical Assistance.
Gonzalez claims the defendants were deliberately indifferent to her medical needs while in custody, in violation of the Eighth Amendment. (Amended Complaint at 9). Eighth Amendment claims by pretrial detainees alleging denials of medical assistance essentially turn on whether the challenged official action constituted "deliberate indifference" to a "serious medical need". Consolo v. George, 58 F.3d 791, 793-94 (1st Cir.1995); Bowen v. City of Manchester, 966 F.2d 13, 17 n. 13 (1st Cir.1992). A "serious medical need" is one "that has been diagnosed by a physician as mandating treatment, or one that is so obvious that even a lay person would easily recognize the necessity for a doctor's attention." Gaudreault v. Municipality of Salem, Mass., 923 F.2d 203, 208 (1st Cir. 1990). Gonzalez asserts that she requested medical assistance during her detention due to the injuries inflicted by Brunet and Gualbert. Defendants initially denied the request, but eventually authorized two paramedics to examine her. The examination revealed an accelerated pulse rate, high blood pressure, and high sugar levels. (Amended Complaint at 7). Neither of these pleadings, however, provide any information at all about the seriousness of Gonzalez's alleged medical condition. Accordingly, Gonzalez's allegations are insufficient to establish a violation of her Eight Amendment right to be free from cruel and unusual punishment.
3. Malicious Prosecution.
We review the Amended Complaint to determine whether Gonzalez has made out a § 1983 constitutional claim of malicious prosecution. Morales v. Ramirez, 906 F.2d 784, 787 (1st Cir.1990). It is well established that a malicious prosecution brought against an individual does not necessarily truncate that person's constitutional rights. Morales, 906 F.2d at 787; Torres, 893 F.2d at 409; cf. Baker v. McCollan, 443 U.S. 137, 145, 99 S. Ct. 2689, 61 L. Ed. 2d 433 (1979) ("The Constitution does not guarantee that only the guilty will be arrested. If it did, § 1983 would provide a cause of action for every defendant acquittedindeed, for every suspect released."). To assert a malicious prosecution constitutional claim Gonzalez has the burden of alleging "that the [defendants'] malicious conduct was so egregious that it violated substantive or procedural due process rights. . . ." Torres, 893 F.2d at 409. "It follows that to invoke the Due Process Clause, the complainant[s] must do more than prove in common-law terms that [they] [were] harassed and prosecuted in bad faith and without probable cause by government officials acting under color of their authority. The `more' comprises an ability to show that defendants' conduct was `so egregious as to subject the individual to a deprivation of constitutional dimension.' Torres, 893 F.2d at 409; accord Coogan v. City of Wixom, 820 F.2d 170, 175 (6th Cir.1987). In other words, the challenged behavior, before becoming constitutionally actionable, must, substantively, `shock the conscience,' Barnier v. Szentmiklosi, 810 F.2d 594, 599 (6th Cir. 1987), or, procedurally, `deprive plaintiff[s] of liberty by distortion and corruption of *262 the processes of law,' Torres, 893 F.2d at 410." Morales, 906 F.2d at 787.
Here Gonzalez argues that co-defendants Gualbert and Brunet called State Police Officer, Luis Ramos Candelario, who after hearing Gualbert's and Brunet's allegations, proceeded to file an indictment with three (3) counts of attempted murder against Gonzalez. At 10:00 p.m., Gonzalez was brought before a magistrate. On March 25, 1998, Gonzalez was released after posting bail. On March 3, 1999, the indictment pending against Gonzalez was dismissed by a judgment of the Honorable Carmen Dolores Ruiz Lopez, Superior Judge of the Puerto Rico Court of First Instance, San Juan Part. Gonzalez's allegations are, however, insufficient to justify a due process concern. (Constitutional claim for malicious prosecution was not stated, where the very worst that could be said was that defendants, or some of them, instigated criminal prosecution manipulatively and without probable cause.) Morales v. Ramirez, 906 F.2d 784, 790 (1st Cir.1990).
On this record, the proper avenue of relief would be a tort action under Puerto Rican law, see, e.g., P.R. Laws Ann. tit. 31, § 5141; and not a section 1983 claim, inasmuch as the acts and omissions complained of were neither "conscience-shocking" nor "so egregious as to violate due process". Morales, 906 F.2d at 790. Accordingly, Gonzalez's constitutional claim of malicious prosecution must be dismissed.
C. Supervisory Liability.
Plaintiffs allege that Velez and Gonzalez are liable for the Alcoholic and Beverages Unit misconduct inasmuch as their policies resulted in the inadequate selection and/or supervision and/or training and/or discipline of the Alcoholic Beverages Unit. (Docket 38 at 8-10). Furthermore, plaintiffs claim that Superintendent Toledo and Captain Rivera are liable as supervisors to the extent that they have encouraged, condoned or been deliberately indifferent to Vice Enforcement Division police officers' behavior. (Docket 38 at 10-12). Plaintiffs allege that Superintendent Toledo and Captain Rivera were aware of previous incidents of police misconduct and that the policies and procedures that Superintendent Toledo and Captain Rivera established failed to adequately train, supervise and discipline the police personnel of the Vice Enforcement Division. (Id.). Plaintiffs further contend that Superintendent Toledo and Captain Rivera's failure to train amount, as a matter of law, to reckless or callous indifference to the federally protected rights of others under the Constitution. (Id.) We disagree.
It is axiomatic that section 1983 imposes liability only upon those who actually cause a deprivation of rights. See Malley v. Briggs, 475 U.S. 335, 341, 106 S. Ct. 1092, 89 L.Ed.2d 271(1986); Camilo-Robles v. Zapata, 175 F.3d 41 (1st Cir. 1999). Supervisory liability may not be grounded upon a theory of respondeat superior. See Monell v. Department of Soc. Servs., 436 U.S. 658, 692-94, 98 S. Ct. 2018, 56 L. Ed. 2d 611 (1978); Figueroa-Torres v. Toledo-Davila, 232 F.3d 270, 279 (1st Cir. 2000); Febus-Rodriguez v. Betancourt-Lebron, 14 F.3d 87, 91 (1st Cir.1994). Thus, "[g]iven the lack of respondeat superior liability under Section 1983, a supervisor's liability is not for the use of excessive force . . . but for distinct acts or omissions that are a proximate cause of the use of that force." Wright v. Smith, 21 F.3d 496, 501 (2d Cir.1994); see also Figueroa v. Aponte-Roque, 864 F.2d 947, 953 (1st Cir. 1989). The Supervisor's conduct or inaction must have been intentional, Simmons v. Dickhaut, 804 F.2d 182, 185 (1st Cir. 1986), grossly negligent, or must have "amounted to a reckless or callous indifference *263 to the constitutional rights of others." Gutierrez-Rodriguez v. Cartagena, 882 F.2d 553, 562 (1st Cir.1989); Gaudreault v. Municipality of Salem, Mass., 923 F.2d 203, 209 (1st Cir.1990). "An official displays such reckless or callous indifference when it would be manifest to any reasonable official that his conduct was very likely to violate an individual's constitutional rights." See Febus-Rodriguez v. Betancourt-Lebron, 14 F.3d 87, 92 (1st Cir.1994). Moreover, "an `affirmative link' between the street-level misconduct and the action, or inaction, of supervisory officials," must be established. Gutierrez-Rodriguez, 882 F.2d at 562 (quoting Rizzo, 423 U.S. at 371, 96 S. Ct. 598).
Gonzalez alleged facts are insufficient to meet the stringent criteria for "failure to train" claims. Hayden v. Grayson, 134 F.3d 449, 456 (1st Cir.1998) (citations omitted). It is well established that "an arguable weakness in police training (or supervision does) not amount to a policy of failure to train arising from deliberate indifference to citizen's constitutional rights." See Burns v. Loranger, 907 F.2d 233, 239 (1st Cir.1990). Furthermore, Gonzalez's allegations of inadequate training, supervision and discipline of the police force are not linked in any way to Gualbert's and Brunet's misconduct. Gonzalez also fails to furnish legally sufficient facts showing that, at the time of Gonzalez' arrest, there was a widespread violation of civil rights known to Mayor O'Neill and Commissioner Castillo which they failed to address. Moreover, even assuming that a widespread violation of civil rights would have existed, no reasonable inference can be drawn from the Amended Complaint to conclude that Mayor O'Neill and Commissioner Castillo were callously negligent, or that they incurred in willful blindness, or that they had constructive knowledge of these situations, such that their negligence can be affirmatively linked to Gualbert's and Brunet's misconduct. Accordingly, Plaintiffs' allegations do not give rise to a section 1983 cause of action against co-defendants Velez, Gonzalez, Superintendent Toledo and Captain Rivera. Accordingly, the Complaint against co-defendants Velez, Gonzalez, Superintendent Toledo and Captain Rivera is dismissed.
CONCLUSION
In light of the foregoing, the Court grants in part defendants' motion to dismiss (Docket Nos. 12, 20, 29) and dismisses Gonzalez' federal Eighth Amendment and malicious prosecution claims against all defendants as well as all federal claims against co-defendants Mayor O'Neill and Commissioner Castillo with prejudice. The supplemental state claims against co-defendants Mayor O'Neill and Commissioner Castillo are also dismissed without prejudice pursuant to 28 U.S.C. § 1367(c)(3), inasmuch as no federal claims to ground jurisdiction remain against them.
IT IS SO ORDERED.
NOTES
[1] The facts are taken from the Amended Complaint.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433157/
|
206 F. Supp. 2d 183 (2002)
Scott BRACKETT, Petitioner,
v.
UNITED STATES, Respondent.
Nos. CIV.A. 00-12636WGY, CR.A. 96-10252WGY.
United States District Court, D. Massachusetts.
June 18, 2002.
Scott T. Brackett, FCI Otisville, Otisville, NY, Pro se.
Dina M. Chaitowitz, United States Attorney's Office, Boston, MA, for Respondent.
MEMORANDUM AND ORDER
YOUNG, Chief Judge.
Scott Brackett ("Brackett") was convicted in this Court of conspiracy to distribute methamphetamines and possession of *184 methamphetamines with intent to distribute. Brackett had multiple prior state criminal convictions. As a result, the federal sentencing guidelines mandated that Brackett receive an enhanced sentence. After sentencing, however, Brackett was successful in overturning two of his state criminal convictions. As a result, Brackett no longer "qualifies" for the enhanced sentence imposed on him by this Court.
Recognizing this, Brackett filed a petition for writ of habeas corpus with the Court. This petition was denied due to the stringent time limitations established by the Anti-Terrorism and Effective Death Penalty Act of 1996, Pub.L. No. 104-132, 110 Stat. 1214 (codified in relevant parts at 28 U.S.C. § 2255) ("AEDPA"). Brackett v. United States, 135 F. Supp. 2d 112, 125 (D.Mass.2001) ("Brackett I").[1] Brackett requested a certificate of appealability, which this Court granted, though the First Circuit likewise rejected his claim for relief. Brackett v. United States, 270 F.3d 60 (1st Cir.2001) ("Brackett II"). Brackett then applied for permission to file a second or successive habeas petition, which was denied by the First Circuit. Finally, Brackett filed a motion with this Court pursuant to Rule 60(b) of the Federal Rules of Civil Procedure, seeking relief from his sentence.
Today, Brackett is a man with only one criminal conviction that may be used in calculating his criminal sentence. Under our laws and sentencing guidelines, were he sentenced today he could serve no more than three years in prison for that crime. Instead, he is serving nine years for that crimeand was denied resentencing merely due to a missed filing deadline. In and of itself, this state of affairs does not violate any of his constitutional rights. See, e.g., United States v. Barrett, 178 F.3d 34 (1st Cir.1999) (discussing generally the lack of constitutional concerns where otherwise meritorious claims are denied for failure properly to comport with procedural requirements).
Nevertheless, this result is deeply troubling. It is, in fact, patently unjusta point I made as eloquently as I know how in Brackett I.[2] Moreover, this Court, relying on United States v. Pettiford, 101 F.3d 199 (1st Cir.1996), has long advised criminal defendants, when being sentenced as armed career criminals or the like, that if they successfully overturn the enhancing predicate offense or offenses, the Court would resentence them. See, e.g., United States v. Prochilo, Criminal Action No. 96-10321-WGY (transcript of sentencing hearing at 2-4) (D.Mass. Mar. 26, 1998), rev'd on other grounds, 187 F.3d 221 (1st Cir.1999); United States v. Gunn, Criminal Action No. 96-10055-WGY (transcript of sentencing hearing at 17-21) (D.Mass. Feb. 28, 1997), aff'd, 141 F.3d 1150 (1st Cir.1998).[3] The Court sentenced Brackett, *185 pre-AEDPA, with this in mind. That being *186 the practice of this Court, it seems to me especially unjust to deny Brackett resentencing since, having relied on the practice of this Court, Brackett has found himself without recourse.
Stung by the fact that it is complicit in working an injustice, this Court requested the parties brief several issues. Most importantly, this Court ordered briefing on aspects of the ancient writ of error coram nobis. The parties, in responding to this Court's order, also addressed the ancient writ of audita querela. In short, the writ of error coram nobis is granted to correct an error of fact, unknown at trial, that affected the validity of the legal proceeding itself. E.g., United States v. Addonizio, 442 U.S. 178, 186, 99 S. Ct. 2235, 60 L. Ed. 2d 805 (1979). The writ of audita querela provides "relief against a judgment or execution because of some defense or discharge arising subsequent to the rendition of the judgment." United States v. Ayala, 894 F.2d 425, 427 (D.C.Cir.1990) (citing 11 Charles Allen Wright & Arthur R. Miller, Federal Practice & Procedure § 2867, at 235 (1973)).
The applicability of either writ turns on analysis of three issues. First, does the Court retain the power to issue the writ? If so, ought this petition nevertheless fall within section 2255and thus be treated as a hopeless second or successive petition? Last, if both these questions are answered in the negative, does Brackett meet the stringent standards required of either writ?
In addressing these issues, the government has argued at length that section 2255 explicitly addresses Brackett's case, and thus provides the exclusive mechanism through which Brackett may seek relief. Resp't's Mem. at 11-14 [Docket No. 12]. It is well settled that the All Writs Act, 28 U.S.C. § 1651, "is a residual source of authority to issue writs that are not otherwise covered by statute. Where a statute specifically addresses the particular issue at hand, it is that authority, and not the All Writs Act, that is controlling." Carlisle v. United States, 517 U.S. 416, 429, 116 S. Ct. 1460, 134 L. Ed. 2d 613 (1996) (quoting Pennsylvania Bureau of Correction v. United States Marshals Service, 474 U.S. 34, 43, 106 S. Ct. 355, 88 L. Ed. 2d 189 (1985)). Accordingly, the Government argues that the Court does not have the authority to issue a writ of error coram nobis in this situation.
It is worth noting that the Government has previously maintained exactly the opposite position in this case. During the appeal of this Court's order dismissing Brackett's habeas petition as time barred, the Government argued before the First Circuit that section 2255 was inapplicable to redress Brackett's grievance, and thus his petition ought be dismissed. Brief for Appellee at 10-27, Brackett v. United States, 270 F.3d 60 (1st Cir.2001) (No. 01-1466). Noting this, the Court questioned whether it ought hold the Government to its prior argumentthat section 2255 is inapplicable.
The First Circuit limits the application of judicial estoppel to situations in which the party to be estopped is the prevailing party in a prior argument. Faigin v. Kelly, 184 F.3d 67, 82 (1st Cir. 1999). Here, even though the government asserted the argument that section 2255 was inapplicable, it did not prevail on that issue. Thus, it is inappropriate for this Court now to estop the Government from asserting a directly contrary position, even though such conduct is rather demeaning for government advocates supposedly seeking principled adjudication. Moreover, that underlying propositionthat section 2255 is inadequate to redress sentencing grievanceshas been rejected by *187 the First Circuit. Pettiford, 101 F.3d at 201 (1st Cir.1996). Correction of sentences is within the scope of section 2255. The First Circuit has held that courts are without power to issue a writ of error coram nobis where section 2255 is available to remedy the grievance. Barrett, 178 F.3d at 55. As section 2255 would be competent to redress Brackett's grievances had he met its time limits, the Court lacks the power to issue either the writ of error coram nobis or audita querela.
Furthermore, Brackett's motion is in fact a second or successive habeas petition. Though disguised as a petition for writ of error coram nobis, claims that are within the scope of section 2255, and could have been raised in a prior habeas petition, are in reality second or successive habeas petitions, and must meet the strict "second or successive" requirements of section 2255. See id. This is true whether Brackett's motion is viewed as motion pursuant to Rule 60(b) or a petition for a writ.
Brackett has not met the stringent requirements to make a second or successive petition, thus his claim cannot be considered. Moreover, his claim would be denied even if he were permitted to make a second petition. As has been affirmed by the First Circuit, Brackett missed the one-year statute of limitations applied to section 2255 petitions. Brackett 270 F.3d at 68. No matter how many times he petitions, he will never meet statute of limitations. His argument is destined always to fail.
Congressin essence, the people of the United Stateshas determined, for various policy reasons, that it prefers that prisoners who fail to bring timely habeas claims remain in prison serving sentences three times as long as that actually provided by law for their crimes. Though the Court remains convinced that Brackett's predicament is fundamentally unjust, it is without power to rectify Brackett's grievance. Brackett's requests for relief [Docket Nos. 6, 13] are therefore DENIED. If he wishes to be resentenced, Brackett must persuade Congress to change the law or seek clemency from the President.
SO ORDERED.
NOTES
[1] The Court's opinion addressing Brackett's initial habeas petition is captioned Gonzalez v. United States. Because Brackett's petition raised issues nearly identical to those raised by a petitioner named Jose Gonzalez, the Court resolved both petitions in a single Memorandum and Order, which was entered in both cases.
[2] The Court's additional concernthat AEDPA is a form of "rights stripping," a legislative technique which, though today visited on a disfavored class (repeat felons), could be expanded to threaten civil liberties generally, see Brackett I, 135 F.Supp.2d at 115 n. 5is more expansively discussed in Developments in the LawThe Law of Prisons, 115 Harv. L.Rev. 1838 (2002). See especially id. at 1863 ("The Importance of Federal District Judges"), 1864 ("The Virtues of Trial, Rather Than Appellate, Federal Courts"), 1865 ("Implications That Should Concern Even Those Who Do Not Support Prisoners' Rights").
[3] Today, of course, guided by more recent decisions of the First Circuit, e.g., Brackett, 270 F.3d at 67-69; Delaney v. Matesanz, 264 F.3d 7, 14-15 (1st Cir.2001); Neverson v. Bissonnette, 261 F.3d 120, 127 (1st Cir.2001), the recommended practice in order to gain the benefits of Pettiford requires a defendant to file a generalized habeas petition virtually as soon as his conviction becomes final, but to ask the district court to stay consideration of the petition until he has had his prior state convictions vacatedan eventuality not uncommon in the Massachusetts district courts.
Consider the actual effect of these individualized attempts to do justice:
Concerned that judicial resources were being overwhelmed by the flood of habeas corpus petitions, and that petitioners obtained an unfair benefit through delay and appeal of issues long after records and the like were destroyed, see, e.g., H.R.Rep. No. 104-23 at 7-11 (1995), Congress enacted AEDPA. Through AEDPA, Congress created a number of procedural hurdles designed to restrict the quantity of habeas corpus petitions. In construing AEDPA, the courts have sought to give effect to Congress's intentions, and have strictly applied and interpreted the hurdles established by AEDPA.
Congress and the courts are limited, however, in how they may restrict availability of the writ of habeas corpus. The writ of habeas corpusoften referred to as "the great writ"is a constitutionally guaranteed writ. U.S. Const. art. I, § 9. Thus, in interpreting AEDPA, courts must be cognizant that interpreting AEDPA to pinch too tightly on access to the writ may create significant constitutional concerns. E.g., INS v. St. Cyr, 533 U.S. 289, 301 n. 13, 121 S. Ct. 2271, 150 L. Ed. 2d 347 (2001); see also Note, The Avoidance of Constitutional Questions and the Preservation of Judicial Review: Federal Court Treatment of the New Habeas Provisions, 111 Harv. L.Rev. 1578 (1998). See generally Gerald Neuman, Habeas Corpus, Executive Detention, and the Removal of Aliens, 98 Colum. L.Rev. 961 (1998); Richard H. Fallon, Jr., Applying the Suspension Clause to Immigration Cases, 98 Colum. L.Rev. 1068 (1998). Accordingly, courts have been careful to note how, if a petitioner had just done the right thing, the petitioner would be able properly to present his claim and, where such claim was meritorious, would be entitled to relief. In doing so, courts demonstrate that AEDPA has not pinched too hardthe great writ is still available, so long as the petitioner has jumped through all of the hoops set up by AEDPA to ask for the writ.
This case presents a classic example Brackett could have obtained relief, if only he had followed the counterintuitive procedure of filing a habeas corpus petition immediately after sentencing and then asking the Court to stay its hand while he pursued relief in state court.
The result of these efforts, however, has been severely to undermine the effectiveness of AEDPA in achieving its purpose. The courts have, in essence, over the past five years created a new roadmap of how prisoners may jump over the procedural hurdles of AEDPA, thereby preserving their ability to petition for the great writ. In doing so, court decisions are likely to increase significantly the burden habeas corpus petitions place on the court system. Why? Because we have basically advised every prisoner to file a habeas petition within one year of sentencing, and to then ask the court to stay any action on the petition pending resolution of other issues in state court. E.g., Brackett, 270 F.3d at 68 (pending collateral attack on state court conviction); Zarvela v. Artuz, 254 F.3d 374, 378 (2nd Cir.2001) (mixed petitions ought be filed and stayed pending state court exhaustion). Thus, rather than have some prisoners who will only petition when a potentially meritorious claim becomes available, the courts have admonished every prisoner to petition, just in case something develops.
Again, Brackett provides a perfect example. Very few prisoners succeed in overturning a state court conviction. Thousands of prisoners, however, attempt to have state convictions overturned. Yet the procedure the federal courts have endorsed is one in which each and every one of the thousands of prisoners is to file a habeas corpus petition before he knows the outcome of his state challenges. Thus, rather than have failure in the state court act as a natural screen, the courts' approach results in thousands of meritless petitions being filedeach of which requires a case file be opened, orders issued, papers docketed, and the file stored. In the norm, this is the approach recommended by the courts to circumvent almost all of AEDPA's hurdles. E.g., Brackett, 270 F.3d at 68; Zarvela, 254 F.3d at 378. The net result is that the burden on the courts imposed by habeas corpus petitions is likely to increase, not decrease, as the courts continue to wrestle with AEDPA.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433159/
|
206 F. Supp. 2d 128 (2002)
BOSTON & MAINE CORPORATION, et al., Plaintiffs,
v.
TOWN OF AYER, et al., Defendants.
No. CIV.A. 99-12606-JLT.
United States District Court, D. Massachusetts.
June 10, 2002.
*129 Eric L. Hirschhorn, M. Carter DeLorme, Winston & Strawn, Washington, DC, Mark Bobrowski, Concord, MA, Robert B. Culliford, Guilford Rail System, N. Billerica, MA, for Plaintiffs.
Jocelyn M. Sedney, Brody, Hardoon, Perkins & Kesten, Boston, MA, for Defendants.
MEMORANDUM
TAURO, District Judge.
On March 20, 2002, this court allowed Plaintiffs Boston & Maine Corporation, Springfield Terminal Railway Company, and Guilford Transportation Industries' *130 (collectively "Guilford") Motion for Summary Judgment, adopting a Surface Transportation Board ("STB") decision which found that the actions of Defendants Town of Ayer, Ayer Board of Selectmen, Ayer Planning Board, and Ayer Board of Health (collectively "Ayer") were preempted by 49 U.S.C. 10501(b),[1] part of the Interstate Commerce Commission Termination Act of 1995 ("ICCTA").[2] Guilford's motion for attorneys' fees is currently before the court.
Guilford argues that because its claim is cognizable under 42 U.S.C. § 1983, it is entitled to attorneys' fees under 42 U.S.C. § 1988(b).[3] Guilford points out that even though § 1988(b) provides for discretionary award of fees and costs, the First Circuit has explained that "although [the] fee shifting provision is couched in permissive terminology, awards in favor of prevailing civil rights plaintiffs are virtually obligatory."[4] Guilford apparently has accrued attorneys' fees and costs upwards of $300,000. Ayer opposes Guilford's motion for fees, arguing that when this court decided that Ayer's actions were preempted by the ICCTA, that decision was based entirely on the Supremacy Clause, which is not a cognizable claim under 42 U.S.C. § 1983.[5]
While it is true that a claim based solely on the Supremacy Clause is not cognizable under § 1983,[6] in Golden State Transit Corp. v. City of Los Angeles[7], the Supreme Court noted that "the fact that a federal statute has preempted certain state action does not preclude the possibility that the same federal statute may create a federal right for which § 1983 provides a remedy."[8] The Court further explained that "a Supremacy Clause claim based on a statutory violation is enforceable under § 1983 only when the statute creates `rights, privileges, or immunities' in the particular plaintiff."[9] In that case, the Court, noting that the coverage of § 1983 "must be broadly construed,"[10] considered whether the National Labor Relations Act ("NLRA") created a particular *131 right in labor and management which was enforceable under § 1983, and concluded that it did.[11] According to Golden State therefore, if the ICCTA creates a right for which § 1983 provides a remedy, Guilford's claim is cognizable under § 1983.
The Supreme Court has developed a test for determining whether a federal statute creates rights enforceable through § 1983:
First, Congress must have intended that the provision in question benefit the plaintiff. Second, the plaintiff must demonstrate that the right assertedly protected by the statute is not so vague and amorphous that its enforcement would strain judicial competence. Third, the statute must unambiguously impose a binding obligation on the States. In other words, the provision giving rise to the asserted right must be couched in mandatory, rather than precatory, terms.[12]
If that test is satisfied, however, only a rebuttable presumption results. If Congress "specifically foreclosed a remedy under § 1983," either explicitly, or impliedly through a comprehensive enforcement scheme, then dismissal is proper.[13]
When applying this inquiry to the ICCTA, particularly § 10501(b), it is clear that there is a right not to be regulated. As Guilford points out, the ICCTA was intended to benefit railroads because a major purpose of the ICCTA was to "free railroads from excessive regulation generally and from state and local regulation in particular."[14] The legislative history indicates that Congress intended to free railroads from regulation in order to continue to promote growth in the industry.[15] The right conferred on Guilford by the ICCTA is not so "vague and amorphous as to strain judicial competence," because, after all, the STB's decision was based on the fact that the ICCTA preempted Ayer's actions, implicitly recognizing that Guilford had a right not to be regulated.[16] By conferring exclusive jurisdiction over railroad matters to the STB, the ICCTA imposes a binding obligation on the states not to regulate railroads with respect to those matters. Finally, there is no comprehensive enforcement mechanism in the ICCTA which would foreclose a § 1983 action. There are enforcement provisions within that part of the ICCTA,[17] but they do not apply to the right not to be regulated. It follows, therefore, that § 10501(b) creates a right not to be regulated, enforceable through § 1983.
In Petrey v. City of Toledo,[18] the plaintiff challenged the defendant city's towing regulations, arguing that they were preempted by 49 U.S.C. § 14501(c),[19] a *132 part of the ICCTA which applies to motor carriers. In deciding whether the plaintiff had a claim under § 1983, the court, following the Supreme Court's analysis in Golden State, found that the plaintiff had a right under § 14501(c)(1).[20] The Sixth Circuit therefore held that an aspect of the defendant's regulation of the towing industry violated § 14501(c)(1), thus depriving the plaintiff of her federal right not to be regulated.[21] Noting that § 14501 "does not have a comprehensive enforcement mechanism that would preclude § 1983 relief,"[22] the court held that § 1983 relief was available to the plaintiff for violation of her right not to be regulated, and remanded to the district court for a determination of damages.[23] Just as in Petrey, Guilford has a right not to be regulated, which Ayer violated, and Guilford's right is enforceable through 42 U.S.C. § 1983. Guilford is consequently entitled to attorneys' fees under 42 U.S.C. § 1988(b).
Defendants rely on Soo Line R.R. Co. v. City of Minneapolis,[24] to argue that there is no § 1983 claim. In that case, the court held that the defendant city's actions were preempted by § 10501(b) of the ICCTA but held that "a federal preemption claim premised upon a violation of the Supremacy Clause is not cognizable under 42 U.S.C. § 1983."[25] But that court did not inquire as to whether the underlying statute, the ICCTA, created a right in the plaintiff. Because Golden State makes it clear that a court can look to the underlying statute, Defendants' reliance on Soo is misplaced.
Accordingly, for the reasons stated above, Guilford's Motion for Attorneys' Fees and Costs is ALLOWED. Guilford shall submit to the court information supporting the specifics of its fee and costs claims by July 1, 2002. Ayer shall respond by July 15, 2002.
AN ORDER WILL ISSUE.
NOTES
[1] That section provides that the jurisdiction of the [STB] over . . . (1) the transportation by rail carriers, and the remedies provided in this part with respect to rates, classifications, rules (including car service, interchange, and other operating rules), practices, routes, services, and facilities of such carriers; and (2) the construction, acquisition, operation, abandonment, or discontinuance of spur, industrial, team, switching, or side tracks, or facilities, even if the tracks are located, or intended to be located, entirely in one State . . . is exclusive. Except as otherwise provided in this part, the remedies provided under this part are exclusive and preempt the remedies provided under Federal or State law.
[2] See Memorandum and Order, March 20, 2002.
[3] 42. U.S.C. § 1988 provides, in relevant part: "In any action or proceeding to enforce a provision of sections 1981, 1981a, 1982, 1983, 1985, and 1986 of this title . . . the court, in its discretion, may allow the prevailing party . . . a reasonable attorney's fee as part of the costs. . . ."
[4] Gay Officers Action League, et. al. v. Puerto Rico, 247 F.3d 288, 293 (1st Cir.2001) (citation omitted).
[5] See Defs.' Opp'n to Pls.' Mot. for Att'ys' Fees and Costs.
[6] See Chapman v. Houston Welfare Rights Organization, 441 U.S. 600, 613, 99 S. Ct. 1905, 60 L. Ed. 2d 508 (1979) ("For even though [the Supremacy] clause is not a source of any federal rights, it does `secure' federal rights by according them priority whenever they come in conflict with state law.")
[7] 493 U.S. 103, 110 S. Ct. 444, 107 L. Ed. 2d 420 (1989).
[8] Id. at 108, 110 S. Ct. 444.
[9] Id. at 108 n. 4, 110 S. Ct. 444.
[10] Id. at 105, 110 S. Ct. 444.
[11] See id. at 112-113, 110 S. Ct. 444.
[12] Blessing v. Freestone, 520 U.S. 329, 340-1, 117 S. Ct. 1353, 137 L. Ed. 2d 569 (1997) (internal quotations and citations omitted).
[13] Id. at 341, 117 S. Ct. 1353.
[14] Mem. in Supp. of Pls.' Mot. for Att'ys' Fees and Costs at 6.
[15] See H.R. REP. NO. 104-311, at 1, 82-96 (1995), reprinted in 1995 U.S.C.C.A.N. at 793-808.
[16] See Joint Petition for Declaratory Order-Boston & Maine Corporation and Town of Ayer, STB Finance Docket No. 33971, 2001 STB LEXIS 435 (May 1, 2001).
[17] See 49 U.S.C. §§ 11701-11707.
[18] 246 F.3d 548 (6th Cir.2001).
[19] 49 U.S.C. § 14501(c) provides that "a State, political subdivision of a State, or political authority of 2 or more States may not enact of enforce a law, regulation, or other provision having the force and effect or law related to a price, route, or service of any motor carrier . . . with respect to the transportation of property."
[20] See Petrey, 246 F.3d at 565.
[21] See id.
[22] Id.
[23] Id.
[24] 38 F. Supp. 2d 1096 (D.Minn.1998).
[25] Id. at 1101.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433162/
|
206 F. Supp. 2d 406 (2002)
Constance J. ROEDER, Plaintiff,
v.
Joseph W. ROGERS, et al., Defendants.
No. 01-CV-6516L.
United States District Court, W.D. New York.
May 22, 2002.
*407 Edward P. Hourihan, Jr., Harris Beach, LLP, Pittsford, NY, for Plaintiff.
*408 Suzanne E. Ouellette, Jaeckle, Flieschmann & Mugel, LLP, Rochester, NY, for Joseph Rogers and Margaret A. Rogers.
Richard A. Palumbo, Boylan, Brown, Code, Fowler, Vigdor & Wilson, LLP, Rochester, NY, for Mark Malcolm, II.
William H. Helferich, III, Harter, Secrest & Emery, LLP, Rochester, NY, for Lopinto, Schlather, Solomon & Salk, Raymond M. Schlather and Daniel L. Hoffman.
DECISION AND ORDER
LARIMER, Chief Judge.
This diversity action has its genesis in a property dispute that is currently the subject of a civil action in Yates Supreme Court, New York ("state court action"). The state court action involves disputes concerning two contiguous pieces of land located on Keuka Lake in Yates County, New York.
Plaintiff's two-count federal complaint alleges state-law claims of tortious interference with prospective business relations and abuse of civil process. Plaintiff, Constance J. Roeder ("Roeder"), and defendants, Joseph and Margaret Rogers ("the Rogers defendants"); the law firm of LoPinto, Schlather, Solomon & Salk; Raymond Schlather; and Daniel Hoffman (collectively "the LoPinto defendants"), are all involved in the state court action. Plaintiff and the Rogers are litigants, while the LoPinto defendants acted as counsel for the Rogers. Currently pending before this Court are the Rogers defendants' motion to dismiss under abstention principles or for summary judgment[1], and the LoPinto defendants' motions for summary judgment and sanctions pursuant to Fed. R.Civ.P. 11. Plaintiff opposes the motions and cross-moves pursuant to Fed.R.Civ.P. 56(f) for further discovery.
I. BACKGROUND
In 1993, the Rogers commenced the state court actiona trespass and quiet-title actionagainst Roeder's husband, John Nicolo ("Nicolo"), and Nicolo's corporation, South Slope Holding Corporation, who were former owners of the property during some of the relevant periods. Roeder was later added as a defendant when the property was conveyed to her.[2] The property involved abuts property owned by the Rogers on Keuka Lake and the dispute revolves in part around a large boathouse constructed by Nicolo in 1991. The Rogers contend that the boathouse interferes with their littoral and riparian property rights. In addition, both the Rogers and plaintiff are claiming ownership of the same portion of the foreshore near their adjoining property lines. See Docket No. 13, Ex. 4, p. 2, 7.
The LoPinto defendants began representing the Rogers in the state court action in February of 2000, many years after the action was filed. In an apparent attempt to bolster the Rogers's claims, the LoPinto defendants negotiated two quitclaim deeds, executed in September and *409 November 2000, from the remaining heirs of Helen Bentley Westlake ("Westlake"), a previous owner of the Rogers's property. Westlake had conveyed the property to the Rogers's predecessor in title, Charles Eckel.
In the state court action, Roeder claims that the transfer from Westlake to Charles Eckel did not include any area beyond the high water mark of the property. Such an omission is arguably important, because a portion of the property in dispute in the state court action is between the high and low water marks of the two properties. The quitclaim deeds conveyed the grantors' interests, to the extent that any interests remained, to the Rogers. In this federal action, Roeder claims that the negotiation for and recording of the two quitclaim deeds was an abuse of civil process and constituted tortious interference with prospective business relations that Roeder had with Todd Tickner ("Tickner"), a potential purchaser of Roeder's property.
On November 24, 2000, Roeder sold a portion of her propertyproperty that is not the subject of the state court action to Tickner. There is no dispute that Tickner was aware of the pending state court action. Negotiations between Roeder and Tickner continued, with the parties discussing transferring the remaining property subject to an agreement that Roeder would indemnify Tickner from liability in the state court action.
On August 24, 2001, the LoPinto defendants prepared and recorded a notice of pendency (or lis pendens) against Roeder's property, with reference to the state court action. After learning of the notice, Tickner chose not to purchase the remaining property, even with the inclusion of an indemnification agreement. Plaintiff claims that the notice of pendency tortiously interfered with her prospective contractual relationship with Tickner and constituted an abuse of civil process. Plaintiff has never taken any steps to vacate or challenge the notice of pendency in state court.
II. DISCUSSION
A motion for summary judgment shall be granted when "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). It is the moving party's burden to demonstrate "the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). "When the moving party has carried its burden," the non-moving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986). "[T]he non-moving party must come forward with `specific facts showing that there is a genuine issue for trial.'" Id. at 587, 106 S. Ct. 1348 (emphasis in original) (quoting Fed.R.Civ.P. 56(e)).
Based on these well established principles, it is clear that summary judgment in favor of defendants is appropriate and that the complaint must be dismissed in all respects.
A. Tortious Interference
Plaintiff alleges in her complaint that the defendants interfered with the sale of the remaining parcel of land by "falsely stating that plaintiff does not own the Premises, fraudulently obtaining and illegally filing [sic] quit-claim deed,[3] [and] improperly *410 filing a notice of lis pendens. . . ." Complaint, ¶ 28.[4] In support of her claim, plaintiff offers an affidavit signed by Tickner outlining his reasons for declining plaintiff's offer of sale. In his affidavit, Tickner makes no reference to the quitclaim deeds or to any allegations attributed to defendants that plaintiff did not own the premises. Instead, Tickner claims that when notified of the notice of pendency, through an August 27, 2001 letter addressed to his attorney, he elected not to purchase the property, even with an indemnification agreement. Tickner Aff., ¶ 13. Since, according to Tickner, the notice of pendency was the sole factor leading to his decision, there is no evidence to support plaintiff's claims that statements allegedly made by the defendants concerning the ownership of Roeder's property or the quitclaim deeds somehow caused Tickner to refuse to purchase the property. Therefore, the Court will address only the remaining contentionthat is, whether the filing of the notice of pendency constituted tortious interference with prospective contractual relations.
To state a prima facie case for tortious interference with a prospective contract under New York law, plaintiff must show: "(1) business relations with a third party; (2) the defendant's interference with those business relations; (3) that the defendant acted with the sole purpose of harming the plaintiff or used dishonest, unfair, or improper means; and (4) injury to the business relationship." Astor Holdings, Inc. v. Roski, 2002 WL 72936, at *19 (S.D.N.Y. Jan.17, 2002).
Essentially, in order to establish a claim for tortious interference, "plaintiff must demonstrate that the defendant[s'] interference with [her] prospective business relations was accomplished by `wrongful means' or that defendant acted for the sole purpose of harming the plaintiff. `Wrongful means' includes physical violence, fraud, misrepresentation, civil suits, criminal prosecutions and some degree of economic pressure, but more than simple persuasion is required." Snyder v. Sony Music Entertainment, Inc., 252 A.D.2d 294, 684 N.Y.S.2d 235, 239 (1st Dep't 1999) (citations omitted); see also Hannex Corp. v. GMI, Inc., 140 F.3d 194, 206 (2d Cir. 1998).
Thus, the Court must determine, drawing all inferences in favor of plaintiff, if the notice of pendency can constitute wrongful means or could demonstrate that defendants acted for the sole purpose of harming plaintiff. Crucial to this inquiry is whether the notice was, in fact, improperly filed.
A properly filed notice of pendency "puts the world on notice of the plaintiff's potential rights in the action and thereby *411 warns all comers that if they then buy the realty or lend on the strength of it or otherwise rely on the defendant's right, they do so subject to whatever the action may establish as the plaintiff's right." In the Matter of Sakow, 97 N.Y.2d 436, 741 N.Y.S.2d 175, 767 N.E.2d 666, 669 (2002) (quotations omitted). Because a notice of pendency can affect the alienability of property, this device, by statute, has a narrow application. 5303 Realty Corp. v. O & Y Equity Corp., 64 N.Y.2d 313, 315-316, 486 N.Y.S.2d 877, 476 N.E.2d 276 (1984). Specifically, "a notice of pendency may be filed in any action . . . in which the judgment demanded would affect the title to, or the possession, use or enjoyment of, real property. . . ." N.Y.C.P.L.R. § 6501.[5] Although not utilized at all in this case by Roeder, the statute does provide a procedure to challenge the filing of a notice of pendency and to obtain its cancellation. The notice of pendency may be challenged pursuant to N.Y.C.P.L.R. § 6514.[6] A court's review of the notice is limited, but "[i]f the procedures prescribed in article 65 have not been followed or if the action has not been commenced or prosecuted in good faith, the notice must be canceled in the first instance, and it may be in the second." 5303 Realty Corp., 64 N.Y.2d at 320, 486 N.Y.S.2d 877, 476 N.E.2d 276.
Here plaintiff does not dispute the procedures by which the notice was filed. Instead, plaintiff argues that the state court action only seeks the removal of the boathouse, suggesting that the underlying dispute would not "affect the title to, or the possession, use or enjoyment of, real property," N.Y.C.P.L.R. § 6501. Such a contention is frivolous. The proceedings in the state court action clearly involve a dispute that affects not only title to a portion of the property but also the use or enjoyment of the premises in question. The state court judge handling the proceedings, Justice Dennis Bender, described the Rogers's complaint as alleging not only an interference with their littoral rights, but also as seeking "a declaration that they own the `parcel 4' foreshore, under alternative theories of ownership by title, adverse possession and/or prescriptive easement." Docket No. 13, Ex. 4, p. 2. Thus, the state court action involves more than just the removal of the boathouse. *412 The Rogers also seek to establish title to a portion of real property.
I conclude that the properly filed notice of pendency did not constitute "wrongful" conduct which would subject defendants to liability for tortious interference. It is clear to this Court that the state court action falls within the scope of disputes delineated in section 6501, and, thus, the notice of pendency was properly filed. Not only was the filing appropriate, but I believe that a conscientious attorney representing a client in a hotly contested property dispute would be remiss if he or she failed to file a notice of pendency to protect the client's interest. The record clearly does not support Roeder's claim that the notice of pendency was filed for the sole purpose of harming her or her relationship with Tickner. There was a legitimate purpose in filing the notice of pendency because it provided notice to the world of the pending litigation and the fact that it may affect title to, and use and enjoyment of, the property described. Of course, the filing of the notice of pendency conveyed no new information to Tickner, who was well aware of the pending litigation and had discussed an indemnification agreement with Roeder to hold him harmless. Although Tickner claims that the filing of the notice caused him not to buy the premises (at least for now), it is hard to understand why that would be so.
A notice pendency hardly falls within the typical definition of wrongful conduct warranting liability for tortious interference. See Snyder, 684 N.Y.S.2d at 239 ("`Wrongful means' includes physical violence, fraud, misrepresentation, civil suits, criminal prosecutions and some degree of economic pressure . . ."). Perhaps the filing of a notice of pendency could be deemed a "civil suit," but that is a stretch. In any event, in view of the facts here involving an obvious dispute over property rights, the filing of the notice was proper. It is only when civil suits or other proceedings are "frivolous" that there might be a viable claim for tortious interference. See Pagliaccio v. Holborn Corp., 289 A.D.2d 85, 734 N.Y.S.2d 148, 149 (1st Dep't 2001) ("civil suits and threats thereof constitute `improper means' only if such tactics are frivolous") (citing Restatement [Second] of Torts § 767).
It is significant that plaintiff's complaint does not address the procedural validity of the notice of pendency or allege that the filing of the underlying state court action was in anyway tortious. Instead, plaintiff challenges only the breadth of the notice. For example, plaintiff contends in her brief in opposition to defendants' motions that the notice was wrongful because it "purported to assert claims against plaintiff's property that are based upon a fictitious, self-serving property line that is not contained in either the Rogers or plaintiff's deeds." Plaintiff's Memorandum in Opposition, p. 4. Yet Tickner in his affidavit does not claim that the scope of the notice of pendency led him to decline to purchase the property. Tickner simply states:
The letter by Mr. Hoffman to my attorney Mr. Reynolds was the first time I became aware that the Rogers and/or their attorneys had tied up the property by filing a lis pendens. To my understanding, the process of filing a lis pendens publicly alerts all interested purchasers of the affected property that, if they buy the realty, they do so subject to the outcome of the legal action. Once I became aware of this fact . . . I contacted Mr. Nicolo and advised him that I was no longer interested in consummating the purchase and sale agreement with Ms. Roeder even with an indemnification agreement regarding the Rogers/Roeder litigation. Simply put, my desire to finalize the purchase and *413 sale agreement with Ms. Roeder ended when the LoPinto law firm advised me, through my attorney, that a lis pendens had been filed against the property.
Tickner Aff., ¶¶ 12-13 (emphasis added).
There is no apparent connection between the breadth of the notice of pendency and Tickner's failure to purchase the remaining property. Moreover, the description in the notice of pendency mirrors the description of the "subject property" in the Fourth Amended Complaint. Compare Notice of Pendency, Docket No. 013, Ex. 5 with Fourth Amended Complaint, ¶ 11, Docket No. 13, Ex. 3. It is difficult to comprehend how the scope of the notice of pendency can give rise to a tortious interference action where the language in the notice simply tracks the complaint on which it was baseda complaint which plaintiff has not challenged as frivolous.
Finally, when the Court first reviewed the pleadings and pending motions in this federal case, I could not understand why plaintiff would commence a federal action for damages alleging only state causes of action but take no steps whatsoever to challenge the offending notice of pendency in the state court action. At oral argument on these motions, counsel for plaintiff failed completely to provide a satisfactory explanation. Despite plaintiff's claim that her "ability to sell her property has been compromised by defendants' actions, and prompt resolution is required," plaintiff elected not to pursue the most direct remedy and instead sought redress before a federal court which has no jurisdiction to vacate the challenged notice of pendency. Plaintiff's Memorandum in Opposition, p. 18.
B. Abuse of Civil Process
1. The notice of pendency
Plaintiff alleges that the filing of the notice of pendency constituted an abuse of process because the notice was filed: 1) "in an attempt to induce her to sell a portion of her Premises at a below market value to defendants Rogers"; 2) for the sole purpose of "harassing plaintiff"; and 3) to prevent plaintiff from selling the property to Tickner. Complaint, ¶ 35. This cause of action is also frivolous.
A malicious abuse of process action can be maintained against a defendant who "(1) employs regularly issued legal process to compel performance or forbearance of some act (2) with intent to do harm without excuse or justification, and (3) in order to obtain a collateral objective that is outside the legitimate ends of the process." Shain v. Ellison, 273 F.3d 56, 68 (2d Cir. 2001) (quoting Cook v. Sheldon, 41 F.3d 73, 80 (2d Cir.1994)). Thus, the focus is on the misuse of the process, not on how the process was obtained. See Ramirez v. Platt, 1988 WL 127452, at *3 (E.D.N.Y. Nov.28, 1988) (citing Alexander v. Unification Church of America, 634 F.2d 673, 677-78 (2d Cir.1980)); RESTATEMENT (SECOND) OF TORTS § 682.
Although plaintiff claims that the notice was filed to "coerce" her into selling a portion of her property to the Rogers, plaintiff offers no evidence to support that claim. Obviously, plaintiff was not coerced since she has not sold the property to anyone. In light of this record, it does not appear that plaintiff or her husband, an experienced real estate broker and appraiser, could be "coerced" into doing anything relative to this property.
In any event, in plaintiff's own affidavit, she does not describe any coercive overtures initiated by defendants after the filing of the notice of pendency. Plaintiff's husband, John Nicolo, describes several "settlement proposals" whereby the Rogers offered to purchase varying areas of *414 lakefront property from the then owner, South Slope. Nicolo Aff., ¶ 11. Yet according to his affidavit, these offers occurred before the filing of the notice. Like plaintiff, Nicolo makes no mention of defendants' alleged attempts to force a below market value sale of the property.
Plaintiff's allegation that the notice was filed for the sole purpose of harassing her likewise cannot support her abuse of process claim. "[A] malicious motive, without more, does not give rise to [such] a cause of action." Brown v. Bethlehem Terrace Assocs., 136 A.D.2d 222, 525 N.Y.S.2d 978, 980 (3rd Dep't 1988). Moreover, the notice merely restates the claim and property description set forth in the complaint, thus serving the legitimate purpose of protecting the Rogers's claim in the event that the property is transferred pendente lite. As such, defendants are using the notice for its proper purpose, even if "a more malevolent impulse may simultaneously be satisfied." Raved v. Raved, 105 A.D.2d 735, 481 N.Y.S.2d 170, 171-172 (2d Dep't 1984).
Finally, the interference with the sale of property is a lawful purpose of a notice of pendency. Brown, 525 N.Y.S.2d at 980; Andesco v. Page, 137 A.D.2d 349, 530 N.Y.S.2d 111, 115 (1st Dep't 1988). The very nature of a notice of pendency dictates that the filing of the notice:
will . . . hinder prospective buyers from purchasing property that might ultimately be subject to a judgment. This would result regardless of the underlying motivation for utilizing the process.
Raved, 481 N.Y.S.2d at 171. Thus, defendant here has used the notice of pendency consistent with its purpose, and no action for abuse of process can lie.
2. The Quitclaim Deeds
To the extent that plaintiff's complaint could be read to allege that the filing of the quitclaim deeds somehow constituted an abuse of process, this claim must also fail. First, plaintiff has offered no argument nor cited any case law which would suggest that a quitclaim deed can constitute regularly issued legal process. Moreover, plaintiff has not produced any evidence to support her argument that the deeds were filed for an improper purpose. Plaintiff's chief complaint seems to be that the deeds will be used to gain an advantage in the state court action. Such a result hardly justifies a separate tort action in federal court.
In any event, by their terms, the deeds affect plaintiff's property only to the extent that the grantors had an actual interest in that property. Plaintiff may disagree with the description of the metes and bounds articulated in the deeds, but it is specious to suggest, as plaintiff does, that these deeds somehow sought to "convey" portions of plaintiff's property. Such a contention misapprehends the nature of a quitclaim deed, since such a deed passes only the "right, title, and interest [that] the grantor has as the time of making the deed." 43A N.Y.Jur.2d Deeds § 228.
C. Plaintiff's Motion Pursuant to Rule 56(f)
In opposing defendants' motions for summary judgment, plaintiff requests additional discovery pursuant to Fed.R.Civ.P. 56(f). A party seeking such additional discovery "must submit an affidavit explaining, among other things, `what facts are sought and how they are to be obtained; . . . what efforts the affiant has made to obtain those facts; and . . . why those efforts were unsuccessful.'" National Union Fire Ins. Co. v. Stroh Cos., Inc., 265 F.3d 97, 117 (2d Cir.2001) (quoting Burlington Coat Factory Warehouse Corp. v. Esprit De Corp., 769 F.2d 919, 926 (2d Cir.1985)).
*415 Here plaintiff alleges that additional discovery is necessary "to challenge, through deposition examination, the LoPinto defendants [sic] conclusory statement that their conduct was not wrongful or was done without malice." Hourihan Aff., Docket No. 35, ¶ 24. Yet a fishing expedition for evidence of "malice," even if successful, could not rescue plaintiff's claims. Regardless of any malevolent intent, the notice of pendency was properly filed. Even if defendants' actions were spurred in part by impure hearts, the legitimate purpose of filing the noticeto protect the Rogers's state law claims in the event of a conveyancedirects a finding that the notice of pendency did not constitute tortious interference.
Furthermore, additional discovery could not affect the Court's ruling on the abuse of process claim. Bad intent alone cannot support such an action. Brown, 525 N.Y.S.2d at 980. In addition, plaintiff has advanced no evidence of an attempt to misuse the notice of pendency or the quitclaim deeds in order to compel performance or forbearance of some act. Surely if defendants had used the notice or deeds to force a below market sale upon plaintiff either she or Nicolo would have some knowledge of the attempted coercion. Yet both plaintiff's and Nicolo's affidavits are silent on this topic.
Because there are no discoverable facts that reasonably could alter the Court's findings here, plaintiff's request is denied. See Hudson River Sloop Clearwater, Inc. v. Department of Navy, 891 F.2d 414, 422 (2d Cir.1989).
D. Rogers Defendants' Motion for Abstention
The Rogers defendants argue that the issues here can and should be resolved as part of the pending action in state court. Thus, they ask this Court to abstain from exercising its jurisdiction here. I deny the request, although it is academic and moot in view of this Court's decision, to dismiss the complaint.
I can certainly understand why defendants have made this request. There seems to be little reason to be in federal court. There are no federal claims advanced here, and the disputes revolve around an existing state court action. The New York State Court could certainly have handled all these disputes in one proceeding or in a series of proceedings. Nevertheless, the wisdom, efficiency and practicality of plaintiff's determination to initiate a new, federal lawsuit is not controlling on the issue of abstention.
Pursuant to the Colorado River doctrine, a "court may abstain in order to conserve federal judicial resources only in `exceptional circumstances,' where the resolution of existing concurrent state-court litigation could result in `comprehensive disposition of litigation.'" Woodford v. Community Action Agency of Greene County, Inc., 239 F.3d 517, 522 (2d Cir. 2001) (citing Colorado River Water Conservation Dist. v. U.S., 424 U.S. 800, 813, 817, 96 S. Ct. 1236, 47 L. Ed. 2d 483 (1976)). In considering the factors to be weighed by this Court in evaluating the applicability of this doctrine, I find that abstention is not appropriate here. See id. at 522 (listing factors).
First, although the state court action does involve a res over which the state court has assumed jurisdiction, this Court need not exercise jurisdiction over this property in order to resolve the dispute pending here. Second, this forum has been mutually convenient for all parties, and had the case proceeded to discovery, any problems with duplication could have been resolved through careful case management. Third, while this action and the *416 state court action share many facts in common, this Court's exercise of jurisdiction will not result in piecemeal litigation. Fourth, although the state court proceedings have been pending for some time, the claims raised by plaintiff here have not been addressed in that action. Finally, although none of plaintiff's claims here involve federal law, and the state procedures would have been adequate to protect plaintiff's rights, these factors alone do not require abstention. The Rogers' defendants motion for abstention is hereby denied.
E. The LoPinto Defendants' Motion for Rule 11 Sanctions
The LoPinto defendants have asked this Court to impose sanctions pursuant to Fed.R.Civ.P. 11, arguing in part that plaintiff's complaint is not warranted by existing law or by any non-frivolous argument to extend the existing law. Given the utter lack of legal support for plaintiff's claims here, the LoPinto defendants' motion is granted.
Rule 11(b)(2) provides that an attorney presenting a pleading to the court:
is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, . . . the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law.
Rule 11(b)(2) "establishes an objective standard, intended to eliminate any `empty-head pure-heart' justification for patently frivolous arguments." Margo v. Weiss, 213 F.3d 55, 64 (2d Cir.2000) (quoting Fed. R.Civ.P. 11 advisory committee note to 1993 amendments). Thus, an attorney's conduct triggers sanctions when it is objectively unreasonable. Id. at 65. "Sanctions should only be imposed if `it is patently clear that a claim has absolutely no chance of success,' and all doubts should be resolved in favor of the signing attorney." K.M.B. Warehouse Distributors, Inc. v. Walker Mfg. Co., 61 F.3d 123, 131 (2d Cir.1995) (quoting Rodick v. City of Schenectady, 1 F.3d 1341, 1350 (2d Cir.1993)).
In opposing the LoPinto defendants' motion, plaintiff does not argue that the complaint can be justified by an argument to extend existing law. Instead, plaintiff argues that both the tortious interference action and the abuse of process action are warranted by current New York law. As discussed at length earlier in this decision, New York law provides no foundation for plaintiff's claims. More importantly, it is plainly clear that plaintiff's claims on their face stood no chance of success.
1. The Tortious Interference Claim
The facts alleged in the complaint and the evidence which existed at the time the complaint was filed simply cannot support a claim for tortious interference. Although plaintiff claims that the notice of pendency filed by defendants was overly broad, it is clear that this notice was properly filed. Even a cursory inspection of the Fourth Amended Complaint filed in the state court action reveals a dispute over the ownership of a portion of plaintiff's property. Moreover, the language in the notice tracks almost verbatim the description of the disputed property in that complaint. It is simply impossible for plaintiff to demonstrate that this notice constituted the wrongful means necessary to prosecute an action for tortious interference.
Moreover, the tortious interference alleged by plaintiff herean interference with the sale of her propertyis the natural result of a properly filed notice of *417 pendency. Brown, 525 N.Y.S.2d at 980; Andesco, 530 N.Y.S.2d at 115.
2. The Abuse of Process Claim
Similarly, the decision to proceed with the abuse of process claim was objectively unreasonable. Neither plaintiff nor Nicolo was able to articulate any attempt to use the notice of pendency for an improper purpose. Even if defendants filed the notice to satisfy some secondary "malevolent impulse," such an impulse, without more, cannot give rise to an abuse of process claim. Brown, 525 N.Y.S.2d at 980; Raved, 481 N.Y.S.2d at 171-172.
Significantly, in arguing that the notice somehow constituted an abuse of process, plaintiff essentially admits that a dispute concerning the Rogers and plaintiff's property line is set forth in the Fourth Amended Complaint:
The bad faith of the LoPinto Defendants in filing the lis pendens is highlighted by the fact that the three prior complaints only referred to the Rogers' deed as the basis for their claim of littoral water rights. Yet in the fourth amended compliant, the Rogers purport to claim ownership to the "Parcel 4 foreshore" based upon the above-noted fictional properly line.
Plaintiff's Memorandum in Opposition, Docket No. 23, p. 8. The fact that the first three complaints in the state court action apparently did not reference a disputed property line is irrelevant. The Fourth Amended Complaint, the complaint on which the notice of pendency was based, states, as plaintiff admits, a claim against plaintiff's property. Thus, plaintiff cannot demonstrate that the notice was diverted from its lawful purpose.
Plaintiff correctly suggests that the filing of a notice of pendency can, in certain circumstances, give rise to an abuse of process claim. However, Felske v. Bernstein, 173 A.D.2d 677, 570 N.Y.S.2d 331 (2d Dep't 1991), the principal case on which plaintiff relies, merely illustrates that the notice must be diverted from its proper purpose in order to sustain such an action. In Felske, the court found that the underlying action, one for specific performance, would not affect the title to, possession, use or enjoyment of real property, thus a claim for abuse of process could be sustained. Id., 570 N.Y.S.2d at 333. Unlike Felske, plaintiff here simply cannot demonstrate that the notice was so diverted.
In addition, plaintiff offers no authority to support the allegation that the quitclaim deeds could constitute an abuse of process. Although plaintiff claims that these deeds improperly "transferred" portions of plaintiff's property to the Rogers, such an argument distorts beyond recognition the true effect of a quitclaim deedto transfer only the interest possessed by the grantor at the time of signing.
The issuance of sanctions is not a course undertaken lightly by this Court. In evaluating the arguments and evidence before me, I have given the signing attorney every benefit of the doubt here. Unfortunately, plaintiff's attorney has chosen to advance through the filling of the complaint in this action two claims that unquestionably had no chance of success. I find that the decision to file this complaint was objectively unreasonable, and, as such, I hereby sanction plaintiff's attorneys pursuant to Rule 11(b)(2).
The LoPinto defendants have requested sanctions in the amount of $8,800, the cost of legal services and expenses incurred by the LoPinto defendants in reviewing and defending against this complaint. Although plaintiff contests the appropriateness of sanctions in general, plaintiff has not disputed the reasonableness of these fees. I therefore award sanctions against plaintiff's *418 attorneys in the amount of $8,800. I find this amount to be "sufficient to deter repetition of such conduct." Fed.R.Civ. Pro. 11(c)(2).
III. CONCLUSION
For the foregoing reasons, the Rogers defendants'[7] motion for summary judgment (Docket No. 17) and the LoPinto defendants' motion for summary judgment (Docket No. 13) are hereby granted, and the complaint is dismissed. The Rogers defendants' motion for abstention is denied (Docket No. 17), as is plaintiff's cross motion for additional discovery (Docket No. 30) pursuant to Fed.R.Civ.P. 56(f). The LoPinto defendants' motion for Rule 11 sanctions (Docket No. 22) is granted and plaintiff's attorneys are directed to pay to defendants' attorneys the sum of $8,800 to reimburse them for defending against the action, within thirty days.
IT IS SO ORDERED.
NOTES
[1] The Rogers defendants' motion is styled as a motion to dismiss. The LoPinto defendants' motion is also styled as a motion to dismiss, or alternatively for summary judgment. All of the parties, including plaintiff, rely heavily on matters outside the pleadings. For this reason, the Court informed the parties during oral argument that these motions would be treated as motions for summary judgment. See Fed.R.Civ.P. 12(b).
[2] Nicolo acquired this property in 1969. In 1992, the property was conveyed to South Slope Holding Corporation, of which Nicolo is the sole shareholder. See Docket No. 13, Ex. 4, p. 2. South Slope conveyed much of this property to plaintiff in 1996. The disputed area was conveyed by South Slope to plaintiff in 2000. See Id. at p. 3.
[3] Although the complaint references only one quitclaim deed executed by Suzanne Sprung Westlake on November 10, 2000, plaintiff, in her papers, references a second deed signed by Judith Manning on September 5, 2000. Judith Manning was married to the now deceased grandson of Helen Bently Westlake.
[4] Plaintiff also claims that defendants interfered with her prospective contractual relationship with Tickner by "attempting to arrange a sale of the Premises at below market value to Rogers without consent or knowledge of plaintiff." Complaint, ¶ 29. This allegation apparently relates to an August 27, 2001 letter sent to Tickner by the LoPinto defendants, essentially proposing a resolution of the property dispute. See Tickner Aff., Ex. B.
In the letter, the Rogers offered to purchase from Tickner the boathouse and the lake frontage associated with it at an "agreeable price." In return, the Rogers would discontinue the state court action. Obviously, Tickner did not and could not accept this offer, since he declined to purchase the subject property from Roeder. Moreover, the record does not indicate that Ticker ever seriously considered the offer since he was never in a position to act on it. It is, therefore, impossible to see how this offer interfered in any way with the relationship between Roeder and Tickner.
[5] Section 6501 provides in full:
A notice of pendency may be filed in any action in a court of the state or of the United States in which the judgment demanded would affect the title to, or the possession, use or enjoyment of, real property, except in a summary proceeding brought to recover the possession of real property. The pendency of such an action is constructive notice, from the time of filing of the notice only, to a purchaser from, or incumbrancer against, any defendant named in a notice of pendency indexed in a block index against a block in which property affected is situated or any defendant against whose name a notice of pendency is indexed. A person whose conveyance or incumbrance is recorded after the filing of the notice is bound by all proceedings taken in the action after such filing to the same extent as a party.
[6] Section 6514 provides in part:
(a) Mandatory cancellation. The court, upon motion of any person aggrieved and upon such notice as it may require, shall direct any county clerk to cancel a notice of pendency, if service of a summons has not been completed within the time limited by section 6512; or if the action has been settled, discontinued or abated; or if the time to appeal from a final judgment against the plaintiff has expired; or if enforcement of a final judgment against the plaintiff has not been stayed pursuant to section 5519.
(b) Discretionary cancellation. The court, upon motion of any person aggrieved and upon such notice as it may require, may direct any county clerk to cancel a notice of pendency, if the plaintiff has not commenced or prosecuted the action in good faith.
[7] While this matter was under advisement, the parties informed the Court of the death of Joseph Rogers. No formal suggestion of death has been filed, and the Court sees no need to delay a decision in this matter, especially since the claims are dismissed. If necessary, the parties can make any required substitutions under Fed.R.Civ.P. 25 in due course.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433426/
|
153 F. Supp. 2d 1133 (2001)
WESTLANDS WATER DISTRICT and San Benito County Water District, Plaintiffs,
v.
UNITED STATES of America, Department of Interior, Bureau of Reclamation; Kirk C. Rodgers, Acting Regional Director, Mid-Pacific Region, United States of America, Department of Interior, Bureau of Reclamation; Bruce Babbitt, Secretary of Interior; Defendants.
San Joaquin River Exchange Contractors Water Authority; Friant Power Authority, Defendants-in-Intervention.
Friant Water Users Authority; Orange Cove Irrigation District; Shafter-Wasco Irrigation District; and Terra Bella Irrigation District; Chowchilla Water District; Madera Irrigation District Defendants-in-Intervention.
No. CVF945217 OWWDLB.
United States District Court, E.D. California.
June 26, 2001.
*1134 *1135 *1136 *1137 Daniel J O'Hanlon, Kronick Moskovitz Tiedemann and Girard, Sacramento, CA, for Westlands Water Dist.
William Thomas Chisum, Kronick Moskovitz Tiedemann and Girard, Sacramento, CA, for San Benito County Water Dist.
Maria A. Iizuka, U.S. Dept. of Justice, Env. and Natural Resources Div., Sacramento, CA, for U.S., Dept. of Interior, Bureau of Reclamation, Bruce Babbitt, Gale Norton.
Michael Victor Sexton, Minasian Spruance Baber Meith Soares and Sexton, Oroville, CA, for San Joaquin River Exchange Contractors Water Authority, Friant Power Authority.
Gregory K Wilkinson, Best Best and Krieger, Riverside CA, for Friant Water Users Authority.
Benslow B Green, Green Green and Rigby, Madera, CA, for Chowchilla Water Dist., Madera Irrigation.
MEMORANDUM DECISION AND ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT
WANGER, District Judge.
Before the court are the parties' cross-motions for summary judgment, which seek to determine the relative rights to water from a federal reclamation project, under three separate contracts with the United States, executed: (1) with plaintiff Westlands Water District ("Westlands") in 1963 ("1963 Contract"); (2) with plaintiff San Benito County Water District ("San Benito") in 1978 ("1978 Contract"); and (3) with defendants-in-intervention San Joaquin River Exchange Contractors Water Authority and Friant Power Authority ("Exchange Contractors") in 1939, and amended in 1967 ("Exchange Contract"). See Doc. 243 (Exchange Contractors); Doc. 248 (defendants-in-intervention Friant water-users);[1] Doc 255 (plaintiffs); Doc. 259 (federal defendants). Oral argument *1138 was held, see Doc. 291, and all issues have been fully briefed and considered.
INTRODUCTION
The Central Valley Project ("CVP") delivers water throughout the Central Valley of California that helps make it the most agriculturally-productive region in the world. It is the nation's largest federal reclamation project, with nine separate divisions. This dispute centers on CVP water delivered through the San Luis Unit, a subset unit within the West San Joaquin Division of the CVP. Westlands and San Benito (collectively "plaintiffs") contract for water service with the United States. Westlands has a 1963 water-service contract with the United States and San Benito has a 1978 water-service contract with the United States. Both are to be supplied water from the San Luis Unit, although San Benito is in a different division, the San Felipe.
This case arises from the United States Bureau of Reclamation's ("Bureau") mid-February 1994 announcement of CVP water allocations for the 1994-1995 water year ("WY94") (March 1, 1994, to February 28, 1995). See Doc. 1 ex. C at 1. Because a water shortage was forecasted, the Bureau reduced most CVP contractors' contractual water allocations. Plaintiffs were allocated thirty-five percent (35%) of their contracted water supply. Others who receive water from the CVP did not suffer similar reductions. The Exchange Contractors' 1939 agreement with the United States is for substitute water. They receive water from the San Luis Unit. In WY94, they were allocated seventy-five percent (75%) of their contracted water supply.[2]See id. The Bureau justified the disparity in percentage water allocations based on its interpretation of the parties' contracts. See id. ("Agricultural contractor's forecasted amounts are less than others due to contract provisions which allow for larger reductions.").
Plaintiffs claim their contracts do not permit them to be subject to larger reductions in their CVP water allocations over any others who receive CVP water. See Doc. 1 at ¶ 16. They further suggest that in times of water shortage, the Bureau must allocate all CVP water supplies on a pro-rata basis among "all CVP contractors," including the Exchange Contractors. See Doc. 256 at 2:10-15. Alternatively, in times of shortage, they say at least all San Luis Unit water should be apportioned on a pro-rata basis among any who receive such water, including the Exchange Contractors. In either event, the Exchange Contractors' contractual water supply from the CVP would be reduced to the same quantity plaintiffs receive, e.g., thirty-five percent (35%) of the annual allotment.
The federal defendants and all intervenors oppose these contract interpretations. Each party seeks summary judgment on interpretation of plaintiffs' and the Exchange Contractors' relative rights to San Luis Unit water.
I. LEGAL STANDARD
"Summary judgment `shall be rendered forthwith 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.'" 7-Up Bottling Co. of Jasper Inc. v. Varni Bros. Corp. (In re Citric Acid Litig.), 191 F.3d 1090, 1093 (9th Cir.1999) (quoting FED. R. CIV. P. 56(c) and citing *1139 Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986)). A genuine issue of fact exists when the non-moving party produces evidence on which a reasonable trier of fact could find in its favor, viewing the record as a whole in light of the evidentiary burden the law places on that party. See Triton Energy Corp. v. Square D Co., 68 F.3d 1216, 1221 (9th Cir.1995) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252-56, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986)) ("The mere existence of a scintilla of evidence in support of the non-moving party's position is not sufficient."). The non-moving party cannot simply rest on its allegation(s) without any significant probative evidence that supports the complaint. See U.A. Local 343 v. Nor-Cal Plumbing, Inc., 48 F.3d 1465, 1471 (9th Cir.1994) ("As the Supreme Court has explained, `[i]f the evidence is merely colorable or is not significantly probative summary judgment may be granted.'") (citing Liberty Lobby, Inc., 477 U.S. at 249-50, 106 S. Ct. 2505).
[T]he plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails 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. In such a situation, there can be "no genuine issue as to any material fact," since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.
Celotex Corp., 477 U.S. at 322-23, 106 S. Ct. 2548.
The more implausible the claim or defense asserted by the opposing party, the more persuasive its evidence must be to avoid summary judgment. See United States ex rel. Anderson v. N. Telecom, Inc., 52 F.3d 810, 815 (9th Cir.1995); see also Van Westrienen v. Americontinental Collection Corp., 94 F. Supp. 2d 1087, 1094 (D.Or.2000) ("when the non-moving party's claims are factually implausible, that party must come forward with more persuasive evidence than would otherwise be required.") (citing Cal. Architectural Bldg. Prods., Inc. v. Franciscan Ceramics Inc., 818 F.2d 1466, 1470 (9th Cir.1987)). Nevertheless, "the evidence of the non-movant is to be believed and all justifiable inferences are to be drawn in its favor." Murphy Exploration & Prod. Co. v. Oryx Energy Co., 101 F.3d 670, 673 (Fed.Cir.1996) (quoting Liberty Lobby, Inc., 477 U.S. at 255, 106 S. Ct. 2505; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986)). At the summary judgment stage, a court may not weigh the evidence, i.e., issue resolution, but rather simply searches for genuine factual issues. See Abdul-Jabbar v. Gen. Motors Corp., 85 F.3d 407, 410 (9th Cir.1996).[3]
*1140 II. PROCEDURAL HISTORY
Plaintiffs filed this case March 4, 1994, to enjoin the Bureau's WY94 allocation of CVP water and to obtain "a declaration that the Bureau may not satisfy its obligations to the Exchange Contractors by providing preferential allocations to the Exchange Contractors over the allocations received by Westlands and San Benito." Doc. 1 at 11:27-12:2 (complaint).
Between March 18, and March 23, 1994, the Exchange Contractors, see Doc. 13, the Friant Power Authority ("FPA"),[4]see Doc. 14, Friant water-users,[5]see Doc. 16, and two irrigation districts, Madera Irrigation District and Chowchilla Water District, see Doc. 17, intervened. These intervenors receive water from different CVP areas.[6] All will be adversely impacted if plaintiffs prevail, and the Exchange Contractors are forced to exercise their pre-CVP rights to that water.
Plaintiffs' motion for preliminary injunction (Doc. 3) was denied. See Westlands Water Dist. v. Patterson, 864 F. Supp. 1536, 1551-52 (E.D.Cal.1994) ("Westlands III"). On December 23, 1994, plaintiffs moved to voluntarily dismiss this complaint without prejudice. See Doc. 93. On January 9, 1995, the federal defendants, Friant water-user intervenors, and the Exchange Contractors moved for summary judgment. See Doc. 99; Doc. 102; Doc. 110. On August 9, 1995, the motion for voluntary dismissal was denied and the motions for summary judgment granted. See Westlands Water Dist. v. Patterson, 900 F. Supp. 1304, 1312, 1324 (E.D.Cal. 1995) ("Westlands IV") (Doc. 157). Plaintiffs appealed. See Doc. 160. The Ninth Circuit reversed the denial of plaintiffs' motion to dismiss without prejudice; vacated the summary judgment decision; and remanded the case "for a determination whether costs and attorney['s] fees should be imposed as a condition of the dismissal without prejudice and, if so, in what amount." Westlands Water Dist. v. United States, 100 F.3d 94, 98 (9th Cir. 1996) ("Westlands V").
*1141 A July 31, 1997, district court order conditioned voluntary dismissal on plaintiffs' paying $100,446.08 attorney's fees and costs to the intervenors. See Doc. 199 at 20-21 (citing Lau v. Glendora Unified Sch. Dist., 792 F.2d 929, 931 (9th Cir. 1986)). On August 21, 1997, plaintiffs elected to: not pay the attorney's fees and costs; not dismiss; and instead, proceed on the merits. See Doc. 200.
The pro-rata apportionment claim raises three issues: (1) whether the 1963 Westlands and 1978 San Benito Contracts require water delivered to the Exchange Contractors from the CVP to be included within supplies to which the contractual formulas are applied to calculate plaintiffs' pro-rata shares; (2) whether any such pro-rata calculation, if required, violates the Bureau's statutory duty to operate the CVP as an integrated unit; and (3) what rights under California water law, if any, the parties have to CVP water, and whether the pro-rata distribution plaintiffs seek violates any such rights.
III. FACTUAL BACKGROUND
"[W]ater can be either a liability or an asset." Cent. Green Co. v. United States, 531 U.S. 425, 121 S. Ct. 1005, 1009, 148 L. Ed. 2d 919 (2001). "California has a serious water problem particularly in the Central Valley." Ivanhoe Irrigation Dist. v. All Parties & Persons, 53 Cal. 2d 692, 3 Cal. Rptr. 317, 350 P.2d 69, 76 (1960). "California's Central Valley is an immense elongated bowl approximately four hundred miles in length and at its widest point approximately one hundred miles in width. It is bounded on the north by the Siskiyou Mountains, on the south by the Tehachapi Range, on the east by the Sierra Nevada and on the west by the Coast Range." California v. Rank, 293 F.2d 340, 342 (9th Cir.1961).
The history of California water development and distribution is a story of supply and demand. California's critical water problem is not a lack of water but uneven distribution of water resources. The state is endowed with flowing rivers, countless lakes and streams and abundant winter rains and snowfall. But while over 70 percent of the stream flow lies north of Sacramento, nearly 80 percent of the demand for water supplies originates in the southern regions of the state. And because of the semiarid climate, rainfall is at a seasonal low during the summer and fall when the demand for water is greatest; conversely, rainfall and runoff from the northern snowpacks occur in late winter and early spring when user demand is lower.
United States v. State Water Res. Control Bd., 182 Cal. App. 3d 82, 227 Cal. Rptr. 161, 166 (1986) (citing 1 ROGERS & NICHOLS, WATER FOR CALIFORNIA 20, 26-33, 43-46 (1967)). The Central Valley Project was created to attempt to solve this problem. See id.
A. The Central Valley Project ("CVP")
"The CVP is the nation's largest federal reclamation project, spanning `the length of California's Central Valley, from Shasta Dam, in the north, to the Friant-Kern Canal, in the south.'" United States v. Westlands Water Dist., 134 F. Supp. 2d 1111, 1116 (E.D.Cal.2001) ("Westlands 2001") (quoting Firebaugh Canal Co. v. United States, 203 F.3d 568, 570 (9th Cir. 2000)). The California Legislature conceived the CVP in 1933. See State Water Res. Control Bd., 227 Cal.Rptr. at 166. "The Central Valley Project ([Cal.] Wat. Code, §§ 11100-11925) was approved by the [California] Legislature and state voters in the early '30's. As originally proposed it was to be financed with revenue bonds, with revenues to be generated by the sale of water and power." Goodman v. County of Riverside, 140 Cal. App. 3d 900, 190 Cal. Rptr. 7, 14 n. 6 (1983). "Efforts in the 1930's to sell bonds to finance *1142 the central valley project had been unsuccessful, partly because the state's general credit did not guarantee payment." Antelope Valley-E. Kern Water Agency v. Local Agency Formation Comm'n of Los Angeles County, 204 Cal. App. 3d 990, 251 Cal. Rptr. 593, 594 n. 4 (1988) (citing id.).
As a result of these pervasive unfavorable economic conditions during the Great Depression, California turned to the federal government for assistance to finance and construct the CVP. See S. Delta Water Agency v. United States, 767 F.2d 531, 534 (9th Cir.1985). The federal government assumed the role of building and operating the CVP. Congress initially authorized funds for the CVP under Section 4 of Chapter 48 of the Emergency Relief Appropriations Act of 1935 (Work Relief Act).[7]See id. Congress re-authorized the CVP under the Rivers and Harbors Act of 1937,[8]see id., and the Bureau was assigned the task of undertaking the construction and operation of the CVP, see Dugan v. Rank, 372 U.S. 609, 611, 83 S. Ct. 999, 10 L. Ed. 2d 15 (1963).
"The grand design of the [Central Valley] Project was to conserve and put to maximum beneficial use the waters of the Central Valley of California," id. at 612, 83 S. Ct. 999 (footnote omitted), which comprises approximately one-third of California's territory.
The Central Valley basin development envisions, in one sense, an integrated undertaking, but also an aggregate of many subsidiary projects, each of which is of first magnitude. It consists of thirty-eight major dams and reservoirs bordering the valley floor and scores of smaller ones in head waters. It contemplates twenty-eight hydropower generating stations. It includes hundreds of miles of main canals, thousands of miles of laterals and drains, electric transmission and feeder lines and substations, and a vast network of structures for the control and use of water on two million acres of land already irrigated, three million acres of land to be newly irrigated, 360,000 acres in the delta needing protection from intrusions of salt water, and for municipal and miscellaneous purposes including cities, towns, duck clubs and game refuges. These projects are not only widely separated geographically, many of them physically independent in operation, but they are authorized in separate acts from year to year and are to be constructed at different times over a considerable span of years.
Cent. Green Co., 531 U.S. at ___, 121 S.Ct. at 1009 (quoting United States v. Gerlach Live Stock Co., 339 U.S. 725, 733, 70 S. Ct. 955, 94 L. Ed. 1231 (1950) ("Gerlach")).
The contemporary CVP consists of nine distinct geographic areas, known as "divisions." See Doc. 292 at 5-7 (Central Valley Project: Operating Criteria and Plan, dated October, 1992) ("CVP-OCAP"). These are the: (1) Trinity; (2) Shasta; (3) Sacramento; (4) American River; (5) Delta; (6) Eastside; (7) San Felipe; (8) West San Joaquin; and (9) Friant Divisions. See id. at 1-25. Each division has various facilities, including dams, lakes, canals, powerplants, and reservoirs. See id. at 5-7. This case involves water from three of the CVP Divisions: the West San Joaquin; the Friant; and the San Felipe Divisions.
The West San Joaquin Division primarily consists of the San Luis Unit, discussed infra. See id. at 7; Appendix E. The Friant Division consists of the Friant Dam, Millerton Lake, the Friant-Kern Canal, the Madera Canal, and the John A. Franchi Diversion Dam. See Doc. 292 at 7; Central Valley Project-Friant Division, at *1143 http://dataweb.usbr.gov/html/friant.html (last modified May 05, 2001) (last visited May 09, 2001);[9] Appendix D. "The San Felipe Division includes Pacheco Tunnel and Santa Clara Tunnel, conveyance facilities, pumping plants, power transmission facilities, a regulating reservoir, and distribution facilities in Santa Clara and San Benito Counties. Deliveries to the San Felipe Division are made through the San Luis Reservoir." Doc. 292 at 9; see also Central Valley Project-San Felipe Division, at http://dataweb.usbr.gov/html/sanfelipe.html (last modified June 02, 2001) (last visited June 05, 2001); Appendix A.
B. Ownership of CVP Water Rights
The original CVP plan called for the United States to obtain, by purchase or otherwise, rights (both appropriative and riparian)[10] from water-rights holders in strategic areas to facilitate CVP water distribution, to provide a reliable and stable water supply. See Gerlach, 339 U.S. at 725, 70 S. Ct. 955. Purchases began in 1939. See Dugan, 372 U.S. at 613-14, 83 S. Ct. 999. From 1938 through 1949, each of Interior's annual Bureau budgets, except three (fiscal years 1941, 1945, and 1946), contained a line-item for the purchase of water rights in every federal appropriations request. See Gerlach, 339 U.S. at 735 n. 9, 70 S. Ct. 955.
Not all CVP water rights were purchased. Interior obtained some water rights for the CVP through formal exchanges. "Prior to the construction of the [Friant] dam it was necessary for the Bureau to enter into water rights settlement contracts with downstream riparian water rights holders on the San Joaquin River." Westlands Water Dist. v. United States, 805 F. Supp. 1503, 1504 (E.D.Cal.1992) ("Westlands I"). For example, in 1939, the Exchange Contractors executed a contract with Interior (the "Exchange Contract") that conditionally allows Interior to exercise "their rights to San Joaquin [River] waters in exchange for the agreement of the Bureau to provide `substitute water [to them].'" Westlands Water Dist. v. Firebaugh Canal, 10 F.3d 667, 669 (9th Cir.1993) ("Westlands II"). The Exchange Contract grants the United States the right, "either in whole or in part, [to] store, divert, dispose of and otherwise use, within and without the watershed of the aforementioned San Joaquin River," the waters of that river, over which the Exchange Contractors hold rights under California law. Doc. 246 ex. 21 at 387-88. The reserved right to exercise their San Joaquin River water rights is conditional: it lasts "so long as, and only so long as, the United States does deliver to the [Exchange Contractors] by means of the [Central Valley] Project or otherwise substitute water in conformity with this contract." Id. at 388 (emphasis added).
An examination of the government's CVP water rights as of 1939 and later is instructive:
[T]he fact the Bureau does not consume water is not synonymous with having no *1144 substantial interest in the water. The Bureau has appropriative water rights in the Central Valley Project. The Bureau owns the CVP facilities, has operational control and responsibilities relating to flood control, water supply, power generation, and fish and wildlife mitigation. The Bureau has substantial property rights in its water rights permits, whereby the Bureau diverts, transports, and stores water.
County of San Joaquin v. State Water Res. Control Bd., 54 Cal. App. 4th 1144, 63 Cal. Rptr. 2d 277, 285 n. 12 (1997) (citing State Water Res. Control Bd., 227 Cal. Rptr. at 161) (internal citation omitted) (emphasis added). "The Bureau operates the Central Valley Project under water rights permits from the California State Water Resources Control Board." Id. at 279. Once the Bureau assumed control of construction of the CVP, "the DWR [Department of Water Resources] assigned its applications to the ... Bureau. The CVP was actually completed and in operation before [water] permits were issued: the first permits were issued to the U.S. Bureau in 1958 (Decision 893), and the principal permits were issued in 1961 (Decision 990)." State Water Res. Control Bd., 227 Cal.Rptr. at 172. "For their initial operations in the Sacramento Valley and the Delta, federal authorities acquired appropriative rights." Id. "The U.S. Bureau and the DWR hold a combined total of 34 permits for various units of the CVP and SWP to authorize diversion and use of the Delta's waters. These permits were issued by the Board and its predecessors over a period of years extending through 1970." Id. at 165.
"The United States ... by virtue of the Reclamation Act, stands in the position of an upstream appropriator for a beneficial use." Gerlach, 339 U.S. at 743-44, 70 S. Ct. 955. "For the most part, the CVP applications preceded those of the SWP, so that most appropriative water rights of the CVP have a higher priority than the rights of the SWP." State Water Res. Control Bd., 227 Cal.Rptr. at 188 n. 25.
The Bureau obtained rights to all water within the CVP Divisions implicated in this case by California Water Rights Decisions D-893 (American River, dated March 18, 1958), see 1958 WL 5645; D-935 (San Joaquin River rights, dated June 2, 1959), see Doc. 21 ex. 10; D-990 (Sacramento River, Rock Slough, Old River, and Channels of the Sacramento-San Joaquin Delta, dated February 9, 1961), see Doc. 273 ex. 3; and D-1020 (Old River, dated June 30, 1961), see id. at ex. 5.
The United States has acquired, by exchange, purchase, exercise of eminent domain, and appropriation, riparian and appropriative rights to all the water within the CVP for administration as part of an integrated federal reclamation project. Access to CVP water is only by contract with the United States. See, e.g., 43 U.S.C. § 511 (2001). As the owner of CVP water rights, the United States has contractual authority and administrative discretion over how it provides water service among the CVP's water and power-users, and how it fixes priorities among them.
C. The San Luis Unit and the Plaintiffs' Water Contracts
Each of the CVP's nine divisions has at least one subset "unit," which itself is comprised of various facilities, e.g., a dam and a power plant. This dispute centers on one unit of the West San Joaquin Division, the San Luis Unit, authorized by the San Luis Act of 1960,[11] to be built and operated *1145 jointly between the United States and the State of California. See Doc. 292 at 8 (CVP-OCAP). The San Luis Act "contemplated additional construction projects to provide CVP water to Santa Clara, San Benito, Santa Cruz and Monterey Counties." Westlands II, 10 F.3d at 669 (citing § 6 of the San Luis Act of 1960).
The San Luis Unit consists of: "the San Luis Dam[12] and the San Luis Reservoir, together with a number of smaller facilities." Westlands II, 10 F.3d at 669 (footnote added);[13]see also Appendix B. The San Luis Reservoir has very little natural inflow. See Doc. 292 at 64 (CVP-OCAP). The water supply for the San Luis Reservoir is secured almost entirely by pumping surplus water from elsewhere through the Delta-Mendota Canal. See Doc. 245 ex. 1 at 12 (page 200) ("Comprehensive Report").[14] "The water supply for this project [is] largely obtained from winter and early spring flows into the Sacramento-San Joaquin Delta," id. at 11 (page 219), which is supplied with water from the Sacramento River, see Dugan, 372 U.S. at 612, 83 S. Ct. 999. "The `principal purpose' of the San Luis Unit is to furnish irrigation to land in Merced, Fresno, and Kings counties, California." Westlands 2001, 134 F.Supp.2d at 1116 (citing Firebaugh Canal Co., 203 F.3d at 570).[15]
Plaintiff Westlands is the largest contractor for water from the San Luis Unit. See id. (citing Firebaugh Canal Co., 203 F.3d at 570); Appendix F. Westlands' June 5, 1963, amended contract with the United States for water service runs through 2007. See O'Neill v. United States, 50 F.3d 677, 680 (9th Cir.1995); Doc. 246 ex. 20 (1963 Contract: contract no. 14-06-200-495-A).
Plaintiff San Benito's April 15, 1978, water-service contract is for forty years, through 2018, from the San Felipe Division. See O'Neill, 50 F.3d at 680; Doc. 246 ex. 19 at 1 (1978 Contract: contract no. 8-07-20-W0130). This division was created after the San Luis Unit, to serve Santa Clara, San Benito, Santa Cruz, and Monterey counties. See O'Neill, 50 F.3d at 680. All water for the San Felipe Division is delivered through the San Luis *1146 Reservoir. See Doc. 292 at 9; Appendices A-B.
D. Operational History of the CVP
The Exchange Contractors hold riparian and pre-1914 appropriative rights to waters from the San Joaquin River. See Doc. 28 at ¶ 1. The San Joaquin is one of the "two great rivers" around which the CVP is built; the other is the Sacramento. See Ivanhoe Irrigation Dist. v. McCracken, 357 U.S. 275, 281, 78 S. Ct. 1174, 2 L. Ed. 2d 1313 (1958), abrogated on other grounds, California v. United States, 438 U.S. 645, 98 S. Ct. 2985, 57 L. Ed. 2d 1018 (1978).[16] These rivers naturally meet in the Sacramento-San Joaquin Delta, where the water would flow into the Pacific Ocean.
"The Sacramento Valley, containing the Sacramento River, lies in the northern portion of the Central Valley, and the San Joaquin Valley, containing the San Joaquin River, lies in the southern portion." County of San Joaquin, 63 Cal.Rptr.2d at 279 (quoting S. Delta Water Agency, 767 F.2d at 534). The San Joaquin River "rises in the Sierra Nevada northeast of Fresno, runs westerly to Mendota and then northwesterly to the Sacramento-San Joaquin Delta where it joins the Sacramento River," Dugan, 372 U.S. at 612, 83 S. Ct. 999, and eventually flows into the Pacific Ocean. "The Sacramento River rises in the extreme north, runs southerly to the City of Sacramento and then on into San Francisco Bay and the Pacific Ocean." Id. If left to run their natural courses, these two rivers form a water paradox: "The Sacramento River has a surplus of water because of heavier rainfall in the northern region [but has little available tillable soil.] The San Joaquin River, in contrast, does not supply sufficient water for the extensive amount of tillable soil in its valley." County of San Joaquin, 63 Cal.Rptr.2d at 279 (quoting S. Delta Water Agency, 767 F.2d at 534) (citing id.) (alteration added).
To accomplish the reclamation goals of the CVP, the courses of both rivers were changed through an "imaginative engineering feat." Dugan, 372 U.S. at 612, 83 S. Ct. 999. The waters of the San Joaquin River are diverted completely from their natural course. See id. This is accomplished by impounding San Joaquin River waters by a dam constructed at Friant, California (Friant Dam),[17] approximately 60 miles upstream from Mendota. See id.
Once San Joaquin River water reaches Friant Dam, it "is controlled by the United States government as part of the federal Central Valley Project and is not within the State Water Resources Development System." People v. Shirokow, 26 Cal. 3d 301, 162 Cal. Rptr. 30, 605 P.2d 859, 862-63 (1980) (in bank). The Friant Dam "forces the entire flow of the San Joaquin into Millerton Lake." Ivanhoe Irrigation Dist., 357 U.S. at 282, 78 S. Ct. 1174.
Absent the cooperation of the Exchange Contractors, this diversion would not be *1147 possible, because they hold riparian and pre-1914 appropriative rights to the San Joaquin River water south of Friant, that allowed the Bureau to convey water from Millerton Lake to flow north into the Madera Canal, which "extends about 37 miles in length and services the Madera [Irrigation] District,"[18]id. at 282-83, 78 S. Ct. 1174, and south into the Friant-Kern Canal, which supplies water to "the vicinity of Bakersfield for use in those areas for irrigation and other public purposes," Dugan, 372 U.S. at 612, 83 S. Ct. 999. In return for the conditional non-exercise of their San Joaquin River water rights, the Exchange Contractors have received substitute water from the Sacramento River and Delta since 1951. The waters of the Sacramento River are diverted into the San Joaquin Valley to replenish the San Joaquin River bed "for the entire length of the San Joaquin below Friant Dam." Id. This is accomplished by pumping water (at the Tracy Pumping Plant) from the Sacramento-San Joaquin Delta into the Delta-Mendota Canal. See id. Water flows by gravity along this canal, located on the west side of the San Joaquin Valley, see id., to the Mendota Pool approximately 120 miles south of the Delta, see Ivanhoe Irrigation Dist., 357 U.S. at 282, 78 S. Ct. 1174, where it is discharged into the San Joaquin River bed, see Dugan, 372 U.S. at 612, 83 S. Ct. 999, "replac[ing] that diverted from the San Joaquin by the dam at Friant," Ivanhoe Irrigation Dist., 357 U.S. at 282, 78 S. Ct. 1174.
Even with the dual diversion, the Sacramento River water does not replace all the water taken from the San Joaquin River: "This impoundment and diversion leaves a dry stretch of San Joaquin riverbed." Natural Res. Def. Council v. Houston, 146 F.3d 1118, 1123 (9th Cir.1998). Because the river bed at the Friant Dam is approximately 240 feet higher than the river bed at Mendota, the Sacramento River water cannot replenish the dry San Joaquin River bed in the 60-mile area between Mendota and Friant Dam. See Dugan, 372 U.S. at 613, 83 S. Ct. 999.
The Friant Dam currently diverts all of the San Joaquin River water north of the location where the Exchange Contractors hold their water rights, and stores that water at Millerton Lake, located at the northern point of the Friant Division of the CVP.
The water is distributed for use either to the north (into Madera Canal), or to the south (into Friant-Kern Canal). *1148
This diversion has altered the natural river flows formerly used by the Exchange Contractors. Figure 1 shows that plaintiffs and the Exchange Contractors receive water that primarily originates in the Sacramento River, which is delivered through the San Luis Unit of the West San Joaquin Division of the CVP. See also Appendix B.
Westlands disputes the Exchange Contractors' priority to CVP-delivered water from the Sacramento River, claiming that any riparian and pre-1914 appropriative rights to San Joaquin River water, conditionally *1149 exchanged by the Exchange Contractors, have been extinguished and can have no effect in allocation of water, especially CVP water from the San Luis Unit, because it is from a different source, the Sacramento River.
IV. THE PARTIES' ARGUMENTS
To support their contention that the Bureau must allocate all CVP (or at the minimum, all San Luis Unit) water on a pro-rata basis in times of water shortage, the plaintiffs advance three contentions: (1) the 1963 Contract applies to any party who receives CVP water (or at least CVP water from the San Luis Unit); (2) the 1963 Contract's pro-rata calculation includes any water delivered to the Exchange Contractors through the San Luis Unit, under the subsections defining "contractual commitments" and "available supply;" and (3) the Exchange Contractors are "customers" who are subject to the 1978 Contract's shortage provisions.
All defendants oppose these interpretations.[19] The federal defendants argue that the Exchange Contractors are not CVP water-service contractors, "because they hold senior water rights which the United States has agreed [it] is required to honor pursuant to California water law" in the Bureau's management of the CVP. Doc. 265 at 3:22-4:2; see also Doc. 244 at 11:14-17 ("Neither the history of the San Luis Unit, the language of Plaintiffs' contracts nor the course of dealing since the Unit was built establish any right to pro[-]rata apportionment of all CVP water on the part of the Plaintiffs.") (capitalization omitted); Doc. 249 at 10:23-25 ("Neither the Bureau's course of dealing with regard to the San Luis Unit nor the Districts' water supply contracts establish any right to a pro[-]rata apportionment of all water pumped by the CVP from the Sacramento-San Joaquin Delta.").
V. ANALYSIS
The United States holds all water rights to CVP water. To access CVP water, water-users such as plaintiffs must enter into water-service contracts with the United States. See 43 U.S.C. § 511 (2001).
Four independent, alternative, and severable grounds defeat plaintiffs' pro-rata allocation interpretations. First, under federal contract law, plaintiffs' interpretation ignores the plain language of, and applicable extrinsic evidence that aids interpretation of, the amended 1939, 1963, and 1978 Contracts. See infra Part VI. Second, assuming, arguendo, plaintiffs' contractual interpretation is correct, such pro-rata allocation frustrates the necessary balancing of water rights Interior undertakes each year to discharge its statutory duty to properly operate the CVP as an integrated unit. See infra Part VII.A. It also violates basic principles of equity that would elevate plaintiffs, later-in-time water contractors, who have contributed very little to the creation or operation of the CVP, to an equal priority with the Exchange Contractors, senior water rights holders, who own conditionally-reserved senior and pre-existing riparian and pre-1914 appropriative water rights on the San Joaquin River, which have been utilized to create and operate the CVP. See infra Part *1150 VII.B. Third, even if plaintiffs' contractual interpretation is correct, and the statutory mandate to operate the CVP as an integrated unit "would not be frustrated," "pro-rata distribution" applied to the Exchange Contractors violates the California priority water-right principle, first-in-time, first-in-right, in derogation of the Exchange Contractors' senior and vested federal contract rights to receive water from the Bureau. See infra Part VIII.B. Fourth, plaintiffs have no independent state-law water rights that entitled them to any priority over Interior or the Exchange Contractors. See infra Part VIII.C.
VI. DISCUSSION: LEGAL (CONTRACTUAL)
Plaintiffs contend that Article 11(a) of the 1963 Contract and Article 7(b) of the 1978 Contract unambiguously require that in times of water shortage, the Bureau must allocate all CVP water pro-rata among all CVP contractors, or at least, must allocate all San Luis Unit water pro-rata among all who receive water from the San Luis Unit.[20]
A. Federal Contract Law Analysis
Federal law governs the interpretation of a contract if the United States is a party, especially federal reclamation contracts. See Mohave Valley Irrigation & Drainage Dist. v. Norton, 244 F.3d 1164, 1165 (9th Cir.2001) (citing cases); see also Westlands 2001, 134 F.Supp.2d at 1135 (applying federal law to interpret Westlands' 1963 water-service contract) (citing Klamath Water Users Protective Ass'n v. Patterson, 204 F.3d 1206, 1210 (9th Cir.1999) (citing O'Neill, 50 F.3d at 682)). For guidance, federal courts also follow general principles of contract interpretation. See Westlands 2001, 134 F.Supp.2d at 1135 (citing Saavedra v. Donovan, 700 F.2d 496, 498 (9th Cir.1983) (citing United States v. Seckinger, 397 U.S. 203, 209-11, 90 S. Ct. 880, 25 L. Ed. 2d 224 (1970))). "When interpreting contract language, courts start with the assumption that the parties have used the language in the way that reasonable persons ordinarily do." E. ALLAN FARNSWORTH, CONTRACTS § 7.11 (1990). "[C]ourts should attempt to construe contracts to avoid absurdity, and must reject interpretations which would make the contract unusual, extraordinary, harsh, unjust, or inequitable." Blecher & Collins, P.C. v. N.W. Airlines, Inc., 858 F. Supp. 1442, 1459 (C.D.Cal.1994) (citing sources).
The Uniform Commercial Code ("U.C.C.") is one source of federal common law used to interpret any contract to which the federal government is a party. See O'Neill, 50 F.3d at 684 (applying the U.C.C. to the disputed contracts). "[T]he backdrop of the legislative scheme that authorized" a government contract may also be examined to interpret that contract. Peterson, 899 F.2d at 807 (citing Fed. Hous. Admin. v. Darlington, Inc., 358 U.S. 84, 87-88, 79 S. Ct. 141, 3 L. Ed. 2d 132 (1958)). Additional contract interpretation rules apply:
(1) the four corners of the contract must be read as a whole;
(2) preference is given to reasonable interpretations, favoring those that avoid internal conflict;
(3) under the U.C.C., extrinsic evidence, including usage of trade;[21] course of *1151 dealing;[22] and course of performance,[23] is admissible to determine whether the contract is ambiguous;
(4) if the contract is ambiguous, i.e., whether "reasonable people could find its terms susceptible to more than one interpretation," extrinsic evidence may be considered to interpret the parties' intent in light of earlier negotiations, later conduct, related agreements, and industry-wide custom;[24]
(5) whether a contract (or any term) is ambiguous is a question of law.[25]
See Westlands 2001, 134 F.Supp.2d at 1134-38 (quoting and citing cases).[26]
*1152 B. The 1939 (as amended) Exchange Contract
"The transfer of water between contractors of the Bureau of Reclamation's Central Valley Project has been an integral part of CVP operations since its inception. The vast network of storage, pumping, and conveyance facilities has been used to transfer surface and ground water to increase CVP supplies, reduce costs, and to improve the timing and efficiency of deliveries to CVP contractors." Morris Israel & Jay R. Lund, Recent California Water Transfers: Implications for Water Management, 35 NAT. RES. J. 1, 23 (1995) (emphasis added). No party disputes that the Exchange Contractors are "holders of pre-1914 and riparian water rights on the San Joaquin River." Doc. 28 at ¶ 1. This dispute is over what rights they hold, if any, with respect to CVP water the Bureau delivers to them from another source, such as from the San Luis Unit, supplied not by San Joaquin River water, where the Exchange Contractors own senior water rights, but from "surplus" Sacramento River water.
The Exchange Contract has language that impacts plaintiffs. The original Exchange Contract was executed July 27, 1939, and most recently was amended December 6, 1967. See Westlands I, 805 F.Supp. at 1504; Doc. 246 ex. 21 at 1 (1967 Second Amended Exchange Contract, no. I1r-1144).[27] The Exchange Contractors conditionally promise not to, and to allow Interior to, exercise their vested state-law riparian and pre-1914 appropriative rights to San Joaquin River water, in return for a promise they would be provided a permanent, substitute water supply. Article 4 of the Exchange Contract, "Conditional Permanent Substitution of Water Supply," authorizes the United States to annually exercise the Exchange Contractors' San Joaquin River water rights, conditioned on a return supply of substitute water:
The United States may hereafter, either in whole or in part, store, divert, dispose of and otherwise use, within and without the water-shed of the aforementioned San Joaquin River, the aforesaid reserved waters of said river for beneficial use by others than the [Exchange Contractors] so long as, and only so long as, the United States does deliver to the [Exchange Contractors] by means of the [Central Valley] Project or otherwise substitute water in conformity with this contract.
Doc. 246 ex. 21 at art. 4a (emphasis added). The Exchange Contract was executed in 1939, but the government did not begin to store and divert the San Joaquin River waters or to supply the Exchange Contractors with substitute Sacramento River or Delta waters until approximately July 16, 1951. See id. at 3; see also Wolfsen, 162 F.Supp. at 405.
Article 4a's express language does not extinguish, but instead, expressly reserves, the Exchange Contractors' riparian and pre-1914 appropriative rights to San Joaquin River water, subject to the express condition that the government may exercise the Exchange Contractors' rights only if substitute water is provided them. See Doc. 246 ex. 21 at art. 4a ("so long as, and only so long as").
Article 4b grants the Exchange Contractors a federal contractual right to receive San Joaquin River water during temporary interruptions of delivery of the substitute waters:
Whenever the United States is temporarily unable for any reason or for any *1153 cause to deliver to the [Exchange Contractors] substitute water from the Delta-Mendota Canal or other sources, water will be delivered from the San Joaquin River as follows:
(1) During this period, for the first 7 consecutive days, in the quantities and rates as specified in Article 8 of this contract;
(2) For the balance of this period, in quantities and rates as reserved in the Purchase Contract, except that the United States further agrees that if the resulting delivery of water would be less than seventy-two per centum (72%) of Schedule One in said Purchase Contract then the United States shall make up such quantities by releases of available storage from Millerton Lake, provided, however, that the United States shall in no event be required to draw the storage in Millerton Lake below Elevation 464.00 U.S.G.S. datum or to retain water in storage for such releases.
Id. at art. 4b (emphasis added). The Exchange Contractors' right to receive water from the San Joaquin River if delivery of substitute water is temporarily interrupted, does not impair their reserved state-law right to exercise their riparian and pre-1914 appropriative rights to San Joaquin River water.
If the government permanently fails to provide the Exchange Contractors with substitute water, Exchange Contract Article 4c requires the government to release the "reserved" San Joaquin River water (they continue to own) held at Friant Dam:
Whenever the United States is permanently unable for any reason or for any cause to deliver to the [Exchange Contractors] substitute water in conformity with this contract, the [Exchange Contractors] shall receive the said reserved waters of the San Joaquin River as specified in said Purchase Contract and the United States hereby agrees to release at all such times said reserved waters at Friant Dam.
Id. at art. 4c (emphasis added).
Article 16 mandates that the Exchange Contract:
shall never be construed as a conveyance, abandonment or waiver of any water right, or right to the use of water of the [Exchange Contractors], or as conferring any right whatsoever upon any person, firm or corporation not a party to this contract, or to affect or interfere in any manner with any right of the [Exchange Contractors] to the use of the waters of the San Joaquin River, its channels, sloughs and tributaries, except to and in favor of the United States to the extent herein specifically provided.
Id. at art. 16 (emphasis added). Article 16 confirms the mutual intent of the Exchange Contractors and the United States that the Exchange Contractors never gave up their pre-1939 state water rights, and the Exchange Contract "shall never" be construed as conferring any right on any non-contracting party (here plaintiffs) to "affect or interfere in any manner" with the Exchange Contractors' rights to use San Joaquin River water. The government has expressed its intent to assure the Exchange Contractors' priority to San Joaquin River water to prevent the type of challenge here; i.e., that plaintiffs can impair the Exchange Contractors' federal contract priority to substitute water from the Bureau or their senior state San Joaquin River water rights. This unambiguous language preserves the Exchange Contractors' pre-1939 priority of San Joaquin River water rights. This conditional subordination of senior water rights is different from a conveyance, abandonment, or waiver of water rights, because the Exchange Contractors have an absolute right *1154 to exercise their pre-1939 riparian and appropriative rights to San Joaquin River water, which they still own and have reserved the right to exercise, if substitute water is not provided.[28] Article 16 also establishes that plaintiffs have no basis to claim any San Joaquin River water, in derogation of the Exchange Contractors' riparian and pre-1914 appropriative water rights.
The Ninth Circuit considered an exchange contract in Madera Irrigation District v. Hancock, 985 F.2d 1397 (9th Cir. 1993), addressing the Madera Irrigation District's ("MID") 1939 contract for sale of land and San Joaquin River water rights to the United States and a later 1951 contract by which MID exchanged its lands and water rights "for a `permanent' supply of water," id. at 1401. The Ninth Circuit held MID had a "vested property right to a permanent water supply based on express provisions of its contracts." Id. at 1402 (citing Alpine Ridge Group v. Kemp, 955 F.2d 1382, 1385-86 (9th Cir. 1992), rev'd on other grounds, Cisneros v. Alpine Ridge Group, 508 U.S. 10, 113 S. Ct. 1898, 123 L. Ed. 2d 572 (1993)) (emphasis added).
Article 4a of the 1939 Exchange Contract contains an analogous term: "Conditional Permanent Substitution of Water Supply." Doc. 246 ex. 21 at art. 4a (emphasis added).[29] By analogy to Madera Irrigation District, the Exchange Contractors hold a vested property right to a conditional permanent water supply provided by the United States, see 985 F.2d at 1402, from the CVP or other source chosen by the Bureau in its discretion.
Although the source of substitute water is not exclusive, the Exchange Contract expressly reserves discretion to the United States to provide substitute water from "the Sacramento River, the Sacramento-San Joaquin Delta and other sources through the Delta-Mendota Canal of [the CVP] and by other means." Doc. 246 ex. 21 at 3. The Exchange Contract "anticipated that most if not all of the substitute water provided the [Exchange Contractors] will be delivered to them via the aforementioned Delta-Mendota Canal." Id. at art. 5a. This language provides notice that the Bureau contractually selected the Sacramento River, Delta, and Delta-Mendota Canal as the primary source of substitute water. This source is consistent with the reality that the Delta-Mendota Canal is the only conveyance facility to transport substitute water from the CVP to the Exchange Contractors that does not originate in the San Joaquin River.
The California Supreme Court interpreted the 1939 MID exchange contract in Madera Irrigation District v. All Persons, 47 Cal. 2d 681, 306 P.2d 886 (1957):
In May, 1939, the District entered into a contract with the United States whereby *1155 it transferred its dam site, gravel lands and applications to the United States for use in connection with the Central Valley Project. In exchange the District received $300,000 and a permanent priority right to contract for an annual supply of water from the project. Part A of the contract now under consideration is in partial recognition of that right. The contract in Part A provides for a designated water supply for the District from the Friant Dam and the Madera Canal for a period of forty years, commencing with the year in which the initial delivery date occurs. The United States agrees to furnish to the District, and the District agrees to accept and pay for the water supplied at rates whose maximum limits are fixed by the contract. Part B of the contract provides that, to the extent that funds may be available by appropriation, the United States will construct a distribution system to cost not exceeding $8,320,000.
Id. at 889 (emphasis added). The California Supreme Court characterized the MID's exchange contract as creating "permanent priority" water rights in the CVP.
By the 1939 Exchange Contract, the Exchange Contractors grant Interior a defeasible right to exercise their retained, senior San Joaquin River water rights in exchange for a conditional permanent supply of substitute water that can come from any source (including from outside the CVP) that the Bureau, in exercise of its reasonable discretion, selects; subject to Article 4a's and c's conditions that if substitute water is not provided by the United States, the Exchange Contractors have reserved the right to exercise and enforce their extant riparian and pre-1914 appropriative rights to San Joaquin River water. As the appropriator under state permits, Interior had authority to establish a vested federal contractual priority to Sacramento River and Delta water as the primary source of substitute water for the Exchange Contractors.
C. Extrinsic Evidence
It is appropriate to consider extrinsic evidence of course of dealing to interpret underlying rights arising from federal contracts. See O'Neill, 50 F.3d at 684-85.[30] In a December 29, 1959, letter, H.P. Dugan, Director of Region 2 of the Bureau of Reclamation, wrote:
*1156 I confirm to you that it has been, is, and will continue to be the policy and practice of the United States to utilize the water available to it or made available to it [from] ... the Sacramento River and its tributaries and the Sacramento-San Joaquin Delta to first satisfy the requirements of the Exchange Contract and Schedule 2 of the Purchase Contract so long as it is legally and reasonably physically possible for it to satisfy these requirements ....
Doc. 245 ex. 7 at 3 (emphasis and alterations added).
The water-districts, e.g., MID, that received water from the Friant Division were concerned that addition of the San Luis Unit to the CVP, to provide water to Westlands and others, could reduce availability of Sacramento River and Delta water, which would require the Exchange Contractors to exercise their San Joaquin River water rights in future times of shortage, which in turn would reduce MID's available water:
This letter is written on behalf of the Madera Irrigation District, and is in response to your letter of December 29, 1959. That letter reiterated the long standing policy and practice of the United States to utilize the water available to it or made available to it under its applications to appropriate from the Sacramento River and the Sacramento-San Joaquin Delta to first satisfy the requirements of the Exchange Contract ... so long as it is legally and reasonably physically possible for it to satisfy these requirements; provided that the United States has met and will not voluntarily impair the delivery of water required to satisfy these requirements.
This letter is in response also to the letter ... from the Regional Solicitor of the Department of the Interior respecting the proposal of the United States to enlarge and consolidate the service areas under all applications and permits of the United States for the [CVP].
The Madera Irrigation District agrees generally that the proposal to enlarge and consolidate all [CVP] service areas will permit a more flexible distribution of water to the areas of need, with a consequent even better benefit in most instances to the State of California from the [CVP]. However, as we have pointed out in various meetings and discussions in the past few months with you and representatives of your office and the Regional Solicitor's office, we are concerned that in times of water shortage the proposal could result in less Sacramento River and Delta water being available for the [Exchange Contractors], which is the foundation of our Friant water supply, than under the present service area arrangements.
Id. ex. 8 at 1-2 (letter dated February 1, 1960) (emphasis added).[31] To address this *1157 risk, the water-districts requested their existing contracts be amended to cause the United States to do everything to ensure that the Exchange Contractors receive their full allocation of substitute water, to prevent them from exercising their San Joaquin River water rights to the detriment of those water-districts:
The statement of policy in your letter of December 29, 1959, greatly clarifies this matter. But, as we stated in the meetings referred to above, we believe it is essential that this policy be made firm by incorporating it into amendments to our present water service contracts. Inasmuch as the policy is of long standing and has been expressed publicly on a number of occasions, it has been our assumption that the United States could have no objection to such amendments.
Your assurance that our assumption is correct, and that such amendments will be prepared and submitted for adoption as soon as it can conveniently be done, will enable us to give the United States wholehearted and active support in any and all proceedings for the establishment of the consolidated and enlarged [CVP] service area.
Id. at 2. In response, several water-service contracts were amended. For example, On August 7, 1962, the Terra Bella Irrigation District's contract was amended to include the following section:
the United States further agrees that it will not voluntarily and knowingly render itself unable to deliver to the parties entitled thereto from water that is available or that may become available to it from the Sacramento River and its tributaries or the Sacramento-San Joaquin Delta those quantities required to satisfy the obligations of the United States under said Exchange Contract.
Id. ex. 10 at 3 (contract no. 175r-2446); see also Doc. 273 ex. 14 at 25-26 (Exeter Irrigation Contract, no. 175r-2508R); Doc. 273 ex. 22 at 3 (Kern Canon Water District Contract, no. 14-06-200-924). Most of these confirmatory amendments to protect the Exchange Contractors' priority to Sacramento River and Delta water as the source of their substitute water preceded formation of plaintiffs' 1963 and 1978 Contracts. Plaintiffs' attorney, Mr. Moskovitz and his law firm, which continues to represent plaintiffs, effectuated these amendments with Interior. Plaintiffs knew that Interior by contract and performance vested the Exchange Contractors with a prior right to the Bureau's appropriated CVP water.
The 1961 California Water Rights Decision 990 ("D-990") approved some of the Bureau's CVP water rights under California law. See Doc. 273 ex. 3. It expressly included a section entitled "Protection of Existing Rights." See id. at 75. D-990 confirms that "the Bureau's representatives have consistently affirmed their policy to recognize and protect all water rights on the Sacramento River and in the Delta existing under State law at the time these applications were filed, including riparian, appropriative, and others." Id. This language applies to the Bureau's right, practiced for ten preceding years, to use such water rights to provide substitute water to the Exchange Contractors.
When discussing the rights of the Exchange Contractors during the debate over the 1992 CVPIA, United States Senator Malcolm Wallop of Wyoming stated "those rights are secured under State law and are superior to any CVP right." 138 CONG. REC. S17658, S17660; 1992 WL 279403 (statement of Sen. Wallop) (Oct. 8, 1992) *1158 (emphasis added). (Plaintiffs hold only a water-service contract for CVP water). He further emphasized the priority of the Exchange Contractors' rights to CVP water: "[d]uring the current drought, prior right and exchange right holders agreed to forgo certain deliveries in order to permit the Secretary to make deliveries to the wildlife refuges and to urban users. No reductions were imposed on them since no reductions could be imposed so long as there was any water." Id. at S17661 (emphasis added).
The 1949 Comprehensive Report on future development of the CVP also addressed the impact of the proposed San Luis Unit on prior, existing water rights:
Water rights for existing irrigation developments are superior to any which may accrue to new developments.
Doc. 245 ex. 1 at 104 (emphasis added). The Exchange Contractors claim that:
[i]ncluded in the definition of "course of dealing" under U.C.C. § 1-205(1) is Westlands' letter of September 5, 1957, answering the Bureau's protest to Westlands' application with the State Water Rights Board (now the State Water Resources Control Board) for the appropriation of unappropriated water.
In response to the Bureau's objection to Westlands' 1954 application, number 15764, to the California State Water Rights Board to appropriate unappropriated water from a tributary of the San Joaquin River, Westlands wrote:
The Applicant, Westlands Water District, does not intend by the permit ... to cause injury to those having valid vested rights in and to the waters of Old River. The Applicant intends to take only that water which is in excess of the water needed to supply the valid vested rights under reasonable means of diversion and use.
Doc. 246 ex. 32 at 1 (letter dated Sept. 5, 1957) (emphasis added).[32] "Old River" refers to a channel of the Sacramento-San Joaquin Delta, flowing from the San Joaquin River. See Doc. 273 ex. 5 at 1. Westlands, to induce the State to grant it a water appropriation permit, represented it would not claim water rights in derogation of the water needed to supply "valid vested rights," such as those held by the Exchange Contractors.
Interior's discretion to manage the CVP as an integrated whole makes reasonable the diversion and use of Sacramento River and Delta water through the San Luis Unit to satisfy vested, senior, contractual water rights held by the Exchange Contractors. The plaintiffs had full knowledge that the Bureau had, since the inception of the CVP, utilized Sacramento River and Delta water to provide substitute water to the Exchange Contractors. Plaintiffs are equitably estopped by their knowledge and conduct to claim otherwise in derogation of a long-standing course of dealing by which Interior has recognized the contractual priority of the Exchange Contractors' vested water rights to substitute water, which it has supplied from Sacramento River and Delta water. See, e.g., Lehman v. United States, 154 F.3d 1010, 1016-17 (9th Cir.1998) (listing elements of estoppel); Omega Indus., Inc. v. Raffaele, 894 F. Supp. 1425, 1433 (D.Nev. 1995) (stating that equitable estoppel "stands for the basic precepts of common honesty, clear fairness and good conscience.") (quoting Aetna Cas. & Sur. Co. v. Jeppesen & Co., 440 F. Supp. 394, 403 (D.Nev.1977) (quoting cases)).
*1159 This substantial extrinsic evidence proves that the parties (the water-districts and the Bureau), by their conduct, recognized the priority of the Exchange Contractors' pre-CVP, vested, reserved water rights under the Exchange Contract, and the Bureau has operated the CVP accordingly for over forty years to supply substitute water to the Exchange Contractors from Sacramento River and Delta water, until water shortages forced this litigation. On the other hand, plaintiffs point to no extrinsic evidence concerning usage of trade, course of dealing, or performance that supports an interpretation of this clause to ignore the Exchange Contractors' vested senior water rights and relegate them to co-equal status with plaintiffs to receive CVP water.
Westlands' Article 11(a) does not direct how Interior should distribute water to others with whom Interior has contractual commitments to provide CVP water, particularly holders of senior vested rights. The plain language of the 1963 Contract only requires that, in times of shortage, Westlands receive its pro-rata share of San Luis Unit water, inter sese, with other water-service contractors who have specifically contracted for San Luis Unit water. Not for thirty years, until 1994, did Westlands attack the Exchange Contractors' CVP water rights and the Bureau's long-established course-of-dealing and operational practice in management of the CVP, to first supply Sacramento River and Delta CVP water to the Exchange Contractors as substitute water. Plaintiffs submit no evidence that they received any different share of San Luis Unit water in WY 1994 from other San Luis Unit contractors.
D. The Shortage Provisions of Westlands' 1963 Contract: Article 11(a)
"Interpretation begins with the contract's language which `is to govern if the language is clear and explicit.'" Thompson v. Enomoto, 915 F.2d 1383, 1388 (9th Cir.1990) (quoting sources) (ellipsis omitted). Article 11(a) of Westlands' 1963 Contract provides:
There may occur at times during any year a shortage in the quantity of water available for furnishing to the District through and by means of the Project, but in no event shall any liability accrue against the United States or any of its officers, agents, or employees for any damage, direct or indirect, arising from a shortage on account of errors in operation, drought, or any other causes. In any such year in which there may occur a shortage from any cause, the United States reserves the right to apportion the available water supply among the District and others entitled under then existing contracts to receive water from the San Luis Unit in accordance with conclusive determinations of the Contracting Officer as follows:
(i) A determination shall be made of the total quantity of water agreed to be accepted during the respective year under all contracts then in force for the delivery of Central Valley Project water by the United States from the San Luis Unit, the quantity so determined being hereinafter referred to as contractual commitments;
(ii) A determination shall be made of the total quantity of water from the Central Valley Project which is available for meeting the contractual commitments, the quantity so determined being hereinafter referred to as the available supply;
(iii) The total quantity of water agreed to be accepted by the District during the respective year, under Article 3 hereof, shall be divided by the contractual commitments, the quotient thus obtained being hereinafter referred to as the District's contractual entitlement;
*1160 (iv) The available supply shall be multiplied by the District's contractual entitlement and the result shall be the quantity of water required to be delivered by the United States to the District for the respective year, but in no even shall such amount exceed the total quantity of water agreed to be accepted by the District pursuant to Article 3 hereof.
Insofar as determined by the Contracting Officer to be practicable, the United States will, in the event a shortage appears probable, notify the District of such determinations in advance of the irrigation season.
Doc. 246 ex. 20 at 356-57; Doc. 273 ex. 15 at 19-20 (emphasis added).[33]
The federal defendants assert the United States must meet its prior contractual commitment to deliver substitute water to the Exchange Contractors, which constitutes "any cause" within Article 11(a)'s shortage provisions. The "apportionment" right invoked by Westlands applies only to "others entitled under then existing contracts to receive water from the San Luis Unit." The Exchange Contractors do not have a contract to receive water "from the San Luis Unit," which is not a source of supply designated in their amended 1939 Exchange Contract. See supra Part VI.B. The United States has contractual and administrative discretion to choose the Exchange Contract's source of supply for substitute water, from the CVP or elsewhere. The unambiguous language of the Exchange Contract (Articles 4a-c), leaves to the Bureau's good-faith discretion, the choice of source to supply such substitute water. The Exchange Contractors retain the right to enforce and exercise their senior, vested San Joaquin River water rights, if the Bureau does not deliver substitute water to them.
1. Pro-rata formula applied in times of shortage
Subsection (i) requires Interior to calculate the total of its contractual San Luis Unit water commitments"contractual commitments." Subsection (ii) requires Interior to calculate how much water from the whole CVP is available for use to meet San Luis Unit water contracts"available supply." Subsection (iii) yields, as a quotient, Westlands' percentage of the total San Luis Unit water contracts. Subsection (iv) states that Westlands is to receive its pro-rata share of the CVP water available to the San Luis Unit, i.e., Westlands' portion of the actual San Luis Water pie, but not more than the quantity in acre-feet of water specified in its contract. Article 11(a)'s formula is:
where WW = total volume of Westlands' contracted San Luis Unit water; SLC = total San Luis Unit contractual commitments; TAS = total available supply of the entire CVP for meeting all Interior's contracts for water service from the San Luis Unit; and WPR = Westlands' pro-rata water in shortage years, capped at the stated contract amount.
*1161 Plaintiffs advance two contractual arguments based on Article 11(a): (1) that the 1963 Contract binds all CVP water contractors; and (2) the Exchange Contractors' water falls within the 1963 Contract's pro-rata formula in Article 11(a), both under (a)(i)'s "contractual commitments" and (a)(ii)'s "available supply."
2. Argument 1: Westlands' 1963 Contract applies to all CVP water contractors
Plaintiffs argue Article 11(a)'s contractual language requires the Bureau to "allocate Central Valley Project ... water supplies on a pro-rata basis in times of shortage." Doc. 256 at 2:5-8. The plain language of Article 11(a) provides no support for this interpretation.
Article 11(a) provides:
the quantity of water required to be delivered by the United States to the District for the respective year, but in no event shall such amount exceed the total quantity of water agreed to be accepted by the District pursuant to Article 3 hereof.
Doc. 246 ex. 20 at art. 11(a)(iv) (emphasis added). This unambiguous language in no way suggests that the formula should (or could) be applied to any party other than Westlands, whether in the San Luis Unit or the whole CVP; nor has any legal authority been provided to justify such an interpretation. Westlands' contractual pro-rata formula does not apply to other water-users who are non-signatory, non-parties to the 1963 Contract. Article 11(a) only governs the respective distribution rights and Interior's obligation to deliver CVP water to Westlands in times of shortage.
3. Argument 2: The Exchange Contractors' water falls within Westlands' 1963 Contract's Pro-Rata Calculations
Plaintiffs interpret the 1963 Contract to include within Article 11(a)(i) "contractual commitments" and Article 11(a)(ii) "available supply," any quantity of water from the San Luis Unit, provided in any year to the Exchange Contractors.
a. Clause (a)(i): "Contractual Commitments"
Plaintiffs argue that any water due the Exchange Contractors under the 1939 Exchange Contract is an Article 11(a)(i) "contractual commitment," because the Exchange Contractors' right to receive water delivered by the federal government arises from a contract; i.e., the amended 1939 Exchange Contract. See Doc. 282 at 2:23-25 ("[C]ontractual commitments refers to the total quantity of water agreed to be accepted during the respective year under all contracts then in force for the delivery of Central Valley Project water by the United States from the San Luis Unit.") (emphasis in original). The express language of Article 11(a)'s formula is limited to CVP water specifically contracted for water delivery, and agreed to be accepted, from the San Luis Unit, i.e., by San Luis Unit water contractors, who are not parties to Westlands' 1963 Contract. The first step in Article 11(a)'s formula is to calculate all the "contractual commitments" for the "delivery of [CVP] water ... from the San Luis Unit:"
the total quantity of water agreed to be accepted during the respective year under all contracts then in force for the delivery of Central Valley Project water by the United States from the San Luis Unit.
Doc. 246 ex. 20 at art. 11(a)(i). This language unambiguously limits the calculation to contractual commitments for water from the San Luis Unit. The phrase "all contracts then in force for the delivery of [CVP] water by the United States" is specifically qualified by the source: "from the San Luis Unit."
*1162 The Exchange Contractors have not specifically contracted for delivery of substitute water from the San Luis Unit, which did not exist in 1939, or even necessarily from the CVPthe substitute water can come from any source the Bureau determines. The Exchange Contract gives the Exchange Contractors the right to receive "by means of the [CVP] or otherwise[,] substitute water," which can come from any source that the Bureau selects, including outside the CVP. Doc. 246 ex. 21 art. 4a at 5. Because the Exchange Contractors did not contract "for the delivery of [CVP] water from ... the San Luis Unit," their substitute water is not included within Article 11(a)(i)'s "contractual commitments," even if the Bureau chooses to supply it from the San Luis Unit.
b. Clause (a)(ii): "Available Supply"
Plaintiffs argue: (1) "available supply" is not limited to water from the San Luis Unit, but includes the whole CVP; and (2) in any year the Bureau allocates CVP water to the Exchange Contractors from the San Luis Unit, such water should be included in the calculation of Article 11(a)(ii)'s "available supply," because the water is delivered through the San Luis Unit, and is "available" to meet their contracts for San Luis Unit water.
Article 11(a)(ii) references "the total quantity of water from the Central Valley Project," not the total quantity of water from the San Luis Unit of the Central Valley Project. This reference is made with respect to the CVP water "available for meeting the `contractual commitments,'" which Article 11(a)(i) defines as "the total quantity of water agreed to be accepted during the respective year under all contracts then in force for the delivery of Central Valley Project water by the United States from the San Luis Unit." Doc. 246 ex. 20 at art. 11(a)(i) (emphasis added). If the parties intended to limit "available supply" to San Luis Unit water, they knew how to so do, as they did when they defined "contractual commitments" in Article 11(a)(i). This omission is significant to interpretation of two clauses so closely-located and related within the same contract. Accord 11 RICHARD A. LORD, WILLISTON ON CONTRACTS §§ 32:332:7 (4th ed. 1999 & 2000 Supp.); JOHN D. CALAMARI & JOSEPH M. PERILLO, THE LAW OF CONTRACTS § 3.13, at 154-58 (4th ed.1998).
That CVP water from outside the San Luis Unit is within (a)(ii)'s "available supply" definition to meet contractual commitments to San Luis Unit water contractors does not mean that Interior must treat CVP water delivered as substitute water through the San Luis Unit, although not contractually committed to the Exchange Contractors from that Unit, as "available supply," or count such substitute water as available to satisfy plaintiffs' contracts. A court cannot, under the guise of construction, add words to a contract, which would impermissibly re-write that contract. See, e.g., McConnell v. Pickering Lumber Corp., 217 F.2d 44, 47 (9th Cir.1954) (citing cases). Although the plain language of Article 11(a)(ii) does not limit "available supply" for Westlands' 1963 Contract to San Luis Unit water, such "available supply" does not include the substitute water delivered to the Exchange Contractors by the Bureau in the exercise of its CVP management discretion. The Bureau has never treated this substitute water as "available" CVP water. Even if the substitute water originates from the Sacramento River and the Delta and is now delivered through the San Luis Unit and Delta-Mendota Canal, such substitute water was first committed to the Exchange Contractors in 1939, and delivered every year after 1951 for at least ten years before the San Luis Unit existed and before 1963, the earliest date either of plaintiffs contracted with the Bureau for water service. Accord Central Valley Project Improvement *1163 Act ("CVPIA") § 3406(b)(2), Pub.L. No. 102-575, 106 Stat. 4600, 4706 (Oct. 30, 1992) (requiring that water commitments under pre-existing contracts and requirements of law existing when the CVPIA took effect be satisfied before any subsequent water-service contracts).
The term "available supply" in Article 11(a)(ii) of the 1963 Contract is defined as "the total quantity of water from the [CVP] which is available for meeting [San Luis Unit] contractual commitments." Id. at art. 11(a)(ii). The contract does not specify by what formula Interior is to annually calculate the quantity of CVP water to be allocated to the entire San Luis Unit. Extrinsic evidence shows that the Bureau's historical practice and policy, followed for forty prior years, does not count any CVP water (including any from the San Luis Unit) used to satisfy the Exchange Contractors' pre-existing vested water rights as "available supply." This course of dealing establishes that any Sacramento River and Delta water from the San Luis Unit or other source, used in any year to satisfy the Bureau's obligation to supply substitute water to the Exchange Contractors, is not "available [CVP] supply."
c. Clause (a)(iii): "Contractual Entitlement"
No legitimate dispute can exist over the entitlement language of Article 11(a)(iii), which specifies that Westlands' contractual amount of water (1.1 MAF) is divided by the total San Luis Unit contractual commitments, yielding a quotient, which is Westlands' contractual entitlement, i.e., its portion of the contracted-for San Luis Unit water pie.
Article 11(a) solely defines the calculus for Westlands' pro-rata share during times of CVP water shortage; it does not bind any other party. It cannot be construed to diminish the Exchange Contractors' senior, reserved San Joaquin River water rights under state law, or under Articles 4 and 16 of the amended 1939 Exchange Contract, or their vested priority right to substitute water from the Sacramento River and Delta waters, or any other source, delivered through the San Luis Unit under the Bureau's long-established CVP operational practice and course of dealing. Plaintiffs' motion for summary judgment based on their interpretation of Article 11(a) is DENIED in every respect.
E. The Shortage Provisions of San Benito's 1978 Contract: Article 7(b)
San Benito's 1978 Contract, Article 7(b), governing water-shortage and apportionment, provides:
In any year that the Contracting Officer determines there is a shortage in the quantity of water available to customers of the United States from the Project, the Contracting Officer will apportion available water among the water users capable of receiving water from the same Project facilities by reducing deliveries to all such water users by the same percentage, unless he is prohibited by existing contracts, Project authorizations, or he determines that some other method of apportionment is required to prevent undue hardship. In the event reduced deliveries within the Division are unnecessary, the water supplies for both M & I and agricultural use shall be reduced by the same percentage for each contractor.
Doc. 273 ex. 16 at 11-12 (emphasis added). The threshold inquiry is whether the Exchange Contractors are "water[-]users capable of receiving water from the same Project facilities." Next is whether the 1939 Exchange Contract is an existing contract that prohibits reducing deliveries to the Exchange Contractors, and whether the Bureau has used some other method of apportionment to avoid undue hardship. *1164 The definition of CVP "customers," only applies to determine if there is a water shortage in any year. There is no dispute that whatever the Exchange Contractors' status, a water shortage existed in WY94 among San Luis Unit contractors, such as plaintiffs. It is also undisputed that plaintiffs are Project (CVP) water "customers" of the United States.
1. Argument 3: the Exchange Contractors are governed by Article 7(b)'s shortage provisions
a. "Customer"
The parties argue over the definition of "customer" in Article 7(b). The Contract does not define "customer" in its "Definitions" section. See id. at 2-3. Plaintiffs contend that the Exchange Contractors are "customers," as "defined" by the 1978 Contract, and subject to apportionment under the 1978 Contract's Article 7(b) pro-rata provision. Plaintiffs argue that the Exchange Contractors "traded their riparian rights for a regular and constant supply of Project water from Reclamation which they regularly use and consume," and that this makes them "customers." Doc. 282 at 3:26-4:1 (plaintiffs' reply). This is factually inaccurate, because the Exchange Contractors' water is not required to be provided from the CVP or any specified source.
The federal defendants rejoin that the Exchange Contractors are not "customers," because under Reclamation law, "customer" has a statutory meaning, also recognized by a long-established course of dealing: one who purchases water or power from a Reclamation project for money. Doc. 265 at 6:9-11 (federal defendants' opposition). As authority, they cite: Section 485h(c) of the Reclamation Project Act of 1939;[34]City of Anaheim v. Kleppe, 590 F.2d 285, 287 (9th Cir.1978); City of Santa Clara v. Andrus, 572 F.2d 660, 664 (9th Cir.1978); and Arizona Power Authority v. Morton, 549 F.2d 1231, 1237 (9th Cir. 1977).
Section 485h(c) of the Reclamation Project Act defines a class of preference customers for contracts to "furnish water for municipal water supply or miscellaneous purposes" and to purchase "electric power or lease electric power privileges." 43 U.S.C. § 485h(c) (2000). As to "customer preferences," this section provides, inter alia:
That in said sales or leases preference shall be given to municipalities and other public corporations or agencies; and also to cooperatives and other nonprofit organizations financed in whole or in part by loans made pursuant to the Rural Electrification Act of 1936 [7 U.S.C.A. § 901 et seq.].
Id. City of Anaheim, City of Santa Clara, and Arizona Power Authority all discuss the import of the customer preference clause on awarding contracts for electrical power. None defines "customer" or limits the term to "one purchasing water or power from a reclamation project for money."
The Exchange Contractors are not "customers" under any normally-understood definition of the word. Rather, they conditionally exchanged the right to exercise their riparian and pre-1914 appropriative rights to San Joaquin River water for a vested property right in a firm supply of substitute water. Their substitute water entitlement may be satisfied from another source, not only the CVP. In times of shortage, the Bureau (through its contracting officer), as part of its statutory responsibility to operate the CVP as a whole, integrated project, makes a discretionary water-management policy decision to choose the source and amount of substitute water. Regardless whether "the Exchange *1165 contractors are `capable of receiving water from the same Project facilities' under Article 7(b) of the San Benito contract," Westlands, 10 F.3d at 676, they are not "customers."
b. Other 7(b) terms
The express, unambiguous language of Article 7(b) makes "water[-]users capable of receiving water from the same Project facilities" subject to apportionment:
the Contracting Officer will apportion available water among the water[-]users capable of receiving water from the same Project facilities by reducing deliveries to all such water[-]users by the same percentage....
Doc. 246 ex. 19 at art. 7(b). Two phrases dictate whether the Exchange Contractors fall within Article 7(b)'s apportionment provision: (1) "available water;" and (2) "water[-]users capable of receiving water from the same Project facilities."
The 1978 Contract does not define either of these phrases. It does, however, define "Project" as "the Central Valley Project, California, of the Bureau of Reclamation," id. at art. 1(b), and "`[d]ivision' shall mean the San Felipe Division of the Project," id. at art. 1(c). Although "same Project facilities" is not explicitly defined, "Division Facilities"[35] and "San Benito Facilities"[36] are. See id. at art. 1(d)-(e). All three terms include the common element "facilities," which are the means used "to deliver water."
Article 7(b)'s unambiguous language includes the Exchange Contractors as "water[-]users capable of receiving water from the same Project facilities." The Exchange Contractors receive water from the San Luis Reservoir. San Benito receives water that is released from the San Luis Reservoir. See Doc. 292 at 9. The San Luis Reservoir is a CVP, i.e., "Project", water-storage and conveyance facility. The Exchange Contractors and San Benito are "water[-]users capable of receiving water from the same Project facilit[y]."
However, substitute water delivered to the Exchange Contractors is not "available water," because such water is a vested priority obligation the Bureau must satisfy without including it in CVP available supply. See supra Part VI.D.3.b. Article 7(b) only allows the Bureau to apportion "available water," not the Exchange Contractors' substitute water. Its apportionment clause does not impact the Exchange Contractors. However, even if, arguendo, the Exchange Contractors are water-users capable of receiving water from the same Project facilities, and "available water" includes the substitute water delivered to the Exchange Contractors, the inquiry continues.
2. Article 7(b) Exceptions
Specific exceptions exist to disable Article 7(b)'s requirement for pro-rata reduction of water deliveries. No pro-rata reduction can be required if it is prohibited by "existing contracts," "Project authorizations," or "some other method of apportionment [as determined by the Contracting Officer that] is required to prevent undue hardship." Doc. 273 ex. 16 at 11-12.
Under Madera Irrigation District, the amended 1939 Exchange Contract is an "existing contract" that created vested *1166 property rights to substitute water in the Exchange Contractors, which must first be satisfied under Article 7(b) before any pro-rata reduction in San Luis Unit water distribution to plaintiffs. Under Exchange Contract Article 16, Article 7(b) of the 1978 Contract cannot be interpreted in favor of a later CVP contractor to impair the amended 1939 Exchange Contract.
A second exception to Article 7(b) operates to prevent "undue hardship." If substitute water is not provided the Exchange Contractors and forces them to exercise their reserved riparian and pre-1914 appropriative rights to San Joaquin River water, "undue hardship" will be imposed on the overall operation of the CVP, by abridging effective CVP operations of the Friant Division, which will interfere with a number of public uses of CVP water for energy, municipal, and related public purposes on the entire east side of the Central San Joaquin Valley. See Westlands III, 864 F.Supp. at 1549-52 (listing negative effects of the Exchange Contractors' exercise of their San Joaquin River water rights).
Both of Article 7(b)'s exemptions, to meet "existing contracts" and "to prevent undue hardship," bar imposing pro-rata distribution on the Exchange Contractors under the 1978 San Benito Contract. Plaintiffs' summary judgment motion based on interpretation of Article 7(b) is DENIED.
F. Result of Contract Interpretation
The 1939 Exchange Contract commits the United States to provide substitute water to the Exchange Contractors from any source selected by Interior in its discretion, not necessarily from either the CVP or the San Luis Unit. Extrinsic evidence shows that the Sacramento River and Delta waters were identified as the primary source for substitute water, which is confirmed by engineering reality, i.e., the Delta-Mendota Canal is the only conveyance facility available to transport such water to the Exchange Contractors. Article 11's shortage provisions defeat Westlands' rights to water-service in the event of drought or for "any other cause." Meeting pre-existing, senior, vested water rights held by the Exchange Contractors is such an Article 11(a) "other cause," arising from Interior's exercise of reasonable administrative discretion in managing the CVP.
Plaintiffs were represented by highly-experienced and expert water lawyers with comprehensive knowledge of the entire history of the CVP when the 1963 Contract was negotiated with the United States (the Exchange Contract had been in existence for over 20 years, and CVP waters from the Sacramento River and Delta delivered to the Exchange Contractors since 1951). The contracting parties could have explicitly made the Exchange Contractors subject to pro-rata sharing with plaintiffs or any other contractor who received CVP water from the San Luis Unit of the CVP. They did not do so.
The 1963 and 1978 Contracts' water-shortage provisions do not bind any nonsignatories who hold senior vested water rights. The Exchange Contract does not commit San Luis Unit water for the purposes of Article 11(a)(i). Any CVP water delivered to the Exchange Contractors is not within the ambit of Article 11(a)(ii)'s "available supply." Such water is not "available" to meet any Article 11(a)(i) commitment, because no San Luis Unit water is expressly committed to the Exchange Contractors from that specific source. Articles 4 and 16 of the Exchange Contract prevent such an interpretation. The Exchange Contractors' original substitute water from the Sacramento River and Delta waters could not be provided "from" a non-existent San Luis Unit. The Bureau has never treated substitute water as "San *1167 Luis Unit water," even if it is delivered through the San Luis Unit. The Exchange Contractors' substitute water cannot be included when calculating Westlands' and San Benito's pro-rata shares under their respective contracts. All plaintiffs' motions for summary judgment are DENIED.
VII. DISCUSSION: EQUITABLE EFFECT ON CVP OF IMPOSING PRO-RATA DISTRIBUTION REQUIREMENTS
Even if the language of the 1963 Westlands or 1978 San Benito Contracts could be construed to require that the Exchange Contractors' substitute water be included within the formulas to determine plaintiffs' pro-rata share of San Luis Unit water (thereby reducing the Exchange Contractor's allotment), such a reading: (1) directly conflicts with the statutory requirement to operate the CVP as an integrated whole; and (2) violates basic principles of equity by placing inferior water-right holders (plaintiffs) on a par with superior water-right holders (Exchange Contractors).
A. Effect on Integrated CVP Operation
In WY94, the Bureau carefully balanced all the rights and needs of CVP water contractors, and established water allocations accordingly. To understand how plaintiffs' interpretation of their contracts frustrates this delicate balance and integrated operation of the CVP, the location of the Exchange Contractors' vested water rights and how that water is used within the CVP must be reviewed. See supra Part III.D.
The Exchange Contractors own riparian and pre-1914 appropriative rights to San Joaquin River water that they conditionally subordinated in exchange for the Bureau's promise to provide them substitute water. "Their substitution was part of the whole plan proposed by the Secretary of Interior and approved by the President and authorized by Congress." Wolfsen, 162 F.Supp. at 406. This is an express Congressional mandate. This San Joaquin River water was used to create and operate the Friant Division of the CVP. Requiring any substitute water, furnished by the United States to the Exchange Contractors through the San Luis Unit, to be included within the sum of Article 11(a)'s "contractual commitments" or "available supply" ignores the Exchange Contractors' historical and still-existing vested superior water rights to San Joaquin River water, which Articles 4a and 4c of the amended 1939 Exchange Contract specify they can exercise any time they are permanently deprived of their full supply of substitute water. It also ignores Congress' intent in creating the Friant Division, the historical operating regime of the CVP, and Interior's forty-year operation of the CVP and course of dealing to supply the Exchange Contractors substitute water from the Sacramento River and Delta waters through the San Luis Unit and Delta-Mendota Canal. If the plaintiffs' interpretation of their contracts prevailed, the Exchange Contractors would not receive their full contractual allotment of substitute water, which would trigger the Exchange Contractors' right to exercise their San Joaquin River water rights. However, this San Joaquin River-Friant Dam water is already fully-dedicated to use by the Friant Division and related water-users. Plaintiffs' interpretation would completely destroy the Bureau's delicate operating balance that must be maintained to effectively manage the entire CVP as an integrated water project.
For the CVP to successfully provide service to its many agricultural, municipal, and other water-users, the Bureau must, according to statute, operate it as an integrated unit. See Pub.L. No. 86-488, 74 Stat. 156 (1960) (San Luis Act); accord Westlands II, 10 F.3d at 671 ("Such a *1168 provision ... would be inconsistent with the mandate that the San Luis Unit be operated as an integral part of the whole CVP.") (emphasis added). The addition of the San Luis Unit to the CVP was not an exception to the rule of integrated management of the CVP. Rather, the San Luis Unit was expressly "planned as an addition to the Central Valley Project to be coordinated fully, both physically and financially, with the existing and authorized features of the parent project." Doc. 246 ex. 2 at 18 (1955 feasibility report) (emphasis added). This was well-known to plaintiffs when they contracted for water in 1963 and 1978. See Doc. 293 at 3 (July 13, 1962, letter from H.P. Dugan to Westlands' board of directors).[37] Plaintiffs' contracts do not create special, preferential rights, in derogation of the overall integrated management of the CVP. Rather, they contain shortage provisions that abate the right of plaintiffs to receive CVP water "for any cause" in water-shortage years.
The destructive impact of plaintiffs' interpretation on Interior's operation of the CVP as an integrated whole is illustrated by what would occur if the Exchange Contractors are forced to exercise their extant riparian and pre-1914 appropriative rights to San Joaquin River water. Plaintiffs are not directly impacted, because the water they receive is "surplus" Sacramento River water, see Dugan, 372 U.S. at 612, 83 S. Ct. 999, delivered through the San Luis Unit, see Doc. 246 ex. 1 at 220 ("Comprehensive Report"). The Exchange Contractors' exercise of their rights to San Joaquin River water dammed at Friant, however, would jeopardize significant operations of the CVP elsewhere, particularly within the Friant Division, which uses diverted San Joaquin River water. The Madera District, see Ivanhoe Irrigation Dist., 357 U.S. at 283, 78 S. Ct. 1174, the Central East side of the San Joaquin Valley, and Bakersfield and its vicinity (Friant Division), see Dugan, 372 U.S. at 612, 83 S. Ct. 999, all rely on the diversion of San Joaquin River water at Friant Dam, which is made possible only by providing substitute waters to the Exchange Contractors. If the Exchange Contractors exercise their riparian or pre-1914 appropriative rights to such water, which they have the right to do under Articles 4 and 16 of the Exchange Contract, no water would be available for other contractors served by the Friant-Kern and Madera Canals.
Plaintiffs' interpretation of the 1963 Contract would destroy the careful, balanced approach to integrated project management, carried out by the Bureau each year for almost forty years. Plaintiffs point to no extrinsic evidence that shows a statutory directive to abrogate the Bureau's duty to operate the CVP as an integrated whole. Absent the Exchange Contractors' conditional promise not to exercise their riparian and pre-1914 appropriative rights to San Joaquin River water, the CVP could not have been built or operated as it was prior to 1963, and the so-called "surplus" water that first allowed the San Luis Unit to be built would not have been available.[38]
The Bureau has discretion to prioritize and re-prioritize releases and CVP water *1169 allocations to re-balance the overall CVP. Plaintiffs do not here assert an Administrative Procedure Act challenge to the manner in which the Bureau exercised its CVP operating authority and discretion. See 5 U.S.C. § 704 (2001). Plaintiffs' argument that they have been disproportionately disadvantaged compared to the Exchange Contractors ignores that plaintiffs are not similarly-situated, factually, legally, or equitably.
B. Equity
The Exchange Contractors contracted in 1939 to conditionally allow the government to exercise their riparian and pre-1914 appropriative rights to San Joaquin River water in exchange for a grant from the United States of a permanent substitute water supply from the CVP or other source selected by the Bureau. Such exchange allowed creation of the contemporary CVP, from which many municipalities and other water-users (including plaintiffs) are supplied with water and electricity. By contrast, at most, plaintiffs contributed a 1954 then-unapproved application for appropriation of water from a tributary of the San Joaquin River, expressly made subject to existing vested water rights. As of the date of the application, the Exchange Contractors had received substitute CVP Sacramento River and Delta water, delivered through the Delta-Mendota Canal, for over three years, under a plan approved by the United States. See Doc. 246 ex. 21 at 3.
A federal court has the inherent power from the United States Constitution *1170 to prevent inequitable results. See, e.g., Levander v. Prober (In re Levander), 180 F.3d 1114, 1118 (9th Cir.1999) ("`The inherent powers of federal courts are those that "are necessary to the exercise of all others.'" This inherent power, which is based on equity, not only springs forth from courts' traditional power `to manage their own affairs so as to achieve the orderly and expeditious disposition of cases,' but also `furthers the pursuit of achieving complete justice by enabling the court to suspend those judgments whose enforcement leads to inequitable results.'") (quoting cases). To permit plaintiffs, who held no rights that were necessary to the creation of the CVP, to enjoy equal rights with the Exchange Contractors, whose senior state-law water rights were integral to the creation, and necessary for the current operation, of the CVP, violates basic principles of equity. Such an interpretation should be avoided, if possible.
Given the superiority of the Exchange Contractors' riparian and pre-1914 appropriative rights to San Joaquin River water and the extensive protections afforded these interests by California law, see infra Part VIII, it is inconceivable that the Exchange Contractors would have relinquished their vested San Joaquin River water rights in 1939 to facilitate construction of the original CVP to be later relegated to a "pro rata" water-share with late-comer CVP contractors, who did not as of that date hold any (comparable) water rights (Westlands and San Benito did not even exist); who contributed little to the CVP; and who seek to claim equal priority to Sacramento River and Delta waters, long-ago committed to the Exchange Contractors. There is no inequity to plaintiffs, who through representation by the same law firm, have had actual notice through the long history of the CVP's operation that provided Sacramento River and Delta water for the Exchange Contractors' substitute water. Before 1994, plaintiffs, in their dealings with the State Water agencies and the Bureau, recognized and acquiesced in the priority of this senior vested right to the Exchange Contractors' source of substitute water.
Plaintiffs' interpretation of their contracts frustrates Interior's statutory duty to operate the CVP as an integrated unit and violates basic principles of equity. Throughout the entire history of CVP operations, plaintiffs never advanced the assertion that their rights to CVP water were on a par with the Exchange Contractors. Their motion for summary judgment is DENIED.
VIII. DISCUSSION: CALIFORNIA WATER LAW PRIORITIES
The parties' relative rights were analyzed under California law in Westlands I. See 805 F.Supp. at 1509 ("under California law, the Exchange Contractors are entitled to available water supplies ahead of junior appropriators."). In affirming the ruling that Article 11 prevents Westlands from asserting any absolute right to its full contract amount of CVP water, the Ninth Circuit recognized that California water-law priorities apply to CVP water contractors. See Westlands II, 10 F.3d at 675-76. In the seven years this litigation has been pending, plaintiffs have never advanced any state water-law right to CVP water that puts them on the same level of priority as the Exchange Contractors. The Bureau owns all the state-law rights to CVP water, which it uses to operate the CVP as an integrated unit. Parties who receive water from the CVP do not file appropriation permits with the California State Water Resources Control Board, as is normally required to perfect priority of the right to take water from a California water source, see CAL. WATER CODE § 1450 (West 2000). Rather, the Bureau holds California water permits to all CVP water it delivers, pursuant to contracts with water-districts *1171 and other CVP contractors. See 43 U.S.C. § 511 (2001).
A. California Water Law
In constructing the CVP, "Congress proceeded on the basis of full recognition of water rights having valid existence under state law." Gerlach, 339 U.S. at 734, 70 S. Ct. 955. "Congress directed the Secretary of the Interior to proceed in conformity with state laws, giving full recognition to every right vested under those laws," and, as the work on the CVP progressed, Congress and the water-users were advised that "existing water rights would be respected." Id. at 739, 70 S. Ct. 955 (footnotes omitted); see also Sporhase v. Nebraska ex rel. Douglas, 458 U.S. 941, 959, 102 S. Ct. 3456, 73 L. Ed. 2d 1254 (1982) (the Reclamation Act of 1902 "mandates that questions of water rights that arise in relation to a federal project are to be determined in accordance with state law") (citing California, 438 U.S. at 645, 98 S. Ct. 2985).
The only exception to this rule is where there is a "clear congressional directive" to the contrary. See, e.g., S. Delta Water Agency, 767 F.2d at 538; Westlands I, 805 F.Supp. at 1509 ("Under Section 8 of the 1902 Reclamation Act, federal reclamation projects must be operated in accordance with state water law, when not inconsistent with congressional directives.") (citing California, 438 U.S. at 674, 98 S. Ct. 2985). The Ninth Circuit interprets the term "congressional directive" as "a preemptive federal statute." Natural Res. Def. Council, 146 F.3d at 1132 (citing United States v. California, 694 F.2d 1171, 1176-77 (9th Cir.1982)). "Reclamation projects are ... subject to state law, so long as that law is not inconsistent with federal law." Concerned Irrigators v. Belle Fourche Irrigation Dist., 235 F.3d 1139, 1143 n. 3 (8th Cir.2001) (citing California, 438 U.S. at 670-79, 98 S. Ct. 2985; S. Delta Water Agency, 767 F.2d at 536-37). Here, no preemptive Congressional statute that benefits plaintiffs is alleged to control.[39] "[T]he San Luis Act requires, as does all federal reclamation law, that the Bureau respect California's appropriative water rights hierarchy." Westlands I, 805 F.Supp. at 1509.[40]
"To fully understand the California [water] law, one must know its involved background as developed in endless bitter litigation." Edward F. Treadwell, Developing a New Philosophy of Water Rights, 28 CAL. L. REV. 572, 572 (1950) (citing SAMUEL C. WIEL, WATER RIGHTS IN THE WESTERN STATES (3d ed.1911); Lucien Shaw, The Development of the Law of Waters in the West, 10 CAL. L. REV. 443 (1922); Tulare Irrigation Dist. v. Lindsay-Strathmore Irrigation Dist., 3 Cal. 2d 489, 45 P.2d 972 (1935)). "California operates under a `dual' or hybrid system of water rights which recognizes both doctrines of riparian rights and appropriation rights." State Water Res. Control Bd., 227 Cal.Rptr. at 168 (citing Shirokow, 162 Cal. Rptr. 30, 605 P.2d at 864 (citing WELLS A. HUTCHINS, THE CALIFORNIA LAW OF WATER RIGHTS 40, 55-67 (1956))).
1. Riparian Rights
"`Riparian' is defined as pertaining to or situated on the bank of a river. And *1172 riparian rights are those which a person whose land is bounded or traversed by a natural stream has to the use of the stream or water." 62 CAL. JUR. 3D, Water § 65, at 101 (1981 & 2000 Supp.) (citing 78 AM. JUR. 2D, Waters § 260).[41] On the other hand, "[t]he appropriative right to the use of waters is generally founded on the doctrine of prior appropriation." Id. at § 255, at 280.[42] "It is not always the case that the use of water on a riparian parcel is an exercise of a riparian right. `It is established in California that a person may be possessed of rights as to the use of the waters in a stream both because of the riparian character of the land owned by him and also as an appropriator.'" Pleasant Valley Canal Co., 72 Cal.Rptr.2d at 22 (quoting Rindge v. Crags Land Co., 56 Cal. App. 247, 205 P. 36, 38 (1922)).
"The riparian doctrine confers upon the owner of land the right to divert the water flowing by [ ] land for use upon [that] land, without regard to the extent of such use or priority in time." State Water Res. Control Bd., 227 Cal.Rptr. at 168 (citing Miller & Lux v. Enter. Canal & Land Co., 169 Cal. 415, 147 P. 567 (1915)).
2. Appropriation Rights
"The appropriation doctrine confers upon one who actually diverts and uses water the right to do so provided that the water is used for reasonable and beneficial uses and is surplus to that used by riparians or earlier appropriators." Id. "By far, the largest share of water in this state is used under claims of appropriative water rights or as secondary customers of an appropriator under contracts for water deliveries." 1 SCOTT S. SLATER, CALIFORNIA WATER LAW AND POLICY ch. 2, at 2-7 (2000). Appropriators need not own land contiguous to the water course. See State Water Res. Control Bd., 227 Cal.Rptr. at 168. Originally, appropriation rights were acquired only by the actual diversion and use of water. See id. This changed in 1914, when California enacted a statutory scheme as the exclusive method to acquire appropriation rights. See id. (citing Shirokow, 162 Cal. Rptr. 30, 605 P.2d at 864); see also, e.g., Envtl. Def. Fund, Inc. v. Armstrong, 352 F. Supp. 50, 58 (N.D.Cal. 1972) ("Under California law all water rights are conditional and thus any person wishing to appropriate public water must file an application for a permit from the California Water Resources Control Board.") (citing sources); CAL. WATER CODE § 1225 (West 2001).
This scheme begins with Section 1201 of the California Water Code. See CAL. WATER CODE § 1201 (West 2001).[43] To acquire an appropriative right to California water, one must submit an application to the State Water Resources Control Board. See State Water Res. Control Bd., 227 Cal. Rptr. at 168-69. Before there can be a taking and use of a specified quantity of water and/or construction of necessary water *1173 works, the application for appropriative rights must be approved. See id. "Any application properly made gives to the applicant a priority of right as of the date of the application until such application is approved or rejected. Such priority continues only so long as the provisions of law and the rules and regulations of the board are followed by the applicant." CAL. WATER CODE § 1450 (West 2000). "The issuance of a permit continues in effect the priority of right as of the date of the application and gives the right to take and use the amount of water specified in the permit until the issuance of a license for the use of the water or until the permit is revoked." CAL. WATER CODE § 1455 (West 2000).
The United States is specifically authorized to hold permits for California water, see CAL. WATER CODE § 1252.5 (West 2000) ("All rights and privileges conferred by this part upon any person in relation to the appropriation of water are likewise conferred upon the United States, the State, and any entity or organization capable of holding an interest in real property in this State."), but cannot acquire appropriative water rights to California water without following the same requirements as any other person, see United States v. Fallbrook Pub. Util. Dist., 347 F.2d 48, 55-56 (9th Cir.1965).
3. Priorities
In times of shortage, California water law establishes the following priorities:
(1) Riparians have first priority: "in times of shortage, riparians are entitled to fulfill their needs before appropriators are entitled to any use of the water." State Water Res. Control Bd., 227 Cal.Rptr. at 168.
(2) Among riparians, in times of shortage, all riparians must reduce their usage proportionately because all riparians on a stream system are vested with a common ownership. See id. (citing Prather v. Hoberg, 24 Cal. 2d 549, 150 P.2d 405 (1944); 1 ROGERS & NICHOLS, WATER FOR CALIFORNIA 216-51 (1967); WELLS A. HUTCHINS, THE CALIFORNIA LAW OF WATER RIGHTS 40-41, 52-55, 218-30 (1956)).
(3) Only after the riparians have fulfilled their needs are appropriators entitled to any water. See id. (citing Meridian, Ltd. v. City & County of San Francisco, 13 Cal. 2d 424, 90 P.2d 537, 547-48 (1939)).
(4) "[B]etween appropriators, the rule of priority is `first in time, first in right.'" Id. (citing Irwin, 5 Cal. at 147). "The senior appropriator is entitled to fulfill his needs before a junior appropriator is entitled to use any water." Id. (citing 1 ROGERS & NICHOLS, WATER FOR CALIFORNIA 254-304; 472-80 (1967); WELLS A. HUTCHINS, THE CALIFORNIA LAW OF WATER RIGHTS 40-51 (1956)).
B. Analysis
The Bureau holds rights to all the water in the CVP, as an appropriator under permits from the California State Water Resources Control Board, which it uses to operate the CVP as an integrated unit. See, e.g., In the Matter of Application 5625 and 38 Other Applications of United States Bureau of Reclamation and California Department of Water Resources to Appropriate from the Sacramento-San Joaquin Delta Water Supply ("D-1379"), 1971 WL 15197, *1 (July 28, 1971) (listing major water decisions approving applications filed by the Bureau). The Exchange Contractors own, but do not currently exercise, riparian and pre-1914 appropriative rights to the San Joaquin River water dammed at Friant. See supra Part VI.B. They also own federal contract rights with *1174 Interior to substitute water from an appropriator of Sacramento River or Delta water, under the amended 1939 Exchange Contract. See Doc. 246 ex. 21 at art. 4. Plaintiffs hold 1963 and 1978 contractual rights to San Luis Unit water from the Bureau, as secondary customers of an appropriator, which are expressly subject to diminution during times of shortage. See Doc. 245 ex. 19 at 11-12 (San Benito); Doc. 246 ex. 20 at art. 11(a) (Westlands).
Plaintiffs rely on Westlands II dicta as authority for their argument that the Exchange Contractors have no superior state water rights, claiming that the diversion of the San Joaquin River water at Friant Dam extinguished the Exchange Contractors' riparian and pre-1914 appropriative rights to that water source.[44]See Doc. 267 at 30:17-20 (plaintiffs' opposition) ("since this litigation does not involve diversion of water from the San Joaquin River, California water rights law does not provide a basis for giving the Exchange Contractors a priority and taking them outside the apportionment requirements of the Districts' contracts."). Without full briefing on an issue not essential to the issues before it for decision, the Ninth Circuit expressed skepticism as to Westlands I's observation, see 805 F.Supp. at 1507, that the Exchange Contractors could hold senior water rights to CVP water from another source (e.g., the San Luis Unit), see Westlands II, 10 F.3d at 675 ("Unlike the district court, we are not convinced that the Exchange contractors, prior appropriators of water from one river, have superior water rights (i.e.[,] vested property rights) to water from a different source.").[45] Dicta on an issue not submitted for decision, gratuitously offered by the Appeals Court without the benefit of briefing, are not precedential, nor preclusive of the need to analyze the nature of the Exchange Contractors' rights. Accord Westlands 2001, 134 F.Supp.2d at 1132-34 (pronouncements on an issue not necessary to prior 1990 decision were dicta, requiring de novo interpretation in the district court) (citing cases).
Plaintiffs also argue that any riparian rights to San Joaquin River water that the Exchange Contractors held are "now extinguished," because riparian rights extend only to landowners bordering a watercourse, and as a result of the CVP's diversion of the San Joaquin River at Friant Dam under the rights granted by the Exchange Contract, the Exchange Contractors no longer hold land that borders a "natural" watercourse. See Doc. 287 at 29:5-14. Rank v. Krug, 142 F. Supp. 1 (S.D.Cal.1956), facially supports this conclusion.
[W]hen a change in the point of diversion of water is made, or attempted to be made, to land other than that to which the riparian right formerly attached, then the law governing the right to divert is the law relating to appropriation of water, and not the law relating to riparian rights.
Id. at 119 (emphasis added), aff'd in part & rev'd in part sub. nom, California, 293 F.2d at 340, aff'd in part sub. nom, City of Fresno v. California, 372 U.S. 627, 83 S. Ct. 996, 10 L. Ed. 2d 28 (1963), aff'd in *1175 part, reversed in part, Dugan, 372 U.S. at 609, 83 S. Ct. 999. Plaintiffs cite the Bureau's March, 1971, "Report on rights of J.W. Wilson to San Joaquin and Kings River Water in Fresno Slough," where the Bureau acknowledges that "[i]n California riparian rights do not apply to foreign water." Doc. 273 ex. 34 at 2.
The federal defendants cite Wolfsen v. United States, 142 Ct. Cl. 383, 162 F. Supp. 403 (1958), where the claimants contended:
their riparian rights depended on San Joaquin water; that the substitution of exchange waters extinguished their riparian rights; and that without such rights, the potential use of their lands was reduced from wet (irrigated farming) to dry (native pasture), with consequent loss of value.
Id. at 405. The Wolfsen defendants rejoined that:
they had riparian rights as long as the water came from the San Joaquin River, water from the Sacramento River was foreign water; and under California law, they say, he who discharges foreign waters into a stream may take them away with impunity.
Id. at 406. The Court of Claims held:
In the absence of a specific ruling by a California court, we cannot accept the application of the foreign water doctrine to the exchange waters of the Sacramento flowing down the channels of the San Joaquin from Mendota pool. These waters of the Sacramento were substituted in consideration of the diversion of the San Joaquin waters. Their substitution was a part of the whole plan proposed by the Secretary of Interior and approved by the President and authorized by Congress. The diversion of San Joaquin waters was authorized only because of the commitment to substitute water from the Sacramento River. We do not believe that the United States could, with impunity, take away the substituted waters.
Id. (emphasis added). Federal defendants do not address Krug, and plaintiffs do not address Wolfsen.
The Exchange Contractors never transferred their riparian and pre-1914 appropriative rights to San Joaquin River water. To the contrary, the Exchange Contractors still own, and on condition may exercise, their senior water rights in the San Joaquin River. See supra Part VI.B. By Article 16 of the Exchange Contract, Interior expressly granted the Exchange Contractors a vested priority right to substitute water against all other later-in-time CVP water contractors, which has been recognized in operational practice, legislative history, later contracts, and direct correspondence on the subject to Westlands.
The Bureau holds rights, including riparian and appropriation, to all water in the CVP. It historically contracted with various users for delivery of the majority of this water. The Exchange Contractors are among the first contractors (1939) who provided the CVP a conditional water supply, and among the first (1951) to actually receive CVP water. The amended Exchange Contract's unambiguous language and the extrinsic evidence prove, by more than a preponderance of the evidence, that the Exchange Contractors have a vested property right to substitute water from the United States from Sacramento River or Delta water, or any other source. This right is sui generis; it is a vested first-in-time contractual priority right that reserves, for the purpose of establishing relative rights under California water law, the Exchange Contractor's superior status above the plaintiffs as of the date of the original Exchange Contract, July 27, 1939,[46] and the earliest date delivery of *1176 appropriated CVP water began under the Exchange Contract, July 16, 1951.
In California, appropriation water rights are governed by the principle: "the one first in time is the first in right." Wishon v. Globe Light & Power Co., 158 Cal. 137, 110 P. 290, 292 (1910); see also City of Barstow v. Mojave Water Agency, 23 Cal. 4th 1224, 99 Cal. Rptr. 2d 294, 5 P.3d 853, 863 (2000) ("As between appropriators, however, the one first in time is the first in right, and a prior appropriator is entitled to all the water he needs, up to the amount he has taken in the past, before a subsequent appropriator may take any.") (citation omitted in original). None of the CVP contractors has water rights permits to San Luis Unit water, because they are all secondary to the appropriator of that water, Interior. To the extent plaintiffs and the Exchange Contractors are bound by California water law to determine their priority to San Luis Unit water, under the amended 1939 Exchange Contract, the Exchange Contractors are first-in-time vested water-rights holders from an appropriator. Under California's water-law priority regime, the federal defendants' subsequent contracts for CVP water service to contractors like plaintiffs, Westlands and San Benito, are later-in-time and subordinate to the Exchange Contractors' rights. This determination is reinforced by the language of the contracts and contracting history.
For purposes of determining relative priority under California law, as prior contractors (1939)[47] under the Exchange Contract, the Exchange Contractors have superior, not equal, rights over those of the water-districts, who are later (1963 and 1978) secondary customers for CVP water from Interior. The only source of authority to ignore state water law is a preemptive federal statute or clear Congressional directive to the contrary. See Natural Res. Def. Council, 146 F.3d at 1132; S. Delta Water Agency, 767 F.2d at 538. Plaintiffs do not identify any federal statute granting them priority, nor do they provide evidence that Congress ratified their 1963 or 1978 Contracts, or that either is a Congressional directive. Even if, arguendo, plaintiffs' contracts are interpreted, as a matter of law, to require pro-rata distribution of San Luis Unit water, Interior is bound to honor vested priority water rights when performing its water-service contracts. Plaintiffs have provided no evidence or legal authority that supports their claim that their right to San Luis Unit water is superior under California law to the Exchange Contractors' rights. Plaintiffs' position, that they are unaffected *1177 by these priority principles, is untenable. Plaintiffs' motion for summary judgment is DENIED.
C. Plaintiffs' Lack of California Water Rights
After seven years of litigation, plaintiffs have not argued or submitted any evidence that supports a priority in their contracts based on California water-rights law. They have no independent state-law right to San Luis Unit water that is superior to the Exchange Contractors' vested priority rights to that water. They rely only on their contracts.
CONCLUSION
This litigation exemplifies the axiom that "desperate times call for desperate measures." E.g., Robert G. Bracknell, All the Laws But One: Civil Liberties in Wartime, 47 NAVAL L. REV. 208, 220 (2000) (reviewing WILLIAM H. REHNQUIST & ALFRED A. KNOPF, ALL THE LAWS BUT ONE: CIVIL LIBERTIES IN WARTIME (1998)). Plaintiffs are in desperate straits due to the inexorable increase in demands on a limited CVP water supply. They seek to elevate their contract claims as secondary purchasers of federal reclamation water over prior, vested property water-rights holders, the Exchange Contractors. The argument that a last-in-time taker of a benefit can impair the rights of a first-in-time contributor, who made the benefit possible, defies logic and the fifty-year CVP history, with reference to which these disputed contracts were made and performed. Throughout the course of this litigation, plaintiffs have ignored that when the CVP originated, water rights held by the Exchange Contractors were subordinated, not conveyed, because they were integral to the existence and operation of the CVP, especially the Friant Division. The Exchange Contractors conditionally agreed to not exercise (not to extinguish) their riparian and pre-1914 appropriative rights to San Joaquin River water, in exchange for a grant from the United States of a conditional, permanent substitute water supply from the CVP or other source selected by the Bureau in its reasonable discretion. The Bureau selected Sacramento River and Delta water as the source for this substitute water. Congress agreed. The Bureau has, by a fifty-year course of dealing, operated the CVP to recognize this source as a vested priority right in the Exchange Contractors. In times of shortage, Article 4 provides the Exchange Contractors priority recourse to San Joaquin River waters. Four independent and severable bases contract, equitable, and state lawsupport the Exchange Contractors' priority.
The plain language of plaintiffs' 1963 and 1978 Contracts and substantial extrinsic evidence establish that reducing the Exchange Contractors to pro-rata distribution with plaintiffs was never intended or required. Article 11(a) of the 1963 Contract does not bind other non-parties or require inclusion of the Exchange Contractors' substitute water as part of any pro-rata calculation made under the terms "contractual commitments" or "available supply." The Exchange Contractors' substitute water is not within the meaning of "available water" in Article 7(b) of the 1978 Contract, and the exceptions for "existing contracts" and "undue hardship" also apply. Plaintiffs point to no authority that requires the Bureau to count Sacramento River and Delta water, which is used as substitute water, as part of the available CVP supply, even if it is delivered to the Exchange Contractors through the San Luis Unit.
Second, according to statute and engineering reality, the CVP must be operated as an integrated project. The express, unambiguous terms of Article 4 of the Exchange Contract empower the Exchange Contractors to exercise their reserved San Joaquin River water rights, if *1178 Interior fails to provide them with substitute water. This exercise, however, will significantly interfere with operation of the CVP and cause undue hardship to contractors and the public who rely on municipal and power generation uses from the Friant Division under the Bureau's CVP management. See, e.g., Westlands III, 864 F.Supp. at 1549-52 (discussing harmful effects on the Friant Division of the Exchange Contractors' exercise of their San Joaquin River water rights). By contrast, plaintiffs only contributed a then-unapproved application to appropriate water from a San Joaquin River tributary, but no existing water rights that facilitated the creation or operation of the San Luis Unit or the CVP. Plaintiffs have substantially benefitted over the years from government-subsidized water. See Westlands 2001, 134 F.Supp.2d at 1141-42 (citing statements of Senator Proxmire; and Congressmen Coelho and Wolpe). Plaintiffs' contract rights are inferior to the Exchange Contractors' water rights. They have no comparable equities. The precise definition under California law of the Exchange Contractors' CVP water rights does not provide priority to plaintiffs' contracts.
Article 11(a) must be interpreted as void to the extent it places plaintiffs on equal priority to CVP water with the Exchange Contractors. A pro-rata interpretation violates the amended Exchange Contract, frustrates basic principles of equity, and impairs the Bureau's ability and statutory duty to operate the CVP as an integrated project. Plaintiffs' interpretation would force the Exchange Contractors to exercise their riparian and pre-1914 appropriative rights to San Joaquin River water, with a destructive effect that would prevent effective operation of the Friant Division of the CVP, harming not only water-service contractors, but also public non-agricultural water-users served by that water.
To the extent California water law applies to determine water-distribution priority within the CVP, the first-in-time 1939 Exchange Contract grants the Exchange Contractors a priority right to water from the Bureau as of that date. The California water law principle, first in time is first in right, see, e.g., Wishon, 110 P. at 292, establishes the Exchange Contractors' senior priority over later CVP water contractors, such as plaintiffs. Relegating the Exchange Contractors to a pro-rata share of San Luis Unit water on the same level with plaintiffs abrogates these senior state-law water rights. There is no clear congressional directive that overcomes the undisputed default rule that the Bureau must operate the CVP, a federal reclamation project, in accordance with California law. Article 11(a) cannot be interpreted to require inclusion of San Luis Unit water, furnished the Exchange Contractors in any year, as "available supply," because such an interpretation would produce a result in conflict with California water law. See, e.g., Walsh v. Schlecht, 429 U.S. 401, 408, 97 S. Ct. 679, 50 L. Ed. 2d 641 (1977) ("Since a general rule of construction presumes the legality and enforceability of contracts, ambiguously worded contracts should not be interpreted to render them illegal and unenforceable where the wording lends itself to a logically acceptable construction that renders them legal and enforceable.") (citing 6A CORBIN, CONTRACTS §§ 1499, 1533 (1962)).[48]
*1179 Last, plaintiffs have not introduced any evidence or California law that makes their 1963 and 1978 Contracts superior to the first-in-time 1939 Exchange Contract. They have had seven years and full opportunity during the pendency of this case to demonstrate they possess equal water rights under any other theory of contract or state water law. They have not done so. Plaintiffs' contracts do not trump the 1939 Exchange Contract. No pro-rata distribution with plaintiffs of San Luis Unit or other CVP water used by Interior to meet Exchange Contract requirements can be imposed on the Exchange Contractors.
Interior is entitled to provide the Exchange Contractors CVP water on a priority basis over plaintiffs, who have no contract, superior equity, or state-law water rights that take precedence over the Exchange Contractors' senior federal contract vested water rights and reserved state water-law rights. This decision does not address whether the Bureau's overall CVP management has wrongfully deprived plaintiffs of water; only, that taking Sacramento River and Delta (or other CVP) water, delivered through the San Luis Unit, to satisfy the Exchange Contractors' vested property right to substitute water, does not.
Plaintiffs' contracts entitle them to an available pro-rata San Luis Unit water supply, with all other San Luis Unit contractors, only after the Exchange Contractors have received their full substitute water allocation from such source as Interior in its discretion provides, including from the San Luis Unit.
For the reasons stated:
1. Plaintiffs' motion for summary judgment is DENIED.
2. The federal defendants' motion for summary judgment is GRANTED.
3. The Exchange Contractors' and Friant water-users' motions for summary judgment are GRANTED.
4. Judgment SHALL BE ENTERED for the federal defendants and all intervenors against plaintiffs on all claims.
The federal defendants SHALL LODGE, within five (5) days following date of service of this decision, a judgment in conformity with this decision.
SO ORDERED.
APPENDIX
A. Central Valley Project
B. Central Valley ProjectSouth Half
C. CVP Districts Served With Delta Water
D. Friant Division and Cross Valley Division Districts
E. CVPWest San Joaquin Division
F. CVPSan Luis Unit
G. CVPWater Districts
*1180 APPENDIX A
*1181 APPENDIX B
*1182 APPENDIX C
*1183 APPENDIX D
*1184 APPENDIX E
*1185 APPENDIX F
*1186 APPENDIX G
NOTES
[1] This group includes the Friant Water Users Authority; the Orange Cove Irrigation District; the Shafter-Wasco Irrigation District; and the Terra Bella Irrigation District.
On January 24, 2000, the Madera Irrigation District and Chowchilla Water District intervenors joined the Friant intervenors' summary judgment motion. See Doc. 258.
[2] Later in the year, "[t]he Exchange Contractors received ... notice of full water supply from the Bureau on March 14, 1994." Doc. 28 at ¶ 4; see also Doc. 21 ex. 9 at 1 (03/14/94 letter showing 100% allocation to Exchange Contractors).
[3] Evidence submitted in support of or in opposition to a motion for summary judgment must be admissible under the standard articulated in Rule 56(e). See Keenan v. Hall, 83 F.3d 1083, 1090 n. 1 (9th Cir.1996); Anheuser-Busch, Inc. v. Natural Beverage Distribs., 69 F.3d 337, 345 n. 4 (9th Cir.1995). Properly authenticated documents, including discovery documents, although such documents are not admissible in that form at trial, can be used in a motion for summary judgment if appropriately authenticated by affidavit or declaration. See United States v. 1 Parcel of Real Property, Lot 4, Block 5 of Eaton Acres, 904 F.2d 487, 491-92 (9th Cir.1990). Supporting and opposing affidavits must be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. See FED. R. CIV. P. 56(e); Conner v. Sakai, 15 F.3d 1463, 1470 (9th Cir.1993), rev'd on other grounds sub nom., Sandin v. Conner, 515 U.S. 472, 115 S. Ct. 2293, 132 L. Ed. 2d 418 (1995).
[4] Defendant-in-intervention FPA is a public agency, formed "in order to finance, design, acquire, construct, and operate and maintain a federally licensed hydroelectric generating station located at Friant Dam." Doc. 31 at 2:8-10. The FPA is a Joint Powers Agency and a California state public agency formed and existing in accordance with CAL. GOVT. CODE § 6500 et seq. See Doc. 31 at 1:27-2:2. It consists of nine public agencies: Chowchilla Water District, Madera Irrigation District, Orange Cove Irrigation District, Lindsay-Strathmore Irrigation District, Lindmore Irrigation District, Terra Bella Irrigation District, Delano-Earlimart Irrigation District, and Southern San Joaquin Municipal Utility District. See id. at 2:4-7.
[5] The Friant water-user defendants-in-intervention, Friant Water Users Authority ("FWUA"), Orange Cove Irrigation District ("OCID"), Shafter-Wasco Irrigation District ("SWID"), and Terra Bella Irrigation District ("TBID"), rely on water from the Friant Division of the CVP. See Appendix D.
The FWUA is a California joint powers agency consisting of 25 irrigation districts, responsible for operating and maintaining the Friant-Kern Canal. See Doc. 19 at ¶ A. All members of FWUA have contracts with the United States for delivery of CVP water through the Friant-Kern Canal. See id.
The OCID entered into a long-term (40-year) water service contract with the United States in 1949, which was renewed in 1989 for another forty-year term, to receive Class I water for irrigation purposes from Friant Dam and Millerton Lake. See id. at ¶ B.
The SWID entered into a long-term water service contract for forty years with the United States in 1955 to receive both Class 1 and Class 2 Water Service from the Friant Division. See id. at ¶ C.
The TBID entered into a long-term water service contract for forty years with the United States in 1950, which was renewed in 1991 for another forty years, for Class 1 water. See id. at ¶ D.
[6] The San Luis Unit or the Friant Division.
[7] 49 Stat. 115 (Apr. 8, 1935).
[8] 50 Stat. 844, 850 (Aug. 26, 1937).
[9] Internet citations are appropriate for background information. Accord Kyllo v. United States, ___ U.S. ___, 121 S. Ct. 2038, 150 L. Ed. 2d 94 (2001) (citing Internet); cf. United States v. Jackson, 208 F.3d 633, 637-38 (7th Cir.2000); St. Clair v. Johnny's Oyster & Shrimp, Inc., 76 F. Supp. 2d 773, 773-74 (S.D.Tex.1999) (explaining shortcomings of Internet information).
[10] California law recognizes both riparian and appropriative rights. "Riparian" water rights are those that a person whose land is bounded or traversed by a natural stream has to the use of the stream or water. See 62 CAL. JUR. 3D, Water § 65, at 101 (1981 & 2000 Supp.) (citing 78 AM. JUR. 2D, Waters § 260). "Appropriative" rights to the use of water are founded on the doctrine of prior appropriation, which is based on actual use of the water, as compared to ownership of the land through which the water travels. See id. at § 255.
[11] Pub.L. No. 86-488, 74 Stat. 156 (June 03, 1960). For more discussion of the San Luis Act, see, e.g., Metro. Water Dist. of S. Cal. v. Marquardt, 59 Cal. 2d 159, 28 Cal. Rptr. 724, 379 P.2d 28, 45-47 (1963) (in bank).
[12] "B.F. Sisk (San Luis) Dam is located on San Luis Creek extending from SE ¼, Sec. 9, T. 10S., R. 8E., to NW ¼, Sec. 26, T. 10S. R. 8E., at 37 041 N. latitude and 121 041 W. longitude on the west side of the San Joaquin Valley, 12 miles west of Los Banos, California. The basin area is 82.6 square miles (Drainage Basin Map) and elevations across the basin range from 544 feet at the dam to over 3,200 feet at the southwest corner of the basin. Mean annual precipitation varies from 10 to 20 inches over the basin." B.F. Sisk (San Luis) Dam, California, at http://dataweb.usbr.gov/dams/ca10183.htm (last modified May 08, 2001) (last visited May 09, 2001).
[13] The facilities that comprise the San Luis Unit are: the B.F. Sisk San Luis Dam and San Luis Reservoir, Coalinga Canal, Dos Amigos Pumping Plant, Los Banos and Little Panoche Detention Dams and Reservoirs, O'Neill Dam and Forebay, O'Neill Pumping-Generating Plant, Pleasant Valley Pumping Plant, San Luis Canal, and William R. Gianelli Pumping-Generating Plant. See Doc. 292 at 7 (CVP-OCAP).
[14] A Comprehensive Departmental Report on the Development of the Water and Related Resources of the Central Valley Basin, and Comments from the State of California and Federal Agencies, dated August, 1949, H.R. REP. No. 2682, 85th Cong., 2d Sess. 14 (1958).
[15] The San Luis Unit was constructed to utilize "surplus" water not required to satisfy the rights of existing water-rights holders:
The operation of the federal San Luis Unit would conserve and regulate surplus wintertime water now wasting into the Pacific Ocean through the Golden Gate and make it usable, along with additional Central Valley Project Water from storage, in the water-deficient San Joaquin Valley to the south.
H.R. REP. No. 399, 86th Cong., at 2 (2d Sess. 1960) (emphasis added).
[16] Although Ivanhoe Irrigation District's holding has been abrogated, courts continue to cite to it for the history of the CVP. See, e.g., Peterson v. United States Dep't of Interior, 899 F.2d 799, 804 (9th Cir.1990).
[17] "Friant Dam, which impounds water from the San Joaquin River in Millerton Lake, was one of the initial CVP facilities constructed." Westlands I, 805 F.Supp. at 1504. Although the Friant Dam was completed in late 1947, the dual-diversion system did not become fully operational until mid-1953. See Gustine Land & Cattle Co. v. United States, 174 Ct. Cl. 556, ¶ 52, available at 1966 WL 8856 (Ct.Cl. 1966). The Friant-Kern Canal opened for partial operation on July 9, 1949, at which time more of the San Joaquin River water was diverted from its river-bed and into the Friant-Kern canal to irrigate new lands to the south towards Bakersfield. See id. The Delta-Mendota Canal opened on August 1, 1951, and was substantially in full operation by July 19, 1953. See id.
[18] Madera Irrigation District was permitted to intervene in this case. See Doc. 17.
[19] Several defendants cite equitable reasons for not reading the contract in this manner. For example, the Friant water-user intervenors contend that pro-rata allocation of CVP water would "produce a reapportioning of the Exchange Contractors' deliveries from the Delta, which in turn would result in the Exchange Contractors seeking alternative supplies from Friant." Doc. 20 at 3:25-28. The FPA contends pro-rata distribution of CVP water would result in a significant default on the bonds issued for the construction of the Friant facilities and eliminate its ability to "consider, evaluate and negotiate restructuring and/or refinancing of the existing debt." Id. at 3:13-17.
[20] In Westlands II, the Ninth Circuit rejected the argument that any or all of the Act, the Westlands 1963 Contract, or the San Benito 1978 Contract mandates preferential treatment of the San Luis Contractors. See 10 F.3d at 676. In dicta, it noted that plaintiffs "did not allege, even in the alternative, that they are entitled to share Reservoir water with the Exchange contractors on an equal or pro rata basis." Id.
[21] A usage of trade is:
any practice or method of dealing having such regularity of observance in a place, vocation or trade as to justify an expectation that it will be observed with respect to the transaction in question. The existence and scope of such a usage are to be proved as facts. U.C.C. § 1-205(2).
[22] A course of dealing is:
a sequence of previous conduct between the parties to a particular transaction which is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct. U.C.C. § 1-205(1).
[23] "Where the contract for sale involves repeated occasions for performance by either party with knowledge of the nature of the performance and opportunity for objection to it by the other, any course of performance accepted or acquiesced in without objection shall be relevant to determine the meaning of the agreement." U.C.C. § 2-208.
[24] Initially, plaintiffs took the position that because the express terms are unambiguous, it is not necessary for the Court to consider extrinsic evidence. See Doc. 256 at 10-11. In their reply, however, they now claim that the extrinsic evidence offered by the federal defendants and the defendants-in-intervention is not the type of extrinsic evidence allowed under O'Neill. See Doc. 282 at 11-14.
[25] The Fifth Circuit applies a tripartite inquiry for ambiguity:
1. Were the express contract terms ambiguous?
2. If not, are they ambiguous after considering evidence of course of dealing, usage of trade, and course of performance?
3. If the express contract terms by themselves are ambiguous, or if the terms are ambiguous when course of dealing, usage of trade, and course of performance are considered (that is, if the answer to either of the first two questions is yes), what is the meaning of the contract in light of all extrinsic evidence?
Bloom v. Hearst Entm't, Inc., 33 F.3d 518, 523 (5th Cir.1994) (quoting Paragon Res., Inc. v. National Fuel Gas Distrib., 695 F.2d 991, 995 (5th Cir.1983)). The first part of the inquiry presents a question of law and the third part, a question of fact. See id. Neither Paragon nor Bloom resolves the "thorny" problem of whether the second part was a question of law or fact or mixed. See id.
[26] Plaintiffs cite Maffei v. Northern Insurance Co. of New York, 12 F.3d 892, 898 (9th Cir. 1993), to support their assertion that "[i]f a contract is ambiguous, thereby requiring the use of extrinsic evidence, summary judgment is inappropriate." Doc. 256 at 8:3-4. This statement is technically correct, but possibly misleading.
According to Maffei:
Whether a contract provision is ambiguous is a question of law. If it is, ordinarily summary judgment is improper because differing views of the intent of parties will raise genuine issues of material fact.
Maffei, 12 F.3d at 898. Under this language, Maffei only holds that summary judgment is inappropriate where a court has already determined a contract provision is ambiguous. See, e.g., Adair v. City of Kirkland, 185 F.3d 1055, 1063 (9th Cir.1999) (holding summary judgment inappropriate because the contract was ambiguous) (citing San Diego Gas & Elec. Co. v. Canadian Hunter Mktg. Ltd., 132 F.3d 1303, 1307 (9th Cir.1997) ("If we find a contract to be ambiguous, we `ordinarily' are hesitant to grant summary judgment `because differing views of the intent of parties will raise genuine issues of material fact.'") (quoting Maffei, 12 F.3d at 898)). If the extrinsic evidence, e.g., under the U.C.C., is merely used to determine whether the contract is ambiguous (as opposed to interpret ambiguous terms), summary judgment is not presumptively inappropriate, so long as a material dispute of fact does not exist regarding that extrinsic evidence.
[27] This contract "supercedes and replaces" the original 1939 Exchange Contract and its amendments. Doc. 246 ex. 21 at art. 1.
[28] The contract confirms the Exchange Contractors' riparian and pre-1914 appropriative rights to San Joaquin River water still exist. It requires the government to notify any subsequent contractors for San Joaquin River water (i.e., Friant Division water contractors) that the Exchange Contractors still possess rights to water from that source. See Doc. 246 ex. 21 at art. 4d ("The United States further promises and agrees that with respect to any contract between it and third parties for the use of water of the San Joaquin River it either will notify said parties in writing, prior to the execution of such contract, of the rights reserved to the [Exchange Contractors] in this article, or will specifically provide for the recognition n[sic] of such rights in such contract.").
[29] This Article heading is not significant in interpretation of the Exchange Contract; it specifies, the "article and subarticle headings of this contract are merely summary indications of their subject matter and are placed herein for ease of reference only. They are not to be regarded as part of this contract for purposes of the construction thereof." Doc. 246 ex. 21 at art. 16.
[30] The Exchange Contractors contend the 1949 A Comprehensive Report on the Development of the Water and Related Resources of the Central Valley Basin ("Comprehensive Report"), see Doc. 245 ex. 1, and the 1955 San Luis Unit Central Valley Project: Report on the Feasibility of Water Supply Development ("Feasibility Report"), see Doc. 246 ex. 2, demonstrate that the San Luis Unit was intended to fulfill the needs of the Exchange Contractors first and then allow others to have water. They cite the following from the Comprehensive Report:
The water supply for [the San Luis Unit] reservoir would be secured almost entirely by pumping through the Delta-Mendota canal at such times as the full capacity of that canal is not required for initial Central Valley project needs.
Doc. 245 ex. 1 at 220 (Comprehensive Report) (emphasis added). In effect, they argue that the San Luis Unit was built for the purpose of storing water "for later use in the summer." Doc. 244 at 15:12-13 (citing Comprehensive Report at 219-20). The Exchange Contractors' restatement of purpose is not set forth in the Comprehensive Report itself:
The San Luis-West Side project is proposed for initial development to: (1) provide a substitute irrigation water supply for 100,000 acres of lands which are now exhausting their ground-water supply, and (2) provide water for 150,000 acres of presently dry lands which could be served from the contemplated San Luis-West Side canal.
Doc. 245 ex. 1 at 219 (Comprehensive Report).
The Exchange Contractors argue that the substitute waters were not only to come from the Delta, see Doc. 244 at 14:9-10, quoting the Feasibility Report:
Part of the irrigation water released from Trinity, Shasta, and Folsom reservoirs is used in the Sacramento Valley and part flows to the northern edge of the Sacramento-San Joaquin Delta. From there the Delta Cross-Channel conveys this released water, as supplemented by surpluses in the Delta, to the intake of the Tracy Pumping Plant at the southern edge of the Delta. The Tracy Pumping Plant lifts it into the Delta-Mendota Canal which conveys it to lands along the canal and to Mendota Pool.
Doc. 246 ex. 2 at 67-68 (Feasibility Report). The Exchange Contractors view their substitute water as an "initial Central Valley project need."
[31] This letter was written on behalf of MID by its counsel, Adolf Moskovitz of then-Kronick & Moskovitz, the predecessor law firm of Kronick, Moskovitz, Tiedemann & Girard, which now represents Westlands in this case. It establishes plaintiffs had actual knowledge that Friant Division water-users foresaw the need to maintain the Bureau's ability to service the Friant Division, and sought written confirmation of the priority of the Exchange Contractors' vested water-right claims, recognized by Interior's policy and operational practice that appropriated Sacramento River and Delta water as the primary source for substitute water under the Exchange Contract.
[32] Westlands assigned this application to the Bureau on October 10, 1960. See Doc. 246 ex. 33 at 1-3. The State approved the application and issued the Bureau an appropriation permit on August 4, 1961. See WRIMS Database Inquiry, at http://www.waterrights.ca.gov/program/wrims/ (last modified Nov. 20, 2000) (last visited June 08, 2001).
[33] Article 11(a) has already been the subject of one lawsuit. In 1992, plaintiffs filed suit claiming, inter alia, that in times of shortage, Article 11(a) entitled them to preferential access to waters from the San Luis Reservoir. See Westlands II, 10 F.3d at 670. The Ninth Circuit held that "the Westlands and San Benito contracts contain no such requirements." Id. at 676. It also held "[n]either the [San Luis] Act nor the Westlands contract prohibits the Bureau from using Reservoir water to meet its contractual obligations to the Exchange contractors." Id. at 676. In dicta, Westlands II noted that Plaintiffs "did not allege, even in the alternative, that they are entitled to share Reservoir water with the Exchange contractors on an equal or pro rata basis." Id.
[34] 53 Stat. 1193 (Aug. 4, 1939).
[35] "`Division Facilities' shall mean main conveyance, pumping, regulating reservoirs, and other works including, but not restricted to San Benito Facilities constructed or acquired by the United States to deliver water to the contractors within the Division." Id. at art. 1(d) (emphasis added).
[36] "`San Benito Facilities' shall mean the Division Facilities used to deliver water to [San Benito] exclusively."
[37] "In order to maintain the flexibility required to regulate and distribute the water from the Central Valley Project it becomes necessary that the facilities of the Federal San Luis Unit be operated as an integrated part of the Project. To operate it in any other way would reduce its effectiveness to supplement the requirements of any given area and would cost more to operate.... For these reasons the storage by [Westlands] of water in the San Luis Reservoir or any other use of the facilities curtailing the benefits of integration appears unfeasible."
[38] Sections of the California Water Code also arguably support the determination that the Bureau has great discretion when fulfilling the mandate to operate the CVP as an integrated unit. "The [State Water Resources B]oard has no power, jurisdiction, authority or control over the construction, operation or maintenance of the Central Valley Project or any part of it." CAL. WATER CODE § 8536 (West 2000). California recognizes the importance of the mandate to operate the CVP as an integrated unit: "The approval and adoption of the State Water Plan do not repeal any of the provisions of the Central Valley Project Act of 1933, and to the extent there may be any inconsistency or conflict, the provisions of Part 3 of this division shall prevail over the provisions of this part and of the State Water Plan." CAL. WATER CODE § 10002 (West 2000) (footnote omitted); see also CAL. WATER CODE § 10006 (West 2000) ("The provisions of this part do not repeal or modify any of the provisions of Part 3 of this division."). The legislative intent of the California Water Plan in relation to the CVP is:
The Legislature hereby finds and declares that agreements which provide for the transfer of water from the federal Central Valley Project to public entities supplying water for domestic or irrigation use offer potential benefits to California's hard-pressed farmers and to California's water-dependent urban areas. It is the intent of the Legislature that these contracts be entered into for the purposes of strengthening California's economy, serving the public, and protecting the environment. The director shall continue to pursue negotiations with the United States Bureau of Reclamation to contract for the interim rights to stored water from the federal Central Valley Project for use in the State Water Resources Development System by state water supply contractors.
CAL. WATER CODE § 10008 (West 2000).
Part 3 of Division 6 of the California Water Code is entitled "Central Valley Project." It encompasses 11 chapters, each with multiple sub-articles, which together comprise many different statutory sections. See CAL. WATER CODE §§ 11100-925 (West 1992 & 2001 Supp.). Section 12931 of the California Water Code makes these provisions applicable to the CVP. See id. at § 12931 (West 1992 & 2001 Supp.) ("Any facilities heretofore or hereafter authorized as a part of the Central Valley Project or facilities which are acquired or constructed as a part of the State Water Resources Development System with funds made available hereunder shall be acquired, constructed, operated, and maintained pursuant to the provisions of the code governing the Central Valley Project, as said provisions may now or hereafter be amended. For the purposes of this chapter the Sacramento-San Joaquin Delta shall be deemed to be within the watershed of the Sacramento River.").
[39] An argument exists that the Exchange Contractors are benefitted by Congressional action. See, e.g., Wolfsen, 162 F.Supp. at 406 ("Their substitution was part of the whole plan proposed by the Secretary of Interior and approved by the President and authorized by Congress.").
[40] See also Reclamation Act of 1902, Pub.L. No. 57-161, ch. 1093, § 1(a), 32 Stat. 388, former 43 U.S.C. §§ 371-616 (1902) ("In constructing, operating, and maintaining the San Luis Unit, the Secretary shall be governed by Federal reclamation laws.").
[41] See also BLACK'S LAW DICTIONARY 1328 (7th ed.1999) (defining riparian as "[o]f, relating to, or located on the bank of a river or stream (or occasionally another body of water, such as a lake)").
[42] Scholars trace the origin of California's water law of appropriation to Irwin v. Phillips, 5 Cal. 140 (1855). For a more extensive discussion of the history of California's water rights, see, e.g., Pleasant Valley Canal Co. v. Borror, 61 Cal. App. 4th 742, 72 Cal. Rptr. 2d 1, 7-9 (1998) (citing sources).
[43] "All water flowing in any natural channel, excepting so far as it has been or is being applied to useful and beneficial purposes upon, or in so far as it is or may be reasonably needed for useful and beneficial purposes upon lands riparian thereto, or otherwise appropriated, is hereby declared to be public water of the State and subject to appropriation in accordance with the provisions of this code."
[44] Plaintiffs misstate that this issue was "definitively resolved" by Westlands II. The appeals court expressly declined to finally decide whether the Exchange Contractors' water is to be considered a "contractual commitment" as described in Article 11. See Westlands II, 10 F.3d at 675 ("We need not resolve this issue of California water law.").
[45] These dicta appear to be based on a suggestion that because water trapped within the San Luis Unit would otherwise run into the Pacific Ocean, California water-law analysis of distribution is inapplicable. See Westlands II, 10 F.3d at 675.
[46] This does not conflict with California's water-law priorities, because it does not grant the Exchange Contractors greater priority over prior appropriators. Accord CAL. WATER CODE § 1475 (West 2000) ("In any case where a reservoir has been or shall hereafter under the provisions of this division be constructed, or surveyed, laid out, and proposed to be constructed, for the storage of water for a system, which water is to be used at one or more points under appropriations of water and rights held and owned by the person owning the reservoir site and constructing the reservoir, the reservoir, appropriations, and rights shall, in the discretion of the board constitute a single enterprise and unit, and work of constructing the reservoir, or work on any one of the appropriations shall, in the discretion of the board, be sufficient to maintain and preserve all applications for appropriations and rights thereunder.").
[47] That the Exchange Contractors have contracted for substitute water from the Bureau as of 1939, long before plaintiffs, makes it unnecessary to decide the open question of California law that troubled the Court of Appeal, whether they remain riparians as to San Luis Water, i.e., whether as riparians before they exchanged (but did not unconditionally transfer and relinquish) the right to exercise their San Joaquin River water rights for a conditional, permanent supply of water, the Exchange Contractors are also considered riparians, for purposes of water-rights priority, with respect to the substitute CVP water.
[48] See also Great N. Ry. Co. v. Delmar Co., 283 U.S. 686, 690, 51 S. Ct. 579, 75 L. Ed. 1349 (1931) ("where two constructions of a written contract are possible, preference will be given to that which does not result in violation of law.") (citing cases); United States ex rel. Sharma v. U.S.C., 217 F.3d 1141, 1145 (9th Cir.2000) ("As the Ninth Circuit has held, `ambiguously worded contracts should not be interpreted to render them illegal if a legal construction is plausible.'") (quoting United States v. Sacramento Mun. Util. Dist., 652 F.2d 1341, 1346 (9th Cir.1981)); CAL. CIV. CODE § 1643 (West 2000) ("A contract must receive such an interpretation as will make it lawful, operative, definite, reasonable, and capable of being carried into effect, if it can be done without violating the intention of the parties."); RESTATEMENT (SECOND) OF CONTRACTS § 203(a) (1982) ("an interpretation which gives a reasonable, lawful, and effective meaning to all the terms is preferred to an interpretation which leaves a part unreasonable, unlawful, or of no effect").
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433523/
|
153 F. Supp. 2d 133 (2001)
J. Gary HENDERSON
v.
FLOORGRAPHICS, INC.
No. 3:00CV1517(JBA).
United States District Court, D. Connecticut.
July 13, 2001.
*134 Alfred J. Smith, Jr., Stamford, CT, for Plaintiff.
David P. Atkins, Zeldes, Needle & Cooper, Bridgeport, CT, for Defendants.
MEMORANDUM OF DECISION [Doc. # 11]
ARTERTON, District Judge.
Plaintiff J. Gary Henderson sued his former employer, defendant FLOORgraphics, Inc. ("FLOORgraphics"), claiming that he was terminated without cause on July 2, 2000, and that FLOORgraphics has since refused to pay him his base compensation, bonus commissions, benefits, stock options and severance pay. Plaintiff also seeks a declaratory judgment that no non-competition agreement exists between him and FLOORgraphics.
Currently pending is defendant's motion to dismiss under the doctrine of forum non conveniens [Doc. # 11]. According to defendant, because the transactions underlying the complaint in this action occurred in New Jersey and are the subject of a pending New Jersey state court action, "the balance of public and private interests strongly favors the existing New Jersey state court as a forum, and the Complaint should therefore be dismissed under the doctrine of forum non conveniens." Doc. # 11, at 1. For the reasons discussed below, defendant's motion is DENIED.
Background
Defendant's New Jersey complaint alleges that Henderson is a citizen of New Jersey, and seeks a declaratory judgment that "no severance, stock options, performance options, benefits and/or other sums are due to [Henderson]; that [Henderson's] demands therefore are unlawful, and lack any legal or contractual basis, and a declaration of the parties' rights under the employment agreement(s)." Def.Ex. A at ¶ 6. The New Jersey complaint also claims that Henderson has breached his fiduciary and contractual obligations to FLOORgraphics and tortiously interfered with its current and prospective business opportunities and contractual rights by disclosing confidential information, threatening to interfere with FLOORgraphics' business, seeking to induce its employees to abandon employment, and meeting with FLOORgraphics' competitors. The New Jersey suit was filed in Superior Court on August 10, 2000, at 3:14 p.m.
Plaintiff filed the complaint in this action that same day, at 4:00 p.m. Plaintiff's federal complaint alleges that defendant terminated him without cause on July 2, 2000, and that FLOORgraphics has since refused to pay him his base compensation, bonus commissions, benefits, stock options and severance pay, to which he was entitled or would have become entitled had he not been unlawfully terminated. In addition, plaintiff requests declaratory relief that no non-competition agreement exists between him and FLOORgraphics. The basis for this Court's jurisdiction is diversity; plaintiff claims that he is a citizen of Connecticut, and it is undisputed that FLOORgraphics' principal place of business is in New Jersey.
*135 Plaintiff assertsand the Court agreesthat this action and the New Jersey state court action are not identical, as he seeks "damages for compensation, equity and benefits, for wrongful termination of his employment contract, for fraud and misrepresentation, and for a declaratory judgment that no non-compete agreement exists between Henderson and FlOORgraphics," based on events that occurred prior to his termination, while FLOORgraphics' state court action seeks "damages for the alleged actions of Henderson since his employment with FLOORgraphics terminated." Doc. # 14, at 5.
Discussion
There are three possible avenues for evaluating the propriety of venue under federal law: 28 U.S.C. § 1406(a), 28 U.S.C. 1404(a), and the common law doctrine of forum non conveniens. Under § 1406(a), "the district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." Section 1404(a), in contrast, applies in those circumstances where venue is proper in the district in which the case is brought, but transfer to another federal district court in which the case could originally have been brought would serve "the convenience of parties and witnesses, in the interest of justice." Finally, the doctrine of forum non conveniens permits a court to dismiss a case over which it has jurisdiction, where factors of convenience and justice demonstrate that the case should proceed in an alternative, non-federal forum. See Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S. Ct. 839, 91 L. Ed. 1055 (1947); Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88, 100 (2d Cir.2000); Guidi v. Inter-Continental Hotels Corp., 203 F.3d 180 (2d Cir.2000).
FLOORgraphics does not claim that venue is improper within the meaning of 28 U.S.C. § 1406(a). See Doc. # 12, at 8. It also does not pursue a transfer under § 1404(a). According to defendant, § 1404(a) "cannot apply to the circumstances of this case: while New Jersey is the preferred forum, there is no diversity of citizenship between the parties, no federal question, and hence no subject matter jurisdiction in the federal court in New Jersey." Doc. # 12 at 8. Thus, defendant argues, because the federal transfer statute does not apply, this action should be dismissed under the common-law doctrine of forum non conveniens.
If the Court lacks diversity jurisdiction, however, the appropriate remedy is a dismissal for lack of jurisdiction. As the Supreme Court has noted, "the doctrine of forum non conveniens can never apply if there is absence of jurisdiction or mistake of venue." Gulf Oil Corp., 330 U.S. at 503, 67 S. Ct. 839. Because this Court's jurisdiction has been challenged, albeit indirectly, the Court first proceeds to determine whether there is a basis for federal jurisdiction over this action. Next, the Court turns to the question of the available remedy for the allegedly inconvenient forum.
Plaintiff's complaint alleges that he is a Connecticut citizen. Plaintiff has submitted a sworn affidavit stating that he has owned his home in Ridgefield, Connecticut for over 17 years, votes in Ridgefield, pays state and federal taxes there, and his children have attended school there. He also states that although he owns a vacation property in Surf City, New Jersey, he spends limited time there during the summer with his wife. Defendant has not offered any evidence controverting this affidavit. Plaintiff's complaint further alleges that the amount in controversy "exceeds $5,000,000." Compl. ¶ 2.
*136 A party's citizenship for purposes of the diversity statute, is a mixed question of law and fact. See Palazzo v. Corio, 232 F.3d 38, 42 (2d Cir.2000). "An individual's citizenship, within the meaning of the diversity statute, is determined by his domicile." Id. (citing Linardos v. Fortuna, 157 F.3d 945, 948 (2d Cir.1998)). Domicile is defined as "the place where a person has his true fixed home and principal establishment, and to which, whenever he is absent, he has the intention of returning." Id. at 948 (internal quotation marks omitted). A person has only one domicile at any given time. See Rosario v. INS, 962 F.2d 220, 224 (2d Cir.1992). Under this standard, it is clear that plaintiff is domiciled in Connecticut, not New Jersey. Accordingly, the Court has diversity jurisdiction over this action. See 28 U.S.C. § 1332.
Thus, contrary to defendant's assertion, transfer to New Jersey pursuant to § 1404(a) would provide an available remedy for the allegedly inconvenient forum.[1] However, defendant argues that the forum non conveniens analysis may be applicable where the proposed alternative forum is domestic state court, even where transfer to federal court is available. See, e.g., Capital Currency Exchange, N.V. v. National Westminster Bank PLC, 155 F.3d 603, 607 (2d Cir.1998) ("Section 1404(a) thus supplanted the common law doctrine of forum non conveniens for transfers between United States district courts. Section 1404(a) does not apply in cases where the purportedly more convenient forum is not a United States district court. In such cases, almost always involving foreign countries, the common law doctrine of forum non conveniens still governs.") (emphasis added); TUC Electronics, Inc. v. Eagle Telephonics, Inc., 698 F. Supp. 35, 37 (D.Conn.1988) ("even if venue is properly laid in a particular federal district court, where factors of convenience and justice suggest that the case should proceed in a state or foreign court (i.e., a non-federal forum), the action may be dismissed under the common-law doctrine of forum non conveniens"); 15 Wright, Miller & Cooper, Federal Practice and Procedure, Civil 2d § 3828, at 279-80 ("The doctrine of forum non conveniens has only a limited continuing vitality in federal courts. If the more convenient forum is another federal court, since 1948 the case can be transferred there under § 1404(a) and there is no need for dismissal. It is only when the more convenient forum is in a foreign countryor perhaps, under rare circumstances, in a state court or a territorial courtthat a suit brought in a proper federal venue can be dismissed on grounds of forum non conveniens.") (emphasis added).
Cases are dismissed for forum non conveniens grounds where, notwithstanding the substantial deference given to plaintiff's choice of forum, after balancing "the private interests of the parties in maintaining the litigation in the competing fora and any public interests at stake, [the defendant establishes] that the pertinent factors `tilt strongly in favor of trial in the foreign forum.'" Wiwa, 226 F.3d at 100 (quoting R. Maganlal & Co. v. M.G. Chem. Co., 942 F.2d 164, 167 (2d Cir.1991)). Convenience to the parties, location of witnesses and documents, and whether there is an "obviously better suited foreign forum for the *137 adjudication of the dispute," are all relevant factors to consider. Id. at 107. As geographical location plays a primary role in determining convenience, where the allegedly more convenient forum is another state, rather than a foreign country, dismissal on forum non conveniens grounds would not appear to be necessary because transfer to a federal district court would provide a sufficient remedy, unless the federal court would lack jurisdiction over the action. See Nieves v. American Airlines, 700 F. Supp. 769, 771 (S.D.N.Y.1988) ("since the enactment of 1404(a) of Title 28 of the United States Code, the courts have universally held that if the forum is found to be inconvenient, the remedy is transfer and not dismissal"); Chance v. E.I. Du Pont De Nemours & Co., 371 F. Supp. 439 (E.D.N.Y.1974) (where transfer to federal districts where incidents giving rise to lawsuit occurred is possible, the more drastic action of dismissal on forum non conveniens grounds is inappropriate); Doran v. City of Clearwater, 814 F. Supp. 1077, 1078 (D.Fla.1993) (rejecting argument that forum non conveniens allowed dismissal of case where alternative forum was state court because "[t]he field of that doctrine is now entirely occupied by 28 U.S.C. § 1404(a)"). But see Kettenbach v. Demoulas, 822 F. Supp. 43, 45 (D.Mass.1993) (citing the need for flexibility, and concluding that "the forum non conveniens doctrine is available as a matter of law to a defendant who seeks ... a dismissal [where the alternative forum is a state court]," but noting "that as a practical matter the great majority of such movants will be unable to satisfy the requisite balancing test when the alternative forum is across town, rather than across the country or international borders").
Recognizing that § 1404(a) provides a remedy under such circumstances, recent case law casts serious doubt on the viability of dismissals for forum non conveniens grounds where the alternative forum is a domestic state court rather than a foreign country. For example, the Supreme Court has observed in dicta that "[a]s a consequence [of the enactment of § 1404(a) ], the federal doctrine of forum non conveniens has continuing application only in cases where the alternative forum is abroad." American Dredging Co. v. Miller, 510 U.S. 443, 449 n. 2, 114 S. Ct. 981, 127 L. Ed. 2d 285 (1994); accord DiRienzo v. Philip Servs. Corp., 232 F.3d 49, 56 (2d Cir.2000).
Defendant relies on TUC Electronics, Inc., 698 F.Supp. at 37, in which the court dismissed the case, a breach of contract action, on the grounds of forum non conveniens, notwithstanding plaintiff's argument that the case should be transferred from district court in Connecticut to federal district court in New York under § 1404(a) if the court found that New York was the appropriate forum. In that case, however, the court expressly held that sole basis for the dismissal was the fact that the contract at issue contained an express forum selection provision that required the action to be brought exclusively in the state courts of New York. Id. at 40, n. 7. To give effect to that provision, the court held that the case should not be transferred to federal district court in New York, and that dismissal was therefore the appropriate remedy. As there is no such contractual provision at issue here, the Court finds TUC Electronics easily distinguishable.
In Nieves, the Southern District of New York confronted a similar issue, where the plaintiff in that case brought a subsequent action in state court in Puerto Rico after filing suit in federal court in New York, and the defendant moved to dismiss the federal suit for forum non conveniens grounds, arguing that the pendency of the state court action provided a more convenient *138 forum. The court rejected this argument:
The Court notes that "pendency of an action in the state court is no bar to proceedings concerning the same matter in the Federal court having jurisdiction. ..." Colorado River Water Conservation District v. United States, 424 U.S. 800, 96 S. Ct. 1236, 47 L. Ed. 2d 483 (1976). A party may bring suit in both a state and federal court. Therefore, the fact that plaintiff has brought a subsequent suit in Puerto Rico, in and of itself, is not grounds for dismissal. The Court finds the doctrine of forum non conveniens inapplicable in the case at bar and defendant's motion to dismiss on forum non conveniens grounds is hereby denied.
700 F.Supp. at 771.[2]
This Court finds this reasoning persuasive. The mere existence of the New Jersey state court action is an insufficient basis to warrant dismissal of plaintiff's action in this case. Accordingly, to the extent that defendant finds Connecticut an inconvenient forum for adjudication of this dispute, its remedy is a transfer pursuant to § 1404(a). However, as previously noted, defendant does not seek a transfer, and has placed all its eggs in the dismissal basket.[3]
Conclusion
For the reasons discussed above, defendant's motion to dismiss this case on forum non conveniens grounds [Doc. # 11] is DENIED.
IT IS SO ORDERED.
NOTES
[1] Defendant does acknowledge that § 1404(a) applies in the event the Court has diversity jurisdiction, but contends that transferring the case to federal district court in New Jersey pursuant to 28 U.S.C. § 1404(a) would result in "further inefficiency and duplication of effort." Doc. # 12, at 9. As it is clear to the Court that defendant is solely interested in a dismissal of this action, the Court construes defendant's motion as disclaiming any interest in a transfer to federal court in the District of New Jersey pursuant to § 1404(a).
[2] The court then granted the defendant's alternative motion to transfer pursuant to § 1404(a). See 700 F.Supp. at 772-74.
[3] The Court also notes that even if dismissal were an available remedy, under the facts of this case, defendant has not met its "heavy burden" of showing that the "pertinent factors tilt strongly in favor of trial in the foreign forum." Wiwa, 226 F.3d at 100. New Jersey is not prohibitively far from Connecticut, the events giving rise to this action occurred in both New Jersey and Connecticut, documents and witnesses are located in New Jersey, Connecticut and other states, and this Court is certainly able to apply New Jersey law to the employment agreement; indeed, the Court notes that the stock option agreement requires application of Pennsylvania law, and thus the New Jersey courts will not be applying the law of their forum either. These factors would similarly counsel against transfer pursuant to § 1404(a).
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433528/
|
153 F. Supp. 2d 839 (2001)
Katherine A. MEYER
v.
IMPERIAL TRADING CO., INC.
No. Civ.A. 01-146.
United States District Court, E.D. Louisiana.
March 28, 2001.
*840 Paula Anne Perrone, Patricia Ellen Pannell, Chehardy, Sherman, Ellis, Breslin & Murray, Metairie, LA, for plaintiff.
Michael Thomas Tusa, Jr., Pamela W. Carter, Kelly McCarthy Rabalais, Le-Blanc, Tusa & Butler, Metairie, LA, for defendant.
BARBIER, District Judge.
Before the Court is the Motion to Dismiss filed by defendant, Imperial Trading Company, Inc. ("Imperial"). Rec. Doc. 3. Plaintiff opposes the motion. The motion, set for hearing on Wednesday, March 28, 2001, is before the Court on briefs without oral argument.
BACKGROUND
This lawsuit was initiated when plaintiff Katherine Meyer filed suit alleging that Imperial had terminated her employment because she informed Imperial of her desire to take leave under the Family & Medical Leave Act ("FMLA", "the Act"). Meyer, who had been working for Imperial since April 12, 1999, alleges that she was experiencing respiratory problems brought on by her exposure to second-hand smoke in her workplace, which apparently does not have a designated smoking area, and that her doctor suggested a leave to see if relief from the second-hand smoke exposure would improve her respiratory function. Meyer was fired on April 5, 2000, one day after presenting her employer with written notice that she sought to take leave under the FMLA. Imperial's stated reason for the termination was Meyer's "substandard performance."
Imperial has now moved for dismissal on two grounds. First, it argues that Meyer cannot state a claim under the FMLA because she is not an "eligible employee" under the Act, since she had not worked at Imperial for a full year at the time of her termination. Second, Imperial argues that plaintiff has not alleged a "serious health condition," as required by the FMLA. For the reasons that follow, the Court finds that Imperial's motion should be DENIED.
DISCUSSION
The FMLA allows eligible employees who have a serious health condition to take up to twelve weeks of unpaid leave for medical reasons. 29 U.S.C. § 2601 et seq. Under the Act, an "eligible employee" is one "who has been employed (i) for at least 12 months by the employer with respect to whom leave is requested ...; and (ii) for at least 1,250 hours of service with such employer during the previous 12-month period." 29 U.S.C. § 2611(2)(a). A "serious health condition" is "an illness, injury, impairment, or physical or mental condition that involves (A) inpatient care in a hospital, hospice, or residential medical care facility; or (B) continuing treatment by a health care provider." 29 U.S.C. § 2611.
*841 Eligibility Under The FMLA
Imperial argues that Meyer cannot state a claim under the FMLA because she was not an eligible employee at the time she sought leave under the Act, because she was hired on April 12, 1999, requested leave in a letter of April 4, 1999, and was terminated April 5, 1999, before having worked a full year for Imperial.
The Code of Federal Regulations provides guidance concerning which employees are eligible under the FMLA:
The determination[] of whether an employee ... has been employed by the employer for a total of at least 12 months must be made as of the date leave commences. If an employee notifies the employer of need for FMLA leave before the employee meets these eligibility criteria, the employer must either confirm the employee's eligibility based upon a projection that the employee will be eligible on the date leave would commence or must advise the employee when the eligibility requirement is met.
29 C.F.R. § 825.110(d) (emphasis added).
Thus, the federal regulations anticipate precisely the scenario in which Meyer found herself: seeking leave under the Act before the date she became eligible, but to commence after she was eligible (i.e., after her one-year employment anniversary). Not only do the regulations not suggest that this timing would exclude an employee from coverage by the Act, the regulations place a burden on the employer who has received the notice to either confirm eligibility based on the projected eligibility date, or to advise the employee when he or she becomes eligible. Accordingly, based on the plain language of the applicable regulations, Imperial's argument that Meyer can state no claim under the Act because she requested leave before twelve months of employment was completed, to commence after the twelve months was completed, is baseless.
Serious Health Condition
Imperial also argues that plaintiff's allegations of the serious health condition she suffers are legally insufficient to state a claim under the FMLA, because she failed to allege "continuing treatment by a health care provider," or make reference to a period of incapacity or treatment two or more times by her doctor.
The Code of Federal Regulations provide as follows with respect to ascertaining what is a "serious health condition" entitling an employee to FMLA leave:
(a) For purposes of FMLA, "serious health condition" entitling an employee to FMLA leave means an illness, injury, impairment, or physical or mental condition that involves:
* * * * * *
(2) Continuing treatment by a health care provider. A serious health condition involving continuing treatment by a health care provider includes any one or more of the following:
(i) A period of incapacity (i.e., inability to work, attend school or perform other regular daily activities due to the serious health condition, treatment therefor, or recovery therefrom) of more than three consecutive calendar days, and any subsequent treatment or period of incapacity relating to the same condition, that also involves:
(A) Treatment two or more times by a health care provider, by a nurse or physician's assistant under direct supervision of a health care provider, or by a provider of health care services (e.g., physical therapist) *842 under orders of, or on referral by, a health care provider....
29 C.F.R. § 825.114.
Thus, to state a claim under the Act, a plaintiff must allege continuing medical treatment, which includes a period of incapacity of at least three consecutive days, plus treatment on at least two occasions by a health care provider. While plaintiff's original complaint alleged only one doctor's visit, on the same day her opposition was filed, plaintiff filed an amended complaint, alleging three separate doctor visits, and that her doctor had opined that a leave from work was necessary to determine whether plaintiff's chronic respiratory condition would abate when she was removed from her smokefilled work environment. And, although plaintiff has not explicitly stated that she suffered a period of incapacity of three consecutive days, the general tenor of Meyer's complaint suggests that she was chronically incapacitated by respiratory problems resulting from the smoky environment, and this inference is supported by her doctor's recommendation that she take a leave to determine if removing herself from the smoke exposure would resolve her chronic condition.
"[O]n a motion to dismiss we presum[e] that general allegations embrace those specific facts that are necessary to support the claim." Meadowbriar Home for Children, Inc. v. G.B. Gunn, 81 F.3d 521, 529 (5th Cir.1996) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S. Ct. 2130, 2136, 119 L. Ed. 2d 351 (1992)). Further, a motion to dismiss under rule 12(b)(6) "is viewed with disfavor and is rarely granted." Kaiser Aluminum & Chem. Sales v. Avondale Shipyards, 677 F.2d 1045, 1050 (5th Cir.1982).
Accordingly, while ideally plaintiff would have pled the duration of her incapacity with more specificity, because it does not "appear[] beyond doubt that the plaintiff can prove no set of facts in support of [her] claim which would entitle [her] to relief," the Court will not dismiss this action. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 2 L. Ed. 2d 80 (1957). Therefore;
IT IS ORDERED that the Motion to Dismiss (Rec.Doc. 3) filed by defendant Imperial Trading Company, Inc., should be and is hereby DENIED.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433630/
|
189 F. Supp. 2d 1372 (2002)
CITICASTERS LICENSES, INC., Plaintiff,
v.
CUMULUS MEDIA, INC.; Cumulus Licensing Corp.; and Cumulus Broadcasting, Inc., Defendants.
No. CV101-073.
United States District Court, S.D. Georgia, Augusta Division.
March 4, 2002.
*1373 *1374 *1375 R. Perry Sentell, III, James Barrett Trotter, Kilpatrick Stockton, LLP, Augusta, GA, Jonathan C. Balfus, Heenan Blaikie, PC, Beverly Hills, CA, for plaintiff.
David E. Hudson, Hull, Towill, Norman, Barret & Sallet, PC, Augusta, GA, James W. Dabney, Pennie & Edmonds, New York City, for defendants.
ORDER
BOWEN, Chief Judge.
Both parties have filed preliminary injunction motions. On January 8, 2002, an evidentiary hearing was held on these motions. For reasons set forth below, Plaintiff's motion is GRANTED, and Defendants' motion is DENIED.
I. Introduction
This case involves the right to use "KISS" in the name of radio stations located in Savannah, Georgia. Both parties seek to enjoin each other's use of this mark. Defendants operate WSIS-FM, "KISS 104", which is located at 103.9 on the Savannah FM dial. Until recently Plaintiff operated WAEV-97 FM as "MIX 97.3." On December 14, 2001, Plaintiff changed the station name to "97 KISS FM." Plaintiff filed its motion for a preliminary injunction on the same day.
II. Background
A chronological history of the parties' operations provides the proper background of this lawsuit. Plaintiff owns a radio station named KIIS-FM in Los Angeles, California. Plaintiff or its predecessor began using "KIIS" in Los Angeles as early as December 1, 1984. (Compton Decl. ¶ 5.) On May 23, 1989, Plaintiff's predecessor received official registration of "KIIS" from the United States Patent and Trademark Office.[1] The parties, however, dispute the on-air pronunciation of "KIIS."
In the mid-1990s, Plaintiff began an effort to acquire FM radio stations around the United States. This plan was facilitated by the 1996 Telecommunications Act, 110 Stat. 46, Pub.L. No. 104-104, 1996 S652, which allowed for greater concentration of media ownership. As part of this initiative, Plaintiff wished to identify many of these stations with a common name. In several instances, Plaintiff chose some variation of "KISS FM."
On January 23, 1997, Plaintiff's predecessor filed an application for federal registration of "KISS FM." Included in the application was a logo featuring "KISS FM" with the "i" dotted by a lipsticked *1376 impression of a pair of lips. Plaintiff's predecessor received official registration from the Patent and Trademark Office on May 12, 1998. At the time this lawsuit was filed, nearly forty radio stations operated or licensed by Plaintiff used the KISS-FM name.
In October or November of 1998, Defendants began operating WSIS-FM in Savannah as KISS 104 or KISS 104 FM. Defendants never received a license from Plaintiff.
Three of Plaintiff's radio stations are relevant to this lawsuit. As mentioned above, Plaintiff operates KIIS-FM in Los Angeles. Using satellite technology, Plaintiff simulcasts KIIS throughout the United States on the XM band. Plaintiff claims it pronounces "KIIS" as "kiss," which would bring it into conflict with Defendants' KISS 104. Plaintiff also owns WKSP-FM in Augusta, Georgia. WKSP broadcasts as "KISS 96", and in certain parts of Burke County, Georgia, a radio listener could receive broadcasts of both Plaintiff's KISS 96 and Defendants' KISS 104.
Most relevant to this lawsuit is Plaintiff's WAEV-97 FM in Savannah. Prior to December 14, 2001, its popular name was "Mix 97.3." On December 14, Plaintiff changed the station name to "97 KISS FM." Now, it directly competes with Defendants' KISS 104. As explained more fully below, this conflict has the potential to substantially undermine the revenues of both stations.
III. Preliminary Injunction Standard
Both parties seek to preliminarily enjoin the other party's use of "KISS" to identify radio stations in the Savannah market. The moving party possesses a burden of persuasion to show: (1) a substantial likelihood of success on the merits; (2) a substantial threat of irreparable injury; (3) its own injury outweighs the injury to the other party; and (4) the injunction would serve the public interest. Tally-Ho, Inc. v. Coast Cmty. Coll. Dist., 889 F.2d 1018, 1022 (11th Cir.1989). Although the other factors will be discussed, the primary contention is whether either party has shown a substantial likelihood of success on the merits.
IV. Analysis
A. Substantial Likelihood of Success on the Merits
This lawsuit essentially revolves around two federally registered trademarks held by Plaintiff: "KIIS" and "KISS FM." To succeed on a trademark infringement claim, a party must show: "(1) that its mark has priority and (2) that the defendant's mark is likely to cause consumer confusion." Lone Star Steak-house & Saloon, Inc. v. Longhorn Steaks, Inc., 122 F.3d 1379, 1382 (11th Cir.1997). Plaintiff seeks to enjoin Defendants' use of "KISS" under either one of Plaintiff's marks. In response, Defendants first contend that KISS 104 is unlikely to be confused with KIIS. Secondly, Defendants maintain that its KISS 104 moniker ("moniker" is synonymous with "station name") possesses seniority over Plaintiff's KISS FM mark. I will address each argument in turn.
1. Likelihood of Confusion Between KIIS and KISS 104
The Eleventh Circuit prescribes a multi-factored analysis for determining likelihood of trademark confusion. The test is comprised of the following components: "(1) type of mark, (2) similarity of mark, (3) similarity of the products the marks represent, (4) similarity of the parties' retail outlets and customers, (5) similarity of advertising media used, (6) defendant's intent and (7) actual confusion." Id. The type of mark and actual confusion are the two most important factors. Id.
*1377 The type of mark is a measure of the trademark's strength, and it falls into one of four categories: (1) generic, (2) descriptive, (3) suggestive, and (4) arbitrary. Frehling Enter., Inc. v. Int'l Select Group, Inc., 192 F.3d 1330 (11th Cir.1999) "The categories are based on the relationship between the name and the service or good it describes." Id. A generic mark is the weakest because it refers to a general class of goods or services. Id. A generic term is incapable of being registered. Id. "Descriptive marks describe a characteristic or quality of an article or service." Id. A suggestive mark indicates a characteristic of the good or service and requires the consumer to make an inferential step to associate the term with the product. Id. Finally, an arbitrary mark holds no logical connection to the good or service. Id. Arbitrary marks are the strongest. Id. at 1335-36.
KIIS qualifies as a strong mark for other reasons. Plaintiff's predecessor received registration in 1989. Five years later, the mark became "incontestable" under the trademark laws. 15 U.S.C. § 1065. Although the incontestable status usually gives the mark's holder certain evidentiary rights, see 15 U.S.C. § 1115(b), it also plays a role in the likelihood of confusion analysis. Under the "type of mark" factor, an incontestable mark is "presumed to be at least descriptive with secondary meaning." Dieter v. B & H Indus. of Southwest Fla., Inc., 880 F.2d 322, 329 (11th Cir.1989). Accordingly, KIIS is a "relatively strong mark." Id.
The next factor presents greater difficulties. Under the "similarity of the marks" prong, "the court compares the marks and considers the overall impression that the marks create, including the sound, appearance, and manner in which they are used." Frehling Enter., 192 F.3d at 1337. At first glance, "KIIS" and "KISS 104" would seem dissimilar. Because KIIS is not a word, its normal pronunciation would be "kay-aye-aye-ess." In fact, Plaintiff's Los Angeles station uses this pronunciation in the hourly call-letter identification required by the Federal Communications Commission. (Pl.'s Br. Opp. to Defs.' Motion for Prelim. Inj. at 17.) Plaintiff contends, however, that the regular station identifiers, or sweepers, pronounce "KIIS" as "kiss." (Second Compton Decl. ¶ 4.) Defendants do not dispute this contention.
Because radio is an aural medium, sound and use of a mark largely determine its similarity to other marks. Both KISS 104 and KIIS are used to identify radio stations. Although Plaintiff pronounces "KIIS" as "Kay-aye-aye-ess" once an hour for station identification, the sweepers pronounce "KIIS" as "KISS" nearly twenty times an hour throughout the day. (Id.) Consequently, the predominant pronunciation of "KIIS" mirrors Defendants' pronunciation of "KISS 104." Considering the medium, this common pronunciation makes the marks highly similar. However, Defendants present other grounds for finding dissimilarity.
According to Defendants, the representations of Plaintiff's predecessor preclude a finding of similarity. Plaintiff's predecessor, Gannett Co., Inc., applied for registration of "KIIS." Initially, the United States Patent and Trademark Office refused registration. The basis for the Trademark Office's decision was that the pronunciation of "KIIS" was confusingly similar to two other trademark applications, "KISS and Design" and "KISS RADIO." In a letter titled "RESPONSE TO OFFICIAL ACTION," Gannett argued that the Trademark Office applied the likelihood of confusion analysis too narrowly. Because KIIS operated in a different market than the two other applicants, Gannett argued that there was no possibility for *1378 confusion. Now, Defendants maintain that under the doctrine of statutory estoppel, Gannett's representations bind Plaintiff.
Specifically, Defendants contend that statutory estoppel prevents Plaintiff from asserting that "KISS 104" infringes upon the "KIIS" trademark. Statutory estoppel is comprised of three elements:
(1) assertion by a party of entitlement to statutory right or privilege;
(2) the receipt by that party of an actual benefit pursuant to the statute;
(3) subsequent assertion by that party which is inconsistent with entitlement to the statutory benefit previously received.
Technicon Med. Info. Sys. Corp. v. Green Bay Packaging, Inc., 687 F.2d 1032, 1034 (7th Cir.1982). Assuming Defendants could prevail on the first two factors, they cannot establish the third. Plaintiff's predecessor made its geographic argument under an entirely different set of rules governing media ownership. At the time, federal regulations prohibited a company from owning more than twelve AM and twelve FM radio stations in the United States. Gannett's representations to the Patent and Trademark Office cited these restrictions. The 1996 Telecommunications Act, however, allowed for increased ownership of radio stations.
In addition, registration gives the trademark holder rights throughout the nation. The Lanham Act contemplates the "natural" expansion of a trademark holder's business into areas currently unserved or served by potential infringers. Howard Stores Corp. v. Howard Clothing, Inc., 308 F. Supp. 70, 73 (N.D.Ga.1969). The KIIS registration places no conditions on its use, and it is apparent that Plaintiff's predecessor intended "KIIS" to be pronounced "kiss." (See Dabney Decl. Ex. 1 ("Refusal of registration was premised solely upon the perception that the mark KIIS, when pronounced, sounds confusingly similar to the pending applications for registration of KISS and Design and KISS RADIO and Design" (citations omitted))). For these reasons, I cannot find any inconsistency in Plaintiff's current position. I also find that the "KIIS" mark is similar to "KISS 104."
The next step in the likelihood of confusion analysis is to assess the similarity of the goods. Under this factor I must decide "whether the products are the kind that the public attributes to a single source, not whether or not the purchasing public can readily distinguish between the products of the respective parties." Frehling Enter., 192 F.3d at 1338. In this case, a radio listener "could possibly attribute the [services] here to the same source." Id. Plaintiff alleges the programming of KIIS and KISS 104 overlap. (Scott Decl. ¶ 9.) Although the programming format may differ slightly, a listener could assume one company operates both stations upon hearing the "KISS" name at two different positions on the radio dial. This conclusion is bolstered by the evidence related to radio listener surveys. A company named Arbitron periodically conducts listener surveys to determine a station's ratings. Radio stations set their advertising fees based on these ratings. According to Plaintiff, "the typical Arbitron diarist identifies a given radio station by its moniker, rather that its call letters or dial position." (Id. ¶ 13.) Consequently, a listener could reasonably conclude that two stations using "KISS" have a common owner.
When determining the similarity of retail outlets and customers, the court analyzes "where, how, and to whom the parties' products are sold." Frehling Enter., 192 F.3d at 1339. An identity of customers is not required; the parties need only "cater to the same kinds of individuals." Safeway Stores, Inc. v. Safeway Discount Drugs, 675 F.2d 1160, 1166 (11th Cir.1982). *1379 Obviously, both parties provide radio broadcast services. Nevertheless, KIIS is broadcast over the XM Band using satellite technology. This method allows anyone one in the United States to receive KIIS's broadcast with the proper equipment. KISS 104, on the other hand, uses FM radio waves and is limited to the Savannah area. According to Plaintiff, KIIS and KISS 104 target similar audiences. Although the breadth of XM Band customers is not highlighted in the record, I find the similarity in format, geography, and audience sufficient to weigh in favor of a likelihood of confusion.
The parties present little evidence regarding the similarity of advertising media. Plaintiff claims that the parties' advertising will "inevitably overlap." (Pl.'s Br. Temp. Restr. Order at 13.) This argument, however, seems stronger for Plaintiff's other mark, KISS FM. Neither party has produced any evidence regarding KIIS and KISS 104. Accordingly, this factor does not create a greater likelihood of confusion.
Finally, Plaintiff has also presented little evidence of Defendants' intent or actual confusion between KIIS and KISS 104. Plaintiff claims that Defendants possessed constructive knowledge of the KIIS mark as early as 1989 the year it was registered. But constructive knowledge fails to qualify as evidence of intent. Additionally, Plaintiff's evidence regarding actual intent is more relevant to the KISS FM mark than KIIS. These factors also present little support for a likelihood of confusion.
Overall, I find a likelihood of confusion between KIIS and KISS 104. KIIS is a strong mark that is similar to KISS 104. When hearing the KIIS and KISS 104 stations on their radios, listeners could assume the stations are operated by a common owner. Although there is no evidence of actual confusion or Defendants' intent, the XM Band is an infant technology spreading throughout the United States. The XM Band also can be received in Savannah, and radio listeners could potentially hear both KIIS and KISS 104 in the same market. Accordingly, a likelihood of confusion exists.
2. Infringement of the KISS FM Trademark by KISS 104
a. Likelihood of Confusion
The parties do not dispute the likelihood of confusion between Plaintiff's KISS FM mark and Defendants' KISS 104 mark. Although KISS FM is contestable, its arbitrary relationship to radio broadcasting makes it a strong mark. KISS FM and KISS 104 are also similar and share the same retail outlet and customers. Additionally, Plaintiff's argument about the inevitability of common advertising media has more force with the KISS FM mark. Plaintiff is using the KISS FM mark for its WAEV-97 FM station in Savannah. WAEV-97 FM, popularly known as 97 KISS FM, directly competes with Defendants' KISS 104 station. Finally, Defendants have submitted evidence of actual confusion between 97 KISS FM and KISS 104. (Nelson Dec. ¶ 2; Thomas Decl. ¶ 8.) A likelihood of confusion exists between 97 KISS FM and KISS 104.
b. Seniority
Defendants contend that KISS 104 has seniority over Plaintiff's KISS FM mark. According to the official registration, Plaintiff's predecessor began using the KISS FM mark as early as June 1996. (Compton Decl. Ex. 2.) KISS FM was officially registered on May 12, 1998. In October or November of 1998, Defendants began operating WSIS-104 FM in Savannah as KISS 104. Defendants argued at the hearing, however, that they were using a variation of the "KISS" moniker in Myrtle Beach, South Carolina well before *1380 Plaintiff's predecessor sought registration of the KISS FM mark. (Brown Decl. ¶ 2.)
Defendants maintain that their prior use of KISS in Myrtle Beach affords them seniority over Plaintiff's use of the KISS FM mark in Savannah. Normally, registration of a trademark is prima facie evidence of "the registrant's exclusive right to use the registered mark in commerce." 15 U.S.C. § 1057(b). Registration also confers "a right of priority, nationwide in effect, ... against any other person." § 1057(c). These rules are subject to certain exceptions, and a trademark may also be canceled. Coach House Rest. v. Coach and Six Rest., 934 F.2d 1551, 1557 (11th Cir.1991). A person can move to cancel a mark if he shows use of a similar mark prior to registration. Id. at 1559; see also § 1115(b)(5) (setting forth priority of use as a defense to an "incontestable" mark). Defendants' prior use of "KISS" in Myrtle Beach would seemingly prevent Plaintiff's use of the mark in Savannah. However, the rules governing cancellation must be read against the broader background of the Lanham Act.
Geography, and more specifically geographic marketsare a significant consideration in trademark disputes. As mentioned, registration gives a trademark holder nationwide rights in the mark. § 1057(b)-(c). Nevertheless, the holder does not automatically receive the right to enjoin every infringer from using similar marks.
`[I]f the use of the marks by the registrant and the unauthorized user are confined to two sufficiently geographically separate markets, with no likelihood that the registrant will expand his use into defendant's market, so that no public confusion is possible, then the registrant is not entitled to enjoin the junior user's use of the mark.'
American Foods, Inc. v. Golden Flake, Inc., 312 F.2d 619, 626 (5th Cir.1963) (quoting Dawn Donut Co. v. Hart's Food Stores, Inc., 267 F.2d 358 (2nd Cir.1959)). However, the registrant may move for an injunction after he enters the same geographic market and a likelihood of confusion exists. Id. at 627. This rule reflects the Lanham Act's recognition that trademark holders often expand their businesses beyond the original geographic market. John R. Thompson Co. v. Holloway, 366 F.2d 108, 115 (5th Cir.1966). Although these principles do not necessarily resolve Defendants' argument, they do provide insight.
Defendants may have seniority over Plaintiff in Myrtle Beach, but that seniority does not extend to Savannah. Only federal registrants enjoy nationwide priority. § 1057(c). Consequently, Defendants' prior use of "KISS" in Myrtle Beach did not create a nationwide right. With the exception of the XM Band, radio markets are generally limited by the scope of the broadcast area. Plaintiff presents no evidence that the Myrtle Beach market encompasses Savannah. Accordingly, Savannah is the relevant market.
A simple chronology of events demonstrates Plaintiff's seniority. Plaintiff's predecessor began operating a KISS station as early as June 1996. The predecessor filed for registration of the KISS FM mark in 1997, and registration was approved in May 1998. Defendants admit that they did not begin broadcasting in Savannah as KISS 104 until October or November of 1998. Consequently, Defendants' operations in the Savannah market were always subject to Plaintiff's entry and use of its registered KISS FM mark. When Plaintiff began operating WAEV-97 FM as 97 KISS FM on December 14, 2001, it was the first time Plaintiff could assert its rights in Savannah. American Foods, 312 F.2d at 626. The combination of likely confusion and Plaintiff's superior rights creates a substantial likelihood of Plaintiff's success on the merits.
*1381 B. A Substantial Threat of Irreparable Injury
Without a preliminary injunction, Plaintiff will face a significant threat of irreparable injury. In general, "a sufficiently strong showing of likelihood of confusion may by itself constitute a showing of ... a substantial threat of irreparable harm." E. Remy Martin & Co. v. Shaw-Ross Int'l Imports, 756 F.2d 1525, 1530 (11th Cir.1985). The likelihood of confusion between 97 KISS FM and KISS 104 is great. As discussed, a radio station generates its advertising revenue based upon periodic listener surveys. The listeners often identify a station based upon its name as opposed to its dial position or call letters. (Scott Decl. ¶ 13.) With two KISS stations operating in the same market, listeners have already experienced confusion. (Thomas Decl. ¶ 8.) This confusion will likely have a negative impact upon the ratings of Plaintiff's station. This development, in turn, will lower the rates Plaintiff can charge advertisers. At the hearing, Plaintiff's witnesses also testified that Plaintiff needs the time before the next ratings period to boost its audience and spread its name. The next ratings period falls approximately in March. Discovery, dispositive motions, and a possible trial will extend far beyond that date. Additionally, Plaintiff conducts nationwide advertising campaigns in support of the nearly forty stations which use the "KISS" name. Defendants' operations could undermine this scheme and Plaintiff's "KISS" brand name. (Compton Decl. ¶ 10.) For these reasons, I find that Plaintiff will suffer irreparable harm if Defendants' operations are not enjoined.
C. Whether Injury to Plaintiff Outweighs Injury to Defendants
Although Defendants would be harmed by a preliminary injunction in Plaintiff's favor, Plaintiff would experience greater injury. Plaintiff has developed a network of nearly forty KISS stations throughout the United States. (Compton Decl. ¶¶ 9-10.) Plaintiff promotes its KISS stations in national trade magazines, and it produces programming and announcements which are shared among its forty stations. (Id. ¶¶ 10, 12.) Plaintiff also has developed a concert series for its KISS network. (Id. ¶ 12.) In 2000, Plaintiff spent $9,000,000 promoting its KISS stations. (Id. ¶ 9.) Defendants' continued operation of an infringing KISS station will undermine this scheme.
More importantly, Plaintiff will also suffer significant injury in the Savannah market. Plaintiff decided to launch the KISS format in December because it coincided with the end of the autumn ratings period. (Hearing Trans. at 36.) According to a vice-president of Plaintiff's parent corporation, Plaintiff needs the time before the spring ratings period to boost the name recognition of 97 KISS FM. (Id. at 36-37.) Consequently, the present time is a critical period for Plaintiff. Another KISS station operating in the same market poses the likely possibility of diluting Plaintiff's ratings. Listeners often identify a station based upon its station name, not its call letters or dial position. (Scott Decl. ¶ 13.) Additionally, Defendants' witness admitted that sudden, unannounced format or name changes are common in the radio business. (Hearing Trans. 99-100.) Prohibiting Plaintiff from using its KISS trademark in Savannah will skew its station's ratings and could lead to a substantial loss of goodwill and revenue.
Defendants will be harmed, but the equities favor Plaintiff. Defendants' KISS 104 station enjoys significant name recognition and goodwill in Savannah. (Id. at 93.) It has operated this station as KISS 104 for over three years. In addition, *1382 Defendants have invested substantial sums of money in promoting KISS 104. Nevertheless, Defendants used the "KISS" name without authorization from Plaintiff. As summarized by a leading trademark authority, "[t]he federal registrant obtains this important right: the right to preempt all post-registration junior users in the nation once the registrant expands into a territory." J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 26:33 (4th ed.2001). In other words, the junior user is "living on borrowed time." Id. Well before this lawsuit was filed, Defendants had notice of Plaintiff's federally registered KISS marks. The Executive Vice President of Defendant Cumulus Media, Inc., John Dickey, admitted that he knew of these marks as early as the spring of 2000. (Hearing Trans. at 149.) Despite this knowledge, Defendants continued to operate WSIS-104 FM in Savannah as "KISS 104." A preliminary injunction will be damaging to Defendants, but they cannot claim an absence of warning. Finally, a preliminary injunction does not prevent Defendants from operating WSIS-104 FM under a different name. For these reasons, I find the harm to Plaintiff outweighs the harm to Defendants.
D. The Public Interest
The parties do not dispute the final element in the preliminary injunction standard. "[T]he public interest in preventing confusion around the market place is paramount." Coach House Rest., 934 F.2d at 1564. As indicated above, two radio stations using the "KISS" name has already caused confusion in the Savannah market. (Nelson Dec. ¶ 2; Thomas Decl. ¶ 8.) A preliminary injunction will serve the public interest by eliminating this disruption.
V. Relief
Plaintiff's Motion for a Preliminary Injunction (Doc. No. 6-2) is GRANTED, making its Motion for a Temporary Restraining Order (Doc. No. 6-1) MOOT. Defendants' Motion for a Preliminary Injunction (Doc. No. 13) is DENIED. As of the date this Order is filed, Defendants are enjoined from using "KISS" to identify or promote WSIS-104 FM in Savannah, Georgia. In addition, Defendants are enjoined from using "KISS" in the domain name of WSIS's website and email address. ORDER ENTERED at Augusta, Georgia, this 4th day of March, 2002.
NOTES
[1] It should be noted that "KIIS" is not merely a "moniker" chosen by Plaintiff for marketing purposes. KIIS is also the official federal government call sign for the radio station. In this case, Plaintiff's predecessor also chose to register "KIIS" as a trademark.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433617/
|
153 F. Supp. 2d 1361 (2001)
UNITED STATES OF AMERICA, Plaintiff,
v.
Jay Scott BALLINGER, Defendant.
Nos. 2:99-CR-26-WCO, 2:01-CR-32-WCO.
United States District Court, N.D. Georgia, Gainesville Division.
July 13, 2001.
*1362 Christopher Asher Wray, Assistant United States Attorney, Atlanta, Georgia, for plaintiff.
Paul Stephen Kish, Federal Defender Program, Atlanta, Georgia, for defendant.
ORDER
O'KELLEY, Senior District Judge.
The instant case is presently before the court for consideration of defendant's objections [27-1; 33-1] to the magistrate judge's report and recommendation of February 20, 2001 [26-1] and his report and recommendation of April 13, 2001 [32-1]. Defendant requests that this court grant his motion to dismiss the charges against him for lack of jurisdiction.
Background
As part of a widespread church arson campaign, defendant Jay Scott Ballinger, a self-proclaimed "missionary of Lucifer," deliberately set fire to five churches in the Northern and Middle Districts of Georgia between December 22, 1998 and January 16, 1999 [Stip. at 4]. Defendant's fires completely destroyed the Amazing Grace Baptist Church in Chatsworth, Georgia ("Amazing Grace"); the New Salem United Methodist Church in Commerce, Georgia ("New Salem"); and the fellowship hall of the Sardis Full Gospel Church in Monroe, Georgia ("Sardis Full Gospel") [31-1]. The New Salem fire resulted in the death of one volunteer firefighter and bodily injury to three other firefighters [31-1]. Defendant's two additional fires badly damaged the Johnson United Methodist Church in Watkinsville, Georgia ("Johnson United") and the fellowship hall of the *1363 Mountain View Baptist Church in Chatsworth, Georgia ("Mountain View") [31-1].
In connection with these arsons, defendant pleaded guilty on April 13, 2001 to four counts of violating 18 U.S.C. § 247(a)(1) and (b), which proscribe "intentionally defac[ing], damag[ing], or destroy[ing] any religious real property, because of the religious character of that property," provided "that the offense is in or affects interstate or foreign commerce." 18 U.S.C. § 247(a)(1) & (b) (2001) [30-1]. Further, defendant pleaded guilty to one count of violating § 247(a)(1), (b), (d)(1) and (d)(2) [30-1]. See 18 U.S .C. § 247(a)(1), (b), (d)(1)-(2) (2001). Sections 247(d)(1) and (d)(2) provide for enhanced penalties under the statute "if death results from [the defendant's] acts," 18 U.S.C. § 247(d)(1) (2001), or "if bodily injury results to any person ... and the violation is by means of fire...." 18 U.S.C. § 247(d)(2) (2001).[1]
Pursuant to Rule 11(a)(2) of the Federal Rules of Criminal Procedure, see Fed. R.Crim.P. 11(a)(2), however, defendant conditioned his April 13, 2001 guilty plea upon a judicial determination of the constitutionality of § 247, both on its face and as applied to him, under the Commerce Clause of the United States Constitution [31-1]. See U.S. Const. art. I, § 8, cl. 3. Defendant contends that although he committed these arsons, this court must dismiss the indictments against him because (A) there is an insufficient nexus between each of the burned churches and interstate commerce, such that defendant's offenses were not "in or affect[ing] interstate ... commerce," 18 U.S.C. § 247(b) [33-1]; or (B) section 247 regulates noneconomic intrastate criminal activity, rather than interstate commercial activity, and therefore the statute is an unconstitutional exercise of Congress' power "[t]o regulate Commerce ... among the several States...." U .S. Const. art. I., § 8, cl. 3 [27-1].
For purposes of addressing defendant's constitutional challenges to § 247, the parties stipulated to the following additional facts [31-1]: Prior to its complete destruction, Amazing Grace had purchased song books from Knoxville, Tennessee; pew coverings and hymnals from Cleveland, Tennessee; and fund-raising supplies (candy) from Montgomery, Alabama. Its 300-member congregation, some of whom resided in neighboring Tennessee, had recently purchased the church building and one acre of land from the North Georgia Conference of the United Methodist Church, headquartered in Evanston, Illinois. To finance this acquisition and repair storm damage, the congregation held yard sales, bake sales, and sold cookbooks. The congregation commissioned the printing of these cookbooks in Collierville, Tennessee. Amazing Grace also collected donations for the poor, some of which were provided to needy travelers in the form of food, household items, and hotel or motel lodging.
Mountain View, a 372-member congregation, had acquired Bible school materials from California, building supplies from Alabama and other out-of-state vendors, and plumbing and electrical supplies from Collierville, Tennessee. The church belonged to the 14-member Coosawattee Baptist Association and donated money to the Georgia Baptist Children's Home, which provided housing, clothing, food, and classroom instruction to foreign children *1364 intercepted by the U.S. Immigration and Naturalization Service, as well as children from other U.S. states. In 1998, Mountain View donated $1,536 in such funds. The church contributed an additional $1,536 to Georgia Baptist Hospital's indigent-care fund which, in part, provided medical services to children whom its doctors brought to Georgia from the Dominican Republic, Russia, and various South American countries. At the time of the fire, at least one of Mountain View's members was living out-of-state; this member was serving in the U.S. military but returned to the church when on leave. Mountain View also used a 15-passenger van shipped from Orlando, Florida to transport its youth choir and elderly women's groups.
Sardis Full Gospel, a 60-member congregation, regularly held week-long revivals, hosting visiting pastors from Canada, Florida, Mississippi, Ohio, and South Carolina. These out-of-state pastors would either stay with church members, in local hotels, or in the church itself, which was equipped with showers and sleeping facilities. Further, the congregation prepared and served meals to the visiting pastors in its fellowship hall, which defendant destroyed on December 25, 1998. The church had also acquired, via donation, a fax machine/copier from Panasonic, Inc., a donation that was specifically approved by the company's New Jersey headquarters.
Like Amazing Grace, New Salem was a member of the North Georgia Conference of the United Methodist Church, whose national headquarters were in Evanston, Illinois. Through this conference, New Salem, which had roughly 120 members at the time of its destruction, regularly sent money to the national office. The national office used these funds for a variety of purposes, including foreign and domestic missions. To subsidize its pastor's pension, New Salem also contributed, through the conference, to the Illinois-based pension administratorUnited Methodist Church's General Board of Pension and Health Benefits. The church property itself was held in trust for the General Conference of the United Methodist Church in Illinois.
Prior to its destruction, New Salem had acquired office supplies from Ottawa, Illinois; Bible school materials from Grandview, Missouri; banners from Nashville, Tennessee; church bulletin and newsletter-making materials from Canton, Ohio; and a steeple from Alabama. The congregation had several out-of-state members and several out-of-state recipients of its monthly newsletters. To finance youth group trips and outings, including trips to Orlando, Florida and Chattanooga, Tennessee, New Salem members held fund-raising barbeques, bake sales, and car washes and sold candy.
Johnson United, a 132-member congregation, also belonged to the North Georgia Conference of the Evanston, Illinois-based United Methodist Church, to which it regularly sent monetary apportionments. Like New Salem, Johnson United subsidized its pastor's pension plan and health insurance by contributing, through the conference, to the United Methodist Church's General Board of Pension and Health Benefits. The church property itself was held in trust for the General Conference of the United Methodist Church in Illinois, and several of Johnson United's members lived in other states, including Illinois, yet continued to attend services. Additionally, the congregation purchased Sunday school and Bible school materials from Nashville, Tennessee; Boy Scout and Girl Scout troops used the church for meetings; and the church also served as a voting precinct for citizens in its district.
All five of the damaged or destroyed churches received annual visits from the Nashville, Tennessee-based Gideon Bible *1365 Ministry, which conducted worship services and collected monetary donations used for placing Bibles throughout the United States and in 175 different countries. Further, all five of the churches purchased all of their propane gas from out-of-state suppliers, though local services delivered it. Mountain View was also insured by an out-of-state carrier, Church Mutual Insurance Company of Wisconsin.
To commit the aforementioned arsons, defendant and his girlfriend, Angela Wood ("Wood"), drove from Indiana to Georgia via interstate highways in defendant's Indiana-registered Ford Aerostar van. While en route to Georgia, defendant and Wood spent the night in hotels, purchased gasoline and other supplies, and intentionally set fire to three churches between December 20 and December 22, 1998; the Mt. Eden Christian Church in Scottsburg, Indiana; the Bolton Schoolhouse Missionary Baptist Church in Bonnieville, Kentucky; and the Little Hurricane Primitive Baptist Church in Manchester, Tennessee. Once in Georgia, where they stayed from December 22, 1998 until January 16, 1999, defendant and Wood purchased a plastic gasoline container from K-Mart using defendant's Indiana VISA card and, on separate occasions, set fire to each church at issue by breaking a ground-level or low-level window, pouring gasoline through the broken window, and then igniting it. From December 22 until December 26, 1998, defendant and Wood stayed overnight at the Best Inns of America in Dalton, Georgia. From December 26, 1998 until January 16, 1999, defendant and Wood stayed overnight at the Perimeter Inn in Athens, Georgia.
Following their Georgia arson spree, defendant and Wood drove back to Indiana via interstate highways, purchasing gasoline and other supplies, staying in hotels, and deliberately setting fire to three additional churches along the way: the Cedar Grove Baptist Church in Franklin, Kentucky; the Pleasant Hill Methodist Church in Elkton, Kentucky; and the New Harmony Baptist Church in Beaver Dam, Kentucky.
Discussion
Rule 11(a)(2) of the Federal Rules of Criminal Procedure provides:
Conditional Pleas. With the approval of the court and the consent of the government, a defendant may enter a conditional plea of guilty ... reserving in writing the right, on appeal from the judgment, to review of the adverse determination of any specified pro-trial motion. A defendant who prevails on appeal shall be allowed to withdraw his plea.
Fed.R.Crim.P. 11(a)(2). Upon entering his conditional guilty plea before the magistrate judge on April 13, 2001, defendant obtained the express written consent of the government, pursuant to Rule 11(a)(2) [31-1]. See also United States v. Pierre, 120 F.3d 1153, 1155-56 (11th Cir.1997) (discussing the requirements of a conditional plea pursuant to Rule 11(a)(2)). Further, defendant and the government set forth, in writing, the specific issue upon which defendant conditioned his plea: "the constitutionality of 18 U.S.C. § 247 under the Commerce Clause ... both on its face and as applied to him based on the stipulated factual basis attached [t]hereto and made a part of the Plea Agreement" [Guilty Plea & Plea Agmt. at 2]. Defendant and the government also preserved their right to appeal the determination of this issue, not only before a panel of the United States Court of Appeals for the Eleventh Circuit but also before that court sitting en banc, and on a petition for certiorari to the Supreme Court of the United States [31-1]. Having thus established defendant's factual guilt, this court need only address defendant's contentions as to the constitutional validity of § 247.
*1366 A. Defendant's As-Applied Challenge to § 247
Defendant contends that under Jones v. United States, 529 U.S. 848, 120 S. Ct. 1904, 146 L. Ed. 2d 902 (2000), and its progeny, see, e.g., United States v. Odom, 252 F.3d 1289 (11th Cir.2001); United States v. Johnson, 246 F.3d 749 (5th Cir.2001); United States v. Ramey, 217 F.3d 842, 2000 WL 790959 (4th Cir. June 20, 2000); United States v. Rea, 223 F.3d 741 (8th Cir.2000), this prosecution cannot withstand constitutional scrutiny because each of the churches at issue lacks a sufficient jurisdictional nexus to interstate commerce [33-1]. In other words, defendant argues that the federal church arson statute, 18 U.S.C. § 247, does not reach his conduct because the crimes he committed were not "in or affect[ing] interstate ... commerce." 18 U.S.C. § 247(b).
Yet, defendant relies upon cases construing the jurisdictional element of an entirely different statute: the general federal arson statute, 18 U.S.C. § 844(i). See Jones, 529 U.S. at 850, 120 S. Ct. 1904; Odom, 252 F.3d 1289, 1291; Johnson, 246 F.3d at 751-52; Ramey, 2000 WL 790959, *1; Rea, 223 F.3d at 743. In a § 844(i) prosecution, the United States cannot assert jurisdiction without proving that the property at issue was either "used in interstate ... commerce;" or "used ... in any activity affecting" interstate commerce. 18 U.S.C. § 844(i) (2001) (emphases added). It is true, therefore, that a church's "purchase and receipt of goods or services necessary for or common to the maintenance of any building, such as gas, electricity, insurance, or mortgage loans," do not furnish the requisite connection to interstate commerce to meet the "use" element of § 844(i). Odom, 252 F.3d 1289, 1291 (citing Jones, 529 U.S. at 856-57, 120 S. Ct. 1904). Nor can a church's receipt of donations from out-of-state benefactors, purchase of a nominal amount of Bibles and prayer materials from out-of-state sources, or membership in an intrastate church organization that pays dues to a national organization, such as the National Baptist Convention, satisfy the requirement under § 844(i) that the church be actively engaged in interstate commerce. See id. at 1293 ("These `connections' to interstate commerce are too passive, too minimal and too indirect to substantially affect interstate commerce.").
By contrast, § 247, as amended by The Church Arson Prevention Act of 1996, Pub.L. 104-155 (1996), contains no such "active use" requirement; it confers federal jurisdiction on a mere showing by the government that "the offense is in or affects interstate or foreign commerce." 18 U.S.C. § 247(b) (emphases added). The Supreme Court observed in Jones that this "affecting commerce" language, "when unqualified, signal[s] Congress' intent to invoke its full authority under the Commerce Clause." 529 U.S. at 854, 120 S. Ct. 1904. Similarly, the Tenth Circuit, the only federal appeals court to have addressed the jurisdictional scope of § 247, recently opined that the 1996 amendments to § 247, see The Church Arson Prevention Act § 3(3), were "intended by Congress `to exercise the fullest reach of the Federal commerce power' by eliminating previously existing jurisdictional obstacles, including a minimum dollar amount of loss, and broadening the reach of the statute." United States v. Grassie, 237 F.3d 1199, 1209 (10th Cir.2001) (quoting 142 Cong. Rec. S7908-04 (daily ed. July 16, 1996) (Joint Statement of Floor Managers Regarding H.R.3525, The Church Arson Prevention Act of 1996)).[2]
*1367 Applying this reasoning, the Tenth Circuit rejected a defendant's constitutional attack on his § 247 conviction even though, at trial, the district judge instructed the jury that only a de minimis effect on interstate commerce need be proved to satisfy the jurisdictional element of the offense.[3]See id. at 1208-09. Grassie, like the defendant in the instant case, had unsuccessfully argued that Jones mandated a reversal of his conviction because the churches he damaged could not satisfy the "active use" requirement under § 844(i). See id. This court need not decide whether a de minimis effect rule is appropriate for § 247 convictions. Nevertheless, it is important to note that the 1996 amendments to § 247 were an explicit attempt by Congress to expand federal jurisdiction over church arsons. See id. at 1209. Further, in requiring that the property at issue be actively engaged in interstate commerce to satisfy the jurisdictional element of § 844(i), the Jones court observed that "Congress did not define the crime described in § 844(i) as the explosion of a building whose damage or destruction might affect interstate commerce...." 529 U.S. at 854, 120 S. Ct. 1904. See also Rea, 223 F.3d at 743 ("While the destruction of a building might affect interstate commerce, the building itself must have been used in commerce ... to meet the requirements of § 844(i)."). Here, however, Congress has defined such a crime; the jurisdictional element of § 247 is satisfied where "the offense" (e.g., the destruction of religious property) "is in or affects" (e.g., occurs in or impacts) interstate commerce. 18 U.S.C. § 247(b). The Supreme Court thus appears to have envisioned in Jones the very scenario presented in this case and approved, albeit inferentially, a nominal jurisdictional nexus requirement under § 247. See 529 U.S. at 854, 120 S. Ct. 1904. Lastly, the Eleventh Circuit approved similar jurisdictional language in the face of a post-Lopez constitutional challenge to 18 U.S.C. § 922(g), which makes it a crime for any convicted felon to "possess [any firearm or ammunition] in or affecting commerce." United States v. McAllister, 77 F.3d 387, 389-90 (11th Cir. 1996), cert. denied, 519 U.S. 905, 117 S. Ct. 262, 136 L. Ed. 2d 187 (1996) (emphases added) (citing 18 U.S.C. § 922(g)).
The stipulated factual basis attached to defendant's plea agreement [31-1] convinces this court that each of the five Georgia churches defendant burned were sufficiently involved in interstate commerce to satisfy the jurisdictional threshold of § 247(b). Amazing Grace, New Salem, Johnson United, and Mountain View had all purchased religious materials, not simply generic maintenance supplies, electricity, propane, or insurance coverage, from a variety of out-of-state sources [31-1]. This distinction is critical because the purchase, delivery, and dissemination of religious and non-religious literature, religious educational supplies, and prayer materials is precisely the sort of commerce in which churches engage. See Odom, 252 F.3d 1289, 1294. Further, all five of the churches defendant burned either regularly hosted out-of-state guests, such as visiting pastors, or held services that were regularly attended by one or more out-of-state members [31-1]. This fact is equally important because at least one federal court has opined that attendance by out-of-state members is sufficient to satisfy the *1368 higher jurisdictional threshold of § 844(i). See United States v. Tush, 151 F. Supp. 2d 1246, 1252 (D.Kan. 2001) ("Very few out-of-state guests may actually attend services at the ... church, but the fact that the church has some out-of-state guests shows that it is actively employed or used in an activity affecting interstate commerce."). Amazing Grace, New Salem, and Johnson United all belonged to an intrastate church organization that contributed financially to the United Methodist Church, a large national organization that spreads charitable and religious services throughout the world [31-1]. Moreover, the New Salem and Johnson United properties were held in trust for the Illinois-based General Conference of the United Methodist Church, from whom Amazing Grace had recently purchased its property outright [31-1]. Johnson United also served as a voting precinct for local and national elections,[4] Amazing Grace commissioned the printing of fund-raising cookbooks by an out-of-state press, and New Salem raised funds in order to send youth groups on trips to Florida and Tennessee [31-1]. Lastly, Mountain View contributed financially to two intrastate organizations that provided medical assistance, food, and housing to American and foreign children intercepted and/or retrieved in interstate commerce, and all five of the burned churches contributed to the Gideon Bible Ministry, a national organization whose donations help spread Bibles throughout the world [31-1]. This court finds that the stipulated factual basis furnishes a sufficient nexus between each of the burned churches and interstate commerce to satisfy the jurisdictional element of § 247.
B. Defendant's Facial Challenge to § 247
The Constitution confers upon Congress the power "[t]o regulate Commerce with foreign Nations, and among the several States...." U.S. Const. art. I. § 8, cl. 3. Nearly two centuries ago, Chief Justice Marshall opined that "[c]ommerce, undoubtedly, is traffic, but it is something more: it is intercourse. It describes the commercial intercourse between nations, and parts of nations...." Gibbons v. Ogden, 22 U.S. (9 Wheat) 1, 189-90, 6 L. Ed. 23 (1824). In United States v. Lopez, 514 U.S. 549, 115 S. Ct. 1624, 131 L. Ed. 2d 626 (1995), the Supreme Court identified three broad categories of activity that Congress may regulate and protect pursuant to its commerce power: (1) "the use of the channels of interstate commerce;" (2) "the instrumentalities of interstate commerce, or persons or things in interstate commerce, even though the threat may come only from intrastate activities;" and (3) "those activities that substantially affect interstate commerce." Id. at 558-59, 115 S. Ct. 1624. Lopez and its progeny have focused primarily on the "substantially affect[ing] interstate commerce" prong of the newly delineated analysis. See e.g., id.; Jones, 529 U.S. at 856-57, 120 S. Ct. 1904 (2000); United States v. Morrison, 529 U.S. 598, 609-10, 120 S. Ct. 1740, 146 L. Ed. 2d 658 (2000).
For example, the Lopez court invalidated the Gun-Free School Zones Act of 1990, 18 U.S.C. § 922(q)(1)(A), which criminalized the possession of a firearm within 1,000 feet of a school, on grounds that "[t]he possession of a gun in a local school zone is in no sense an economic activity *1369 that might, through repetition elsewhere, substantially effect any sort of interstate commerce." 514 U.S. at 567, 115 S. Ct. 1624. Likewise, in United States v. Morrison, 529 U.S. 598, 120 S. Ct. 1740, 146 L. Ed. 2d 658 (2000), the Supreme Court ruled that Congress exceeded its authority under the commerce power in enacting the Violence Against Women Act of 1994, 42 U.S.C. § 13981, which provided a federal civil remedy for victims of gender-motivated violence. See id. at 619, 120 S. Ct. 1740. The Morrison court reasoned: "Where economic activity substantially affects interstate commerce, legislation regulating that activity will be sustained," id. at 610, 120 S. Ct. 1740 (quoting Lopez, 514 U.S. at 560, 115 S. Ct. 1624), but "[g]ender-motivated crimes of violence are not, in any sense of the phrase, economic activity." Id. at 613, 115 S. Ct. 1624. In both Lopez and Morrison, the Supreme Court was forced to evaluate the statutes at issue under the "substantially affect[ing] interstate commerce" rationale, because neither statute regulated a channel of interstate commerce, nor did either purport to protect an instrumentality of interstate commerce, or persons or things in interstate commerce. See Morrison, 529 U.S. at 609, 120 S. Ct. 1740; Lopez, 514 U.S. at 559, 115 S. Ct. 1624.
For the proposition that the Commerce Clause empowers Congress to protect the instrumentalities of interstate commerce even from exclusively intrastate threats, the Lopez court cited Perez v. United States, 402 U.S. 146, 91 S. Ct. 1357, 28 L. Ed. 2d 686 (1971) (aircraft), Houston, East & West Texas Railway Company v. United States, 234 U.S. 342, 34 S. Ct. 833, 58 L. Ed. 1341 (1914) (railroads), and Southern Railway Company v. United States, 222 U.S. 20, 32 S. Ct. 2, 56 L. Ed. 72 (1911) (railway vehicles/boxcars). See Lopez, 514 U.S. at 558, 115 S. Ct. 1624. Further, federal courts have sustained Commerce Clause legislation protecting or regulating instrumentalities such as telephones, see United States v. Gilbert, 181 F.3d 152 (1st Cir.1999); automobiles, see United States v. Cobb, 144 F.3d 319 (4th Cir.1998); vessels, see Marchese v. United States, 126 F.2d 671 (5th Cir.1942); cellular telephone cloning equipment and identification numbers, see United States v. Clayton, 108 F.3d 1114 (9th Cir.1997); federally-insured banks, see United States v. Harris, 108 F.3d 1107 (9th Cir.1997); interstate roads, see Alstate Const. Co. v. Durkin, 345 U.S. 13, 73 S. Ct. 565, 97 L. Ed. 745 (1953); and toll roads and drawbridges connecting interstate roads, see Overstreet v. North Shore Corp., 318 U.S. 125, 63 S. Ct. 494, 87 L. Ed. 656 (1943). Moreover, in United States v. Bishop, 66 F.3d 569 (3d Cir.1995), the Third Circuit observed:
The Supreme Court has made clear that airplanes, railroads, highways, and bridges constitute instrumentalities of interstate commerce which Congress can regulate under the Commerce Clause [citations omitted]. Instrumentalities differ from other objects that affect interstate commerce because they are used as a means of transporting goods and people across state lines. Trains and planes are inherently mobile; highways and bridges, though static, are critical to the movement of automobiles.
Id. at 588. This court is not bound by decisions of the Third Circuit, yet its reasoning is persuasive. Given this authority, and looking to the plain meaning of "instrumentality" ("something by which an end is achieved: means ... something that serves as an intermediary or agent through which one or more functions of a controlling force are carried out," Webster's Third New International Dictionary 1172 (1981)), § 247 may fairly be characterized as a statute aimed at protecting the instrumentalities of interstate commerce (churches and synagogues), from both interstate *1370 and intrastate threats (arson). See Lopez, 514 U.S. at 558, 115 S. Ct. 1624.
Congress amended § 247 to expand its Commerce Clause jurisdiction over attacks on places of religious worship "[i]n the face of a virtual national epidemic of arson and other attacks on churches and synagogues." Grassie, 237 F.3d at 1209 (citing The Church Arson Prevention Act of 1996, Pub.L. 104-155 (1996)). Congress found churches and synagogues to be involved in interstate commerce in a variety of ways, "including social services, educational and religious activities, the purchase and distribution of goods and services, civil participation, and the collection and distribution of funds for these and other activities across state lines." Id. (citing 142 Cong.Rec. S7908-04 at *S7909 (daily ed. July 16, 1996) (Joint Statement of Floor Managers Regarding H.R.3525, The Church Arson Prevention Act of 1996)). Further, the Eleventh Circuit recently observed that although "[c]hurches are not commonly considered a business enterprise ... churches can and do engage in commerce. The `business' or `commerce' of a church involves the solicitation and receipt of donations, and the provision of spiritual, social, community, educational (religious or non-religious) and other charitable services." United States v. Odom, 252 F.3d 1289, 1291 (11th Cir.2001); see also Grassie, 237 F.3d at 1204 ("there was from these church buildings a constant flow of information, money, travel, and purchase and delivery of goods back and forth across state lines."). Finally, the non-profit nature of church "business" is of no consequence; the Supreme Court has declared that the Commerce Clause applies equally to charitable and non-profit entities which "are major participants in interstate markets for goods and services, use of interstate communications and transportation, raising and distributing revenues ... interstate, and so on." Camps Newfound/Owatonna, Inc. v. Town of Harrison, 520 U.S. 564, 583-86, 117 S. Ct. 1590, 137 L. Ed. 2d 852 (1997); see also Odom, 252 F.3d 1289, 1291 ("The question of whether a building is used in commerce or affects commerce does not turn merely on whether the activity is engaged in for a profit.").
Churches and synagogues may be regarded as "indispensable to the interstate movement of persons and goods," Bishop, 66 F.3d at 588, as well as information, money, religious and non-religious literature, and a plethora of social services and civic activities. See Odom, 252 F.3d 1289, 1294. Moreover, through such activities, places of worship ultimately serve as "intermediar[ies] or agent[s] through which one or more functions of a controlling force are carried out." Webster's Third New International Dictionary 1172 (1981). Unlike planes, trains, and automobiles, churches and synagogues are not "inherently mobile." Bishop, 66 F.3d at 588. And unlike highways and bridges, churches and synagogues are not "critical to the movement of automobiles." Id. Yet churches and synagogues are critical to the movement of clergy, congregants, goods, and services across state lines. On its face, therefore, § 247 may be sustained as a valid exercise of Congress' power to protect the instrumentalities of interstate commerce. As such, this court need not address whether the destruction of religious property, the activity regulated by 247, substantially affects interstate commerce. See, e.g., United States v. Owens, 159 F.3d 221, 226 (6th Cir.1998), cert. denied, 528 U.S. 817, 120 S. Ct. 56, 145 L. Ed. 2d 49 (1999) ("Where a statute regulates the `instrumentalities of interstate commerce,' the law need not address conduct having a substantial effect on interstate commerce in order to survive a constitutional challenge." (citing Lopez, 514 U.S. at 558, 115 S. Ct. 1624)).
*1371 C. Defendant's Arson Spree Occurred in Interstate Commerce
Section 247 survives defendant's constitutional attack because the churches at issue in this case, and houses of worship in general, furnish a sufficient connection to interstate commerce to justify protective federal legislation under the Commerce Clause of the United States Constitution. See U.S. Const. art. I, § 8, cl. 3. Disregarding the entire prior discussion, however, this case could stand alone on the mere fact that defendant's conduct may in itself be regarded as occurring in or affecting interstate commerce. See 18 U.S.C. § 247(b). As Congress explained in 1996, the jurisdictional element of § 247 will be satisfied "where in committing, planning, or preparing to commit the offense, the defendant either travels in interstate ... commerce, or uses ... any facility or instrumentality" of interstate commerce. 142 Cong.Rec. S7908-04 at *S7909 (daily ed. July 16, 1996) (Joint Statement of Floor Managers Regarding H.R.3525, The Church Arson Prevention Act of 1996). In the instant case, defendant traveled through Indiana, Kentucky, and Tennessee on his way to Georgia and then back through Kentucky thereafter [31-1]. Defendant utilized interstate highways, gas stations, hotels, and supplies and made various purchases in interstate commerce to prepare for and accomplish a multi-state arson campaign that ultimately targeted eleven churches in four different states [31-1]. Although defendant's crimes in Indiana, Kentucky, and Tennessee are not presently before this court, the stipulated factual basis illustrates that these transactionally-related offenses constitute part of a larger campaign which may fairly be characterized as an "offense ... in or affect[ing] interstate or foreign commerce." 18 U.S.C. § 247(b). This court is satisfied that on these grounds alone, defendant's § 247 prosecution is constitutionally permissible.
Conclusion
Having determined that 18 U.S.C. § 247 is a valid exercise of Congress' power to regulate interstate commerce, as applied to the facts of this case and on its face, the court hereby REJECTS defendant's objections to the magistrate judge's report and recommendation of February 21, 2001 and his report and recommendation of April 13, 2001. This court hereby APPROVES and ADOPTS each report and recommendation and directs that this case be scheduled for sentencing on August 17, 2001.
NOTES
[1] The counts to which defendant pleaded guilty appeared in two separate indictments: Indictment No. 2:99-CR-026 [1-1] and Indictment No. 2:01-CR-032 [1-1] (Indictment No. 3-99-CR-10, transferred from the United States District Court for the Middle District of Georgia pursuant to Rule 20 of the Federal Rules of Criminal Procedure. See Fed. R.Crim.P. 20).
[2] The prior version of § 247 required that "(1) in committing the offense, the defendant travels in interstate or foreign commerce, or uses a facility or instrumentality of interstate or foreign commerce in interstate or foreign commerce; and (2) ... the loss resulting from the defacement, damage, or destruction is more than $10,000." 18 U.S.C. § 247 (1988), as amended by The Church Arson Prevention Act § 3(3) (emphasis added).
[3] The district court instructed the jury, in relevant part: "If you decide that there would be any effect at all on interstate commerce, then that is enough to satisfy this element." Id. at 1206 n. 5.
[4] Although the stipulated factual basis does not specifically indicate whether Johnson United ever served as a voting precinct for federal, rather than local, elections [Stip. at 3], defendant does not appear to have contested the government's assertion, in a May 4, 2001 brief, that the church served as a voting precinct for "nationwide elections" [Gov't. Resp. to Def.'s Objections to Mag. R & R to Accept Def.'s Guilty Plea at 10].
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433621/
|
189 F. Supp. 2d 635 (2002)
Karen PRIGMORE, Plaintiff,
v.
HOUSTON PIZZA VENTURES, INC. d/b/a PAPA JOHN'S PIZZA Defendant.
No. G-01-180.
United States District Court, S.D. Texas, Houston Division. Galveston Division.
March 7, 2002.
*636 *637 *638 David Alan Slaughter, Attorney at Law, Houston, for Karen Prigmore, plaintiffs.
David Anthony Scott, Jackson Lewis et al, Dallas, for Houston Pizza Ventures, Inc. dba Papa John's Pizza, defendants.
ORDER GRANTING DEFENDANT HOUSTON PIZZA VENTURES, INC.'S MOTION FOR SUMMARY JUDGMENT
KENT, District Judge.
Plaintiff Karen Prigmore ("Prigmore") brings this lawsuit against her former employer, Defendant Houston Pizza Ventures, Inc. ("Houston Pizza") seeking damages for sexual harassment pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and the Texas Commission on Human Rights Act, Tex. Labor Code § 21.001 et seq.,[1] and for intentional infliction of emotional distress pursuant to Texas common law. Now before the Court is Houston Pizza's Motion for Summary Judgment, filed February 11, 2002. After carefully reviewing Houston Pizza's Motion, Prigmore's Response to that Motion, the summary judgment evidence and the applicable law, the Court finds Houston Pizza's Motion for Summary Judgment meritorious and consequently, the Motion is hereby GRANTED.
I.
Houston Pizza, the owner and operator of multiple Papa John's Pizza franchises in the greater Houston area, initially hired Prigmore in January 1999 as a delivery driver in its Galveston, Texas store. Prigmore was granted a promotion to assistant manager three months later and worked in that capacity at the Galveston store until October of 1999, at which time she requested a transfer to Houston Pizza's Texas City, Texas location. Houston Pizza complied with her request and Prigmore transferred to the Texas City Papa John's Pizza. Prigmore's salary and job responsibilities were identical before and after the transfer.
While working on November 13, 1999, Prigmore set out to deliver five pizzas. Prigmore delivered only one of these pizzas, however, and returned the other four pizzas as "bad ordered." At least one customer called to complain about not receiving his pizza that evening. Consequently, Prigmore received a written counseling the next day from Mike Rios ("Rios"), the Texas City store manager. In that counseling, Prigmore was cautioned to pay more attention to her job responsibilities and advised that any further *639 problems could lead to disciplinary action, up to and including her termination. Prigmore signed the consultation memorandum and understood the nature of the action that had been taken against her.
On November 21, 1999, Prigmore was responsible for closing the Texas City store. At closing time that evening, Prigmore violated company policy by allowing Stephen Flowers, a delivery driver, to secure the store's bank bag in the safe.[2] The next day, Rios discovered that $100.00 was missing from the bank bag. When he confronted Prigmore with this discovery, Prigmore admitted to violating Houston Pizza's cash handling procedures. Consequently, Rios terminated Prigmore's employment. In Prigmore's termination paperwork, Rios provided the following explanation for his action: "November 22, the store was $100 short from night before. Subsequently, Karen was fired on 11/22 because of shortage." In response, Prigmore wrote that "I didn't steal that money" and "I honestly believe Stephen took [the] money," but she nevertheless agreed to pay back $100.00 to Houston Pizza "to please this company" and because she "enjoyed [her] job" and "loved working here." In her deposition, Prigmore candidly admitted that Mike Rios terminated her for "wrongfully handling cash."
Four months after her termination, Prigmore filed the instant suit against Houston Pizza. Prigmore belatedly alleges that while she was working for Houston Pizza, she was sexually harassed, subjected to a hostile work environment and terminated for pretextual reasons. Prigmore bases her harassment claim on comments and conduct allegedly directed towards her by Steve Buchanan, a Houston Pizza area manager. According to Prigmore, Buchanan (1) told her about a $500.00 per night hotel room in Houston five or six times; (2) commented on her husband's infidelity and asked if he was "treating her OK"; (3) asked if Prigmore "wanted to pay her husband back" and stated that "I won't tell, if you don't tell"; (4) remarked that Prigmore looked nice with shorts on; (5) tugged on the hemlines of her clothing twice; and (6) asked her to have a drink with him "a couple of times"; and (7) called Prigmore "babe," "gorgeous," "beautiful" and "sweetie." Prigmore also alleges that Buchanan called her numerous times, followed her "around like a puppy" and made her clean the baseboards of the store while in his presence.[3]
*640 II.
Summary judgment is appropriate if no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2552-53, 91 L. Ed. 2d 265 (1986). When one party moves for summary judgment, the nonmoving party must set forth specific facts showing that there is a genuine issue for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). Issues of material fact are "genuine" only if they require resolution by a trier of fact. See id. at 248, 106 S. Ct. at 2510. The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment. Only disputes over facts that might affect the outcome of the lawsuit under governing law will preclude the entry of summary judgment. See id. at 247-48, 106 S. Ct. at 2510. Nevertheless, if the evidence is such that a reasonable factfinder could find in favor of the nonmoving party, summary judgment should not be granted. See id.; see also Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538 (1986); Dixon v. State Farm Fire & Cas. Co., 799 F. Supp. 691 (S.D.Tex. 1992) (noting that summary judgment is inappropriate if the evidence could lead to different factual findings and conclusions). Determining credibility, weighing evidence, and drawing reasonable inferences are left to the trier of fact. See Anderson, 477 U.S. at 255, 106 S. Ct. at 2513.
III.
In two companion cases, Burlington Indus., Inc. v. Ellerth, 524 U.S. 742, 118 S. Ct. 2257, 141 L. Ed. 2d 633 (1998) and Faragher v. City of Boca Raton, 524 U.S. 775, 118 S. Ct. 2275, 141 L. Ed. 2d 662 (1998), the United States Supreme Court articulated a clear framework for trial courts to follow when analyzing supervisor sexual harassment lawsuits. At the first step of the Ellerth/Faragher analysis, the Court must determine whether the complaining employee suffered a "tangible employment action." See Casiano v. AT&T Corp., 213 F.3d 278, 283 (5th Cir.2000) ("Determining whether the complaining employee has suffered a tangible employment action is the indispensable first step in every supervisor sexual harassment/vicarious liability case under Title VII"). The Supreme Court defines a tangible employment action as "an official act of the enterprise, a company act," such as "hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits." Ellerth, 524 U.S. at 761, 118 S. Ct. at 2268. If the employee has suffered such an action, the suit can be analyzed as a "quid pro quo" case. See Casiano, 213 F.3d at 283. On the other hand, if the employee did not suffer a tangible employment action on account of the alleged harassment, the Court will analyze the suit as a "hostile environment" case, and an alternative branch of the Ellerth/Faragher analysis applies.
Prigmore's Quid Pro Quo Claim
In this case, Prigmore's termination undoubtably qualifies as a "tangible employment action." Thus, the Court will initially analyze the instant suit under the "quid pro quo" branch of the Ellerth/Faragher framework. The second step of the requisite "quid pro quo" analysis necessitates that the Court decide whether the *641 tangible employment action suffered by the employee resulted from the employee's acceptance or rejection of the alleged sexual harassment by the supervisor. See Ellerth, 524 U.S. at 753-54, 118 S. Ct. at 2265; Casiano, 213 F.3d at 283. If the employee cannot show such a nexus, the employer is not subject to Title VII liability. On the other hand, "proof that a tangible employment action did result from the employee's acceptance or rejection of sexual harassment by [her] supervisor makes the employer liable, ipso facto; no affirmative defense will be heard." Casiano, 213 F.3d at 284; see also Ellerth, 524 U.S. at 753, 761-62, 118 S. Ct. at 2269 (explaining that a tangible employment action taken by the supervisor becomes for Title VII purposes the act of the employer); Faragher, 524 U.S. at 804-05, 118 S. Ct. at 2291.
Prigmore concedes that Rios terminated her employment with Houston Pizza because she violated the company cash handling policy. Put another way, the undisputed facts conclusively prove that Prigmore was fired for one reason alone-the $100.00 that was missing from Houston Pizza's bank bag. Absolutely nothing in Prigmore's evidence or the inferences drawn from it support a conclusion that she was terminated because she rejected (or accepted) Buchanan's alleged advances. Moreover, there is absolutely no evidence suggesting that unwelcome sexual harassment was present in this case to begin with.[4] As such, the Court concludes that Prigmore's "quid pro quo" sexual harassment claim must fail, as a matter of law, because she has not set forth competent summary judgment evidence to create a genuine issue of material fact that she was subject to sexual harassment that culminated in a tangible employment action. Accordingly, Houston Pizza's Motion for Summary Judgment on Prigmore's "quid pro quo" sexual harassment claim is hereby GRANTED.
Prigmore's Hostile Environment Claim
Having determined that the absence of a tangible employment action with a nexus to Buchanan's alleged conduct prevents further "quid pro quo" analysis of Prigmore's claims, the Court will now turn to the "hostile environment" branch of the Ellerth/Faragher framework. An employee *642 seeking to establish a hostile environment claim involving harassment by a supervisor must establish four elements: (1) that the employee belongs to a protected class; (2) that the employee was subject to unwelcome sexual harassment; (3) that the harassment was based on sex; and (4) that the harassment affected a "term, condition, or privilege" of employment. See Pfeil, 90 F.Supp.2d at 748. If the employee fails to establish all four elements, Title VII does not impose vicarious liability on the employer; but if the employee makes a successful showing, vicarious liability attaches-unless the employer successfully establishes both prongs of the Ellerth/Faragher affirmative defense. See Casiano, 213 F.3d at 284. To prevail on this affirmative defense, the employer must prove that (1) it exercised reasonable care to prevent and correct promptly any such sexual harassment, and (2) the employee unreasonably failed to take advantage of any preventative or corrective opportunities provided by the employer or to avoid harm otherwise. See Faragher, 524 U.S. at 807, 118 S. Ct. at 2293; Casiano, 213 F.3d at 284.
To establish that the harassment affected a "term, condition or privilege" of her employment, Prigmore must show that the discriminatory conduct was severe or pervasive enough to create an objectively hostile or abusive working environment. See Shepherd v. Comptroller of Pub. Accounts of State of Texas, 168 F.3d 871, 873 (5th Cir.1999); Butler v. Ysleta Indep. Sch. Dist., 161 F.3d 263, 269 (5th Cir.1998). Courts determine whether a working environment is sufficiently abusive to give rise to a Title VII claim by reviewing "all of the relevant circumstances, including the frequency of the conduct, its severity, whether it is physically threatening or humiliating, or a mere offensive utterance, and whether it unreasonably interferes with the employee's work performance." Pfeil, 90 F.Supp.2d at 749 (citing Butler, 161 F.3d at 269). Incidental or occasional sexual comments, discourtesy, rudeness, or isolated incidents (unless extremely serious) are not discriminatory changes in the terms and conditions of a worker's employment. Id.
Furthermore, even if Prigmore establishes the existence of a hostile environment, she must also establish that the abusive or hostile environment altered the terms and conditions of her employment. See Nash v. Electrospace Sys., Inc., 9 F.3d 401, 403 (5th Cir.1993). Central to this inquiry is whether the Buchanan's alleged actions undermined Prigmore's workplace competence, discouraged her from remaining in her job or kept her from advancing in her career. See Pfeil, 90 F.Supp.2d at 749; Shepherd, 168 F.3d at 874; Butler, 161 F.3d at 270. Title VII is intended only tp prohibit and prevent conduct "that is so severe and pervasive that it destroys a protected class member's opportunity to succeed in the workplace." Shepherd, 168 F.3d at 874. Equality, the overall goal of Title VII, "is not served if a claim can be maintained solely based on conduct that wounds or offends, but does not hinder an employee's performance." Pfeil, 90 F.Supp.2d at 749 (citing Weller v. Citation Oil & Gas Corp., 84 F.3d 191, 194 (5th Cir.1996)).
After reviewing the summary judgment evidence submitted in the instant action, the Court concludes that Prigmore's hostile environment claim necessarily fails because she has not created a genuine issue of material fact regarding the issue of whether the alleged harassment was severe or pervasive enough to alter the terms and conditions of her employment. As previously stated, some of Buchanan's alleged comments and conduct could be considered improper and in extremely poor taste; however, at best, these remarks and actions offended Prigmore and caused her transitory embarrassment. *643 Hurt feelings do not affect the conditions of employment in a manner that gives rise to Title VII liability. See Pfeil, 90 F.Supp.2d at 750. Rather, the challenged conduct must be both objectively reasonable (meaning that a reasonable person would find the conduct hostile and abusive) and subjectively offensive (meaning that the victim perceived the conduct to be hostile or abusive). See id. at 749; Shepherd, 168 F.3d at 874. Moreover, as noted above, Buchanan's alleged conduct was not sexual harassment. As previously discussed, Prigmore does not allege that Buchanan directly propositioned her for sex; threatened her in any way that implied her future employment was conditioned on her welcoming his sexual advances; touched or fondled her; or commented on her sex life (or his own sex life).[5] Moreover, none of his alleged comments insinuated that Prigmore was unable to perform her assigned duties on account of her gender. Succinctly put, absolutely nothing that Buchanan allegedly said or did was so extreme or severe that it prevented Prigmore from succeeding in the workplace or destroyed her opportunity for advancement at Houston Pizza. See Weller, 84 F.3d at 194. Indeed, Prigmore was promoted and transferred to her satisfaction, and even upon termination expressed that she "loved" her job. Furthermore, as pointed out in note three above, while the precise time period over which the alleged harassment took place is unclear, Prigmore never formally reported it pursuant to the company's "Smart Start" policy or actively pursued any corrective action whatsoever. Consequently, the Court finds that Prigmore has not established, or created a genuine issue of material fact, that her working environment was hostile or abusive. Accordingly, Houston Pizza's Motion for Summary Judgment on Prigmore's "hostile environment" sexual harassment claim is hereby GRANTED.
IV.
As this Court has previously explained, "[w]hen a plaintiff alleges a claim for intentional infliction of emotional distress based on the same facts making up her Title VII claim, the former is preempted." Stewart v. Houston Lighting & Power Co., 998 F. Supp. 746, 757 n. 8 (S.D.Tex.1998) (citing Jackson v. Widnall, 99 F.3d 710, 716 (5th Cir.1996); Rowe v. Sullivan, 967 F.2d 186, 189 (5th Cir.1992)). Therefore, because Prigmore's common law tort claim for intentional infliction of emotional distress and her Title VII claim arise from identical factual allegations, her intentional infliction of emotional distress claim cannot survive. And even if not preempted, the facts alleged by Prigmore do not even begin to rise to the level of egregiousness that the Texas Supreme Court requires to support such a cause of *644 action. See Brewerton v. Dalrymple, 997 S.W.2d 212, 216 (Tex.1999) (explaining that, in order the sustain a claim for intentional infliction of emotional distress under Texas law, the conduct at issue must be "so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community"); GTE Southwest, Inc. v. Bruce, 998 S.W.2d 605, 612-13 (Tex. 1999) (explaining that mere insults, indignities, threats, annoyances and petty oppressions do not rise to the level of extreme and outrageous conduct and that the conduct required for an intentional infliction of emotional distress cause of action in the workplace exists only in the most unusual of circumstances). Accordingly, Houston Pizza's Motion for Summary Judgment on Prigmore's intentional infliction of emotional distress claim is hereby GRANTED.
IT IS SO ORDERED.
NOTES
[1] The Texas Commission on Human Rights Act ("TCHRA") is modeled after federal law for the purpose of executing the policies embodied in Title VII of the federal Civil Rights Act of 1964. See Tex. Labor Code § 21.001. As such, the Court views Prigmore's sexual harassment claim under Title VII and her sexual harassment claim under TCHRA as identical for all practical purposes. Consequently, the Court will analyze both claims simultaneously and the outcome of this analysis will apply with equal force to both causes of action.
[2] Houston Pizza's cash handling policy expressly states that "[i]f you have more that a $10.00 overage or shortage in your drawer or bank per shift you may be subject to immediate termination." Prigmore signed the policy on January 21, 1999. Above her signature, the following statement appears: "I am signing this policy because I have read it and completely understand it. I understand that any violation of the policy may result in termination." The Parties also agree that, pursuant to company policy, the closing manager is responsible for all the cash in the store at the end of the business day.
[3] Given the pervasive nature of these allegations, the Court finds it more than curious that Prigmore never availed herself of the company's "Smart Start" policy for preventing sexual harassment. This policy, which Prigmore admits to knowing word for word during her employment, instructs employees to report, fix or stop inappropriate conduct in the workplace. Prigmore understood that she was supposed to report any sexual harassment in the workplace to her supervisor, and, if she did not obtain a satisfactory resolution, she was to inform upper management of the problem. While Prigmore claims to have had two conversations with her store manager about suggestive comments directed towards her by Buchanan, she admits that she never formally reported to anyone that she was being "sexually harassed" by Buchanan or availed herself of the "Smart Start" procedures that she was clearly familiar with in her capacity as an assistant manager. The Court is likewise puzzled by the fact that Prigmore waited until several months after her termination to file a charge of discrimination, and wonders why Prigmore never informed her own husband, a fellow Houston Pizza employee, of the alleged harassment until after she was terminated.
[4] The Court has carefully reviewed all conduct and comments attributed to Buchanan and concludes that the statements and actions, as a matter of law, do not constitute sexual harassment. Although the comments and actions can be characterized as flirtatious, and perhaps indicative of Buchanan's romantic interest in Prigmore, or worse, childish and patronizing, they simply cannot be characterized as rising to the level of sexual harassment. Some of Buchanan's remarks certainly could be considered insensitive, indecent, inappropriate or even offensive; however, "that one may be offended by a remark does not elevate the statement to the level of sexual harassment." Pfeil v. Intecom Telecomms., 90 F. Supp. 2d 742, 748 (N.D.Tex. 2000). Title VII is not a general civility code. Id. (citing Faragher, 524 U.S. at 788, 118 S. Ct. at 2283-84). Sexual harassment by definition means "[u]nwelcome sexual advances, request for sexual favors, and other verbal or physical conduct of a sexual nature." Meritor Sav. Bank, FSB v. Vinson, 477 U.S. 57, 65, 106 S. Ct. 2399, 91 L. Ed. 2d 49 (1986) (citing 29 C.F.R. § 1604.11(a) (1985)). In this case, there are absolutely no allegations that Buchanan directly propositioned Prigmore for sex; had sex with her; threatened her or in any way implied that her continued employment was conditioned on her granting him sexual favors; touched or fondled her; promoted a sexually charged environment; or that he implied or stated that Prigmore was incompetent because of her sex. See Pfeil, 90 F.Supp.2d at 748 (citations omitted). For these reasons, while certainly not condoning it, the Court holds that the alleged comments and conduct of Buchanan do not, as a matter of law, constitute sexual harassment. Thus, it necessarily follows that Prigmore's termination could not have been because of her sex.
[5] The Court acknowledges that some of Buchanan's alleged comments are suggestive and may amount to indirect propositions for sex. For instance, Buchanan's alleged suggestion that Prigmore "pay her husband back [for his infidelity]" and his alleged statement that "I won't tell, if you don't tell" appear to constitute at least a potential invitation for sexual relations. Nevertheless, such oblique references to sex, made on an infrequent basis, do not give rise to an actionable hostile environment claim. See, e.g., Shepherd, 168 F.3d at 872-75 (holding that supervisor's unquestionably sexual conduct towards an employee, including the supervisor's attempts to look down employee's clothing and remark that "your elbows are the same color as your nipples," did not create a genuine issue of material fact that the harassment constituted a hostile working environment); Pfeil, 90 F.Supp.2d at 745-747 (holding that supervisor's conduct towards complaining employee, including the supervisor's request for a "personal and private lunch," "grunting" and his checking her "from head to toe," did not create a genuine issue of material fact that the harassment constituted a hostile working environment).
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433625/
|
189 F. Supp. 2d 377 (2002)
GENEVA PHARMACEUTICALS, INC., et. al., Plaintiff,
v.
GLAXOSMITHKLINE PLC and Smithkline Beecham Corporation, d/b/a Glaxosmithkline Inc., Defendants.
Nos. CIV.A. 2:01CV391, CIV.A. 2:01CV677, CIV.A. 2:01CV925.
United States District Court, E.D. Virginia, Norfolk Division.
February 25, 2002.
*378 Conrad Moss Shumadine, Wilcox & Savage, Norfolk, VA, Leslie Morioka, DimitriosTheodore Drivas, Louis Sebastian Silvestri, White & Case LLP, New York, NY, for Geneva Pharmaceuticals, Inc.
Alan Dale Albert, Troutman Sanders Mays & Valentine LLP, Norfolk, VA, William Michael Merone, William K. Wells, Jr., Thomas J. Meloro, Steven Jeffrey Lee, Jeremiah Francis Manning, Larissa Ann Soccoli, Kenyon & Kenyon, New York, NY, for Teva Pharmaceuticals USA, Inc.
Beth Hirsch Berman, Hofheimer Nusbaum, P.C., Norfolk, VA, Christy Lynn Green, Joseph Francis Jennings, Knobbe Martens Olson & Bear LLP, Newport Beach, VA, for Ranbaxy Pharmaceuticals, Inc.
Liam O'Grady, Finnegan, Henderson, Farabow, Garrett & Dunner, Washington, DC, Kelly Ann Casey, Richard Lawrence Rainey, Walter Wayne Brown, Russell Leon Sandidge, Finnegan Henderson Farabow Garrett & Dunner LLP, Atlanta, GA, Stephen Edward Noona, Kristan Boyd Burch, Kaufman & Canoles, PC, Norfolk, VA, for Glaxosmithkline PLC.
OPINION AND ORDER
MORGAN, District Judge.
This matter comes before the Court on Plaintiff Teva Pharmaceuticals' (Teva) motion *379 for summary judgment, alleging that both U.S. Patent Nos. 4,560,552 (the '552 patent) and 6,218,380 B1 (the '380 patent) are invalid on the grounds of obviousness-type double patenting. Both are owned by Defendant Glaxosmithkline, et. al., (Defendants and all predecessors in interest are collectively referred to as GSK). GSK filed a cross-motion for partial summary judgment, arguing that these same patents are not invalid for double patenting as a matter of law. Both motions are pursuant to Federal Rule of Civil Procedure 56. After a hearing on December 14, 2001, the Court GRANTED GSK's motion with regard to the '552 patent, because Title 35 U.S.C. § 121 precludes it from legal attack in this Court. The Court further GRANTED Teva's motion with regard to the '380 patent, FINDING that patent invalid because of obviousness-type double patenting. This opinion further sets forth the reasoning for the Court's decision.
FACTUAL[1] AND PROCEDURAL BACKGROUND
While it is not necessary to repeat the factual background contained in the Court's August 27, 2001 order declining to dismiss or transfer venue in the related matter, Geneva Pharmaceuticals v. GSK,[2] a brief factual recitation is appropriate.
AUGMENTIN® is an oral antibacterial combination consisting of the antibiotic amoxicillin and the β-lactamase inhibitor, potassium clavulanate, which is the potassium salt form of clavulanic acid. GSK has been marketing AUGMENTIN® in the United States since the FDA first approved the antibiotic in 1984. AUGMENTIN® and its component parts are the subject of a number of patents. The subject of Plaintiffs' motion is that its proposed generic version of AUGMENTIN® will not infringe upon the '552 patent and '380 patent held by Defendant GSK, which expire in 2002 and 2017, respectively, because they are invalid due to double patenting. The original patents for AUGMENTIN® begin expiring in the summer of 2002. The Plaintiff has applied to the Food and Drug Administration to begin producing generic AUGMENTIN® upon the expiration of the original patents. In this action, Plaintiff seeks a declaratory judgment, pursuant to 28 U.S.C. §§ 2201-2 and Rule 57 of the Federal Rules of Civil Procedure, that the '552 patent and the latest patents issued covering AUGMENTIN® are invalid.
On October 31, 2001, this cause of action was joined with an action previously filed in this Court by Geneva Pharmaceuticals, Inc., against these same defendants. Subsequently, all parties have agreed to join another cause of action to this litigation, i.e. Ranbaxy Pharmaceuticals Inc. v. Glaxosmithkline, et al.,[3] which was filed on January 16, 2002.
STANDARD OF REVIEW
District courts may enter summary judgment only when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Fed. R.Civ. P. 56(c); Eli Lilly and Co. v. Barr Laboratories, et al., 251, F.3d 955, 962 (Fed.Cir.2001); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). The burden *380 falls on the moving party to show that there is no genuine issue of material fact. Fed. R.Civ. P. 56(c); Charbonnages de France v. Smith, 597 F.2d 406, 414 (4th Cir.1979). The non-moving party who bears the burden of proof on a particular claim, however, must present evidence to support each element of his claim. See Celotex v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). This evidence must be more than a mere scintilla, and summary judgment may be granted "[i]f the evidence is merely colorable, or is not significantly probative." Anderson, 477 U.S. at 249-50, 106 S. Ct. 2505. Nonetheless, all inferences drawn from the facts must be viewed in the light most favorable to the non-moving party, with "his version of all that is in dispute accepted, [and] all internal conflicts in it resolved favorably to him." Charbonnages de France, 597 F.2d at 414. When evaluating a motion for summary judgment in a patent case, the court views the record evidence through the prism of the evidentiary standard of proof that would pertain at a trial on the merits. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252-53, 106 S. Ct. 2505, 91 L. Ed. 2d 202, (1986).
Statutorily, a patent enjoys a presumption of validity,[4] which can only be overcome through clear and convincing evidence. United States Surgical Corp. v. Ethicon, Inc., 103 F.3d 1554, 1563 (Fed. Cir.1997). Therefore, a moving party seeking to invalidate a patent "must submit clear and convincing evidence of invalidity so that no reasonable jury could find otherwise." Eli Lilly, 251 F.3d at 962. "Alternatively, a moving party seeking to have a patent held not invalid at summary judgment must show that the non-moving party, who bears the burden of proof at trial, failed to produce clear and convincing evidence on an essential element of a defense upon which a reasonable jury could invalidate the patent." Id.
TITLE 35 U.S.C. § 121
Before the Court can reach the substantive issues before it on these matters, 35 U.S.C. § 121 ("Section 121" or "§ 121") must be examined. Section 121 provides in pertinent part:
A patent issuing on an application with respect to which a requirement for restriction under this section has been made, or on an application filed as a result of such a requirement, shall not be used as a reference either in the Patent and Trademark Office or in the courts against a divisional application or against the original application or any patent issued on either of them.
In simplified terms, this section of the code shields a patent-holder from a charge of double patenting when the holder was forced by the Patent and Trademark Office ("PTO") to sever the disputed patents from a single application into multiple applications. See Applied Materials, Inc. v. Advanced Semiconductor Materials, 98 F.3d 1563, 1568 (Fed.Cir.1996). In her concurring opinion in Studiengesellschaft Kohle mbH v. Northern Petrochemical Co., Judge Pauline Newman set out the purpose of § 121 rather succinctly by stating, "Section 121 effects a form of estoppel that shields the applicant from having to prove the correctness of the restriction requirement in order to preserve the validity of the second patent." 784 F.2d 351, 361 (Fed.Cir.1986).
THE '552 PATENT
On April 17, 1975, SmithKline Beecham Corporation, a predecessor in interest of GSK, filed a patent application[5]*381 with the PTO seeking patent protection for the combination of compounds that would eventually become the drug AUGMENTIN®. That application contained 35 claims related to the varying aspects of clavulanic acid and its properties and uses. In April, 1976, Examiner Richard J. Gallagher imposed a four-way restriction requirement ordering that the 35 claims in the application be submitted in multiple applications.
After Gallagher issued this restriction requirement, the claims were separated and pursued in separate applications. The claim that eventually issued as the '552 patent was included as part of the divisional application designated as Serial Number 726,480 (the '480 application). That application, too, was subject to a requirement of restriction. The claim that eventually became the '552 patent was included in a number of applications subject to restriction requirements, as the PTO ordered the claims from the '480 application further broken down over the ensuing years.
On March 5, 1979, Examiner Jerome D. Goldberg imposed the final restriction requirement leading to the '552 patent. Goldberg ordered that claims 36-105 of the claims in application Serial Number 964,035 be separated due to his requirement of restriction. Unmistakably marked on the form issued that day, Goldberg stated that these claims were "subject to a restriction or election requirement." "Applicants are ... required to elect an invention of a single disclosed composition containing clavulanic acid and one penicillin or celpahosporin antibiotic for examination on the merits." GSK Cross-Mot. at Exhibit 52. From this requirement of restriction, GSK filed applications for, and was issued, the '552 patent and U.S. Patent Number 4,525,352 (the '352 patent).
Plaintiffs now come to the Court and ask it to decide the question of whether the '552 patent was obvious over the '352 patent, and therefore improperly issued. The Court, however, cannot reach that issue. As stated earlier, § 121 says, "[A]n application filed as a result of ... a [restriction] requirement, shall not be used as a reference ... in the courts against a divisional application or against the original application or any patent issued on either of them." 35 U.S.C. § 121 (Lexis 2001). Given that the Court FINDS that a restriction requirement leading to the '552 and '352 patents was imposed by the PTO, the Court must further comply with the language of § 121. As a factual matter, it does appear to the Court that these two patents are obvious over one another and therefore improperly issued as separate patents. However, it is not within the purview of the Court to so rule. Neither this Court, nor any tribunal may look under the administrative veil that Congress has placed upon a patent issued as the result of a PTO restriction requirement.
It being clear and unmistakable to this Court that the '552 and '352 patents were issued as a result of the PTO's decision to impose a restriction requirement, the Court FINDS that as a matter of law the '552 patent cannot be attacked as obvious over, and therefore invalid in light of, the '352 patent.
THE '380 PATENT
a. 35 U.S.C. § 121's Application to the '380 Patent
As with the '552 patent, the Court must first determine whether section 121 precludes consideration of the merits of the obviousness-type double patenting challenge to the '380 patent. Whereas the restriction requirements issued in relation to the '552 patent were clear and unmistakable, the proffered evidence by GSK regarding a restriction requirement in relation to the '380 patent is insufficient.
*382 As with the claims which eventually became the '552 patent, the claims which became the '380 patent were originally included in the original patent that Examiner Gallagher ordered split in his four-way restriction requirement of April, 1976. The '380 claims, however, followed a different path than the '552 claims. GSK elected to pursue these claims in the original patent application, designated Serial Number 569,007 (the '007 application)while severing the other claims into different applications.
At this point, GSK's evidence becomes muddled. Sometime following Examiner Gallagher's restriction requirement, the '007 application was put before another reviewer, Examiner Berch. GSK estimates that "[s]ometime between February 9, 1979 and April 12, 1979" there was an in-person interview between its representatives and Examiner Berch. GSK Cross-Mot. for Sum. Jud. at 5. GSK claims Berch issued a restriction requirement at that meeting. Teva disputes that contention, claiming the Interview Summary does not contain the formalities required to impose a restriction requirement.
It is clear to the Court that following the 1979 meeting the claims which eventually became the '380 patent were split and pursued in other applications. However, it does not appear from the evidence that the claims which eventually became the '380 patent were split because of a restriction requirement.
A logical reading of § 121 leads to the conclusion that it places the burden of producing the requisite evidence of the imposition of a restriction requirement with the party seeking to invoke the protection of that statute. That party is in the best position to proffer the strongest evidence memorializing the restriction requirement that they claim stops a pending action. If a party invoking § 121 is not successful in proving a restriction requirement was issued, however, the burden of proving invalidity of the patent remains with the party asserting invalidity. By invoking § 121 as an affirmative defense to the action, it is the responsibility of GSK to proffer evidence that a restriction requirement was indeed issued by the PTO.
GSK proffers an undated, one-page document, entitled "Examiner Interview Summary Record," as its principal evidence of the imposition of a restriction requirement. GSK Cross-Mot. for Sum. Jud. at Exhibit 33. The document states that it was "Agreed" that the claims that eventually were issued as the '380 patent would go into another application. Such language is insufficient to support the imposition of a restriction requirement by the PTO. The form submitted to the Court in relation to the restriction requirement that became the '552 unequivocally states, "Claims 36-105 are subject to a restriction or election requirement." Such is not the case with this undated Interview Summary. If the Examiner intended to impose a restriction requirement he could have so indicated.
The Defendants argue that after the fact language in subsequent documents establishes that a restriction requirement was imposed. However, the parties agree that if a restriction requirement was imposed it could only have been imposed at the informal conference before Examiner Berch. Even if the Court accepts the inference that GSK and the PTO both erroneously proceeded uponthat a restriction requirement had been imposedsuch conduct cannot alter or enlarge the language summarizing the informal conference.
The imposition of a restriction requirement has important consequences. An invention could potentially receive serial patent protection as a result of such imposition, and thereby obtain a more lengthy statutory period of protection than that intended by law. Under the system contemplated *383 by Article I, § 8, cl. 8 of the United States Constitution[6], and further spelled out by Congress in Title 35 of the United States Code, inventors are rewarded with a limited period of exclusive right to their innovations, then they must turn that invention over to the normal processes of open competition.
The PTO's own Manual of Patent Examining Procedure (MPEP)[7] warns its examiners that it is "very important that the practice [of issuing restriction requirements] under this section be carefully administered." MPEP § 803.01 (8th Ed.2001) (emphasis added).[8] If an examiner is communicating that a restriction requirement is being issued, it should be clearly communicated, as opposed to standing upon an inference which could be drawn from post issuance patent history. If the owner of a patent were permitted to base the existence of a restriction requirement upon the tenuous evidence proffered by GSK, the door to abuse would be widely opened; an inventor could divide applications at a whim, thereby using a restriction requirement as a sword instead of a shield.
Accordingly, the Court FINDS that GSK has proffered insufficient evidence to support a fact finder's conclusion that a restriction requirement was issued by the PTO. Therefore, § 121 does not bar the Court from deciding whether the '380 patent is invalid due to double patenting over U.S. Patent Number 4, 529,720 (the '720 patent).
b. Obviousness-Type Double Patenting
The Court must now move to the underlying issue of whether the '380 patent is invalid due to obviousness-type double patenting. By statute, Congress has limited the duration a patent holder may lay exclusive claim to an invention before it falls into the public domain.[9] "The judicially-created *384 doctrine of obviousness-type double patenting cements that legislative limitation by prohibiting a party from obtaining an extension of the right to exclude through claims in a later patent that are not patently distinct from claims in a commonly owned patent." Eli Lilly, 251 F.3d at at 967. Obviousness-type double patenting is a question of law for a court to decide. In re Berg, 140 F.3d 1428, 1432 (Fed.Cir.1998); General Foods v. Studiengesellschaft Kohle mbH, 972 F.2d 1272, 1277 (Fed.Cir.1992); In re Goodman, 11 F.3d 1046, 1052 (Fed.Cir.1993).
When conducting an obviousness-type double patenting review, a court should conduct a two step analysis. Eli Lilly, 251 F.3d at 968. First, the court construes the claims in the patents at issue to determine the differences between the two. Id.; Georgia-Pacific Corp. v. United States Gypsum Co., 195 F.3d 1322 (Fed. Cir.1999). Next, a court must determine whether the differences in subject matter between the two are sufficient to render the two patentably distinct. Id. Only if the later claim is not patentably distinct from the earlier claim is the commonly owned patent to be ruled invalid due to obviousness-type double patenting. Id.
A later patent claim is not patentably distinct from an earlier claim if the later claim is obvious over, inevitable in light of or anticipated by the earlier claim. Id. A reference is obvious over, or anticipated by an earlier claim if it discloses every limitation of the claimed invention either explicitly or inherently. Id. at 970. "A reference includes an inherent characteristic if that characteristic is the `natural result' flowing from the reference's explicitly explicated limitations". Id.; see also Continental Can Co. USA, Inc. v. Monsanto Co., 948 F.2d 1264, 1269 (Fed.Cir. 1991). If the later claim is anticipated by the earlier claim, there can be no patentable distinction, as a matter of law. Eli Lilly, 251 F.3d at 970. To state it more simply, in order to receive patent protection the newly claimed invention must be novel and distinct from all previously claimed patented inventions the holder owns. Id.; see also General Foods, 972 F.2d at 1279.
The Court has carefully reviewed the claims of the two patents at issue, and found them to be strikingly similar. For example, claim one of the '720 patent reads:
1. A method of effectingβ-lactamase inhibition in a human or animal in need thereof arising from a β-lactamase producing bacteria which comprises administering to said human or animal a β-lactamase inhibitory amount of clavulanic acid or a pharmaceutically acceptable salt thereof.[10]
Claim one of the '380 patents is a near perfect reflection of that claim:
1. A pharmaceutical composition useful for effecting β-lactamase inhibition in humans and animals which compromises β-lactamase inhibitory amount of clavulanic acid in combination with a pharmaceutically acceptable carrier.[11]
As one reads each claim in these two patents, the similarities are obvious and continuous. What we have in the '380 patent appears to be either a rewording of the '720 patent or an obvious by-product of something already included in that earlier patent. Often the difference appears to be that "Pharmaceutical composition" is substituted for "method," and submitted as a new invention for patent protection. As the Federal Circuit has stated, "We do not agree that there is a patentable distinction *385 between the method of using the device and the device itself." In re Lonardo, 119 F.3d 960, 968 (Fed.Cir.1997).
Therefore, Court FINDS by clear and convincing evidence that the differences between these two patents are not patentably distinct. Accordingly, the Court FINDS that the '380 patent is invalid on the ground of obviousness-type double patenting.
CONCLUSION
Section 121 precludes judicial review of a patent's validity for double patenting when a restriction requirement was properly issued. There being clear evidence that a restriction requirement was issued and led to the '552 patent's issuance, the Court GRANTS GSK's motion for partial summary judgement in reference to the '552 patent.
Given that the Court has found that there was no restriction requirement issued regarding the '380 patent, it is available for review under an obviousness-type double patenting theory. Having construed the differences, the Court FINDS by clear and convincing evidence that the '380 patent and the '720 patent are not patentably distinct. Accordingly, the Court FINDS that the '380 patent is invalid on the ground of obviousness-type double patenting, and GRANTS Teva's motion for partial summary judgment in reference to the '380 patent.
The Clerk is REQUESTED to send a copy of this order to all counsel of record.
It is so ORDERED.
NOTES
[1] This opinion views the facts and all legitimate inferences therefrom in the light most favorable to the plaintiffs as to the '552 patent and most favorable to GSK as to the '380 patent.
[2] While the Geneva Pharmaceuticals matter (2:01cv391) was instituted prior to the Teva cause of action or their consolidation, the administrative and factual background of the Court's August 27 order is pertinent to the issues in this opinion and order.
[3] Civil Action Number 2:01cv925.
[4] 35 U.S.C.S. § 282 (2000).
[5] This application was designated Serial Number 569,007.
[6] Article 1, § 8, cl. 8 of the United States Constitution specifically states, "[Congress shall have the power t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."
[7] The Manual of Patent Examining Procedure sets out the published rules that both examiners and applicants must follow during the patent application process. While it does not carry the binding force of law, it has been held that a reviewing court may take notice of its provisions because it is the official interpretation of the PTO's governing set of regulations and statutes. Litton Systems Inc. v. Whirlpool Corp 728 F.2d 1423 (Fed.Cir.1984); see also Application of Kaghan, 55 C.C.P.A. 844, 387 F.2d 398 (Cust. & Pat.App.1967).
[8] Manual of Patent Examining Procedure
Chapter 800 Restriction In Applications Filed Under 35 U.S.C. 111; Double Patenting
Since requirements for restriction under 35 U.S.C. 121 are discretionary with the Commissioner, it becomes very important that the practice under this section be carefully administered. Notwithstanding the fact that this section of the statute apparently protects the applicant against the dangers that previously might have resulted from compliance with an improper requirement for restriction, IT STILL REMAINS IMPORTANT FROM THE STANDPOINT OF THE PUBLIC INTEREST THAT NO REQUIREMENTS BE MADE WHICH MIGHT RESULT IN THE ISSUANCE OF TWO PATENTS FOR THE SAME INVENTION. Therefore, to guard against this possibility, only an examiner with permanent or temporary full signatory authority may sign final and non-final Office actions containing a final requirement for restriction, except that an examiner with permanent or temporary partial signatory authority may sign non-final Office actions containing a final requirement for restriction. (Emphasis original.)
[9] 35 U.S.C. 154(a)(2) (1994). A patent holder has twenty years of exclusivity before the public is allowed to copy the invention for profit. When the patents being considered today were issued, the statutory period of exclusivity was seventeen years.
[10] '720 patent, column 40, lines 12-18.
[11] '380 patent, column 40, lines 20-24.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433627/
|
189 F. Supp. 2d 298 (2002)
MUTUAL BENEFIT INSURANCE CO.
v.
Jeffrey LORENCE, et al.
No. CIV.A. DKC 2000-827.
United States District Court, D. Maryland.
March 11, 2002.
*299 William Carlos Parler, Jr., Parler and Webber LLP, Towson, MD, for Plaintiff.
William N. Zifchak, Sasscer Clagett and Bucher, Upper Marlboro, MD, Donald A. Clower, Kay M. Clarke, Law Offices of Donald A. Clower, Washington, DC, for Defendants.
MEMORANDUM OPINION
CHASANOW, District Judge.
Presently pending and ready for resolution in this declaratory judgment action are cross-motions for summary judgment. The court now rules pursuant to Local Rule 105.6, no hearing being deemed necessary. For the reasons that follow, both motions will be denied and the complaint will be dismissed.
I. Background
This complaint arises out of an insurance contract dispute as to whether there is coverage for a dog bite that occurred on February 17, 2000. On that date Defendants, Jeffrey Lorence and Kathy Ann Tippett, owned two pit bulls which were housed at their residence at 26730 Connemara Lane, Mechanicsville, Maryland. Defendants' property was insured by a Mutual Benefit homeowner's policy that was initially issued on August 17, 1998, the date they purchased their house. Lorence and Tippett owned these dogs for approximately four years prior to February 17, 2000, with no reported record of aggression or violence. Lorence and Tippett failed to disclose their ownership of the pit bulls at the time they applied for insurance with Mutual Benefit. The application asked in pertinent part:
9. Does applicant or any tenant have any animals or exotic pets?
Paper No. 20, Ex. B. The answer given was "No" and the application was signed by Lorence and Tippett on August 17, 1998.
At the time of the original application, Mutual Benefit's underwriting guidelines prohibited issuance of a homeowner's policy *300 to an applicants who owned pit bull dogs. Paper no. 20, Ex. C. (Mutual Benefit contends that statistics and the "inherent viciousness" of pit bulls support its economic and business purpose in adopting the guidelines. Paper no. 20, p. 9.)
The homeowner's insurance coverage was renewed on August 17, 1999, but no further application or renewal questionnaire was required. Mutual Benefit did not send an inspector to the home to verify the application representations made by Lorence and Tippett, either at the time of the original application or at the time of the renewal.
On February 17, 2000, one of Lorence and Tippett's dogs, Buck, attacked Belinda Quade and her two year old son, Michael. Both people were injured and were flown by helicopter to Medstar and Children's Hospitals in Washington, D.C. for treatment. After the attack, Mutual Benefit received notice of the presence of the pit bulls for the first time, through a claim submitted by Lorence and Tippett for indemnification.
In a letter dated March 15, 2000, Mutual Benefit notified Lorence and Tippett that this declaratory judgment action would be filed, to seek a ruling that it owed no duty to defend or indemnify based on the alleged material misrepresentation in the policy application. The complaint was filed in this court on March 23, 2000 against Lorence, Tippett and the Quades.[1] By notice dated May 5, 2000, Mutual Benefit also notified Lorence and Tippett that the company was cancelling their homeowner's insurance policy, on the ground that the company does not have a rate that "contemplates an insured misrepresentation of material fact", effective June 21, 2000, and would refund the "excess paid premium above the earned premium for the expired term." Paper No. 23, Ex. 7. Mutual Benefit has refunded the premiums paid for the period June 21, 2000 through August 17, 2000.
Neither party has instituted a proceeding before the Maryland Insurance Commissioner concerning the underwriting standards in effect at the time of the original policy or its renewal. As will be discussed below, there are proceedings before the Commissioner presently concerning pit bull policies.
II. Standard of Review
While a federal court is authorized to issue a declaratory judgment under 28 U.S.C. § 2201 (1994), it is not obligated to do so. Rather, there are circumstances in which the court may properly exercise its discretion not to declare the rights and responsibilities of the parties before it. Centennial Life Ins. Co. v. Poston, 88 F.3d 255, 257 (4th Cir.1996), quoting Wilton v. Seven Falls Co., 515 U.S. 277, 288, 115 S. Ct. 2137, 132 L. Ed. 2d 214 (1995), states:
"Consistent with the nonobligatory nature of the remedy, a district court is authorized, in the sound exercise of its discretion, to stay or to dismiss an action seeking a declaratory judgment before trial or after all arguments have drawn to a close. In the declaratory judgment context, the normal principle that federal courts should adjudicate claims within their jurisdiction yields to considerations of practicality and wise judicial administration."
The generally applicable considerations guiding a district court in deciding whether to entertain a declaratory judgment action are whether the relief sought will serve a useful purpose in clarifying *301 and settling the legal relations in issue and whether it will terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding. Aetna Casualty & Surety Co. v. Ind-Com Elec. Co., 139 F.3d 419, 422 (4th Cir.1998) (quoting Aetna Casualty & Surety Co. v. Quarles, 92 F.2d 321 (4th Cir.1937)). In addition, the court may consider:
(i) the strength of the state's interest in having the issues raised in the federal declaratory judgment action decided in the state courts; (ii) whether the issues raised in the federal action can more efficiently be resolved in the court in which the state action is pending; and (iii) whether permitting the federal action to go forward would result in unnecessary "entanglement" between the federal and state court systems, because of the presence of "overlapping issues of fact or law."
Mitcheson v. Harris, 955 F.2d 235, 237-40 (4th Cir.1992) (quoted in Ind-Com Elec., 139 F.3d at 422). In some cases, the declaratory judgment action is "used merely as a device for `procedural fencing' that is, `to provide another forum in a race for res judicata' or `to achiev[e] a federal hearing in a case otherwise not removable.'" Ind-Com Elec., 139 F.3d at 422, quoting Nautilus Ins. Co. v. Winchester Homes, Inc., 15 F.3d 371, 377 (4th Cir.1994).
While the most common circumstance justifying a district court's dismissal of a declaratory judgment action is the pendency of a parallel state court action, that circumstance is not a necessary prerequisite:
[A] district court does not per se overstep the bounds of its discretion when it dismisses a declaratory judgment action in the absence of a pending parallel state court proceeding. Rather, such dismissal is within the district court's discretion, and that discretion is not abused so long as the factors which we have enumerated to guide district courts in this determination weigh in favor of denying declaratory relief.
Ind-Com Elec., 139 F.3d at 424.
III. Analysis
Mutual Benefit asserts that the homeowner's policy in question is void ab initio because Lorence and Tippett's failure to disclose their ownership of pit bulls constitutes a material misrepresentation upon which Mutual Benefit relied when issuing the policy. The court might well be able to issue a declaration as to some of the run of the mill insurance contract issues. Mutual Benefit defends its underwriting standards, however, on their merits and seeks, in part, a declaration that the standard applicable to pit bull ownership legitimately serves its business and economic purposes. Paper No. 20, p. 9. Defendants argue that the policy of refusing to insure pit bull owners is discriminatory under Maryland Insurance Code, § 27-501(a)(1), which prohibits an insurer from canceling "based wholly or partly ... for any arbitrary, capricious, or unfairly discriminatory reason." Paper No. 23, p. 7-10. They argue that the underwriting standard prohibiting insurance of pit bull owners is arbitrary and discriminatory as to persons who own pit bulls, under § 27-501(a)(1), and it has no reasonable relationship to the insurer's legitimate economic and business purposes.[2]
*302 As cogently synthesized in North American Specialty Ins. Co. v. Savage, 977 F. Supp. 725, 728 (D.Md.1997):
Generally, insurance policies may be voided ab initio when an insurer issued a policy in reliance on a material misrepresentation in the application. See Fitzgerald v. Franklin Life Ins. Co., 465 F. Supp. 527, 534 (D.Md.1979), aff'd, 634 F.2d 622 (1980). Materiality is determined by considering whether, given the circumstances of the case, the information omitted could "`reasonably have affected the determination of the acceptability of the risk.'" Hartford Accident and Indem. Co. v. Sherwood Brands, Inc., 111 Md.App. 94, 109, 680 A.2d 554, 561 (1996) (quoting Nationwide Mut. Ins. Co. v. McBriety, 246 Md. 738, 744, 230 A.2d 81, 84 (1967)), cert. granted, 344 Md. 116, 685 A.2d 450 (1996). The misrepresentation must actually have been relied on in issuing the policy or setting the premium in order for it to be material. See id. (relying on Erie Ins. Exch. v. Lane, 246 Md. 55, 59, 227 A.2d 231, 234 (1967), overruled in part on different grounds, Cohen v. American Home Assurance Co., 255 Md. 334, 258 A.2d 225 (1969)). Summary judgment is appropriate when "there is no genuine issue as to any material fact, and if the moving party is entitled to judgment as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S. Ct. 2505, 91 L. Ed. 2d 202. 477 U.S. 242, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986). The materiality of a misrepresentation can be determined as a matter of law "when the evidence is clear and convincing, or uncontradicted." See Peoples Life Ins. Co. v. Jerrell, 271 Md. 536, 538, 318 A.2d 519, 520 (1974); see also National Life and Accident Ins. Co. v. Gordon, 45 Md.App. 139, 140-41, 411 A.2d 1087, 1088 (1980) (citing cases).
In addition, as Judge Blake noted in a footnote, a misrepresentation ordinarily will not be material unless it is reasonably related to the insurer's economic and business purposes, as required by the Maryland Insurance Code. Id., 977 F.Supp. at 728, n. 2.
The Maryland Insurance Code makes clear that only the Insurance Commissioner has the authority to determine compliance with § 27-501(a), in the first instance. Subsection (h) provides that the Commissioner may request an insurer to file a copy of its underwriting standards, and the Commissioner may review them to ensure compliance with "this article." MD. CODE ANN., INS. § 27-501(h) (1997). Alternatively, an insured may ask the Commissioner to review a cancellation or refusal to renew. § 27-501(f). At a hearing before the Commissioner, the burden is on the insurer to justify the refusal to underwrite. § 27-501(g). If the Commissioner finds that the refusal to underwrite violates § 27-501, the Commissioner "may ... order the insurer to accept the risk." § 27-505(a). A party to the hearing or proceeding may then appeal to the appropriate Circuit Court in accordance with § 2-215. § 27-505(b).
The Insurance Representative testified as to the practical application of these code provisions:
*303 There is no requirement that a company submit underwriting standards to the Insurance Commissioner prior to their use. The statute requires that the carrier submit them when the Insurance Administration requests them.
Paper No. 23, Ex. 2, p. 44.
There is no parallel state court proceeding pending between the same parties. There are, however, administrative proceedings pending before the Maryland Insurance Commissioner concerning underwriting policies about pit bulls. According to the deposition testimony of Mr. Santiago, the Insurance Commissioner has stayed any consideration of those policies pending the outcome of this action. Paper No. 23, Ex. 2, p. 90. Unfortunately, that result is backward. Maryland law has provided a comprehensive administrative mechanism for determination of the permissible underwriting guidelines in conformity with Maryland law. For the Insurance Commissioner to await the outcome of this action, which has entirely bypassed the administrative procedure, flies in the face of the factors guiding this court's discretion. The state's interest in having the issues concerning insurance underwriting standards decided in state courts is extremely strong. The nature of the material that can be considered by the Insurance Commissioner is much better suited to the economic and policy determination to be made regarding coverage of pit bulls than is the meager record in this court, which is nearly barren concerning the underwriting risks associated with pit bulls. Permitting this action to continue (particularly if the factual issues cannot be decided on summary judgment, and a trial must be scheduled) will result in unnecessary entanglement. While it cannot be said that Mutual Benefit is using this federal case as a device for procedural fencing, there appear to be avenues within the Maryland administrative and judicial structure to resolve the underwriting policy issues as well as the legal issues of misrepresentation and rescission.
Accordingly, because both parties assert that resolution of this case will require a determination of whether Mutual Benefit's underwriting standard refusing to insure risks that include pit bulls complies with § 27-501(a) of the Maryland Insurance Code, this court declines to exercise jurisdiction under 28 U.S.C. § 2201 and the complaint will be DISMISSED. A separate order will be entered.
ORDER
For the reasons stated in the foregoing Memorandum Opinion, it is this ____ day of March, 2002, by the United States District Court for the District of Maryland, ORDERED that:
1. The motions of Mutual Benefit Insurance Company and Jeffrey Lorence and Kathy Ann Tippett for summary judgment BE and the same hereby ARE, DENIED;
2. The complaint of Mutual Benefit Insurance Company for a declaratory judgment BE, and the same hereby IS, DISMISSED; and
3. The clerk is directed to transmit copies of the Memorandum Opinion and this Order to counsel for the parties and CLOSE this case.
NOTES
[1] Federal jurisdiction is grounded on diversity of citizenship, with the amount in controversy exceeding $75,000. The parties agree that Maryland law applies.
[2] Defendants also assert that because the policy questionnaire was filled out by a third party and they did not read it before signing it, they did not know that the application stated that they did not own any animals and, thus, the misrepresentation was innocent and fraud did not occur. Third, Lorence and Tippett argue that even if they made a material misrepresentation, the insurance policy in effect was a new contract which began on the renewal date, August 17, 1999, and, as no renewal questionnaire was sent, Mutual Benefit cannot establish that it issued the renewal policy in reliance upon any alleged misrepresentation. Finally, Lorence and Tippett argue that even if Mutual Benefit does have adequate grounds to cancel the policy under § 21-501(a)(2), Mutual Benefit has waived that right by failing to promptly refund all of the defendants' premium payments for the entire period dating from August 17, 1998.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433641/
|
189 F. Supp. 2d 1226 (2002)
UNITED STATES of America, Plaintiff/Respondent,
v.
Bobby Lee BRIDGES, Defendant/Movant.
Nos. 98-40068-DES, 01-3167-DES.
United States District Court, D. Kansas.
March 5, 2002.
*1227 *1228 Dwight L. Miller, Topeka, KS, for Bobby Lee Bridges.
*1229 Anthony W. Mattivi, Topeka, KS, for U.S.
MEMORANDUM AND ORDER
SAFFELS, District Judge.
This matter is before the court on defendant's Motion to Vacate, Set Aside, or Correct Sentence (Doc. 151) brought pursuant to 28 U.S.C. § 2255. In its Order (Doc. 156) dated June 27, 2001, the court granted defendant's Motion for Leave (Doc. 155) to amend his original § 2255 motion. Thereafter, the government filed a Response (Doc. 159), which addressed defendant's original and amended grounds for relief. Defendant later filed a Reply (Doc. 162). Defendant subsequently filed two additional Motions for Leave (Docs. 163, 164) to amend his original § 2255 motion. For the following reasons, defendant's § 2255 motion shall be denied, and his subsequent motions for leave to amend will be transferred to the Tenth Circuit.
I. BACKGROUND
Defendant was charged in three counts of a four count indictment with his co-defendant, Michael Huffman. On October 26, 1998, defendant pled guilty in this court to one count of conspiracy to manufacture methamphetamine, in violation of 21 U.S.C. § 846; one count of manufacturing methamphetamine, in violation of 21 U.S.C. § 841; and one count of endangering human life while manufacturing methamphetamine, in violation of 21 U.S.C. § 858. Defendant's arrest and plea were based on evidence gathered from two controlled buys of methamphetamine by a confidential informant and a search of defendant's residence.
Defendant's plea was entered pursuant to a plea agreement reached with the government. According to the terms of the agreement, in exchange for defendant's plea and cooperation, the government agreed to: (1) bring no further charges against defendant resulting from the activities that formed the basis of the indictment; (2) not file an information pursuant to 21 U.S.C. § 851, regarding defendant's prior felony drug convictions; (3) recommend defendant receive a three level adjustment for acceptance and responsibility; (4) file a motion for downward departure if defendant provided substantial assistance pursuant to U.S.S.G. § 5K1.1 and 18 U.S.C. § 3553(e); and (5) not oppose defendant's argument at sentencing that he should receive a sentence at the bottom end of the appropriately calculated guideline range.
As will be discussed at length below, the plea agreement also contained the following language regarding drug quantity:
The defendant agrees to not oppose a recommendation by the government at the time of sentencing that the defendant be sentenced for a quantity of (actual) methamphetamine in excess of 100 grams (thus subjecting the defendant to the mandatory minimum sentencing provisions of Title 21, United States Code, Section 841(b)(1)(A)). The defendant agrees that the factual basis for this recommendation by the government is true, actual, and supported by laboratory analysis and reports completed by the Kansas Bureau of Investigation during the investigation of this case.
(Plea Agreement ¶ 4(b) attach. to Pet. to Enter Plea of Guilty (Doc. 93)).
The presentence investigation report in this case revealed a forensic chemist for the Kansas Bureau of Investigations estimated, based on the amount of iodine seized from defendant's clandestine lab, that defendant was capable, utilizing a fifty percent yield, of producing 105 grams of (actual) methamphetamine. The 100 grams of (actual) methamphetamine computed into an initial offense level of thirty-two pursuant to U.S.S.G. § 2D1.1(c)(4). A *1230 three level enhancement for endangering human life was applied pursuant to U.S.S.G. § 2D1.10. However, a three level reduction was also applied for defendant's acceptance and responsibility pursuant to U.S.S.G. § 3E1 .1. In the end, the court applied a total offense level of thirty-two. Consideration of defendant's criminal history revealed a total of twenty-four criminal history points, which amply qualified defendant for the criminal history category of VI.
Based on a total offense level of thirty-two and a criminal history category of VI, the guideline range for imprisonment was 210 to 262 months. The government's motion for downward departure recommended a four level departure to a guideline range of 140 to 175 months of imprisonment. On May 18, 1999, defendant was sentenced by the court to 175 months of imprisonment on counts one and two and 120 months on count three to be served concurrently with counts one and two.
Defendant subsequently appealed his sentence to the Tenth Circuit. On appeal, defendant raised two issues: (1) the court erred in assessing a three-level enhancement pursuant to U.S.S.G. § 2D1.10 over his objections without requiring the government to present evidence supporting the enhancement; and (2) the court erred in using count three, endangering human life while illegally manufacturing a controlled substance, as the most serious count for grouping pursuant to U.S.S.G. § 3D1.2. In an unpublished opinion dated June 21, 2000, the Tenth Circuit affirmed defendant's sentence. United States v. Bridges, 2000 WL 796079, at *3, 216 F.3d 1088 (10th Cir.2000).
II. DEFENDANT'S CLAIMS
Within defendant's original and first amended § 2255 motion he levies the following grounds for relief: (1) the court erred in applying the sentencing guidelines by failing to make a factual determination regarding the quantity of drugs defendant was responsible for; (2) Apprendi is applicable; (3) methamphetamine was never properly reclassified as a Schedule II controlled substance; (4) defense counsel was ineffective; and (5) the government breached the plea agreement.
III. DISCUSSION
A. Drug Quantity
In sentencing defendant, the court found defendant responsible for approximately 100 grams of (actual) methamphetamine. Although somewhat convoluted, defendant appears to now argue that either the court erred in using this quantity of drugs and/or the court erred in using the quantity without first holding an evidentiary hearing. Although defendant raised two issues related to his sentencing on direct appeal, he failed to raise the issue of drug quantity before the appellate court. It is well established, as the government asserts, that "[a] defendant who fails to present an issue on direct appeal is barred from raising the issue in a § 2255 motion, unless he can show cause for his procedural default and actual prejudice resulting from the alleged errors, or can show that a fundamental miscarriage of justice will occur if his claim is not addressed." United States v. Talk, 158 F.3d 1064, 1067 (10th Cir.1998) (internal citation and quotation marks omitted). See also United States v. Allen, 16 F.3d 377, 378 (10th Cir.1994) ("section 2255 is not available to test the legality of matters which should have been raised on appeal") (internal citation and quotation marks omitted). Defendant fails to supply the court with any "cause" for his procedural default or grounds for finding a fundamental miscarriage of justice, so the court is compelled to enforce the procedural bar and deny to *1231 reach the claim's merits. All relief will be denied as to this issue.
In the alternative, even if the claim's merits were considered, the court would likely deny relief. As noted above, integral to defendant's plea agreement was his stipulation or agreement to the 100 grams of (actual) methamphetamine. Defendant stated in open court that the statements in his petition to enter a plea of guilty, which incorporated the plea agreement, were true and correct. (Change of Plea Hr'g Tr. at 12). In his original motion, defendant concedes the plea agreement was entered knowingly and voluntarily. Furthermore, defendant did not argue before the Tenth Circuit that his plea was the product of coercion. See Bridges, 2000 WL 796079 at *2, 216 F.3d 1088 (noting defendant did not challenge voluntary nature of the plea before the appellate court). As asserted by the government, defendant's stipulation to the proper amount of drugs attributable to him for sentencing purposes certainly satisfied the government's burden of establishing the quantity of drugs for which defendant was responsible. The court employed a quantity agreed to by the parties, which had a reasonable factual basis listed in the presentence investigation report. See U.S.S.G. § 6B1.4(a).
B. Apprendi
Defendant asserts the Supreme Court's recent decision in Apprendi v. New Jersey, 530 U.S. 466, 120 S. Ct. 2348, 147 L. Ed. 2d 435 (2000) requires vacation of his sentence.[1]Apprendi stands for the following rule of constitutional law: "Other than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt." 530 U.S. at 490, 120 S. Ct. 2348.
In the present case, the charging instrument failed to include specific drug quantities. Assuming for the moment that defendant's plea agreement did not include the drug quantity stipulation, under Apprendi, defendant could only have been sentenced in accordance with the catchall sentencing provision contained in 21 U.S.C. § 841(b)(1)(C). United States v. Jackson, 240 F.3d 1245, 1248 (10th Cir. 2001) ("In other words, after Apprendi, a trial court may not utilize §§ 841(b)(1)(A) and 841(b)(1)(B) for sentencing without the drug quantity being charged in the indictment. Instead, the defendant may be sentenced only under § 841(b)(1)(C), which defines penalties for offenses involving [controlled substances] without reference to drug quantity ...."), overruled on other grounds by United States v. Prentiss, 256 F.3d 971 (10th Cir.2001). Therefore, the applicable statutory maximum would be twenty years. 21 U.S.C. § 841(b)(1)(C) ("such person shall be sentenced to a term of imprisonment of not more than 20 years"). Defendant's sentence of 175 months falls well below the 240 month maximum, so, by its very terms, defendant's sentence did not run afoul of Apprendi. All relief will be denied as to this issue.
In the alternative, even though defendant's actual sentence fell below the twenty *1232 year maximum contained in the catchall statute, defendant's stipulation to the 100 grams of (actual) methamphetamine exposed him to the statutory maximum of life pursuant to 21 U.S.C. § 841(b)(1)(A). Bridges, 2000 WL 796079 at *2, 216 F.3d 1088 (noting defendant's stipulation to quantity triggered the sentencing provisions of 21 U.S.C. § 841(b)(1)(A)). Once again, 175 months is less than the statutory maximum, so there cannot be an Apprendi violation.
C. Classification of Methamphetamine
Defendant next asserts methamphetamine has never been properly reclassified as a Schedule II controlled substance pursuant to 21 U.S.C. § 812(c) (stating substances shall remain within their classifications "unless and until amended pursuant to section 811 of this title"). Defendant's interpretation of the statute is flawed, for, contrary to his assertion, reclassification does not require a congressional amendment. Instead, the statute empowers the Attorney General to regulate controlled substances and their respective classifications. 21 U.S.C. § 811. Without question, methamphetamine is a properly classified Schedule II controlled substance. United States v. Youngblood, 949 F.2d 1065, 1066 (10th Cir.1991) ("Under 21 C.F.R. § 1308.12(d), methamphetamine or its isomers is a Schedule II controlled substance ...."). All relief will be denied as to this issue.
D. Ineffective Assistance of Counsel
The Tenth Circuit recently reiterated the standard for considering claims of ineffective assistance of counsel:
To prevail on an ineffective assistance of counsel claim, [defendant] must demonstrate (1) that representation fell below an objective standard of reasonableness, and (2) that counsel's deficient performance prejudiced the defendant. See Strickland v. Washington, 466 U.S. 668, 687, 104 S. Ct. 2052, 80 L. Ed. 2d 674 (1984). Pursuant to this standard, [defendant] must show that defense counsel's performance was not simply wrong, but instead was completely unreasonable. See Hoxsie v. Kerby, 108 F.3d 1239, 1246 (10th Cir.1997). [Defendant] bears a heavy burden to prevail on this claim, for he must overcome the presumption that defense counsel's actions were sound trial strategy. See Strickland, 466 U.S. at 689, 104 S. Ct. 2052. To show prejudice, [defendant] must establish that, but for counsel's errors, there was a reasonable probability that the outcome of his trial would have been different. See id. at 694, 104 S. Ct. 2052. A reasonable probability is a probability sufficient to undermine confidence in the outcome. See id.
Gonzales v. McKune, 247 F.3d 1066, 1072-73 (10th Cir.2001). See also Hill v. Lockhart, 474 U.S. 52, 58, 106 S. Ct. 366, 88 L. Ed. 2d 203 (1985) ("We hold, therefore, that the two-part Strickland v. Washington test applies to challenges to guilty pleas based on ineffective assistance of counsel.")
1. Deficient Representation
Defendant asserts his counsel was deficient in two respects: (1) counsel should have challenged the drug quantity and rejected the plea agreement; and (2) counsel coerced defendant into entering his plea. The court rejects defendant's arguments. First, challenging the drug quantity would have necessarily required a rejection of the proposed plea agreement. As outlined above, the agreement included several concessions on the part of the government. In particular, the agreement protected defendant from his own prior drug convictions under 21 U.S.C. § 851, and the agreement provided for an acceptance and responsibility reduction and *1233 downward departure. As the court noted at defendant's sentencing, defendant's extensive criminal history easily placed him within the highest criminal history category, but due to his assistance, he received a downward departure of eighty-seven months. (Sent. Hr'g Tr. at 7). In all, the agreement negotiated by counsel on behalf of defendant was remarkable under the circumstances. The court finds counsel was not deficient in seeking a compromise with the government.
Defendant fails to explain his claim of coercion or offer any support in its furtherance. At defendant's change of plea hearing, the court delved extensively into defendant's motivation for entering his plea. (Change of Plea Hr'g Tr. at 10). The court is now unpersuaded by baseless accusations. The court finds no grounds for concluding defense counsel acted inappropriately in advising defendant to enter his plea.
2. Prejudice
Although the court found defense counsel was not deficient, the court will briefly consider the prejudice prong of the Strickland analysis. Defendant asserts the alleged instances of deficient representation prevented him from rejecting the plea agreement and proceeding to trial. In this context, the Supreme Court has stated, "in order to satisfy the `prejudice' requirement, the defendant must show that there is a reasonable probability that, but for counsel's errors, he would not have pleaded guilty and would have insisted on going to trial." Hill, 474 U.S. at 59, 106 S. Ct. 366. This inquiry into what defendant may have done is to be adjudged objectively. See id.
In this case, the government had an overwhelmingly strong evidentiary basis for convicting defendant. As described by the government at defendant's change of plea, the government was prepared to admit evidence seized from defendant's apartment and the testimony of several witnesses directly implicating defendant in the charged offenses. (Change of Plea Hr'g Tr. at 13-16). In particular, the individual who sold the methamphetamine to the confidential informant admitted that the methamphetamine was produced by defendant.
If convicted at trial, defendant would have faced the sentencing guidelines without the assistance of the government's concessions. As mentioned earlier, under Apprendi, defendant could only have been sentenced under 21 U.S.C. § 841(b)(1)(C). However, after trial, the government could have filed an information pursuant to 21 U.S.C. § 851, which would have resulted in a thirty year statutory maximum.[2] Without the three level assistance and responsibility reduction, defendant's sentence would have been calculated using a total offense level of thirty-five and a criminal history category of VI. The guideline range would have been in excess of 300 months.
Under the plea agreement, defendant was sentenced to approximately fifteen years. On the other hand, going to trial would have meant facing a possible sentence of approximately thirty years. Given this disparity in outcome, the court finds defendant has not satisfied his burden in demonstrating a likely probability that he, or any objective defendant, would have rejected the plea and faced trial.
Having found petitioner failed to carry his burden under either prong of the *1234 Strickland analysis, the court will deny all relief as to this issue.
E. Breach of Plea Agreement
Defendant's final argument is that the government breached the plea agreement. Apparently, defendant believes the plea agreement presented to him by his counsel is different than the agreement finally entered by the parties. In particular, defendant asserts the "actual" plea agreement obligated the government to recommend, at the time of sentencing, a sentence at the low end of the appropriate sentencing range. On the other hand, the government now argues the plea agreement only obligated the government not to oppose defendant's arguments for a sentence at the low end of the range. The breach is, therefore, embodied in the difference between recommending a sentencing and not opposing a sentence. The court finds defendant's argument unpersuasive.
First, the plea agreement presented in open court, bearing defendant's and counsel's signatures, clearly states: "The government agrees not to oppose the defendant's argument at sentencing that he should receive a sentence at the bottom end of the sentencing range to which he is assigned ...." (Plea Agreement ¶ 4(f) attach. to Pet. to Enter Plea of Guilty) (emphasis added). Second, during defendant's sentencing, the government reemphasized to the court and defendant it had fulfilled its obligation under the agreement by not opposing, as compared to recommending, a low end sentence. (Sentencing Hr'g Tr. at 11).
Defendant's argument that he somehow signed a different agreement or was duped in some other fashion is completely unsupported by the record. The government did not oppose defendant's arguments-thereby fulfilling its obligation. All relief will be denied as to this issue.
F. Defendant's Pending Motions for Leave to Amend
As noted earlier, defendant has filed three motions for leave to amend his original § 2255 motion. While the first motion was granted, the court has yet to consider the remaining two motions. The first pending motion for leave to amend was filed on October 9, 2001 (Doc. 163) and the second was filed on November 19, 2001 (Doc. 164). Both motions seek to raise additional grounds for relief.[3]
Unlike the first motion, however, the two presently pending motions were filed outside the one year limitation period established by the Antiterrorism and Effective Death Penalty Act of 1996 ("AEDPA"). 28 U.S.C. § 2255. Under the AEDPA, a defendant has one year from the date his conviction becomes final to file his § 2255 motion. Id. In this case, the Tenth Circuit entered its judgment affirming defendant's sentence on June 21, 2000. According to Supreme Court rule, defendant had ninety days in which to file a petition for a writ of certiorari. Sup.Ct. R. 13.1. Defendant declined to seek the writ. Therefore, defendant's conviction became final when the ninety days expired on September 21, 2000. See United States v. Burch, 202 F.3d 1274, 1276 (10th Cir.2000) (finding that if a defendant does not file a *1235 petition for a writ of certiorari after a direct appeal, the judgment of conviction becomes final when the time for such filing expires); Sup.Ct. R. 13.3 (stating petitions are timely if filed within ninety days of entry of judgment, irrespective of date the mandate is issued). Therefore, defendant had until September 21, 2001, to file his § 2255 motion. Both of the pending motions for leave to amend were filed after this date and must be construed as untimely.
Although not argued for by defendant, the Tenth Circuit has held that the relation back doctrine embodied in Rule 15(c) of the Federal Rules of Civil Procedure may apply to untimely requests to amend § 2255 motions. United States v. Espinoza-Saenz, 235 F.3d 501, 505 (10th Cir.2000). However, Rule 15(c) will only operate to save an untimely amendment if (1) the original motion was timely and (2) the proposed amendment does not seek to add a new claim or insert a new theory into the case. Id. (citing United States v. Thomas, 221 F.3d 430, 431 (3d Cir.2000)). As stated above, both of defendant's untimely amendments present new claims or theories. As such, Rule 15(c) is inapplicable.
The court is left with two untimely motions for leave to file amendments, so, ordinarily, the court would deny the motions. In the context of § 2255 motions, however, the court is without authority to consider the motions. The court must interpret the untimely motions as "second or successive" § 2255 motions and transfer the pleadings to the Tenth Circuit. Id. at 503. See also 28 U.S.C. § 2255 ("[a] second or successive motion must be certified as provided in section 2244 by a panel of the appropriate court of appeals").
IV. CONCLUSION
With the exception of the first issue, which was found to be procedurally barred, the court considered and rejected all of defendant's arguments on their merits. All relief pursuant to 28 U.S.C. § 2255 shall be denied.
IT IS THEREFORE BY THIS COURT ORDERED that defendant's Motion to Vacate, Set Aside, or Correct Sentence (Doc. 151) brought pursuant to 28 U.S.C. § 2255 is denied.
IT IS FURTHER ORDERED BY THIS COURT that defendant's Motions for Leave (Docs. 163 and 164) to file amendments to his § 2255 motion are transferred to the United States Court of Appeals for the Tenth Circuit. The clerk of the court shall mail the motions and a copy of this order to the United States Court of Appeals for the Tenth Circuit.
NOTES
[1] Whether Apprendi should be applied retroactively on initial § 2255 motions is an issue currently undecided in the Tenth Circuit. See United States v. Sanders, 247 F.3d 139, 151 (4th Cir.) (concluding Apprendi did not apply retroactively to collateral review of initial § 2255 motion), cert. denied, ___ U.S. ___, 122 S. Ct. 573, 151 L. Ed. 2d 445 (2001). See also Browning v. United States, 241 F.3d 1262, 1266 (10th Cir.2001) (en banc) (concluding Apprendi does not apply to second or successive habeas petitions, absent express direction from the Supreme Court). The court declines to consider this question, for even assuming Apprendi is applicable, defendant's claim is wholly lacking in merit.
[2] Once again, the court has factored in an assumed retroactive Apprendi impact. In reality, at the time defendant was weighing his options, he was facing a mandatory minimum sentence of twenty years to life as prescribed by 21 U.S.C. § 841(b)(1)(A).
[3] While one of defendant's pending motions for leave to amend (Doc. 164) revisits the issue of drug quantity, the court finds it raises a distinct argument from defendant's original § 2255 motion. Specifically, the original motion argued the court erred in failing to hold an evidentiary hearing to determine drug quantity, while the pending motion argues defendant's equal protection rights were violated by the imposition of defendant's sentence.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1807826/
|
417 So.2d 303 (1982)
Jack L. TERNER, Appellant,
v.
Freda RAND, As Personal Representative of the Estate of Ruth C. Terner, Deceased, Appellee.
No. 81-1433.
District Court of Appeal of Florida, Third District.
July 27, 1982.
Keith, Mack, Lewis & Allison and Gisela Cardonne and Edgar Lewis, Miami, for appellant.
Fine, Jacobson, Block, Klein, Colan & Simon and Theodore Klein and Linda Ann Wells, Miami, for appellee.
Before DANIEL PEARSON and FERGUSON, JJ., and OWEN, WILLIAM C., Jr. (Ret.), Associate Judge.
FERGUSON, Judge.
Owner of a Totten Trust may revoke it by any decisive act of disaffirmance. In Re Totten, 179 N.Y. 112, 71 N.E. 748 (N.Y.Ct.App. 1904). See also Litsey v. First Federal Savings & Loan Association of Tampa, 243 So.2d 239 (Fla.2d DCA 1971) (though Totten Trust may be revoked by any decisive act of disaffirmance, burden on one seeking to prove revocation by oral statements alone is exceedingly heavy). Where owner of trust delivered a document to her attorney which expressly revoked the "in-trust-for" accounts, beneficial interest of third-person was extinguished even though the document was not published in the owner's lifetime. The passbook agreement between the owner and the bank specifying the method for changing title to the accounts is solely for the protection of the bank and is not a limitation upon the owner's power to revoke a Totten Trust by any decisive act of disaffirmance. Jones v. First National Bank of Rome, 142 Ga. App. 18, 234 S.E.2d 794 (1977). As to the remaining issues no reversible error is shown.
Affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433688/
|
189 F. Supp. 2d 153 (2002)
BAYER CORPORATION, Plaintiff,
v.
CHESTNUT ACQUISITION CORPORATION, ChemDesign Corporation, and Specialty-Chem Products Corporation, Defendants.
No. 02 CIV 0941 LAK.
United States District Court, S.D. New York.
March 14, 2002.
Robert W. Gaffey, Mark S. Mandel, Jennifer W. Cohen, Jones, Day, Reavis & Pogue, for Plaintiff.
Glenn M. Kurtz, Robert Kelly, Meghan McCurdy, White & Case LLP, for Defendants.
MEMORANDUM OPINION
KAPLAN, District Judge.
The issue in this declaratory judgment action is which entity, as between the seller *154 of the shares of two of its former wholly owned subsidiaries, the buyer, and the subsidiaries themselves, is responsible for continuing to provide long term disability benefits for eleven of the subsidiaries' disabled personnel following the sale. One would have hoped that the entities involved would have reached some reasonable accommodation in light of the difficulties in which these eleven individuals, some of whom are seriously ill, find themselves. Unfortunately, that hope has not been realized.
I
A. The Marketing of the Companies
At the outset of the relevant period, Bayer Corporation ("Bayer") owned all of the outstanding capital stock of ChemDesign Corporation, which in turn owned all of the outstanding capital stock of SpecialtyChem Products. (The latter two entities are referred to collectively as the "Companies").
The Companies, as is common, provided their employees with an array of employee benefits, among them long term disability coverage. The means by which it did so was to pay Bayer for the right to have its employees included in the Bayer plan, which made coverage available to employees of Bayer and its affiliates.
Some time in 2001, Bayer decided to sell the Companies and caused its investment banker to prepare a descriptive memorandum that was used to interest prospective purchasers. The memorandum came to the attention of John Van Hulle of Chestnut Acquisition Corporation ("Chestnut"), who attended a presentation for potential purchasers with representatives of Bayer, the Companies, and Bayer's investment bankers in July 2001.[1] Among the inducements held out was Bayer's intention to assume certain of the Companies' liabilities, including liabilities relating to retirement and employee welfare benefits, prior to closing.[2]Pro forma financial statements were distributed which showed, among other things, that the intercompany obligations of the Companies to Bayer would be eliminated.[3] Among the so-called excluded liabilities was general ledger account number XXXXX, which included, among other things, costs in respect of long term disability coverage allocated to the Companies by Bayer. The balance in that account was approximately $3.8 million.[4] Prospective buyers were told that the elimination of these obligations should increase the price they were willing to pay.[5]
B. The Contracts
Chestnut was the successful bidder. The parties executed a Stock Purchase Agreement ("SPA") and an Assignment and Assumption Agreement ("AAA"), among other documents.
1. The SPA
The SPA contained several provisions pertinent to this dispute.
First, Bayer warranted and represented that the Companies' financial statements "present fairly, in all material respects, the consolidated financial position of the Companies *155 as of the date thereof," that the Companies had no material liabilities (whether or not required to be disclosed on their balance sheets in accordance with generally accepted accounting principles) as of the date of the transaction except as set forth on their balance sheets or otherwise disclosed, that one of the schedules to the SPA listed each of the Companies' "Employees" (a term defined to include inactive employees), and that neither of the Companies had any liability or was obligated to contribute to any employee benefit plan except as set forth on a disclosure schedule.[6] The schedule referred to in the employee representation and warranty listed only some of the eleven inactive employees whose benefits are here at issue.[7] The disclosure schedule, insofar as is relevant here, listed only obligations to the Bayer Corporation Disability Plan.[8]
Second, Section 5.1(b) of the SPA provided in relevant part:
"Except as provided below, Purchaser [Chestnut] will provide coverage for Employees beginning as of the date hereof... under the employee benefit plans and programs ... currently maintained by Purchaser for similarly situated employees of Purchaser.... The Companies will continue to be responsible for payment of any salary, medical benefit or disability benefit to any Inactive Employee who is receiving or has qualified to receive such payment as of the date hereof."[9]
"Inactive Employees" was defined to mean "all employees of the Companies whose employment is primarily or exclusively related to the Business and who are listed in Section 5.1(c)(ii) of the Disclosure Schedule and who, as of the date hereof, are on a nonmedical leave or short or long-term disability."[10] Section 5.4 went on to say that "Seller [Bayer] will take, or will cause to be taken, all action necessary to cause [the Companies] to cease participating in the Employee Benefit Plans sponsored by Seller ..., effective as of the date hereof."[11]
Finally, Article VIII of the SPA defined the term "Excluded Liabilities" as those listed in Section 8.2 of the Disclosure Schedule.[12] Schedule 8.2 in turn listed, among other things, $3.8 million of accrued intercompany debt due to Bayer under general ledger account 26710 in respect of retirement and welfare employee benefits.[13] Bayer, by virtue of Section 6.2, agreed to indemnify Chestnut for "the liabilities associated with the Excluded Liabilities ... and any claims related thereto."[14]
2. The AAA
The pivotal provision of the AAA was Section 2, under which Bayer "assume[d] and agree[d] to pay, perform and discharge when due, the obligations and liabilities of the [Companies] described on Schedule B hereto."[15] These assumed liabilities are precisely the same as the Excluded Liabilities defined in the SPA. In *156 other words, by Section 2 the Companies assigned to Bayer, and Bayer agreed to assume, all of the Excluded Liabilities.[16] Thus, one effect of Section 2 of the AAA was to extinguish the Companies' liability to Bayer for participation in its disability benefit plan. As we shall see, this was not the only effect.
Sections 3 also is said by one or the other of the parties to be of some relevance. Section 3 released the Companies from all obligations relating to the Excluded Liabilities.[17]
C. The Disabled Employees and the Dispute
Prior to the acquisition, eleven individuals who had worked for the Companies were receiving disability benefits under the Bayer (then Miles) disability plan. Upon the occurrence of the acquisition, they ceased to be employees or former employees of a Bayer affiliate and therefore no longer are eligible for its plan in its current form.[18] Bayer, moreover, argues that the obligation to provide disability coverage to these individuals always was that of the Companies and that the Companies agreed in Section 5.1(b) of the SPA to "continue to be responsible for payment of" those benefits on the theory that these individuals are "Inactive Employee[s] who [were] receiving or [were] qualified to receive such payment as of the date hereof."[19]
Chestnut takes a very different position. It argues that the premise of the entire dealreflected in the original presentation, the discharge of the Companies' intercompany obligation to Bayer in respect of the retirement plan, and other circumstances was that it was buying the Companies free of any obligation to these individuals, the existence of at least some of whom was not even acknowledged in the Disclosure Schedule. Chestnut contends that, by excluding the liability for the intercompany obligation and assuming that liability in the AAA, Bayer assumed the obligation to provide those benefits.
It appears that the hardened positions of both sides have left the employees entirely out in the cold.
D. Prior Proceedings
Bayer commenced this declaratory judgment action and immediately sought advancement of the matter pursuant to FED. R. CIV. P. 57 in view of the potential adverse effects of the dispute on the individual disabled persons. The parties were unable to work out a mutually acceptable interim modus operandi to ensure that these individuals would receive benefits until the case is resolved, with the loser ultimately to bear the entire financial burden. Accordingly, the Court set the declaratory judgment action for immediate trial. Although Chestnut has interposed counterclaims for, inter alia, indemnification by Bayer for any liability it may have to provide the benefits, the parties agreed to sever the counterclaims, on which there is a jury demand, in order to permit prompt trial of the declaratory judgment action. Both sides waived a jury on the declaratory judgment action and, further, agreed that any findings the Court makes in the declaratory judgment action will be binding with respect to the counterclaims notwithstanding any right either otherwise would have had to a jury determination of *157 those issues.[20] In addition, the Companies were added as defendants during the trial.[21]
This is the Court's decision following trial of the declaratory judgment action.
II
A contract of course should be construed to give effect to all of its parts.[22] Where the contract is clear, its construction presents a question of law for the Court to be decided on the basis of the document alone.[23] If it is ambiguousthat is, if it reasonably might yield two or more interpretations extrinsic evidence is admissible to assist in determining the intention of the parties.[24] And the intention that governs is that which is discerned from their objective manifestations of agreement; subjective, uncommunicated intentions are not material.[25]
Bayer argues that neither it nor its plan has any further liability in respect of these individuals in consequence of Sections 5.1(b) and 5.4 of the SPA. Section 5.1(b), as noted above, provides that "[t]he Companies will continue to be responsible for payment of any salary, medical benefit or disability benefit to any Inactive Employee who is receiving ... such payment as of the date hereof." Section 5.4 requires Chestnut to cause the Companies to cease participating in Bayer's benefit plans. But this argument, while not without some initial appeal, is far from conclusive.
To begin with, the Companies arguably never were responsible for payment of any long term disability benefits to any of these individuals. They made available to their employees the opportunity to participate in the Bayer disability plan and paid Bayer something in respect of their participation. But any benefits paid were paid by the Bayer disability plan. This is distinct from the situation with respect to short term disability, which the Companies paid both before and after the acquisition.[26]
Second, the term Inactive Employee is defined in the SPA in relevant part as "employees of the Companies whose employment is primarily or exclusively related to the Business and who are listed in Section 5.1(c)(ii) of the Disclosure Schedule."[27] But it was the practice of the Companies, perhaps unlike that of Bayer itself, to terminate employees at the end of their periods of short term disability,[28] so it appears that none of the individuals in question still is an employee, much less one whose employment is primarily or exclusively *158 related to the business. Even if the Companies are regarded as having paid disability benefits in the past, it is far from clear that they were paying them to Inactive Employees as defined in the SPA. Hence, the applicability of the last sentence of Section 5.1(b) is far from clear.
At this first stage of the analysis, the issue is not which of these two constructions is more appealing. It suffices for present purposes to note that these difficulties, not to mention others, render the contracts susceptible of at least two reasonable interpretations. They therefore are ambiguous, thus permitting consideration of parol evidence.
III
This transaction was structured as a purchase by Chestnut of the stock of the Companies. Absent special agreements between parties to such a transaction, the companies whose stock is sold remain liable for their obligations, including debts owed to the seller. The seller simply transfers the companies' shares. The critical question here is whether Bayer and Chestnut reached some different agreement with respect to liability for these benefits.
As in any contract case, the objective here is to give effect to the reasonable expectations of the parties. The Court is somewhat handicapped in doing so, however, because there was no discussion of this issue during the negotiation of the deal.[29] Thus, it is entirely possible that, in the words of an ancient proverb, these parties were sleeping in the same bed but dreaming different dreamsthat Bayer, if it thought about the subject at all, believed or hoped that it was getting rid of this obligation while Chestnut thought that the responsibility, to the extent it was aware of any responsibility, would be assumed by Bayer. But that is neither here nor there. In Judge Learned Hand's famous words, later adopted by the New York Court of Appeals:[30]
"A contract has, strictly speaking, nothing to do with the personal, or individual, intent of the parties. A contract is an obligation attached by the mere force of law to certain acts of the parties, usually words, which ordinarily accompany and represent a known intent. If, however, it were proved by twenty bishops that either party, when he used the words, intended something else than the usual meaning which the law imposes upon them, he would still be held, unless there were some mutual mistake, or something else of the sort. Of course, if it appear by other words, or acts, of the parties, that they attribute a peculiar meaning to such words as they use in the contract, that meaning will prevail, but only by virtue of the other words, and not because of their unexpressed intent."[31]
Thus, the Court is obliged to determine the reasonable expectations of the parties not by choosing between their present assertions of what they thought or intended at the time, but by assessing the reasonable meaning of the words of the contracts, in light of the circumstances in which the parties assented to them, including what they said to each other. The Court finds several factors especially persuasive.
*159 To begin with, the lack of any discussion of this issue in the negotiation of the deal is significant. This was a $3.5 million stock sale. The Companies were losing money at the time of the transaction, so their anticipated future costs were of pivotal importance to prospective purchasers. The benefits payable to these eleven employees exceed $288,000 per year, or almost 10 percent of the purchase price. Their present value is over $3.2 million.[32] The lack of any discussion of the issue in these circumstances, taken together with the fact that Bayer touted the deal to prospective purchasers in a manner that arguably implied that any liabilities for former employees would remain with Bayer, as it did by representing that it would eliminate the intercompany obligation in respect of the retirement and disability plans, makes it more likely than not that Bayer created the impression that the liability with respect to former employees would remain with Bayer.[33] Indeed, the expense reports that Bayer provided to prospective purchasers reflected no expenditures in respect of long term disability obligations.[34]
Even more compelling is the AAA. Section 3 released the Companies from all obligations relating to the Excluded Liabilities, including general ledger account 26710. But the AAA did not stop there. Rather, the Companies' liability to Bayer was defined in the AAA as an Assumed Liability. In Section 2, Bayer contracted to "assume[ ] and ... to pay, perform and discharge when due, the" Assumed Liabilities.[35] But how does an assignee "perform" a liability of the assignor to the assignee? The assignment itself extinguishes the liability. Hence, Bayer's covenant to "perform and discharge" the intercompany obligation reflected in general ledger account 26710 would be entirely meaningless unless it imported something more than the release of the obligation. The only meaning that makes sense of that language is that Bayer thereby assumed the responsibility to pay the benefits in respect of which the liabilities in that account were accrued. Since the liabilities in that account reflected the cost of future benefits to disabled former employees,[36] the AAA is best construed as an assumption by Bayer of the obligation to pay those benefits.
Third, the Summary Plan Description for the Bayer plan lists events, the occurrence of which would result in termination of benefits. A change of control such as occurred here is not among them.[37] In consequence, the plan description itself, which was made available to Chestnut in *160 due diligence,[38] suggested that employees already receiving benefits under the Bayer plan prior to a change of control would continue to do so thereafter.
Finally, while there is some disagreement in this case concerning FAS 112, this much is clear. Under FAS 112, the Companies were obliged to reflect on their balance sheets an accrued liability in respect of their obligation to make future benefit payments.[39] The consolidated pro forma balance sheet furnished to Chestnut by Bayer reflected no such accrual.[40] Bayer, moreover, represented and warranted, that the statement fairly presented, in all material respects, the consolidated financial position of the Companies and that there were no liabilities as of the date of the transaction except as there stated.[41] That representation and warranty lends support to the view that the parties expected that Bayer would remain liable to pay benefits to these former employees.
As noted above, Bayer nevertheless argues that Sections 5.1(b) and 5.4 are inconsistent with this interpretation of the agreements. But its position ultimately is not sufficiently persuasive. Section 5.1(b) is easily reconciled with this construction by virtue of the fact that the Companies have paid short-term disability benefits both before and after the acquisition,[42] which is sufficient to explain the reference to the Companies' continued responsibility for disability benefits in a manner consistent with the conclusion stated above..
Nor is Section 5.4 an obstacle. It says that the Companies were obliged to cease offering their employees the opportunity to participate in the Bayer plans. There is no dispute that the Companies have ceased participation in the Bayer plans going forward and adopted plans of their own. Section 5.4, however, simply does not address the status of employees who already had become eligible for benefits under the Bayer plans. Thus, there is no inconsistency in holding that Bayer now is responsible for their benefits.
IV
For the foregoing reasons, the Court is persuaded that the obligation to continue benefit payments to these eleven employees was assumed by Bayer and, as between Bayer and the defendants, is not the responsibility of Chestnut or the Companies. While the Court recognizes that this may require changes to Bayer's plan or, alternatively, that Bayer pay the benefits itself, this is a problem of its own making. If it wished to rid itself of this obligation, it should have been far more explicit and careful in its dealings with Chestnut.
A declaratory judgment will enter determining that Bayer is responsible for paying the disability benefits to the eleven employees here at issue and that neither Chestnut nor the other defendants, as between them and Bayer, is responsible for doing so. As this moots Chestnut's counterclaims, those are dismissed. The Court has considered Bayer's other arguments and found them to lack merit. These constitute the Court's findings of fact and conclusions of law.
Settle judgment on two days' notice.
SO ORDERED.
NOTES
[1] Van Hulle St. ¶ 2-3.
In order to expedite the trial, the direct testimony of all witnesses was submitted in the form of statements which the witnesses adopted on the stand. These are referred to by the name of the witness followed by "St."
[2] Id. ¶¶ 3-5.
[3] Id. ¶¶ 6-7; DX 2, at 97-101.
[4] Van Hulle St. ¶ 15.
[5] Id. ¶ 7.
[6] SPA §§ 2.5(a)-(b) (financial statements, liabilities), 2.15(b) (employees), 2.16(a) (benefit plans), 5.1(c) (definitions).
[7] SPA Disc. Sched. § 5.1(c)(ii).
[8] Id. § 2.16.
[9] SPA § 5.1(b).
[10] Id. § 5.1(c).
[11] Id. § 5.4.
[12] Id. at 39.
[13] SPA Disc. Sched. § 8.2.
[14] SPA § 6.2.
[15] AAA § 2.
[16] Compare SPA Disc. Sched. § 8.2, with AAA Sched. B.
[17] AAA § 3.
[18] Yenerall St. ¶ 6.
[19] See id. ¶¶ 10-13.
[20] In effect, the parties have waived the protection of Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 504, 508, 79 S. Ct. 948, 3 L. Ed. 2d 988 (1959), and Dairy Queen, Inc. v. Wood, 369 U.S. 469, 479, 82 S. Ct. 894, 8 L. Ed. 2d 44 (1962).
[21] Tr. 4-6.
[22] E.g., Hartford Fire Ins. Co. v. Orient Overseas Containers Lines (UK) Ltd., 230 F.3d 549, 558 (2d Cir.2000); New York v. Oneida Indian Nation, 90 F.3d 58, 62 (2d Cir.1996).
[23] E.g., Metro. Life Ins. Co. v. RJR Nabisco, Inc., 906 F.2d 884, 889 (2d Cir.1990).
[24] E.g., Investors Ins. Co. v. Dorinco Reins. Co., 917 F.2d 100, 104 (2d Cir.1990); Hanley v. Lark Deli Corp., 2 F. Supp. 2d 534, 537 (S.D.N.Y.1998), aff'd sub nom. Hanley v. Deluxe Caterers of Shelter Rock, Inc., 175 F.3d 1007 (2d Cir.1999) (table).
[25] E.g., Hotchkiss v. Nat'l City Bank, 200 F. 287, 293 (S.D.N.Y.1911), aff'd, 201 F. 664 (2d Cir.1912), aff'd, 231 U.S. 50, 34 S. Ct. 20, 58 L. Ed. 115 (1913).
[26] McCracken St. ¶ 25.
[27] SPA § 5.1(c).
[28] Tr. 38-43; DX 11, at 15; DX 12, at 16; DX 14-16.
[29] Tr. 23-24; 48.
Indeed, the Court is persuaded that there were no internal discussions at Bayer with respect to the possibility of the Companies assuming the obligations here at issue. See Tr. 25.
[30] Mencher v. Weiss, 306 N.Y. 1, 7-8, 114 N.E.2d 177 (1953).
[31] Hotchkiss, 200 F. at 293.
[32] Handley St. ¶ 8.
[33] This is true despite the fact that, following the closing, there was a difference of view on defendants' side as to whether Bayer was obliged by the agreements to pay these benefits. Compare PX B (agreement silent), with DX 20 (Bayer retaining responsibility).
[34] Tr. 102.
[35] AAA § 2.
[36] Under Financial Accounting Standard (FAS) No. 112, generally accepted accounting principles require accrual basis employers to accrue liabilities for future disability benefits during an employee's active service. Cantor St. ¶ 7; Tr. 106. This reflects an overall goal of accrual basis accountingreflection of costs associated with the generation of revenue in the period in which the revenue is recognizedin that the liability to pay future disability benefits is a cost of generating revenue during the employee's active employment. Id. at 107-08. Thus, when an employee is terminated or otherwise leaves the payroll, the employer ceases to accrue in respect of liability for payment of future benefits to that employee. Id. at 65.
[37] DX 10, at 1449-50; Tr. 50-55.
[38] Van Hulle St. ¶ 10; see PX H, at 36.
[39] Cantor St. ¶¶ 7-8.
[40] Id. ¶¶ 11-12; McCracken St. ¶ 24.
[41] SPA § 2.5(a)-(b).
[42] McCracken St. ¶ 25.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433668/
|
189 F. Supp. 2d 406 (2002)
Clarence E. JORDAN, Plaintiff,
v.
SANDWELL, INC., et alia, Defendants.
Westvaco Corporation, Plaintiff,
v.
Sandwell, Inc., et alia, Defendants.
Nos. 7:99CV00713, 7:99CV00724.
United States District Court, W.D. Virginia, at Roanoke.
January 31, 2002.
*407 *408 William Thomas Wilson, Russell Wayne Updike, Nolan R. Nicely, Jr., Wilson, Updike & Nicely, Covington, VA, for Clarence E. Jordan.
James Wilson Jennings, Jr., Elizabeth L. Niles, Woods, Rogers & Hazlegrove, PLC, Roanoke, VA, for Westvaco Corp.
Stephan Forrest Andrews, James W. Walker, James D. Hobbs, Jr., Paul David Anders, Wright, Robinson, Osthimer & Tatum, Richmond, VA, Paul C. Kuhnel, Wooten & Hart, Roanoke, VA, Robert Francis Redmond, Jr., LeClair Ryan, A Professional *409 Corp., Richmond, VA, for Defendants.
MEMORANDUM OPINION
TURK, District Judge.
These two cases, which involve a plaintiff allegedly injured when superheated water erupted from a tower at a paper mill and scorched his back, were consolidated for pretrial proceedings. The two defendants, Sandwell Engineering, Inc. ("Sandwell") and U.S. Filter Corporation ("U.S. Filter")[1] have moved for summary judgment against the two plaintiffs, Clarence Jordan and Westvaco Corporation ("Westvaco"). After carefully considering the parties' filings (which were voluminous, to put it mildly) and oral arguments, the Court rules on the motions seriatim as is outlined below.
I. BACKGROUND
Plaintiff Jordan was an employee of Manpower, Inc., engaged in work on the site of Plaintiff Westvaco's Covington paper mill. The paper mill itself is a large and technically complex factory with varied pieces of equipment. One by-product of the paper making process is contaminated water, to which the parties refer as "foul condensate." In essence, the mill cleanses the foul condensate by boiling it; the water, transformed into gas, floats upward purified while the contaminants, still solid, fall downwards and otherwise find their way to disposal. The structure in which this takes place is a tower-like edifice called a "stripper." The newly cleansed water leaves the stripper and ends up in a "standpipe," which is open at the top.
Before the water is boiled in the stripper, it is heated up to near-boiling in a unit called the "heat exchanger." The hot water exiting the stripper also flows into the heat exchanger, where it transfers its heat to the water entering the stripper and supplies the thermal energy needed for the warming-up process. Thus, the heat exchanger serves both to cool down water exiting the stripper at boiling temperatures and heat up water entering the stripper to near-boiling temperatures.
On the day on which Mr. Jordan suffered his injury, some sort of malfunction in the system occurred and water ceased flowing into the stripper. The water leaving the stripper flowed into the heat exchanger but because there was no longer water flowing into the stripper, there was no impure, incoming water with which the already superheated water could exchange heat and it retained its high temperature. When the superheated water reached the standpipe, which had much cooler contents, the result was a "geyser." Boiling water spewed out of the standpipe and onto Mr. Jordan, burning him severely.
After mediation, Mr. Jordan settled the claims he had against Westvaco for one million dollars. He then filed a complaint against Sandwell and U.S. Filter, alleging design malpractice. Both defendants had participated in the design and construction of the improvements to the paper mill in the early 90's. Each had also had some involvement with the mill as late as 1995. Westvaco also filed a separate suit against both defendants, alleging that the defendants were contractually obligated to indemnify Westvaco for all or some portion of the million dollars it had paid to Mr. Jordan.
Both defendants have now moved for summary judgment on the claims against them.
*410 II. SANDWELL'S MOTION FOR SUMMARY JUDGMENT AGAINST JORDAN
The standards under which this Court must consider a summary judgment motion are well-established. Upon a motion for summary judgment, the Court must view the facts, and inferences to be drawn from those facts, in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986); Nguyen v. CNA Corp., 44 F.3d 234, 236-37 (4th Cir.1995). Summary judgment is proper where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). "Summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole." Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986).
The parties agree that Virginia law governs this diversity-of-citizenship action. Sandwell's basis for its motion is the Virginia statute of repose, Va.Code. § 8.01-250 (Michie Supp.2001). That statute provides that
no action to recover for any injury to property, real or personal, or for bodily injury or wrongful death, arising out of the defective or unsafe condition of an improvement to real property, nor any action for contribution or indemnity for damages sustained as a result of such injury shall be brought against any person performing or furnishing the design, planning, surveying, supervision of construction, or construction of such improvement to real property more than five years after the performance or furnishing of such services and construction.
The limitation prescribed in this section shall not apply to the manufacturer or supplier of any equipment or machinery or other articles installed in a structure upon real property ...
Sandwell maintains that the services that it performed for Westvaco, which allegedly caused Mr. Jordan's injuries, were performed from 1989-91. Mr. Jordan filed his complaint in 1999. According to Sandwell, the complaint is untimely under the statute of repose, which under Sandwell's theory would extinguish any actions filed against it after 1996.[2] Mr. Jordan replies that Sandwell engaged in other, later activities at the Sandwell site which reset the repose period and render his action timely.
The language of the statute bars actions (1) for personal injuries (2) against a designer, planner, surveyor, or constructor (3) of an improvement to real property (4) who is not a manufacturer or supplier of equipment or machinery (5) when those actions are filed more than five years after the defendant furnished the services in question. The parties dispute each of *411 these aspects with varying degrees of vigor. The Court will therefore address each in turn.
A. A Claim for Personal Injuries
The statute of repose applies, by its own terms, to actions for "personal injuries." Mr. Jordan claims that the statute should not apply because although he has filed claims for negligence, he also asserts a claim for breach of warranty. Under his theory, Sandwell warranted that it had safely constructed the Westvaco mill, when in fact it had not done so. The warranty counts of his action sound in contract, not tort, and therefore fall outside § 8.01-250.
The Court finds this argument to be without merit. Mr. Jordan obviously claims compensation in tort for injury to his person. This Court is aware of no Virginia law directly construing this aspect of the statute of repose. However, this situation is conceptually similar to Friedman v. Peoples Service Drug Stores, Inc., 208 Va. 700, 160 S.E.2d 563 (1968). There the plaintiff tried to avoid the personal injury statute of limitations (two years under § 8.01-243) by pleading his claims as breaches of warranty, which have a longer limitations period under § 8.01-246. The Virginia Supreme Court rejected the plaintiffs efforts: "[T]he object of an action and not its form determines which statute of limitations is applicable."[3] Likewise it seems logical that the object of an action and not its form should determine whether the statute of repose is applicable. Because this is an action "to recover for ... bodily injury," see § 8.01-250, the statute of repose can apply regardless of whether the complaint sounds in tort or contract. In addition, the Court's holding harmonizes with that of the Massachusetts Supreme Court in McDonough v. Marr Scaffolding Co., 412 Mass. 636, 591 N.E.2d 1079, 1083 (1992) (plaintiff cannot "nullify" statute of repose by recasting negligence claim as breach of warranty claim).
Jordan's claim against Sandwell meets the first element of the § 8.01-250 test.
B. Against a Designer, Contractor, Surveyor, or Constructor
By its terms, the statute protects "any person performing or furnishing the design, planning, supervision of construction, or construction" of the improvements that the statute covers. Sandwell submits that the services it provided fall under the statute. In opposition, Mr. Jordan urges that the statute does not apply to Sandwell because the services that Sandwell provided "were much broader than the limited services ... to which § 8.01-250 applies." See Plaintiff's brief at 8, 22.
The Court finds that Sandwell has the better of this argument. Although he cites very little to depositions or affidavits, Mr. Jordan complains in his brief that Sandwell was responsible for "layout" and "coordination" of the projects, which sounds to the Court like "design" and "supervision of construction."[4]Id. at 22. Sandwell "set forth the parameters and specifications" for the project. Id. In other words, it "designed" the system. § 8.01-250. It "was involved in determining issues related to safety, warning, testing, etc.," Plaintiff's Brief at 22, which again seems like design. Sandwell "was responsible for the interconnection of various piping lines"for constructing themand "was *412 aware of new systems and components," as a designer and constructor no doubt would be. The contract between Sandwell and Westvaco echoes terms similar to those that the Plaintiff uses in his brief. The evidence demonstrates that Sandwell's duties were those that the statute encompasses.
The contract between Westvaco and Sandwell does contemplate that Sandwell will "fabricate" certain items to be used in construction. Plaintiff's Appendix to Motion in Opposition to S.J., Exhibit 1, at 1. Even assuming that this fabrication took placewhich Sandwell deniesPlaintiff's claim does not concern the fabrication of the component parts of the paper mill. Rather, the only expert who will testify for the plaintiffs will testify concerning the mill's defective design. There is no allegation that the individual parts of the mill were defectively manufactured, that the steel in the pipes was somehow impure or that the rubber of the seals in the pipes was cracked. Rather, the claim is that Sandwell negligently arranged for these parts to be put together in such a way as to injure the plaintiff.[5] Even if Sandwell fabricated paper mill parts, that is irrelevant to Jordan's claim of design malpractice, which is covered under the statute.
Sandwell meets the second prong of the statute.
C. Of an Improvement to Real Property
The parties appear to agree that the services that Sandwell provided constituted an "improvement to real property" within the meaning of the statute. In any event, it appears that the definition of "improvement to real property" enunciated by the Virginia Supreme Court in Danville Holding Corp. v. Clement, 178 Va. 223, 16 S.E.2d 345, 349-50 (1941) applies here. See Sandwell's Brief at 7. Thus, Sandwell meets the third prong of the statute.
D. But not a Manufacturer or Supplier of Equipment or Machinery
By its terms, the statute does not extend its protection to a "manufacturer or supplier of equipment or machinery." Such persons remain liable as if the statute of repose did not exist. The statute has a complicated but illuminating legislative history, which the Virginia Supreme Court discussed at length in Cape Henry Towers v. National Gypsum Co., 229 Va. 596, 331 S.E.2d 476, 478-80 (1985), and which this Court will briefly recount now.
The original version of § 8.01-250 included only the first paragraph of the modern statute; it did not include the `manufacturer or supplier' clause of the second paragraph. In Wiggins v. Proctor & Schwartz, 330 F. Supp. 350 (E.D.Va.1971), aff'd mem. op. 71-1952 (4th Cir. Mar. 8, 1972), the District Court for the Eastern District of Virginia applied the repose statute to bar a claim against a manufacturer of a two-ton jute machine that had been brought into defendant's factory and installed fourteen years earlier. The Court found that the machine itself, when brought in and bolted down, had become an improvement to real property. The statute of repose therefore extinguished the plaintiff's products liability action against the maker of the jute machine. In other words, the Wiggins Court found the statute of repose barred products liability actions once the product became a fixture.[6]
*413 The Wiggins decision caused considerable legislative gnashing of teeth. Apparently the General Assembly did not intend to abolish products liability actions against manufacturers whose products fortuitously became fixtures; rather, the legislators intended merely to protect architects, designers, and the like. The federal court, however, had swept equipment manufacturers into the statute, and had converted the statute into from a real improvements statute of repose to a general products liability statute of repose for fixtures. The Legislature added the second paragraph of § 8.01-250 to re-establish the products liability actions that Wiggins would have barred.
In 1974, this Court considered Smith v. Allen-Bradley Co., 371 F. Supp. 698 (W.D.Va.1974) (Turk, J.). The action in Smith accrued in 1970; thus, even though the Legislature had amended § 8.01-250 in 1973, this Court considered the preamendment version of it. The Plaintiff in Smith sued over the defective condition of a "limit switch" in a die cutting press. Finding Wiggins indistinguishable and controlling, this Court found that the pre-1973 version of § 8.01-250 barred the plaintiff's products liability action. Nevertheless, this Court commented that the new version of § 8.01-250, which included the `manufacturers and suppliers' clause, would have operated to allow the plaintiff's products liability action against the switch manufacturer. Id. at 700. This Court also noted Smith's contention that the original version of the statute of repose would not bar actions based on "manufactured chattels which were added at a later time." Id.
The Virginia Supreme Court took up § 8.01-250 in 1985 in Cape Henry Towers. The court found that the 1973 amendment to § 8.01-250 reversed the Wiggins decision and restored the products liability causes of action for defective equipment or machinery that Wiggins would have barred. The Virginia Supreme Court also seized on this Court's comment regarding "manufactured chattels which were added at a later time" to draw a distinction between "ordinary building materials," which fall under the statute's protection, and "equipment and machinery," which does not. Compare Cape Henry Towers, 331 S.E.2d at 480 with Smith, 371 F.Supp. at 700.[7]
Considering the legislative history along with the holding of the Virginia Supreme Court in Cape Henry Towers, it is possible meaningfully to chart the scope of § 8.01-250: Before 1973, the statute barred products liability actions against manufacturers and suppliers when they designed or constructed their products and the products subsequently became improvements to real property. After 1973, the legislature restored those products liability actions by adding the second paragraph to § 8.01-250. In 1985, the Virginia Supreme Court created a subclass of products liability actions involving ordinary building materials and brought those actions once again under *414 the protection of the statute. Cape Henry Towers, 331 S.E.2d at 481.
Keeping in mind the history of the statute, it is a relatively easy matter to apply it to the case at hand. The plaintiff here has clearly alleged design malpractice. His dispute is not with the defective condition of any discrete component of the "Foul Waste Condensate System," but is with the design of the system as a whole. He thinks that the different components of the systemthe heat exchanger, the pipes, the stripper, the standpipe, the pre-heater, and otherswere designed and put together in such a way that water spewed out the system and injured him. The plaintiff contends the items here are "equipment and machinery" within the meaning of the statute, and are not "ordinary building materials." Nevertheless, the plaintiff misses the initial classification between design malpractice actions (against architect/designers) and products liability actions (against manufacturer/designers). This action seems much more like a design malpractice action than a products liability action. The Foul Condensate Stripping System is not a machine hauled into the Westvaco factory, placed in some building, and bolted down (like the jute machine in Wiggins). Rather, the Foul Condensate Stripping System is so comprehensive in its functioning that it is the improvement to real property, not a discreet fixture put into some pre-existing improvement. The products liability subclassification between "machinery" and "ordinary building materials" is irrelevant because Sandwell is not being sued as a "manufacturer or supplier" of a fixture, but instead as a designer of an improvement. The actions that Sandwell took were never within the Wiggins-Smith-Cape Henry Towers line of cases that caused the legislative row in the first place.
Because Jordan sues Sandwell in its capacity as the designer of a system constituting an improvement to real estate and not as the manufacturer of a discrete fixture of that improvement, the second paragraph of § 8.01-250 allows the statute of repose to bar his action.
E. Filed More than Five Years After Beginning of Repose Period
The final component of the § 8.01-250 is the repose period: a plaintiff must file his action against the defendant within "five years after the performance or furnishing" of the defendant's services. Sandwell argues that it had completed work on the Westvaco project and had received payment by December 1992, at the latest. If this is so, § 8.01-250 would bar the suit. Sandwell has submitted a supporting affidavit. The plaintiff responds that Sandwell was involved in the project as late as 1995. If that is so, the suit is timely.
The Plaintiff cites to several portions of the record which he says demonstrate the nature of Sandwell's involvement with the Westvaco project in the mid-1990's. Jordan Brief at 11-13. He claims that the record shows that Sandwell made alterations in the mid-1990's to systems involved in the accident. Nevertheless, Mr. Jordan's citations themselves reveal that Sandwell's involvement was very limited. For instance, he cites to a 1995 contract between Sandwell and Westvaco whereby Sandwell would "evaluate anchors, guides, and supports on the" pipes in the Foul Waste Condensate System. In other words, Sandwell was to inspect and repair the metal struts that held up the pipes. Plaintiff's Appendix Exhibit 6. Plaintiff's other cites confirm this interpretation: Sandwell worked on "pipe bridges" to make sure that the pipes would not fall down. Plaintiff's Brief at 12. It is evident *415 that this work was of a completely different nature than the 1991 work, and in 1995 Sandwell did not act to repair any condition that contributed to or caused Mr. Jordan's injuries, as Sandwell engineer Wally Sumner testified during his deposition. See Sumner Dep. at 18. The 1991 work had to do with the design of a facility. The 1995 work repaired metal supports for the pipes in the Westvaco mill. These pipes may have been pipes that Sandwell designed in 1991, but the work was not the same type of work. Furthermore, the record reveals that the 1995 contract was worth $15,000hardly enough for a job anywhere near the size of the 1991 work. Plaintiff's Appendix Exhibit 6.
It follows, then, that the statute of repose will apply unless the time provisions of it are wide-ranging enough to "reset" anytime a defendant revisits the site on which it performed the initial work, even when the work is of a completely different type. The Court knows of no Virginia case law that is directly on-point. The Plaintiff cites to Federal Reserve Bank of Richmond v. Wright, 392 F. Supp. 1126, 1129 (E.D.Va.1975), for the proposition that the repose period begins to run "from the completion of the services and construction." This is true as far as it goes, but it sheds no light on how to determine what a "project" is for the purposes of the analysis. Mr. Jordan also cites to McDonald v. Windermere Construction Co., 41 Va.Cir. 177 (Fairfax Co.1996), which involved a dispute against the developer of an apartment complex. Did the repose period begin when the allegedly defective stove was installed in one unit of the apartment complex, or when the entire complex was complete? Judge Smith decided that it started when the entire project was complete. Still, McDonald is inapposite here because the construction of the apartment complex was one continuous work. If the developer in McDonald had returned to the complex two years later, under a different contract and for additional consideration, in order to fix a broken window in a different apartment unit than the one in which the allegedly defective stove was located, no one could seriously contend that the window repair would reset the repose period for any defect that might turn up in the whole complex.[8]
The case that more closely resembles this situation is one that Sandwell cites, Fueston v. Burns and McDonnell Engineering Co., 877 S.W.2d 631 (Mo.App. 1994). Fueston was a personal injury action against the designers of a "melt shop." The plaintiff got his head caught in a crane at the shop and suffered severe injuries. The defendant pled that Missouri's ten year statute of repose barred the claims. In response, the plaintiff argued that the statute did not apply because the defendant had performed additional engineering services at the melt shop within ten years of the time that the plaintiff filed suit. The defendant pointed out that the additional services were to completely different components of the melt shop. The trial court granted summary judgment for the defendant, and the Missouri Court of Appeals affirmed: "Because the crane with surrounding structure is the improvement alleged by the Fuestons to be defective or unsafe ... it is the date on which the *416 crane and the surround structure was completed that is relevant to the determination" of when the repose period begins. Id. at 637.
Consistent with Fueston, this Court holds that when there is no nexus of causation between the subsequent work and the system that causes the accidentwhen, as here, the subsequent work involves repairs that do not implicate the defects that allegedly caused injury to the plaintiffthen the original work is complete for the purposes of § 8.01-250. Repairs to the struts that hold up pipes in the Westvaco Mill had nothing to do with the reasons that the Foul Waste Condensate System spewed superheated water onto Mr. Jordan. Thus, the repose period began when Sandwell completed the initial work, a date no later than December 1992.
Sandwell satisfies that final prong of the repose test.
F. Other Considerations
Finally, Mr. Jordan argues that the Court should deny Sandwell's motion for summary judgment on one final ground. According to him, Sandwell produced manuals that failed to warn Westvaco of the Foul Waste Condensate System's propensity to spew boiling water out of its standpipe. A manual is clearly not an improvement to real property, says Mr. Jordan, and therefore the statute of repose does not bar his claim. The question is whether a failure-to-warn-in-a-manual type claim will defeat the statute of repose in these circumstances. Is the manual separable from the improvement to real estate that § 8.01-250 covers?[9]
The majority of the cases bearing on this question deal with products liability statutes of reposestatute which extinguish causes of action against a manufacturer after a certain time period. However, the general principles are applicable to this case also. The great majority of the cases find that a manual is an inseparable part of the system or product that the plaintiff complains was defective. Thus, the statutes of repose extinguish all actions arising from the defective condition of the product, even when the specific claim is that the product's manual was defective. Typical of the analysis is Butchkosky v. Enstrom Helicopter Corp., 855 F. Supp. 1251 (S.D.Fla.1993), which involved an allegedly defective helicopter that crashed and injured its occupants.
The plaintiff in Butchkosky found his claim against the helicopter manufacturer barred by Florida's twelve-year products liability statute of repose. However, the manufacturer issued manuals after the end of the repose period that failed to correct or warn of the design flaws. The plaintiff argued that because the manufacturer issued a manual within the repose period, his claim was not barred. The District Court rejected his argument, however, and found that the manual claim was not separable from the other, barred claims:
To hold that [the manufacturer] should be liable because its manuals issued within the repose period did not provide adequate means of correcting the design flaw of the critical component, [sic] would be to circumvent the statute of repose by providing a back door to sue for the design flawostensibly not for the design flaw itself, but for the failure of the manuals to adequately correct [sic] the flaw. The result would be an evisceration of the statute of repose. If a plaintiff is precluded by the statute of repose from suing for a design flaw in a product, the plaintiff must also be precluded *417 from suing for a failure to correct the design flaw, whether that failure be in the inadequacy of the test of a subsequently issued owner's manual or in repair guidelines subsequently sent to mechanics.
Id. at 1257 (emphasis supplied). Similarly here, to allow Mr. Jordan to sue for the failure of the manuals or training to address Sandwell's alleged design malpractice would be in essence to allow him to maintain suit for that design malpractice in violation of the statute of repose. If anything the rationale for barring suit is even stronger here than it was in Butchkosky because Sandwell here issued the manuals eight years before the lawsuit, in a state with a five-year real estate improvement statute of repose. In contrast, the twelve-year Florida statute of repose protected the manufacturer in Butchkosky even though it issued its manuals less than twelve years before the filing of the suit.
Most case law agrees with the Butchkosky analysis.[10] The Court knows of only one case in which the court allowed a claim based on manuals to circumvent a statute of repose. That case is Driver v. Burlington Aviation, Inc., 110 N.C.App. 519, 430 S.E.2d 476 (1993). The North Carolina Court of Appeals there treated an aircraft manual as a completely separate product than the aircraft, and allowed a claim based on defects in the manual even though the underlying product, the aircraft, had been manufactured long enough ago that the North Carolina statute of repose would have barred a direct claim for defective design of the plane itself. Driver is distinguishable from the Mr. Jordan's case on at least two grounds.
First, the gravamen of Driver's complaint really was that the manuals were defective, not that the plane itself was defective. Driver's complaint did not even include an allegation that the plane was defective. He only maintained that the manual did not adequately instruct pilots on how to deal with airplane carburetor icing, a common condition and not one that renders an aircraft defective. Id., 430 S.E.2d at 483. In contrast, Mr. Jordan's complaints here center upon the defective design of the Foul Condensate Waste System itself. Discovery has focused on the system design; the manuals are almost an afterthought.
Second, in Driver the manual was sold separately to the pilot. Id. It was a separate product, not intertwined with the product against which the statute of repose barred claims. Here, the manuals were supplied with the design services that Sandwell provided. Thus, they are legally indistinguishable from the services that § 8.01-250 covers.
G. Conclusion to Jordan's Claim Against Sandwell
The statute of repose, Va.Code § 8.01-250, clearly bars Mr. Jordan's claim against Sandwell. There are no issues of material fact and Sandwell is entitled to judgment as a matter of law. Thus, Sandwell's motion for summary judgment against Mr. Jordan is GRANTED.
III. U.S. FILTER'S MOTION FOR SUMMARY JUDGMENT AGAINST JORDAN
The second defendant, U.S. Filter, also moves for summary judgment pursuant to *418 Fed.R.Civ.P. 56. Like Sandwell, U.S. Filter bases its motion on Va.Code Ann. § 8.01-250. The observations that the Court has made with regard to § 8.01-250 and Sandwell are equally applicable to U.S. Filter. Mr. Jordan's claim against Westvaco is one for personal injuries. Although U.S. Filter's "Lump Sum Contract"[11] (like Sandwell's contract) includes the word "fabricate", U.S. Filter has produced an affidavit stating that it in fact fabricated nothing. See U.S. Filter Mot. for S.J. Ex. A ¶ 5. Mr. Jordan has been unable to dispute this. The mill was an improvement to real property, and the `manufacturers and suppliers' clause does not apply. U.S. Filter's situation differs from Sandwell's so little that the Court need only discuss one prong of § 8.01-250 separately: the date that the repose period began to run.
U.S. Filter's involvement with the Westvaco mill in 1994-95 was more intensive than Sandwell's work. Sandwell has a $15,000 contract with Westvaco at the time, see Jordan's Appendix Ex. 6, but U.S. Filter's contract came at a price of $2,155,000, see id. Ex. 2. Furthermore, it appears that U.S. Filter reviewed the design of its 1990-91 work for the purpose of coordinating the operation of the older facilities with the addition that it was constructing. U.S. Filter replaced some of the older system's pumps. Id. Ex. 13 at 27. As U.S. Filter employee Craig van Dyke testified in his deposition, U.S. Filter "had to look at the entire system." Id. Ex. 13 at 28.
Nevertheless, to look at the system is not to alter it. U.S. Filter's expert testified unambiguously in his deposition that the accident would have happened even if U.S. Filter had never visited the site in 1994-95. U.S. Filter Reply to Jordan Ex. A at 67. "The new effect didn't change those design conditions" the ones that caused the accident"at all." Id. (emphasis supplied). "There is no net impact on the potential for these [allegedly dangerous] conditions to be created, whether that new effect was there or not." Id. Even Mr. Jordan's expert concedes that the 1995 changes were not part of the accident's chain of causation:
Q. All right, and if fact, if that additional [1995] effect had not been added and all other things were equal, Clarence Jordan still would have gotten burned; is that right?
A. Yes. The addition of the ... effect in 1995 really did not play any part in the causation.
McLaughlin Dep. at 131.
Again, for subsequent work to cause a new repose period, there must be a nexus of causation between the modifications and the injury. There must be a new tort the subsequent work must involve alterations that create or aggravate the defects that allegedly injured the plaintiff. Mere review of a preexisting design, without alteration of the preexisting structures of that design, is not enough to create a new repose period. Here, the system that injured Mr. Jordan was complete in 1991. Cf. Fueston v. Burns and McDonnell Eng'g Co., 877 S.W.2d 631 (Mo.App.1994). It was not changed after that. Indeed, the uncontroverted testimony indicates that the additions to the system did not contribute to the accident in any way. The repose period for the system in question expired in 1996 at the latest, and § 8.01-250 therefore bars the suit.
*419 It follows that U.S. Filter's motion for summary judgment against Jordan must be GRANTED.
IV. SANDWELL'S MOTION FOR SUMMARY JUDGMENT AGAINST WESTVACO
Sandwell moves for summary judgment on its contract claim against Westvaco. Under the contract between Westvaco and Sandwell, Sandwell was obligated to "indemnify, defend, and hold harmless" Westvaco "against any and all losses, costs, fines, penalties, or expenses ... resulting from any and all claims, actions, judgments, or demands" arising out of injuries to any person caused by "the negligent act(s) or omission(s)" of Sandwell.[12] Westvaco's General Conditions of Contract, Westvaco's Brief Against Sandwell Ex. B, at 16. Westvaco seeks indemnification under this clause for the one million dollars that it paid Mr. Jordan to settle Mr. Jordan's claims against it.
Sandwell raises but one argument in support of its motion for summary judgment: It contends that Va.Code Ann. § 8.01-250 bars Westvaco's indemnity action against it for the same reasons that § 8.01-250 bars Mr. Jordan's action against it. Westvaco replies that § 8.01-250 does not apply to contractual indemnity actions. In support of this proposition, it cites Fidelity & Deposit Co. of Maryland v. Bristol Steel and Iron Works, Inc., 722 F.2d 1160 (4th Cir.1983). Sandwell rejoins that Fidelity & Deposit Co is distinguishable from these facts; if it is not, claims Sandwell, then the decision is flawed and this Court should overrule the Fourth Circuit. The Court finds neither argument well-taken; thus, the Court will deny Sandwell's motion for summary judgment against Westvaco on the authority of Fidelity and Deposit Co.
Fidelity and Deposit Co. involved a contract gone bad between the Pennsylvania Department of Transportation ("PenDOT") and Bristol Steel and Iron Works ("Bristol Steel"). The Fidelity and Deposit Company ("Fidelity") had acted as surety on the contract, and paid PenDOT when Bristol Steel went into default. Fidelity then sued Bristol Steel for the amounts that it paid to PenDOT. Bristol Steel raised § 8.01-250 as a defense. The trial court rejected the defense, and the Fourth Circuit affirmed. The Court of Appeals quoted the statute, which bars actions "for contribution or indemnity for damages sustained as a result" of an injury, like Mr. Jordan's, to which the act applies. The court then commented, in toto:
It will be observed that the statute, by its express terms, is restricted in its application to what are in effect tort actions to recover for `injury' to property or persons, and not to actions in contract. That such is the proper construction of the statute was recognized in President and Directors, etc. v. Madden, 505 F. Supp. 557, 576-77 (D.Md. 1980), where the district court held that a District of Columbia statute, similar in language to section 250, did not extend to `causes of action sounding in contact.' On appeal we implicitly accepted this construction of the statute. 660 F.2d 91 at 94 (4th Cir.1981). Accordingly, since this action is not one sounding in tort but is one arising out of a specific written contract of indemnity, it is outside the scope of Section 250.
Id. at 1162 (footnote omitted). Sandwell attempts to explain this language away using three arguments.
First, Sandwell maintains that the real distinction in Fidelity & Deposit Co. is between indemnity claims arising from the *420 indemnitee's tort liability and indemnity claims arising from the indemnitee's contract liability. Sandwell Brief at 11. However, it is clear from the case that the relevant distinction concerns the nature of the indemnitor's obligation to the indemnitee, not the nature of the indemnitee's obligation to the injured party. In determining whether the statute of repose applies to an indemnity or contribution claim the question is why Sandwell is obligated to Westvaco, not why Westvaco is obligated to Jordan. Fidelity & Deposit Co. clearly distinguishes between indemnity claims "sounding in tort" and ones "arising out of a specific written contract of indemnity." Westvaco's claim is clearly the latter, a contract claim, and Fidelity and Deposit Co. therefore applies.
Second, Sandwell points out that contribution between joint tortfeasors is based on an implied contract between them to share expenses equally. See Houston v. Bain, 170 Va. 378, 196 S.E. 657 (1938). Nevertheless, this tort-based contribution is clearly within the plain language of the statute. It therefore follows, argues Sandwell, that contract actions are included in § 8.01-250. This argument also misses the mark. According to the Fourth Circuit, the terms "contribution" and "indemnity" in § 8.01-250 both refer to contribution between joint tortfeasors; neither refers to written contracts of indemnity. Id. at 1162 n. 3. Just because one type of pseudo-contract action is included in § 8.01-250, it does not follow that all contract actions are subject to the statute of repose. Formal contracts of indemnity are an entirely different creature than contribution between joint tortfeasors, and the Fourth Circuit found that the statute treated them differently.
Finally, Sandwell faults the reasoning of the Fourth Circuit because that court cited the Madden case. Madden held that the District of Columbia statute of repose did not apply to contract actions. In Fidelity & Deposit Co. the Fourth Circuit cited Madden to bolster its conclusion that the Virgin statute of repose did not apply to contract actions. Sandwell points out that Madden is a poor choice for citation because unlike the Virginia statute, the District of Columbia statute of repose on its face excludes all contract actions from its scope. This Court agrees that Madden does little to bolster the Fourth Circuit's reasoning in Fidelity & Deposit Co. Nevertheless, the reasoning of the Fourth Circuit is sound even without the Madden cite. The Virginia General Assembly has acquiesced in the decision by failing to pass legislation that overrules it. Cf. Cape Henry Towers, 331 S.E.2d at 479 (describing how General Assembly previously overruled construction of § 8.01-250 that it considered erroneous). The Fourth Circuit itself reaffirmed Fidelity & Deposit Co. in a 1991 case, Delon Hampton & Assoc. v. Washington Metro. Transit Authority, 943 F.2d 355, 362 (4th Cir.1991). Even if it disagreed with the reasoning of the Court of Appeals, this Court is obviously without power to overrule it. The Fourth Circuit must itself resolve any errors in its own decisions.
Sandwell has not made any other arguments in support of its motion. It follows, therefore, that its motion for summary judgment against Westvaco must be DENIED.
V. SANDWELL'S MOTION TO CERTIFY QUESTION OF LAW
In addition, Sandwell asks this Court to seek guidance from the Virginia Supreme Court about whether the Fidelity & Deposit Co. decision accurately states Virginia law. Of course, certification of a question to the Virginia Supreme Court is a matter subject to this Court's discretion. See Virgin Supreme Court Rule 5:42(a). *421 At this point in time certification would unduly delay the proceedings. Furthermore, the Fourth Circuit decision that Sandwell attacks is nearly twenty years old; during that time, the General Assembly has passed no law suggesting that Fidelity & Deposit Co. is incorrect. Finally, given that the Fourth Circuit decided Fidelity and Deposit Co., it would be more appropriate for the Fourth Circuit to correct any errors in the decision by overturning it or certifying the question itself than it would be for this Court to undermine a controlling precedent by certifying the question now. Sandwell's motion for certification is DENIED.
VI. U.S. FILTER'S MOTION FOR SUMMARY JUDGMENT AGAINST WESTVACO
The final matter for disposition is U.S. Filter's motion for summary judgment on Westvaco's contractual indemnity claim against it. Westvaco maintains that its contract with U.S. Filter requires U.S. Filter to indemnify it for amounts paid to Mr. Jordan in settlement of Mr. Jordan's suit. U.S. Filter argues that the terms of the contracts do not require indemnification at this late date. Because the Court agrees, U.S. Filter's motion for summary judgment will be granted.
When contracts are unambiguous, the meaning of a contract provision is a question of law for the Court. Richmond, Frederick & Potomac R.R. v. Hughes-Keegan, Inc., 207 Va. 765, 152 S.E.2d 28, 33 (1967). There are two different contracts under which an indemnification obligation might conceivably arise: one in 1990 and one in 1994. Westvaco sent a proposed contract to U.S. Filter in 1990, along with a copy of its "General Conditions of Contract." See Westvaco Brief in Opp. to U.S. Filter, Ex. A, B. U.S. Filter responded with its own "Lump Sum Contract," which provided that document executed later in time prevails over document executed earlier in time. Id. Ex. C, at 2-3. In 1994, in the course of negotiating the second contract, Westvaco and U.S. Filter agreed that Westvaco's General Conditions of Contract would apply except for the exceptions noted in U.S. Filter document No. 940558. Id. Ex. D, at 3. Of course, as the Court has held supra, the underlying tort for which Westvaco seeks indemnification occurred in 1991, not in 1994-95. Ultimately, then, indemnification can arise only from the 1991 contract, not from the 1994 contract.
In the 1990 contract, Westvaco's General Conditions of Contract provide that the contract shall broadly indemnify Westvaco for claims arising from the contractor's (U.S. Filter's) negligence. Id. Ex. B at 16, ¶ 4(a). The indemnity provisions of the General Conditions of Contract contain no expiration date and specifically provide that the indemnity clauses shall "survive the contract." U.S. Filter's Lump Sum Contract, however, contains the following term numbered 4:
With the exception of liability for personal injuries, the contractor's maximum liability under this Indemnity Agreement shall not exceed $8,000,000. The provision of the indemnity agreement shall also apply to the Work to the extent direct losses, costs, or expenses (excluding consequential damages) are $300,000.00 per occurrence. The Contractor's liability limit for losses, costs or expenses to the Work prior to the completion of the Work is $300,000.00 per occurrence. The liability limit is not applicable for claims occurring after Final Payment is made.
The indemnity will be applicable until the completion of the Work and thereafter whenever the Contractor is on the Owner's premises until the expiration of the warranty period.
*422 Id. Ex. C., at 19, ¶ 4 (emphasis supplied; pagination in original). Like the General Conditions of Contact, the Lump Sum Contract states that it "shall survive the contract." Id. Ex. C, at 19, ¶ 3. The warranty period in the contract was eighteen months. Id. Ex. C, at 13, ¶ 11(B). Because the project was completed on July 9, 1991, see U.S. Filter Brief Ex. A ¶ 10, the warranty period expired in November 1992.
Not surprisingly, the parties disagree on the interpretation of the contract. Their disagreements center in two areas.
First, Westvaco argues that the italicized portion of section 4 above, "with the exception of liability for personal injuries," applies to each clause in the paragraph. Thus, any expiration date contained in the third paragraph of section 4 does not apply to any action for personal injuries. U.S. Filter posits that the phrase "with the exception of liability for personal injuries" applies only to the first paragraph of section 4, since it appears only in that first paragraph. To hold otherwise, suggests U.S. Filter, would be to rewrite the contract as:
4. With the exception of liability for personal injuries,
(a) the contractor's maximum liability under this Indemnity Agreement shall not exceed $8,000,000.
(b) the provision of the indemnity agreement shall also apply to the Work to the extent direct losses, costs, or expenses (excluding consequential damages) are $300,000.00 per occurrence. The Contractor's liability limit for losses, costs or expenses to the Work prior to the completion of the Work is $300,000.00 per occurrence. The liability limit is not applicable for claims occurring after Final Payment is made.
(c) the indemnity will be applicable until the completion of the Work and thereafter whenever the Contractor is on the Owner's premises until the expiration of the warranty period.
U.S. Filter argues that this would constitute an unacceptable reformation of the contract.
The Court finds that U.S. Filter's construction of the contract is the more reasonable one. The phrase in dispute, "with the exception of liability for personal injuries," seems tied in with the sentence of which it is a part, a sentence which addresses the contractor's "maximum liability." Westvaco would have the Court supply the phrase to clauses (b) and (c). However, it seems unnatural to add the phrase to clause (b), which addresses a "liability limit," or to clause (c), which does not contain the word "liability" at all. The general thrust of section 4 is to limit U.S. Filter's liability; each paragraph of the section contains a limitation of some kind. Given the likelihood of a personal injury claim at some point in the life of the mill, to read the contract as Westvaco suggests would be to allow the exception to swallow up the limitation. Such a construction seems unreasonable, and a court must avoid unreasonable constructions. See generally 4A M.J. Contracts § 43 (1999) (citing cases that hold construction of contracts must be reasonable). Finally, the plain language of the writing indicates that the phrase excluding personal injuries from section four's scope, which if present would create liability for U.S. Filter in this situation, simply does not appear anywhere in clause 4(c), which creates an expiration date for the indemnity obligation. U.S. Filter cannot be liable under the 1990 contract.
Finally, Westvaco points to language in section 3 of the 1990 indemnity agreement *423 which provides that the provisions of the Lump Sum Contract shall not "negate" or "abridge" independently existing indemnity obligations. Westvaco Brief against U.S. Filter Ex. C, at 19, ¶ 3. Thus, Westvaco maintains that the language of the Lump Sum Contract cannot abridge the indemnity clauses contained in the General Conditions of Contract. However, in 1990 U.S. Filter never agreed to the General Conditions of Contract. When it received Westvaco's proposed contract (which included the General Conditions of Contract), it sent back its own Lump Sum Contract. No party has cited Va.Code § 8.2-207 (the Uniform Commercial Code provision regarding battles between forms) or argued that it applies to this situation; rather, the common law of contracts applies.[13] A purported acceptance that varies the terms of an offer is actually a rejection and counteroffer. See Chittum v. Potter, 216 Va. 463, 219 S.E.2d 859, 864 (1975); Wards Co. v. Lewis & Dobrow, 210 Va. 751, 173 S.E.2d 861, 864-65 (1970). Under the common law, U.S. Filter rejected Westvaco's offer (the "General Conditions of Contract") and made a counteroffer (the "Lump Sum Contract"). The General Conditions of Contract were never binding; they never created any indemnity obligation in 1990. Thus, there was no preexisting indemnity obligation for page 19, ¶ 3 of the Lump Sum Contract not to change.
Because the contract between Westvaco and U.S. Filter forecloses any possibility that Westvaco might recover from U.S. Filter for the amount it paid to Mr. Jordan, the Court will GRANT U.S. Filter's motion for summary judgment.
VII. CONCLUSION
Sandwell's motion for summary judgment against Mr. Jordan is GRANTED. Sandwell's motion for summary judgment against Westvaco is DENIED. Sandwell's motion to certify a question of law to the Virginia Supreme Court is DENIED. U.S. Filter's motions for summary judgment are GRANTED both as to Mr. Jordan and as to Westvaco.
ON THE MOTION FOR RECONSIDERATION
This matter is before the Court on Plaintiff Jordan's motion to reconsider this Court's December 3, 2001 order that granted summary judgment to the two defendants in this case, Sandwell, Inc. ("Sandwell") and U.S. Filter Corporation ("U.S.Filter"). The motion is meritless as to Sandwell; the Court will therefore deny the motion to reconsider as to it. As to U.S. Filter, the motion has some merit; the Court will therefore grant it in part and reinstate upon the docket one of Plaintiff's three negligence claims against that corporation, as more fully discussed below.
DISCUSSION
The Court has previously recited the facts of this case in some detail in its memorandum opinion dated December 3, 2001. Thus, a summary of those facts will suffice here. The plaintiff alleges that the design of the Westvaco Paper Mill in Covington was defective. The designers are the defendants. When on the premises one day as a temporary employee, superheated water spewed out of a pipe and burned the plaintiff severely. The defendants raised the Virginia statute of repose, Va.Code § 8.01-250, as a defense to the *424 claims. They stated that more than five years had passed since their work on the design in 1991 and that the statute therefore barred the claims. The plaintiff argued that the statute of repose did not apply for a variety of reasons, and that in any case both defendants worked on the plant within five years of the time he filed his lawsuit.
The Court addressed the arguments in its December opinion. It found that the statute of repose did apply to the claims. With regard to Sandwell, it found that the work Sandwell did on the plant in 1995 had nothing to do with the conditions that eventually caused Mr. Jordan's injury. Similarly, the Court found it undisputed that U.S. Filter's 1995 expansion work did not have any effect on the conditions that led to the accident. The 1995 visits were therefore not relevant to the statute of repose analysis. The Court granted summary judgment to the defendants and dismissed the case on that basis. It is this decision that the plaintiff asks the Court to reconsider.
Looking back on its opinion, the Court is still satisfied that the opinion is correct as far as it goes. The statute of repose does apply to this action. With regard to Sandwell, the plaintiff has failed to raise any persuasive arguments that the Court's initial analysis of the case was incorrect. The Plaintiff's motion to reconsider will therefore be denied as to Sandwell.
The claim against U.S. Filter, however, requires more thought. Mr. Jordan has alleged three separate and distinct causes of action against U.S. Filter. First, he claims that U.S. Filter negligently designed the Westvaco mill in 1990-91 (the "1991 claims"). Second, he states that when U.S. Filter returned to the plant in 1995 to expand the Westvaco facility, it should have corrected the initial design flaws and failed to do so (the "1995 claims"). Third, he declares that when Westvaco returned to the plant in 1996 and 1997 to analyze problems that Westvaco was having with its facilities, it should have discovered the existence of the problem that led to Mr. Jordan's injury (the "1996 and 1997 claims"). In his motion for reconsideration, Mr. Jordan argues that the court was incorrect in its resolution of the first claim and failed to consider the second two claims.
The Court continues to believe that its resolution of the first claim was correct. Furthermore, contrary to the plaintiff's suggestion, the Court did address the second claim in its opinion. See Memorandum Opinion at 418-19. The Court found that no new tort took place in 1995 because whatever changes U.S. Filter made were outside the accident's chain of causation. Mere review of the defective design, for the purpose of adding an element to that design, was insufficient to create a duty to report deficiencies in the preexisting design. U.S. Filter took the plant as it found it. "Mere review of a preexisting design, without alteration of the preexisting structures of that design, is not enough to create a new repose period." Memorandum Opinion at 418-19.
The plaintiff's third cause of action is different, however. The plaintiff has submitted evidence that Westvaco hired U.S. Filter in 1996 and afterwards to troubleshoot problems with the paper mill components that caused the accident. Declaration of Kenneth Cole ¶¶ 6-10. Mr. Jordan has also submitted evidence that U.S. Filter fell below the applicable standard of care during those troubleshooting visits, see Declaration of Kenneth McLaughlin ¶¶ 8-11, and that on those occasions U.S. Filter should have discovered the problem that led to Mr. Jordan's injury, id. ¶ 13. These are independent torts, separate and apart from any claims arising out of the 1991 or 1995 contracts. *425 The statute of repose therefore has no effect on them and it was error for the Court to dismiss them.[1]
U.S. Filter tries to enlarge the scope of this Court's December opinion so that it covers the 1996 and 1997 incidents also. The defendant attempts to lump together the 1995 failure-to-warn claims, which occurred in the context of the expansion project, with the 1996 and 1997 failure to warn claims, which took place in the context of troubleshooting visits. However, these are two different types of claims. The issue is not, as U.S. Filter asserts, a matter of the repose period resetting in some way because of the later visits. As the Court's December opinion makes clear, the statute of repose bars claims arising from the 1991 design, whether those claims are based upon contract or tort, and whether they concern the defective design of strippers or defective preparation of manuals. The 1995 claim, in essence an independent tort, fails because the undisputed evidence is that no action that U.S. Filter took during the 1995 expansion caused the accident, and because U.S. Filter in its capacity as the designer of an expansion project had no duty to inspect the plant and warn of already existing design defects in 1995. Rather, the issue is whether the statute of repose applies to a separate tort at all.
In that vein, it is not logical to assume that because the statute of repose bars one tort (such as the alleged 1991 tort here), a defendant has a license to commit other, future torts (like alleged negligent inspections in 1996 and 1997) with impunity.[2] In applying the statute of repose to bar Plaintiff's 1991 claims, the Court did not extinguish "any other possible" negligence claims by Mr. Jordanonly those theories of liability that have, as their operative facts, allegedly improper acts in 1991. The 1996 and 1997 claims are based on a negligent inspectiona separate and independent act of negligencethat failed to reveal an already existing negligent design. They are not based on the negligent design itself. Indeed, the Court comments that under the facts of this case, it may be improper for the jury to know who is responsible for the initial negligent design. Those issues are for another day. In any event, the statute of repose does not apply to the 1996 and 1997 negligence claims, and material issues of fact exist regarding them. It follows that summary judgment was improper on those claims.
Mr. Jordan's motion to reconsider will therefore be GRANTED IN PART only as *426 to his 1996 and 1997 claims against U.S. Filter, and DENIED IN PART as to his other claims against U.S. Filter and his claims against Sandwell. An appropriate order will this day enter.
NOTES
[1] `U.S. Filter Corporation' is that defendant's business name; the official corporate name is `U.S. Filter Wastewater Group, Inc.'
[2] In this sense, a statute of repose is different than a statute of limitations. A statute of limitations extinguishes a cause of action when the plaintiff does not file his complaint within a certain amount of time after the action arises. For instance, in Virginia a personal injury plaintiff must generally file his action within two years after the time at which he is injured. See Va.Code § 8.01-243 (Michie 2000). A statute of repose (like § 8.01-250), in contrast, extinguishes actions against certain defendants not filed within a given time period after the defendant's last involvement with the events giving rise to the injury. For the purposes of a statute of repose, it is irrelevant when the injury accrues; the relevant point in time is when the defendant last interacted with the item or events allegedly causing harm. See Cooper Indus. v. Melendez, 260 Va. 578, 537 S.E.2d 580, 588 n. 9 (2000).
[3] See also Birmingham v. Chesapeake & O. Ry. Co., 98 Va. 548, 37 S.E. 17, 17 (1900) (action of assumpsit subject to personal injury statute of limitations when declaration complains of personal injuries).
[4] Sandwell disputes Jordan's description of its responsibilities. See Sandwell Supplemental Brief (Nov. 28, 2001) at 4. Even using Jordan's broader description, however, the Court still finds the statute of repose applicable.
[5] The distinction between defective design and defective manufacturing is one with strong roots in tort law. See Restatement (Third) of Torts, Products Liability § 2 (1998).
[6] Under the Virginia Uniform Commercial Code, fixtures are "goods that have become so related to particular real property that an interest in them arises under real property law." Va.Code Ann. § 8.9A-102 (41) (Michie 2001).
[7] Under the Virginia Supreme Court's reasoning, the General Assembly was aware of this Court's alleged distinction between "equipment and machinery" on the one hand and "manufactured chattels which were added at a later time" (i.e. "ordinary building materials") on the other when it recodified § 8.01-250 in 1977. Because the General Assembly did not act to exclude ordinary business materials from the statute in 1977, the reasoning goes, the Assembly implicitly accepted the Smith distinction and retained the repose immunity for ordinary building materials. In the Smith opinion, this Court had stated its view that no manufacturer was within the protection of the statute after 1973, even manufacturers of ordinary building materials. Smith, 371 F.Supp. at 700. The Virginia Supreme Court, the final arbiter of Virginia law, disagreed. Cape Henry Towers, 331 S.E.2d at 480.
[8] No one could seriously contend that if Westvaco had hired a company other than Sandwell to do the 1995 work, the repose period for Sandwell's 1991 work would have begun anew. The Plaintiff would have the Court hold Sandwell liable simply because Westvaco happened to hire Sandwell rather than another company in 1995. To do so would likely discourage long-term business relationships as companies hesitated to restart the repose period on every contract they ever had with a business by performing some small additional service for it.
[9] The plaintiff also complains about Sandwell's training sessions for Westvaco employees on essentially the same grounds. Because the Court finds the analyses indistinguishable, the court will discuss only the claims concerning the manuals.
[10] See Caldwell v. Enstrom Helicopter Corp., 230 F.3d 1155 (9th Cir.2000) (manual inseparable from system it explains); Schamel v. Textron-Lycoming, 1 F.3d 655 (7th Cir.1993) (for purposes of products liability statute of repose, provision of manuals inseparable from products liability action); Alter v. Bell Helicopter Textron, Inc., 944 F. Supp. 531 (S.D.Tex.1996) ("... manufacturers' maintenance and repair manuals are not a `separate' product or component upon which plaintiffs may base a claim to avoid a repose statute.").
[11] See infra Part VI. (detailing `Lump Sum Contract' and its relationship with other documents).
[12] This language is contained in the standard "General Conditions of Contract" that Westvaco attaches to every contract that it proposes.
[13] Even if the parties had cited § 8.2-207, it does not apply here. Article 2 of the U.C.C. applies only to sales of goods. Va.Code § 8.2-102. "Goods" are "movable things." Va.Code § 8.2-105(1). The design services that U.S. Filter provided are clearly not "goods."
[1] In the Court's defense, the parties did not argue strenuously the claims from 1996 and 1997; rather, they focused on the statute of repose issues surrounding the 1991 and 1995 claims. The 1996 and 1997 claims got "buried" in the mound of paperwork that the parties filed on other issues.
[2] To put it another way: It seems to the Court that if a third party had come to Westvaco in 1995 to perform the expansion work, it would be very difficult to hold that party liable for the defects in the 1991 design simply because that party added additional effects to an already-defective facility. In that situation it would be unfair to hold U.S. Filter liable when a third company would not be liable merely because that U.S. Filter had performed previous work on the plant. Similarly here, there would be no question that if Westvaco had retained a third party company to troubleshoot the plant in 1996 and 1997, and that third party company negligently had failed to detect the problem that injured Mr. Jordan, the plaintiff would state a cause of action against that third party company. It would be equally unfair here to allow U.S. Filter to escape liability, when a third party would be liable, merely because U.S. Filter had performed earlier work which was now under the protection of the statute of repose. Sauce for the proverbial goose is sauce for the gander: Work performed previously has no effect on separate torts that accrue afterwards.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/795869/
|
464 F.3d 963
James Edward KING, Petitioner-Appellant,v.A. LAMARQUE, Warden, Respondent-Appellee.
No. 05-15757.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted March 14, 2006.
Opinion filed July 26, 2006.
Opinion Withdrawn September 20, 2006.
Filed September 20, 2006.
Matthew Dale Alger, Clovis, CA, for the petitioner-appellant.
Lisa Ashley Ott, Deputy Attorney General, San Francisco, CA, for the respondent-appellee.
Appeal from the United States District Court for the Northern District of California; Susan Yvonne Illston, District Judge, Presiding. D.C. No. CV-00-01988-SI.
Before ALFRED T. GOODWIN, STEPHEN REINHARDT, and MICHAEL DALY HAWKINS, Circuit Judges.
ORDER AND OPINION
HAWKINS, Circuit Judge.
ORDER
1
James Edward King's petition for rehearing and A. LaMarque's petition for rehearing are granted in part, without further oral argument. The Opinion and separate concurring Opinion, filed on July 26, 2006 and reported at 455 F.3d 1040(9th Cir.2006), are withdrawn and superceded by the Opinion filed concurrently with this Order. The previous Opinion may not be cited as precedent by or to this court or any district court of the Ninth Circuit.
2
The parties' petitions for rehearing en banc are denied as moot. Subsequent petitions for panel rehearing and/or petitions for rehearing en banc may be filed with respect to the new Opinion in accordance with the requirements of Fed. R.App. P. 40 and 35.
OPINION
3
James Edward King ("King") appeals the denial of his habeas corpus petition, raising four issues, only one of which was listed within the Certificate of Appealability ("COA") at the time of argument. Three of the issues pertain to the California Supreme Court's dismissal of an ineffective assistance claim because it determined that King's habeas petition was filed after substantial delay. King asserts that the rule is inadequate and that his case fits the exceptions that allow federal courts to review claims that are otherwise procedurally barred. His fourth claim asserts the district court erred in finding that he was not prejudiced by his trial counsel's failure to review a videotape of the victim and failure to object to a reference to his parole officer within that tape.1
FACTS AND PROCEDURAL HISTORY
4
A jury convicted King of violating California Penal Code §§ 288 and 269 by committing a lewd act and three aggravated assaults — rape, oral copulation, and digital penetration — on a child. King pursued direct appeal and state habeas corpus petitions, both of which were unsuccessful.
5
King's first federal habeas petition contained exhausted and unexhausted claims. After King's attorney failed to respond to the government's motion to dismiss, the district court dismissed the petition. King submitted a pro se motion under Rule 60(b) of Civil Procedure, and the district court set aside the judgment of dismissal, finding that King's counsel had been grossly negligent. The district court stayed its proceedings while King pursued his unexhausted claims in state court. The California Supreme Court summarily denied King's subsequent habeas petition, citing two cases barring review of habeas petitions filed after substantial delay: In re Clark, 5 Cal.4th 750, 21 Cal.Rptr.2d 509, 855 P.2d 729 (1993) [hereinafter Clark], and In re Robbins, 18 Cal.4th 770, 77 Cal.Rptr.2d 153, 959 P.2d 311 (1998). King then filed, and the district court denied, an amended habeas petition.
STANDARD OF REVIEW
6
We review a district court's decision to grant or deny a habeas corpus petition de novo. Clark v. Murphy, 331 F.3d 1062, 1067 (9th Cir.2003).
DISCUSSION
7
* Federal courts will not generally review a question of federal law decided by a state court if its decision rests on a state law ground that is independent of the federal question and adequate to support the judgment. See Coleman v. Thompson, 501 U.S. 722, 750, 111 S.Ct. 2546, 115 L.Ed.2d 640 (1991). King claims that California's rule barring review of habeas claims filed after "substantial delay" is inadequate and, therefore, does not bar federal review of his claim. To be adequate, the state's legal grounds for its decision must be firmly established and consistently applied. Bennett v. Mueller, 322 F.3d 573, 583(9th Cir.2003).
8
To be firmly established or consistently applied, a rule must be clear and certain. See Melendez v. Pliler, 288 F.3d 1120, 1124 (9th Cir.2002) (citing Morales v. Calderon, 85 F.3d 1387, 1390-92 (9th Cir. 1996)); see also Wells v. Maass, 28 F.3d 1005, 1010 (1994) ("a state rule must be clear, consistently applied, and well-established"). Novel procedural rules do not bar federal review because petitioners are not put on sufficient notice that they must comply. See Ford v. Georgia, 498 U.S. 411, 423-25, 111 S.Ct. 850, 112 L.Ed.2d 935 (1991); NAACP v. Alabama, 357 U.S. 449, 354-358, 78 S.Ct. 1163 (1958). Just so, state procedural rules with overly vague standards do not provide petitioners with sufficient notice of how they may avoid violating the rule. Furthermore, poorly defined procedural rules do not provide courts the guidance required for consistent application.
9
California's timeliness rule bars habeas petitions that are filed after "substantial delay." A habeas petitioner in California must justify any "significant" or "substantial" delay in seeking habeas corpus relief. Clark, 21 Cal.Rptr.2d 509, 855 P.2d at 738, 750-51. There are no standards for determining what period of time or factors constitute "substantial delay" in noncapital cases. There are also no standards for determining what factors justify any particular length of delay. The rule's ambiguity is not clarified by the California Supreme Court's application of the timeliness bar, in part because the court usually rejects cases without explanation, only citing Clark and Robbins, as it did here. See Morales, 85 F.3d at 1392.
10
California's timeliness rule applies to both capital and noncapital cases. In capital cases, California's Supreme Court Policies Regarding Cases Arising from Judgments of Death ("Policies") create a presumption of timeliness if a petition "is filed within 90 days of the final due date for the filing of an appellant's reply brief." Clark, 21 Cal.Rptr.2d 509, 855 P.2d at 751. The Policies also create more explicit standards for deciding whether there has been substantial delay when the petitioner has filed after the ninety-day presumption period. Id. at 751-53. Clark clarified the application of these Policies within capital cases and provided four specific exceptions for granting review even when a petition's "substantial delay" is unjustified. Id. at 758-59. But Clark did nothing to clarify the application of the basic "substantial delay" standard with regard to noncapital cases. Furthermore, the Clark exceptions, specifying when review can be granted despite "substantial delay," do nothing to clarify the "substantial delay" standard itself.
11
In Morales, we indicated that California's timeliness rule was too uncertain, pre-Clark, to be a procedural bar for capital cases. 85 F.3d at 1391; see also Calderon v. United States Dist. Court (Bean), 96 F.3d 1126, 1131 (9th Cir.1996). The holding in Morales intertwined "inconsistent application" analysis with "well established" analysis: "We find so much variation in [the] application of California's timeliness requirements before Clark that we conclude that no discernible clear rule then existed for petitions filed more than 90 days after the due date of the reply brief on direct appeal." Id. Just as inconsistent application leads to ambiguous standards, overly ambiguous standards almost inevitably lead to inconsistent application. See Bennett, 322 F.3d at 573, 583(citing Morales, 85 F.3d at 1392).
12
Bennett specifies the burden-shifting process involved in determining whether a procedural rule is adequate. 322 F.3d at 586. Once the government has pleaded "the existence of an independent and adequate state procedural ground as an affirmative defense, the burden to place that defense in issue shifts to the petitioner." Id. The petitioner "may satisfy this burden by asserting specific factual allegations that demonstrate the inadequacy of the state procedure, including citation to authority demonstrating inconsistent application of the rule." Id. The burden then shifts back to the government, and it bears "the ultimate burden of proving the adequacy" of the relied-upon ground. Id. at 585-86.
13
The government explicitly pleaded "the existence of an independent and adequate state procedural ground," the California rule against petitions filed after substantial delay, as an affirmative defense in district court. The burden, therefore, shifted to King. Bennett, 322 F.3d at 586.
14
In response, King asserts that the California Supreme Court's dismissal of his case demonstrates that it inconsistently applies the timeliness rule because he properly justified his delay. As the district court noted, this is not proof of inconsistent application, but simply rehashes the merits of his arguments before the California Supreme Court.
15
King fails to explicitly raise the issue of whether the timeliness rule is too uncertain to be well established. The question then arises: Is simply contesting the adequacy of a state rule sufficient to meet the petitioner's burden under Bennett if we have previously found the rule to be too ambiguous to bar federal review during the applicable time period? We hold it is.
16
Bennett requires the petitioner to "place [the procedural default] defense in issue" to shift the burden back to the government. 322 F.3d at 586. In most circumstances, the best method for petitioners to place the defense in issue is to assert "specific factual allegations that demonstrate the inadequacy of the state procedure" by citing relevant cases. Id. But where we have already made a determination regarding the adequacy of the state procedural rule, the petitioner's method of placing the defense in issue must be modified.2
17
In Ortiz v. Stewart, 149 F.3d 923 (9th Cir.1998), we held that a petitioner had not met his burden because we had already held the state procedural rule to be consistently applied and the petitioner failed to cite cases demonstrating subsequent inconsistent application. Id. at 932. This holding helps prevent inconsistent determinations regarding a state procedural rule's adequacy during a given time period. This same reasoning provides a firm foundation for applying the Ortiz requirement bilaterally. Once we have found a state procedural rule to be inadequate, petitioners may fulfill their burden under Bennett by simply challenging the adequacy of the procedure; the burden then shifts back to the government to demonstrate that the law has subsequently become adequate. Here, because we held in Morales that the California timeliness rule was insufficiently clear, the government must show on remand that the rule has since been clarified for noncapital cases and that the clarified rule has since been consistently applied.
18
This holding is necessary to maintain the primary principle we announced in Bennett: the government bears the ultimate burden of establishing the adequacy of a rule. This burden should exist whether or not the petitioner identifies the correct basis upon which to challenge the adequacy of the rule. If we held otherwise, the government could avoid its burden under Bennett, and illogical results would occur. Here, for example, we would bar King's claim based on a procedural rule already found to be inadequate. In essence, we would be holding that the same rule is adequate in some cases and inadequate in others. This defies common sense. A procedural rule is either adequate or inadequate during a given time period; its adequacy does not depend upon the facts of a petitioner's case.
19
By challenging the adequacy of a state procedural rule we have found to be insufficiently clear in Morales, King has met his Bennett burden. On remand, the government must demonstrate that California's "substantial delay" rule has become sufficiently clear and consistently applied to justify barring federal review of King's claim.3
II
20
King asserts that even if California's timeliness rule is an independent and adequate ground, his claim is still reviewable because he meets the "cause and prejudice" exception for procedural defaults. Having decided to remand this case to reconsider whether King has procedurally defaulted his claim, we need not reach this issue.
CONCLUSION
21
We vacate the district court's judgment with regard to the adequacy of the California timeliness rule and remand for further proceedings consistent with this opinion.
22
VACATED IN PART and REMANDED.
Notes:
1
Applying the relevant standards we grant King's motion to expand the COA with regard to his claim addressing the adequacy of California's "substantial delay" rule, but deny his motion with regard to his other uncertified issuesSlack v. McDaniel, 529 U.S. 473, 484, 120 S.Ct. 1595, 146 L.Ed.2d 542 (2000); Schlup v. Delo, 513 U.S. 298, 327, 115 S.Ct. 851, 130 L.Ed.2d 808 (1995); Lambright v. Stewart, 220 F.3d 1022, 1026 (9th Cir.2000).
2
Bennett did not foreclose alternative methods of "plac[ing][the] defense in issue," stating only that the petitioner "may satisfy this burden by asserting specific factual allegations . . . ." Id. (emphasis added). Bennett, of course, did not resolve all of the potential issues involved with applying the "new standard" because it specified the burden-shifting process but did not apply it. Id.
3
Morales specifically reserved the issue of whether Clark successfully cleared up the uncertainties regarding capital cases. Id.; see also Bennett, 322 F.3d at 583(stating only that Clark had "attempted to set out a definite rule" and that it "set out to create a rule that would be consistently applied").
|
01-03-2023
|
04-19-2012
|
https://www.courtlistener.com/api/rest/v3/opinions/2433745/
|
320 S.W.2d 396 (1959)
Eugene D. GUTHRIE, Appellant,
v.
SINCLAIR REFINING COMPANY, Appellee.
No. 13294.
Court of Civil Appeals of Texas, Houston.
January 15, 1959.
Rehearing Denied February 5, 1959.
*398 Mandell & Wright, Houston, Ben N. Ramey, Houston, of counsel, for appellant.
B. D. McKinney, Frank G. Harmon, Houston, Baker, Botts, Andrews & Shepherd, Houston, of counsel, for appellees.
WERLEIN, Justice.
Appellant, Eugene D. Guthrie, third engineer of the SS MacDonald, brought this suit under the Jones Act, 46 U.S.C.A. § 688 and for unseaworthiness against appellee, Sinclair Refining Company, to recover for personal injuries sustained by him about 2 o'clock a. m., July 26, 1955, when he stepped on a short length of line which lay on a lower deck level to which he had descended from the operating platform for the purpose of replacing a light bulb which had just burned out. The line was some 7 to 12 inches in length and about the size of an ordinary sash cord. It was located about 6 feet from the light bulb which had burned out and about 6 inches from the edge of the operating platform. Appellant testified that he could see the area of the lower deck where the line lay from the operating platform. Even after the light bulb burned out there was sufficient light to see the floor plates of the deck on which the line lay.
Unseaworthiness, as a ground of recovery, was not submitted to the jury, nor did appellant request submission of any issue or instructions thereon. The case was submitted under the Jones Act and the jury exonerated both appellant and appellee of negligence by finding unavoidable accident. The court rendered judgment on the verdict for appellee.
Appellant's first Point of Error is to the effect that the finding of the jury that the line in question was a proximate cause of injury to appellant required judgment for him on the ground of unseaworthiness.
The court gave the usual definition of "proximate cause", including the elements of foreseeability and reasonable anticipation.
Appellant argues that the jury, in finding that the line was a proximate cause of appellant's injury, in effect found that it could reasonably have been anticipated that someone would step on the line and be injured, and that, therefore, the part of the deck where the line lay was necessarily unseaworthy.
With this contention we do not agree. It seems evident that appellant is confusing his alleged two grounds of recovery. Negligence to be actionable must be a proximate cause of the injury. Anticipation and foreseeability are important considerations in determining liability for negligence. Seaworthiness vel non is not dependent upon either negligence or foreseeability. The fact that some small foreign *399 substance on the deck proximately caused appellant to fall no more establishes unseaworthiness as a matter of law and in the absence of a jury finding, than does the finding of proximate cause establish common law liability without a finding of negligence. Unseaworthiness is essentially a species of liability without fault. A shipowner's liability for unseaworthiness is absolute regardless of the presence or absence of negligence or proximate cause in the legal sense. Seas Shipping Company, Inc. v. Sieracki, 1946, 328 U.S. 85, 66 S. Ct. 872, 90 L. Ed. 1099.
It was not shown how the line got on the deck or how long it had been there. Appellant testified that he did not see it until after he had fallen. If the presence of a line 7 to 12 inches long and about the size of a sash cord or a pencil, as a matter of law, rendered that part of the deck unseaworthy where the line lay, then it would be our duty under decisions of the Supreme Court of the United States to reverse the case and render judgment for appellant for the sum of $2,378, representing $500 which the jury found for physical pain and suffering from the date of injury to the trial, and $1,878 which the jury found to be the reasonable cash value of the loss to appellant, including meals and lodging and wages he reasonably would have earned from July 26, 1955, to October 13, 1955, but for the injury.
Ordinarily unseaworthiness allegedly arising from the presence of a transitory substance on a deck is a matter for the determination of the jury or court as a fact issue. Poignant v. United States, 2 Cir., 1955, 225 F.2d 595; Troupe v. Chicago, Duluth & Georgian Bay Transit Company, 2 Cir., 1956, 234 F.2d 253; Carter v. Schooner Pilgrim, Inc., 1 Cir., 1956, 238 F.2d 702.
Appellant either abandoned unseaworthiness as an independent ground of recovery or else concluded that a finding by the jury that the line was a proximate cause of appellant's injury would, as a matter of law, establish unseaworthiness. We are of the opinion that by not requesting submission of an issue and instructions on unseaworthiness appellant has waived that ground of possible recovery in the same manner as the plaintiff waived such ground of recovery by not pleading it in the case of Keplinger v. American Mail Line, Ltd., D.C.W.D.Wash.1956, 11 A.M.C. 2318.
Some courts have denied liability in cases involving a transitory condition where the vessel or appliance is inherently sound and the danger has resulted from a foreign substance of a transitory nature. Cookingham v. United States, 3 Cir., 1950, 184 F.2d 213; Shannon v. Union Barge Line, 3 Cir., 194 F.2d 584. In Daniels v. Pacific-Atlantic Steamship Co., D.C.E.D.N.Y.1954, 120 F. Supp. 96, 99, the Court stated:
"The weight of authority is that an injury caused by slipping on a spot of oil or other matter of a transitory nature in and of itself does not support a cause of action for damages for unseaworthiness."
See also McDonald v. Dingwall Shipping Company, D.C.S.D.Tex.1954, 135 F. Supp. 374, 376, in which the Court stated:
"The cases upon which the Libelant places principal reliance, Pope & Talbot, Inc., v. Hawn [346 U.S. 406, 74 S. Ct. 202, 98 L. Ed. 143], supra; Seas Shipping Co. v. Sieracki, supra; Mahnich v. Southern S. S. Co., 321 U.S. 96, 64 S. Ct. 455, 88 L. Ed. 561, and others, show the relationships to which the unseaworthiness doctrine has been extended, but do not, in my opinion, apply the doctrine to a case where, as here, the vessel or the appliance in question is inherently sound and where the danger results from a foreign substance placed there by an undisclosed person an indeterminate time prior to the accident."
In Spero v. The Argodon, D.C.E.D.Va. 1957, 150 F. Supp. 1, 3, a third engineer slipped on oil on the floor of the engine *400 room and fell through a floor where a floorplate had been removed. Beyond question the removal of the floorplate was sufficient to constitute unseaworthiness in itself. The Court stated:
"The presence of oil on the engine room floor would not, standing alone, be sufficient to impose liability for unseaworthiness under the facts of this particular case, but the combination of circumstances leads to the conclusion of liability."
Appellant contends, however, that in the case of Poignant v. United States, 2 Cir., 225 F.2d 595, 598, the Court reversed the decision of the trial court in dismissing the libel, alleging unseaworthiness causing injuries which resulted from slipping on an apple skin or some piece of garbage on the floor of a passageway on the vessel. In such case it was found that the vessel had no garbage disposal chutes, and the practice was at the conclusion of each meal to pull large cans of garbage from the galley over the passageway in question to the ship's rail for dumping overboard. It was not shown whether the apple skin had dropped out of one of the garbage cans or had been dropped otherwise. The court reversed the decision of the trial court and remanded the case for new trial, stating that it became necessary to consider whether there was sufficient evidence on the issue of unseaworthiness to raise questions of fact which only the trial judge could resolve. The Court further stated there was some testimony to support possible inferences (1) that the absence of garbage chutes on the vessel was the proximate cause of the accident, and (2) that comparable vessels generally are provided with such chutes. The Court stated, with reference to the standard required:
"And so, we hold, although the owner is absolutely liable for failure to provide a vessel which measures up to the standard of the law, that standard is not perfection but reasonable fitness."
The instant case is readily distinguishable from the cases cited by appellant. In Petterson v. Alaska Steamship Company, 9 Cir., 1953, 205 F.2d 478, affirmed 1954, 347 U.S. 396, 74 S. Ct. 601, 98 L. Ed. 798, a block broke while in ordinary use in the customary manner.
In Pacific Far East Lines v. Williams, 9 Cir., 1956, 234 F.2d 378, 379, certiorari denied 352 U.S. 871, 77 S. Ct. 96, 1 L. Ed. 2d 76, there was frost on a hatch combing coupled with poor lighting.
In Carlisle Packing Company v. Sandanger, 259 U.S. 255, 42 S. Ct. 475, 66 L. Ed. 927, a can labelled "Kerosene" was filled with gasoline, thus unquestionably rendering the vessel unseaworthy. In some of the cases cited by appellant the vessel was unseaworthy, as a matter of law. In others the Court could decide as a question of fact.
In the instant case, we are in effect called upon to decide whether a piece of small line from 7 to 12 inches long rendered a vessel unseaworthy as a matter of law. We think at the very most only a fact issue was raised. We could no more hold as a matter of law that the presence of the short length of line rendered the vessel unseaworthy than we could hold as a matter of law that a spot of grease or oil, a piece of slippery paper, or an apple skin, rendered the vessel unseaworthy simply because it proximately caused a fall and injury. Appellant testified that the engine room was seaworthy as he understood the term. This of course did not foreclose his right to submit the issue to the jury for its determination.
By not requesting the submission of an issue for the determination of the jury on unseaworthiness, appellant waived such ground of recovery. He cannot now undertake to recover under a theory that he abandoned before the trial court charged the jury.
"When the complaint is that the court has wholly failed to submit to the *401 jury the controlling issues necessary to establish an independent ground of recovery or of defense, the party relying upon such ground must request the submission of such omitted issues in substantially correct form, or he will waive the ground of recovery or defense." (3 McDonald, Texas Civil Practice 1148, Sec. 12.32.)
See also Rule 279, Texas Rules of Civil Procedure; 3-A Tex.Jur. 244, Appeal and Error, Sec. 188; and Ramm v. Ramm, Tex. Civ.App., 294 S.W.2d 174.
Appellant's second Point asserts the trial court erred in not submitting to the jury a charge containing issues, definitions and instructions making clear the federal law as to the distinction between the absolute and nondelegable duty of the employer and the duty of ordinary care imposed upon the employee.
There can be no question that in cases brought under the Jones Act or the Federal Employers' Liability Act, 45 U.S.C.A. § 51 et seq., the State court must follow the law as established by federal decisions. This is too clear for the citation of authorities. Appellant relies heavily on Thompson v. Gibson, Tex.Civ.App., Ft. Worth 1956, 290 S.W.2d 305, reversed and rendered by the Texas Supreme Court, 298 S.W.2d 97, reversed per curiam 355 U.S. 18, 78 S. Ct. 2, 3, 2 L. Ed. 2d 1, order in compliance Tex., 310 S.W.2d 564. The jury found that the defendant was negligent in failing to use gravel of a uniform size and in failing to pack it between the railroad tracks and in failing to provide a smooth walkway for plaintiff. The United States Supreme Court, in reversing the Texas Supreme Court, which held there was no evidence of negligence, stated:
"We hold that the proofs justified with reason the jury's conclusion that employer negligence played a part in producing the petitioner's injury."
In the instant case the court submitted Special Issue No. 5, reading:
"Do you find that at, and immediately prior to, the time Eugene D. Guthrie suffered injury, if any, the presence of the line, if any, made that part of the deck where it lay not a reasonably safe place to work?"
to which the jury answered: "We do not."
In connection with Special Issue No. 5, the court gave the following definition:
"By the term `reasonably safe place to work' is meant a place in which the work to be carried on can be done with reasonable safety."
We think this definition is correct and adequate.
Appellant's requested Issue No. 15, which was refused, reads:
"Do you find from a preponderance of the evidence that Defendant failed to furnish to Eugene D. Guthrie, at the time and on the occasion of his injury, if any, a reasonably safe place in which to work?"
The only thing that could possibly have rendered the place not reasonably safe was the presence of the line in question. The court properly confined the Issue to whether the presence of the line made that part of the deck where it lay not reasonably safe. The instruction in connection with appellant's requested Issue was an instruction on law with which the jury were not concerned. Further, the instruction was not a correct statement of the law in that under the Jones Act there must be employer negligence to create liability for not providing a safe place to work.
In West v. United States, D.C.E.D.Pa. 1956, 143 F. Supp. 473, 480, the court stated:
"Unlike the distinct and sometime overlapping duty to provide a seaworthy vessel and appurtenances, a shipowner's duty to provide a safe place to work is not an absolute duty; rather, it is a requirement of reasonable care under the circumstances. Brabazon v. Belships Co., 3 Cir., 1953, 202 *402 F.2d 904, 906. It is not a unique and separate ground of liability but rather liability predicated upon negligence. Cookingham v. United States, 3 Cir., 1950, 184 F.2d 213, see opinion of Chief Judge Kirkpatrick, D.C.E.Pa., 1949, 87 F. Supp. 203, 205."
There was no evidence of inadequate lighting and no request for submission of an independent issue thereon or for its inclusion in the court's Issue No. 5. We think appellant's contention relative to his requested issue and instructions is without merit.
Appellant cites Cox v. Esso Shipping Company, 5 Cir., 247 F.2d 629, with reference to instructions that should be given a jury as to the duty of a shipowner in an action for unseaworthiness. In that case the court distinguished between the absolute duty to provide a seaworthy vessel and the standard of due care under the Jones Act. In the instant case no instruction was required in connection with seaworthiness since no issue was requested with respect thereto. Indeed, the instruction requested by appellant in connection with such issue was not necessary to enable the jury to properly pass upon and answer Issue No. 5 relative to a safe place to work and the giving of such instruction would have been improper and error. Boaz v. White's Auto Stores, 141 Tex. 366, 172 S.W.2d 481; Texas Bus Lines v. Whatley, Tex.Civ.App., 210 S.W.2d 626, ref. n. r. e.
The court refused appellant's requested Issue No 9, reading:
"Do you find from a preponderance of the evidence that the Defendant failed in its duty to inspect Eugene D. Guthrie's place of work?"
We think the court properly refused this Issue and the instruction in connection therewith. Appellant stood the 12 to 4 a.m. watch in the engine room where the injury occurred at 2 o'clock a. m. As third engineer on watch it was his responsibility, according to his testimony, to make inspections to determine the presence of gear adrift about the deck. He further testified that it had been his practice in making his inspections to pick up a thing like the line in question and to put it in a safe place, and that if he had seen it before the accident that's what he would have done, whether it was a part of his job or not.
Appellant contends that under the governing union contract, appellant was forbidden to do clean-up work. Under such contract appellant, as a licensed engineer, was not required to do clean-up work customarily assigned to unlicensed personnel, and usually done by wipers. As officer on watch, however, the responsibility of inspection was his. He had two unlicensed men on watch with him and as their senior it was his responsibility and duty to tell them to clean up any oil spills or pick up loose gear. The court submitted Special Issue No. 12 inquiring whether appellant failed to make a proper inspection of the area in question during the two hours he was on watch prior to his fall, and the jury answered in the negative. Since appellee's duty of making a proper inspection, though nondelegable, was reposed for the time in appellant, the jury's finding should be construed as exonerating appellee of any failure to make a proper inspection. Regardless of that, an inspection could only have disclosed the presence of the line which admittedly was on the deck but which the jury found did not render that part of the deck a place not reasonably safe to work. Further, there was no evidence that appellee had failed in its duty of inspection. Appellant testified that he was not saying that the people on watch before him were negligent in any way. There is no evidence that they were.
The court did not err in refusing to give Special Issue No. 12, requested by appellant, inquiring whether a fellow employee of Eugene D. Guthrie left the line on the deck where appellant suffered his injury. There is no evidence as to how the line got at the place in question or how *403 long it had been there. Appellant testified he did not know how it got there. He did state, however, that "they were painting in there. I do not know whether they were using it to tie a bucket, but I do not know. If we assume, however, that the jury might have drawn an inference from such negative testimony and have found that the line was left by a fellow employee, we are still confronted with the proposition that the submission would have been in effect a double submission. The court in its charge specifically inquired as to whether the presence of the line made the deck where it lay not a reasonably safe place to work, and the jury found that it did not. If, in addition to such issue, the jury was asked whether an employee left the line where it was and whether it was negligence to do so, the inquiry would have covered the same issue, or a phase or shade thereof. It was not the leaving of the line but its presence on the deck that might have threatened harm and made the place unsafe for work.
Moreover, the jury exonerated both appellant and appellee of all negligence in finding that the occurrence in question was the result of an unavoidable accident. The jury was instructed in connection with the submission of the issue as to whether the accident was or was not an unavoidable accident, that
"By the term `unavoidable accident', as used herein, is meant the unforeseen and unanticipated happening of an event occurring without either the Defendant or the Plaintiff being guilty of negligence that proximately caused the accident in question, if any."
The finding of the jury negated negligence in all particulars.
Had there been alleged defects, other than the presence of the line in question, it would have been proper for the court to have submitted issues covering such other defects that might have made the deck an unsafe place to work. Roosth & Genecov Production Co. v. White, 152 Tex. 619, 262 S.W.2d 99. Appellant, however, did not prove any defect allegedly making the deck unsafe, other than the presence of the line which was included in the issue answered by the jury adversely to appellant's contention. The ultimate issue given adequately covered the requested issue. Rule 279, Texas Rules of Civil Procedure; S. H. Kress & Co. v. Selph, Tex. Civ.App., 250 S.W.2d 883, ref., n. r. e.; Serna v. Cochrum, Tex.Civ.App., 290 S.W.2d 383, ref., n. r. e.; Fullingim v. Dunaway, Tex.Civ.App., 267 S.W.2d 483, no writ history. The law is well settled that it is not necessary to submit a special issue covering an evidential or subordinate fact (in the instant case, how did the line get there or who left it?) which is necessarily embraced in the determination of the ultimate fact (did the presence of the line, regardless of how it got there, make that part of the deck where it lay not a reasonably safe place to work?). Wichita Falls & Oklahoma Ry. Co. v. Pepper, 134 Tex. 360, 135 S.W.2d 79. See McDonald, Texas Civil Practice, Sec. 12.09; Northeast Texas Motor Lines v. Hodges, Tex.Com.App., 138 Tex. 280, 158 S.W.2d 487, 489, in which the court stated:
"It has never been the policy of the law to lengthen and complicate special issue charges by requiring trial courts to give issues that merely submit various phases or other shades of meaning of an issue already in the charge. It is required only that each controlling issue raised by the pleadings and the evidence be submitted once, fairly, simply and succinctly. Otherwise, such charge could be drawn out to interminable length confusing not alone to the jury but to court and counsel as well."
We think the case was fairly and adequately submitted and that the jury's findings should stand.
The judgment of the trial court is affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433748/
|
320 S.W.2d 944 (1959)
Mary CROSBY (Plaintiff), Respondent,
v.
ST. LOUIS COUNTY CAB COMPANY, Inc. (Defendant), Appellant.
No. 29936.
St. Louis Court of Appeals. Missouri.
February 17, 1959.
Motion for Rehearing or for Transfer Denied March 13, 1959.
*945 James J. Amelung, Holtkamp, Miller & Risch, St. Louis, for appellant.
Lawrence E. Ehrhart, St. Louis, for respondent.
Motion for Rehearing or for Transfer to Supreme Court Denied March 13, 1959.
RUDDY, Presiding Judge.
This is an appeal by defendant from a judgment of $3,500 in favor of plaintiff. A taxicab owned by defendant and operated by its employee struck the rear of an automobile operated by plaintiff when it was stopped behind another vehicle at or near an intersection. As a result of the collision plaintiff sustained personal injuries.
On April 24, 1956, plaintiff was operating her automobile westwardly in the middle lane on Clayton Road, which is a six-lane highway, three lanes east and three lanes west. The accident occurred about 5 P.M. The sun was shining and the street was dry. Plaintiff had one passenger in the car.
Plaintiff was driving her automobile westwardly on Clayton Road in heavy traffic and as she drew near to the intersection of Bellevue Avenue the automobile ahead of plaintiff's car came to a stop. Plaintiff also stopped and her car was the third car from the intersection in the middle lane. Plaintiff's car when stopped was about three feet behind the car ahead. There were cars in the lane to the left of plaintiff but no cars in the lane to her right. After being stopped for approximately one minute, plaintiff's car was struck in the rear by a taxicab owned by the defendant and operated by William Leinert, its employee. No part of plaintiff's car struck the car in front. No sound of brakes being applied was heard before the collision. The radiator, headlights and fenders of defendant's car were damaged. The back and lid of the trunk on plaintiff's car were damaged and the bumper guards were pulled away from the pan attached to the car.
Plaintiff introduced in evidence certain questions propounded to and answers given by the defendant's driver, William Leinert, when his deposition was taken. The questions and answers indicate that the driver of the taxicab, William Leinert, prior to the collision, as he was driving westwardly on Clayton Road was engaged in some sort of an altercation with the driver of an automobile to his left. In his deposition when asked about the altercation, he said:
"A. * * * no, we wasn't arguing. I left him go until he kept pushing me over and all I said, what is the matter, sir, I have to make a turn, too.
"Q. And while you were saying that to him this traffic stopped in front of you? A. That is when I noticed the traffic, but I wasn't looking at him that far, there is no use in me saying I wasn't, I was talking to the man because if I had my eyes in front of me I would have stopped my taxicab.
"Q. You had your eyes towards him making this remark to him? A. Talking to him.
"Q. At that moment the traffic stopped? A. Yes, that is right, because I had control of my cab at all times.
*946 "Q. If you had been looking, you would have stopped your cab, is that correct? A. I amwell, I said if I would have been looking straight ahead, but I did glance, because I knew Ithe traffic was heavy, but I just happened to say, what is the matter, and then, bingo, I was there.
"Q. There was nothing between the car ahead to obstruct your vision? A. No, nothing at all."
At the trial William Leinert was offered as a witness by defendant. He testified that he made a left turn into Clayton Road off of Yale Avenue to go west on Clayton Road and in doing so he aroused the anger of another motorist who started "hollering something" at the witness. In the course of his testimony Leinert said: "I must have cut in front of him." When asked on cross-examination about any conversation he had with the man in the other car, he testified: "I didn't have no conversation with him. He was hollering at me, and I said to himI was drivingI said, `What do you want?'"
He further testified that he was traveling approximately ten miles an hour and could have stopped his car in 3 to 5 feet. At one point in his testimony he said that the plaintiff's car was about 5 to 7 feet in front of him. He was then asked this question:
"Q. Three to five feet. So there would have been distance between the car ahead of you and the cab to stop your cab if you had been looking? A. That's right, sir."
Again the witness testified as follows:
"Q. Your visibility was good that day, wasn't it? A. Fine, yes, sir.
"Q. You made a statement that `if I had my eyes in front of me, I would have stopped my taxicab' did you not? A. At the time that I bumped the lady if I would have been looking straight I should have stopped my taxicab, I could have stopped my taxicab, certainly."
He further testified that he knew there was a car ahead of him and in his direct testimony, when asked if he had an opportunity to see the car with which he had the accident, he answered, "Yes, I seen it up in front of me, sir." When he was asked how long he had been following the car in front of him, he answered, "A block and a half, sir."
Instruction No. 1 authorized a verdict in favor of plaintiff if the jury found that defendant's taxicab overtook plaintiff's automobile when it was stopped and negligently and carelessly was allowed by the operator of the taxicab to run into and collide with the rear end of plaintiff's automobile.
Instruction No. 2 after instructing the jury that it was the duty of the driver of a motor vehicle to maintain a vigilant lookout to see and discover other vehicles on the highway, told the jury if it found that defendant's driver by keeping a vigilant lookout could have seen and observed plaintiff's automobile at the time and place it was stopped and that thereafter defendant's driver upon the first appearance of danger could have avoided striking and colliding with the rear end of plaintiff's automobile by stopping and slowing and swerving the taxicab, but that defendant's driver failed to do so, then the jury must find in favor of plaintiff.
Defendant contends that Instruction No. 2 is a humanitarian instruction which stated an abstract rule of law that had no application to a case submitted under the humanitarian doctrine when it stated that it was the duty of defendant's driver to keep a vigilant lookout to see and discover other vehicles upon the highway. Defendant is in error in contending that Instruction No. 2 was a submission to the jury under the humanitarian doctrine. It lacks a finding of all the elements necessary to recovery under the humanitarian doctrine and contains findings that have no place in a humanitarian instruction. *947 We agree with plaintiff that Instruction No. 2 was one of primary negligence.
Defendant next asserts that if Instruction No. 2 is a submission of primary negligence based on defendant's failure to keep a lookout, the giving of the instruction was error for other reasons.
In the view we have taken of this case it is not necessary to rule on the other complaints of defendant against this instruction. This is so, because the verdict is obviously for the right party. The evidence before the jury in the trial court was such as to permit no other result. If the verdict returned by the jury was manifestly for the right party, and a different result could not be allowed to stand, then the verdict will not be disturbed, notwithstanding an erroneous instruction may have been given for the prevailing party. Moloney v. Boatmen's Bank, 288 Mo. 435, 232 S.W. 133; Green v. Boothe, 239 Mo.App. 73, 188 S.W.2d 84; O'Dell v. Hurt, Mo.App., 106 S.W.2d 526; Henry v. Missouri Ins. Co., Mo.App., 68 S.W.2d 852; Selinger v. Cromer, Mo.App., 208 S.W. 871. We are commanded by the terms of Section 512.160 RSMo 1949, V.A.M.S., not to reverse any judgment, where the error alleged to have been committed does not materially affect the merits of the action. Moloney v. Boatmen's Bank, supra.
In the case of Jones v. Central States Oil Company, 350 Mo. 91, 164 S.W.2d 914, the Supreme Court held that if the jury found that plaintiff was in a place where he had the right to be and was operating his car properly as required by the highest degree of care and if the jury further found that the defendant drove its truck into that part of the highway and against the rear end of plaintiff's car that surely such facts would conclusively show active negligence on defendant's part and that if the jury believed them, no result other than a finding of negligence could be reached.
In the case of Hughes v. St. Louis Public Service Company, Mo.App., 251 S.W.2d 360, decided by this court, we held that such a course of conduct on the part of the defendant made out a prima facie case of negligence against the person in charge of the overtaking vehicle. There is nothing in the facts in the instant case to show that plaintiff was not exercising the highest degree of care in the operation of her automobile and there was no attempt on the part of the defendant to charge or prove contributory negligence on the part of plaintiff.
Adverting to the facts outlined heretofore, we find that no dispute exists as to what caused the collision. Defendant's driver and witness admitted he had been following plaintiff's automobile for a block and a half. He admitted visibility was good and that if he had kept his eyes in front and looked straight ahead he could have stopped the taxicab in time to have avoided the collision. He admitted there was nothing to obstruct his vision, and that at the speed he was traveling there was distance enough to stop the cab if he had been looking. It was the duty of defendant's driver to keep a vigilant lookout to see and discover plaintiff's automobile on the highway. The testimony of the taxicab driver is an admission that he failed to keep the required lookout and instead engaged in an altercation with another automobile driver. It is undisputed that plaintiff's automobile had been stopped an appreciable length of time, plaintiff says one minute. It is undisputed that defendant's taxicab ran into the rear of plaintiff's automobile. Defendant's witness and driver admitted that he could have stopped his car if he had been maintaining a proper lookout. Can there be any question about defendant's negligence? We think not.
The facts we have stated which establish the negligence of defendant's driver were testified to by the taxicab driver who was defendant's witness. Defendant, therefore, is bound by his testimony, for the rule is well settled that when a party produces a witness to testify in his own behalf, he vouches for the credibility of that witness' testimony, and in the absence of contradictory *948 evidence, he is bound by such testimony. Harper v. St. Joseph Lead Co., Mo., 233 S.W.2d 835; Platt v. Platt, 343 Mo. 745, 123 S.W.2d 54; Mississippi Valley Trust Co. v. Francis, Mo.App., 186 S.W.2d 39; 31 C.J.S. Evidence § 311, p. 1089. There was no other testimony tending to contradict that of defendant's witness.
Upon a close examination of the evidence contained in the record before us we are unable to say that the criticisms, if true, leveled at Instruction No. 2 by the defendant are such as to materially affect the merits of the action. As we said before, the jury returned the only verdict authorized by the evidence. Any other verdict could not be allowed to stand and this is true even though Instruction No. 2 was erroneous. Defendant's complaint against the instruction is overruled for the reasons stated.
Defendant's next complaint is directed at Instruction No. 4 which authorized the jury to allow damages for impairment of plaintiff's ability to earn a livelihood and for future medical care and attention. Defendant contends that the evidence was insufficient to support an award for these items. In addition defendant contends the verdict is excessive. These contentions require a review of the evidence concerning plaintiff's injuries.
Plaintiff's testimony shows that immediately after the collision she had a headache and within an hour her "neck started to stiffen" and her "shoulders started feeling funny." He ankle was black and blue and her knee was swollen. Pain radiated from her back into her left hip and knee. She went to Dr. Bockelman who gave her some medicine that made her sleepy. She could not take this medicine and changed to Dr. William A. Stephens. He administered heat treatments and prescribed medicine to ease the pain. A bandage was applied to the knee, but no medication was applied. She continued working. However, approximately three weeks after the accident she stayed away from her work for a week. Dr. Stephens ordered a special corset which she wore for about three months and continues to wear it whenever her back gives her trouble. Sometime during the month of October or November 1956, while at work operating a cash register her "right arm went perfectly dead." At the suggestion of her boss she saw Dr. Lawrence Kotner who treated her and suggested that she see a physical therapist. She received five treatments from the physiotherapist who administered heat and massage. These treatments did help to relieve some of the pain.
Concerning her physical condition at the time of the trial her testimony shows that she continued to experience pain "now and then" in her arm, neck, shoulders, back, right arm, left hip and left knee. The pain in her hip and knee is more constant than the pain in the other parts of her body. The lower back, shoulders, neck, left hip and left knee at times get stiff and when the weather is damp or cold the pain is very severe and she is caused to limp when walking. When she steps up on a curb her knee seems to "give out." However, her knee is no longer swollen. She is still having trouble with her right arm.
It still feels numb and has no strength. She has lost strength in her back and is still bothered with headaches. She continues to do the work she formerly did, except for one function. She is unable to operate a billing machine, because it hurts her back to raise the carriage on the machine. She has been relieved from doing that part of the work she formerly did. Someone else has been assigned to this work.
The initial examination of plaintiff by Dr. William A. Stephens was on May 14, 1956. On that examination she complained of aching pain in her neck and lower back. There was tenderness over the bony prominences of the fifth and sixth cervical vertebrae and the left brink of the trapezius muscle. He also found tenderness over parts of the dorsal and lumbar spine.
*949 There was mild local swelling of the capsule of the ankle joint. His diagnosis was a soft tissue strain of the neck and low back. The soft tissues he referred to were the musculature that supports the neck and back, also the ligaments and tendonous portions of those muscles. He saw her a total of 15 times and her symptoms were essentially the same on all of her visits. The examination before his last one took place November 16, 1956. The physical findings on that date were essentially the same as the earlier examinations with the exception that the swelling of the left ankle had subsided. On this visit she had some soreness of the left knee joint. The trial of this case took place about thirteen months after the accident. About one week before the trial plaintiff was again examined by Dr. Stephens. This examination disclosed tenderness in the same areas found tender on the first examination. She still complained of pain in the lower back, left hip and left knee. At times it caused her to limp and would interfere with her sleep at night. She continued to complain of stiffness in the neck with associated headaches. She still experienced an occasional sensation of numbness in her right forearm. He had prescribed a corset for her which she continued to wear at the time of her last examination. He said her condition was chronic and permanent and that she would continue to have pain in her neck and low back in the future.
Dr. Lawrence Kotner saw plaintiff the first time on September 28, 1956. She told him her right arm suddenly became numb that morning and she also complained of her lower back, left knee and hip. His examination disclosed marked tenderness over the lateral portion of the right elbow. He prescribed heat for the elbow and gave her some tablets to take. At some stage of his treatment he sent her to a physiotherapist for treatments. Dr. Kotner saw her a total of five times. His diagnosis was chronic sprain of the neck, right elbow, knee and hip. He testified that by chronic sprain he meant a type of sprain "which will endure for anywhere from several months to several years." He found definite limitation of movement of the neck in all directions. He said a neck sprain could produce pressure on the nerves as they emerge from the cervical vertebrae which will produce numbness in the forearm, also loss of strength in the elbow joint and pain when attempting to bear weight. On one of her visits he noted a definite swelling of the left knee. He found a chronic sprain of the left knee and hip which he said would be painful and would cause some restriction of movement. He thought only heat and rest could alleviate her pains.
Joseph Savan, a physical therapist who treats through remedial exercises, heat, electricity and manipulation, treated plaintiff five times. He found muscle spasm in her triceps and deltoid muscle. The last time he treated her there was no muscle spasm. He thought the areas affected may stay weak for a period of six months to a year.
Defendant's contention that the evidence was insufficient to support an award for impairment of plaintiff's earning capacity is without merit. The evidence shows that plaintiff was not able to do all the work she formerly performed. She is unable to operate the billing machine because she cannot raise the carriage and she had to be relieved of this duty. The medical evidence shows her condition is chronic and permanent and that there will be impairment in the use of her right arm when attempting to bear weight. We think this and other evidence which demonstrated the chronic nature of plaintiff's injuries which will endure for some time in the future was sufficient to authorize a submission of damages for impairment of earning capacity. The evidence is such as to show that plaintiff's injuries will affect her ability to do work requiring bending and lifting. Baker v. Norris, Mo.App., 248 S.W.2d 870; Rauch v. McDonnell Aircraft Corporation, Mo.App., 303 S.W.2d 226.
*950 In the cases of Brooks v. McCray, Mo.App., 145 S.W.2d 985, and Williams v. Illinois Cent. R. Co., 360 Mo. 501, 229 S.W.2d 1, 20 A.L.R. 2d 322, relied on by defendant, the sole question considered was the alleged excessiveness of the verdict. Defendant is in error in asserting that the court in the case of Johnston v. Owings, Mo.App., 254 S.W.2d 933, loc. cit. 998, held that the evidence was not sufficient to support an award for damages for loss of future earning capacity. The court upheld the instruction submitting loss of future earning capacity in the following language:
"The above is sufficient evidence upon which to base an instruction authorizing a verdict for future pain and suffering and for future loss of earnings."
Defendant's next contention that the evidence was insufficient to support an award for future medical expenses must be overruled. While the evidence in this connection was somewhat meager, we feel it was sufficient from which the jury could find that the need for some future medical expense would be reasonably probable. The evidence shows that at the time of the trial plaintiff still suffered off and on from pain in her arm, neck, low back, left hip and knee and that her condition was permanent. Dr. Kotner said heat treatment may be needed in the future to alleviate plaintiff's pain. We think the evidence was sufficient to support submission of this item for the jury's consideration.
We next examine the contention of defendant that the verdict is excessive. In considering this contention we must consider the evidence most favorable to plaintiff and indulge in the presumption of right action on the part of the jury in finding that plaintiff was entitled to $3,500 and the trial court in approving the verdict. Page v. Wabash R. Co., Mo.App., 206 S.W.2d 691, loc. cit. 697. No precise yardstick of measurement can be applied to plaintiff's injuries to ascertain their money value. The facts in each case must be carefully considered. In the cases an effort is made to maintain reasonable uniformity in awards for similar injuries. However, we must also give effect to changed economic conditions in the years that elapsed since those awards were approved. Montana v. Nenert, Mo.App., 226 S.W.2d 394; Clayton v. St. Louis Public Service Company, Mo.App., 276 S.W.2d 621.
Defendant relies on two cases, Ulmer v. Farnham, Mo.App., 28 S.W.2d 113, decided in 1930, and Brooks v. McCray, supra, decided in 1940. The value of the dollar has decreased materially since those cases were decided and they are of little help today for purpose of comparison. More helpful are the cases of Clayton v. St. Louis Public Service Company, Mo.App.1955, 276 S.W.2d 621, and Montana v. Nenert, Mo.App.1950, 226 S.W.2d 394, decided by this court. The principal injuries sustained by the plaintiffs in those cases were similar in most respects to those sustained by plaintiff in the instant case. It must be admitted that the injuries when received by the plaintiff in the Clayton case were more severe than in the present case. However, the residual effects of the injuries were about the same in the two cited cases to those of plaintiff in this case. So was the prognosis. In the Clayton case we approved a verdict for $6,250. In the Montana case we approved $3,500.
The record discloses that plaintiff had $327.50 in medical expenses. Keeping in mind this factor and our duty to maintain reasonable uniformity of awards for similar injuries, with due consideration to the economic circumstances existing at this time and considering the evidence in the light most favorable to plaintiff, we cannot say that the verdict is so excessive as to shock the conscience of this court. On the contrary, we think the amount of the verdict is reasonable and fair.
The judgment should be affirmed. It is so ordered.
ANDERSON and WOLFE, JJ., concur.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433756/
|
320 S.W.2d 845 (1959)
M. G. BROWN, Appellant,
v.
STATE of Texas, Appellee.
No. 30386.
Court of Criminal Appeals of Texas.
February 11, 1959.
Levie Old, Mark Callaway, Brownwood, for appellant.
Leon B. Douglas, State's Atty., of Austin, for the State.
WOODLEY, Justice.
The offense is felony theft; the punishment, two years.
The indictment alleged the theft of bed sheets of the value of over $50 from C. H. Hester, in Randall County, Texas.
*846 Hester was the freight agent for the Santa Fe Railway at Brownwood. He testified that he was in charge of any freight that was in the depot or coming through it.
A shipment of sheets arrived in Brownwood in two Santa Fe trucks. They were shipped from Post, Texas and consigned some to Stephenville and some to Arlington and Grand Prairievia Brownwood.
Appellant was an employee of the Santa Fe at Brownwood, acting as clerk and dispatcher. He was one of a number of employees, including all truck drivers, who had a key that would unlock any of their trucks and the warehouse.
There was testimony to the effect that on the day the shipment of sheets was in Brownwood appellant asked a fellow employee to permit him to drive his Buick to Amarillo, but his request was not granted.
Without setting out the evidence in that regard, it is sufficient to say that the jury was warranted in believing that the bed sheets were taken by someone while the shipment was moving through the Brownwood terminal.
Prosecution was in Randall County, the State relying upon Art. 197, Vernon's Ann.C.C.P. which reads: "Where property is stolen in one county and carried off by the offender to another, he may be prosecuted either in the county where he took the property or in any other county through or into which he may have carried it."
It was incumbent upon the State to establish beyond a reasonable doubt that appellant was guilty of the theft of the bed sheets, and also that he carried them into Randall County after they were stolen.
Three hundred and eighty-three bed sheets answering the description of those missing were found in a dry goods store in Hereford, Deaf Smith County. They were being sold at such low prices as to create suspicion.
Amador Munoz, the owner of the store, told the officers who investigated that he purchased the sheets from John W. Daniels, who delivered them to his store. Munoz so testified at the trial.
John W. Daniels testified that he purchased the bed sheets he sold to Munoz from appellant at a liquor store in Amarillo, and that they were unloaded from appellant's automobile into his truck on the roadside at a point shown to be in Randall County.
Wilma Mae Daniels, wife of John W. Daniels, gave similar testimony.
The court recognized Daniels and his wife as being accomplice witnesses, and so instructed the jury.
The question is whether or not there is evidence sufficient to corroborate the accomplice testimony, as required by law and by the court's charge.
As we understand the record, the state relies upon the evidence mentioned and one other circumstance as furnishing the required corroboration.
The accomplice witness Daniels was arrested after Munoz named him as the person from whom he purchased the sheets. Several days later he told the officers that he wrote the number of the automobile from which the sheets were delivered to him on a small pasteboard box which bore the name and address of his wife. The accomplice witness Mrs. Daniels testified that she gave the box to the officers. It was admitted in evidence over appellant's objection that it was hearsay and an attempt to bolster the testimony of the accomplice witnesses by their own actions and conduct.
Evidence was introduced showing that the license number on the box was the license number of appellant's automobile.
*847 Powdrill v. State, 159 Tex. Crim. 618, 266 S.W.2d 879, supports appellant's contention that the writing on the box which the witness said he made was inadmissible. In that case it was held that notations made on the label on a bottle by the arresting officer were not admissible as original evidence. See also Parker v. State, 132 Tex. Cr.R. 567, 106 S.W.2d 313; Dix v. State, 136 Tex. Crim. 296, 124 S.W.2d 998; Freeman v. State, 141 Tex. Crim. 158, 147 S.W.2d 1095.
If admissible, the notation made by the accomplice witness could but bolster his testimony or refresh his memory as to the car number. It was not and could not constitute evidence "aside from that of all the accomplices connecting the defendant with the commission of the offense." (Quoted from the court's charge.)
There was no evidence from any source other than that of the accomplice witnesses that appellant was ever in Amarillo or in Randall County; or that he carried any stolen sheets into Randall County. There is no evidence that in any way tends to connect appellant with the theft of the sheets, unless such may be found in the above summarized facts.
A conviction will not be sustained upon the uncorroborated testimony of one or more accomplices.
An accomplice cannot corroborate himself by his own statements made to third persons. Branch's Ann.P.C., 2d Ed., Sec. 748, and cases cited.
The same rule applies where the accomplice makes a writing as would apply to his oral statement to a third person.
We conclude that there is not sufficient evidence to corroborate the testimony of the accomplice witnesses, hence the evidence is insufficient to sustain the conviction.
The judgment is reversed and the cause remanded.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433758/
|
189 F. Supp. 2d 1235 (2002)
Irene FLORES, Plaintiff,
v.
J.C. PENNEY COMPANY, INC., Defendant.
Civil Action No. 01-2024-GTV.
United States District Court, D. Kansas.
March 8, 2002.
*1236 Norman R. Kelly, Norton, Wasserman, Jones & Kelly, Salina, KS, for Plaintiff.
Jack D. Rowe, Lathrop & Gage L.C., Kathleen M. Nemechek, Berkowitz, Feldmiller, Stanton, Brandt, Williams & Shaw, LLP, Kansas City, MO, Nicholas A. O'Kelly, Plano, TX, for Defendant.
*1237 MEMORANDUM AND ORDER
VanBEBBER, Senior District Judge.
Plaintiff, Irene Flores, brings this case alleging that Defendant, J.C. Penney Company, Inc. ("J.C.Penney"), discriminated against, harassed and constructively discharged her based on her race and national origin in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. ("Title VII") and the Kansas Act Against Discrimination, K.S.A. § 44-1001 et seq. ("KAAD"). The case is before the court on Defendant's motion for summary judgment (Doc. 21). For the reasons set forth below, Defendant's motion is granted.
I. FACTUAL BACKGROUND
The following facts are either uncontroverted or are based on the evidence submitted with the summary judgment papers and viewed in the light most favorable to the nonmoving party. Immaterial facts and facts not properly supported by the record are omitted.
Plaintiff, a Hispanic female, was hired by Defendant as a merchandise manager trainee in August 1997. Defendant initially assigned Plaintiff to the J.C. Penney store located in North Platte, Nebraska, where Plaintiff was to complete a twenty-three week merchandising training course supervised by Robin Hutchinson, a merchandise manager. Ms. Hutchinson recorded Plaintiff's progress as a trainee in 30-day, 90-day, and 150-day performance evaluations. The evaluations indicated that, for the most part, Plaintiff's performance was either "good" or "satisfactory." Despite the generally favorable evaluations, Plaintiff testified in deposition that she believed her training at the North Platte store to be inadequate because neither Ms. Hutchinson nor the other managers at the store trained her on Defendant's new computer systems.
In January 1998, Defendant converted its North Platte store into a procurement store. As a result of the conversion, North Platte store employees no longer performed merchandising functions, and the need for Plaintiff's position as a merchandiser was negated. Given the change in store status, Plaintiff assumed various assistant manager duties and remained in that capacity at the North Platte store for approximately seven months.
In approximately October 1998, Dennis Bostow, the manager of the North Platte store, arranged for Plaintiff to receive additional merchandising training at Defendant's Denver, Colorado office. As she had previously done at the North Platte store, Plaintiff trained in Denver as a merchandise manager trainee for approximately three to four months. Plaintiff received no performance evaluations during her time in Denver, and she testified in deposition that by the time she finished her stint in Denver, she felt that Defendant had provided her with inadequate training and was setting her up to fail.
In January 1999, Defendant assigned Plaintiff to the J.C. Penney store located in Salina, Kansas, where her supervisor was Store Manager, Cathy Brown. When Plaintiff first reported to the Salina store, Ms. Brown assigned Plaintiff to the Children's Department. Plaintiff's responsibilities as the Children's Department merchandiser were to run the department, including hiring employees, training employees and managing inventory.
Plaintiff testified in deposition that during her tenure at the Salina store, Ms. Brown discriminated against and harassed her because of her race and national origin in a variety of ways. Plaintiff alleges that the discriminatory treatment is evidenced by Ms. Brown: (1) classifying Plaintiff as a merchandise manager trainee, as opposed to a merchandise manager, until February *1238 1999; (2) forcing Plaintiff to work more hours, weekends and special events than non-Hispanic employees; (3) requiring Plaintiff to use vacation time to tend to family matters when non-Hispanic employees were not required to do so; (4) threatening to terminate Plaintiff's employment on several occasions; (5) requiring Plaintiff to spend more time on the "floor" to cover staffing needs than non-Hispanic employees; and (6) overseeing Plaintiff's scheduling and use of lower level associates when non-Hispanic employees were not subject to such oversight.
In addition, Plaintiff testified in deposition that Ms. Brown: (1) told her during her first week of work that "[t]his was going to be the worst year of her life" and that Ms. Brown "got stuck with her;" (2) once asked her if she had ever read before, a question that Plaintiff inferred meant that Ms. Brown thought she was uneducated and unaware of the English language; (3) publicly chastised her for mistakes; (4) told her that she spoke too fast and did not use proper grammar; (5) asked her during a meeting if she "was stupid;" and (6) twice raised the issue of the existence racism in Salina to Plaintiff.[1]
Plaintiff received three performance evaluations during her tenure at the Salina store. Defendant's performance evaluations ranked employees on a scale of one to six, with one being the highest rating, five being the lowest rating, and six indicating that the employee was "too new to rate."
In April 1999, Ms. Brown gave Plaintiff an overall performance rating of six. Despite the overall "too new to rate" rating, Ms. Brown gave Plaintiff a "Needs Development" rating in five specific areas, a "Good" rating in one area, and a "Satisfactory" rating in three areas. In addition, Ms. Brown noted the following in the Comments section of Plaintiff's evaluation:
Irene is fresh off the training program and is lacking in many areas of development. She needs to develop a strong desire to learn and to continue developing the skills she needs to manage and merchandise a department. Irene needs to take responsibility for her career immediately and continuous improvement must be demonstrated. Failure to achieve these goals could result in termination.
In September 1999, Ms. Brown evaluated Plaintiff again, this time giving her an overall performance rating of three. Ms. Brown gave Plaintiff the same "Needs Development," "Good," and "Satisfactory" ratings in specific work areas as she did in Plaintiff's April 1999 review. Ms. Brown noted the following in the Comments section of Plaintiff's September evaluation:
Irene's performance through 1st half has not been satisfactory. Attached is a list of accomplishments that must be achieved in time frame designated. Irene must develop the leadership and merchandising skills to accomplish her job. She has been in position a sufficient time and must raise every level of her business. 3 rating at this time, but to be re-evaluated in 60 days. If progress not made at this time, she will be re-rated.
The list of accomplishments referenced by Ms. Brown focused primarily on preparation and timeliness issues. Plaintiff testified in deposition that she agreed with her September 1999 performance evaluation and that nothing about the evaluation suggested that she was being discriminated against because of her race or national origin.
*1239 On March 13, 2000, Ms. Brown downgraded Plaintiff's overall performance rating to a four and gave her a "Needs Development" rating in six specific areas and a "Satisfactory" rating in three areas. In the Comments section, Ms. Brown noted:
I[r]ene has been in position 1 year and is still lacking in many areas of development. In Sept., she was given a list of accomplishments that needed to be achieved to secure a satisfactory rating. These were not achieved. Irene must develop the necessary merchandising skills and leadership to accomplish her job. Some improvement has been demonstrated but not consistently. New goals will be established according to Regional Guidelines and Irene will have 90 days to achieve these goals to earn back her 3 rating.
Plaintiff admitted in deposition that she failed to satisfy all of the goals outlined for her by Ms. Brown in September 1999.
On March 14, 2000, Plaintiff resigned from J.C. Penney. In her Notice of Resignation, Plaintiff listed the following reasons for her resignation: "I feel that Mrs. Cathy Brown gave me an unfair appraisal that was unjustified. Also I feel that it was done to avoid giving me a raise." Plaintiff's final day working for Defendant was March 24, 2000. Plaintiff received three salary increases while employed at Defendant's Salina store, two of which were across-the-board increases and one of which was at the manager's request shortly after Plaintiff's transfer from Denver.
Defendant has a written policy in its Associate Handbook prohibiting harassment on the basis of, among other things, race or ethnic origin. The policy directs employees who feel that they have been harassed to contact the store manager or, if that would be ineffective, the district, regional or home office to inform an appropriate official of the harassment. In addition, Defendant also hangs anti-discrimination and anti-harassment posters at their stores, including the Salina store, which contain the names and telephone numbers of management personnel to whom employees may report any concerns regarding perceived discrimination or harassment. Plaintiff admitted in deposition that she had read Defendant's Associate Handbook and knew of the anti-discrimination and anti-harassment posters hanging in the stores, but that she did not report any complaints of harassment or discrimination to management during her employment at Defendant's Salina store.[2]
II. SUMMARY JUDGMENT STANDARDS
Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Fed. R.Civ.P. 56(c). The requirement of a "genuine" issue of fact means that the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). An issue of fact is "material" if it is essential to the proper disposition of the claim. Id. Essentially, the inquiry is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a *1240 matter of law." Id. at 251-52, 106 S. Ct. 2505.
The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). This burden may be met by showing that there is a lack of evidence to support the nonmoving party's case. Id. at 325, 106 S. Ct. 2548. Once the moving party has properly supported its motion for summary judgment, the burden shifts to the nonmoving party to show that there is a genuine issue of material fact left for trial. Anderson, 477 U.S. at 256, 106 S. Ct. 2505. "[A] party opposing a properly supported motion for summary judgment may not rest upon mere allegation or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial." Id. The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment. Id. "Any evidence tending to show triable issues will be viewed in the light most favorable to the nonmoving party." Black Hills Aviation, Inc. v. United States, 34 F.3d 968, 972 (10th Cir.1994) (citation omitted).
III. DISCUSSION
A. Disparate Treatment Claim
Title VII and the KAAD prohibit an employer from discriminating against an employee on the basis of, among other things, the employee's race or national origin. See 42 U.S.C. § 2000e-2(a); K.S.A. § 44-1009(a)(1). Where, as here, there is no direct evidence of discrimination, the court applies the three-step, burden-shifting analysis set forth by the United States Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S. Ct. 1817, 36 L. Ed. 2d 668 (1973).[3] Under the McDonnell Douglas analysis, the plaintiff bears the initial burden of establishing a prima facie case of discrimination. 411 U.S. at 802, 93 S. Ct. 1817. If the plaintiff presents a prima facie case, then the burden shifts to the defendant to offer evidence suggesting a legitimate, non-discriminatory reason for the adverse employment action taken against the plaintiff. Id. Once the defendant articulates a legitimate, non-discriminatory reason, the ultimate burden reverts to the plaintiff to demonstrate an issue of material fact as to whether the proffered reason is pretextual. St. Mary's Honor Ctr. v. Hicks, 509 U.S. 502, 507-08, 113 S. Ct. 2742, 125 L. Ed. 2d 407 (1993) (citation omitted). Pretext can be established if the plaintiff shows either "that a discriminatory reason more likely motivated the employer or ... that the employer's proffered explanation is unworthy of credence." Texas Dep't of Cmty. Affairs v. Burdine, 450 U.S. 248, 256, 101 S. Ct. 1089, 67 L. Ed. 2d 207 (1981) (citation omitted). "[A] plaintiff's prima facie case, combined with sufficient evidence to find that the employer's asserted justification is false, may permit the trier of fact to conclude that the employer unlawfully discriminated." Reeves. v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 148, 120 S. Ct. 2097, 147 L. Ed. 2d 105 (2000).
To establish a prima facie case of discrimination in the terms and conditions of employment, Plaintiff must show that: (1) she is a member of a protected class; (2) she suffered adverse employment action; and (3) she was treated less favorably than similarly situated employees that were not in the protected class. See Trujillo v. Univ. of Colo. Health Sciences Ctr., 157 *1241 F.3d 1211, 1215 (10th Cir.1998) (citation omitted). Rather than mounting a full-frontal assault on Plaintiff's prima facie case, Defendant in this case focuses primarily on Plaintiff's lack of evidence of pretext.[4] For that reason, the court assumes for purposes of this opinion that Plaintiff has established a prima facie case and proceeds directly to the final two steps of the McDonnell Douglas analysis.[5]
Assuming that Plaintiff has established a prima facie case of discrimination, the burden shifts to Defendant to articulate legitimate, non-discriminatory reasons for the adverse employment actions taken against Plaintiff. Defendant explains that any adverse employment action suffered by Plaintiff was merely the result of Plaintiff's poor performance or her misunderstanding of store policies. Because Defendant need only explain its actions against Plaintiff "in terms that are not facially prohibited by Title VII," the court concludes that Defendant has met its burden. EEOC v. Flasher Co., 986 F.2d 1312, 1317 (10th Cir.1992) (citations omitted).
The court next evaluates whether Plaintiff has satisfied her ultimate burden of demonstrating a genuine issue of material fact as to whether Defendant's proffered reasons are pretextual. Plaintiff argues that pretext is shown by virtue of the fact that she received three salary increases while employed at Defendant's Salina store and that she met many of the goals established by Ms. Brown in September 1999, yet she was still given an overall performance rating of four in March 2000. Plaintiff maintains that the salary increases and the attainment of some of the September 1999 goals demonstrate that Defendant's reasons for giving her a four rating in March 2000 are false. The court disagrees.
First, the undisputed facts demonstrate that two of Plaintiff's salary increases at the Salina store, including the one that was given between Plaintiff's September 1999 and March 2000 performance evaluations, were across-the-board increases given to all employees. Plaintiff received the remaining salary increase shortly after she arrived at the Salina store-well before the March 2000 evaluation at issue. The salary increases do not demonstrate that Plaintiff's performance was better than the *1242 four rating that she received and, accordingly, do not create a genuine issue of material fact regarding pretext.
Second, while the record indicates that Plaintiff met some of the goals established by Ms. Brown in September 1999, Plaintiff admitted in deposition that she failed to satisfy all of the goals. Given that (1) Plaintiff testified in deposition that she agreed with her September 1999 evaluation, and (2) Ms. Brown specifically warned Plaintiff in the September 1999 evaluation that she needed to accomplish all of the goals to avoid being re-rated, the court concludes that Plaintiff's attainment of some of the goals prior to March 2000 fails to create a genuine issue of material fact regarding pretext.
The court notes that Plaintiff's pretext argument only addresses the final adverse employment action Plaintiff claims to have sufferedie., the four rating on her March 2000 performance evaluation. The court concludes, however, that even if Plaintiff had addressed the remaining adverse employment actions, she would have failed to establish any genuine issues of material fact regarding the pretextual nature of Defendant's explanations for those actions. Most importantly, Plaintiff has produced no competent evidence in this case of any animus against her based on her race or national origin. In some instances, such as Plaintiff's allegation that Defendant discriminated against her at the North Platte store by providing her with inadequate training, Plaintiff actually admitted in deposition that she had no evidence that the alleged action was discriminatory. In all other instances, Plaintiff relied on either her own deposition testimony that she "believed" that Defendant was discriminating against her on the basis of her race and national origin or on deposition testimony much of it also her ownthat some of her co-workers thought that she was being treated "unfairly" by Ms. Brown. With respect to Plaintiff's testimony that she "believed" that she was being discriminated against, "`mere conjecture that her employer's explanation is a pretext for intentional discrimination is an insufficient basis for denial of summary judgment.'" Panis v. Mission Hills Bank, N.A., 60 F.3d 1486, 1491 (10th Cir.1995) (quoting Branson v. Price River Coal Co., 853 F.2d 768, 772 (10th Cir.1988)). Accordingly, Plaintiff's own testimony fails to create a genuine issue of material fact regarding pretext in this case. As for Plaintiff's co-worker's alleged statements regarding "unfair" treatment, Plaintiff fails to offer any evidence that any of the co-workers believed that the alleged "unfair" treatment had any nexus to Plaintiff's race or national origin. Therefore, the alleged statements by Plaintiff's co-workers likewise fail to create a genuine issue of material fact regarding pretext.[6]
For these reasons, the court concludes that Plaintiff has failed to carry her burden of establishing a genuine issue of material fact about the pretextual nature of Defendant's proffered explanations for the adverse employment actions against Plaintiff. Accordingly, the court grants summary judgment to Defendant on Plaintiff's disparate treatment claim.
B. Harassment Claim
To survive summary judgment on a hostile work environment harassment claim, a plaintiff must show "under the totality of the circumstances (1) the harassment was *1243 pervasive or severe enough to alter the terms, conditions, or privilege of employment, and (2) the harassment was racial [or national origin-oriented] or stemmed from racial [or national origin-oriented] animus." Bolden v. PRC Inc., 43 F.3d 545, 551 (10th Cir.1994) (internal citation omitted). Harassment that is merely general and not based on a person's race or national origin is not actionable. See id. To be actionable, the plaintiff must offer evidence of "`more than a few isolated incidents of racial [or national origin-oriented] enmity.'" Hicks v. Gates Rubber Co., 833 F.2d 1406, 1412 (10th Cir.1987) (quoting Snell v. Suffolk Co., 782 F.2d 1094, 1103 (2d Cir. 1986)). Instead, the plaintiff must offer evidence of "a steady barrage of opprobrious racial [or national origin-oriented] comments." Bolden, 43 F.3d at 551 (citation omitted).
Plaintiff bases her harassment claim in this case on various statements made by and actions taken by Ms. Brown which Plaintiff believed to be based on her race and national origin. Specifically, Plaintiff points to her allegations that Ms. Brown: (1) told her during her first week of work that "[t]his was going to be the worst year of her life" and that Ms. Brown "got stuck with her;" (2) once asked her if she had ever read before, a question that Plaintiff inferred meant that Ms. Brown thought she was uneducated and unaware of the English language; (3) publicly chastised her for mistakes; (4) asked her during a meeting if she "was stupid;" (5) twice raised the issue of the existence racism in Salina to Plaintiff; (6) required her to work more hours, weekends and special events than non-Hispanic employees; and (7) threatened to terminate Plaintiff's employment on several occasions.
The court concludes that Plaintiff's allegations regarding the allegedly hostile work environment created by Ms. Brown are insufficient to survive summary judgment. Plaintiff has not presented evidence that she was subjected to "a steady barrage of opprobrious" racial or national origin-oriented comments, as required to show a hostile work environment. In fact, Plaintiff offers no evidence whatsoever other than her own subjective beliefs that any of Ms. Brown's comments or actions were based on Plaintiff's race or national origin.[7] For that reason, the court grants summary judgment to Defendant on Plaintiff's hostile work environment harassment claim.
In addition, the court concludes that Defendant is also entitled to summary judgment on Plaintiff's hostile work environment harassment claim on the basis that Plaintiff failed to avail herself of Defendant's anti-harassment policies. In Burlington Industries, Inc. v. Ellerth, 524 U.S. 742, 118 S. Ct. 2257, 141 L. Ed. 2d 633 (1998) and Faragher v. City of Boca Raton, 524 U.S. 775, 118 S. Ct. 2275, 141 L. Ed. 2d 662 (1998), the United States Supreme Court outlined the hostile work environment vicarious liability standard courts must apply when the alleged harasser, as here, is a supervisor. Specifically, the court held that so long as the supervisor's harassment did not result in "tangible employment action," the employer could avoid liability by proving that: (1) it had exercised reasonable care to prevent and promptly correct harassment; and (2) *1244 the plaintiff unreasonably failed to take advantage of opportunities to prevent or avoid harm. Ellerth, 524 U.S. at 765, 118 S. Ct. 2257; Faragher, 524 U.S. at 807, 118 S. Ct. 2275. An employment action is "tangible" if it "constitutes a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits." Ellerth, 524 U.S. at 761, 118 S. Ct. 2257 (citations omitted).
In this case, the court does not find that any of the employment actions complained of by Plaintiff were tangible under the definition set forth in Ellerth and Faragher. Accordingly, the court may analyze the potential vicarious liability of Defendant for the actions of its supervisor, Ms. Brown, under the affirmative defense framework set forth in Ellerth and Faragher.
The undisputed facts in this case indicate that Defendant had a written employee handbook as well as posters hung in their stores, including the Salina store, that explained Defendant's anti-harassment and anti-discrimination policies and provided employees with the names of a variety of individuals to contact to report any concerns regarding perceived harassment or discrimination. Plaintiff testified in deposition that she had read Defendant's employee handbook and knew of Defendant's anti-discrimination and anti-harassment posters, but that she did not report any complaints of harassment or discrimination to management during her employment at the Salina store. Given these facts, the court concludes that no genuine issue of material fact exists as to whether Defendant has satisfied both prongs of the Ellerth and Faragher affirmative defense. Plaintiff's failure to complain about the alleged harassment she received at the hands of Ms. Brown constitutes an unreasonable failure to take advantage of the opportunities that Defendant provided to prevent or avoid harm. See Patterson v. SEK-CAP, Inc., 29 F. Supp. 2d 1248, 1253 (D.Kan.1998).[8] Accordingly, the court grants summary judgment to Defendant on Plaintiff's hostile work environment harassment claim on that basis as well.
C. Constructive Discharge Claim
"Constructive discharge occurs when `the employer by its illegal discriminatory acts has made working conditions so difficult that a reasonable person in the employee's position would feel compelled to resign.'" Sanchez, 164 F.3d at 534 (quoting Derr v. Gulf Oil Corp., 796 F.2d 340, 344 (10th Cir.1986)). "The conditions of employment must be objectively intolerable; the `plaintiff's subjective views of the situation are irrelevant.'" Id. (quoting Yearous v. Niobrara County Mem'l Hosp., 128 F.3d 1351, 1356 (10th Cir.1997)). In essence, a plaintiff must demonstrate that, objectively, she had "`no other choice but to quit.'" Id. (quoting Yearous, 128 F.3d at 1356 (quoting Woodward v. City of Worland, 977 F.2d 1392, 1401 (10th Cir.1992))).
Plaintiff bases her constructive discharge claim in this case on the same facts *1245 as her disparate treatment and hostile work environment harassment claims. Because the court has already concluded that summary judgment must be granted to Defendant on those claims, the court likewise concludes that Plaintiff has failed to offer evidence sufficient to sustain her constructive discharge claim. In short, Plaintiff has not demonstrated the existence of a genuine issue of material fact showing that, objectively, Plaintiff had no other choice but to resign from J.C. Penney in March 2000. Accordingly, the court grants summary judgment to Defendant on Plaintiff's constructive discharge claim.
D. KAAD Claims
As a final note, Plaintiff argues that Defendant's motion for summary judgment fails to address Plaintiff's KAAD claims and that, therefore, those claims should remain in the case. The court disagrees. Defendant specifically requests in its motion that the court grant summary judgment and dismiss the action "in its entirety." Moreover, as noted by Plaintiff herself, the court applies identical analyses to Plaintiff's claims of disparate treatment, harassment and constructive discharge whether those claims are brought under Title VII or the KAAD. See, e.g., Aramburu, 112 F.3d at 1403 n. 3. Therefore, the court grants summary judgment to Defendant on Plaintiff's Title VII claims as well as her KAAD claims.
IT IS, THEREFORE, BY THE COURT ORDERED that defendant's motion for summary judgment (Doc. 21) is granted.
The case is closed.
Copies of this order shall be transmitted to counsel of record for the parties.
IT IS SO ORDERED.
NOTES
[1] Plaintiff testified that Ms. Brown asked Plaintiff on two occasions if she had been subject to any racism in Salina. On both occasions, Plaintiff responded that she had not.
[2] Plaintiff testified in deposition that she attempted to contact two individuals at some point during the course of her employment with J.C. Penney to complain about Ms. Brown, but was unsuccessful. Plaintiff also testified that she did not contact the district manager about Ms. Brown because she believed that Ms. Brown had already made her views about Plaintiff known to the district manager.
[3] The court applies the same allocation, burden and order of proof to Plaintiff's Title VII and KAAD claims. See Aramburu v. Boeing Co., 112 F.3d 1398, 1403 n. 3 (10th Cir.1997) (citation omitted).
[4] In its summary judgment briefing, Defendant states in passing that Plaintiff has no evidence that she was treated differently than other employees, however, Defendant fails to elaborate on the issue any further than its fleeting reference.
[5] Although the court proceeds directly to the final two steps of the McDonnell Douglas analysis in light of Defendant's failure to fully brief the issue, it notes its skepticism at Plaintiff's ability to establish a prima facie case. As an initial matter, many of the alleged adverse employment actions suffered by plaintiff are questionable. An adverse employment action does not include "`a mere inconvenience or an alteration of job responsibilities,'" nor is an action adverse simply because an employee dislikes or disagrees with it. Sanchez v. Denver Pub. Schs., 164 F.3d 527, 532 (10th Cir.1998) (quoting Crady v. Liberty Nat'l Bank & Trust Co., 993 F.2d 132, 136 (7th Cir.1993)) (further citation omitted). In this case, the court doubts that many of the actions of which Plaintiff complains would rise to the level of adverse under Tenth Circuit precedent. In addition, Plaintiff's evidence that she was treated less favorably than similarly situated non-minority employees is weak. For instance, the court finds no evidence that Plaintiff's training in North Platte and Denverwhich she claims was insufficient and discriminatorydiffered in any respect from training given to non-minority merchandise manager trainees. Moreover, Plaintiff's evidence of differential treatment at the Salina store consists primarily of her own conclusory deposition testimony that non-Hispanic employees were treated more favorably than she. Rarely, if ever, does Plaintiff provide any specific details on how the often unnamed non-Hispanic employees were similarly situated or how in particular they were treated more favorably.
[6] Plaintiff also offered evidence of Ms. Brown's alleged "unfair" treatment of an African-American former employee of the Salina store named Lynn Thomas. Again, however, Plaintiff failed to offer any evidence that the allegedly unfair treatment was connected in any way to Mr. Thomas' race. Plaintiff merely testified that she "gathered" that Mr. Thomas felt discriminated against because of his race.
[7] The only evidence related in any manner to Plaintiff's race or national origin is Plaintiff's testimony that Ms. Brown twice raised the issue of the existence racism in Salina to Plaintiff. Interestingly, Plaintiff testified that when Ms. Brown raised the issue, Plaintiff responded on both occasions that she had not experienced any racism in Salinaa fact that would seem to weigh against Plaintiff's allegations of discrimination and harassment in this case.
[8] Plaintiff testified in deposition that she attempted to contact two individuals at some point during the course of her employment with Defendant to complain about Ms. Brown, but was unsuccessful. However, Plaintiff's vague testimony regarding these attempts fails to raise a genuine issue of material fact sufficient to preclude summary judgment on this issue. Plaintiff also testified that she did not contact the district manager about Ms. Brown because she believed that Ms. Brown had already made her views about Plaintiff known to him. This testimony is also insufficient to preclude summary judgment; an employee's fear that a complaint of harassment might not be taken seriously is generally not a valid excuse for failing to lodge a complaint. See, e.g., Caridad v. Metro-North Commuter R.R., 191 F.3d 283, 295-96 (2d Cir.1999).
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433779/
|
189 F. Supp. 2d 627 (2002)
Timothy R. LEONARD, Plaintiff,
v.
TRANSOCEANIC SEDCO FOREX, et al. Defendants.
No. CIV.A.G-01-228.
United States District Court, S.D. Texas, Houston Division. Galveston Division.
March 4, 2002.
*628 Lawrence Blake Jones, Scheuermann and Jones, David C Whitmore, Scheuermann & Jones, Stephen F Armbruster, Scheuermann & Jones, New Orleans, LA, for Timothy R Leonard, plaintiffs.
Christopher David Bertini, Mills Shirley et al, Galveston, John C Elliott, Fitzhugh & Elliott, Houston, for Transoceanic Sedco Forex, R & B Falcon Drilling USA, Inc., Art Catering Inc, Hyundai Heavy Industries Co., Ltd., defendants.
ORDER GRANTING DEFENDANT ART CATERING'S MOTION FOR PARTIAL SUMMARY JUDGMENT
KENT, District Judge.
This is a maritime lawsuit filed by Plaintiff Timothy Leonard ("Leonard") against Defendants Transoceanic Sedco Forex, R & B Falcon Drilling U.S.A., Inc., Hyundai Heavy Industries, Co. and ART Catering, Inc. ("ART") pursuant to the general maritime law and the Jones Act, 46 U.S.C.App. § 688, or, alternatively, the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. 901 et seq., and Texas state law. Now before the Court is ART's Motion for Summary Judgment on Leonard's Jones Act claims, on grounds that Leonard is not a Jones Act seaman because the vessel upon which he worked was not "in navigation" on the date he was injured. After carefully reviewing ART's Motion, the Responses to ART's Motion filed by Leonard and Defendant R & B Falcon Drilling U.S.A., Inc., the summary judgment evidence and the applicable law, the Court finds ART's Motion for Summary Judgment meritorious and consequently, the Motion is hereby GRANTED.
I.
The DEEPWATER NAUTILUS ("Nautilus") was originally manufactured, subjected to a series of sea trials, issued its *629 ABS certification and registered as a Panamanian vessel in South Korea. Subsequently, the Nautilus was "piggy backed" on the M/V BLACK MARLIN from South Korea to the Gulf of Mexico. When it left South Korea, the Nautilus was complete and ready for deployment as a drilling rig, save for a few pieces of equipment. Upon its arrival in the Gulf of Mexico, ocean tugs towed the Nautilus to the Port of Galveston and left the rig floating dockside. While the Nautilus was docked in Galveston, drilling supplies were loaded onboard and a portion of its optional equipment was swapped out. On June 8, 2000, the Nautilus left the Port of Galveston for an offshore test site. Four days later, the Nautilus began earning its first commercial daily rates as a drilling rig.
ART, a food and housekeeping services company, primarily serves oilfield customers on oil rigs and fixed platforms. Leonard, an ART employee, worked aboard the Nautilus as a galley hand while the vessel was floating dockside in Galveston. On May 22, 2000, Leonard was injured when he allegedly slipped on the vessel's deck. Leonard was no longer working aboard the Nautilus on June 8, 2000 when the vessel left Galveston, and has not worked aboard the Nautilus at any time since.
II.
In order to recover damages pursuant to the Jones Act, an injured plaintiff must be a seaman at the time of his injury. See 46 U.S.C.App. § 688, White v. Valley Line Co., 736 F.2d 304, 305 (5th Cir.1984). To qualify as a Jones Act seaman, a plaintiff must prove that he (1) was permanently assigned to, or performed substantial work on, a vessel in navigation; and (2) contributed to the function of the vessel or the accomplishment of its purpose. See Barrett v. Chevron U.S.A., Inc., 781 F.2d 1067, 1073 (5th Cir.1986). The issue of seaman status is a mixed question of law and fact. See Harbor Tug & Barge v. Papai, 520 U.S. 548, 554, 117 S. Ct. 1535, 1540, 137 L. Ed. 2d 800, 809 (1997) (explaining that while determination of seaman status is generally a factual issue, summary judgment is proper if the facts and law support only one reasonable conclusion); Chandris v. Latsis, 515 U.S. 347, 369, 115 S. Ct. 2172, 2190, 132 L. Ed. 2d 314 (1995) (noting that summary judgment is improper where reasonable minds could differ regarding seaman status); Williams v. Weber Mgmt.Servs., Inc., 839 F.2d 1039, 1040 (5th Cir.1987) ("The issue of Jones Act seaman status is left to the jury except in the rare circumstance where the underlying facts are undisputed and the record reveals no facts from which reasonable persons could draw conflicting inferences."). Accordingly, granting summary judgment against Leonard on seaman status is appropriate only if no reasonable evidentiary basis exists to support a finding that he was a seaman at the time of his alleged injury.
III.
ART contends that Leonard was not a seaman, and therefore not covered by the Jones Act, because the Nautilus was not yet "in navigation" at the time that Leonard was injured. The Fifth Circuit's test for whether a vessel is "in navigation" asks whether the vessel is "engaged as an instrument of commerce and transportation on navigable waters." Williams v. Avondale Shipyards, Inc., 452 F.2d 955, 958 (5th Cir.1971). A public non-merchant vessel is in navigation if it is engaged in its expected duties on navigable waters. See Garret v. Dean Shank Drilling Co., 799 F.2d 1007, 1009 (5th Cir. 1986) (citing Williams, 452 F.2d at 958). Although "in navigation" status, like seaman status, usually involves a factual determination, the question of whether a vessel was in navigation at a particular time can be appropriately decided at the summary *630 judgment stage where the relevant facts clearly indicate that the requirements for "in navigation" have been satisfied. See Stewart v. Magnum Transcon. Corp., 81 F. Supp. 2d 753, 756 (S.D.Tex.2000) (citing Garret, 799 F.2d at 1009); Shanks v. Hercules Offshore Corp., 58 F. Supp. 2d 743, 745 (S.D.Tex.1999).
Past Fifth Circuit decisions clearly establish that "the pivotal question [with respect to seaman status] is whether the vessel has been placed in navigation for its intended purpose." Garret, 799 F.2d at 1009 (emphasis added) (finding that barge being fitted as drilling rig was not "in navigation" for purposes of affording a worker seaman status, where before barge could operate as a drilling rig, its intended use, the installation of additional equipment was required); see also Fredieu v. Rowan Cos., Inc., 738 F.2d 651, 652-54 (5th Cir.1984) (holding that a rig with navigational lights, an operating generator, lighting, plumbing, a galley, living quarters and personnel aboard was not "in navigation" because it had not yet been put to use as a drilling rig); Williams, 452 F.2d at 958 (holding that a launched vessel conducting sea trials could not be considered "in navigation" for Jones Act purposes because it was not yet engaged in drilling, its intended use). In this case, the undisputed evidence establishes without a doubt that the Nautilus was not carrying out its intended purpose (drilling) until after Leonard was injured. Therefore, because the Nautilus was not an "instrumentality of commerce" at the time of Leonard's injury, the applicable Fifth Circuit precedent compels a conclusion that the first criteria of the seaman test fails. Without a vessel "in navigation," there can be no Jones Act coverage. See Garret, 799 F.2d at 1010; see also Reynolds v. Ingalls Shipbuilding, 788 F.2d 264, 267 (5th Cir.1986). Thus, this case qualifies as one of the rare instances where the facts are such that the Court can determine as a matter of law that the vessel at issue was not in navigation. See Williams, 452 F.2d at 958. Consequently, ART's Motion for Summary Judgment on Leonard's Jones Act claim is hereby GRANTED on grounds that Leonard is not a Jones Act seaman for purposes of this case. A Final Judgment on such claims will be issued in due course. Leonard's remaining claims remain pending, subject to further resolution by the Court.
IT IS SO ORDERED.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433930/
|
189 F. Supp. 2d 970 (2002)
UNITED STATES of America, Plaintiff,
v.
Leonard PELTIER, Defendant.
Crim. No. C77-3003.
United States District Court, D. North Dakota, Southeastern Division.
February 15, 2002.
*971 Eric A. Seitz, Honolulu, HI, William Kirschner, Dona Ana County Legal Dept., Las Cruces, NM, for Leonard Peltier.
Lynn E. Crooks, U.S. Attorney's Office, Fargo, ND, for Plaintiff.
MEMORANDUM AND ORDER
MAGNUSON, District Judge.
This matter is before the Court on Defendant Leonard Peltier's Renewed Rule 35 Motion to reduce the sentence imposed on him in 1977. Mr. Peltier originally filed a Rule 35 motion on June 22, 1979. That motion was denied on October 4, 1979. For the following reasons, the Court denies Peltier's Renewed Motion.
BACKGROUND
A brief sketch of the otherwise notoriously convoluted procedural history of this case is sufficient for the purposes of this Motion. On June 1, 1977, following a five-week jury trial, Mr. Peltier was sentenced by Judge Paul Benson to two consecutive life terms in prison for the first degree murder of and aiding and abetting the first degree murder of two FBI agents. Mr. Peltier's conviction and sentence was affirmed on direct appeal. See United States v. Peltier, 585 F.2d 314 (8th Cir. 1978), cert. denied 440 U.S. 945, 99 S. Ct. 1422, 59 L. Ed. 2d 634 (1979).
In June 1979, Mr. Peltier filed a motion pursuant to Fed.R.Crim.P. 35 to reduce his sentence. Shortly thereafter, however, Mr. Peltier escaped from prison. See United States v. Peltier, 693 F.2d 96 (9th Cir.1982). Once Mr. Peltier was captured, the court denied the Rule 35 motion on October 4, 1979.
In April 1982, Mr. Peltier filed his first motion under 28 U.S.C. § 2255 for a new trial. This motion was denied in December 1982. See United States v. Peltier, 553 F. Supp. 890 (D.N.D.1982). Mr. Peltier appealed, and on April 4, 1984, the Eighth Circuit granted a limited remand for an evidentiary hearing related to ballistics evidence used by the government during the trial. See United States v. Peltier, 731 F.2d 550 (8th Cir.1984). Following that evidentiary hearing, the district court again denied Mr. Peltier's motion for post-conviction relief. See United States v. Peltier, 609 F. Supp. 1143 (D.N.D.1985). Not surprisingly, Mr. Peltier appealed. Although the Eighth Circuit determined that "the prosecution withheld evidence from the defense favorable to Peltier," United States v. Peltier, 800 F.2d 772, 775 (8th Cir.1986), the court ultimately affirmed the district court. See id. at 779-80.
In 1991, Mr. Peltier filed another § 2255 motion alleging that during the oral arguments before the Eighth Circuit in 1985, the government changed its theory of the case. Essentially, Mr. Peltier argued
that the government tried him and he was convicted solely on the theory that he personally shot the agents at point blank range; and that during the oral argument before [the Eighth Circuit], the government admitted that his conviction could not be sustained on that theory.
Peltier v. Henman, 997 F.2d 461, 465 (8th Cir.1993). Mr. Peltier's motion was denied by the district court. The Eighth Circuit affirmed, holding that
(A) The government tried the case on alternative theories: it asserted that Peltier personally killed the agents at point blank range, but that if he had not done so, then he was equally guilty of their murder as an aider and abettor[; and] (B) [t]he government's statement at the prior oral argument, upon which Peltier relies, was not a concession that the government had not proved that Peltier had not killed the agents personally, and that Peltier's conviction could be sustained *972 only on an aiding and abetting theory.
Id.
On November 1, 2001, Mr. Peltier filed the instant Motion seeking to renew his original Rule 35 motion for reduction of sentence. The crux of Mr. Peltier's contention is that there have been several changes in circumstances since his original sentencing which should now be considered. Based on these changes, Mr. Peltier seeks to have his sentence reduced from two consecutive life sentences to two concurrent life sentences.
DISCUSSION
A. Timeliness and Jurisdiction
The threshold issue in this case is whether Mr. Peltier's current Motion is timely. When Mr. Peltier was sentenced, Fed.R.Crim.P. 35(b) provided, in pertinent part, that the district court could
reduce a sentence within 120 days after the sentence [was] imposed, or within 120 days after receipt by the court of a mandate issued upon affirmance of the judgment or dismissal of the appeal, or within 120 days after entry of any order or judgment of the Supreme Court denying review of, or having the effect of upholding, a judgment of conviction.
Although the rule "authorize[d] district courts to reduce a sentence ... [t]he [120-day requirement was] jurisdictional." United States v. Addonizio, 442 U.S. 178, 189, 99 S. Ct. 2235, 60 L. Ed. 2d 805 (1979). Nevertheless, "a majority of the circuits adhered to the view that the district courts retained jurisdiction for a `reasonable time' beyond the 120-day period to consider timely filed Rule 35 motions." In re Laurain, 113 F.3d 595, 599 (6th Cir.1997) (citations omitted). Indeed, in the Eighth Circuit, "the defendant's filing of a Rule 35 motion within 120 days [was] the critical act entitling the trial courts to rule on the motion." United States v. DeMier, 671 F.2d 1200, 1206 (8th Cir.1982) (citations omitted).
Mr. Peltier argues that because his original Rule 35 motion was filed within 120 days of the Supreme Court's denial of certiorari on his direct appeal, this Court retains jurisdiction to consider his renewed Motion. There are two fatal flaws to Mr. Peltier's argument. First, it overlooks a crucial procedural fact: the original Rule 35 motion was considered and denied. As other courts have pointed out, a motion for reduction of sentence cannot be "revitalized by the mere act of filing subsequent motions beyond the 120 day period." United States v. Dansker, 581 F.2d 69, 72 (3rd Cir.1978); see also United States v. Ferri, 686 F.2d 147, 155 (3rd Cir.1982) (noting that allowing a defendant to file "subsequent Rule 35 motions by piggy-backing on the grant of the previous motion frustrates the object of the 120 day time restraint"); United States v. Gonzalez-Perez, 629 F.2d 1081, 1083 (5th Cir. 1980) (stating that "some limitation on jurisdiction to seek a reduction of sentence is necessary"); United States v. Friedland, 83 F.3d 1531, 1538 (3rd Cir.1996) (finding that the district court lacked jurisdiction to consider a subsequent untimely Rule 35 motion that attempted to relate back to a timely Rule 35 motion which had been denied).
Second, even if Mr. Peltier's current Motion could somehow relate back to the original motion, the Court would have to give an overly generous reading to the term "reasonable time" in order to find that it retained jurisdiction to consider the Motion for more than twenty years. Although "Rule 35[was] intended to give every convicted defendant a second round before the sentencing judge," United States v. Ellenbogen, 390 F.2d 537, 543 (2nd Cir.1968), extending the time during which a court may consider a Rule 35 *973 motion indefinitely is no insurance of justice. As the Supreme Court noted in the context of new trial motions under Rule 33, "as time passes, the peculiar ability which the trial judge has to pass on the fairness of the trial is dissipated as the incidents and nuances of the trial leave his [or her] mind to give way to immediate business." United States v. Smith, 331 U.S. 469, 475-76, 67 S. Ct. 1330, 91 L. Ed. 1610 (1947); see also Dansker, 581 F.2d at 73 (stating that the object of Rule 35 "was to limit, and to limit severely, the district courts' jurisdiction no doubt for substantially the same reasons that support enforcement of the time restraints contained in Rule 33"). Reading the reasonable time exception as Mr. Peltier suggests would "stand the time restraint of Rule 35 on its head." Dansker, 581 F.2d at 73.
Mr. Peltier also argues, however, that there is "precedent holding that a district court may consider an untimely Rule 35 motion under certain circumstances." United States v. Regan, 503 F.2d 234, 237 (8th Cir.1974). While this may be true, none of the cases cited by Mr. Peltier stand for the proposition that courts may or should consider motions as extraordinarily untimely as his. As the Government points out, these cases primarily involve circumstances where a defendant has made a good faith attempt to comply with the prescribed time limit, but for reasons wholly beyond his or her control, the Rule 35 motion does not timely reach the court. See United States v. Blanton, 739 F.2d 209, 213 (6th Cir.1984) (citations omitted) (noting that courts have excused the late filing of a Rule 35 motion when the delay resulted from reliance on an affirmative statement by the court, reliance on a statement in a letter sent by the United States Attorney to the defendant, or delay of prison authorities in mailing what otherwise would have been a timely motion).
In this case, even if Mr. Peltier were correct in asserting that there have been substantial changes in circumstances since the filing of his original Rule 35 motion, these alleged changes have been known to Mr. Peltier for more than five years, at the very least. It is therefore impossible for the Court to find that Mr. Peltier has made a good faith attempt to comply with the limitations of Rule 35. Accordingly, the Court finds that Mr. Peltier's current Motion is untimely and that the Court lacks jurisdiction to consider it.
B. The Merits of the Motion
Even assuming, however, that Mr. Peltier's Motion was timely or that some exception excusing its dilatory filing was available, the Court would still deny the Motion. Mr. Peltier catalogues four ostensible changes in circumstances justifying his Motion: (1) the alleged change of theory by the Government; (2) the acquittal of persons who admittedly engaged in the same underlying criminal conduct attributed to Mr. Peltier; (3) an alleged error in the criminal history portion of presentence report relied on by the Judge during the original sentencing; and (4) the fact that concurrent sentences are now the norm under the sentencing guidelines.[1]
1. Change of Theory
The first alleged change in circumstances to which Mr. Peltier points, is that during oral arguments before the Eighth *974 Circuit in 1985, the Government altered its theory of prosecution. Mr. Peltier contends that in 1985, the Government abandoned its theory that he had directly fired the shots which resulted in the deaths of the two FBI agents. Mr. Peltier, in other words, makes essentially the same argument that he made in his 1991 Section 2255 motion.
The Eighth Circuit specifically rejected this argument, stating that the Government did not concede that it had failed to prove that Mr. Peltier killed the agents and that Mr. Peltier's conviction could only be sustained on an aiding and abetting theory. See Peltier v. Henman, 997 F.2d at 465. The Eighth Circuit's holding on this matter is unequivocal and controlling. Mr. Peltier's argument that there has been a change of theory by the Government that was not before the sentencing Judge is therefore untenable.
2. The Acquittal of Co-Actors
Mr. Peltier argues that because the other persons who admittedly engaged in the shootout which resulted in the death of the two FBI agents were acquitted his two consecutive life sentences are grossly disproportionate and unfair. It is unnecessary for the Court to determine the merits of Mr. Peltier's argument, however, because there is no conceivable way that Mr. Peltier can contend that the acquittal of these co-actors constitutes a change in circumstances that was unknown to the sentencing judge. These co-actors were tried and acquitted in the summer of 1976. Mr. Peltier was not tried and convicted until 1977. Not only was the acquittal of Mr. Peltier's co-actors a fact that was known to Judge Benson at the time of Mr. Peltier's sentencing, but it was a fact known to Mr. Peltier during his original Rule 35 motion. Accordingly, Mr. Peltier has had a meaningful opportunity to have the fact that his co-actors were acquitted taken into account.
3. Alleged Errors in the Presentence Report
Mr. Peltier contends that the criminal history in the presentence report relied on by Judge Benson during sentencing was incorrect in several respects. He admits, however, that he was given the opportunity to review this report prior to his sentencing. (See Peltier Aff. at ¶ 5.) Although he argues that his counsel told him, at that time, that there was nothing that could be done to correct the alleged errors, Mr. Peltier has had ample opportunity to raise challenges to his sentence on the basis of this alleged faulty presentence report. Again, any errors in that report are not changed circumstances which were unknown to him when he filed his original Rule 35 motion.
4. Concurrent Sentences as the Norm
Finally, as the Government points out, Mr. Peltier's contention that his sentence should be reduced because the sentencing guidelines now express a preference for concurrent sentences is unavailing. Comparing the system that was in place at the time of Mr. Peltier's sentencing with the system that now exists under the guidelines is fraught with conceptual difficulties. Under the older system, because parole was possible, consecutive sentences were available to courts as a means of imposing an increased penalty in appropriate cases. Under the guidelines, parole is no longer available. Because all first degree murders under U.S.S.G. § 2A.1.1 carry a base offense level of 43, or life imprisonment, *975 it would seem that if Mr. Peltier were sentenced today, absent a downward departure, he would still serve a life sentence. In any event, the fact that consecutive sentences are no longer preferred under the guidelines is not, standing alone, a sufficient reason to review the wisdom of Judge Benson's sentence.
CONCLUSION
Mr. Peltier's renewed Rule 35 Motion is untimely and the Court therefore lacks jurisdiction to consider it. Even if the Court retained jurisdiction, however, Mr. Peltier has failed to alleged sufficient changes in circumstances to warrant the Court's consideration of his Motion. The changes that Mr. Peltier claims justify his Motion were either known to Judge Benson at the time of sentencing or to Mr. Peltier prior to his original Rule 35 Motion. Notwithstanding Mr. Peltier's protestations to the contrary, then, he has had a meaningful second round before the sentencing judge as intended by the drafters of Rule 35.
Accordingly, IT IS HEREBY ORDERED that Defendant's Renewed Motion to Reduce or Correct Sentence pursuant to Rule 35 (Clerk Doc. No. 501) is DENIED.
NOTES
[1] Mr. Peltier also argues that his prison record has been exemplary and that if the Court were to make his two life sentences concurrent, he would not automatically be released from confinement. The Court fails to see how either issue is relevant to a consideration of the instant Motion. Accordingly, the Court will not factor either argument into its consideration of the Motion.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433824/
|
964 N.E.2d 656 (2012)
357 Ill. Dec. 977
METROBANK, Successor by Merger with Chicago Community Bank, Plaintiff-Appellant,
v.
Frank R. CANNATELLO, The City of Chicago, Unknown Others and Non-record Claimants, Defendants-Appellees.
No. 1-11-0529.
Appellate Court of Illinois, First District, First Division.
January 9, 2012.
*657 Martin & Karcazes, Ltd., Chicago (Lance Johnson, of counsel), for appellant.
No brief filed for appellee.
OPINION
Justice ROCHFORD delivered the judgment of the court, with opinion.
¶ 1 Plaintiff-appellant, Metrobank, successor by merger with Chicago Community Bank, brought this action to foreclose a mortgage and obtain a personal deficiency judgment against defendant-appellee Frank R. Cannatello (defendant).[1] Defendant failed to appear in this case after receiving notice via abode service. A default judgment was entered against him and the mortgaged property was sold. After the sale, the trial court denied plaintiff's request for a personal deficiency judgment, having found that defendant was not personally served as required under section 15-1508(e) of the Illinois Mortgage Foreclosure Law (Foreclosure Law). 735 ILCS 5/15-1508(e) (West 2010). It appears that no Illinois case has previously addressed whether a personal deficiency judgment may be entered against a defendant who failed to appear in the foreclosure action after abode service. We reverse.
¶ 2 I. BACKGROUND
¶ 3 The mortgage at issue was executed by defendant on May 11, 2004, and was on a multi-unit property located at 520 W. 44th Place in Chicago (property). The mortgage was secured by defendant's promissory note, which was later renewed in a principal amount of $190,318.25. The mortgage provided for various remedies in the event of a default by defendant, including the right to obtain a judgment against defendant for any deficiency owed plaintiff after foreclosure and sale of the property. The mortgage was recorded against the property on July 14, 2004. The mortgage and notes listed defendant's home address as 2947 S. Halsted Street, Chicago. Subsequently, defendant defaulted on his payments.
¶ 4 On January 25, 2010, plaintiff filed its complaint against defendant seeking to foreclose the mortgage on the property pursuant to section 15-1504 of the Foreclosure Law. 735 ILCS 5/15-1504 (West 2010). The unpaid principal balance, at the time of the filing of the complaint, was $189,203.54. Plaintiff also alleged defendant was personally liable for any deficiency. The complaint prayed for a judgment of foreclosure, sale of the property, and a personal judgment for any deficiency balance found due after the sale against defendant.
¶ 5 Pursuant to section 2-203 of Article II of the Illinois Code of Civil Procedure, plaintiff accomplished abode service on defendant. 735 ILCS 5/2-203 (West 2010). The sheriff's affidavit of service averred that, on February 17, 2010, a copy of the complaint and summons was left with Robert Cannatello, age 64, a member of defendant's family or person who lived at 2947 S. Halsted Street in Chicago, defendant's usual place of abode. The affidavit further stated the deputy sheriff explained the contents of the complaint and summons to Robert Cannatello and mailed the summons and complaint in a sealed envelope with postage prepaid to defendant at the same address.
¶ 6 Defendant failed to appear or answer. On July 14, 2010, upon plaintiff's *658 motion, with notice to defendant, and supported by affidavits and exhibits, the circuit court found defendant in default and entered a default judgment in the amount of $214,173.57 in favor of plaintiff and ordered the sale of the property. The order also provided that, after the sale:
"[I]f the remainder of the proceeds shall not be sufficient to pay the above described amounts and interest, the Selling Officer shall then specify the amount of the deficiency in his Report of Sale. The Plaintiff shall be entitled to a judgment in personam/in rem against defendant(s) FRANK R. CANNATELLO, as the named defendant(s) for the amount of such deficiency, with the same lien priority as to the underlying mortgage foreclosed herein." (Emphasis in original.)
Judicial Sales Corporation was appointed selling officer for the public auction of the property.
¶ 7 On October 15, 2010, the property was sold to plaintiff as the highest bidder for a credit bid of $170,000. The report of the sale and distribution indicated a deficiency of $51,956.89. On December 16, 2010, plaintiff filed a motion to confirm the sale and a motion under section 15-1508(e) of the Foreclosure Law seeking a judgment against defendant for the deficiency. Section 15-1508(e) of the Foreclosure Law provides:
"In any order confirming a sale pursuant to the judgment of foreclosure, the court shall also enter a personal judgment for deficiency against any party (i) if otherwise authorized and (ii) to the extent requested in the complaint and proven upon presentation of the report of sale in accordance with Section 15-1508. Except as otherwise provided in this Article, a judgment may be entered for any balance of money that may be found due to the plaintiff, over and above the proceeds of the sale or sales, and enforcement may be had for the collection of such balance, the same as when the judgment is solely for the payment of money. Such judgment may be entered, or enforcement had, only in cases where personal service has been had upon the persons personally liable for the mortgage indebtedness, unless they have entered their appearance in the foreclosure action." 735 ILCS 5/15-1508(e) (West 2010).
Defendant was notified of the motions. The circuit court confirmed the sale on January 20, 2011, but it entered an order denying the motion for a personal deficiency judgment "based on the reason that abode service was had on the defendant." Plaintiff timely appealed.
¶ 8 II. ANALYSIS
¶ 9 On appeal, plaintiff contends the circuit court erred when it determined that abode service was insufficient to obtain a personal deficiency judgment against defendant under section 15-1508(e), where defendant had not appeared. Plaintiff argues that the phrase "personal service," as used in section 15-1508(e), should be interpreted to include both manners of service on individuals as provided under section 2-203 of Article II of the Code of Civil Procedure. We agree.
¶ 10 We note that defendant has not filed an appellee's brief. We therefore consider the merits of plaintiff's appeal on its brief alone, pursuant to the principals set forth in First Capitol Mortgage Corp. v. Talandis Construction Corp., 63 Ill. 2d 128, 345 N.E.2d 493 (1976) (a reviewing court should decide the merits of an appeal where the record and the claimed errors are such that a decision can be made easily without the aid of an appellee's brief).
*659 ¶ 11 A. Standard of Review
¶ 12 This appeal raises an issue of law as to the interpretation of the phrase "personal service" contained in section 15-1508(e) of the Foreclosure Law. The trial court's ruling is subject to de novo review. JPMorgan Chase Bank, N.A. v. Earth Foods, Inc., 238 Ill. 2d 455, 461, 345 Ill. Dec. 644, 939 N.E.2d 487 (2010). In Solon v. Midwest Medical Records Ass'n, 236 Ill. 2d 433, 440-41, 338 Ill. Dec. 907, 925 N.E.2d 1113 (2010), our supreme court set forth the fundamental rules of statutory construction as follows:
"As we have consistently held, our primary objective in interpreting a statute is to ascertain and give effect to the intent of the legislature. [Citation.] The most reliable indicator of such intent is the language of the statute, which is to be given its plain and ordinary meaning. [Citation.]
In determining the plain meaning of the statute, we consider the statute it its entirety, the subject it addresses, and the apparent intent of the legislature in enacting it. [Citation.] When the statutory language is clear and unambiguous, it must be applied as written, without resort to extrinsic aids of statutory construction. [Citation.]
However, if a statute is capable of being understood by reasonably well-informed persons in two or more different ways, the statute will be deemed ambiguous. [Citation.] If the statute is ambiguous, the court may consider extrinsic aids of construction in order to discern the legislative intent. [Citation.] We construe the statute to avoid rendering any part of it meaningless or superfluous. [Citation.] We do not depart from the plain statutory language by reading into it exceptions, limitations, or conditions that conflict with the expressed intent. [Citation.]
We may also consider the consequences that would result from construing the statute one way or the other. [Citation.] In doing so, we presume that the legislature did not intend absurd, inconvenient, or unjust consequences. [Citation.]"
¶ 13 With these rules in mind, we begin our analysis by examining the principles surrounding service of process, the history and the nature of foreclosure proceedings and deficiency judgments, and by reviewing the relevant provisions of the Foreclosure Law. Our citation to appellate court decisions prior to 1935 is for historical or persuasive purposes, and not as binding precedential authority. See Parker v. Murdock, 2011 IL App (1st) 101645, ¶ 23, 355 Ill. Dec. 486, 959 N.E.2d 1219.
¶ 14 B. Service of Process
¶ 15 Absent the appearance of defendant or waiver of process, the service of summons "in the manner directed by statute" is necessary to create personal jurisdiction over a defendant. Kappel v. Errera, 164 Ill.App.3d 673, 677, 115 Ill. Dec. 701, 518 N.E.2d 226 (1987); State Bank of Lake Zurich v. Thill, 135 Ill. App. 3d 747, 754, 90 Ill. Dec. 304, 481 N.E.2d 1215 (1985). "Service to be effective must be by personal service unless designated otherwise by law." Bell Federal Savings & Loan Ass'n v. Horton, 59 Ill.App.3d 923, 927, 17 Ill. Dec. 700, 376 N.E.2d 1029 (1978) (citing Haj v. American Bottle Co., 261 Ill. 362, 103 N.E. 1000 (1913)). Section 2-203(a) of Article II of the Code of Civil Procedure states: "service of summons upon an individual defendant shall be made (1) by leaving a copy of the summons with the defendant personally, [or] (2) by leaving a copy at the defendant's usual place of abode, with some person of the family or a person residing there, of the age of 13 years or upwards, and informing that person of the *660 contents of the summons, provided the officer or other person making service shall also send a copy of the summons in a sealed envelope with postage fully prepaid, addressed to the defendant at his or her usual place of abode." (Emphasis added.) 735 ILCS 5/2-203(a) (West 2010). The abode service provision of section 2-203 has been found to meet the requirements of due process in a foreclosure action, as such service is a reasonable method of informing a defendant of the pendency of the suit and providing a defendant an opportunity to be heard. Mid-America Federal Savings & Loan Ass'n v. Kosiewicz, 170 Ill.App.3d 316, 327, 120 Ill. Dec. 633, 524 N.E.2d 663 (1988). Accordingly, where there is abode service as set forth in section 2-203, a court hearing a foreclosure action or any other action at law or equity would have personal jurisdiction over a defendant who resides within this state.
¶ 16 An action in rem is considered to be "`taken directly against property or one which is brought to enforce a right in the thing itself.'" In re Possession & Control of the Commissioner of Banks & Real Estate of Independent Trust Corp., 327 Ill.App.3d 441, 465, 261 Ill. Dec. 775, 764 N.E.2d 66 (2001) (quoting Black's Law Dictionary 713 (5th ed. 1979)). In rem proceedings do not require "personal service of process." In re Commissioner, 327 Ill.App.3d at 465, 261 Ill. Dec. 775, 764 N.E.2d 66.
¶ 17 C. History and Nature of Foreclosure Actions and Deficiency Judgments
¶ 18 In ABN AMRO Mortgage Group, Inc. v. McGahan, 237 Ill. 2d 526, 342 Ill. Dec. 7, 931 N.E.2d 1190 (2010), our supreme court recently addressed the question of whether foreclosure proceedings should be considered quasi in rem or in rem proceedings. There, the court noted that prior decisions had "inconsistently characterized a foreclosure as both in rem and quasi in rem actions." Id. at 533, 342 Ill. Dec. 7, 931 N.E.2d 1190. The court concluded that a foreclosure suit "must be deemed a quasi in rem action" (id. at 535, 342 Ill. Dec. 7, 931 N.E.2d 1190), explaining that:
"because the mortgagor is a necessary party in a foreclosure action, it is necessarily true that there must be personal service on the mortgagor, i.e., `citation' to him or her. [Citation.] In in rem actions, personal service is not required on any person, not even the owner. [Citation.] In in rem actions, there is a public citation to the world. [Citation.]" Id. at 536-37, 342 Ill. Dec. 7, 931 N.E.2d 1190.
¶ 19 Additionally, historically foreclosure actions have been considered equitable in nature and matters for chancery courts. Levy v. Broadway-Carmen Building Corp., 366 Ill. 279, 287, 8 N.E.2d 671 (1937) (foreclosure is "committed to courts of chancery, under their general equity powers"). Prior to the adoption of the judicial article of the Illinois Constitution of 1970, there was a distinction between courts of law and equity as to jurisdiction to hear matters. Stevens v. Protectoseal Co., 27 Ill.App.3d 724, 729, 327 N.E.2d 427 (1975) (recognizing that the judicial article granted circuit courts original jurisdiction of all justiciable matters and vested the circuit courts with jurisdiction to adjudicate all controversies). Under early jurisprudence of this state, in part because of the distinction between actions at law and equity, and in part because foreclosure actions were largely considered "in rem," a personal deficiency judgment at law could not be entered in a foreclosure proceeding in the absence of statutory authority. State Bank of St. Charles v. Burr, 375 Ill. 379, *661 382, 31 N.E.2d 798 (1941); Hickey v. Union National Bank & Trust Co. of Joliet, 190 Ill.App.3d 186, 190, 138 Ill. Dec. 134, 547 N.E.2d 4 (1989) ("Prior to the merger of actions based in equity with those of law, there existed a marked distinction between the power of a court of equity to decree mortgage foreclosures and its power to enter a personal deficiency judgment."); Note, Mortgage Deficiency Acts and the Impairment of Contract Clause, 35 Ill. L. Rev. of Northwestern University 594, 596 (1941) ("Under original equity practice, a foreclosure action was strictly in rem and the court had no authority to render a personal judgment for a deficiency. Since this practice was followed by states generally, most courts of equity refused to render deficiency judgments unless authorized by statute.").
¶ 20 In contrast, courts in equity had the power to enter decrees directing that rents or other income relating to the property be used to satisfy any deficiency, even in the absence of personal service, as such a judgment was considered to be against the property or "in rem" and not personal. Fidelity Trust & Savings Bank v. Ahlgrim, 278 Ill.App. 147, 151 (1934); St. Ange v. Chambliss, 71 Ill.App.3d 658, 660, 28 Ill. Dec. 317, 390 N.E.2d 484 (1979). As a result, a mortgagee was required to bring a separate action at law to obtain a personal judgment for any deficiency after the sale of the property in foreclosure. Burr, 375 Ill. at 383, 31 N.E.2d 798. Such a judgment was considered "in personam." See Lewis v. Matteson, 257 Ill.App. 1, 5 (1929); Metz v. Dionne, 250 Ill.App. 369, 373 (1928) ("[T]he right to a personal judgment in foreclosure proceedings does not rest on general equity principles but upon the legal obligation of the maker of the note."); Hughes v. Hoerich, 259 Ill.App. 158, 162 (1930) ("`The mortgagee might, if he desired a judgment in personam, bring his action at law upon the indebtedness, and might at the same time file a bill in chancery for the foreclosure of the mortgagor's equality of redemption.'" (quoting Phelan v. Iona Savings Bank, 48 Ill.App. 171 (1892))).
¶ 21 Prior to the enactment of the Foreclosure Law, statutory authority existed in this stateat least since 1865which allowed the entry of a personal judgment against the mortgagor for the balance of money due after the sale of property. See Martin v. Strubel, 367 Ill. 21, 23-24, 10 N.E.2d 325 (1937); Northern Trust Co. v. Sanford, 308 Ill. 381, 395, 139 N.E. 603 (1923). These statutory provisions were found to be constitutional and satisfy due process considerations. Martin, 367 Ill. at 24, 10 N.E.2d 325; Northern Trust Co. v. Meyers, 367 Ill. 308, 309, 11 N.E.2d 393 (1937). Prior statutes authorizing personal deficiency judgments required that personal service be effectuated where defendant had not personally appeared. See, e.g., Martin, 367 Ill. at 24, 10 N.E.2d 325 (referring to Ill. Rev Stat.1935, ch. 95, ¶ 16); Strause v. Dutch, 250 Ill. 326, 331, 95 N.E. 286 (1911) (referring to Ill. Rev Stat.1909, ch. 95, ¶ 16); Ahlgrim, 278 Ill. App. at 150-51 (referring to Ill. Rev Stat. 1933, ch. 95, ¶ 17); Skolnik v. Petella, 376 Ill. 500, 502-03, 34 N.E.2d 825 (1941) (referring to Ill.Rev.Stat.1939, ch. 95, ¶ 17). The purpose of these provisions was to allow a mortgagee to "obtain a decree in rem for the sale of the property and a decree in personam in case of a deficiency, in the same proceeding." Burr, 375 Ill. at 382, 31 N.E.2d 798.
¶ 22 Certain issues arose as to the sufficiency of service under these prior statutes authorizing personal deficiency judgments. For example, in City of Chicago v. Chatham Bank of Chicago, 54 Ill.App.2d 405, 406, 203 N.E.2d 788 (1964), the city brought the original action against a trustee under a land trust and the trustee *662 under a mortgage to enforce compliance with certain ordinances by requiring repairs to the building at issue. Gale Johnson, an obligor on the note securing the mortgage on the property, filed a pro se appearance in the ordinance suit, although she had not been named or made a defendant. Id. The owners and holders of the mortgage on the property were granted leave to intervene in the city's suit and thereafter filed a counterclaim to foreclose the mortgage naming Ms. Johnson as a defendant. The counterclaim alleged Ms. Johnson was personally liable for any deficiency that would result after a foreclosure sale. Id. at 406-07, 203 N.E.2d 788.
¶ 23 An affidavit of service stated the counterclaim was mailed to Ms. Johnson. Id. at 409, 203 N.E.2d 788. In a pleading filed on the same day, the counterplaintiffs stated that they had been unsuccessful in their attempts to contact Ms. Johnson to discuss a settlement. Id. Ms. Johnson did not appear or answer the counterclaim, was found in default, andafter the sale of the propertya deficiency judgment was entered against her. Id. at 409-10, 203 N.E.2d 788. The relevant statute at the time provided that "an execution upon a deficiency decree can only issue in cases where personal service was had upon the defendant or defendants `personally liable for the mortgage debt, unless their appearance shall be entered in such suits.'" Id. at 414-15, 203 N.E.2d 788 (quoting Ill.Rev.Stat.1963, ch. 95, ¶ 17).
¶ 24 The Chatham court found a judgment in personam should not have been entered in the foreclosure counterclaim based on the facts and circumstances in that case. Ms. Johnson had not been made a party and had not been served in the original suit when intervention was allowed. Id. at 421-22, 203 N.E.2d 788. Noting that "personal service" was required, the court found the "attempt to bring her within the jurisdiction of the court by serving notices upon her at her last known address when the attorneys for the defendant admitted that she had disappeared and was not available for service, is not sufficient." (Emphasis added.) Id. at 422, 203 N.E.2d 788. The Chatham decision thus turned on whether, under the circumstances, the trial court had personal jurisdiction over the defendant so as to allow the entry of a personal deficiency judgment.
¶ 25 In Ahlgrim, 278 Ill.App. at 148, a foreclosure suit was brought against the defendants, the makers of notes secured by a trust deed. Because the defendants could not be found, service was by publication. Id. The foreclosure decree provided that any deficiency was to be satisfied from the rents, profits or issues in accordance with the terms of the trust deed. Id. at 149. The appellate court rejected an argument that this decree was improper, because the defendants had not been personally served, as the decree was "not in the nature of a personal judgment in so far as the rents, issues and profits are concerned, but is an enforcement of the lien granted by the trust deed to an interest in the real estate consisting of the rents and profits derived therefrom." Id. at 151; accord Chicago Title & Trust Co. v. Suter, 287 Ill.App. 162, 168, 4 N.E.2d 650 (1936). Thus, the appellate court found that while personal jurisdiction did not exist based on publication notice, it was not necessary because the deficiency decree at issue was in rem. Ahlgrim, 278 Ill.App. at 151. As in Chatham, the Ahlgrim court's concern was the need for personal jurisdiction over the defendant for any deficiency judgment.
¶ 26 D. Foreclosure Law
¶ 27 The Foreclosure Law, which was enacted in 1987, brought together various statutory provisions relating to foreclosure that previously had been spread throughout *663 various codes and governs actions commenced after its effective date. 735 ILCS 5/15-1106(f) (West 2010); see also Catherine A. Gnatek, Note, The New Mortgage Foreclosure Law: Redemption and Reinstatement, 1989 U. Ill. L.Rev. 471 (1989). A foreclosure action seeks to "terminate legal and equitable interests in real estate." 735 ILCS 5/15-1203 (West 2010). Article II of the Code of Civil Procedure generally applies to an action brought under the Foreclosure Law. 735 ILCS 5/15-1107(a) (West 2010).
¶ 28 The Foreclosure Law sets forth the general form of a foreclosure complaint 735 ILCS 5/15-1504(a) (West 2010). The statutory short-form complaint may include the "[n]ames of defendants claimed to be personally liable" for any deficiency (735 ILCS 5/15-1504(a)(3)(M) (West 2010)) and request a "personal judgment for a deficiency" in the event that "the sale of the mortgaged real estate fails to produce a sufficient amount to pay the amount found due." (735 ILCS 5/15-1504(f) (West 2010)). See also 735 ILCS 5/15-1511 (West 2010) ("foreclosure of a mortgage does not affect a mortgagee's rights, if any, to obtain a personal judgment against any person for a deficiency"). The mortgagor, and other persons "who owe indebtedness or * * * other obligations secured by the mortgage," are necessary parties to a foreclosure action. 735 ILCS 5/15-1501(a)(i), (a)(ii) (West 2010). The Foreclosure Law specifically states, service of process of the summons and foreclosure complaint "shall be in accordance with the provisions of Article II of the Illinois Code of Civil Procedure and any other statutes of this State which are from time to time applicable, and with Illinois Supreme Court Rules." 735 ILCS 5/15-1107(a) (West 2010).
¶ 29 A judgment of foreclosure may be entered by default and, as with any judgment of foreclosure, provide for the sale of the property. 735 ILCS 5/15-1506(c), (f) (West 2010). The person who conducts the sale must "promptly make a report to the court" and upon a motion, the court will conduct a hearing to confirm the sale. 735 ILCS 5/15-1508(a), (b) (West 2010). An order confirming the sale may "provide for a personal judgment against any party for a deficiency." 735 ILCS 5/15-1508(b)(2) (West 2010). The provisions of section 15-1508(e), set forth above, along with the prior statutory provisions previously discussed, therefore provide the foreclosure court with the authority to enter personal judgments for any deficiencies after sale of the real estate where defendant has been personally served or has appeared. 735 ILCS 5/15-1508(e) (West 2010).
¶ 30 E. "Personal Service" Under Section 15-1508
¶ 31 Thus, the Foreclosure Law provides a claim for deficiency judgment may be brought as part of a foreclosure action, and where defendant is personally liable for such deficiency, and has appeared or been subject to "personal service," a deficiency judgment shall be entered and enforced as any other money judgment. Although the Foreclosure Law does not include a definition of the phrase "personal service," it does specifically provide that service shall be in accordance with Article II of the Code of Civil Procedure, which notably includes the abode service provisions of section 2-203.
¶ 32 The record establishes defendant here was properly served in accordance with section 2-203. The service was made at defendant's home address listed on the mortgage and notes. The complaint and summons were left with a person of proper age, who had the same last name as defendant, and who was averred to be a family member or person who resided at defendant's *664 abode, and then correctly mailed to defendant. The circuit court had personal jurisdiction over defendant and service was accomplished as set forth in Article II of the Code of Civil Procedure. When the phrase "personal service" is read in conjunction with section 2-203which governs service on individuals and has been specifically incorporated into the Foreclosure Lawit is reasonable to conclude abode service satisfies the service requirements of section 15-1508.
¶ 33 We are aware of a long line of cases which distinguish the "abode service" procedure for service of process on individuals from personal service by referring to abode service as "substitute service." See, e.g., Mid-America Federal Savings, 170 Ill.App.3d at 322, 120 Ill. Dec. 633, 524 N.E.2d 663. These cases usually involve the standards for determining whether the requirements of section 2-203 have been met in the context of a motion-to-quash service, and do not involve issues of statutory construction as to the phrase "personal service." Abode service, however, has long been "regarded as actual service." Brand v. Brand, 252 Ill. 134, 140, 96 N.E. 918 (1911). We have also recognized that the abode service provision of section 2-203 is personal in nature, in the context of construing a similar statutory provision. Specifically, we stated as follows:
"The language of section 2-203 is similar to that set forth in section 12-911. Specifically, section 2-203 provides that service shall be made `by leaving a copy thereof with the defendant personally,' or `by leaving a copy at the defendant's usual place of abode, with some person of the family * * * of the age of 13 years or upwards.' [Citation.] Clearly, section 2-203 provides for personal service or substituted service, which, too, must be personal." Northwest Diversified, Inc. v. Mauer, 341 Ill.App.3d 27, 38, 274 Ill. Dec. 751, 791 N.E.2d 1162 (2003).
¶ 34 Furthermore, definitions in dictionaries and treatises "are reliable indicators of the meaning of an undefined statutory term." JPMorgan Chase Bank, N.A. v. Earth Foods, Inc., 238 Ill. 2d 455, 465, 345 Ill. Dec. 644, 939 N.E.2d 487 (2010). Plaintiff's brief cites definitions of "service" or "personal service" found in legal dictionaries published prior to enactment of the Foreclosure Law, each of which included abode service within their respective definitions. See Bouvier's Law Dictionary 3048 (8th ed. 1984) (definition of "service" includes the following passage: "to serve a summons is to deliver a copy of it at the house of the party, or to deliver it to him personally"); Black's Law Dictionary 1227 (5th ed. 1979) (defining "personal service" to include "delivering a copy of the summons and complaint to the person named or by leaving copies thereof at his dwelling or usual place of abode with some responsible person"). Finally, these matters have been discussed in Corpus Juris Secundum as follows:
"Personal service ordinarily means actual delivery of the process to the defendant in person, and does not include service by leaving a copy at his or her usual place of abode, or his or her home, or at his or her office, or by delivery to someone else for him or her, although, under some statutes, the term `personally served' includes such service." (Emphasis added.) 72 C.J.S. Process § 42 (2005).
These dictionary and treatise definitions lend support to our reading of the phrase "personal service" found in section 15-1508 to include abode service as set forth in section 2-203.
¶ 35 Moreover, we must determine the legislative purpose by considering both the history of the particular statutory provision and the goals to be accomplished, and *665 by reading the statute as a whole. People ex rel. Nelson v. Olympic Hotel Building Corp., 405 Ill. 440, 445, 91 N.E.2d 597 (1950). "Historical facts and the significant circumstances leading up to the enactment of a statute may be noticed to show that a literal interpretation of the words used is not the intended meaning." Id. As we have discussed, deficiency judgment statutes originated when foreclosures were considered strictly equitable in nature and often considered in rem proceedings. Statutory deficiency judgment provisions were enacted to give courts in equity, charged with determining and enforcing the parties' rights as to real property, the authority to enter personal money judgments at law. These early deficiency judgment provisions addressed a prevailing view that a personal judgment should not be entered in a foreclosure action unless defendant "was in court in some appropriate mode." Winkelman v. Kiser, 27 Ill. 21, 22 (1861).
¶ 36 When considering the relevant history, we conclude that the inclusion of the phrase "personal service" demonstrates a legislative concern that a court hearing a foreclosure action have personal jurisdiction over the defendant before the entry of a personal judgment. As such, we interpreted a prior version of a similar deficiency judgment statute as providing the trial court with "express statutory authority to render a personal judgment for a deficiency against any defendant over whom it has personal jurisdiction, or any defendant who has appeared in the foreclosure action." (Emphasis added.) Farmer City State Bank v. Champaign National Bank, 138 Ill.App.3d 847, 849-50, 93 Ill. Dec. 200, 486 N.E.2d 301 (1985) (interpreting Ill. Rev.Stat.1981, ch. 95, ¶ 56, which provided for a judgment for balance of money due after foreclosure sale, and "`execution shall issue only in cases where personal service has been had upon the defendant or defendants personally liable for the mortgage debt, unless they have entered their appearance in such suits'").
¶ 37 Our interpretation that the phrase "personal service," as contained in section 15-1508(e), encompasses both procedures set forth in section 2-203 is therefore consistent with the original purpose for a deficiency judgment statute. Deficiency judgment statutes were enacted to allow actions for a personal deficiency judgment and a foreclosure to proceed together in a single proceeding. To hold that abode service is appropriate and sufficient to obtain jurisdiction over plaintiff for the purposes of a foreclosure claim, but not for purposes of a request for a deficiency judgment within that action, would be contrary to this purpose. Moreover, the Foreclosure Law anticipates that a claim for deficiency judgment will be part of a foreclosure suit, as it provides a foreclosure complaint may include allegations and a request for relief as to any deficiency and further provides that such a judgment "shall" be entered pursuant to section 5-1508. Our interpretation of the phrase "personal service" is thus consistent with the Foreclosure Law as a whole, and furthers its express purposes.
¶ 38 Indeed, an interpretation that abode service is insufficient to seek a personal judgment for the deficiency in a foreclosure action would lead to absurd, inconvenient and unjust consequences. Under such an interpretation, the mortgagor would be forced to bring a separate suit for a deficiency judgment, one where abode service alone would provide the court with personal jurisdiction over a defendant. We do not believe such a result was intended by the legislature.
¶ 39 III. CONCLUSION
¶ 40 For the foregoing reasons, we find the trial court erred in denying plaintiff's *666 motion for a deficiency judgment, reverse only that decision, and remand for further proceedings consistent with this decision.
¶ 41 Reversed and remanded.
Justices HALL and KARNEZIS concurred in the judgment and the opinion.
NOTES
[1] Metrobank also named a number of other parties as defendants. None of the named defendants-appellees, including defendant, have ever filed appearances or otherwise participated in this case.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1965594/
|
225 B.R. 393 (1998)
In re Bonnie J. DUNN, Debtor.
Robert L. DUNN, Plaintiff,
v.
Bonnie J. DUNN, Defendant.
Bankruptcy No. 96-15111, Adversary No. 97-1174.
United States Bankruptcy Court, S.D. Ohio, Western Division.
September 17, 1998.
*394 *395 Thomas H. Flessa, Batavia, OH.
James R. Garvin, Cincinnati, OH.
*396 DECISION
JEFFERY P. HOPKINS, Bankruptcy Judge.
We are asked to decide in this adversary proceeding whether a debt incurred under a property settlement, as incorporated into a state court divorce decree, is nondischargeable pursuant to 11 U.S.C. § 523(a)(15). The Plaintiff in the case is Robert L. Dunn, the debtor's ex-husband. (Plaintiff, Robert L. Dunn and Defendant-Debtor, Bonnie J. Dunn are hereinafter referred to as "Mr. Dunn" and "Mrs. Dunn," respectively.) Our jurisdiction over this matter rests upon 28 U.S.C. § 1334(b) and the General Order of reference entered in this District. This is a core proceeding under 28 U.S.C. § 157(b)(2)(I). What follows is the court's findings of fact and conclusions of law pursuant to Rule 7052.
Procedural History
On October 4, 1997, Mrs. Dunn, filed a petition seeking relief under chapter 7. In a general order dated January 7, 1998, Mrs. Dunn was released from all dischargeable debts, and on January 13, 1997, the case was closed. Subsequently, Mrs. Dunn moved to reopen the case to add two creditors to the Schedules, including in particular, her ex-husband for the purpose of discharging a divorce-related debt. When Mr. Dunn objected to the case being re-opened, the Court after conducting a hearing on the matter, issued an order, on August 25, 1997, granting Mrs. Dunn's motion to amend the Schedules adding Mr. Dunn as a creditor, but also permitting him 30 days in which to file an adversary complaint objecting to discharge of the divorce obligation.[1] A Complaint challenging dischargeability of the debt and an Answer were timely filed. On June 12, 1998, a trial on the merits was conducted.
Finding of Facts
While married in 1992, Mr. and Mrs. Dunn purchased a new Geo Storm automobile. The parties financed the Geo Storm through G.E. Evendale Employees Federal Credit Union (the "Credit Union"). The Credit Union would only acquiesce in the deal if allowed to place a second mortgage against the parties' marital residence for $15,343, or the purchase price of the automobile. When the parties' 12-year marriage was terminated on December 15, 1993, the divorce decree entered by the Clermont County Court of Domestic Relations incorporated by reference a separation agreement which they had signed on November 10, 1993. In that settlement, the parties agreed that Mrs. Dunn would take possession of the Geo Storm and hold Mr. Dunn harmless with respect to the debt. The pertinent language of the agreement incorporated into the decree provides:
b. Motor Vehicles:
. . .
The 1992 Chevrolet Geo Storm shall be the property of the wife. The wife shall be responsible for the debt associated with the 1992 Geo Storm and shall hold the husband harmless from the same.
. . .
Both the husband and the wife agree to execute any documents necessary to accomplish the aforementioned division of vehicles.
Instead of repaying the debt associated with the court-ordered obligation, on October 4, 1996, Mrs. Dunn filed the instant chapter 7 petition. In the bankruptcy petition, Mrs. Dunn noticed all interested parties that she was surrendering the Geo Storm to the creditor, pursuant to 11 U.S.C. § 521. Eventually, the car was repossessed by the Credit Union and presumably sold. A deficiency balance on the Geo Storm debt then arose *397 but no one is altogether certain how much is still owed. None of the evidence adequately addressed that issue. No promissory note was ever produced, nor was there any discussion of the interest rate being charged under the note. In the Amendment to Schedule D filed after the case had been re-opened, Mrs. Dunn placed the balance due on the automobile note at $10,700. At trial, however, she lowered the value of the debt significantly to around $9,000. Mr. Dunn, on the other hand, believes based on statements received from the Credit Union that a balance of $10,500 remains. The parties do not dispute that the monthly payments on the Geo Storm had been approximately $195 before the car was repossessed.
Mrs. Dunn, a 46-year-old woman, was once employed in middle management at General Electric where she had earned an annual salary of $47,000 before electing early disability retirement in June 1992. Mrs. Dunn suffers from a severe case of rheumatoid arthritis. She has had numerous surgeries and expects to have several more intrusive surgical procedures to resolve some of the pain associated with her condition. There is no dispute that Mrs. Dunn's illness is chronic and has rendered her permanently unable to work.
Despite her unemployment and poor health, Mrs. Dunn maintains a very high standard of living. Most of Mrs. Dunn's medical expenses including physician visits, hospitalization and prescription medicine are covered under health insurance. Mrs. Dunn reluctantly admits spending only nominal amounts on co-payments, averaging around $70 for prescriptions and $30 for physician visits every month. As for income, Mrs. Dunn testified that she receives a total of $2,600 from various sources every month. Included within this sum are a pension from G.E. in the amount of $552 which is taxed income. Mrs. Dunn also receives Social Security benefits of $1,134 and disability income of $918.75 from another source, which are not subject to taxation according to her. For reasons that were never fully explained, however, Mrs. Dunn's Schedules only reflect a monthly income of $2,458 from those same three sources, leaving a surplus of $142 over expenses.
More evidence concerning Mrs. Dunn's standard of living emerged during her crossexamination. In 1996, Mrs. Dunn began living with a companion, Joseph Kelly.[2] Kelly is employed as a building inspector for the State of Ohio where currently he earns $18.00 per hour. Based on that wage, Kelly probably earns an annual income in the vicinity of $38,480. Even though the couple is unmarried, according to their testimony they live as "husband and wife." They also share all living expenses with only one exception of note relating to the purchase of a new pickup truck used primarily by Mrs. Dunn. Mrs. Dunn and Kelly also live in a home which was purchased for $144,750. From the testimony, it appears that the couple viewed this acquisition as a joint transaction with each expected to contribute half to the monthly mortgage payment of $1,330 on the house. In fact, Mrs. Dunn and Kelly deposit all their income into one joint checking account. Mrs. Dunn performs all the couple's bookkeeping and pays all the bills from that joint account.
On January 7, 1997, Mrs. Dunn received a discharge under Chapter 7 of personal liability on over $11,500 of unsecured debts. However, very shortly after filing for bankruptcy, Mrs. Dunn began making extravagant purchases. Mrs. Dunn purchased a new pick-up truck valued at $23,000 which by agreement with Kelly he financed but she pays for from her income alone. In the process, Mrs. Dunn traded an older model Bronco that she had owned. Mrs. Dunn does not try to hide these facts. Instead, Mrs. Dunn justifies buying the new truck on the basis that there is only an .85 cents difference in the monthly payments between the two vehicles. Mrs. Dunn failed, however, to discuss the difference in the term and interest rate on the *398 remaining payments for the new truck which would greatly increase the cost of owning that vehicle.
Mrs. Dunn and Kelly also made a number of expenditures on consumer goods and real estate improvements shortly after she filed bankruptcy for which there also appears to be no reasonable explanation. Perhaps because of Mrs. Dunn's pending bankruptcy, the couple again used Kelly's accounts to incur all these expenses. However, there was a clear understanding between Mrs. Dunn and Kelly, then and now, that her income would also be used to service the accumulating debts. For example, Mrs. Dunn and Kelly purchased all new appliances,[3] new carpeting and a new vinyl kitchen floor for their home. A new $7,000 outdoor pond was constructed on part of the six acres of property surrounding the couple's home, along with a gravel driveway costing between $1,500 and $2,000, and a new 12' × 60' deck on the rear of their home. More than $2,000 worth of shrubs and trees were also installed. In addition to these aesthetic improvements, the couple purchased a new computer for $3,100, and a new John Deere tractor costing them $350.15 a month. Mrs. Dunn and Kelly both own cellular telephones which, from the evidence presented, they were billed $282.19 during May 1998. Their home also contains two separate phone lines which cost them $122.21 in May 1998 to operate.
By contrast, Mr. Dunn maintains a rather Spartan lifestyle compared to that of his exspouse. Mr. Dunn currently works as a custodian at the General Electric plant where he earns an annual salary of $41,000 per year. Mr. Dunn has few debts, none of which are very large, including some personal loans, a $1,300 Visa bill and car note. Mr. Dunn also resides in the house which was once the parties' marital residence.[4] Moreover, the Credit Union continues to hold a second mortgage on the home stemming from Mrs. Dunn's default on repayment of the debt related to the Geo Storm. At the moment, the Credit Union is taking a wait-and-see approach before attempting to collect the debt. However, the Credit Union has the option of initiating foreclosure proceedings against Mr. Dunn's residence or bringing civil action against him personally as cosignor of the note to recover the unpaid balance.
Mr. Dunn instituted this adversary action in Mrs. Dunn's bankruptcy proceeding seeking a determination that the debt associated with the Geo Storm which Mrs. Dunn was ordered to repay as part of the property settlement in the divorce case is nondischargeable pursuant to 11 U.S.C. § 523(a)(15). Mrs. Dunn claims no ability to repay the debt at this time or that the benefits to her of a discharge of the debt outweigh the detriment to Mr. Dunn if he is forced to repay the obligation. Mr. Dunn argues, however, that his former spouse could repay the divorce-related expense were she to live a less extravagant lifestyle. He also maintains that it would be economically detrimental for him to repay Mrs. Dunn's remaining obligation on the Geo Storm given his other financial responsibilities such as meeting his mortgage payment, car note and dating expenses each month.
Discussion
The 1994 amendments to the Bankruptcy Code created a new section 11 U.S.C. § 523(a)(15). In effect, the amendment provides that debts incurred in divorce proceedings are generally nondischargeable in bankruptcy. In re Patterson, 132 F.3d 33, 1997 WL 745501 (6th Cir. Nov. 24, 1997) (other citations omitted). The majority of courts which have analyzed the terminology of § 523(a)(15) have found that this section creates a "rebuttable presumption" that the divorce *399 obligation is nondischargeable unless the debtor makes an appropriate showing under subsections (A) or (B) of 11 U.S.C. § 523(a)(15). In re Carroll, 187 B.R. 197, 200 (Bankr.S.D.Ohio 1995); In re Patterson, 199 B.R. 21 (Bankr.W.D.Ky.1996); see also, In re Barnes, 218 B.R. 409 (Bankr.S.D.Ohio 1998) (there may be a trend developing among bankruptcy courts to treat the proof required to establish grounds for dischargeability of a debt incurred in a divorce proceeding under § 523(a)(15)(A) or (B) as affirmative defenses); In re Jodoin, 209 B.R. 132, 139-40 (9th Cir. BAP 1997); In re Moeder, 220 B.R. 52, 56 (8th Cir. BAP 1998) (of the Bankruptcy Appellate Panels which have considered this question, both have concluded that § 523(a)(15)(A) and (B) must be treated as affirmative defenses); In re Crosswhite, 148 F.3d 879, 883 (7th Cir.1998) ("stating that bankruptcy discharge is subject to exception which must be proven by the `one who would bring himself within the exception,' and that when there is an `exception to the exception,' the debtor must offer evidence to show the right to the benefit.") (quoting Hill v. Smith, 260 U.S. 592, 594-95, 43 S. Ct. 219, 67 L. Ed. 419 (1923)).
Another important aspect of § 523(a)(15) is that it concerns the relative positions of the parties as of the date of the filing of bankruptcy, not as of the date of the divorce. In re Carroll, 187 B.R. at 200. But see, In re Anthony, 190 B.R. 433, 438 (Bankr. N.D.Ala.1995) (financial condition of parties at the time of trial is controlling); In re Paneras, 195 B.R. 395, 404-05 (Bankr. N.D.Ill.1996) (some courts look through the time of trial into the immediate future). In every case decided under § 523(a)(15), bankruptcy courts have exclusive jurisdiction to determine dischargeability. See In re Milburn, 218 B.R. 862 (Bankr.W.D.Ky.1998); In re Windom, 207 B.R. 1017 (Bankr.W.D.Tenn. 1997).
Turning our attention now to the statute in this case, 11 U.S.C. § 523(a)(15), it reads in pertinent part, as follows:
(a) A discharge under section 727 . . . of this title does not discharge an individual debtor from any debt
* * *
(15) not of the kind described in paragraph (5) that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, a determination made in accordance with State or territorial law by a governmental unit unless
(A) the debtor does not have the ability to pay such debt from income or property of the debtor not reasonably necessary to be expended for the maintenance or support of the debtor or a dependent of the debtor and, if the debtor is engaged in a business, for the payment of expenditures necessary for the continuation, preservation, and operation of such business; or
(B) discharging such debt would result in a benefit to the debtor that outweighs the detrimental consequences to a spouse, former spouse, or child of the debtor.
As discussed, no one disputes that the debt on the Geo Storm was incurred by Mrs. Dunn "in connection with a separation agreement, divorce decree, or other court order of record." § 523(a)(15). Indeed, the parties entered a stipulation on that matter prior to the beginning of trial. Evidence of that fact alone is enough to support a judgment in favor of nondischargeability of the debt unless Mrs. Dunn establishes one of the two defenses articulated under subsections (A) or (B) of 11 U.S.C. § 523(a)(15). In order for Mrs. Dunn to prevail she must prove, by a preponderance of the evidence, an inability to pay the debt pursuant to § 523(a)(15)(A), or that a discharge of the debt would result in a benefit to her that outweighs any detrimental consequences to Mr. Dunn or his dependents under § 523(a)(15)(B). See, e.g., In re Barnes, 218 B.R. at 411.
A. Inability to Pay Test.
A debt incurred through divorce proceedings will only be discharged under the narrow exception in § 523(a)(15)(A) if repaying it reduces the debtor's current income below that reasonably needed for the support of the debtor or dependents. In re Carroll, 187 B.R. at 200. Moreover, the *400 language of § 523(a)(15)(A) has been found to be analogous to the language of the "disposable income" test found in 11 U.S.C. § 1325(b)(2). Thus, only expenses which are "reasonably necessary" for the support of a debtor and debtor's dependents will be considered in calculating whether the debtor is unable to pay the debt arising from a divorce decree or property settlement.[5] "Courts interpreting `reasonably necessary' have arrived at several standards. Many courts are reluctant to impose their own values on the debtor and exclude only luxury items and obvious indulgences. Other courts find that only those expenses for basic needs not related to the debtor's former status in society or accustomed lifestyle should be allowed." In re Willey, 198 B.R. 1007, 1014 (Bankr. S.D.Fla.1996) (quoting In re Hill, 184 B.R. 750, 755 (Bankr.N.D.Ill.1995)) (other citations omitted). We conclude ultimately that the debt will be deemed dischargeable only if the debtor cannot afford ordinary living expenses in addition to having to repay the divorce obligation ordered by the state court. See In re Barnes, 218 B.R. at 411.
Here, Mrs. Dunn's Schedules I and J show current monthly income and expenditures totaling $2,458, respectively. Under this scenario, Mrs. Dunn has no disposable income from which she could possibly repay the debt ordered in the divorce proceedings associated with the Geo Storm. However, the figures presented in Schedule I vary significantly from Mrs. Dunn's trial testimony where she stated a monthly income of $2,600. As noted, this results in a surplus of $142 each month over her expenses. Also listed under the Mrs. Dunn's Schedule J is an expenditure of $490 per month for "tuition and school and living expenses for daughter." When pressed, Mrs. Dunn substantially modified that statement at trial. There, Mrs. Dunn testified that she no longer makes those tuition payments because her daughter dropped out of school. Thus, Mrs. Dunn's disposable income level actually exceeds her monthly expenses listed in Schedule J at the time of trial. Under these circumstances, Mrs. Dunn currently has excess monthly income of $632. Furthermore, Mrs. Dunn has made no effort to amend Schedule J to add expenses that may have been forgotten when the petition was filed, as sometimes occurs in these cases. Nor has Mrs. Dunn sought to include unexpected, necessary expenses that may have been incurred since the petition was filed.[6] Mrs. Dunn's only response to why there are not now any discretionary funds available is that the money has all been applied to cover other living expenses.
By her own admission, Mrs. Dunn currently uses all her disposable income to pay for luxury items and obvious indulgences not reasonably necessary for her support. Very shortly after filing for bankruptcy, Mrs. Dunn began irresponsibly incurring debt on extravagant expenses, albeit jointly with Kelly. The list includes a relatively expensive mortgage,[7] a new personal computer, a very expensive deck, outdoor pond, shrubs and driveway, a remodeled kitchen, a new tractor, and a new pick-up truck. All these items are unnecessary amenities.[8] By analogy, these expenditures clearly are not ones which bankruptcy courts have considered "reasonably necessary" for the support of a debtor or a dependent under 11 U.S.C. § 1325(b)(2). Accordingly, we are not inclined here to find *401 them acceptable under a § 523(a)(15)(A) analysis.
As a general rule, "reasonably necessary" expenses as defined in chapter 13 cases means "adequate" but not "first class." Luxury items are definitely excluded from this definition. See In re Easley, 72 B.R. 948, 949 (Bankr.M.D.Tenn.1987) (citing In re Kitson, 65 B.R. 615 (Bankr.E.D.N.C.1986)); In re Tinneberg, 59 B.R. 634 (Bankr. E.D.N.Y.1986). Mrs. Dunn may be forced by this decision to live a less opulent lifestyle than the one she desires. However, courts have consistently held that the bankruptcy laws in this country are to give the honest but unfortunate debtor a fresh start. This time-honored principle does not guarantee that debtors should have a fine finish, as well. See In re Jones, 138 B.R. 536, 539 (Bankr.S.D.Ohio 1991).
We also hold serious doubt about many of the claims being asserted in Schedule J regarding Mrs. Dunn's monthly expenses. The Court need not engage in an exhaustive analysis in order to reach this conclusion. Schedule J states that Mrs. Dunn spends $450 a month for food for one individual. See In re Reyes, 106 B.R. 155 (Bankr.N.D.Ill. 1989) (the court held that $300 per month is too much to pay on a food bill for a single person with no dependents in refusing to confirm a chapter 13). Mrs. Dunn also lists $100 per month for clothing and $130 per month for transportation even though she lacks any need to incur costs for the daily commute to and from work, or for uniforms or business attire. Further, despite testifying that she owns health insurance which covers most of her medical costs except for a nominal amount of $100, Mrs. Dunn asserts in Schedule J that she pays $250 a month on medical and dental expenses. We believe that the costs contained in Schedule J may have been purposefully inflated to make it appear as though Mrs. Dunn has no ability to satisfy any other obligation besides the ones listed. That strategy seems, however, to have backfired based upon the discovery of excess income which is now being used to pay for luxury items.
In re Armstrong, 205 B.R. 386 (Bankr.W.D.Tenn.1996), lists nine factors bankruptcy courts should consider when examining whether a debtor has the ability to pay an obligation incurred in a divorce proceeding sought to be discharged under § 523(a)(15)(A).[9] Of the factors listed, Mrs. Dunn seems only to receive favorable consideration under the one directed at the lack of future earning potential. However, even if Mrs. Dunn's income remains stagnant as she claims that it has for the past seven years, we conclude that she still can afford the court-ordered $195 payment. This is especially true because of Mrs. Dunn's marriage-like arrangement with Kelly. Kelly is in relatively good health and enjoys stable employment. Further, he appears willing, well into the foreseeable future, to continue sharing living expenses with Mrs. Dunn. Indeed, as illustrated, Mrs. Dunn and Kelly, for the past two years, have incurred numerous joint expenses and commingled their incomes as though they are husband and wife. Thus, we believe that it is appropriate to include Kelly's income, after deducting his personal expenses, for purposes of calculating Mrs. Dunn's ability to repay the court-ordered debt. See In re Crosswhite, 148 F.3d 879, 889 n. 17 (whether economic interdependence *402 between a debtor and live-in companion improves the debtor's economic condition and ability to pay under § 523(a)(15)(A), is left to the sound discretion of the trial judge who should consider such factors as the period of time the individuals have lived together as a single economic unit and the degree to which they have commingled their assets); see also In re Cleveland, 198 B.R. 394, 399 (Bankr. N.D.Ga.1996) (considering income of a new spouse or "spousal equivalent" when applying § 523(a)(15)(A) is appropriate). But see, In re Willey, 198 B.R. 1007 (Bankr.S.D.Fla. 1996) (refusing to consider income of debtor's girlfriend).
Based on this record, the Court concludes that Mrs. Dunn failed to carry the burden of proving an inability to pay the divorce-related debt owed her ex-spouse from disposable income. Even without considering Kelly's income, Mrs. Dunn has excess monthly disposable income of $632 which is enough to satisfy her court-ordered obligation of $195 each month on the Credit Union loan. This result can be achieved without depriving Mrs. Dunn of adequate food, clothing shelter and other necessities. Having thus failed to satisfy the test under § 523(a)(15)(A), we next turn our attention to § 523(a)(15)(B) to see if the debt under the state property settlement agreement and divorce decree is dischargeable under the so called "balancing detriments" test.
B. Balancing of Detriments Test.
Mrs. Dunn may still be able to shed her divorce-related obligation if she can prove by a preponderance of the evidence that the benefit of a discharge to her outweighs the detriment that will be suffered by her ex-husband. 11 U.S.C. § 523(a)(15)(B). In the Patterson case, the Sixth Circuit voiced approval of an eleven-part test meant to examine the "totality of the circumstances" in these type of cases which was adopted in In re Smither, 194 B.R. 102, 111 (Bankr.W.D.Ky.1996).[10]See In re Patterson, 1997 WL 745501, at 3. The Smither court reviewed the financial status of both the debtor and the former spouse in order to ascertain the actual benefit the debtor would derive from a possible discharge of the debt against any hardship the former spouse and/or children would suffer as the result of the discharge. If, after applying the eleven Smither factors, the debtor's standard of living would be greater than or approximately equal to the ex-spouse's/creditor's if the debt is not discharged, then the debt should be nondischargeable under § 523(a)(15)(B). However, if the debtor's standard of living would fall materially below the creditor's standard of living if the debt is not discharged, then the debt should be discharged. See In re Patterson, 1997 WL 745501, at 3 (quoting In re Smither, 194 B.R. 102, 111 (Bankr.W.D.Ky.1996) (quoting In re Owens, 191 B.R. 669, 674-75 (Bankr.E.D.Ky.1996))); see also Crosswhite, 148 F.3d 879, 888 n. 16 (the court supplies an excellent synopsis of the several different versions of the "totality of circumstances" tests approved in these cases).
Application of some of the Smither factors to the present case does not bode well for Mrs. Dunn. Neither the Credit Union debt of up to $10,500, nor the $195 monthly payment amount is particularly onerous for Mrs. Dunn to bear judging from her monthly income and reasonable living expenses.[11] As *403 the Court earlier noted, Mrs. Dunn's present income exceeds her monthly liabilities by $632. Nor does Mrs. Dunn have any dependents who would be affected if the debt is deemed nondischargeable. Moreover, Mrs. Dunn's lack of capacity for higher income is off set by Kelly's potential to increase his earnings through his employment with the state. We also believe that Mrs. Dunn's recent discharge of over $11,500 in unsecured debts listed on Schedule J should improve her ability to repay the debt ordered by the divorce court. It is true that Mr. Dunn admits having an ability to pay this debt from his income. However, Mrs. Dunn has not met her burden of proving that her standard of living will fall materially below that of her ex-spouse's if the debt is not discharged. In re Patterson, 1997 WL 745501, at 3; In re Crosswhite, 148 F.3d 879, 889.
Finally, we feel compelled to comment briefly on suggestions of bad faith found in this record. This is an important factor to be considered under Smither. As noted, Mrs. Dunn has engaged in a reckless pattern of spending on non-essential luxuries. We believe that the Congressional policies underlying 11 U.S.C. § 523(a)(15)(B) militate strongly against allowing debtors to escape court-ordered divorce obligations by exhausting disposable income on luxury purchases in order to claim an inability to pay an otherwise valid debt. Likewise, we do not believe a proper construction of § 523(a)(15)(B) would permit a debtor to receive a discharge of a debt owed an ex-spouse based solely upon an assertion that repayment of the obligation would cause a reduction in the debtor's standard of living below one which is suitable for the debtor's own tastes, but is equal to or in this case above that of the non-debtor former spouse, who lives modestly within his means. This would send debtors the wrong message and give them an unfair advantage which, in our opinion, does not outweigh the detriment to the debtor's ex-spouse. See § 523(a)(15)(B); In re Crosswhite, 148 F.3d 879, 886.
We conclude that despite having a serious permanent illness which limits her ability to pursue meaningful future employment, Mrs. Dunn has enough monthly income to satisfy appropriate living expenses while also being able to repay the obligation to Mr. Dunn incurred under the divorce decree. Mrs. Dunn enjoys a much higher standard of living than her ex-spouse does. We have little doubt that Mrs. Dunn will continue to maintain at least an equivalent standard of living to that of her ex-husband well into the future even if the debt is not discharged, especially given her quasi-marital relationship with Kelly. Under these circumstances it is clear that Mrs. Dunn can afford to make a $195 monthly payment in connection with the debt owed to her ex-husband with relative ease. "Discharging this obligation would simply provide [Mrs. Dunn] with additional disposable income to `use at [her] discretion.' This is not the type of benefit that § 523(a)(15)(B) sought to protect." In re Carroll, 187 B.R. at 201.
Based on the foregoing, it is hereby
ORDERED that the financial obligation on the Geo Storm debt owed Mr. Dunn pursuant to the Judgment Entry and Divorce Decree entered by the Clermont County Court of Domestic Relations, Common Pleas, Division of Domestic Relations, is not discharged pursuant to 11 U.S.C. § 523(a)(15). Thus, creditors holding a valid claim against Mrs. Dunn on the Geo Storm are not enjoined against the commencement of an action to collect the debt by lawful means notwithstanding the general order of discharge already issued in this case. 11 U.S.C. §§ 524(a) and 727(a).
IT IS SO ORDERED.
NOTES
[1] See In re Walker, 195 B.R. 187, 204-209 (Bankr.N.H.1996) (court finds legal and equitable authority for determining that it had the power to set new deadlines for filing complaints objecting to discharge of debts for fraud, wilful and malicious injury, embezzlement, or non-support divorce debts in cases where the creditor had been omitted from the schedules); see also In re Soult, 97 B.R. 363, 365 (S.D.Ohio 1989), aff'd 894 F.2d 815 (6th Cir.1990) (citing In re Daniels, 51 B.R. 142 (Bankr.S.D.Ohio 1985) (omitted creditor given 30 days in re-opened case to file nondischargeability complaint)); In re Brown, 60 B.R. 983 (Bankr.S.D.Ohio 1986) (previously unscheduled creditor given a reasonable opportunity to file nondischargeability complaint).
[2] Kelly also appears to be the same individual to whom Mrs. Dunn claims to have sold a 19' boat that she had received under the divorce decree. Mrs. Dunn's Schedules reflect she sold the boat to Kelly in June 1996 for $1,000 and that there is "no relationship" between the parties. However, her trial testimony put the sale amount on this boat closer to $3,000. She claims to have used those proceeds and the proceeds from the sale of a 1968 Chevelle received under the divorce decree for living expenses.
[3] These purchases were made even though the divorce decree evinces that Mrs. Dunn received a washer and dryer. She claims to have given one of these appliances to her mother for lack of any storage space.
[4] Under the separation agreement, Mr. Dunn was allowed to retain possession of the parties' former marital residence in exchange for payment of $5,000 to Mrs. Dunn. Mrs. Dunn was required to tender a quitclaim deed of her interest in the property to Mr. Dunn. Mr. Dunn owes approximately $35,000 on the first mortgage for the house.
[5] In this case, the Court need not consider the potential negative impact on the Debtor's dependents since there are none.
[6] Though not listed in Schedule J, Mrs. Dunn claims that she spends an additional $100 on average each month to care for an adult daughter living outside her home. The Court is not persuaded by Mrs. Dunn's testimony nor is that the kind of expense which can ordinarily be classified as one for a dependent for bankruptcy purposes. See, e.g., In re Tracey, 66 B.R. 63 (Bankr.D.Md.1986) (in an unusual case, a 72-year-old grandmother was considered a dependent of the debtor).
[7] A home mortgage payment may not be reasonable in some circumstances when the debtor can find adequate rental housing for significantly less money. See In re Kitson, 65 B.R. 615 (Bankr. E.D.N.C.1986); In re Jones, 55 B.R. 462 (Bankr. D.Minn.1985).
[8] In Reyes, the court determined that a four-wheel drive Blazer is an extravagance. In re Reyes, 106 B.R. 155 (Bankr.N.D.Ill.1989). Similarly, a late model Cadillac and Corvette were held to be luxury items not "reasonably necessary" for the support of the debtor. In re Gibson, 142 B.R. 879, 882 (Bankr.E.D.Mo.1992).
[9] Those factors are as follows: (1) debtor's "disposable income" as measured at the time of trial; (2) presence of more lucrative employment opportunities which might enable the debtor fully to satisfy his divorce-related obligation; (3) extent to which the debtor's burden of debt will be lessened in the near term; (4) extent to which the debtor previously has made a good faith effort towards satisfying the debt in question; (5) amount of the debts which a creditor is seeking to have held nondischargeable and the repayment terms and condition of those debts; (6) value and nature of any property the debtor retained after his bankruptcy filing; (7) amount of reasonable and necessary expenses which the debtor must incur for the support of the debtor, the debtor's dependents and the continuation, preservation and operation of the debtor's business, if any; (8) income of debtor's new spouse as such income should be included in the calculation of the debtor's disposable income; and (9) any evidence of probable changes in debtor's expenses. In re Armstrong, 205 B.R. at 392.
[10] The Smither court relied on the following eleven non-exclusive factors: (1) the amount of debt and payment terms; (2) all parties' and spouses' current incomes; (3) all parties' and spouses' current expenses; (4) all parties' and spouses' current assets; (5) all parties' and spouses' current liabilities; (6) parties' and spouses' health, job training, education, age, and job skills; (7) dependents and their ages and special needs; (8) changes in financial conditions since divorce; (9) amount of debt to be discharged; (10) if objecting creditor is eligible for relief under the Code; and (11) whether parties have acted in good faith in filing bankruptcy and in litigation of § 523(a)(15). In re Smither, 194 B.R. at 111; see also In re Armstrong, 205 B.R. at 392.
[11] Even if the Court were only to focus on the late model pick-up truck Mrs. Dunn purchased, we would have to conclude that by selling that vehicle she could afford to repay the divorce-related debt.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433812/
|
320 S.W.2d 211 (1958)
SOUTHWEST WEATHER RESEARCH, INC., et al., Appellants,
v.
Joe ROUNSAVILLE et al., Appellees.
No. 5352.
Court of Civil Appeals of Texas, El Paso.
November 26, 1958.
Rehearing Denied January 21, 1959.
*212 Turpin, Kerr, Smith & Dyer, William M. Kerr, Raymond A. Lynch, Midland, for appellants.
Henry Russell, Pecos, W. B. Browder, Jr., Milton Bankston, Tom Sealy, Midland, for appellees.
PER CURIAM.
This is an appeal from an injunction issued by the Eighty-third District Court, Jeff Davis County, Texas, which said injunction commands the appellants "to refrain from seeding the clouds by artificial nucleation or otherwise and from in any other manner or way interfering with the clouds and the natural condition of the air, sky, atmosphere and air space over plaintiffs' lands and in the area of plaintiffs' lands to in any manner, degree or way affect, control or modify the weather conditions on or about said lands, pending *213 final hearing and determination of this cause; and from further flying over the above-described lands of plaintiffs and discharging any chemicals or other matter or material into the clouds over said lands." Appellees are ranchmen residing in West Texas counties, and appellants are owners and operators of certain airplanes and equipment generally used in what they call a "weather modification program," and those who contracted and arranged for their services.
It is not disputed that appellants did operate their airplanes at various times over portions of lands belonging to the appellees, for the purpose of and while engaged in what is commonly called "cloud seeding." Appellants do not deny having done this, and testified through the president of the company that the operation would continue unless restrained. He stated, "We seeded the clouds to attempt to suppress the hail." The controversy is really over appellants' right to seed clouds or otherwise modify weather conditions over appellees' property; the manner of so doing; and the effects resulting therefrom. Appellants stoutly maintain that they can treat clouds in such manner as will prevent the clouds from precipitating hail, and that such operation does not and cannot decrease either the present or ultimate rainfall from any cloud or clouds so treated. Appellants were hired on a hail suppression program by a large number of farmers in and around Fort Stockton and other areas generally east, or easterly, of Jeff Davis County. It was developed that the farmers' land was frequently ravaged by damaging hail storms, which appellants claim originated in and over the Davis Mountains in the Jeff Davis County area.
The appellees' testimony, on the other hand, which was elicited from several witnesses, was to the effect that this program of cloud seeding destroyed potential rain clouds over their property.
The trial court, in granting the temporary injunction, found as a matter of fact that appellants were engaging in day-to-day flying airplanes over appellees' lands and into the clouds over appellees' lands, and expelling a foreign substance into the clouds above appellees' lands in such a manner that there was a change in the contents of the clouds, causing them to be dissipated and scattered, with the result that the clouds over plaintiffs' lands were prevented from following their natural and usual course of developing rain upon and over and near plaintiffs' lands, thereby resulting in retarded rainfall upon plaintiffs' properties. The court further held that such was injurious to appellees and was in interference of their property rights, and would cause irreparable damage if not restrained.
It has long been decided that in cases of this sort we must affirm the decision of the trial court unless it is clearly shown that he abused his discretion in granting the temporary injunction: Rudd v. Wallace, Tex.Civ.App., 232 S.W.2d 121; 24-A, Tex.Juris., ¶ 265, p. 382. Therefore, we must now examine the evidence to see if the trial court's action was proper.
First of all, appellant Kooser, the president of defendant corporation, who was in charge of the operations, when asked if he could prevent or lessen hail, answered as follows: "We feel that we have indicated something along that line in this area." He further admitted that he was trying to and was changing weather conditions, but denied that he depleted any potential or active precipitation, and maintained that, on the contrary, his operation tended to increase precipitation. The experts did not agree in their testimony. Witnesses Quate and Moyer, after qualifying, explained the processes of cloud formation and rain making, and stated positively that seeding clouds, as was done here, with silver iodide or salt brine or both, could not depreciate, deplete or destroy the rain potential of a cloud that was likely to produce rain. They did testify that unimportant clouds with no rain potential could be dissipated. Witness *214 Battle testified that in his opinion overseeding of potential rain clouds could diminish or destroy their rain-making power. All experts agreed that the impregnation of clouds with foreign particles or nuclei would, when carried up to the freezing top of the cloud by a warm updraft, help precipitation to occur by drawing minute droplets of moisture to their surface until they became heavy enough to fall out of the cloud as precipitation. Witness Battle maintained that overseeding would cause a surplus of nuclei, so that the droplets would never get big enough to fall out. The other two experts denied that this could happen and testified that the type of operation here concerned would increase precipitation and prevent hail. Reference was made to various articles and publications as, for example, the September 1953 Bulletin of the American Meteorological Society, wherein the writer, R. T. Beaumont, maintains that a two-year cloud seeding program in southern Oregon decreased, instead of increasing, the annual precipitation in the area under study. Quate and Moyer both disagreed with this finding. Then there is reference to a statement in Vol. 1, Page 43, of the Stanford Law Review, which quotes Vincent Schaefer as saying that he believed that rain could be prevented by overseeding clouds. In Volume 45 of the California Law Review, Page 702, this statement is found:
"On the other hand, if through accident or design a storm is overseeded, the effect can be to form so many ice crystals that they dispers the moisture in the freezing zone and thus destroy the basic conditions for precipitation. This is the process involved in hail dispersion."
Witness Battle, when asked the following question:
"Q. In the type of cloud we have been talking about here, the thunderhead in the Davis Mountain area, which occur in the summer months, when you stop hail, do you stop rain?
A. I would say you slow it down considerably and many times it absolutely stops it."
Then, finally, we have the statement on Page 707, Volume 45 of the California Law Review, as follows:
"Scientific and mathematical evaluation of the results of cloud seeding is in its experimental infancy.",
citing as authority therefor several articles and publications. It is therefore clear that there was sharp divergence in the expert testimony presented to the trial court.
On behalf of the appellees' position there were eleven witnesses. They testified that on various occasions they had been observing what they considered rain clouds over their property. They testified that these were clouds from which they usually got rain and which, in their opinion, would probably produce rain. In several instances it had begun to rain or sprinkle. Some of these witnesses testified to a lifetime and others to many years of practical and actual observation of clouds and the formation of those clouds which produced rain. For example, witness Jim Duncan testified he had been in the area since before the turn of the century, and that it was the habit of ranchers to observe and evaluate all clouds with the idea of whether or not rain could be expected therefrom. He testified that his land was ranch land which depended upon the natural elements, such as rain, to grow feed and forage for his livestock. Without detailing the individual testimony of each witness, they all generally agreed that they would be observing a potential rain cloud or thunderhead which they were confident was going to produce rain on their property, when appellants' plane or planes would show up. Now appellants denied ever flying into any clouds, saying that it was dangerous and they wouldn't do it. But witnesses for appellees testified that they had seen the planes going into the clouds. In any event they were generally agreedall of themthat when the plane or planes showed up and began spraying the foreign *215 substance, in some ten to twenty minutes the potential rain cloud or thunderhead would be destroyed and dissipated, leaving only a fuzzy or wispy type of mist. As one witness said, it seemed like a "nightmare." Another one stated he would remember it to his "dying day." Now these witnesses all testified flatly that the airplance action destroyed clouds that they felt were going to produce rain on their property, and that such clouds were over their property when the airplane appeared. In several instances the lay witnesses testified that the sprinkle or rain stopped as soon as the airplane began its operation. In another instance it was testified that half of the ranch got a rain and the other half didn't, and the witness blamed this phenomenon on the activity of the airplane and its area of operation.
So, summing up the fact situation or the evidence that was before the trial court, we find that the three appellees and other witnesses testified that they had visually observed the destruction of potential rain clouds over their own property by the equipment of the appellants. They testified that they had seen this happen more than once. The experts differed sharply in the probable effect of a hail suppression program accomplished by the cloud seeding methods used here. The trial court apparently, as reflected by his findings included in the judgment, believed the testimony of the lay witnesses and that part of the expert testimony in harmony with his judgment. This he had a right to do as the trier of facts.
We have carefully considered the voluminous record and exhibits that were admitted in evidence, and have concluded that the trial court had ample evidence on which to base his findings and with which to justify the issuance of the injunction.
Now we must turn to the objections of the appellants, who protest the issuance of the injunction on the grounds, generally, that appellants had every right to do what they were doing in order to protect their crops from hail, and that the facts or credible evidence did not justify the issuance of the injunction. Appellants maintain that appellees have no right to prevent them from flying over appellees' lands; that no one owns the clouds unless it be the State, and that the trial court was without legal right to restrain appellants from pursuing a lawful occupation; also, that the injunction is too broad in its terms.
First of all, it must be noted that, here, we do not have any governmental agency, State or Federal, and find no legislative regulation. This is exclusively a dispute between private interests. It has been said there is no precedent and no legal justification for the trial court's action. It has long been understood that equity was created for the man who had a right without a remedy, and, as later modified, without an adequate remedy. Appellees urge here that the owner of land also owns in connection therewith certain so-called "natural rights", and cites us the following quotation from Spann v. City of Dallas, 111 Tex. 350, 235 S.W. 513, 514, in which Chief Justice Nelson Phillips states:
"Property in a thing consists not merely in its ownership and possession, but in the unrestricted right of use, enjoyment and disposal. Anything which destroys any of these elements of property, to that extent destroys the property itself. The substantial value of property lies in its use. If the right of use be denied, the value of the property is annihilated and ownership is rendered a barren right. * * *
* * * * * *
"The very essence of American constitutions is that the material rights of no man shall be subject to the mere will of another. Yick Wo v. Hopkins, 118 U.S. 356, 6 S. Ct. 1064, 30 L. Ed. 220."
In Volume 34, Marquette Law Review, at Page 275, this is said:
"Considering the property right of every man to the use and enjoyment of *216 his land, and considering the profound effect which natural rainfall has upon the realization of this right, it would appear that the benefits of natural rainfall should come within the scope of judicial protection, and a duty should be imposed on adjoining landowners not to interfere therewith."
In the Stanford Law Review, November 1948, Volume 1, in an article entitled, "Who Owns the Clouds?", the following statements occur:
"The landowner does have rights in the water in clouds, however. The basis for these rights is the commonlaw doctrine of natural rights. Literally, the term `natural rights' is well chosen; these rights protect the landowner's use of his land in its natural condition. * * *
"All forms of natural precipitation should be elements of the natural condition of the land. Precipitation, like air, oxygen, sunlight, and the soil itself, is an essential to many reasonable uses of the land. The plant and animal life on the land are both ultimately dependant upon rainfall. To the extent that rain is important to the use of land, the landowner should be entitled to the natural rainfall."
In California Law Review, December 1957, Volume 45, No. 5, in an article, "Weather Modification", are found the following statements:
"What are the rights of the landowner or public body to natural rainfall? It has been suggested that the right to receive rainfall is one of those `natural rights' which is inherent in the the full use of land from the fact of its natural contact with moisture in the air. * * *
"Any use of such air or space by others which is injurious to his land, or which constitutes an actual interference with his possession or his beneficial use thereof, would be a trespass for which he would have remedy." Hinman v. Pacific Air Transport, 9 Cir., 84 F.2d 755, 758.
Appellees call our attention to various authorities that hold that, although the old ad coelum doctrine has given way to the reality of present-day conditions, an unreasonable and improper use of the air space over the owner's land can constitute a trespass: Guith v. Consumers Power Co., D.C., 36 F. Supp. 21; Restatement of the Law of Torts, paragraph 194 etc.; United States v. Causby, 328 U.S. 256, 66 S. Ct. 1062, 90 L. Ed. 1206. Other cases are cited, also, and apparently hold that the land owner, while not owning or controlling the entire air space above his property, is entitled to protection against improper or unreasonable use thereof or entrance thereon.
We believe that under our system of government the landowner is entitled to such precipitation as Nature deigns to bestow. We believe that the landowner is entitled, therefore and thereby, to such rainfall as may come from clouds over his own property that Nature, in her caprice, may provide. It follows, therefore, that this enjoyment of or entitlement to the benefits of Nature should be protected by the courts if interfered with improperly and unlawfully. It must be noted that defendant's planes were based at Fort Stockton, in Pecos County, and had to fly many miles to seed clouds over defendants' lands in Jeff Davis County. We do not mean to say or imply at this time or under the conditions present in this particular case that the landowner has a right to prevent or control weather modification over land not his own. We do not pass upon that point here, and we do not intend any implication to that effect.
There is ample evidence here to sustain the fact findings of the trial court that clouds were destroyed over property of appellees by operations of the appellants. The trial court chose to believe the evidence to that effect, and we hold there was ample *217 evidence to support him in so holding and finding. We further hold that the trial court was justified in restraining appellants from modifying or attempting to modify any clouds or weather over or in the air space over lands of the appellees.
However, we do find that the temporary injunction granted by the trial court was too broad in its terms, in that it purports to restrain appellants from any activity with reference to land in the area of "plaintiffs' lands." The trial court's injunction is, therefore, modified so as to restrain appellants from the activities therein described only as they apply to the lands of appellees.
Appellants have also urged that the District Court of Jeff Davis County did not have jurisdiction, because the defendant-appellants resided either in Pecos County or Harris County. We overrule this point for the reasons set forth; namely, that appellants were found by the trial court to have been guilty of infringement of appellees' "natural rights" in their lands which are actually a part of their lands. Of course any suit involving damage to land may be brought in the county where the land lies. It will be recalled that Mr. Duncan testified that his land depended upon precipitation to produce the food and forage for his livestock. Spann v. City of Dallas, 111 Tex. 350, 235 S.W. 513. However, we do believe that that much of appellants' objections as apply to the lands of appellees about which there has been no testimony is good, and should have been sustained. We make this holding because we do not feel that the court had adequate evidence to prohibit cloud seeding over any lands in the absence of proof that such had been, or would be, done according to the testimony of the witnesses, to the damage of the landowner. Therefore, the injunction is dismissed and dissolved insofar as it applies to any lands in Culberson, Terrell, Winkler and Loving counties, and is further dismissed and dissolved with respect to all plaintiff-appellees excepting Messrs. Ted Grat, Walter McElroy, Jr., Dave Medley, H. C. Patterson, George Asa Jones, Nelson Lethco, Peeler Mathews, and Richard Hoefs.
All other points of appellants are accordingly overruled, and, with the above modification, the judgment of the trial court is affirmed.
ABBOTT, J., not sitting.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433815/
|
320 S.W.2d 150 (1959)
Mrs. Densel Brannum BOOKER, Appellant,
v.
CAMERON COUNTY CHILD WELFARE UNIT, Appellee.
No. 13413.
Court of Civil Appeals of Texas, San Antonio.
January 14, 1959.
*151 Polk Hornaday, Harlingen, for appellant.
Juan Gavito, F. T. Graham, Brownsville, for appellee.
W. O. MURRAY, Chief Justice.
This is an appeal by Mrs. Densel Brannum Booker from a judgment of the District Court of Cameron County, refusing to return to her the custody and care of her five minor children, namely, Veda, David Russell, Dale Roe, Densel, Rena Jo, all of the surname Booker, and terminating all of her parental rights over these five children and awarding their care, custody and control to Jose Ricardo Villarreal, Director of the Cameron County Child Welfare Unit and his successors in office, subject to the further orders of the court.
Appellant's first point is that she was denied a jury trial. The record does not show, either by bill of exception or in any other proper way, that she made a timely demand for a jury, but, regardless of this, in a hearing under the provisions of Articles 2330 to 2337, Vernon's Ann.Civ. Stats., relating to dependent or neglected children, a jury sits only in an advisory capacity and the court is not bound by the jury's finding. Therefore, it is not error for the court to overrule a request for a jury trial in a case of this type. Bee v. Robbins, Tex.Civ.App., 303 S.W.2d 827; Erwin v. Williams, Tex.Civ.App., 253 S.W.2d 303.
Appellant's next point is as follows:
"The judgment of the Court is contrary to the law and evidence, there being some testimony favorable to the mother, appellant; and no testimony against her."
It appears from the record that there had been a prior hearing of this case on January 24, 1957. The parents were presented at this hearing and judgment was rendered declaring these same five children to be dependent and neglected children, and awarding their custody to the Cameron County Child Welfare Unit, without prejudice to the rights of the parents of said children or either of them to petition the court to return the custody of said children or any of them to said parents, within the period of one year, upon a proper showing that said parents or either of them is in a position to maintain the proper care and custody of said children. Within the one-year period the mother, Mrs. Booker, filed the present petition to have the custody and care of the children returned to her. We have read the entire statement of facts and find that the action taken by the trial court was justified and supported by the evidence. Mr. Booker, the father, has now left home and appellant does not know his whereabouts. Mrs. Booker has suffered with some kind of nervous trouble for a long time, and she is now the mother of a young baby that she is breast feeding, and for this and other reasons she is unable to work. She has no income and would have to depend upon charity for the support of herself and her children. We feel it would serve no useful purpose to set out the facts in great detail.
The judgment is affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433830/
|
320 S.W.2d 707 (1959)
Lena WICKS et al., Appellants,
v.
Nathan LANGFORD et al., Appellees.
No. 3420.
Court of Civil Appeals of Texas, Eastland.
January 9, 1959.
George T. Thomas, Big Spring, for appellants.
Grover Cunningham, Jr., Big Spring, for appellees.
GRISSOM, Chief Justice.
Nathan Langford and others, as trustees for the A.M.E. Church of Big Spring, sued James Manning, Lena Wicks, Elnora Dossie Johnson and husband, Willie Johnson, for title and possession of Lot Number One in Block F of the Moore Addition to Big Spring. Plaintiff's petition consisted of three counts, the first was in trespass to try title; the second alleged a contract between the plaintiffs and James Manning and Lena Manning Wicks for the exchange of a lot owned by said church for all of Lot One and that the conveyance by James Manning and Lena Manning Wicks to the trustees of said church of only the west 50 feet, instead of all of said Lot One, was the result of a mutual mistake. In the third count plaintiffs sought title and possession of all of Lot One by virtue of the ten year statute of limitation. Vernon's Ann.Civ.St. art. 5510. The court instructed a verdict for the defendants as to the first and second counts, but, based on a jury finding of ten year limitation, judgment was rendered *708 awarding all of Lot One to plaintiffs. All defendants except James Manning, against whom a default judgment was rendered, have appealed.
*709 Appellants contend the judgment should be reversed because of the admission of testimony of verbal negotiations for the exchange of lots and testimony as to plans of the church for future development of Lot One. Appellants also say that the judgment should be reversed because there is no evidence of the requisites of title by virtue of the ten year limitation statute and because the evidence thereof is insufficient. The evidence relative to verbal negotiations for the exchange by the Mannings of all of Lot One for another lot was adlimited purpose of showing a mutual mistake and cannot be considered in support of the judgment rendered on count three. In order that the facts may be more readily understood, we attach hereto a copy of a survey of Lot One. Plaintiffs introduced a deed from James and Lena Manning, dated November 9, 1942, acknowledged on said date by James Manning and by his wife, Lena Manning, now Wicks, on February 15, 1943, and filed for record on February 22. (Lena Manning is the same person as the defendant Lena Wicks.) It recites that the Mannings in consideration of $10 paid them by the trustees of said A.M.E. Church of Big Spring conveyed to said trustees a tract described as "Being the West 50 feet Eastward and Westward by 140 feet Northward and Southward of Lot No. one (1) in Block `F' Moore Addition to the Town of Big Spring Howard County, Texas." It is undisputed that when said deed was executed James Manning was one of the trustees of said church. There is no evidence when, if ever, he ceased to be a trustee. Appellants admit plaintiffs have title to all of said lots south of the north line of the church located on said lot and, regardless of what disposition should otherwise be made of the judgment, we could affirm the judgment as to that portion if said line were definitely established by the record. Appellants claim all of said lot north of said line that lies more than 50 feet east of the west line of Lot One. In discussing the evidence as to a claim to and use of said lot we shall pay particular attention only to that portion. The evidence shows that in 1945 there were 4" × 4" posts in the ground adjacent to the north and east lines of said lot. Except for gaps at the northwest and northeast corners and on the east line near the church, the posts were placed approximately ten feet apart and were about 24 inches high. All the testimony comes from Nathan Langford and Charlie Merritt, trustees, and Reverend Birt, pastor of said church. Reverend Birt testified that he had been pastor since 1951, or nearly seven years; that the "fence" was there when he became pastor; that a shack, described by Merritt as 20 feet by 6 or 8 feet, was moved on the disputed area, near where Elnora Dossie Johnson's house, marked C on the plat, now stands, in 1951 or 1952 and it was moved off about 1955 when they acquired a cafeteria, which is shown on the plat as house A. He testified that since he had been pastor they have kept the lot clean to the "fence". He said that the year he became pastor, 1951 or 1952, Lena Manning, now the appellant Lena Wicks, told him she owned the land in controversy and asked him if she could sell it and he told her, in substance, that he guessed she could. The chief witness for the trustees was Nathan Langford, who has been a trustee for about 17 years. He said he was a trustee when the church began negotiations for the lots with James Manning; that James Manning was then a member and a trustee of said church and owned Lot One. Langford testified that Manning said he would give Lot One for the lot on which the church and parsonage were then located and that Langford said "all right" and the other trustees approved it. The record does not show whether the church conveyed its lot to the Mannings or explain why the Mannings executed a deed to only the west 50 feet of Lot One. The trustees testified that the church records prior to 1945 could not be found and that the records since that time disclosed no relevant facts. The evidence relative to said negotiations was admitted with the express limitation that it might be considered *710 only in connection with count one, in which mutual mistake in the conveyance of only the west 50 feet of Lot One was alleged. An instructed verdict for defendant was given on this count. Said testimony cannot be considered in support of the judgment rendered awarding the trustees title and possession of all of lot one by virtue of the ten year statute of limitation, alleged in count three. Merritt testified that at one time there was a wire across the top of the posts but he said the wire was not still there and he did not know how long it remained. There is no evidence as to when the posts were placed along the north and east sides of Lot One, nor why, or by whom, they were placed there. It is undisputed that they did not constitute an enclosure. It was not a fence. Automobiles could, and sometimes did, pass between the posts and park on the lot. There were no posts at the northwest corner, the northeast corner or near the church on the east line. Langford testified that they planned to extend the church northward if it should be added to and that every spring they cut the weeds and cleaned off the lot to the posts. Merritt testified, "Sometimes we parked on there." To summarize plaintiffs' testimony, in addition to the posts, it simply consists of the fact that a shack about 20 by 7 feet was moved on the lot and used as a place where the members sold soda water and ice cream and that it was moved off after about five or six years; that people attending church parked on the disputed area and that they cleaned the entire lot and used it occasionally for picnics. We have concluded that the competent evidence pertinent to the count submitted and on which the judgment was rendered is insufficient to sustain a judgment awarding plaintiffs the northeast portion of the lot.
James Manning was a trustee of the church when he and his wife executed a deed to the west 50 feet of Lot One. The pastor testified that when he came to the church nearly seven years before the trial that Lena Wicks told him she owned the property in controversy and asked him if she could sell it and he, in substance, told her she could. So far as the record discloses, James Manning may have continued in his capacity as a trustee of the church. It requires no stretch of the imagination to conclude that, being a trustee as well as members of said church, he and his wife permitted their brethren to use the part of the lot they still owned to park while attending services, sell ice cream and soda pop and for children's picnics and that they did not have notice that James' fellow trustees were claiming title thereto from the use disclosed. The evidence does not show exclusive possession by plaintiffs nor notice to defendants. In Riddle v. Vandiver, Tex.Civ.App., 225 S.W.2d 460, 462, the court quoted the following with approval:
"To be effective as a means of acquiring title, the possession of an adverse claimant must be exclusive of the true owner. The owner must be wholly excluded from possession by claimant. Any sort of joint or common possession by claimant and the owner * * * prevents the possession of claimant from having the requisite quality of exclusiveness. In these circumstances, the law referred the possession to the person having the legal title."
In Southwestern Lumber Co. of New Jersey v. Allison, Com., 276 S.W. 418, our Supreme Court approved a holding that possession to be adverse must be exclusive and that it is not adverse if the land is used jointly by the true owner and those claiming by limitation. The possession by limitation claimants must wholly exclude the owners. W. T. Carter & Bro. v. Holmes, 131 Tex. 365, 113 S.W.2d 1225; Johnican v. Tomasino, Tex.Civ.App., 248 S.W.2d 207 (R.N.R.E.); Humphreys v. Gribble, Tex. Civ.App., 227 S.W.2d 235 (R.N.R.E.); Duncan v. Adams, Tex.Civ.App., 210 S.W.2d 180, 189, affirmed 147 Tex. 332, 215 S.W.2d 599, 605; Freedman v. Bonner, 40 S.W. 47; 170 A.L.R. 846; Richards v. *711 Smith, 67 Tex. 610, 4 S.W. 571, 2 Tex. Jur. 92 and West Production Co. v. Kahanek, 132 Tex. 153, 121 S.W.2d 328, 331.
In Harris v. Wood County Cotton Oil Company, Tex.Civ.App., 222 S.W.2d 331, 334 (R.N.R.E.), there was a comparable issue as to a portion of a lot used by a gin's customers. The customers used half of a lot not owned by the gin company to reach the gin and as a place to park. It was held that such use did not constitute the actual and visible appropriation of the land required by Article 5515.
Appellants' point that the evidence is insufficient to support the verdict and judgment is sustained. The judgment is reversed and the cause remanded.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2433948/
|
189 F. Supp. 2d 1036 (2002)
COALITION OF CLERGY, et al., Petitioners,
v.
George Walker BUSH, et al., Respondents.
No. CV 02-570 AHM (JTLX).
United States District Court, C.D. California.
February 21, 2002.
*1037 Stephen Yagman, Kathryn S. Bloomfield, Joseph Reichmann, Yagman & Yagman & Reichmann & Bloomfield, Venice Beach, CA, Erwin Chemerinsky, Los Angeles, CA, for petitioners.
John S. Gordon, United States Attorney, Ronald L. Cheng, Lawrence Ng, Becky Walker, Douglas A. Axel, Los Angeles, CA, Paul Clement, Deputy Solicitor General, Alice S. Fisher, Deputy Asst. Attorney General, Washington, D.C., for respondents.
ORDER DISMISSING PETITION FOR WRIT OF HABEAS CORPUS AND FIRST AMENDED PETITION FOR WRIT OF HABEAS CORPUS
MATZ, District Judge.
I.
PROCEDURAL BACKGROUND AND SUMMARY OF RULING
This case results from the sudden attacks on the United States on September 11, 2001, resulting in the deaths of thousands of innocent civilians. Within a few days, the President, with the approval of *1038 Congress (Pub.L. No. 107-40 (September 8, 2001)), commanded the Armed Forces of the United States to use all necessary and appropriate force against the persons responsible for those attacks, who soon came to be known as the "Al Qaeda terrorist network." The President dispatched American forces to Afghanistan, where that group was believed to be functioning with the active support of the "Taliban" government then in power in that country. In the course of combat operations, American forces, as well as other nations allied with the United States, captured or secured the surrender of thousands of persons. Beginning in early January 2002, the Armed Forces transferred scores of these captives to the United States Naval Base at Guantanamo Bay, Cuba ("Guantanamo"). Their confinement in Guantanamo led to this action.
Petitioners are a group referring to themselves as the "Coalition of Clergy, Lawyers, and Professors." They include at least two journalists; ten lawyers; three rabbis; and a Christian pastor. Some of these individuals are prominent professors at distinguished law schools or schools of journalism. One is a former Attorney-General of the United States. On January 20, 2002 they filed a Verified Petition for Writ of Habeas Corpus on behalf of "Persons Held Involuntarily at Guantanamo Naval Air Base, Cuba." In substance, the petition alleges that the captives held at Guantanamo (the "detainees") are in custody in violation of the Constitution or the laws or treaties of the United States, in that they: (1) have been deprived of their liberty without due process of law, (2) have not been informed of the nature and cause of the accusations against them and (3) have not been afforded the assistance of counsel. The petition also suggests, somewhat elliptically, that the detainees have rights under the Geneva Convention that have been violated, such as "prohibition of [sic] transferring persons taken prisoner in [sic] war from the country of their capture." (Pet. Memo.7:16-17)
Petitioners allege that "[b]ecause the persons for whom relief is sought appear to be held incommunicado and have been denied access to legal counsel, application properly is made by petitioners acting on their behalf. 28 U.S.C. § 2242...." (Id. 7:20-23)
The relief that petitioners seek is a writ or order to show cause (1) directing the respondents to "identify by full name and country of domicile and all other identifying information in their possession each person held by them within three days;" (2) directing respondents "to show the true cause(s) of the detention of each person;" and (3) directing respondents to produce the detainees at a hearing in this court. (Id. 8:14-23; 9:1-3)
The persons named as respondents are President George W. Bush; Secretary of Defense Donald H. Rumsfeld; Richard B. Myers, the Chairman of the Joint Chiefs of Staff; Gordon R. England, the Secretary of Navy; and five other named individuals and "1000 Unknown Named United States Military Personnel," all of whom are alleged to be military officers responsible for the operations at the Guantanamo Naval Base.
On January 22, 2002, two days after the petition was filed, the Court presided over a brief hearing at which it expressed strong doubts that it has jurisdiction to entertain the petition. The Court ordered the parties to address that threshold question in written briefs. They have done so and appeared at a second hearing today.[1]
*1039 Having reviewed and considered all the arguments and conducted additional research on its own, the Court rules as follows:
1. Petitioners do not have standing to assert claims on behalf of the detainees.
2. Even if petitioners did have standing, this court lacks jurisdiction to entertain those claims.
3. No federal court would have jurisdiction over petitioners' claims, so there is no basis to transfer this matter to another federal district court.
4. The petition must be dismissed.
II.
THE WRIT OF HABEAS CORPUS
Given the importance of the issues that petitioners proclaim are at stake in this case, a decidedly abbreviated description of the writ of habeas corpus is appropriate.
The writ of habeas corpus, providing a means by which the legal authority under which a person is detained can be challenged, is of immemorial antiquity ... The precise origin of the writ ... is not certain, but as early as 1220 A.D. the words "habeas corpora" are to be found in an order directing an English sheriff to produce parties to a trespass action before the Court of Common pleas.... Today it is regarded as "perhaps the most important writ known to the constitutional law of England ...."
Its significance in the United States has been no less great. Article I, ¶ 9 of the Constitution gives assurance that the privilege of the writ of habeas corpus shall not be suspended, unless when in cases of rebellion or invasion the public safety may require it, and its use by the federal courts was authorized [as long ago as in] ... the Judiciary Act of 1789.
WRIGHT, MILLER AND COOPER, FEDERAL PRACTICE AND PROCEDURE: JURISDICTION 2D § 4261 and n. 3 (citations omitted).
The statutory authorization for a federal judge to issue a writ of habeas corpus currently is set forth in 28 U.S.C. § 2241, et seq. In essence, when a judge issues such a writ, the authorities responsible for the petitioner's custody are required to demonstrate that he is being detained lawfully. As Mr. Justice Black put it, the "grand purpose" of the writ of habeas corpus is "the protection of individuals against erosion of their right to be free from wrongful restraints upon their liberty." Jones v. Cunningham, 371 U.S. 236, 243, 83 S. Ct. 373, 377, 9 L. Ed. 2d 285 (1963).[2]
Although the writ of habeas corpus plays a central role in American jurisprudence, there are many limitations on a court's authority to issue such a writ. Here, in urging the court to dismiss the petitioni.e., effectively refuse to issue a writrespondents invoke three such limitations. They contend: (1) petitioners lack "standing" to come to this courti.e., they are not entitled to ask the court on *1040 the detainees' behalf to order respondents to justify the detention of the detainees; (2) this particular federal court lacks jurisdiction to entertain the petition; and (3) no federal district court anywhere has jurisdiction. Respondents are correct as to all three contentions.
III.
PETITIONERS DO NOT HAVE STANDING
Respondents argue that petitioners lack standing to assert claims on behalf of the detainees. Whether a plaintiff (or, in the case of a habeas proceeding, a petitioner) has standing "is the threshold question in every federal case, determining the power of the court to entertain the suit .... The Art. III judicial power exists only to redress or otherwise to protect against injury to the complaining party, even though the court's judgment may benefit others collaterally...." Warth v. Seldin, 422 U.S. 490, 498-499, 95 S. Ct. 2197, 2205, 45 L. Ed. 2d 343 (1975).
28 U.S.C. § 2242 provides that "[a]pplication for a writ of habeas corpus shall be in writing signed and verified by the person for whose relief it is intended or by someone acting in his behalf." (Emphasis added). Courts use the term "next friend" to describe the person who acts on behalf of another person (the "real party in interest") for whom the relief is sought. The "next friend" has the burden "clearly to establish the propriety of his status and thereby justify the jurisdiction of the court." Whitmore v. Arkansas, 495 U.S. 149, 110 S. Ct. 1717, 1727, 109 L. Ed. 2d 135 (1990).
A number of courts have allowed habeas petitions to be filed by "next friends," although in circumstances different from those here. See, e.g., U.S. ex rel. Toth v. Quarles, 350 U.S. 11, 76 S. Ct. 1, 100 L. Ed. 8 (1955) (sister, on behalf of ex-serviceman civilian who was arrested by military authorities and taken to Korea to stand trial before a court-martial); Vargas v. Lambert, 159 F.3d 1161 (9th Cir.1998) (mother of state court prisoner slated to be executed for murder, where mother made showing sufficient to establish her son's lack of mental competence to waive his right of appeal); Nash v. MacArthur, 184 F.2d 606 (D.C.Cir.1950) (attorney, on behalf of seven Japanese nationals convicted of war crimes by military commissions).
In seeking dismissal of this petition on the basis that petitioners lack "next friend" standing, respondents rely primarily on Whitmore v. Arkansas, supra. In Whitmore, the named petitioner was a death row inmate. He sought to intervene in an Arkansas state court criminal proceeding in order to prosecute an appeal on behalf of one Simmons, who had been convicted of multiple murders and had waived his right to direct appeal. Whitmore tried to get permission to appeal on behalf of Simmons on the basis that the heinous facts in Simmons's cases would become included in a database that Arkansas uses for purposes of comparative reviews of capital sentences. Whitmore contended that inclusion of the information about Simmons would make himWhitmore appear less deserving of execution. Whitmore also purported to proceed as "next friend" of Simmons, hoping to overturn the latter's death sentence on appeal. Although Whitmore was not seeking a writ of habeas corpus on behalf of Simmons, the Supreme Court analogized his effort to that of a "next friend" in a habeas case, and defined the prerequisites for "next friend" standing.
First, a "next friend" must provide an adequate explanation such as inaccessibility, mental incompetence, or other disability why the real party in interest cannot appear on his own behalf to prosecute the action .... [Citation]. Second, the "next friend" must be truly *1041 dedicated to the best interests of the person on whose behalf he seeks to litigate .... [Citation]. [It also] has been further suggested that a "next friend" must have some significant relationship with the real party in interest.
Id. at 162-64, 110 S. Ct. 1717 (citations omitted). The Court then held that Whitmore lacked standing because "there was no meaningful evidence that [Simmons] was suffering from a mental disease, disorder or defect that substantially affected his capacity to make an intelligent decision." Id. at 166, 110 S. Ct. 1717.
The Ninth Circuit has stated that under the Whitmore test, "[i]n order to establish next friend standing, the putative next friend must show (1) that the petitioner is unable to litigate his own cause due to mental incapacity, lack of access to court, or other similar disability; and (2) the next friend has some significant relationship with, and is truly dedicated to the best interests of, petitioner." Massie ex rel. Kroll v. Woodford, 244 F.3d 1192, 1194 (9th Cir.2001). The court will now address this two-prong test.
A. Lack of Access to the Court.
Whitmore and the other cases on which respondents rely are all factually distinguishable because the real party in interest clearly did have access to the court, could have filed a petition in his own behalf and chose not to do so. Thus, in Brewer v. Lewis, 989 F.2d 1021 (9th Cir.1993), the person denied standing to seek a writ of habeas corpus was a condemned prisoner's mother. Her son had explicitly sought to abandon all further judicial proceedings, and the mother was unable to establish that he was incompetent. Id. at 1025-1026. Similarly, in Massie a death row inmate filed a federal habeas corpus petition but then moved to dismiss it. A journalist who had dealt with the inmate for fifteen years thereupon filed a "next friend" petition on behalf of the inmate. Like the mother in Brewer and the "next friend" in Whitmore, the journalist failed to present "meaningful evidence" of the inmate's alleged incompetency to dismiss his own habeas corpus petition. Moreover, at oral argument before the Ninth Circuit, the inmate explicitly opposed the journalist's petition. Id. at 1195. Not surprisingly, the Court found that the journalist lacked standing. Id. at 1199.[3]
Here, although the hastily-prepared petition is far from a model of precision or clarity, it does at least allege that the Guantanamo detainees "appear to be held incommunicado and have been denied access to legal counsel...." Pet. Memo. 7:20-23. This is tantamount to alleging lack of access to the court. But standing alone, conclusory allegations such as these are not sufficient to establish standing. Brewer, 989 F.2d at 1026; Massie, 244 F.3d at 1197 ("meaningful evidence" required; "conclusory opinions" are insufficient). In this case, petitioners' assertions that the detainees are totally incommunicado are not supported by the news articles they attached to the petition. Indeed, as respondents point out, the news articles actually contradict the assertions. Some of the articles reflect that the detainees were given the opportunity to write to friends or relatives (Pet.Mem. p. 10); others state that some detainees had already been in contact with diplomats from their home countries (Pet.Mem. pp. 16:20-21); *1042 yet other articles state that a team from the International Red Cross met with the detainees (Pet.Mem. p. 15). In their brief filed a week after respondents' brief, petitioners did not explain these inconsistencies, much less provide a basis for the court to disregard them.[4] Moreover, the Court has been informed that on February 19, 2002, the parents of three specified Guantanamo detainees did file suit on behalf of their respective sons. Shafiq Rasul, et al. v. Bush, No. 02-CV 00299 (D., D.C.) See, "Suit Says U.S. Violates Prisoners Rights in Cuba," Wall Street Journal, February 20, 2002, at A10.
Respondents are correct that as to the first prong of the Whitmore-Massie test, the immediate question before this court is the adequacy of the allegations in the petition concerning lack of access to court. They are also correct that the allegations fail to satisfy that prong. But in court today, counsel for respondents displayed commendable candor in acknowledging that from a practical point of view the detainees cannot be said to have unimpeded or free access to court. Despite the recent filing of a second lawsuit, it would be naive for this court to find that they do enjoy such access. Thus, although it makes no actual finding on the issue, the court will proceed to analyze the second prong under the supposition that the detainees lack access to court.
B. Significant Relationship With The Detainees or "Uninvited Meddlers."
The second prong of the Whitmore-Massie "next friend" test requires the petitioners to demonstrate that they have a "significant relationship" with the detainees. Respondents argue that petitioners cannot demonstrate that they are dedicated to the best interests of the Guantanamo detainees because they have not demonstrated such a relationship. On the question of what constitutes a significant relationship, respondents cite Davis v. Austin, 492 F. Supp. 273 (N.D.Ga.1980), in which a distant relative and a minister were not permitted to proceed on behalf of a death row inmate. But in Davis the real party in interest explicitly made a competent decision to forego further proceedings. It was because the "next friends" were proceeding contrary to the inmate's wishes that the court found they lacked standing not because their ties were too remote. Id. at 275-276.
Respondents also cite Lenhard v. Wolff, 443 U.S. 1306, 100 S. Ct. 3, 61 L. Ed. 2d 885 (1979), in arguing that petitioners fail to demonstrate a significant relationship with the detainees. In Lenhard, then-Justice Rehnquist granted a stay of a prisoner's execution on an application filed by two deputy public defenders who had been appointed by the trial court. In dicta, Justice Rehnquist noted that "however worthy and high minded the motives of `next friends' may be, they inevitably run the risk of making the actual defendant a pawn to be manipulated on a chessboard larger than his own case." Id. at 1312, 100 S. Ct. 3. However, in Lenhard, the lawyers' right to petition on behalf of the inmate was not in question. Indeed, Justice Rehnquist lauded them for their "commendable fidelity to their assignment ...." Id. at 1308, 100 S. Ct. 3. Moreover, he stated,
[I]t strikes me that from a purely technical standpoint a public defender may appear as "next friend" with as much justification as the mother of [the real party in interest] ....
Id. at 1310, 100 S. Ct. 3.
Although Davis and Lenhard are weak authority for respondents, Whitmore, supra, *1043 does buttress their contention that petitioners lack standing, particularly this language:
[L]imitations on the "next friend" doctrine are driven by the recognition that it was not intended that the writ of habeas corpus should be availed of, as a matter of course, by intruders or uninvited meddlers, styling themselves next friends .... Indeed, if there were no restriction on "next friend" standing in federal courts, the litigant asserting only a generalized interest in constitutional governance could circumvent the jurisdictional limits of Art. III simply by assuming the mantle of "next friend."
Whitmore, 495 U.S. at 163, 110 S. Ct. 1717.
The court recognizes that the named petitioners have filed this petition because they perceive there are rights that need to be vindicated. But that consideration, standing alone, does not necessarily make them "uninvited meddlers" within the meaning of Whitmore.[5]See Warren v. Cardwell, 621 F.2d 319, 321 n. 1 (9th Cir. 1980) (California lawyer who filed a petition in his own name on behalf of an Arizona inmate not accessible because of a prison lockdown "was not an uninvited meddler"). There is a difference between being "uninvited because you are meant to be excluded" and being "uninvited but welcome." The next friend/would-be petitioners in the cases upon which respondents rely fall into the former category, because their efforts were at odds with the desires of the real parties on whose behalf they were attempting to proceed. That is not the case here, because there is no evidence that the Guantanamo detainees affirmatively object to the petitioners' efforts, and common sense suggests that they would not.[6] But neither is there evidence that they are welcome, so petitioners cannot demonstrate that they fall into the latter category.
More than four weeks have elapsed since petitioners filed the original petition. In that period, petitioners' counsel has filed a brief on jurisdiction, an amended petition and numerous other memoranda and declarations on other issues. During that same period, the names of at least some of the detainees have been published by the national press and, as indicated above, parents of three specified detainees have filed suit. Yet there is nothing in the record even suggesting that any of the Guantanamo detainees supports this petition. Not one friend, relative, diplomatic or religious representative, fellow countryman or anyone with a direct tie to a particular detainee has authorized this petition. Common sense suggests that something is seriously awry in petitioners' claims to be the appropriate representatives of the detainees. This conclusion is reinforced by yet another telling factor: nowhere have petitioners alleged, much less filed a declaration, that they attempted to communicate with the detainees and were prevented from doing so. Although petitioners *1044 may regard such efforts as futile and thus unnecessary, to bolster their claimed standing as "next friends" it would have been helpful if they had tried anyway.[7]
To summarize, the court finds that the cases on which respondents rely to establish that petitioners lack a sufficient relationship with the detainees or that petitioners can be dismissed as "uninvited meddlers" are all factually distinguishable. Yet these cases state the governing legal principles of standing, and this district court is required to apply them. Petitioners may not be "uninvited meddlers" in the same sense as the petitioners in those cases, but they do lack a "significant relationship" with the detainees indeed, any relationship. To permit petitioners to seek a writ of habeas corpus on a record devoid of any evidence that they have sought authorization to do so, much less obtained implied authority to do so, would violate the second prong of the Whitmore-Massie test. And it would invite well-meaning proponents of numerous assorted "causes." to bring lawsuits on behalf of unwitting strangers. For these reasons, then, the court finds that petitioners lack standing to file this petition on behalf of detainees.[8]
Under standard principles governing leave to amend pleadings, if petitioners sought to amend their petition in order to supplement their claims of standing, this court would be expected to grant such leave. That is not the case, however, if the amended petition, or any amended petition, would be a legal "futility" because it could not satisfy the other jurisdictional requirements. For that reason, the court must proceed to discuss those requirements, for if they preclude this court from exercising jurisdiction then the petition should be dismissed without leave to amend.
IV.
THIS COURT LACKS JURISDICTION TO ISSUE THE WRIT BECAUSE NO CUSTODIAN IS WITHIN THE TERRITORIAL JURISDICTION OF THE COURT.
Respondents argue that even if petitioners have standing this court lacks jurisdiction to entertain this petition because no custodian responsible for the custody of the detainees is present in the territorial jurisdiction of this district. Respondents are correct.
The federal statute governing habeas petitions provides that "writs of habeas corpus may be granted by the Supreme Court, any justice thereof, the district courts and any circuit judge within their respective jurisdictions." 28 U.S.C. § 2241(a) (emphasis added). As the Supreme Court has explained, "the phrase `within their respective jurisdictions' acts *1045 as an obvious limitation upon the action of individual judges" because it reflects the conclusion of Congress that it would be "inconvenient, potentially embarrassing, certainly expensive and on the whole quite unnecessary to provide every judge anywhere with the authority to issue the Great Writ on behalf of applicants far distantly removed from the courts whereon they sat." Carbo v. United States, 364 U.S. 611, 617, 81 S. Ct. 338, 342, 5 L. Ed. 2d 329 (1961).[9]
In Schlanger v. Seamans, 401 U.S. 487, 91 S. Ct. 995, 28 L. Ed. 2d 251 (1971), the Supreme Court held that the Arizona District Court lacked jurisdiction over a habeas petition because the only custodian of the petitioner was outside that district. Id. at 490-91, 91 S. Ct. 995. It stated, "the District Court in Arizona has no custodian within its reach against whom its writ can run.... [T]he absence of [petitioner's] custodian is fatal to the jurisdiction of the Arizona District Court." Id. at 491, 91 S. Ct. 995. The Ninth Circuit has applied this rule several times, and the rule is so well-settled that it is unnecessary to cite these cases. Moreover, the Ninth Circuit has expressly held that 28 U.S.C. § 1391(e), which provides for nationwide service of process on officers of the United States, does not extend habeas corpus jurisdiction to persons outside the territorial limits of the district court. Dunne v. Henman, 875 F.2d 244, 248 (9th Cir.1989); accord, Schlanger, 401 U.S. at 490 n. 4, 91 S. Ct. 995.[10]
It is clear, then, that because there is no showing or allegation that any named respondent is within the territorial jurisdiction of the Central District of California, this court lacks jurisdiction to issue the writ requested by petitioners. It is also true, however, that in cases where the petitioner's direct custodian is outside the territorial jurisdiction of the court where the petition is filed, jurisdiction does lie in a district court where anyone in the "chain of command" with control over the petitioner is present. Ex Parte Hayes, 414 U.S. 1327, 1328, 94 S. Ct. 23, 24, 38 L. Ed. 2d 200 (1973); cf. Kinnell v. Warner, 356 F. Supp. 779, 782 (D.Hawai'i 1973) ("Anyone in the `chain of command' with control over petitioner's whereabouts is that petitioner's proper custodian for habeas purposes."). Here, petitioners have named as respondents several individuals who are custodians of the detainees, either because they are directly responsible for their detention or are within the "chain of command" of those directly responsible. At least some of those respondents are present within the territorial jurisdiction of the District Court for the District of Columbia. If the federal court in that district can exercise jurisdiction over this petition, federal law, at least in this circuit, mandates not dismissal, but transfer to that court.
Whenever a civil action is filed in a court ... and that court finds that there is a want of jurisdiction, the court shall, if it is in the interest of justice, transfer such action ... to any other such court in which the action or appeal could have been brought at the time it was filed or noticed ....
28 U.S.C. § 1631.
In Miller v. Hambrick, 905 F.2d 259 (9th Cir.1990), the Court of Appeals stated,
*1046 Normally, transfer will be in the interest of justice because normally dismissal of an action that could be brought elsewhere is "time-consuming and justice defeating." ...[This approach] was adapted to habeas corpus in applying 28 U.S.C. § 2241(d), the provision to habeas corpus in a State which contains two or more judicial districts...Now under 28 U.S.C. § 1631 the same approach can be taken generally in habeas corpus proceedings...
Id. at 262 (citations omitted).
In Cruz-Aguilera v. INS, 245 F.3d 1070, 1073-74 (9th Cir.2001), the Court of Appeals cited the above language from Miller and added that "[b]ecause the statute's language is mandatory, federal courts should consider transfer without motion by the parties."
Transfer to the United States District Court for the District of Columbia is appropriate if three conditions are met: (1) the transferring court lacks jurisdiction; (2) the transferee court could have exercised jurisdiction at the time the action was filed; and (3) the transfer is in the interest of justice. Id. As to condition (1), this Court has already found that it lacks jurisdiction. As to condition (3), a court is required to construe a habeas petition in the light most favorable to the petitioners. That requires this court to assume, without actually finding, that the allegations in this petition that the detainees' rights have been violated are true. Construing the petition that way, transfer would be in the interests of justice, for it would avoid a "`time-consuming'" and "`justice-defeating'" dismissal. Miller, 905 F.2d at 262 (quoting Goldlawr, Inc. v. Heiman, 369 U.S. 463, 467, 82 S. Ct. 913, 8 L. Ed. 2d 39 (1962)).
What remains for determination, therefore, is whether even though respondents are within the jurisdiction of another courtthe District of Columbiathat court (or any federal court) has the authority to exercise jurisdiction over the parties and claims asserted in this petition. It is to that question that the Court will now turn.
V.
NO DISTRICT COURT HAS JURISDICTION OVER THIS PETITION
A. Johnson v. Eisentrager Compels Dismissal If the Detainees Are Outside the Sovereign Territory of the United States.
As this Court suggested in its previous order, the key case is Johnson v. Eisentrager, 339 U.S. 763, 70 S. Ct. 936, 94 L. Ed. 1255 (1950). Because the Supreme Court's holding in Johnson is controlling here, the decision warrants careful review.
In Johnson, Mr. Justice Jackson described "the ultimate question" as "one of jurisdiction of civil courts of the United States vis-a-vis military authorities in dealing with enemy aliens overseas." Id. at 765, 70 S. Ct. 936. The case arose out of World War II. The habeas petitioners were twenty-one German nationals who claimed to have been working in Japan for "civilian agencies of the German government" before Germany surrendered on May 8, 1945. They were taken into custody by the United States Army and convicted by a United States Military Commission of violating laws of war by engaging in continued military activity in Japan after Germany's surrender, but before Japan surrendered.[11] The Military Commission *1047 sat in China with the consent of the Chinese government. After trial and conviction there, the prisoners were repatriated to Germany to serve their sentences in a prison whose custodian was an American Army officer. While in Germany, the petitioners filed a writ of habeas corpus claiming that their right under the Fifth Amendment to due process, other unspecified rights under the Constitution and laws of the United States and provisions of the Geneva Convention governing prisoners of war all had been violated. Id. at 765-767, 70 S. Ct. 936. They sought the same relief as petitioners here: that they be produced before the federal district court to have their custody justified and then be released. They named as respondents the prison commandant, the Secretary of Defense and others in the civilian and military chain of command.
Reversing the Court of Appeals, the Supreme Court in Johnson upheld the district court's dismissal of the petition on the ground that petitioners had no basis for invoking federal judicial power in any district. Id. at 790-91, 70 S. Ct. 936. In reaching that conclusion, the Supreme Court stated the following:
"[T]he privilege of litigation has been extended to aliens, whether friendly or enemy, only because permitting their presence in the country implied protection. No such basis can be invoked here, for these prisoners at no relevant time were within any territory over which the United States is sovereign and the circumstances of their offense [and] their capture ... were all beyond the territorial jurisdiction of any court of the United States." Id. at 777-78, 70 S. Ct. 936 (emphasis added).[12]
"We are cited to no instance where a court, in this or any other country where the writ is known, has issued it on behalf of an alien enemy who, at no relevant time and in no stage of his captivity, has been within its territorial jurisdiction. Nothing in the text of the Constitution extends such a right, nor does anything in our statutes." Id. at 767, 70 S. Ct. 936.
"A basic consideration in habeas corpus practice is that the prisoner will be produced before the court....To grant the writ to these prisoners might mean that our army must transport them across the seas for hearing .... The writ, since it is ... [argued] to be a matter of right, would be equally available to enemies during active hostilities.... Such trials would hamper the war effort .... It would be difficult to devise more effective fettering of a field commander than to allow the very enemies he is ordered to reduce to submission to call him to account in his own civil courts and divert his efforts and attention from the military offensive abroad to the legal defensive at home..." Id. at 778-79, 70 S. Ct. 936.
Although there has been no decision since Johnson that involves facts comparable to those in this case, other courts have either followed Johnson or acknowledged *1048 its precedential authority. See, e.g., Zadvydas v. Davis, 533 U.S. 678, 121 S. Ct. 2491, 2500, 150 L. Ed. 2d 653 (2001) ("It is well established that certain constitutional protections available to persons inside the United States are unavailable to aliens outside of our geographic borders. See, United States v. Verdugo-Urquidez, 494 U.S. 259, 269, 273-275, 110 S. Ct. 1056, 108 L. Ed. 2d 222 (1990) (Fifth Amendment's protections do not extend to aliens outside the territorial boundaries); Johnson v. Eisentrager, 339 U.S. 763, 784, 70 S. Ct. 936, 94 L. Ed. 1255 (same).") In Verdugo-Urquidez, supra, the Supreme Court also cited Johnson (494 U.S. at 273, 110 S. Ct. 1056) and added, "If there are to be restrictions on searches and seizures of aliens outside of the United States which occur incident to ... American action [abroad], they must be imposed by the political branches through diplomatic understanding, treaty or legislation." Verdugo-Urquidez, supra, 494 U.S. at 275, 110 S. Ct. 1056.
In all key respects, the Guantanamo detainees are like the petitioners in Johnson: They are aliens; they were enemy combatants; they were captured in combat; they were abroad when captured; they are abroad now; since their capture, they have been under the control of only the military; they have not stepped foot on American soil; and there are no legal or judicial precedents entitling them to pursue a writ of habeas corpus in an American civilian court. Moreover, there are sound practical reasons, such as legitimate security concerns, that make it unwise for this or any court to take the unprecedented step of conferring such a right on these detainees.
Petitioners nevertheless argue that Johnson "is both factually and legally inapposite for numerous reasons." Petitioners' first supposed distinction is that in Johnson the petitioners already had been given access to American courts. Not so; the tribunal in Johnson was a Military Commission functioning in China; the petitioners there, as here, were seeking to get into a federal court.[13] Next, petitioners argue that there are issues of fact that underlie jurisdiction which must be resolved before dismissal. Petitioners do not state what those supposed issues are and in any event the question before this court is a purely legal one, as in Johnson. Finally, as petitioners put it, "[m]ost importantly the detainees are `present' in the United States of America, because Guantanamo Naval Base is, as a matter of both fact and law, the United States of America." (Response, p. 15).
Petitioners' last argument requires the Court to assess the legal and juridical status of the Guantanamo Bay Naval Base.
B. Detainees were seized and at all times have been held outside the sovereign territory of the United States.
Johnson establishes that whether the Guantanamo detainees can establish jurisdiction in any district court depends not on the nature of their claims but on *1049 whether the Naval Base at Guantanamo Bay is under the sovereignty of the United States. Petitioners argue that the detainees are now within the territorial jurisdiction of the United States and thus are entitled to a writ of habeas corpus. But there is a difference between territorial jurisdiction and sovereignty, and it is the latter concept that is key. See United States v. Spelar, 338 U.S. 217, 70 S. Ct. 10, 11, 94 L. Ed. 3 (1949), in which the Supreme Court observed, "We know of no more accurate phrase in common English usage than `foreign country' to denote territory subject to the sovereignty of another nation." The Court finds that Guantanamo Bay is not within the sovereign territory of the United States and therefore rejects petitioners' argument.
The legal status of Guantanamo Bay is governed by a lease agreement entered into by the United States and Cuba in 1903 and extended by those countries in 1934. See Lease to the United States of Lands in Cuba for Coaling and Naval Stations, Feb. 16-23, 1903, U.S.-Cuba, T.S. No. 418 ("Lease Agreement"); Treaty Between the United States of America and Cuba Defining Their Relations, May 29, 1934, art. III, 48 Stat. 1682, 1683. The 1903 agreement provides that the United States shall lease Guantanamo Bay from the Republic of Cuba for use as a coaling or naval station. Lease Agreement, art. I. Article III of the 1934 Treaty provides that the 1903 lease shall "continue in effect" until the parties agree to modify or abrogate it.
As to the legal status of Guantanamo Bay so long as it is leased to the U.S., the 1903 agreement states:
While on the one hand the United States recognizes the continuance of the ultimate sovereignty of the Republic of Cuba over the above described areas of land and water, on the other hand the Republic of Cuba consents that during the period of occupation by the United States of said areas under the terms of this agreement the United States shall exercise complete jurisdiction and control over and within said areas.
Lease Agreement, art. III.
It is telling that in their brief petitioners do not even mention the first clause of the 1903 agreement, which provides that Cuba explicitly retained sovereignty. The omission suggests that they realize that sovereignty is the dispositive issue.
Relying instead only on the second clause, petitioners argue that because the Lease Agreement provides that Guantanamo Bay is under the "complete jurisdiction and control" of the United States, the detainees effectively are being held within United States territory and thus are entitled to the writ of habeas corpus.
One need only read the lease to realize that petitioners' argument that "jurisdiction and control" is equivalent to "sovereignty" is wrong. The agreement explicitly distinguishes between the two in providing that Cuba retains "sovereignty" whereas "jurisdiction and control" are exercised by the United States. Cuba and the United States defined the legal status of Guantanamo Bay, and this court has no basis, much less authority, to ignore their determination. Vermilya-Brown Co. v. Connell, 335 U.S. 377, 380, 69 S. Ct. 140, 93 L. Ed. 76 (1948). ("[T]he determination of sovereignty over an area is for the legislative and executive departments.").
In addition to the express terms of the Lease Agreement, the only federal courts that have addressed the issue have held that Guantanamo Bay is not within the sovereign territory of the United States and is not the functional equivalent of United States sovereign territory. In Cuban American Bar Assoc. v. Christopher, 43 F.3d 1412, 1425 (11th Cir.1995), cert. denied, 515 U.S. 1142, 115 S. Ct. 2578, 132 L. Ed. 2d 828 and 516 U.S. 913, 116 S.Ct. *1050 299, 133 L. Ed. 2d 205 (1995), the Eleventh Circuit had to determine whether Cuban and Haitian migrants temporarily detained at the Guantanamo Bay Naval Base could assert rights under various United States statutes and the United States Constitution. Cuban American Bar Assoc., 43 F.3d at 1421. Citing the language of the Lease Agreement quoted above, the Court of Appeals stated "the district court erred in concluding that Guantanamo Bay was a `United States territory.' We disagree that control and jurisdiction is equivalent to sovereignty." Id. at 1425. The Court of Appeals then went on to reject the argument that United States military bases which are leased abroad and remain under the sovereignty of foreign nations are "`functionally equivalent' to being ... within the United States." Id. See also Bird v. United States, 923 F. Supp. 338, 342-43 (D.Conn.1996) (holding that sovereignty over Guantanamo Bay rested with Cuba and therefore plaintiff's tort claim was barred under the "foreign country" exception of the Federal Tort Claims Act). The court finds the analyses and conclusions of these courts persuasive.[14]
For the foregoing reasons, the court finds that sovereignty over Guantanamo Bay remains with Cuba. The court therefore holds that petitioners' claim that the Guantanamo detainees are entitled to a writ of habeas corpus is foreclosed by the Supreme Court's holding in Johnson.
VI.
CONCLUSION
The Court understands that many concerned citizens, here and abroad, believe this case presents the question of whether the Guantanarno detainees have any rights at all that the United States is bound, or willing, to recognize. That question is not before this Court and nothing in this ruling suggests that the captives are entitled to no legal protection whatsoever. For this Court is
not holding that these prisoners have no right which the military authorities are bound to respect. The United States, by the [1949] Geneva Convention ... concluded an agreement upon the treatment to be accorded captives. These prisoners claim to be and are entitled to its protection. It is, however, the obvious scheme of the Agreement that responsibility for observance and enforcement of these rights is upon political and military authorities. Rights of alien enemies are vindicated under it only through protests and intervention of protecting powers as the rights of our citizens against foreign governments are vindicated only by Presidential intervention.
Johnson, 339 U.S. at 789, 70 S. Ct. 936.[15]
For the foregoing reasons, the Verified Petition For Writ of Habeas Corpus and *1051 the Verified First Amended Petition are both DISMISSED with prejudice.
IT IS SO ORDERED.
NOTES
[1] On February 11, 2002, after the parties had filed their respective briefs on the threshold jurisdictional issues, petitioners filed a "First Amended" petition purporting to add a claim under what they refer to as the "cruel and unusual clause" of the Eighth Amendment. Counsel for petitioners had acknowledged at the hearing "I'm going to have to proceed on the petition as it is right now. And if a decision is reached to add an Eighth Amendment claim, then I'm going to have to ask for permission to do that." He neither sought nor received permission. Moreover, the court instructed the parties that "if there is jurisdiction the petition could be amended at a later time." (Tr., p. 10-11) The Amended Petition does not affect, much less cure, the jurisdictional defects described below, and this Order applies to both petitions.
[2] The foregoing discussion involves only the writ of habeas corpus "ad subjiciendum," which compels an inquiry into the cause of restraint. There are other writs of habeas corpus, but they are irrelevant here.
[3] Compare Groseclose v. Dutton, 594 F. Supp. 949 (M.D.Tenn.1984), where next friends, including a death row inmate, minister and two anti-death penalty organizations, were permitted to proceed. There, the real party in interest did not oppose their efforts and the petitioners demonstrated that his previous waiver of the right to file a habeas petition was involuntary. Groseclose, 594 F.Supp. at 951, 961-62.
[4] The Court may take judicial notice of the information in the articles attached to the petition. Fed.R.Evid. 201(b). Indeed, both sides cite these articles for different purposes.
[5] In using the term "uninvited meddlers" in Whitmore, Chief Justice Rehnquist cited to United States ex rel. Bryant v. Houston, 273 F. 915, 916 (2d Cir.1921). There, the named petitioner failed to disclose anywhere in her petition who she was, what relationship, if any, she had with the real party in interest or whether the real party was unable to file the petition himself. Chief Justice Rehnquist also cited to Rosenberg v. United States, 346 U.S. 273, 291-292, 73 S. Ct. 1152, 1161-1162, 97 L. Ed. 1607 (1953). There, the real parties in interest already had several attorneys but their habeas petition was prepared by another lawyer who sought to intervene. Justice Frankfurter noted that the legitimate counsel of record "simply had been elbowed out of the control of their case" by the lawyer who filed the habeas petition. Id.
[6] As Justice Frankfurter stated in a different context, "Nor does law lag behind common sense." Ludecke v. Watkins, 335 U.S. 160, 167, 68 S. Ct. 1429, 1432, 92 L. Ed. 1881 (1948).
[7] The court is not suggesting that the mere failure of a "next friend" to establish direct communication with the prisoner and obtain explicit authorization from him is enough to preclude "next friend" petitioners. If it were, then there would be an incentive for the government to keep all captives, even United States citizens, incommunicado. Although respondents are not advocating that unacceptable and illegal result, a too-expansive interpretation of "uninvited meddlers" could lead to it.
[8] At the hearing today, Prof. Erwin Chemerinsky, one of the named petitioners (but not the author of petitioners' court papers), argued that the requirement that "next friends" demonstrate a "significant relationship" with the real parties in interest should be relaxed where the real parties lack access to court. He urged that general principles of standing under the constitutional requirements of Art. III favor such an approach. The court chooses to apply the standards enunciated in the Whitmore-Massie line of cases and notes that in Whitmore the Supreme Court stated that the limitations on standing that it was applying were in fact required by Article III, and were not based merely on "prudential" limitations. 492 U.S. at 156 n. 1, 109 S. Ct. 2841.
[9] In Braden v. 30th Judicial Circuit Court, 410 U.S. 484, 93 S. Ct. 1123, 35 L. Ed. 2d 443 (1973), the Supreme Court noted that a writ of habeas corpus is issued to the person who has allegedly detained the prisoner unlawfully and held that a federal court with jurisdiction over the custodian can exercise jurisdiction even if the prisoner is outside that court's jurisdiction.
[10] Despite the clear holding of these cases, petitioners' counsel argued in his brief that section 1391 permits this court to subject the respondents to jurisdiction on this basis.
[11] The Supreme Court has "characterized as `well-established' the power of the military to exercise jurisdiction over...enemy belligerents, prisoners of war or others charged with violating the laws of war." Johnson, 339 U.S. at 786, 70 S. Ct. 936 (citations deleted).
[12] In emphasizing the importance of sovereignty, the Court distinguished its earlier decision in In re Yamashita, 327 U.S. 1, 66 S. Ct. 340, 90 L. Ed. 499 (1946). There, a Japanese general convicted by an American Military Commission in the Philippines, challenged the authority of the Commission to try him. The Supreme Court denied his habeas petition on the merits. The Johnson court noted that, unlike the status of Guantanamo (see infra), the United States had "sovereignty" over the Philippines at the time, which is why Yamashita was entitled to access to the courts. Id. at 781, 70 S. Ct. 936.
[13] It appears that the Guantanamo detainees will also be subjected to trial before military commission. On November 13, 2001, the President issued an Executive Order entitling members of Al Qaeda and other individuals associated with international terrorism who are under the control of the Secretary of Defense to be tried before "one or more military commissions" that will be governed by "rules for the conduct of the proceedings ...[and] which shall at a minimum provide for ... a full and fair trial, with the military commission sitting as the triers of both fact and law...." See Detention, Treatment and Trial of Certain Non-Citizens in the War Against Terrorism, 66 Fed. Register 57,833 (November 13, 2001). Thus, it appears that the detainees are similar to the petitioners in Johnson in this respect, too.
[14] The cases on which petitioners mainly rely to avoid this result do not support their arguments. United States v. Corey, 232 F.3d 1166 (9th Cir.2000), not a habeas case, merely reached the unexceptional conclusion that federal courts have jurisdiction over a criminal case charging a United States citizen with offenses committed at United States installations abroad. Cobb v. United States, 191 F.2d 604 (9th Cir.1951) does not holdindeed, rejected the viewthat America's exclusive control over the Guantanamo Naval Base constitutes de jure sovereignty; Okinawa, not Guantanamo Bay, was at issue in Cobb and the court found that de jure sovereignty over Okinawa had not passed to the United States, so Okinawa was still a "foreign country" within the meaning of the Federal Tort Claims Act. Id. at 608. Finally, the judgment in Haitian Centers Council, Inc. v. McNary, 969 F.2d 1326 (2d Cir.1992) was vacated by the Supreme Court in Sale v. Haitian Centers Council, Inc., 509 U.S. 918, 113 S. Ct. 3028, 125 L. Ed. 2d 716 (1993).
[15] The President recently declared that the United States will apply the rules of the Geneva Convention to at least some of the detainees. See "U.S. Will Apply Geneva Rules to Taliban Fighters," Los Angeles Times, February 8, 2002 at A1.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1183867/
|
436 P.2d 268 (1968)
Otto W. HEIDER, Appellant,
v.
COMMERCIAL INSURANCE COMPANY of Newark, New Jersey, a Corporation, Respondent.
Supreme Court of Oregon, Department 2.
Argued and Submitted November 3, 1967.
Decided January 17, 1968.
Norman K. Winslow, Salem, argued the cause for appellant. With him on the briefs was Daniel A. Ritter, Salem.
*269 Howard M. Feuerstein, Portland, argued the cause for respondent. With him on the brief were Davies, Biggs, Strayer, Stoel & Boley and Don H. Marmaduke, Portland.
Before PERRY, C.J., and SLOAN, GOODWIN, HOLMAN and WOODRICH, JJ.
SLOAN, Justice.
In this action plaintiff Heider attempts to obtain indemnity from defendant for the amount he paid to satisfy the judgment affirmed in Gowin v. Heider, 1964, 237 Or. 266, 386 P.2d 1, 391 P.2d 630. At the times material to the case of Gowin v. Heider, supra, defendant, in the instant case, was bound to Heider on a comprehensive liability policy. In the instant action, Heider claims that policy requires defendant to indemnify him for the judgment he was obliged to pay to Gowin. The case was tried to the court without a jury. The court found for defendant and entered judgment accordingly. Plaintiff appeals.
Plaintiff's theory in the instant case is that the conduct of Heider, which caused the judgment against him in Gowin v. Heider were unintentional in respect to Heider because they were committed by Heider's agent and that Heider was, therefore, the victim of an "accident" within the protection of defendant's policy of insurance. He claims that an assault committed by an agent is an "accident" in respect to his employer. He further claims that our opinion in Gowin v. Heider confirms his conclusion that Heider was not intentionally or directly involved in the conduct which gave rise to his liability in that case. Heider overlooks the fact that the instant case is an independent action against his insurer and requires its own determination of the facts.
Plaintiff acknowledges that we have adopted the rule that the insurer's liability to defend, and usually to pay a judgment, must be determined by the complaint filed in the initial action against the insured. The rule was most recently affirmed in Williams v. Farmers Mut. of Enumclaw, 1967, 245 Or. 557, 423 P.2d 518, and in Crist v. Potomac Insurance Co., 1966, 243 Or. 254, 413 P.2d 407. However, in the latter case and in MacDonald v. United Pacific Ins. Co., 1957, 210 Or. 395, 311 P.2d 425, it was recognized that cases may arise in which the complaint would not allege facts creating a duty to defend but that the ultimate proof in the case would show a duty to pay a judgment entered on the complaint. This exception to the insurer's duty has to be the basis of plaintiff's instant action.
The complaint filed by Gowin in the initial case was so much beyond the policy coverage that Heider, in that action, did not tender the defense of the Gowin case to the instant defendant until after the trial of the Gowin case. As stated, plaintiff's claim is that the opinion of this court in Gowin v. Heider, supra, makes it clear that defendant is obligated to indemnify him for the Gowin judgment.
In Jarvis et ux. v. Indemnity Ins. Co., of North America, 1961, 227 Or. 508, 363 P.2d 740, more specific statements were made in respect to the exceptions above noted. In Jarvis we held that the burden is on the insured "* * * to demonstrate that the former judgment was based upon evidence which identified it as one within the coverage of the insurer's obligation." 227 Or. at p. 512, 363 P.2d at 742.
To sustain that burden in the instant case, plaintiff introduced into evidence substantially all of the trial and appellate record in Gowin v. Heider. The trial court, as we mentioned, found generally for defendant upon all material issues of fact. This, of necessity, includes a finding that plaintiff was an active participant in the conduct which created liability in Gowin v. Heider, supra, and that those events were not an "accident" within the meaning of defendant's policy of insurance. Despite plaintiff's assertion to the contrary, these were issues of fact. The record supports the trial court's finding. The judgment is affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2042496/
|
382 Mass. 328 (1981)
415 N.E.2d 214
WILLIAM SETTERLUND
vs.
GROTON-DUNSTABLE REGIONAL SCHOOL COMMITTEE.
Supreme Judicial Court of Massachusetts, Middlesex.
November 5, 1980.
January 20, 1981.
Present: HENNESSEY, C.J., QUIRICO, BRAUCHER, KAPLAN, & WILKINS, JJ.
Brian A. Riley for the plaintiff.
Henry G. Stewart for the defendant.
HENNESSEY, C.J.
The plaintiff appeals from judgments of a Superior Court judge dismissing count 1 of his complaint, in which the plaintiff alleged that he had been dismissed from his full-time teaching position and reassigned to a half-time position in violation of G.L.c. 71, § 42, and granting summary judgment for the school committee (the committee) on count 2 of the complaint, in which the plaintiff sought a declaration that his salary had been reduced in violation of G.L.c. 71, § 43. We hold *329 that summary judgment was correctly granted on count 2 but that count 1 was erroneously dismissed.
The plaintiff is a tenured teacher in the art and related arts department at the Groton-Dunstable Regional High School. He has been continuously employed there since 1968. In May, 1979, he was notified by the superintendent of schools that the superintendent would soon recommend to the committee that the plaintiff's teaching position be reduced from full-time to half-time for the 1979-1980 school year. The stated reasons for this were "staff cuts, tax cut legislation, budgetary problems and program needs." The record does not show how the plaintiff was selected for this reduction from among the four, full-time tenured art teachers, although we were informed at oral argument that he was not the teacher with the least seniority. The complaint alleges that the action of the committee was "arbitrary, capricious and unjustified." The plaintiff objected to this reduction, stating in a letter to the committee that the accompanying salary reduction[1] was prohibited by G.L.c. 71, § 43, and requesting a hearing pursuant to G.L.c. 71, § 43A. A hearing was held, and the committee voted to accept the superintendent's recommendation. The plaintiff then filed his complaint seeking, inter alia, a hearing in Superior Court pursuant to G.L.c. 71, § 43A, reinstatement to his full-time position, and a declaration that his salary had been reduced without his consent. The judge below held, in effect, that the plaintiff's salary was not reduced in violation of G.L.c. 71, § 43, and that he was not entitled to a hearing because he was not "dismissed," as that term is used in G.L.c. 71, § 42. We first discuss whether the decrease in salary paid to the plaintiff violates G.L.c. 71, § 43.
General Laws c. 71, § 43, as amended through St. 1972, c. 464, § 4, provides in part that "[t]he salary of no teacher employed ... at discretion shall be reduced without his consent except by a general salary revision affecting equally *330 all teachers of the same salary grade." The committee urges us to construe "reduce" as meaning reduction in rate of pay. The plaintiff contends that "reduce" means reduction in amount of pay. We see no reason to resolve this particular dispute since the statute provides that, in either event, consent to the reduction in salary removes the reduction from the statutory prohibition. It is clear that the plaintiff, through his collective bargaining representative, has consented to a proportional salary for part-time teachers.[2]Moen v. Director of the Div. of Employment Security, 324 Mass. 246, 249-250 (1949). G.L.c. 150E, §§ 5, 6. The rate of pay for part-time teachers is a purely economic matter. As such it is within the scope of G.L.c. 150E, § 6, and may be the subject of collective bargaining. We do not read the requirement of G.L.c. 71, § 43, that the board obtain consent prior to reducing salaries, as requiring individual consent in all cases.[3] In the absence of an explicit legislative statement establishing an exception to the general rule, such individual consent is required only for the exercise of personal rights, as opposed to the collective consent appropriate for the exercise of merely economic rights. Cf. School Comm. of Brockton v. Massachusetts Commission Against Discrimination, 377 Mass. 392, 399 (1979); Alexander v. Gardner-Denver Co., 415 U.S. 36, 51 (1974). The *331 plaintiff may be legitimately disturbed by being made a parttime teacher, but he may not now complain about the rate at which those teachers are paid.
The plaintiff contends that his reduction from full-time teacher to part-time teacher is sufficient "dismissal" to entitle him to review of the committee's action in the Superior Court. General Laws c. 71, § 43A, as appearing in St. 1975, c. 337, provides that "[a]ny teacher ... employed at discretion ... who has been dismissed, demoted or removed from a position by vote of a school committee under the provisions of [G.L.c. 71, §§ 42, 42A or 63] may ... appeal therefrom to the superior court." If the teacher falls within this description,[4] he is entitled to review. The committee urges us to construe "dismissal" as meaning complete separation from employment, while the plaintiff claims that his reduction to part-time teacher is sufficient to trigger the statutory protection afforded tenured teachers in G.L.c. 71, § 43A. We agree with the plaintiff.
It has been held that a complete separation from the schools is a "dismissal," Nutter v. School Comm. of Lowell, 5 Mass. App. Ct. 77 (1977), although this is not the exclusive definition of "dismissal." We have held, for example, that for a teacher to be "dismissed" he need not be wholly banished from the school system, it being sufficient if he is excluded from the job or category of teacher. Black v. School Comm. of Malden, 365 Mass. 197, 204 (1974). For purposes of claiming entitlement to the procedural protection afforded by G.L.c. 71, § 43A, we think that a tenured teacher who is reduced to part-time employment without his consent has been "dismissed." "[T]o be consistent with the purpose of the School Code the words ["removed" or "dismissed"] must encompass any reduction in the extent of employment. The tenure provisions of the School Code were intended to protect experienced and veteran teachers against capricious, fickle and irregular exploits *332 of school boards.... And limiting the application of `removed' or `dismissed' to instances of complete termination would as a practical matter totally obliterate the protection intended by the statute. If this were the case, a board could merely nibble away and reduce one's employment until economic necessity forced the tenured teacher to resign. Such interpretation cannot be sanctioned." Caviness v. Board of Educ. 59 Ill. App.3d 28, 31 (1978). We find this reasoning persuasive.
The judgment dismissing count 1 of the complaint is reversed, and the case is remanded to Superior Court for further proceedings consistent with this opinion. The summary judgment on count 2 in favor of the committee is affirmed.
So ordered.
NOTES
[1] Plaintiff's salary as a full-time teacher in 1979-1980 would have been $17,473. He received half of this amount for his half-time services.
[2] The collective bargaining agreement between the school committee and the Groton-Dunstable Educator's Association provides that "[p]arttime teachers will be paid on a pro-rated basis, having been placed on the appropriate step of the Salary Schedule in the same manner as full-time teachers." The plaintiff's salary was reduced in accordance with this contractual provision.
[3] The plaintiff claims that "the concept of tenure is meaningless if a committee can reduce a teacher's salary in lieu of dismissal." We think that, consistent with G.L.c. 71, § 43, and c. 150E, § 6, a tenured teacher may have his salary reduced in only two situations: (1) if, as here, he is subject to a collective bargaining agreement, it may be reduced in accordance with the agreement; (2) if he is not subject to a collective bargaining agreement, he must individually consent to a reduction. We think that these conditions, in addition to our holding that the plaintiff has been "dismissed" and is entitled to review in Superior Court, adequately protect the plaintiff's tenure rights.
[4] The plaintiff has consistently characterized the committee's action as a dismissal. We do not discuss the difference in consequences, if any, if he were to characterize it as a "demotion" or "removal."
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1496584/
|
230 A.2d 715 (1967)
DISTRICT OF COLUMBIA, Appellant,
v.
William Dancy HOWIE, Appellee.
DISTRICT OF COLUMBIA, Appellant,
v.
Donald JONES, Appellee.
Nos. 4113, 4203.
District of Columbia Court of Appeals.
Argued March 13, 1967.
Decided June 26, 1967.
*716 Robert C. Findlay, Asst. Corporation Counsel, with whom Charles T. Duncan, Corporation Counsel, Milton D. Korman, Principal Asst. Corporation Counsel, and Hubert B. Pair and Richard W. Barton, Asst. Corporation Counsel, were on the brief, for appellant.
Marilyn Cohen, Washington, D. C., for appellee Howie.
Paul S. Sherbacow, for appellee Jones.
Before HOOD, Chief Judge, MYERS, Associate Judge, and QUINN (Associate Judge, Retired).
HOOD, Chief Judge.
These two appeals from the Juvenile Court present identical questions of law on similar factual situations. In each case appellee was charged with being the father *717 of an illegitimate child. In each case appellee was successful in having the charge dismissed by the court prior to trial, and the government has appealed from the dismissal.
Our statute provides for the institution of proceedings to establish paternity and provide support for a child born out of wedlock "within two years after the birth of the child, or within one year after the putative father has ceased making contributions for the support of the child."[1] The statute also provides that upon the filing of the complaint "the case shall be calendared forthwith for preliminary hearing," and that the clerk of the court "shall issue a summons requiring the accused to appear in court on a day certain for that purpose."[2]
In Perry v. District of Columbia, D.C.App., 212 A.2d 339, 340 (1965), we ruled that "the filing of the complaint is not sufficient to stop the running of the statutory time limitation unless such filing is followed by the issuance of a summons without unreasonable delay." In that case we held that a year's delay was not reasonable and ordered the complaint dismissed. It was on the basis of our ruling in Perry that the trial court dismissed the informations in the two cases before us.[3]
In appellee Howie's case the complaint was filed on January 15, 1965, charging him with being the father of a child born on November 30, 1962, and alleging that the complaint was filed within one year after he had ceased making contributions for the support of the child. (The mother's testimony was that the last payment was made in February 1964.) His first appearance in court was on March 4, 1965. The case was continued for preliminary hearing which was held on October 19, 1965.
In appellee Jones' case the complaint was filed on April 27, 1966, charging him with being the father of a child born on May 12, 1964. His first appearance in court was on June 16, 1966, and his case was continued for preliminary hearing which was held on October 11, 1966.
In each case the trial court at the preliminary hearing found that the mother's testimony made out a prima facie case requiring trial, but thereafter in each case ordered the information dismissed on the authority of our decision in Perry. On these appeals the government argues that the trial court misconstrued the ruling in Perry.
In Perry we were concerned with the long delay (over one year) between the filing of the complaint and the issuing of the summons. The requirement of the statute that upon the filing of the complaint, the case be "forthwith" calendared for preliminary hearing and a summons be issued, indicated to us that it was intended that when a complaint is filed the defendant should be notified with promptness of the existence of the charge against him. Accordingly, we held that the filing of the complaint did not stop the statutory time limitation unless it was followed by the issuance of a summons without unreasonable delay. If this were not so, a charge could be pending indefinitely against a defendant who was totally unaware of its existence.
We did not hold in Perry and we do not now hold, that the word "forthwith" as used in the statute means "immediately." "Forthwith" as used in statutes, has been given a variety of meanings. We hold that *718 forthwith as used in our statute, means without unreasonable delay.[4]
In Howie's case there was a lapse of thirty-four days between filing of the complaint and the issuance of the summons. In Jones' case the lapse was forty days. While it may appear that the summons in each case could have been issued with greater promptness, we are not prepared to say that the delay in either case was so great as to warrant dismissal of the complaint. It may be noted that the statute places the duty of issuing the summons not upon the mother or the prosecuting authority but upon the clerk of the court. The summons, unlike the ordinary summons in civil cases, does not merely call for the filing of an answer but requires defendant to appear in court for a hearing. Therefore, before issuance of a summons the case must be calendared for a definite date. The fixing of a date necessarily requires consideration of the court's other engagements, and it is common knowledge that the Juvenile Court handles a tremendous number of various proceedings. As a very practical matter, the calendaring of the case for preliminary hearing and the issuance of the summons cannot be done immediately upon the filing of the complaint. We hold there was no unreasonable delay in the issuance of a summons in either case.
Appellees also argue that in each case we must consider the time lapse from the filing of the complaint to the actual date of the preliminary hearing (about nine months in Howie's case and about five months in Jones' case) because, they argue, the initial appearance in court did not constitute the preliminary hearing contemplated by the statute.
In District of Columbia v. Mock, D.C.App., 217 A.2d 113, 114 (1966), we pointed out that while the statute provides for a preliminary hearing, it is silent as to the nature and purpose of such hearing. There we said that "the practice appears to be that at the preliminary hearing the court makes a determination of whether reasonable or probable cause exists for prosecuting the complaint", and we found no fault with such procedure. The practice also appears to be that the initial appearance in court partakes of the nature of an arraignment and that the case is then continued for preliminary hearing either because the parties are not prepared for the hearing or the court's schedule will not permit it. We likewise find no fault with this procedure. The essential requirement is that, upon the filing of the complaint, the defendant be notified without unreasonable delay of the pendency of the charge against him and the nature of the charge. The defendant may then take such action as he deems necessary to protect his rights. The records here do not disclose that either appellee objected to the continuance or made demand for a speedy preliminary hearing. Paternity proceedings are noncriminal in nature, and we know of no principle justifying dismissal of a noncriminal proceeding because of delay due to the court's congested docket.
With respect to any claim of the denial of a speedy trial, we also ruled in Perry, and we adhere to that ruling, that the constitutional guaranty of the right to a speedy trial "in all criminal prosecutions" does not apply to paternity cases.
The orders dismissing the informations are reversed.
NOTES
[1] D.C.Code 1961, § 16-2343 (Supp. V 1966).
[2] D.C.Code 1961, § 16-2345 (Supp. V 1966).
[3] Although the proceeding is instituted by a verified complaint of the mother (D.C. Code 1961, § 16-2344, Supp. V 1966), the prosecution is by information based upon the complaint. (D.C.Code 1961, § 16-2342, Supp. V 1966). Apparently the customary procedure is, as was in these two cases, to file the information on the same day the complaint is filed.
[4] D.C.Code 1961, § 16-2356 (Supp. V 1966), provides that the subchapter dealing with paternity proceedings "shall be so interpreted as to effectuate the protection and welfare of the child involved * * *."
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434244/
|
376 S.W.2d 526 (1964)
Jimmie A. WOODFORD, Appellant,
v.
COMMONWEALTH of Kentucky, Appellee.
Court of Appeals of Kentucky.
March 6, 1964.
Tom Garrett, Paducah, for appellant.
Robert F. Matthews, Atty. Gen., F. E. Wood, Asst. Atty. Gen., Frankfort, for appellee.
*527 MONTGOMERY, Judge.
Jimmie A. Woodford was convicted of voluntary manslaughter for the death of Mildred Traughber. His punishment was fixed at three years' confinement in the penitentiary. On appeal he urges that the trial court erred: (1) In requiring the appellant on voir dire to examine the prospective jurors collectively instead of individually; (2) in permitting the Commonwealth's attorney to propound improper questions; (3) in failing to instruct on the whole law of the case; and (4) in refusing his counsel the right to discuss the failure to administer a degree of intoxication test.
On November 7, 1962, at approximately 11:15 p. m., two cars driven by appellant and Mildred Traughber, respectively, collied at the intersection of 17th and Jefferson Streets in Paducah. Mildred Traughber died from injuries suffered in the collision. Issues involved on the trial were whether appellant was under the influence of intoxicating liquor and whether he had run through a stop sign at the intersection.
After appellant's counsel had examined individually five prospective jurors on voir dire, the court refused to let him question individually each of the remaining prospective jurors. Thereafter, the questions were asked of the remaining seven prospective jurors and of two replacements collectively.
Appellant relies on the statement of purpose of voir dire made in Sizemore v. Commonwealth, Ky., 306 S.W.2d 832, and upon statements in Apkins v. Commonwealth, 148 Ky. 662, 147 S.W. 376; Olympic Realty Company v. Kamer, 283 Ky. 432, 141 S.W.2d 293; and Alexander v. Jones, Ky., 249 S.W.2d 35, to the effect that the accused through counsel is entitled "to examine the jurors separately upon their voir dire." See also Criminal Code, Section 213. Such was the old rule.
This case was tried after the adoption of the Criminal Rules of Procedure. RCr 9.38 provides:
"The court may permit the attorney for the Commonwealth and the defendant or his attorney to conduct the examination of prospective jurors or may itself conduct the examination. In the latter event the court shall permit the attorney for the Commonwealth and the defendant or his attorney to supplement the examination by such further inquiry as it deems proper. The court may itself submit to the prospective jurors such additional question submitted by the parties or their attorneys as it deems proper."
This rule quite obviously places the manner of conducting the voir dire examination in the discretion of the trial judge. It is recognized that the trial court, in an effort to expedite the selection of a jury, may "take over" the examination of the prospective jurors on voir dire. In a proper case, this could constitute an abuse of discretion. In the instant case, it has not been shown that there was an abuse of discretion. Webb v. Commonwealth, Ky., 314 S.W.2d 543.
On cross-examination of the appellant, the Commonwealth's attorney asked the following questions:
"113x Now did anything happen to you between the time you left Mayford and started down Sixth Street and came on down to where this accident occurred?
"A. No.
"114x Well did you I will ask you whether or not some police officers chased you before this accident?
"BY MR. GARRETT: I object, if the Court please.
"BY THE COURT: Overruled.
*528 "A. Didn't no police officers chase me.
"115x Didn't any police officers chase you?
"A. No.
"116x Did any police officers chase you at all that night before this accident?
"A. No.
"117x Are you sure about that?
"A. I am sure about that.
"118x Isn't it true that a police car did chase you and you outran them just before this accident happened?
"A. No.
"BY MR. GARRETT: I object, if the Court please.
"BY THE COURT: Overruled.
"119x Isn't that true?
"A. No, it's not.
"120x That did not happen?
"A. No, it did not."
There was no testimony of a police car chase and no further effort to prove any such chase. Similar conduct on the part of a Commonwealth's attorney was condemned as being unfair in Rowe v. Commonwealth, Ky., 269 S.W.2d 247. The repeated questions concerning a chase by a police car injected a false issue into the case which was highly prejudicial. Such conduct is inexcusable and unbecoming in an officer of the court whose duty is to see that a defendant is dealt with fairly and that his legal rights, as well as those of the Commonwealth's, are fully protected. Drake v. Commonwealth, 263 Ky. 107, 91 S.W.2d 1009; May v. Commonwealth, Ky., 285 S.W.2d 160; Arthur v. Commonwealth, Ky., 307 S.W.2d 182. After appellant answered in the negative, the continued questioning permitted by the court on the same matter was reversible error.
The questioning of appellant concerning whether a warrant for assault and battery had been issued was likewise improper. It concerned an incident involving another person at a time and place remote from the matter on trial. Swanger v. Commonwealth, Ky., 255 S.W.2d 38; Acres v. Commonwealth, Ky., 259 S.W.2d 38.
Appellant urges that the whole law of the case was not contained in the instructions. He insists that the court should have defined "wanton indifference" and "reckless conduct." In Jones v. Commonwealth, 213 Ky. 356, 281 S.W. 164, such failure was held to be error. In Dublin v. Commonwealth, 260 Ky. 412, 86 S.W.2d 136, the holding was contra. Inasmuch as there may be another trial, the better practice is to define the key terms used. Monson v. Commonwealth, Ky., 294 S.W.2d 78. While such words are commonly used, their legal meaning may not be so well understood.
The degree of intoxication, if any, of appellant was an issue. Counsel for appellant elicited testimony from the officers that no tests were administered to appellant to determine the degree of his intoxication. In his argument appellant's counsel discussed this proof, but he was prevented from analyzing the evidence and from drawing an inference from the failure to administer such tests. This was an error since counsel in his argument to the jury should have been permitted to "discuss the facts proved, draw reasonable deductions therefrom, and may attack the credibility of witnesses where his remarks are based on facts appearing in the evidence." Elliott v. Drury's Adm'x, 309 Ky. 814, 219 S.W.2d 3. The rule was stated thus in Sellards v. Commonwealth, 5 Ky. Law Rep. 329, 12 Ky.Op. 319:
"Where a party has a legal opportunity of strengthening or explaining a fact in the case and fails to avail himself of it, or to show his inability for a valid reason to do so, it is a fair subject for remark or candid argument upon the part of counsel."
Judgment reversed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434497/
|
312 S.W.2d 383 (1958)
H. PETREY D/B/A H. Petrey & Sons et al., Appellants,
v.
Bettie Ray WILLIAMS et al., Appellees.
No. 6760.
Court of Civil Appeals of Texas, Amarillo.
March 17, 1958.
Rehearing Denied April 21, 1958.
*385 Underwood, Wilson, Sutton, Heare & Boyce, Amarillo, Strasburger, Price, Kelton, Miller & Martin, Dallas, for appellants.
Ross H. Scott, Dallas, for appellees.
CHAPMAN, Justice.
This case involves pleas of privilege appeals. In Cause No. 11,854, in the District Court of Gray County, Texas, Bettie Ray Williams, Mary Louise Williams, by and through her next friend, C. B. Amerson, A. N. Williams, and Mrs. A. N. Williams sued H. Petrey d/b/a H. Petrey & Sons and W. G. McKnight for the death of Vean Orsborn Williams. In Cause No. 11,886, in the same court and county Marsha K. Poindexter, Darla Ann Poindexter and Larry Gann Poindexter, by and through their guardian, Kathryn Ann Poindexter Rudd sued the same defendants for the death of Marshall G. Poindexter. Both deaths grew out of a collision between a milk truck in which the deceased Williams and the deceased Poindexter were riding and the trailer part of a loaded gravel truck driven by C. J. Rogers, an employee of H. Petrey & Sons, who was hauling gravel for highway construction on Highway 66 in Gray County, Texas, W. G. McKnight was the contractor engaged in construction work on Highway 66 and had as one employee, E. R. Carter, a flagman who was directing the traffic at the time and place of the collision. These two suits were consolidated below for the purpose of hearing the pleas of privilege urged separately by both defendants in both suits and the controverting pleas filed by the plaintiffs in both suits as against both defendants. A single order was entered in the consolidated suits overruling the pleas of privilege of both defendants in both suits. Both defendants have appealed and filed their separate briefs. Defendant Petrey, in his pleas of privilege, alleged his residence to be in Ft. Worth and asked that the suits against him be moved to Tarrant County, Texas. Defendant McKnight alleged his residence to be in Hunt County, Texas and asked that the suits against him be moved to that county.
Though the controverting affidavits of appellees do not allege specifically Subdivision 9a of Article 1995, Vernon's Ann. Civ.St., as the exception to exclusive venue in the county of one's residence as the exception they are relying on, it is obvious from their pleadings that is the statute they seek to invoke. The principal ground of negligence urged by appellees against Petrey was failure of Rogers to keep a proper lookout for vehicles traveling on Highway 66. Verious grounds of negligence were urged against defendant McKnight, including the failure of his flagman Carter to keep a proper lookout for vehicles using Highway 66 in its approaches to the intersection in question. Both defendants, by brief, assert all appellees failed to establish the necessary proof to sustain their allegations that defendants were guilty of the negligent acts or omissions complained of and that such negligent acts were the proximate causes of the deaths.
On the question of establishing negligence and that such negligence of each defendant was a proximate cause of such deaths appellees offered the deposition of C. J. Rogers, the driver of the gravel truck owned by defendant Petrey. There were many objections to the questions and answers included in the deposition but much of the testimony of Rogers offered in the deposition is in the record without objection. It is principally to that testimony we now refer.
Highway 66, where the collision in question took place, runs in an east-west direction. About two miles east of Groom in dirt road running north and south intersects Highway 66 on the south side of same. On the occasion of the collision Rogers was hauling gravel about eight miles over the dirt road south of the Highway, then proceeding west on Highway 66 about 15 miles to the area *386 of said Highway which was then under construction. His testimony introduced from the deposition showed a railroad about 50 or 60 feet south of Highway 66 running parallel with said Highway. The railroad dump was about ten feet high where he crossed it in hauling over the dirt road. At the intersection of the dirt road with Highway 66, E. R. Carter was flagman for McKnight. On the occasion in question he was using a red flag about a foot square on a two-foot stick, was standing on the east side of the dirt road about half way between the south side of the pavement and the railroad track, and was facing Rogers as the latter was driving north from the railroad toward the pavement on Highway 66. As Rogers came up to the track he noticed Carter waving him to come on. He waved four or five times for Rogers to keep coming forward to the Highway. According to Rogers' deposition Carter never, on the occasion in question, made any outcry for him to stop and never waved the flag for him to stop or for anyone traveling on the highway to stop for the gravel truck proceeding north from the dirt road onto Highway 66. Rogers noticed the truck and a pickup to his left, west of him, proceeding east on Highway 66 as he started onto the highway. He was asked if the vehicles to the west were as much as a mile away and his answer was, "Possibly, maybe three-fourths, maybe a half * * *."
The distance from the bumper of his truck to the rear end of his trailer attachment was about 35 feet. The width of the pavement on Highway 66 where he came onto it was about 25 or 30 feet. About the time he had taken up the south half of the pavement with the tractor part of his truck, still proceeding north very slowly, he got a glimpse of a two-tone passenger car going west on the highway, which he had never seen until it was right in front of him. With respect to this car his deposition related:
"Q. But you had not observed or seen the car which passed in front of you until it got almost immediately north of your truck, is that right? A. Yes, sir, I didn't see him until he come direct in front of me where I could see him out of the windshield.
"Q. At that time he was still slightly somewhat to the east of you? A. I would say he was, not too far.
"Q. But he was close enough that you knew if you didn't apply your brakes you would have a collision with him, is that correct? A. That is right.
"Q. And you hadn't seen him coming when he was further on down the road? A. I hadn't seen him anywhere. I still don't know where he came from.
"Q. At that time, Mr. Rogers, judging from your own speed, had you not applied the breaks, did you have plenty of time to cross before the Borden truck would have gotten to the intersection? A. Yes, yes I really think so."
The testimony from the deposition shows that automobiles to the east down Highway 66 could be seen three-fourths of a mile away. The deposition also shows that the two-tone car was being driven between 40 and 50 miles an hour and had to take to the north shoulder of the highway in passing in front of the truck. We believe this testimony is amply sufficient to show that appellant Petrey's driver, Rogers, and McKnight's flagman, Carter were each negligent in failing to keep a proper lookout and that said failures were proximate causes of the collision and resulting deaths. Even if Rogers was looking to the flagman to properly guide him the flagman's presence did not relieve him of his duty to keep a proper lookout before driving onto the highway. Had he been keeping a proper lookout he certainly would have seen the two-tone car before it was right in front of his windshield. We also believe the testimony is sufficient to *387 show McKnight's flagman, Carter was guilty of negligence in directing the Petrey truck to proceed onto the highway when it did not have sufficient time to clear the roadway ahead of approaching traffic and that such negligence was a proximate cause of the resulting deaths. It is obvious he could not have been keeping a proper lookout for traffic on the highway when his face was turned to the south and away from it. Had only the vehicles from the west been approaching the intersection the appellants' contentions that appellee failed to prove negligence and that the respective acts of negligence were proximate causes of the deaths might have been well taken. In that event their argument that the testimony showed the Borden truck alone caused the collision would have some weight, but they overlook the fact that the testimony shows failure on the part of both Carter and Rogers to keep a proper lookout to the east, and that had the appearance of the two-tone car traveling from east to west not caused the truck to stop after it was on the highway it would have cleared the highway for the Borden truck to pass.
Appellants' objections in several instances to leading questions would without a doubt, have been good had the hearing been before a jury. It might even be said some of them were good in a hearing before a court, but it requires no citation of authority for us to say that since there is sufficient evidence of probative value not objected to, those questions which were leading did not constitute grounds for reversal.
Much space in appellant, Petrey's brief, is devoted to the negligence of the parties in the Borden truck. If the testimony is the same on a trial on the merits there will be no doubt of the negligence of the driver of the Borden truck, but such being a defensive matter it is immaterial in the instant case. Janes Gravel Co., Inc. v. Stewart, Tex.Civ.App., 265 S.W.2d 874. Particularly do we say it is immaterial under the fact of this case. Both appellants assign as error the action of the trial court in denying their respective pleas of privilege in the Poindexter case because the testimony fails to identify any plaintiff named in the Poindexter cases. We have checked the testimony carefully and find not one shred of evidence that establishes the named plaintiffs as the beneficiaries of the deceased Poindexter. It is true the petition was referred to, adopted, and made a part of the controverting affidavit, but the affidavit was not introduced in evidence.
The venue facts which a plaintiff, desiring to sue a defendant outside the county of defendant's domicile, must allege and prove, if the defendant asserts his privilege, are those which are stated in the particular exception of Article 1995 that is applicable or appropriate to the character of suit alleged in plaintiffs' petition. Compton v. Elliott, 126 Tex. 232, 88 S.W.2d 91.
Appellees, in the Poindexter case, having pleaded such facts as to bring them within Exception 9a of Article 1995 they had the burden of proving that which is set out in said section as being necessary in order to retain venue in a county other than the county of defendants' residences. The third requirement of said Section 9a is that plaintiff must prove that the negligent act or omission relied on was a proximate cause of plaintiffs' injuries. The proof is completely void of any testimony showing the named plaintiffs as beneficiaries of the deceased, Poindexter. If they are not his beneficiaries the plaintiffs suffered no legal injuries. In order to show they suffered legal injuries they would have to prove their relationship to him. By brief, appellees in the Poindexter case assert the relationship of statutory beneficiaries is a matter of proof to be presented upon the trial of the case on its merits. This, of course, is true, but such statement overlooks the fact that one of the necessary elements that must be proven under the 9a Exception is that the negligent act or omission was a proximate cause of plaintiffs' injuries just the same as the element that an act or omission *388 of negligence occurred in the county where suit is filed. The assignment just discussed is therefore sustained. All other assignments are overruled. (Emphasis supplied.)
Appellees, having failed to prove one of the necessary elements of the venue exception relied on in Cause No. 11,886, the judgment of the trial court in that case is reversed and rendered. Said cause alleged against defendant, Petrey, is ordered transferred to Tarrant County, Texas, and the cause alleged against defendant McKnight is ordered transferred to Hunt County, Texas.
In other respects the judgment of the trial court which retains venue in Gray County in Cause No. 11,854, is affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434452/
|
312 S.W.2d 899 (1958)
Mabel E. COPLEY (Now Second National Bank of Ashland, Kentucky, Adm'r De Bonus), Appellant,
v.
Wilhelmina Kahne CRAFT, Appellee.
Court of Appeals of Kentucky.
May 2, 1958.
Bunyan S. Wilson, Jr., E. Poe Harris, Ashland, for appellant.
John L. Smith, Catlettsburg, P. H. Vincent, Ashland, for appellee.
WADDILL, Commissioner.
The issue on this appeal is whether there is evidence of probative value to support the verdict and judgment setting aside the will of Catherine Jiles dated September 26, 1955, on the ground that the will was obtained as the result of undue influence exerted by Mabel E. Copley, the sole beneficiary of the will.
Mrs. Jiles died on May 7, 1956, at the age of seventy-eight. The will in question and a will executed by the decedent on February 26, 1941, were offered for probate. The county court probated the will of September 26, 1955.
The first will of Mrs. Jiles gave a life estate to her then living husband and the remainder to Wilhelmina Kahne Craft, a niece and the appellee herein. Appellee was reared by Mrs. Jiles and lived in the Jiles home until she married.
Later, and after the death of Mrs. Jiles' husband, Mrs. Jiles agreed to make her home with appellee upon the condition that *900 appellee construct another bedroom with bath. Mrs. Jiles advanced $3,000 for this purpose. However, for personal reasons, Mrs. Jiles did not move to appellee's home and appellee did not offer to repay the advancement. Apparently, the close intimacy that existed between them cooled, for appellee admitted that she had not visited Mrs. Jiles during the last year of her life except for a few days before her death.
Approximately four months before Mrs. Jiles made her last will, she executed a deed to her house and lot to Floyd Roberts in consideration of Roberts furnishing her with a home for her lifetime. Roberts failed to perform his obligations under the deed and Mrs. Jiles desired to have the conveyance set aside. In seeking an attorney Mrs. Jiles contacted her friend, appellant's mother, explained her predicament, and asked for her advice. Through the assistance of appellant and her mother, Mrs. Jiles employed counsel and ultimately the conveyance was declared void for failure of consideration. Roberts v. Jiles' Ex'x, Ky., 307 S.W.2d 171. Meanwhile, appellant and her mother furnished Mrs. Jiles companionship and attended to her daily needs until shortly before her death.
Appellee places much significance upon a request made by Mrs. Jiles during her last illness that a certain lock box be brought to her. This lock box contained her last will, $10,000 in cash, $5,000 of building and loan certificates and certain personal papers, all belonging to Mrs. Jiles. The lock box had been deposited in the vault of a local bank in the joint names of Mrs. Jiles and appellant. It appears that Mrs. Jiles' purpose was to have appellant assist in the management of her business affairs. When appellant was told of Mrs. Jiles' wishes, she refused to comply unless Mrs. Jiles' attorney would accompany her to the bank. Subsequently, Mrs. Jiles had a serious stroke and the plans which had been made with the attorney to obtain the lock box were cancelled. The lock box was opened following Mrs. Jiles' death and the will, money and all documents belonging to Mrs. Jiles were intact. It is argued that these facts are relevant in establishing undue influence.
The dispositive clause of the last will of Mrs. Jiles reasonably explains Mrs. Jiles' cause for disinheriting appellee. The clause is:
"I am mindful of my relatives especially Wilhelmina Craft, * * * but as I am desirous in favoring the person who has been helpful to me and of great assistance to me during my most trying time, I hereby will, devise and bequeath my entire estate * * * to my good friend and person who has been most helpful to me Mrs. Mabel E. Copley."
Undue influence which will justify setting aside a will is such influence as obtains dominion over the mind of the testator to such an extent as to destroy his free agency in the disposal of his estate, and constrains him to do that which he would not have done if left to the free exercise of his own judgment. Undue influence must be shown to have been exercised at the time the will was executed. It is not sufficient that it be shown that there was merely an opportunity to exercise undue influence, but some evidence must be adduced showing circumstances from which it can reasonably be inferred that undue influence was exerted. Influence over the testator obtained by acts of kindness or by appeals to the feelings or understanding and not destroying free agency does not amount to undue influence. Madden v. Cornett, 290 Ky. 268, 160 S.W.2d 607; Palmer v. Richardson, 311 Ky. 190, 223 S.W.2d 745.
There is no evidence in this case that even remotely tends to show that undue influence was exerted upon Mrs. Jiles. Therefore, the circuit court erred in submitting this issue to the jury and in failing to sustain appellant's motion for a directed verdict.
*901 Since the appellant did not make a motion for a judgment notwithstanding the verdict, this Court must remand the cause for a new trial with directions that a verdict be directed for Mabel E. Copley if the evidence is substantially the same. Golladay v. Golladay, Ky., 287 S.W.2d 904.
For the reasons indicated the judgment is reversed, and the case is remanded for further proceedings consistent with this opinion.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434468/
|
312 S.W.2d 350 (1958)
I. H. NANCE, Executor, et al., Appellants,
v.
Roscoe VEAZEY et al., Appellees.
Court of Appeals of Kentucky.
January 24, 1958.
Rehearing Denied May 9, 1958.
Franklin & Franklin, Carroll S. Franklin, Madisonville, Thomas L. Withers, Withers & Lisman, Dixon, for appellants.
*351 Neville Moore, Moore & Morrow, Madisonville, for appellees.
CAMMACK, Judge.
This action was instituted in March, 1956, by the appellees, some of numerous second cousins of John V. Brown, deceased, against the appellants, the executor, beneficiaries and legatees under the will of John V. Brown, to contest the will on the ground of mental incapacity. This appeal is from a judgment on a jury verdict declaring that John V. Brown was a person of unsound mind.
The appellants contend that the trial court erred in (1) refusing to instruct peremptorily for the proponents; (2) refusing to admit competent evidence; (3) giving an improper instruction; and (4) admitting incompetent evidence.
The instrument purporting to be the will of John V. Brown was executed on July 25, 1952, when Mr. Brown was more than 70 years old. It was drawn by a lawyer at the home of Mr. Brown and was signed by the testator in the presence of two witnesses. This is the will:
"Will of J. V. Brown
"Know All Men By These Presents
"I, John V. Brown, of Hopkins County, Kentucky, of sound mind and memory do make this instrument my last will and testament as follows:
"1. I hereby appoint I. H. Nance my executor and direct that he sell all my personal property and real estate and convert same into cash, and empower him to convey the real estate and make deed thereto unto the purchaser.
"2. I hereby will and give unto the Olive Branch Church the sum of $500 for the trustees to use in maintaining the Church and Cemetery.
"3. I hereby will and give $100 to each of the following named churches: Rose Creek Church, Pleasant Grove Church, Antioch Church, Christian Church at Slaughters, Methodist Church at Slaughters, Baptist Church at Slaughters, Methodist Church at Hanson, Old Salem Church near Slaughters, Brick Church at Slaughters, Mt. Pleasant Church, Groves Chapel Church, Harmony Church near Vandersburg, Oklahome Church, Mt. Gillard Church.
"4. I will and give unto the County of Webster, Kentucky, the sum of $500 to be used for the purpose of improving and repairing the Webster County Alms House.
"5. To the following persons I will and give $100 each: the daughters of Willis J. Tapp, deceased; the daughters of Jack Tapp, deceased; and Brunett Ragon, Pauline Ragon and Georgia Ragon, and should one or more of these persons be deceased at the time of my death then their parts shall go to the above-named churches.
"6. I hereby direct that all my debts and funeral expenses be paid out of my estate as soon as practicable after my decease.
"7. Also, I will and give unto the Order of Eastern Star the sum of $300 to be used for the purpose of erecting and maintaining its home in or near Louisville, Kentucky, for the needy persons therein.
"8. It is my will and direction that should any one or more persons who are my heirs or beneficiaries herein be instrumental in contesting this will, the ones who do such will be barred from partaking of any part of my estate.
"9. I will and direct that the remainder of my estate, if any, shall go unto the above-mentioned churches, and alms house and Order of Eastern Star.
"In Testimony Whereof, witness my signature this 25th day of July, 1952.
"John V. Brown
"Witnesses
"Lacy Brooks
"Vera Hewlett"
*352 Prior to the execution of the will Mr. Brown had been in poor health. He had suffered a stroke and required hospitalization in 1949. In June and July of 1951 he again required hospitalization and at that time his illness was diagnosed as senile psychosis. Mr. Brown became unable to care for himself and his affairs, and on October 3, 1952, less than three months after the purported will was executed, he was adjudged an incompetent and placed in the care of a committee.
The evidence shows that Mr. Brown had always been an eccentric. His farm of approximately 600 acres, which he had inherited from his parents, began to run down shortly after the death of his father some 35 or 40 years ago. The fences were not kept up, and the fertility of the land was diminished due to improper cultivation. The buildings were never wired for electricity, making it difficult to get tenants. Tenants rarely stayed more than one year because Mr. Brown thought they were taking too much money from him if they raised a good crop.
Mr. Brown bought pure-bred cattle, but due to improper care, they became emaciated. By 1952 he had remaining from a herd of 30 or 40 head only one cow. The others had been lost in poor trades or by starvation.
Mr. Brown had many valued antiques in his home, including a clock, which he would not allow to be moved because it had always stood in the same spot. He kept a stove of his mother's, which he required people to clean whenever they used it. Prior to July, 1952, Mr. Brown began to lose interest in these prized possessions. The clock was given to a stranger and the stove was sold for scrap iron, as were the grates throughout the house. Mr. Brown left himself with no means for cooking his meager food other than small fires built with sticks on the hearth. The house, which was always untidy, became so filthy that the table had to be scraped before relatives would place food upon it.
Mr. Brown had always been a man who paid his own way, but during his later hospitalizations he seemed not to recognize a need for paying his doctors and nurses. A check for $1,000, though later given to a relative to deposit, was carried by him in his pocket like a worthless paper scrap. He made known his desire to sell the timber behind his house, which timber had been sold, cut, and removed some time before. He refused an offer of $20,000 for the oil rights on 70 acres of his land in 1950, but in 1952 he sold the fee to 68 of the same 70 acres for $3,500. (There is some testimony that Mr. Brown refused the $20,000 lease because of the adverse effect it would have on his income tax, and that there was some timber still standing on the farm, though it evidently was not behind the house).
By 1952 Mr. Brown upon occasion forgot the names of persons with whom he was well acquainted. The medical testimony indicates that senile psychosis affects the memory. Two doctors described it as an ailment which will not improve but which may grow worse. The doctors who had treated Mr. Brown stated that in his case it grew progressively worse. They said the disease affects the judgment and that though a person suffering from the affliction may express a plan it could be a plan without reason. On the other hand, the sufferer is said to have occasional lucid intervals when his memory is good. One of the doctors, the employer for some 31 years of one of the contestants, limited the periods of lucidity to a few minutes.
It is not argued that any witness who saw Mr. Brown on the day the will was executed stated that he lacked testamentary capacity on that day. Some neighbors testified that despite his peculiarities he had sufficient mental capacity to make a will. Upon probate of the will the witnesses to it stated that he was mentally competent when he signed it. One of these witnesses was not questioned at the trial in regard to Mr. Brown's competency, but the testimony of other witnesses who saw Mr. Brown on the day the instrument was *353 executed reaffirms their belief in his competency on that day. One of these witnesses stated that Mr. Brown recalled from memory each beneficiary named in the instrument.
The appellants argue that the court should have instructed peremptorily for them because the detailed eccentricities and physical infirmities connoted by the evidence failed to establish mental incompetence of a degree sufficient to prevent the making of a will. Their argument is supported by testimony of numerous friends and relatives of the deceased who opined that he was mentally competent. We believe that there was sufficient conflict in the evidence on the question of mental incapacity to present a question for the jury and that the trial judge was correct in refusing to give a peremptory instruction in favor of the will. The medical testimony which limited lucidity to a few minutes could, in itself, have constituted conflicting evidence sufficient to present a jury question.
The appellants attempted to introduce evidence concerning the reputation of the deceased lawyer who prepared the purported will. They argue that this evidence was competent because a reputable lawyer would not knowingly prepare a will for a person who lacked testamentary capacity, and that it was prejudicial error for the trial court to refuse its introduction. They cite several cases, among them Bennett v. Kissinger, 313 Ky. 417, 231 S.W.2d 74, (wherein we commented upon the favorable reputation of the lawyer who prepared the will) as authority for the competency of this evidence. They urge that it is highly improbable that we would have taken judicial notice of the reputation of an attorney in the case cited, and that surely there was some testimony to substantiate our comments. We do not believe that it was error for the trial judge to exclude this evidence, since the reputation of the lawyer who prepared the instrument was not a material matter. See Model Code of Evidence, Rule 526, p. 290. Generally, the reputation of a third person is admissible when that person's skill is in issue. Here the skill of the lawyer was not in issue. An attempt was made to put his reputation in issue to show his belief in the competency of the testator. The deceased lawyer's belief on this matter was not an issue on the trial. We do not believe that reputation evidence should be admissible under such circumstances.
The appellants argue that Instruction No. 1 is erroneous because it lacks the qualification "if any" following the italicized portion of this quoted excerpt:
"A person is of sound mind in making a will if at the time of its execution he has such mental capacity as to enable him to know the natural objects of his bounty, (if any), his obligation to them, the character and value of his estate, and to dispose of it according to a fixed purpose of his own." (Emphasis supplied and "if any" inserted to demonstrate point.)
The appellants urge that since Mr. Brown's closest surviving relatives were second cousins he had no natural objects of his bounty and that the instruction assumes otherwise erroneously. The instruction is similar to that found in Watson's Ex'r v. Watson, 137 Ky. 25, 121 S.W. 626, which has been approved many times. Stanley's Instructions to Juries, section 750, p. 573. When a qualification will clarify an instruction we have required its inclusion if there is to be a new trial. See Trosper Coal Co. v. Crawford, 152 Ky. 214, 153 S.W. 211. We do not believe the qualification was necessary in Instruction No. I. There was no implication that Mr. Brown owed any duties to the contestants. See Bramel v. Bramel, 101 Ky. 64, 39 S.W. 520, 522, 18 Ky.Law Rep. 1074, where we said that similar phraseology did not instruct that there was a duty to either the natural objects of the testator's bounty or to the persons upon whom his property was bestowed. Furthermore, since the natural *354 objects of a testator's bounty include the persons related to him by blood and affection (see 57 Am.Jur., Wills, section 65, p. 82) it is quite probable that the inclusion of the phrase "if any" would have been erroneous in the case at hand. The record shows that Mr. Brown had at least a passive affection for some of his second cousins.
The appellants urge vigorously that it was error for the trial court to allow the judgment of the inquest in which Mr. Brown was found to be an incompetent person to be read to the jury. We think this contention is well grounded and are reversing the judgment because of this error. Less mental capacity is required to make a will than to transact business generally. The former requires mental ability only, while the latter may require both physical and mental capacities. Consequently, the issues involved in an inquest to have a person placed in the care of a committee may differ materially from those involved in determining testamentary capacity. The findings of a jury in such an inquest would serve only to confuse and mislead the jury which hears evidence regarding capacity to make a will. Watson's Ex'r v. Watson, 137 Ky. 25, 121 S.W. 626.
The appellees argue that this evidence was competent and that the case of Oder's Ex'r v. Webster, 224 Ky. 551, 6 S.W.2d 690, is controlling here. In that case evidence of an inquest held five years after the execution of a will was held to be competent to corroborate a doctor's testimony concerning progressive mental and physical deterioration. The appellees argue that the testimony relative to the effects of senile psychosis in the case at hand warranted introduction of the inquest results.
We believe this case is distinguishable on its facts from the Oder case. In the Oder case there was a conflict in the medical testimony. One doctor testified that the testatrix had no serious sick spells, while another testified that she was suffering from dementia paralytica, a disease of progressive mental and physical deterioration, culminating in mental destruction and, ultimately, death. The Court said that the introduction of the inquest evidence was proper, pointing out that if for no other reason it corroborated the testimony of the doctor who discussed the progressive and fatal disease. In the instant case the doctors are in substantial agreement relative to both the ailment suffered by Mr. Brown and the effects thereof. On fact situations differing from the Oder case we have held such evidence to be inadmissible. See Teegarden v. Webster, 304 Ky. 18, 199 S.W.2d 728. Furthermore, the majority of the Court feel that the prejudicial effect of inquest evidence in a case of this type so far outweighs its probative value as to render it inadmissible. The minority of the Court believe that the evidence should be admissible, but that an admonition concerning its consideration should be given when requested. Therefore, the Oder case, insofar as it allows admission of such inquest evidence in cases involving testamentary capacity, is overruled.
The judgment is reversed and the case is remanded for proceedings consistent with this opinion.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434469/
|
312 S.W.2d 884 (1958)
Elsle W. KIVETT, Appellant,
v.
Charles KIVETT, Appellee.
Court of Appeals of Kentucky.
March 21, 1958.
Rehearing Denied May 29, 1958.
R. W. Keenon, C. Gibson Downing, Jr., Stoll, Keenon & Park, Lexington, for appellant.
*885 Daniel Boone Smith, Smith & Shehan, Harlan, for appellee.
MONTGOMERY, Judge.
Elsie W. Kivett, by appeal, challenges the correctness of the Chancellor's determination of the property to be restored to her and failure to award permanent alimony. The divorce was granted to the husband. Pending the appeal, Elsie W. Kivett filed a motion in the Bell Circuit Court to set aside the parts of the judgment relating to alimony and property restoration because of newly discovered evidence. CR 60.02. The right to proceed in this manner has been upheld. Wolfe v. Combs' Adm'r, Ky., 273 S.W.2d 33. This motion was overruled. Her appeal from that ruling has been consolidated with the original appeal.
The parties were married March 2, 1940. Until 1949, they lived in various places in Kentucky and Tennessee. During that period, appellee served forty-four months in the Navy and attended law school. In January 1949, appellee purchased a one-half interest in Cumberland Ford Motors, Inc., in Pineville. They lived there until they separated. In 1952, appellee and his associates in the Pineville business purchased the Harlan Motor Company, Harlan, Kentucky.
Appellant had been gainfully employed approximately all of her married life except for the three years prior to their separation. Part of the time she was the bookkeeper for the Pineville business. The parties are now in their middle forties. They had no children.
In August 1955, appellee attended an auto dealers' meeting at Kentucky Lake. Appellant accompanied him to visit her people in Murray. Appellee left her in Murray and did not return.
Appellee sued for divorce on October 16, 1955, on the ground of cruel and inhuman treatment. Appellant filed a counterclaim in which she sought a divorce on the same ground, as well as alimony and restoration of property. On the original appeal, appellant contends that she is entitled to alimony because the divorce was erroneously granted to appellee and that error was committed in the determination of the property restored to her. On the appeal from the order overruling her motion under CR 60.02, she insists that the newly discovered evidence is sufficient to warrant setting aside the portions of the judgment concerning property restoration and denial of alimony and that a new trial should be awarded on these issues.
The proof to sustain the charge of cruel and inhuman treatment on the part of appellant showed that she drank alcoholic beverages to excess, with accompanying misconduct, which appellee claimed was embarrassing to him. Other proof showed that appellant was cool toward appellee's parents and that she was quarrelsome, contrary, ill-tempered, and abusive. The witnesses for appellee consisted of members of his family. In the original proceeding, appellant acknowledged by letter and by statement a lack of fault on the part of appellee. This occurred before she learned of appellee's conduct as shown by the newly discovered evidence.
The depositions of appellant, appellee, and the present Mrs. Charles Kivett, formerly Jean Cowden Dickinson, were taken in support of the motion under CR 60.02. The proof is that Jean Cowden Dickinson had operated a florist shop next door to the business which appellee had conducted in Harlan. He frequented her shop during the two years prior to the Kivett separation. Appellee maintained an apartment in Harlan and spent several nights each week there during the latter part of this period. The day after appellee filed his divorce action, Jean left her husband and went to stay with her parents in Raymondville, Texas. She remained there until May 6, 1956, except for a three-day trip back to Harlan in December 1955. The proof was taken in her divorce action on that occasion, and her divorce was granted *886 on February 2, 1956. She obtained a property settlement from her former husband.
The Kivett divorce judgment was rendered on April 5, 1956. Jean and appellee testified that they did not see, or have any communication with, each other from the time she left Harlan in October 1955 until after her return to Harlan sometime following May 6, 1956, when they "happened to meet" at a cafe there. Jean and Charles saw each other a few times but did not "date" or "court". She returned to Texas on June 6, 1956. Charles "thought" he wrote her one time after her return. About the middle of June, he called her from "somewhere in Georgia" and proposed. They met in New Orleans and were married in Gulfport, Mississippi, on June 25, 1956. Each denied any romantic interest in the other prior to the May 6 meeting.
After the marriage, Jean lived with her parents in Raymondville, Texas. She did this for "economic" and other reasons, including a desire not to "shock" her parents. She continued to be known by her maiden name. No announcement of the marriage was made. Charles moved to Texas, living first at Harlingen, then Raymondville, and upon obtaining employment moved to Brownsville. Harlingen and Brownsville are both near Raymondville.
Appellant went to Brownsville in February 1957, where she remained for some time. While there, she obtained some letters written by Jean to Charles. He identified one as having been received by him in February 1957, a reading of which indicates that it was written shortly before Saint Valentine's Day and in the spirit of the day. In part, it reads:
"* * * My darling, did you see the moon tonight? This time last year I was looking at it and wishing. I'm still wishing, but 50 miles is better than 1550. But any distance that keeps me from you is too much. * * *"
Appellee and Jean denied that the letter referred to any relationship existing between them in 1956, prior to the granting of the Kivett divorce. Other letters indicate a desire to keep their marriage a secret in Kentucky. They admitted trying to regain possession of the letters but denied appellant's statement that Jean had threatened her or that Jean had told her "you little fool, you couldn't see what was going on under your nose all these years; Charlie and I have been in love for two or three years."
The divorce was granted under KRS 403.020(4) (d), which is:
"Habitually behaving toward him, for not less than six months in such cruel and inhuman manner as to indicate a settled aversion to him or to destroy permanently his peace or happiness."
All of the proof is inconsistent with any finding that appellant had a settled aversion to appellee. The Chancellor must have found that appellant's conduct was such as "to destroy permanently his (appellee's) peace or happiness". The newly discovered evidence shows that there was a relationship in existence between appellee and Jean prior to his divorce decree. Their association in Harlan, his keeping an apartment and staying there at night, and the quoted letter all indicate that the subsequent marriage did not follow a casual relationship and it was not a spur of the moment matter based on a whirlwind courtship. Sober, mature people do not enter into the serious contract of marriage in such manner, and this is especially true after each has just become disengaged from such a contract. The evidence as to the conduct of appellee and Jean subsequent to the date of divorce corroborates the establishment and existence of more than a casual relationship between them prior to the divorce.
When a divorce has been granted, a review of the evidence is proper for the purpose of determining the correctness of the decree as to other matters adjudged, *887 including alimony and restoration of property. KRS 21.060. Millar v. Millar, Ky., 286 S.W.2d 882; McQueen v. McQueen, Ky., 294 S.W.2d 75. The rule is stated thus: "* * * alimony may be awarded where the husband obtained a divorce but the evidence did not justify the divorce, * * * or where the husband was the one whose conduct caused the final separation of the parties. * * *" See annotation and collected cases in 34 A.L.R.2d § 10, page 342.
In such cases, the court should be governed by the element of "comparative rectitude" that is, it should consider the relative degree of misconduct of the parties and their relative responsibility for the termination of the marital relations when deciding whether to award alimony to the wife. 34 A.L.R.2d § 10, page 344; Flood v. Flood, 302 Ky. 167, 194 S.W.2d 166; Gnadinger v. Gnadinger, 309 Ky. 660, 218 S.W.2d 681. Giving such consideration to the present case, it is readily determined that except for appellee's conduct and relation with Jean Cowden Dickinson, there might never have been any separation of these parties. It, therefore, is concluded that the conduct of appellee, although at the time unknown to appellant, contributed to the marital separation; that the destruction of his peace or happiness was in part, if not wholly, due to the conduct of someone other than appellant; and that the motion under CR 60.02 should have been sustained and a new trial awarded on the question of alimony.
A restoration of property was adjudged to the appellant. She recovered $3,497.04, with interest from February 1, 1949, as the amount contributed by her toward the purchase of the interest in the Cumberland Ford Motor Company, Inc. Appellant recovered $1,500, with interest from date of judgment, as her part of the funds of a joint bank account. In addition, she was awarded a 1955 model Ford automobile, the household goods and furniture in their home. It was decreed that the title to the residence property occupied by the parties as a home and conveyed to them jointly should be conveyed to appellee as having been received by appellant in consideration of the marriage. She also was directed to deliver the possession of a life insurance policy to the appellee. No question is raised concerning the $750 attorney fee allowed to appellant's counsel who represented her in the lower court. She has other counsel on this appeal.
Appellant contends that she should have been awarded by way of restoration of property a proportionate part of the value of the property acquired during the marriage commensurate with the part of the purchase price contributed by her. She claims that the property had been acquired and accumulated by the joint effort, thrift, enterprise, and earnings of the parties and that by mutual consent the title to most of the property had been placed in the name of appellee. The property consisted of: (1) a one-half interest in the Pineville business; (2) a one-third interest in the Harlan Motor Company; (3) the residence; and (4) household goods, auto, and other miscellaneous personalty valued at approximately $4,500. The businesses in which the interests had been purchased had prospered. The evidence as to the value of the property is vague and contradictory, although a substantial value is indicated. In our view, it is unnecessary to consider the evidence as to value.
The governing statutes provide for the restoration of property "obtained from or through the other before or during the marriage and in consideration of the marriage", KRS 403.060(2), "or by reason thereof; and any property so obtained, without valuable consideration, shall be deemed to have been obtained by reason of marriage." KRS 403.065. The word "restore" means "to give back (something which has been lost, or taken away); to make restitution of; to return." Restoration means the "putting back to a former position or condition." Webster's New International Dictionary, Second Edition
*888 It was the intent of the enactors of the statutes that the property of one party to a marriage obtained by the other party without valuable consideration or without any consideration other than by reason of the marriage should be given back to the original party upon the dissolution of the marriage. It was intended that each party should be returned as nearly as possible to the status or condition in which the party would have been except for the marriage. The restoration of a maiden or former name is typical. KRS 403.060 (4); Rayburn v. Rayburn, 300 Ky. 209, 187 S.W.2d 804.
In order to effectuate such an intention and insofar as the property may be determined or identified, the same property should be returned to the original owner. Duvall v. Duvall, 147 Ky. 426, 144 S.W. 78, $500; Eversole v. Eversole's Adm'x, 169 Ky. 234, 183 S.W. 494, insurance premiums; Burns v. Burns, 173 Ky. 105, 190 S.W. 683, articles of personal property; Ritchie v. Ritchie, 311 Ky. 569, 224 S.W.2d 648, specific real estate; Eckhoff v. Eckhoff, Ky., 247 S.W.2d 374, jointly owned real estate.
This is the general rule as exemplified in King v. King, 214 Ky. 171, 283 S.W. 73, where the husband paid $3,800 advanced by his wife on the purchase price of $6,500 for land. The judgment awarding the wife $3,800 plus accrued interest with a lien against the land was affirmed despite the argument of the husband that she was entitled to recover only 38/65 of the land's value. The contention as to proportionate restoration was the same as is made by the appellant here. See also Cotton v. Cotton, 306 Ky. 826, 209 S.W.2d 474, where the husband was ordered to reconvey title to an undivided one-third interest in a farm and the wife was ordered to restore to him $300 of $700 paid on the purchase price of the land. The remaining $400 had been paid by the wife.
A second basis for the general rule thus appears. So long as the property in which the wife's money is invested increases in value, the wife would benefit, but should the property decrease in value, the wife would be forced to bear the burden of her husband's speculation and he would be free to do so without hazard. The terms "wife" and "husband" in the statement of this rule are interchangeable, according to the particular case. Apparently, in the King case, the land value had decreased. We feel that the rule as stated is a protection for the spouse whose property may have been subject to speculation by the other spouse. The operation of the rule must not be made to depend on the rise or fall of property values. This would be foreign to the original concept of restoration of property. There is no merit in the distinction sought by appellant that the King case dealt with an advancement or loan.
Appellant has cited many cases as supporting her right to restoration of a proportionate part of the property owned by appellee. All of these cases have been studied and are distinguishable.
A subpeona duces tecum was served on appellee directing him to produce various records of the Cumberland Ford Motor Company, Inc., and Harlan Motor Company for the years 1954 and 1955. These included income tax returns, books, ledgers, inventories, financial statements, and other business records. The records were sought for the purpose of showing the value of appellee's interests in the two businesses. The ruling of the Chancellor in quashing the subpoena is not prejudicial under the facts of this case.
The judgment is affirmed as to the restoration of property and is reversed with direction to award a new trial on the question of alimony.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434471/
|
312 S.W.2d 422 (1958)
C. J. GRIFFIN, Administrator et al., Appellants,
v.
Charles A. HELFRICH et al., Appellees.
No. 3531.
Court of Civil Appeals of Texas, Waco.
April 11, 1958.
Leake, Henry, Golden & Burrow, Dallas, for appellants.
Alton King, Palestine, Roger Fruin, Paris, Ill., for appellees.
McDONALD, Chief Justice.
This is a trespass to try title suit involving ½ of the minerals under a 50 acre tract of land in Leon County. Parties will be referred to as in the trial court. Plaintiffs are the sons and heirs of J. A. Helfrich, who is deceased; and defendants *423 are the heirs and administrators of George W. Walker, who is deceased.
Plaintiffs alleged that George W. Walker obtained the mineral deed to the 50 acres of land in Leon County from W. M. Gore and wife on 19 April 1922 for $100; that Walker thereafter sold the mineral deed to J. A. Helfrich on 26 July 1922 for $1,000; that J. A. Helfrich had the deed from Gore and wife to Walker and the transfer from Walker to Helfrich recorded in the Deed Records of Leon County in August of 1922; that in 1939 the validity of the conveyance from Gore and wife to Walker was questioned as being a forgery by W. D. Recknor, a subsequent grantee of Gore and wife; that Recknor filed suit in Leon County against Walker and Helfrich; that Walker in such trial judicially admitted and personally testified that he had sold all of his interest in the minerals of the land in controversy to Helfrich; and that defendants as heirs of Walker are estopped from denying the sufficiency of the sale and transfer from Walker to Helfrich. In the foregoing cause, Helfrich had cross-acted against Walker for the $1,000 he paid him for the mineral deed in the event it was determined to be a forgery. The foregoing cause was tried to a jury, which determined that the deed from Gore and wife to Walker was not a forgery. Judgment was entered that Recknor take nothing. The judgment further provided that Helfrich take nothing on his cross-action for the $1,000 (since the cross-action for the $1,000 was only in the event that the mineral deed for which he paid the $1,000 should be determined a forgery and fail).
Plaintiffs further plead that there was some $5,700, accumulated from oil and gas runs on the property which was being held by the Lone Star Producing Company, which belongs to plaintiffs, but was being withheld from them because of the cloud cast on plaintiffs' title by defendants.
Trial was before the court without a jury, which rendered judgment for plaintiffs for title and possession to the land involved. Defendants appeal, contending: 1) Plaintiffs fail to establish a chain of title into themselves; 2) the trial court erred in admitting plaintiffs' Exhibit 2, which was the transfer of the royalty deed from Walker to Helfrich; 3) the royalty deed from Gore and wife to Walker could not be incorporated by reference into the transfer from Walker to Helfrich as it was not referred to with certainty; 4) the take nothing judgment in the 1939 case is res judicata of any interest of plaintiffs in the land; 5) plaintiffs' cause of action was barred by laches; 6) the trial court erred in refusing to admit certain evidence.
The trial court, upon request, filed Findings of Fact and Conclusions of Law, pertinent portions of which follow:
Findings of Fact
1. W. M. Gore and wife are the common source of title.
2. George W. Walker is the same person as Geo. W. Walker who is named as grantee in the royalty deed dated 19 April 1922 from W. M. Gore and wife, and recorded in Vol. 59, pages 355, 356, Deed Records of Leon County, Texas.
3, 4, 5, 6 and 7. George W. Walker is dead and the defendants herein are his children, heirs, and legal representatives.
8. J. A. Helfrich is the same as J. A. Helfrick, grantee in conveyance and transfer dated 26 July 1922 from Geo. W. Walker, and recorded in Vol. 59, page 355 of the Deed Records of Leon County, Texas.
9, 10 and 11. J. A. Helfrich is dead and plaintiffs herein are his sole beneficiaries and heirs.
12. W. M. Gore and wife, on 19 April 1922, for and in consideration of $100 paid to them by Geo. W. Walker, sold and conveyed to Geo. W. Walker the minerals in controversy in this case, such royalty deed being recorded in Vol. 59, pages 355 and *424 356 of the Deed Records of Leon County, Texas.
13. Thereafter on 26 July 1922, for and in consideration of $1000 paid by J. A. Helfrich to Geo. W. Walker, Walker signed and delivered to Helfrich the following conveyance and transfer, to-wit:
"In consideration of $1000, receipt of which is hereby acknowledged, I hereby sell and transfer to J. A. Helfrick the accompanying royalty deed of fifty acres of the land of W. M. and Sady Gore of Leon County, Texas."
"Dated at Paris, Illinois, this 26 day of July, 1922.
"Geo. W. Walker"
(There follows an acknowledgment before a Notary Public).
which said transfer, together with the Notary's certificate attached, were filed for record and recorded on August 28, 1922, in Vol. 59, page 355 of the Deed Records of Leon County, Texas.
14. That on said July 26, 1922, at the time the said Geo. W. Walker executed and delivered the above transfer, and as a part of the same transaction, he also delivered to the said J. A. Helfrich the then unrecorded royalty deed dated April 19, 1922, from W. M. Gore and wife, Sady Gore, to Geo. W. Walker, now of record in Vol. 59, pages 355, 356, of the Deed Records of Leon County, Texas.
15. George W. Walker, by said transaction set out in Nos. 13 and 14 above, for the consideration of $1,000 paid to him by J. A. Helfrich therefor, intended to, and did, sell to the said J. A. Helfrich, and J. A. Helfrich, intended to purchase, and did purchase, from the said Geo. W. Walker all of the ½ of the oil, gas, and other minerals described in and covered by said royalty deed dated April 19, 1922, from W. M. Gore and wife, Sady Gore, to Geo. W. Walker.
16. Said royalty deed dated April 19, 1922, from W. M. Gore and wife, Sady Gore, to Geo. W. Walker did accompany said transfer dated July 26, 1922, from Geo. W. Walker to J. A. Helfrich; and such royalty deed is the identical royalty deed referred to in said transfer to J. A. Heldrich as "the accompanying royalty deed of 50 acres on the land of W. M. Gore and Sady Gore of Leon County, Texas."
17. On August 28, 1922, J. A. Helfrich preserved both vital muniments of his title by filing for record with the County Clerk of Leon County, Texas, both of said muniments of title, to-wit; the royalty deed dated April 19, 1922, from W. M. Gore and wife, Sady Gore, to Geo. W. Walker, recorded in Vol. 59, pages 355 and 356, and the conveyance and transfer dated July 26, 1922, from Geo. W. Walker to J. A. Helfrich, recorded in Vol. 59, page 355, both in the Deed Records of Leon County, Texas.
18. On said date of August 28, 1922, the County Clerk of Leon County, Texas, duly recorded both of said documents in the Deed Records of Leon County, Texas. He recorded the transfer from Geo. W. Walker to J. A. Helfrich, described above, together with the Notary's certificate attached, on page 355 of Vol. 59; and immediately thereafter and following such recordation, and beginning on the same page, and continuing on the following page, 356, of said Vol. 59, he recorded the royalty deed from W. M. Gore and wife, Sady Gore, to Geo. W. Walker, described above. That is, the County Clerk of Leon County, Texas, recorded both of said documents together, one immediately following the other, without any intervening recordation.
19. On August 29, 1922, after the recordation of the two documents set out above, the County Clerk of Leon County, Texas, returned both of said recorded documents by mail to J. A. Helfrich, Paris, Illinois.
20. The transfer dated July 26, 1922, from Geo. W. Walker to J. A. Helfrich, *425 together with the Notary's certificate, are genuine; that said transfer and said Notary's certificate are each ancient documents; that they each have been in existence for more than 30 years prior to the trial of this law suit; that said transfer and Notary's certificate have been recorded in the Deed Records of Leon County, Texas, for more than 30 years prior to the trial of this case and the same are ancient records. Although defendants pleaded forgery, no evidence of forgery was offered.
21. I find that in Case No. 7505, styled W. D. Recknor v. W. M. Gore, et al., filed in the District Court of Leon County, Texas, in 1939, W. D. Recknor sued Geo. W. Walker, J. A. Helfrich, and W. M. Gore, the said W. D. Recknor claiming that the deed from Gore et ux. to Geo. W. Walker, of date April 19, 1922, and of record in Vol. 59, page 355, Deed Records of Leon County, Texas, was a forgery, this being one of the deeds in plaintiffs' chain of title and under which the plaintiffs claim. In this suit, J. A. Helfrich filed a cross-action against Geo. W. Walker, asking that if the deed from Gore et ux. to Walker was found to be a forgery, that he recover of and from the said Walker the $1,000 he paid Walker for the mineral interest in litigation in this suit. The jury found that the deed was not a foregery, and the court entered judgment denying to the plaintiff Recknor all relief sought, and the cross-plaintiff Helfrich was denied any relief on his cross-action. The said J. A. Helfrich only asked relief on his cross-action in case the deed from Gore et ux. to Walker was found to be a forgery. The defendants in this case (being 3531) claim this mineral interest as heirs and/or legal representatives of Geo. W. Walker, this being the same Geo. W. Walker involved in Cause No. 7505. The issue of the sufficiency of the deed from Geo. W. Walker to J. A. Helfrich was in this case, to-wit, No. 7505, and was in fact settled in this law suit, it being put in issue when Geo. W. Walker filed his answer, consisting of a general demurrer and a general denial, to the cross-action of J. A. Helfrich, and being disposed of in the judgment in said cause. Had the deed not been sufficient from Walker to Helfrich then the said Helfrich would have recovered the $1,000 paid Walker therefor. The heirs and/or legal representatives of Geo. W. Walker would be bound by the acts and conduct of Geo. W. Walker.
Conclusions of Law
"1. The title of plaintiffs to the mineral interest in litigation is good in said plaintiffs out of the common source, the description in the conveyance to the said J. A. Helfrich being sufficient by reference to another royalty deed where same was described and identified. And the title of said plaintiffs out of said common source is superior to the title of defendants out of said common source.
"2. The matters in litigation in this cause were litigated in Cause No. 7505, styled W. D. Recknor vs. W. M. Gore et al. in the District Court of Leon County, Texas, wherein the same land was involved, the same parties and/or their heirs or beneficiaries were before the court, and the same issues were passed on and decided. AND the judgment and decision in said Cause No. 7505 is res judicata of the matters and issues raised by defendants in this cause, and have heretofore been decided in said Cause No. 7505.
"3. Further, the acts and conduct of the said Geo. W. Walker in said Cause No. 7505, styled W. D. Recknor vs. W. M. Gore et al. in the District Court of Leon County, Texas, were such as to estop Geo. W. Walker, his heirs and/or legal representatives, from asserting any claim to the mineral interest involved in this suit, and said heirs and/or legal representatives are now estopped from asserting any claim thereto."
(We think the trial court's Conclusions of Law are in accord with the doctrine announced in Grimes v. Maynard, Tex.Civ. *426 App., 270 S.W.2d 282, writ refused, writ certiorari refused 349 U.S. 904, 75 S. Ct. 580, 99 L. Ed. 1241; and the authorities there collated.)
The substance of defendants' contentions in their six points is: 1) that the transfer from Geo. W. Walker to J. A. Helfrich is insufficient to incorporate the deed from Gore and wife to Walker; 2) the take nothing judgment in 1939 against Helfrich on his cross-action bars his heirs to recover in this case; 3) the evidence is insufficient to sustain and support the trial court's Findings of Fact.
We have very carefully considered this record, and conclude that the transfer dated July 26, 1922, executed by Geo. W. Walker to J. A. Helfrich, when considered in connection with the royalty deed to which it refers, not only conveys that instrument, but also all of the oil, gas and other minerals and interests described in and conveyed by such royalty deed dated April 19, 1922, from W. M. Gore and wife to Geo. W. Walker. We further hold that the judgment in Cause No. 7505, Recknor v. Gore et al., is res judicata of the title to the minerals in controversy here in plaintiffs. In this connection, defendants' contention that because there was a take nothing judgment entered against J. A. Helfrich on his cross-action, that such is res judicata against plaintiffs' asserting title to the minerals in controversy, is untenable. J. A. Helfrich only asked for a return of his $1,000 if the deed from Gore and wife to Walker be found a forgery. We further conclude that the evidence is ample to sustain the trial court's Findings of Fact, and that the trial court's Conclusions of Law are correct.
All of defendants' points and the contentions thereunder made are overruled, and the judgment of the trial court is affirmed.
HALE, J., took no part in the consideration and disposition of this case.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434477/
|
312 S.W.2d 354 (1958)
Anna DALZELL, Appellant,
v.
COMMONWEALTH of Kentucky, Appellee.
Court of Appeals of Kentucky.
February 14, 1958.
As Modified on Denial of Rehearing May 9, 1958.
*355 Miller & Griffin, Lexington, for appellant.
Jo M. Ferguson, Atty. Gen., John B. Browning, Asst. Atty. Gen., for appellee.
BIRD, Judge.
Anna Dalzell was convicted of wilfully and feloniously aiding, abetting or assisting another in the crime of abortion. She was fined one thousand dollars and sentenced to one year in prison. She appeals, claiming (1) that the court erred in not directing a verdict for her and (2) that the instructions were "so confusing as to make it impossible for the jury to render a correct verdict." We shall discuss the questions in the order stated.
The testimony introduced on behalf of the Commonwealth was briefly as follows: The prosecutrix became pregnant in Ohio and came with friends to a house at 151 North Mill Street in the City of Lexington, Kentucky. The defendant did at that time, and for twenty years previously, operate a rooming house at that address. The prosecutrix entered the building with her friend and went to one of defendant's upstairs apartments were she was directed by a man (not a physician) to go into a bedroom. She did as directed and there found a woman who, according to the prosecutrix, said nothing and did nothing except to sit in a chair. The man who had given the direction came into the bedroom and performed an operation on the prosecutrix that brought about a miscarriage. The woman in the chair sat through the operation, doing nothing and saying nothing. The defendant was later identified as the *356 woman in the chair by the prosecutrix and also by the friend who went to the apartment with her. A catheter was used in the operation and a box of catheters was found at defendant's house after her arrest. The man performing the operation directed that prosecutrix lay one hundred dollars on a table. This she did in defendant's presence and departed with her friends. She miscarried in a Cincinnati hospital and told her story to her physician. This led to a police investigation which eventually uncovered the parties accused.
The defendant testified that she was not in Lexington during the week in which the operation was performed. Three other persons, including the man identified as the one performing the operation, corroborated the defendant. Defendant testified that the catheters found at her house were left there by an elderly gentleman roomer who had a bladder ailment and who had died since leaving her house. However, a policeman swore that defendant told him that her doctor had used them in treating her own illness and had left them there.
It was strictly for the jury to determine whether or not the man had performed the operation and it was likewise for the jury to determine whether the defendant sat in the chair during the operation or whether she was out of town.
The jury found that she was the woman who sat in the chair while the operation was being performed by the man. The evidence was unquestionably sufficient for that finding.
The jury, however, found further that she had so participated in the commission of the crime as to be guilty of aiding, abetting or assisting as charged in the indictment. Was such a finding supported by the evidence? To constitute one guilty of aiding and abetting in the commission of a crime it is essential that evidence be introduced to show a plan or concert of action in its commission, or to show that the accused by overt act or pronouncement, has encouraged, assisted, or procured the principal to commit the unlawful act. One's mere presence at the scene of the murder is not sufficient proof of an unlawful act to submit that issue to a jury. English v. Commonwealth, 240 Ky. 446, 42 S.W.2d 706; Stacy v. Commonwealth, 221 Ky. 258, 298 S.W 696; Combs v. Commonwealth, 224 Ky. 653, 6 S.W.2d 1082; Gambrell v. Commonwealth, 282 Ky. 620, 139 S.W.2d 454.
There is proof to the effect that she ran the rooming house in which the operation was performed and that catheters suitable for the use of such operations were found there. We find her contradicted as to how those catheters happened to be there. Though saying not a word and doing not a thing we have proof that she knowingly sat through and watched to completion a felonious operation. With that evidence was she entitled to a directed verdict?
It is our opinion that reasonable men may have well concluded from her presence in one of her apartments that she provided the place for the illegal operation, a quite necessary contribution to this nefarious enterprise. It was likewise reasonable for them to determine that she was there for the purpose of providing assurance and confidence for the patients, another important contribution to such business. We too think that reasonable men may have quite logically concluded that the operator would not knowingly and willingly let the defendant see him commit a felony unless she too was a part of the felonious scheme. The jury from the evidence could reasonably conclude that the defendant was not merely present but was, by the contributions heretofore mentioned, continuously lending aid throughout the operation. A reasonable query is this little couplet:
What a strange place just to sit in a chair,
If she didn't aid them, why was she there?
It is our opinion that the court properly submitted the case to the jury.
*357 The instruction about which appellant complains was misprinted in the record. On our own motion we ordered the Clerk of the Fayette Circuit Court to file a certified copy of the instruction as it was given to the jury. It reads as follows:
"Instruction No. 1
"If the jury believe from the evidence in this case, to the exclusion of every reasonable doubt, that Maurice Vice in Fayette County, Kentucky, and before the finding of the indictment herein, wilfully and feloniously did use a certain instrument or instruments upon Gladys Blevins, a woman at the time pregnant with child, with intent to procure the miscarriage of said Gladys Blevins, and did at a time he had reasons to believe the said Gladys Blevins to be pregnant, administer to said Gladys Blevins some sort of instrument or instruments by then and there inserting said instrument or instruments into and against the vagina, uterus and private parts of said Gladys Blevins, and that such miscarriage, if any, and the use of said instrument or instruments, if any were used, were not necessary to preserve the life of said Gladys Blevins, and if you further believe from the evidence in this case, to the exclusion of every reasonable doubt, that at the time he did so, if he did so, the defendant, Anna Dalzell, was then and there present, wilfully and feloniously aiding, abetting or assisting the said Maurice Vice to use a certain instrument or instruments upon Gladys Blevins, a woman at the time pregnant with child, with intent to procure the miscarriage of said Gladys Blevins and at a time he had reasons to believe the said Gladys Blevins to be pregnant, administer to said Gladys Blevins some sort of instrument or instruments by then and there inserting said instrument or instruments into and against the vagina, uterus and private parts of said Gladys Blevins, and that such miscarriage, if any, and use of said instrument or instruments, if any were used, were not necessary to preserve the life of Gladys Blevins, then you will find the defendant, Anna Dalzell, guilty as charged in the indictment, and fix her punishment at a fine of not less than $500.00 nor more than $1,000.00 and by confinement in the penitentiary for a period of not less than one nor more than ten years, in your discretion."
It is readily seen that there is nothing in the instruction to confuse and mislead men of reasonable intelligence. The true record nullified the claim of error.
We find no prejudicial error and the judgment is therefore affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434478/
|
312 S.W.2d 284 (1958)
Pete MARTINEZ, Appellant,
v.
GENERAL BEVERAGE DISTRIBUTORS, Inc., et al., Appellees.
No. 3545.
Court of Civil Appeals of Texas, Waco.
April 3, 1958.
*285 Duckett & Duckett, Edna, Helm, Jones, McDermott & Pletcher, Shirley M. Helm, Mabel G. Howell, Houston, for appellant.
Lewright, Dyer & Redford, James W. Wray, Jr., Corpus Christi, for appellee.
McDONALD, Chief Justice.
This is a venue case. Parties will be referred to as in the Trial Court. Plaintiff Martinez brought this suit against defendants General Beverage Distributors, Inc. and Robert L. Handley for damages for personal injuries resulting from a collision of an automobile in which he was a passenger and General Beverage Distributors' truck which was being driven by Handley. The collision occurred in Jackson County, where suit was instituted. Defendant General Beverage Distributors, Inc., filed its plea of privilege alleging that it was a resident of Cameron County, and defendant Handley filed his plea of privilege alleging that his residence was Willacy County. Plaintiff filed his controverting affidavit on the ground that venue was properly in Jackson County under Sec. 9a, Article 1995, Vernon's Annotated Civil Statutes. Trial was before the court without a jury, which entered judgment sustaining the pleas of privilege of defendants.
Plaintiff appeals, contending:
1) The Trial Court erred in holding that plaintiff has not established by a preponderance of the evidence an exception to exclusive venue in the county of one's residence under Sec. 9a, Article 1995, V.A.C.S.
2) The Trial Court erred in sustaining the pleas of privilege because the implied finding of no negligence on the part of defendants is not supported by probative evidence.
3) The Trial Court erred in sustaining the pleas of privilege because the implied finding of no negligence on the part of defendants is against the great weight and preponderance of the evidence and insufficient.
The evidence is undisputed that the collision occurred in Jackson County and that defendant Handley was driving defendant General Beverage Distributors' truck within the scope of his employment. The only issue joined was whether defendants were guilty of negligence and whether such negligence, if any, was a proximate cause of plaintiff's injuries. Hence the only question for determination by this court is whether the Trial Court should be sustained in its holding that plaintiff did not establish by a preponderance of the evidence that defendants were negligent and/or that such negligence, if any, was not a proximate cause of the collision. As noted, plaintiff appeals contending that the Trial Court's judgment and implied findings against him are not supported by probative evidence, and alternatively, that such findings are against the great weight and preponderance of the evidence.
*286 The plaintiff, in his petition, alleged some 10 specific acts of negligence on the part of defendants, and alleged further that they were proximate causes of plaintiff's injuries. Six witnesses (the plaintiff; the plaintiff's driver; defendant Handley; a driver in a truck being towed by defendant Handley; Long, a policeman who investigated the collision; and Svec, a disinterested eye-witness) testified in the case. The plaintiff and the plaintiff's driver testified to facts which sustained all or most of the plaintiff's allegations of negligence. The defendant Handley, the occupant of the towed vehicle, the policeman who investigated the collision, and Svec, the disinterested eye-witness, testified to facts which sustain the Trial Court's implied finding that plaintiff has failed to discharge his burden of proof that the defendants committed an act of negligence proximately causing plaintiff's injuries.
We are reviewing on appeal a judgment of a trial court sustaining defendants' pleas of privilege, and not trying the case upon first impression.
A hearing on a plea of privilege is tried in the ordinary way and the truth as to the facts in issue is ascertained by the introduction and weighing of evidence offered by both parties, and on appeal from a judgment sustaining or overruling a plea of privilege the power of the Court of Civil Appeals in reviewing the fact findings made by the Trial Court is the same as it is in any other appealed case. Compton v. Elliott, Tex.Com.App., 88 S.W.2d 91.
In cases tried without a jury the trier of facts is the judge of the credibility of the witnesses and the weight to be given their testimony, and must resolve all conflicts in the testimony in such way as its weight and the credibility of the witnesses justify. Where no fact findings are filed and none set out in the judgment, the appellate court will presume that the Trial Court resolved all issurable facts in such a way as to support the judgment entered. If there is competent testimony to support a judgment on a plea of privilege, although the judgment does not recite such fact findings, the judgment will be sustained. See McElyea v. Cozby, Tex.Civ.App., 233 S.W.2d 482.
If the evidence is conflicting and there exists in the record sufficient evidence of probative force to support the judgment of the Trial Court, then the judgment should not be disturbed on appeal. Banks v. Collins, 152 Tex. 265, 257 S.W.2d 97.
We have carefully weighed all of the evidence in the case at bar, and while recognizing that there exist conflicts, we cannot say that it is so against the great weight and preponderance of the evidence as to be manifestly unjust, or insufficient to support the Trial Court's implied findings and judgment. See Banks v. Collins, 152 Tex. 265, 257 S.W.2d 97; In re King's Estate, 150 Tex. 662, 244 S.W.2d 660.
The judgment of the Trial Court is affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434485/
|
312 S.W.2d 742 (1958)
Ray MARTINEZ, Appellant,
v.
Frank WILLIAMS, Appellee.
No. 13180.
Court of Civil Appeals of Texas, Houston.
April 17, 1958.
Rehearing Denied May 8, 1958.
*745 McGregor & Sewell, Houston, attorneys, Burke M. Martin, Ben G. Sewell, Houston, of counsel, for appellant.
Ed Tynes, Helm, Jones, McDermott & Pletcher, Albert P. Jones, Raymond L. McDermott, Houston, for appellee.
WERLEIN, Justice.
Appellee, Frank Williams, sued Ray Martinez, appellant, to recover damages for personal injuries sustained by him as the result of being struck by appellant's car as he was crossing from the northwest corner to the northeast corner of the intersection of Main Street and Congress Avenue in the City of Houston. On the basis of the jury's affirmative findings to the discovered peril issues, being the only issues on liability submitted, the court entered judgment for appellee in the sum of $4,000 for lost earnings and earning capacity, and pain and suffering, and $100 for medical expenses. Appellant has duly perfected his appeal to this Court.
Appellant's First and Second Points of Error are that the trial court erred in overruling appellant's motion for judgment non obstante veredicto and in refusing to enter judgment for appellant because there was no evidence to support the affirmative findings on discovered peril; and that the court erred in failing to grant a new trial because the finding of the jury on the issues of discovered peril are so contrary to the overwhelming preponderance of the evidence as to be manifestly wrong.
There is evidence that appellee started to walk across Main Street, as above stated, at about 4 o'clock p. m. on September 18, 1955, with a green light facing him; that Main Street is approximately 60 feet in which with a double stripe or line marking the center thereof, and Congress Avenue is also approximately 60 feet in width, crossing Main Street at right angles, in downtown Houston; that Main Street has six lanes, three for north bound traffic and three for south; that appellant's car was in the most easterly lane of traffic on Main Street and had come to a stop heading north at the unmarked crosswalk for pedestrians on the south side of Congress Avenue projected across Main Street; that there was also a car in the lane to the left of appellant and, according to some of the testimony, a car in the second lane to appellant's left also, and that such cars had stopped awaiting the change of the traffic light from red to green; that appellant first saw appellee when appellee was in the middle of Main Street; that upon appellee reaching the center of Main Street the green light turned to amber and he then began to run, or hobble, as he expressed it, as best he could in an easterly direction to continue his way across Main Street; that the light facing him turned red after he had gone about the width of a car to the east of the double stripe in the center of Main Street; that he was the cars facing north start up, and he felt the only safe procedure was to run across the street in the direction he was going since if he stayed where he was other cars would have run over him; that appellant's car started upon his light changing from red to green; that at such time, according to appellee's testimony, appellee was just about the width of a *746 car east of the center line on Main Street; that the front right bumper of appellant's car struck appellee at the time appellee was nearing the east curb of Main Street, and when he was several feet to the north of the unmarked pedestrian crosswalk on the north side of Congress Avenue projected across Main Street; that the unmarked pedestrian crosswalks projected across Main Street were from 7 to 15 feet in width, according to various estimates. There was evidence from which the jury could find that after appellant discovered appellee's peril, he traversed a distance of from 74 to 90 feet from his starting position, since his car had to cross the crosswalk on the south side of Congress Avenue, the width of Congress, and then the crosswalk on the north side of Congress; that during the time appellant's car traversed such distance appellee ran or hobbled from a point a car's width to the east of the center of Main Street to a point near the east curb of Main Street, or a distance of approximately 20 feet; and that appellee was knocked, or rolled, some 15 feet from the point of impact. Appellee testified that if appellant had stopped a little bit or turned his wheel a little bit or eased up a little bit, he could have gotten out of the way.
Appellant testified that he never exceeded 10 or 15 miles per hour; that he started off in a normal manner and stayed approximately even with the two northbound cars to his left, and that when he had reached a point some 3 to 4 feet from the crosswalk on the north side of Congress Avenue he slammed on his brakes; that appellee was some 3 to 4 feet to the north of the unmarked crosswalk when struck; that at the time appellant slammed on his brakes the distance between him and appellee was 13 to 16 feet; and that he could stop his car going at a speed of 10 to 15 miles per hour within 4 to 5 yards (12 to 15 feet). The testimony was that there were no skidmarks on the pavement.
The jury might well have concluded that appellant discovered the danger of appellee when he first saw him in the middle of Main Street, undertaking to cross Main Street at a time when heavy afternoon traffic was headed in both directions. There was no obstruction to appellant's view as he started from his stopped position, and there was nothing to hinder appellant from keeping appellee continuously in view. Appellant admitted that he saw the appellee running to get across Main Street. He testified that when he put on his brakes he could see that appellee was in a dangerous position and that he put on his brakes because he figured it was an emergency situation. He stated, however, that at such time the distance between him and appellee was some 13 to 16 feet. The jury were at liberty to conclude that he actually discovered the perilous position of appellee prior to the time that he admitted that he did. Indeed, it might be presumed from the circumstances that as appellant drove his car in a northerly direction on Main Street he was looking ahead, and that appellee's perilous position as he undertook to run or hobble across the east portion of Main Street was apparent to appellant at all times from the time he started up from a stopped position, and that he took chances on appellee being able to get out of his way.
The law is well settled that a reviewing court will not disturb the verdict of the jury where there is some evidence to support the same, viewing the evidence in the light most favorable to the successful party and indulging every legitimate conclusion that is favorable to him. Glenn v. Glenn, Tex.Civ.App., 183 S.W.2d 231, no writ history. See also Payne v. Smith, Tex. Civ.App., 268 S.W. 243, no writ history.
The jury had a right to consider the evidence most favorably for appellee, rejecting all evidence favorable to appellant. Kirksey v. Southern Traction Co., 110 Tex. 190, 217 S.W. 139. The jury had a right to accept part of each witness's testimony without accepting his testimony in its entirety.
*747 In Southland Greyhound Lines, Inc., v. Richards, Tex.Civ.App., 77 S.W.2d 272, writ dismissed, the court held that a jury is not bound by a statement of the defendant as to when he discovered the danger of the plaintiff and as to the effort made by him to avoid the injury. See Quanah, Acme & Pacific Ry. Co. v. Eblen, Tex.Civ.App., 55 S.W.2d 1060, writ refused. In Ford v. Panhandle & Santa Fe Ry. Co., 151 Tex. 538, 252 S.W.2d 561, 562, the court made the following pertinent statement:
"The quantum of proof required of the plaintiff on these elements of discovered peril in order to entitle him to have them submitted to the jury was such facts and circumstances as taken together with all reasonable inferences therefrom constituted some evidence of probative force of their existence. White v. White, 141 Tex. 328, 172 S.W.2d 295; Stevens v. Karr, 119 Tex. 479, 33 S.W.2d 725; Fitz-Gerald v. Hull, 150 Tex. 39, 237 S.W.2d 256."
In such case the court referred with approval to the case of St. Louis Southwestern R. Co. of Texas v. Ford, Tex.Civ.App., 237 S.W. 655, 656, in which it was said:
"The undisputed evidence shows that the wagon was struck near its rear end, and Ford was whipping his team to escape the threatened collision. This warrants the inference that a delay of even one or two seconds might have enabled Ford to escape. Such a delay might have been caused had the engineer used more diligence in applying his brakes."
In the instant case there was ample evidence supporting the answers of the jury to the issues on discovered peril.
Appellant's Third, Fourth and Fifth Points of Error complain of the action of the court in sustaining appellee's objections to certain medical records, or parts thereof, of Memorial Hospital on the ground that they were hearsay and opinions and conclusions of physicians. Exhibit D-3, which was excluded, being a "Report of Emergency Case," showed the following condition on admission: "Satisfactory. Hit by car. Small laceration (superficial) left parietal area. No evidence of any fractures or other injuries." Exhibit D-5, which was excluded and which purports to be the attending physician's summarized report, reads as follows:
"1. Sensitivity to achromycin (Kimmelstiel-Wilson disease)
"2. Essential Hypertension
"3. Retinal, hemmorhages due to nephroschlosis
"4. Diabetes mellitus
"5. Chronic Chorioretinitis uremia."
Exhibit D-6 entitled "Attending Physician's Summarized Report" was admitted with the exception of the physician's diagnosis, as follows: "Infected ulceration of left leg. Generalized secondary absorption diabetes. Pityriasis rosea."
Appellant's Fifth Point is to the effect that the court erred in sustaining appellee's objection to appellant's offer in evidence of the entire medical records of Memorial Hospital relating to appellee. As a matter of fact, appellee's objection was directed to the admission of any hearsay statements and opinions of doctors. Counsel for appellee conceded that all portions of the records from the hospital were admissible except those portions involving medical opinions or conclusions. The court admitted all of the hospital records into evidence with the exception of any "hearsay or conclusion or any statements pertaining to any opinions or conclusions." The court then invited appellant's counsel to read the portions of the records that he desired to introduce except the excluded portions.
This brings us to a consideration of whether Exhibits D-3, D-5, and D-6, which to some extent at least included opinions of doctors, were admissible.
*748 Appellee contends that the medical records were not sufficiently proved. We have carefully examined the statement of facts and agree with the trial court that the routine hospital records were sufficiently proven under the provisions of Article 3737e, Vernon's Ann.Tex.St. and were admissible in evidence. The court admitted the same with the exception of the opinions and conclusions and diagnoses of doctors. The fact that the custodian did not have personal knowledge of the various items or contents of the record could be shown to affect its weight and credibility but not its admissibility under Section 2 of said Article.
The authorities are at variance as to the admissibility of hospital records consisting of diagnostic findings by attending physicians. Many courts hold that such findings are made as regular business entries and are therefore admissible provided the declarant appears to have the necessary qualifications to render an expert opinion. Other courts oppose the admission of medical diagnoses on the ground that opposing counsel would be deprived thereby of the opportunity for cross-examination. They point out that doctors frequently disagree when it comes to a diagnosis and hence medical opinions and diagnoses do not come within the inherent guarantee of accuracy of routine business entries.
In England v. United States, 5 Cir., 174 F.2d 466, 469, the court in excluding opinions of individual physicians based on a patient's past history and conduct, and their conclusion that he suffered from "mental deficiency, (organic brain disease)" stated:
"These we think are not contemporaneous records of events, but are expert opinions based in part on hearsay, with no opportunity for cross-examination."
For like effect, see New York Life Ins. Co. v. Taylor, 1945, 79 U.S.App.D.C. 66, 147 F.2d 297, 303 in which the court summarized:
"Hospital records are no different from any other kind of records kept in the regular course of business. They must be subjected to the same tests as to subject matter. Regularly recorded facts as to the patient's condition or treatment on which the observations of competent physicians would not differ are of the same character as records of sales or payrolls. Thus, a routine examination of a patient on admission to a hospital stating that he had no external injuries is admissible. An observation that there was a deviation of the nasal septum is admissible. Likewise, an observation that the patient was well under the influence of alcohol. But the records before us here are not of that character. The diagnosis of a psychoneurotic state involves conjecture and opinion. It must, therefore, be subjected to the safeguard of cross-examination of the physician who makes it. And accounts of selected items from interviews with patients must be subject to the same safeguard."
It makes no difference under Article 3737e, V.A.T.S., whether the hospital records come from a public or private hospital. See American General Ins. Co. v. Dennis, Tex.Civ.App., 280 S.W.2d 620, no writ history. In the present case there was evidence that Memorial Hospital is a private hospital.
The law does not appear to be settled in Texas as to the admissibility of hospital records consisting of medical opinions and conclusions and diagnoses, under Article 3737e, V.A.T.S. In Thompson v. Robbins, Tex.Civ.App. Texarkana, 297 S.W.2d 247, affirmed Tex., 304 S.W.2d 111, the court held that the trial court did not err in admitting the entire hospital records relating to appellee's hospitalization for his alleged injuries where the objection made was a general one and no particular entry or part of the record was objected to. Of course, we have no means of knowing whether *749 such records contained conclusions, opinions and diagnoses of physicians because no specific objection was made to the admission of the records.
In Pan American Ins. Co. v. Couch, 305 S.W.2d 819, writ ref., n. r. e., the same Court of Civil Appeals held that a physician's physical examination form, which had been filled out after the injuries for which the employee claimed compensation had been sustained, and which had been submitted on behalf of another employer for whom the employee subsequently went to work, was not admissible on the theory that the form was a business record, where the physician who had filled out the form was not available for cross-examination. The court stated that the report in question contained hearsay statements and medical opinions and conclusions which were prejudicial to the employee's case, and that if such report had been admitted in evidence, the employee would have been deprived of the valuable right to cross-examine said doctor on matters vital to his case. The court held that the trial court correctly refused to admit such report in evidence.
We have concluded that factual statements made by physicians and contained in the hospital records are admissible in the same manner as factual statements made by nurses and other employees of the hospital in connection with the routine business of the hospital. For example, medical statements made as routine entries in the course of hospital business, consisting of reports of the patient's temperature, blood pressure, pulse, medicines and treatment prescribed, external bruises, skin rash, alcoholic breath, lacerations or injuries observable to persons generally, routine laboratory tests, expressions of pain, noticeable external physical marks or defects, and similar facts not involving medical opinions, should be admitted. On the other hand, where the statement of the physician consists of an opinion or a conclusion or of a diagnosis based upon his medical examination or findings of conditions not obvious or patently observable to persons generally, the same should be excluded. In such case the doctor should be brought into court where he might be cross-examined by opposing counsel. The determination of whether the record falls within the one category or the other, we believe, should be left largely to the sound discretion of the trial court.
With particular reference to Exhibit D-3 it will be noted that the statement in the report, "hit by car", was based upon hearsay or perhaps double hearsay. Ordinarily such hearsay statements should be excluded unless admissible as res gestae or admissions of a party to the suit. The statement, "Small laceration (superficial). Left parietal area", was admissible since such condition could be observed by any one. The statement, "no evidence of any fracture or other injuries," was a conclusion and opinion of the doctor and was properly excluded as further evidenced by the fact that it was proved at the trial that appellee did sustain a fracture. Since the entire statement was offered in evidence, the court did not err in excluding the same, although part of it was admissible. Exhibit D-5 consisting of a diagnosis in medical terms is a conclusion and opinion of the doctor. It was properly excluded. So also was Exhibit D-6 properly excluded for the same reasons, since at least part thereof was apparently a medical opinion and conclusion.
Nevertheless, if we are wrong in the foregoing conclusions and observations, no harm resulted from the exclusion of said exhibits. The jury would have been merely confused by the medical terminology in Exhibits D-5 and D-6 unless explained. Moreover, Dr. B. D. Thompson, appellee's doctor, testified fully as to the different ailments that appellee had suffered from time to time, and appellee himself testified that he had had a stroke and was not well. Both the doctor and appellee were subjected to cross-examination. Dr. Thompson testified that he did not observe any fracture *750 when he first examined appellee at the hospital. An x-ray later taken disclosed a long, oblique fracture of the fibula of plaintiff's right leg. Appellant's expert witness, Dr. Fred A. Bloom, on examining the x-ray, testified that it showed such fracture. Moreover, the matters contained in the diagnosis that appellant offered in evidence did not relate to the conditions resulting from the injury in question in the present case, to wit: the fracture of the fibula and a 20% to 25% permanent disability as applied to appellee's right leg.
Appellant's Sixth Point of Error is that the trial court erred in not declaring a mistrial because of misconduct of counsel for plaintiff in arguing to the jury in such a manner as to imply that appellant was protected by public-liability insurance to the extent of $5,000. Appellee's counsel made the following remarks in his opening argument to the jury:
"I ask this jury in answering Special Issue No. 8, although we have abundantly proven $15,000 in damages, considering pain and suffering, loss of earnings and loss of earning capacity, with a 20% to 25% permanent-partial disability in that leg, and impaired circulationto answer Special Issue No. 8, $5,000, no more, no less. I have good reason for it. Do not ask me why; I cannot tell you, but please answer that issue $5,000 even. When you do that justice will have been rendered in this case."
The argument was intended evidently to inform the jury that appellant had $5,000 insurance coverage in connection with appellee's injuries. Although all the jurors may not have grasped the significance of the argument, we feel that the argument was improper and should not have been made. Appellee's suggestion that it could have been cured by counsel explaining to the jury, after their retirement to consider of their verdict, that he asked for $5,000 because he did not want an excessive verdict, is without merit. Such an explanation would not have been accepted as valid by the jury since in the same argument appellee's counsel stated that appellee had abundantly proven $15,000 in damages. Appellee contends that the complained of argument did not inject insurance into the case. With this contention, we cannot agree. Some of the jurors in all probability understood what counsel evidently intended to convey to them.
Although the argument was improper, the question is whether it was reasonably calculated to cause, and probably did cause, the rendition of a verdict which the jury might not otherwise have rendered. There is no rule of thumb or formula that can be used as a guide in all cases. The determination as to whether the error is prejudicial or harmless must be left to the sound discretion and good sense of the appellate courts. The court must determine the issues in each case from a study of the record as a whole. Cole v. Waite, 1952, 151 Tex. 175, 246 S.W.2d 849, 851. Associate Justice Calvert of the Supreme Court of Texas, in a well considered article published in the Texas Law Review, Vol. 31, page 1, (November 1952), has drawn the following conclusion from a review of the opinions of our Supreme Court:
"If any definite conclusion may be drawn from a review of the opinions of the supreme court listed above it is that the court is trying to make the provisions of Rules 434 and 503 serve a useful purpose; the court seems to be developing, slowly but surely, a policy of refusing to set aside or reverse judgments for errors of law committed during the trial unless in the sound judgment of the court the errors contributed in a substantial way to bring about an unjust result. This is not to say, of course, that all errors of law will be forgiven in all cases. It is not even to say that the complaining party must, in every instance, prove more than the error itself in order to obtain a reversal. Conceivably, the nature *751 of improper evidence injected into the record or improper argument made to the jury may well be so highly prejudicial and inflammatory that the burden of going forward with proof of harm to the satisfactions of the court would be met, prima facie at least, by simply bringing forward the improper evidence or argument, without more. Into this category I think we may safely fit the case of Southwestern Greyhound Lines, Inc. v. Dickson [149 Tex. 599, 236 S.W.2d 115]."
See Texas Employers' Ins. Ass'n v. Haywood, 153 Tex. 242, 266 S.W.2d 856, in which the argument was so incurably prejudicial and inflammatory as to warrant the conclusion that it must have caused the rendition of an improper judgment.
Bearing in mind the foregoing statements, we have concluded that the argument in the present case was not so highly prejudicial as to warrant reversal of the case, and that appellant has failed to show probable harm under Rule 434, Texas Rules of Civil Procedure. The issues on discovered peril were amply supported by the evidence, and we cannot presume that the argument had any effect upon the question of liability. Moreover, the jury ignored the argument, as evidenced by the fact that instead of returning a verdict for $5,000, as urged by appellee's counsel, they returned a verdict of $4,100, $100 of which was for medical expenses. No complaint is made about the verdict being excessive, and as a matter of fact it appears to be quite moderate for the injuries sustained.
In such particulars, the instant case is distinguishable from Sutton Motor Company v. Crysel, Tex.Civ.App. Beaumont, 289 S.W.2d 631, 639, wherein the court stated:
"Be this as it may, however, the record as a whole considered, we are of the opinion that the argument probably did influence the jury to defendants' prejudice. The evidence, while sufficient to support the jury's findings, by no means compelled a finding that Mrs. Crysel's neurosis was a proximate result of the fright she experienced at the time of the collision; and, as we have already stated, the damages which were assessed because of personal injuries were definitely on the liberal side. * * *"
The lawyer who directly or by implication injects insurance into his case during the examination of witnesses or argument is inviting reversal. Nevertheless, we do not believe that the mention of the word "insurance", or the injection by implication of insurance into a case, should ipso facto result in reversal. If, from an examination of the entire record, it appears that such mention or injection was reasonably calculated to cause, and probably did cause, an improper verdict and judgment, then the case should be reversed, otherwise not. To hold differently would be to vitiate Rule 434, T.R.C.P., to that extent.
In the case of Roosth & Genecov Production Co. v. White, Tex.Civ.App., 281 S.W.2d 333, writ refused, n.r.e., a doctor who was testifying for plaintiff answered a question on cross-examination as to whether the plaintiff's attorney sent the doctor to another doctor's office to examine plaintiff. He responded that he went to the other doctor's office "because the insurance company wanted us to examine him jointly." The defendant in the case moved for a mistrial, which the court overruled. The court held that no contention was made that any juror mentioned or discussed insurance, and no juror was placed on the witness stand in regard thereto, and the verdict of $50,000 damages for plaintiff was not excessive, and no point was presented on appeal that it was excessive. In the present case the jurors were not interrogated as to whether there had been any discussion concerning such argument or any reference made *752 to the possibility of insurance, and the record does not indicate that the argument in question probably caused the jury to render a verdict which they might not otherwise have rendered. See also Moore v. Dallas Railway & Terminal Co., Tex. Civ.App., 238 S.W.2d 741, writ dismissed; Herrin Transportation Co. v. Peterson, Tex.Civ.App., 216 S.W.2d 245, writ refused.
Appellant's Seventh and Eighth Points of Error are to the effect that the trial court erred in refusing to submit appellant's requested Special Issues inquiring as to contributory negligence on the part of appellee. The case was submitted to the jury solely on issues of discovered peril. Appellee did not request any issues on primary negligence. Therefore, the court did not err in refusing to submit appellant's requested issues on contributory negligence, since answers thereto would have been immaterial and would not have affected in any way the issues on discovered peril. The law does not require the doing of a van and useless thing. We have concluded that there was no error in the court's refusing to submit such issues, but if there was, no probable harm has been shown under Rule 434, T.R.C.P.
Appellant's Ninth and Tenth Points of Error, to the effect that the court erred in refusing to permit appellant to inquired as to the time and circumstances under which appellee engaged his counsel and to permit appellant to complete a bill of exceptions as to such matter, are without merit. The court ruled when he advised counsel for appellant that a bill of exceptions might be made at "an appropriate time", that he meant while the trial was still in progress from the standpoint of presentation of evidence. It was only after both sides had rested, and while the court was preparing his charge, that counsel for appellant undertook to present additional evidence for the purpose of making out a bill of exceptions. We are of the opinion that there was no abuse of the court's discretion under the circumstances, and if there was any error, it was harmless.
It is appellant's contention that the time and circumstances under which appellee engaged counsel might have had a material bearing upon the issues in the case with respect to whether the appellee was "claims minded' and thus prone to magnify or "build up" a minor accident into a major claim. The injuries in this case were established largely by physicians. Appellee was in no position to magnify the fracture of the bone in his leg. Moreover, it is not proper to show in evidence that a personal injury litigant is "claims minded" in an effort to attack his credibility. See McCormick and Ray, Vol. 2 (2d Ed.), page 375, where it is stated:
"But where the defendant merely seeks to show that the plaintiff is a chronic personal injury litigant the evidence will be excluded on the theory that its slight probative value is outweighed by the danger of unfairly prejudicing the claim of an innocent litigant."
See Houston & T. C. R. Co. v. Johnson, 103 Tex. 320, 127 S.W. 539; L. B. Price Mercantile Co. v. Moore, Tex.Civ.App., 263 S.W. 657, writ dism.; San Antonio Traction Co. v. Cox, Tex.Civ.App., 184 S.W. 722, no writ history.
The judgment of the trial court is affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434494/
|
312 S.W.2d 315 (1958)
Carl E. RATLIFF, Appellant,
v.
Inez CLIFT et vir, Appellees.
No. 6756.
Court of Civil Appeals of Texas, Amarillo.
March 24, 1958.
Rehearing Denied April 28, 1958.
*316 Vickers & Vickers, Brown & Brown, Lubbock, for appellant.
Crenshaw, Dupree & Milam, Lubbock, for appellees.
PITTS, Chief Justice.
Appellant, Carl E. Ratliff, on October 16, 1956, filed suit in the nature of trespass to try title against his brothers and sisters, Frank Ratliff, Virgil Ratliff, Willie May McWhorter and husband, G. N. McWhorter, and Inez Clift and husband, W. T. Clift, seeking judgment for title and possession of an undivided ¼ interest in all minerals in and under Labor 21, League 43, Rains County School Land, Hockley County, Texas, and to remove cloud from title thereon by having all claims thereto made by any or all of the previously named adverse parties cancelled. Among other allegations, appellant pleaded in effect that he furnished the consideration and directed S. B. Dean and wife, the then owners of the mineral interest in and under Labor 21, to convey an undivided ½ interest of the minerals therein to Murl Ratliff, a single woman who was a sister to all of the principal parties to this suit, which was done on July 9, 1938, with an alleged oral agreement between himself and Murl Ratliff to the effect that she would hold only a life estate in said mineral interest and she would thereafter either deed the said mineral interest to Carl E. Ratliff effective at her death or bequeath the same to him in the execution of her will, and that she did thereafter on March 12, 1948, convey to him an undivided ¼ of the mineral rights in and under the said tract of land, but that she died on or about June 20, 1956, without making either provision on his behalf for the other ¼ undivided mineral interest which is in controversy here, and that he and the other principal parties to this suit were the only legal heirs surviving Murl Ratliff with Inez Clift claiming title to the said ¼ undivided mineral interest here in controversy as a beneficiary under the terms of a purported will executed by the deceased Murl Ratliff.
Appellant's said brothers and his sister, Willie May McWhorter, joined by her husband, G. N. McWhorter, filed an answer excepting to and denying appellant's allegation. Inez Clift and husband, W. T. Clift, filed a separate answer excepting to appellant's allegations followed by a plea of "not guility", a general denial and the Statute of Limitations.
The following facts are conclusively revealed by the record before us: that on July 9, 1938, S. B. Dean and wife conveyed to Murl Ratliff, a single woman who never married, an undivided ½ interest in all minerals in and under Labor 21, League 43, Rains County School Land in Hockley County, Texas; that on November 14, 1947, Murl Ratliff joined J. W. Brown and *317 wife (then joint owners with Murl Ratliff) in the execution of a lease for a primary term of three months to Ernest E. Steele upon the said land in question for the purpose of exploring, drilling, mining and operating for oil and gas; that thereafter and prior to March 12, 1948, oil was discovered in paying quantities on the said land under the terms of the last aforesaid mentioned lease and has since been produced thereon and that Murl Ratliff had collected the mineral interest royalties and revenues from the ¼ undivided interest here involved until her death; that on March 12, 1948, Murl Ratliff conveyed for a consideration therein expressed to appellant, Carl E. Ratliff, an undivided ¼ mineral interest in and under the said land, leaving title vested in herself to the other ¼ undivided mineral interest here in controversy; that in 1954 R. F. Ratliff and wife, Willie L. Ratliff, the father and mother respectively of all of the principal parties to this suit, both died testate, leaving Murl Ratliff as the principal beneficiary under the terms of their wills, which caused a contest of their wills to be instituted in the County Court of Lubbock County by J. R. F. (Frank) Ratliff, L. V. (Virgil) Ratliff and Willie May McWhorter against Murl Ratliff (neither appellant herein, Carl E. Ratliff, nor appellees herein, Inez Clift and husband W. T. Clift, was a party to the will contest suit); that the will contest was tried in the County Court of Lubbock County in November, 1954, and was terminated by a settlement agreement in writing of date July 25, 1955, signed by all parties to the will contest suit and joined therein only in the settlement agreement by appellant herein, Carl E. Ratliff, and appellees herein, Inez Clift and husband, W. T. Clift, who where not parties to the will contest suit; that thereafter Murl Ratliff died testate on or about June 20, 1956, naming Inez Clift as the principal beneficiary in her will which was at the time of the trial of this action being contested in Lubbock County by appellant herein, Carl E. Ratliff, J. R. F. (Frank) Ratliff, L. V. (Virgil) Ratliff and Mrs. Willie May McWhorter, brothers and a sister to both the deceased, Murl Ratliff, and the named beneficiary, Inez Clift.
The case at bar was tried to a jury on January 31, 1957. After the evidence closed appellant presented his motion for a peremptory instruction, which motion was overruled by the trial court, which submitted the case to the jury upon five special issues with a verdict returned after due deliberation, finding in effect that (1) appellant, Carl E. Ratliff, did not furnish the consideration for the conveyance of the mineral interest in controversy to Murl Ratliff by S. B. Dean and wife; (2) that Murl Ratliff did not accept conveyance of the mineral interest in controversy here with the understanding that she was holding title to the same for appellant, Carl E. Ratliff; (3) that Murl Ratliff conveyed the other ¼ undivided mineral interest to appellant, Carl E. Ratliff, on March 12, 1948, with the understanding that the remaining ¼ undivided mineral interest here in controversy belonged to Murl Ratliff herself in fee simple; (4) that appellant, Carl E. Ratliff, had knowledge in the summer of 1949 that Murl Ratliff was claiming fee simple title to the ¼ undivided mineral interest here in controversy; and (5) that in the settlement between appellant, Carl E. Ratliff, and Murl Ratliff in July, 1955, appellant, Carl E. Ratliff, agreed that he had no interest in and to the ¼ undivided mineral interest here in controversy. Based upon the record and these jury findings, the trial court overruled appellant's motion for judgment non obstante veredicto and his motion to set aside the jury verdict and render judgment in his behalf, and proceeded to render judgment denying Frank Ratliff, Virgil Ratliff, and Willie May McWhorter and husband, G. N. McWhorter, any right, title or interest in the mineral interest here in controversy, further adjudged that Carl E. Ratliff take nothing by reason of his suit as against appellees, Inez Clift and husband, W. T. Clift, and declaring that Murl Ratliff owned in fee simple the mineral interest *318 here in controversy at the time of her death, from which judgment Carl E. Ratliff perfected an appeal but Frank Ratliff, Virgil Ratliff and Willie May McWhorter and husband, G. N. McWhorter, did not appeal from the trial court's judgment and are not before this Court.
Appellant presents numerous points of error but has grouped them into several groups or propositions charging in effect, first, that error was committed by the trial court in the refusal to sustain appellant's motion for a peremptory instruction or his motion for judgment non obstante veredicto or his motion to set aside the jury verdict because there was not legal or competent evidence of probative force to support any jury findings, which in effect is challenging the sufficiency of the evidence heard. The evidence is voluminous, showing oral testimony given by thirteen witnesses and a number of exhibits. All of the principal parties to the suit testified and several disinterested witnesses gave testimony. The material issues in the case were controverted. To test the sufficiency of conflicting evidence and to determine if it will support jury findings, we must give credence only to the evidence and circumstances favorable to such findings and disregard all evidence to the contrary, indulging every legitimate conclusion which tends to uphold the findings. Truelove v. Truelove, Tex.Civ.App., 266 S.W.2d 491, 494, (writ refused); Banks v. Collins, 152 Tex. 265, 257 S.W.2d 97.
In addition to circumstances shown, there was positive testimony given by Hon. Robert H. Bean, a former practicing attorney who was Judge of the 140th District Court of Lubbock County at the time of the trial, on both direct and cross-examination, to the effect that at a former trial in another case being heard in November, 1954, between some of the same parties here involved, appellant herein, Carl E. Ratliff, testified in effect that the consideration paid for the mineral interest conveyed to Murl Ratliff by S. B. Dean and wife was $700, which sum was furnished by Murl Ratliff herself. Judge Bean's testimony in this respect was corroborated in part by the testimony of appellant's witness, S. B. Dean, who gave testimony to the effect that $700 was "advanced" as a part of the consideration for the mineral deed on the Rains County School Land, a part of which interest is here in controversy. Hon. Robert H. Bean gave further testimony to the effect that he participated as an attorney in helping to perfect a property compromise agreement in writing between appellant herein, Carl E. Ratliff, and Murl Ratliff during her lifetime, on July 25, 1955, at which time Carl E. Ratliff made no claim of any interest in the mineral rights here in controversy and did not mention at any time any claims of interest by him in the said mineral rights here in controversy. Judge Bean also testified that at the time of the compromise property settlement between Carl E. Ratliff and Murl Ratliff, the feeling between them was apparently very bitter. That agreement in writing between the said parties is also in evidence before us and it reveals in effect that by agreement of the said two parties Murl Ratliff conveyed to Carl E. Ratliff two other separately described mineral interests located in Hockley County but not here involved. There was also testimony given, without objections, by the witness, Inez Clift, to the effect that in 1949 she heard appellant herein, Carl E. Ratliff, tell Murl Ratliff, "Well, you know you have a one-fourth of the Dean Lease, that's yours, and nobody can take it away from you." The jury had a right to believe all of this testimony so given and to give it probative force since the jurors were the exclusive judges of the credibility of the witnesses and of the weight to be given their testimony. There was other testimony given strongly corroborating that previously herein mentioned and some of it was given by other disinterested witnesses. Because of the evidence of probative force found in the record, the trial court was fully justified in overruling appellant's motions for peremptory *319 instruction, for judgment non obstante veredicto and for setting aside the jury verdict and rendering judgment for appellant herein and in submitting the case to the jury.
Appellant further complains about the trial court overruling his objections and exceptions to the main charge given to the jury. An examination of the entire record reveals that the five special issues submitted by the trial court were controlling issues joined by the parties in their pleadings and raised by the controverted evidence heard, for which reasons we find no fault with the trial court's charge.
Appellant further charges error was committed by the trial court in admitting improper and prejudicial evidence over the objections of the appellant. The testimony of the first witness complained about was that given by Mrs. Rudolph Struve, a school teacher who taught school for several years with Murl Ratliff, but the witness was not related to any of the parties and was not a party to this suit. She testifed in effect that while Murl Ratliff was a teacher by profession she had other income from mineral interest. She further testified to the effect that Murl Ratliff had told her on several occasions and as late as November, 1955, that the mineral interest she had was hers and that Carl E. Ratliff had no interest in such; that she, (Murl Ratliff) had deeded back to Carl E. Ratliff all of his interest in the minerals they once owned together and the remainder thereof was hers. The record reveals conclusively that record title to the mineral interest in controversey here was vested in Murl Ratliff from July 9, 1938, until her death on June 20, 1956, and that she collected the revenues and royalties from the mineral lease from the time production began early in 1948 until her death. Consequently, during that period of time Murl Ratliff held possession of the said mineral interest at the time the declarations testified to by Mrs. Struve were made. By reason of these facts, it has been held that such declarations of ownership were admissible. Smith v. Burroughs, Tex.Civ.App., 34 S.W.2d 364, 366; Sloan v. Sloan, Tex.Civ.App., 32 S.W.2d 513, 519; Highway Motor Freight Lines v. Slaughter, Tex.Civ.App., 84 S.W.2d 533, 536. Under these and other authorities therein cited, it is our opinion that the testimony of Mrs. Struve in question was admissible.
Appellant further complains about the testimony given by the disinterested witness, Thelma Burrow, of the same import as that given by Mrs. Struve, which testimony we believe was admissible for the reasons previously herein stated. In any event, the testimony in question given by both Mrs. Struve and Thelma Burrow is merely cumulative of the direct testimony of another witness given without objection being made to the effect that she heard Carl E. Ratliff tell Murl Ratliff in 1949 that she (Murl Ratliff) had ¼ of the Dean mineral lease, which was hers and nobody could take it away from her, as well as other testimony and circumstances corroborating the direct testimony referred to. Consequently if the testimony given by the witnesses, Mrs. Struve and Thelma Burrow, constituted error such was not a reversible error.
Appellant complains further about the testimony given by Hon. Robert H. Bean concerning the written settlement agreement between Carl E. Ratliff and Murl Ratliff of date July 25, 1955, which testimony has been previously herein set out and discussed. Appellant here charges that such testimony was not admissible because it grew out of conversations relating to a compromise settlement of a county court case involving the wills and estates of R. F. Ratliff and wife, Willie L. Ratliff, the deceased parents of the principal parties to this suit. But the record conclusively reveals that Carl E. Ratliff was not a party to that county court suit construing the wills of his parents and was not therefore a necessary party to the suit compromised but that he did voluntarily join the other *320 brothers and sisters in signing the compromise settlement agreement. The record further reveals conclusively that the settlement had between Carl E. Ratliff and Murl Ratliff, about which Judge Bean testified, involved property in no way connected with the estate of his parents but was entirely separate from their estate and concerned nobody other than Carl E. Ratliff himself and Murl Ratliff. Judge Bean did not give affirmative testimony about anything that was said or done on the occasion in question, but he there gave negative testimony to the effect that Carl E. Ratliff, at the time the settlement was being made between himself and Murl Ratliff, never made any claim to the mineral interest here involved nor said anything about claiming such. In any event, the compromise settlement being effectuated in county court was not a compromise of any claim here in issue but it was a compromise of a will contest to which the parties on this appeal, appellant Carl E. Ratliff and appellees Inez Clift and husband W. T. Clift, were not parties, and the testimony given by Judge Bean was about matters which occurred after the settlement agreement had been reached by the parties in the county court case. For the reasons stated it is our opinion that the rule sometimes invoked prohibiting the introduction of testimony relating to "law suit compromise endeavors" does not apply to the testimony given by Judge Bean. But, be that as it may, it is our opinion that, in any event, the pronouncements of the law shown in the following authorities refutes all claims made by appellant about the admission of the testimony in question. Leija v. American Automobile Ins. Co., Tex.Civ.App., 242 S.W.2d 814 (writ dismissed); Brannam v. Texas Employers' Ins. Ass'n, 151 Tex. 210, 248 S.W.2d 118; United Employers Casualty Co. v. Smith, Tex.Civ.App., 145 S.W.2d 249 (writ refused); 20 Amer.Jur. 478, Sec. 566.
The burden was upon appellant to establish his alleged parol trust "by proof that is clear, satisfactory and convincing." Elbert v. Waples-Platter, Co., Tex.Civ.App., 156 S.W.2d 146, 152 and Grasty v. Wood, Tex.Civ.App., 230 S.W.2d 568, 572. In the last case cited the Court said in part:
"The courts are suspicious of resulting trusts of the purchase-money type and `regard them as possible instruments for depriving a person of his property by fraud and perjury, and therefore require one who claims the benefit of such a trust to prove his case by "clear and convincing' evidence. * * * Practically it is probably extermely difficult for a resulting cestui of the purchase-money class to prove his case without some writing. * * *'. 2 Bogert, Trusts and Trustees, § 453, p. 1351."
In our opinion no reversible error has been shown, and both appellant and this Court are bound by the jury finding and the trial court's judgment, but assuming that the trial court may have committed error in the trial of this case, under the provisions of Rules 434 and 503, Texas Rules of Civil Procedure, the burden was then upon appellant to show that such error or errors complained of were prejudicial errors and to show from the record as a whole that such constituted a denial of the rights of appellant, such as was reasonably calculated to cause and probably did cause an improper rendition of judgment in the case. City of Galveston v. Hill, 151 Tex. 139, 246 S.W.2d 860; Ross v. Texas Employer's Ins. Ass'n, 153 Tex. 276, 267 S.W.2d 541; Hassell v. Pruner, Tex.Civ.App., 286 S.W.2d 266. The record before us does not disclose any such a showing.
In any event, it is doubtful if appellant has fully met the requirements made of him as a result of his alleged cause of action under the authorities cited by making clear, satisfactory and convincing proof of his alleged claims. For all the reasons stated, appellant's points of error are all overruled and the judgment of the trial court is affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434480/
|
312 S.W.2d 113 (1958)
J. A. SIMPSON, Respondent,
v.
The KANSAS CITY CONNECTING RAILROAD COMPANY, a Corporation, Appellant.
No. 45590.
Supreme Court of Missouri, En Banc.
March 10, 1958.
Opinion Modified on Motion April 14, 1958.
Rehearing Denied April 14, 1958.
*115 Wilfred Wimmell, John B. Ewing, Jr., Kansas City, Brenner, Van Valkenburgh & Wimmell, Kansas City, of counsel, for appellant.
Hubbell & Mattes, Kansas City, and Walter A. Raymond, Kansas City, for respondent.
Opinion Modified on Court's Own Motion April 14, 1958.
DALTON, Chief Justice.
This cause comes to the writer on reassignment after transfer to Court en Banc and the rejection of an opinion prepared in Division. It is an action for $75,000 damages for personal injuries sustained by plaintiff, a lcomotive engineer employed by defendant. The defendant owned one locomotive and was engaged in the switching and moving of cars in Kansas City, Missouri, and Kansas City, Kansas, at the Kansas City stockyards. Plaintiff fell as he attempted to reboard the locomotive after he had stopped it and dismounted therefrom. He testified that, on December 26, 1950, after he had gotten down from the cab of the locomotive he noticed steam escaping from the boiler check valve or the injector; that he then went to the front end of the engine and was climbing up toward the running board when a big burst of steam came out and hit him in the face, causing him to miss the grabiron with his hand and to fall off backwards, six feet to the ground, and sustain the injuries complained of.
Plaintiff's petition had originally contained allegations stating three grounds of recovery: (a) use on the defendant's line of an unsafe locomotive in violation of the Boiler Inspection Act (45 U.S.C.A. Sec. 23); (b) using the defective locomotive and negligently permitting an "unusual quantity of steam to escape * * * in an unusual manner"; and (c) negligently failing to furnish plaintiff with a reasonably safe place to work in that defendant negligently permitted an unusual quantity of steam to escape in an unusual manner;grounds (b) and (c) being charges of negligence under the Federal Employers' Liability Act, 45 U.S.C.A. Secs. 51-59.
Plaintiff, on the day of the trial, asked and was granted leave to amend his petition by striking the allegations of negligence under the Federal Employers' Liability Act. The record shows that the proceedings were had in chambers after the pleadings were at issue and, apparently, after the parties had announced ready for trial, since it was immediately before the voir dire examination of the jury panel, as follows:
"Mr. Hubbell: If your Honor please, plaintiff requests leave to amend the petition by striking from paragraph 5 sub-paragraph (b) and sub-paragraph (c), leaving the allegations of paragraph 5(a) in the petition; in other words, Your Honor, we are relying solely upon the Safety Appliance Act regarding the condition of the locomotive.
"Mr. Wimmell: When you say `Safety Appliance Act' do you mean Boiler Inspection Act?
"Mr. Hubbell: Yes, because the Safety Appliance Act includes the Boiler Inspection Act. * * *
"Mr. Wimmell: * * * and the particular Act you are basing your suit here on is the Boiler Inspection Act?
"Mr. Hubbell: That is right."
The defendant interposed no objection and the permission requested was granted. Plaintiff then offered evidence in support of the allegations remaining in his petition after the mentioned sub-paragraphs had been stricken out. Plaintiff's own testimony was the only evidence on the issue of liability. At the close of plaintiff's evidence it was defendant's theory that the plaintiff had stated himself out of court by his own testimony tending to show that *116 "at the time of plaintiff's accident defendant's locomotive had reached the place of repair and was not in `use' or in `service' on defendant's `line' within the meaning of the Boiler Inspection Act." Accordingly, defendant presented a motion for a directed verdict in its favor which the court indicated he intended to sustain. Thereupon, the plaintiff requested the court to make an order setting aside the order granting leave to plaintiff to amend its petition by striking therefrom the two grounds for recovery under the Federal Employers' Liability Act, to wit, sub-paragraph (b) and sub-paragraph (c) of paragraph 5. The request to set aside the prior order was accompanied by a statement of purpose, to wit, "so that the plaintiff may proceed upon the basis of allegations contained in said sub-paragraphs (b) and (c) of paragraph 5."
In support of his request, the plaintiff contended that the matter of permitting the pleadings to be amended was "within the jurisdiction and power of the court, and that it would be right for this to be done." Defendant argued, "The case has been tried on the issues that remained after those provisions were stricken. The plaintiff rested and the plaintiff's case has been completed." Plaintiff's request was then denied. Thereafter, the court sustained defendant's motion for a directed verdict and directed the jury to return a verdict for defendant, which was done, and judgment was entered for defendant.
Plaintiff's motion for a new trial in whole or in part was thereafter timely filed and timely sustained to the extent hereinafter stated. The defendant has appealed and assigns error on the action of the court in entering the order for a new trial. Appellant asks that said order be reversed and the cause remanded with directions to the trial court to reinstate the judgment for defendant.
In view of the conclusions we have reached a further review of the testimony offered by plaintiff on the issues involving the alleged violation of the provisions of the Boiler Inspection Act, and the resulting injury and damage to plaintiff, is not required.
A careful review of the record shows that plaintiff by his "motion for a new trial in whole or in part" sought to preserve and assign error on only two orders entered against him during the course of the trial, to wit, (1) the denial of plaintiff's request that the court make an order setting aside the order theretofore made granting leave to plaintiff to amend his petition by striking sub-paragraphs (b) and (c) of paragraph 5 of plaintiff's petition so that the plaintiff could proceed upon the basis of the allegations contained in said sub-paragraphs (b) and (c) of paragraph 5; and (2) the action of the court in sustaining defendant's motion for a directed verdict and thereby holding that plaintiff was not entitled to recover on the evidence presented as to any breach or violation of any of the provisions of the Boiler Inspection Act.
While the court sustained plaintiff's motion for a new trial, as hereinafter stated, on the basis of assignments numbered 7, 12, 13 and 14, we need only set out assignments 7 and 12 and the closing prayer of the motion, as follows:
"7. The court erred and abused his judicial discretion in denying plaintiff the right to reinstate the allegations of his petition as to negligence under the Federal Employers' Liability Act and to develop the evidence on such issues since a new Action under the Act would be barred because the three-year statute of limitations has run since the date of the accident which occurred on December 26, 1950, and the only possible relief for plaintiff is reinstatement of the negligence allegations, or an amendment containing the same, in this pending action; and it is the rule in both the courts of this State and the Federal Courts that amendments will be liberally allowed to prevent a bar by the statute of limitations. * * *
*117 "12. The court erred and abused his judicial discretion in directing a verdict for defendant and entering a final judgment against plaintiff when the evidence already introduced established a case of negligence under the Federal Employers' Liability Act for negligence in failing to exercise proper care to furnish plaintiff a reasonably safe place in which to work and reasonably safe appliances with which to work, although plaintiff had not fully developed the evidence on such issues and requested reinstatement of the allegations of his petition as to such issues and an opportunity to further develop the evidence on such issues. * * *
"Wherefore, plaintiff prays the court to enter an order granting him a whole new trial but if that is not done then he requests that the judgment be set aside as to the issues under the Federal Employers' Liability Act, leave granted to reinstate the allegations in plaintiff's petition as to such issues, and a new trial granted as to the issues of negligence under the Federal Employers' Liability Act."
The order entered by the trial court on plaintiff's motion for a new trial was as follows:
"This court having heretofore heard the arguments of counsel * * * does sustain the assignments in said motion numbered 7, 12, 13 and 14, and grants plaintiff a new trial only as to the allegations of negligence under the Federal Employers' Liability Act referred to in said assignments numbered 7, 12, 13 and 14 of plaintiff's said motion on condition that plaintiff pay all court costs in this cause to date.
"And it now being made to appear to the court that plaintiff has paid the court costs to date in compliance with the order of this court, the judgment heretofore entered herein is hereby set aside and for naught held: plaintiff's motion for a new trial in whole or in part is denied as to assignments 1, 2, 3, 4, 5, 6, 8, 9, 10 and 11, but is sustained as to assignments in said motion numbered 7, 12, 13 and 14 only and the allegations of negligence under the Federal Employers' Liability Act referred to in said assignments and heretofore stricken out of plaintiff's petition by plaintiff by leave of court are hereby reinstated as follows: * * * (subparagraphs (b) and (c) are set out in the order) * * *.
"And now plaintiff is granted a new trial herein only as to the allegations of negligence above set forth and is denied a new trial as to all other issues. * * *."
As stated, the defendant has appealed from the order granting the new trial to plaintiff and the sole issue for decision presented by the appeal is whether the trial court committed reversible error against defendant in granting the new trial. Section 512.020 RSMo 1949, V.A.M.S.
The first point briefed by appellant in this court is that "at the time of plaintiff's accident defendant's locomotive had reached the place of repair and was not in `use' or in `service' on defendant's `line' within the meaning of the Boiler Inspection Act", and that plaintiff did not make a case for the jury under the assignments in sub-paragraph (a) of paragraph 5 of his petition. We need not consider that question on this appeal by defendant. The trial court directed a verdict against plaintiff on that issue and the order granting plaintiff a new trial was not based on any error with reference to the trial court's action in that respect. If the motion for a new trial was correctly ruled on the basis stated in the trial court's order, the order must be affirmed.
With reference to the grounds upon which the motion for a new trial was sustained by the trial court, appellant contends that initially the plaintiff, in amending his petition, by voluntarily striking out the allegations of negligence under the
*118 Federal Employers' Liability Act, (b) and (c), and relying upon the absolute liability imposed by the Boiler Inspection Act, sought and gained a strategic advantage and in so doing there was no "misadventure" in the plaintiff's trial theory, and therefore the trial court did not have the discretionary power after thirty days (Sections 510.330, 510.360, 510.370 RSMo 1949, V.A.M.S.) to set aside its judgment and reinstate the stricken grounds and grant plaintiff a new trial on those grounds only.
The record shows that plaintiff filed his motion for a new trial in whole or in part within ten days after the judgment appealed from was entered. The assignments in said motion numbered 7, 12, 13 and 14, complained of the action of the court in refusing to permit plaintiff to reinstate the allegations of negligence under the Federal Employers' Liability Act. This request was made after plaintiff had rested, but before the motion for a directed verdict had in fact been sustained and before any judgment had been entered for defendant. Plaintiff in his motion charged that the court abused its discretion in refusing to make the order setting aside the order granting leave to plaintiff to amend his petition. Plaintiff had sought to reinstate the stricken assignments of negligence under the Federal Employers' Liability Act and to offer evidence thereunder. At the time this request was made the only objection interposed was that the case had been tried on the issues that remained after those provisions were stricken and that plaintiff had rested. No suggestion of prejudice to defendant, if the request had been granted, was shown, nor was there any suggested that defendant had excused any witnesses or was otherwise unprepared to proceed. We have noted that the pleadings were at issue and the trial had been started when the plaintiff was granted leave to strike the mentioned assignments. At the time the request was made it was clearly apparent that serious prejudice to plaintiff would result, if the request was not granted, on terms or otherwise. There was evidence before the court that plaintiff was an employee of defendant engaged in interstate commerce and that on December 26, 1950, he had sustained serious personal injuries while engaged in the performance of the duties of his employment. The record also showed that plaintiff's suit had been instituted on February 27, 1953 and that the cause was being tried February 20, 1956. From the facts before the court it was determinable whether plaintiff would be finally concluded from further proceeding under the Federal Employers' Liability Act, if his request was not granted.
The fact that the court had indicated to plaintiff's counsel that he intended to sustain a motion for a directed verdict, was some evidence that, at the time, the request was made the court realized that plaintiff was proceeding on an erroneous legal theory or else that plaintiff had disappointed his counsel and had testified himself out of court on the theory relied upon. In any case, it was then clearly apparent to the court and counsel that the cause had not been tried under the Federal Employers' Liability Act allegations before that theory was abandoned. Instead, it appeared that plaintiff had only presented his evidence under the assignments applicable to the Boiler Inspection Act and had run into difficulty and was asking the court to set aside the prior order and permit the reinstatement of the prior allegations so that he could proceed with the trial and put in additional evidence with reference to the Federal Employers' Liability Act allegations. The court was confronted with the determination of the issue upon a factual situation resting within his sound judicial discretion. Appellant concedes that "under the statutes of this state the court probably had the authority, before judgment, to permit amendment of the petition and reinstatement of the allegations which were abandoned * * *" since "it is settled in this state that a trial court has the discretion to permit amendments to pleadings to be made out of time before final judgment and its discretion in allowing or denying *119 amendments will not be interfered with by the appellate courts unless the trial court has palpably abused its discretion." Appellant cites Dyer v. Harper, 336 Mo. 52, 77 S.W.2d 106, 109 and other cases.
In the present case the court denied the request for amendment and thereafter sustained the motion for directed verdict and entered judgment for defendant, but within the time allowed by law the plaintiff filed his motion for a new trial expressly charging that the trial court had, under the factual situation then and there existing at the time, abused its discretion in denying the request for amendment.
Appellant further contends, as stated, that, "while the trial court may have had the power and discretion under Supreme Court Rule 3.25 and Section 510.370 of the statute to set aside this judgment within 30 days after entry of the judgment, it did not have the power or discretion to set such judgment aside after the 30 days had passed for the reason that it is well established in this state that, after the 30 day period has elapsed, the power of a trial court to grant a new trial is discretionary only as to questions of fact and matters affecting the determination of issues of fact and is to be exercised only where there is error with respect to such matters so that the judgment is erroneous," citing Cooper v. 804 Grand Bldg. Corp., Mo. Sup., 257 S.W.2d 649; Schipper v. Brashear Truck Co., Mo.Sup., 132 S.W.2d 993, 125 A.L.R. 674, and other cases.
The above cases are also cited as holding that, while "trial courts have wide discretion in passing on motions for a new trial where there is error in the record, * * * yet the power of the trial court to grant a new trial is discretionary only as to questions of fact and matters affecting the determination of issues of fact. There is no discretion in the law of a case, nor can there be an exercise of sound discretion as to the law of a case." Cooper v. 804 Grand Bldg. Corp., Mo., 257 S.W.2d 649, 655.
The judgment appealed from was entered February 21, 1956, the motion for a new trial was filed March 1, 1956, and it was sustained April 17, 1956. It was sustained upon the basis of the specific grounds stated in the motion, to wit, on the grounds set forth in assignments 7, 12, 13 and 14 of the motion. These assignments had carried over the authority of the court to set aside the judgment on the basis of these assignments, until the court ruled thereon, on April 17, 1956, and within 90 days after it was filed. The motion having been timely filed the judgment was not final until the disposition of the motion by action of the court or the lapse of time, 90 days. Sections 510.340 and 510.360 RSMo 1949, V.A.M.S.; Supreme Court Rule 3.24. While at the time the motion for a new trial was ruled, the 30 day period had elapsed (Supreme Court Rule 3.25), the trial court still retained jurisdiction to rule the motion on the discretionary grounds stated therein. Stroh v. Johns, Mo.Sup., 264 S.W.2d 304, 307, 308.
In support of the contention that "regardless of what the court could or could not have done at the time of the trial," the court had no power to set aside a valid judgment and grant a new trial "to permit amendment of the petition and trial of new issues," the appellant reviews Sections 509.490 and 509.500 RSMo 1949, V.A.M.S., with reference to the amendment of pleadings. Appellant repeatedly refers to the judgment as a valid judgment, not subject to being set aside. But if the trial court was correct in ruling the motion for a new trial, error inhered in the judgment that it set aside, the error was prejudicial to plaintiff and there had been no valid judgment. Appellant says that the latter statute "permits amendments, `even after judgment' only where the amendment of the pleadings is necessary to conform the pleadings to the evidence."
It is apparent that appellant overlooks the fact that the order of the court sustaining the motion for a new trial in *120 part, sustained it upon the basis of error committed in the course of the trial, since in sustaining the motion and setting aside the judgment, the court held that it had in fact abused its discretion in overruling plaintiff's request, which had been made prior to the entry of the order sustaining the motion for directed verdict and prior to the entry of the adverse judgment. We are not here concerned with any of the subsequent orders of the trial court after the order sustaining the motion for a new trial, since appellant has appealed and could only appeal from the order granting the new trial. Section 512.020 RSMo 1949, V.A.M.S.
Appellant further contends that it cannot now be claimed that the court's refusal, in the course of the trial to permit the amendment, was an abuse of discretion. Before ruling this contention, other matters must be considered. We have seen that the court sustained the motion for a new trial upon assignments numbered 7, 12, 13 and 14. Some of these assignments have been hereinbefore set out. In so sustaining the motion for a new trial the trial court held that it had abused its discretion in overruling plaintiff's request to amend. Was this order such an abuse of the court's discretion that this court on this appeal by defendant can properly set the order aside and direct that the original judgment be reinstated? The motion was clearly sustained upon a discretionary ground stated in the motion and the court had jurisdiction to sustain the motion on such a discretionary ground. Stroh v. Johns, supra, 264 S.W.2d 304, 307. In such case, the appellate courts will usually defer to the trial court's action. Brandenburg v. Kasparian, 363 Mo. 20, 247 S.W.2d 806, 808; McDonald v. Logan, 364 Mo. 382, 261 S.W.2d 955, 959. Further, when a motion for a new trial is sustained and the relief requested is granted, an appellate court in reviewing the action of the trial court and in considering the grounds stated in the motion upon which the action is based, will be more liberal in upholding the trial court's action, than it would be if it were reviewing the same matters when considering an appeal from a judgment entered after a motion for a new trial has been overruled. See Teague v. Plaza Express Co., 356 Mo. 1186, 205 S.W.2d 563, 566; Stroh v. Johns, supra, 264 S.W.2d 304, 307.
In further support of the contentions that the court did not abuse its discretion in refusing to permit the amendment of pleadings in the course of the trial and that the court had no discretionary power to set the judgment aside after 30 days and grant a new trial, appellant, as we have seen, insists that the purpose of plaintiff's action in amending the petition before trial was to gain a "strategic advantage" and that there was no "misadventure" in plaintiff's trial theory. Appellant particularly relies upon Hunt v. Chicago, M., St. P. & P. R. Co., 359 Mo. 1089, 225 S.W.2d 738, and Smith v. St. Louis Public Service Co., 364 Mo. 104, 259 S.W.2d 692. We think these cases have no application here. They deal with the exercise of discretion in the appellate court and not in the trial court. In neither of the mentioned cases had the defendant appealed, as here, from an order of the trial court granting a new trial to plaintiff on account of a ruling made by the trial court in the course of the trial, which action the court had subsequently determined to be erroneous and an abuse of a sound judicial discretion. And see 510.330 RSMo 1949, V.A.M.S.; Supreme Court Rule 3.22 and 3.27.
Appellant argues the allegations were stricken by plaintiff "because of the strategic advantage he gained in doing so," and that thereby "plaintiff deprived defendant of the defense of contributory negligence, one of defendant's principal defenses." Of course contributory negligence might affect the amount of recovery under the Federal Employers' Liability Act, but that cause was not tried. It has been noted that the allegations (b) and (c) were stricken before the voir dire examination *121 of the jury and not after the evidence on all issues had been fully developed. It was not an election after the facts had been fully developed and all the evidence was in or after plaintiff had had the benefit of all the evidence. The cause was not tried to a jury on the basis of the allegations in sub-paragraphs (b) and (c). Appellant also argues that "plaintiff's attorneys undoubtedly felt that it was to their advantage to stand on the petition upon which the case was tried and to appeal the adverse judgment." The record does not sustain that contention, because before the cause was finally submitted the plaintiff's attorneys had asked for relief and were seeking to escape the trap into which they had fallen. The request was denied in the course of the trial and not after an adverse ruling had actually been entered of record, or after a judgment had been entered thereon. After the request was denied, there was nothing left for plaintiff to do, but to let judgment go against him and to move for a new trial, as was done. No other adequate relief was available. It wasn't a case of plaintiff having elected to stand, but of being required to stand.
Appellant further says that "it should not be assumed that plaintiff could make a case under the negligence allegations which were abandoned." There is no contention that plaintiff did not state a case under the Federal Employers' Liability Act and appellant has shown no good grounds for assuming that plaintiff cannot make a submissible case under that Act, and there is no suggestion that the evidence in support of the abandoned assignments was fully developed.
We do not find that plaintiff's action in striking sub-paragraphs (b) and (c) was taken to gain "strategic advantage" or that it so resulted. It was a "misadventure" resulting from a mistaken idea of the facts, or a misunderstanding of the applicable law or of surprise, perhaps as to a witness's testimony. In any event, subsequently, the trial judge concluded that he had abused his discretion in denying plaintiff the permission sought, and he granted a new trial. The burden of showing that the trial court abused its discretion in granting the new trial rested upon appellant, the complaining party. Bierman v. Langston, Mo.Sup., 304 S.W.2d 865, 868 (7). And see Ryan v. Campbell "66" Express, Mo.Sup., 304 S.W.2d 825, 827(2).
We do not find that the court abused its discretion in granting a new trial, rather we think the order of the trial court granting a new trial, under the facts shown, conforms to the general rule stated in Houfburg v. Kansas City Stock Yards Co., Mo.Sup., 283 S.W.2d 539, 547(16), a rule often applied even in appellate courts. And see Snyder v. Jensen, Mo.Sup., 281 S.W.2d 819, 824(6); Homfeld v. Wilcoxon, Mo.Sup., 304 S.W.2d 806, 811(6,7).
The order granting a new trial is affirmed and the cause remanded.
All concur, except EAGER, J., who concurs in result.
On Motion for Rehearing
PER CURIAM.
The defendant-appellant, who appealed from the order of the trial court granting a new trial to plaintiff on the issues of negligence under the Federal Employers' Liability Act, has filed no motion for a rehearing against the order and judgment of this court affirming the order of the trial court granting the new trial to plaintiff, but the plaintiff-respondent has filed a motion for rehearing and again asks this court to sustain the order of the trial court upon another and additional ground, to wit, on the ground that the trial court erred in denying a new trial to plaintiff on the issues under the Boiler Inspection Act and to hold that a new trial was properly granted to plaintiff for that additional reason. Respondent *122 urges that under the general rule of affirming orders granting new trials on any theory shown by the record, regardless of the reason or theory given by the trial court, respondents in other cases have been permitted to urge grounds and theories impliedly or expressly denied by the trial court when it granted the new trial. See Craton v. Huntzinger, Mo.Sup., 187 S.W. 48, 53; Thurman v. Wells, Mo.App., 251 S.W. 75, 77; Foley v. Union House Furnishing Co., 228 Mo.App. 1063, 60 S.W.2d 725, 729; Kersten v. Hines, 283 Mo. 623, 223 S.W. 586, 589; Smith v. Kansas City Public Service Co., 328 Mo. 979, 43 S.W.2d 548; 66 C.J.S. New Trial § 84, p. 263. Compare: Sapp v. Key, Mo.Sup., 287 S.W.2d 775, and Williams v. Kansas City, Mo.Sup., 274 S.W.2d 261. However, it is only where the appellate court finds the trial court erred in denying a new trial on the ground urged that the appellate court's holding, on such issue, would support the order of the trial court granting the new trial. Where the appellate court agrees with the trial court in not granting a new trial on certain specified grounds and agrees with the trial court on the reasons assigned for granting a new trial, it is unnecessary for the appellate court, on an appeal by the defendant from an order granting plaintiff a new trial, to review or determine issues, which if determined in the manner the appellate court would determine them, would not support the order granting a new trial to the plaintiff.
In this case, respondent argues that plaintiff was entitled to a new trial on the issues under the Boiler Inspection Act, as well as on the issues under the Federal Employers' Liability Act; and that a holding to that effect would further support the order granting the new trial to plaintiff. We fully agree with the last statement, but if, on the other hand, this court is of the opinion that the trial court was correct in not granting plaintiff a new trial on the Boiler Inspection Act issues, a ruling on that issue is unnecessary to a determination of the issues presented by the appeal and need not be ruled. A divisional opinion supporting the order granting a new trial on the theory mentioned by respondent failed of adoption by the unanimous vote of the court en banc and a ruling on that issue would not support the order of the trial court granting the new trial to plaintiff, hence we do not rule it here.
Respondents' motion for rehearing, or in the alternative for modification and clarification of opinion is overruled.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434663/
|
312 S.W.2d 313 (1958)
The MILLERS MUTUAL FIRE INSURANCE COMPANY OF TEXAS et al., Appellants,
v.
Agnes SCHWARTZ et vir, Appellees.
No. 13317.
Court of Civil Appeals of Texas, San Antonio.
April 2, 1958.
Clinton G. Brown, San Antonio, for appellant.
David R. White, Uvalde, for appellee.
W. O. MURRAY, Chief Justice.
Appellees, Agnes Schwartz and her husband, Lee Schwartz, the owners of a store in Uvalde, Texas, instituted this suit against appellants, The Millers Mutual Fire Insurance Company of Texas and Millers Mutual Insurance Association of Illinois, seeking to recover upon two insurance policies issued by appellants, protecting appellees against loss by reason of explosion.
On the night of July 12, 1956, an accident occurred to appellees' store, which they alleged to be an explosion, and as a result of the accident the store was flooded with water and thereby damaged. The trial was before the court without a jury and resulted in judgment in appellees' favor in the sum of $531.56, from which judgment the insurance companies have prosecuted this appeal.
Appellants present but one point, to the effect that the court erred in rendering judgment for appellees because the incident which occurred at the store was not an explosion.
Sometime during the night of July 12, 1956, a hose became disconnected from a pipe and caused water to go all over appellees' store. The store was closed, no one was there during the night, and the condition was discovered the next morning when the store was opened. There was an air conditioner in the store and water circulated through it up to a cooling tower on the roof then back to the air conditioner. The hose that was fastened to the pipe was a part of this circulating system, and it was fastened by a clamp that could be tightened by turning a screw. When the store was closed on the night of July 12th, this union was in good shape and there was no leakage, but the next morning the tube and pipe were disconnected and water was all over the store. Some of the witnesses in describing what they found the next morning, stated that the hose was "blown off" of the pipe. There is a pump which causes the water to go up to the cooling tower, and one witness expressed the opinion that this pump built up the pressure in the pipe until it blew off *314 the hose. One witness said that, from the way it sprayed water all over the place, it must have come off suddenly. As no one was present when the accident happened, no one knew whether it made any noise when the hose was blown off.
The trial court found that there was an explosion, and the question is whether or not there is sufficient evidence to support the finding. We find many definitions of what is meant by an explosion. What was said by Judge Atwell in Bower v. Aetna Ins. Co., D.C., 54 F. Supp. 897, 898, covers the subject about as well as anything we have found. He said:
"Such authorities as the court has been able to discover seem to agree that the word, `explosion,' is variously used and is not one that admits of an exact definition and has no fixed and definite meaning, either in ordinary speech or in law. It seems to be a general term unlimited in its application. 35 C.J.S. p. 215. That authority, supported by citation, also observes that `its general characteristics may be described, but the exact facts which constitute what we call by that name, are not susceptible of such statement as will always distinguish the occurrence.' It seems that the violence of the explosion and the vehemence of the report vary in intensity. An explosion is an idea of degree and the true meaning of the word in each particular case must be settled, not by any fixed standard, or accurate measurement, but by the common experience and notions of men in matters of that sort. It is also said that the term is to be construed in its popular sense and as understood by ordinary men.
"In a broad sense it has been defined as meaning the act of exploding, bursting with a loud noise or detonation; a shattering by a sudden and intense pressure in distinction to rupture; a sudden bursting or breaking up or in pieces, from an internal or other force.
"Authorities also cited make `explosion' synonymous with `bursting.' 1 Bouv.Law Dict., Rawles Third Revision, p. 1161; 12 C.J.S. p. 760; Westchester Fire Ins. Co. v. Chester-Cambridge Bank & Trust Co., 3 Cir., 91 F.2d 609, 611; 15 Words and Phrases, Perm.Ed., p. 719 [15A Words and Phrases, Explosion].
"Circuit Judge Adams, in B. Roth Tool Co. v. New Amsterdam Casualty Co., 8 Cir., 161 F. 709, 713, said that it was futile to split hairs as to the technical meaning of the word, `explosive.' That observation was not directed upon a point similar to that here presented, but it is applicable in the sense that the plaintiff pleads circumstances, which, if established by testimony to be facts, would demand the submission of the issue to the jury as to whether what happened was the result of an explosion.
"The application of a force from within the radiators which the radiators, or the pipes, could not resist, and burst, or exploded is apparently what happened. If `bursting' is synonymous with `exploding', then there would be liability. The trend of current thought being that bursting, as of a boiler, for instance, or a pipe, is commonly considered to be an explosion, must be read into the contract between the plaintiff and defendant, the plaintiff being entitled to a liberal construction of the policy which was written by the defendant."
There was sufficient evidence to support the trial court's finding that there was an explosion. Crombie & Co. v. Employers' Fire Ins. Co., Tex.Civ.App., 250 S.W.2d 472; 22 Am.Jur. 126; 35 C.J.S. p. 216; Commercial Union Fire Ins. Co. of N. Y. v. Bank of Georgia, 5 Cir., 197 F.2d 453; Lever Bros. Co. v. Atlas Assur. Co. Ltd., 7 Cir., 131 F.2d 770.
*315 On Motion for Rehearing.
We were in error in stating that this was a trial before a jury. The findings herein were made by the trial court.
Our original opinion has been withdrawn and a new opinion filed correcting this error.
We have carefully considered appellants' motion for a rehearing and the same is overruled.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434592/
|
312 S.W.2d 562 (1958)
George H. TRACY et al., Appellants,
v.
LION OIL COMPANY et al., Appellees.
No. 3360.
Court of Civil Appeals of Texas, Eastland.
April 11, 1958.
Rehearing Denied May 2, 1958.
*563 Wynne & Wynne, Wills Point, Carleton P. Webb, Post, for appellants.
Richard S. Brooks, Whitaker & Brooks, Stubbeman, McRae, Sealy & Laughlin, Midland, Frank L. Heard, Jr., Houston, for appellees.
GRISSOM, Chief Justice.
George H. Tracy and H. H. Tracy sued Lion Oil Company, Humble Oil & Refining *564 Company and Charles Lindsey Marchbanks in trespass to try title to an interest in an oil and gas leasehold estate and for specific performance of an alleged contract by Lion to reconvey to the Tracys three-fourths of the leasehold estate in a tract of land in Scurry County. Since some of the Tracys' pleadings and contentions are difficult to understand they will be stated in some detail. They first alleged that they owned an oil and gas lease on a one-fourth interest and a one-sixteenth of seven-eighths overriding royalty on the remaining three-fourths of the leasehold estate. (It is undisputed that the Tracys own the leasehold above 4,000 feet and a one-sixteenth of seven-eighths overriding royalty on three-fourths of the leasehold estate below 4,000 feet. Therefore, this will hereafter be assumed and not repeated.) In the next paragraph they alleged they owned all the leasehold below 4,000 feet; that Lion owned the lease on three-fourths thereof but that Humble and Charles Lindsey Marchbanks did not own any interest. They alleged that on December 28, 1948, they made a contract with Lion for the sale of two oil and gas leases and assigned them to Lion; that Lion approved the title to and paid for a three-fourths interest but did not approve the title to nor pay for the remaining one-fourth; that Lion pretended to work with them in clearing the title to said one-fourth interest but that it did not act in good faith; that Lion had agreed, after it had approved the title to and paid for a one-fourth interest, to either accept and pay for all the remaining three-fourths interest or reconvey it to the Tracys; that Lion accepted the title to and paid for a three-fourths interest but did not approve the title to nor pay for the remaining one-fourth and, therefore, Lion had the duty to reconvey a three-fourths interest. Wherefore, they prayed that the court compel Lion to reconvey said three-fourths interest. In a trial to the court judgment was rendered for all the defendants, except Tracys' undisputed interest heretofore mentioned, and the Tracys have appealed.
The case grew out of the following situation. In 1943 R. Bishop, who is the common source of title, owned the land and conveyed it to R. P. Marchbanks, excepting one-half of the minerals but granting Marchbanks, his heirs and assigns, the right to lease the excepted minerals. Marchbanks died on December 7, 1946. He was survived by his wife and by two sons, Lindsey A. and Robert Marchbanks. He devised his property to his wife, Maggie Marchbanks, for life, then to said two sons for their lives and at their deaths to a grandson, Charles Lindsey Marchbanks, in fee. Lindsey A. Marchbanks was appointed independent executor. On January 6, 1947, R. P. Marchbanks' will was probated and Lindsey Marchbanks qualified as independent executor. At his death R. P. Marchbanks and wife owed the Federal Land Bank approximately $959.07, which was secured by a vendor's lien. The land was not then leased and no oil had been produced thereon.
It is undisputed that R. P. Marchbanks and wife owned as community property one-half of the minerals and had the right to lease the half retained by Bishops; that, after the death of her husband, Mrs. Marchbanks had the power to lease her one-fourth of the minerals, subject to the payment of debts and the rights of the independent executor; that the will of R. P. Marchbankd purported to devise only his one-fourth of the minerals and the minor was devised the fee to said one-fourth subject to said life estates.
C. U. Bishop and wife executed a lease to Cannon Drilling Company, dated December 24, 1946, which was filed for record on June 13, 1947. On June 14, 1947, it was assigned to the Tracys, who on December 16, 1948, assigned it to Lion. About June 13, 1947, the surviving wife and sons of R. P. Marchbanks delivered a mineral lease to Cannon Drilling Company "on our undivided ½ interest" in said land. It was dated December 24, 1946. This lease recited that C. U. Bishop was then the owner of the other half of the minerals and *565 had by a separate instrument leased same. This lease was assigned by Cannon to the Tracys on June 14, 1947, and assigned by the Tracys to Lion on December 16, 1948. In March, 1949, Mrs. Marchbanks and Lindsey Marchbanks, as independent executor, delivered to George Tracy a lease on the land in question. It was not recorded when Humble purchased the lease at the guardian's sale. By assignment dated March 3, 1949, said lease to Tracy was transferred to Lion with Tracy excepting one-sixteenth of seven-eighths of the oil produced thereon. In March, 1949, Maggie Marchbanks and Lindsey A. Marchbanks, as independent executor, delivered to the Tracys and Lion a ratification of the lease by Maggie, Lindsey and Robert Marchbanks to Cannon, stating therein that they ratified same "but as if there had been no specification in said lease of the interest covered thereby and as if there had been no reference therein to the existence of any other oil and gas lease * * *."
Lindsey Marchbanks filed an application in the probate court to be appointed guardian of the estate of the minor, Charles Lindsey Marchbanks. He was appointed, qualified and filed an inventory and appraisement of said minor's estate on July 20, 1948, listing said one-fourth interest as the property of the minor then in his possession. Thereafter, said guardian was authorized to execute a lease on said minor's interest to Humble. In accord with the orders of the probate court, on March 11, 1949, the guardian executed a lease on said minor's "vested remainder in an undivided ¼th of the oil, gas and other minerals" to Humble for a large consideration.
On December 28, 1948, an agreement was executed by Lion and the Tracys, evidenced by a letter, in which it was recited that the Tracys had assigned to Lion the lease from the Bishops to Cannon and the lease from Maggie, Lindsey and Robert Marchbanks to Cannon, reserving, however, to the Tracys the leasehold estate down to and including 4,000 feet and an overriding royalty of one-sixteenth of seven-eighths of the minerals produced from below 4,000 feet. It recited that Lion had then approved title to only a one-fourth interest and had paid the Tracys $16.50 per acre and that the Tracys' assignments to Lion "purported" to convey the "full" interest in said leases. It was agreed that the Tracys would continue their efforts for one year and at their expense to make title acceptable to Lion to the remaining three-fourths and deliver to Lion such additional instruments as might be necessary to vest title in Lion to said interest. The remainder of said contract that may be here material is as follows:
"2. If at any time within one year from this date you are able to make title acceptable to us the leasehold estate in that ¾ of the minerals not yet approved by our attorneys, then upon our acceptance of title we agree to pay you for the additional ¾ leasehold interest at the rate of $16.50 per net leasehold acre, being the same basis upon which payment for ¼ leasehold interest has already been made to you." (The lease to Humble was made within said one year period.)
"3. If at the end of one year you have not made title acceptable to us to the leasehold estate in that ¾ of the minerals mentioned above, we shall have the right as we may then determine (a) to reassign and relinquish to you the leasehold acreage hereinabove described except insofar as the leases above cover that ¼ of the minerals which has been approved by our attorneys and for which we have made payment to you, or (b) to take over in our own right the matter of curing title and securing a lease upon that ¾ of the minerals, title to which is presently unsatisfied; if we make the latter decision we shall have an additional year within which to endeavor to perfect the title and secure leases adequate to cover the particular ¾ of the minerals. If we proceed, under subdivision (b) of this section, to make *566 efforts to cure the title any expense incurred in so doing shall be borne wholly by us.
"4. In the contingency that after you have spent one year in endeavoring to perfect title to the leasehold estate in the ¾ of the minerals mentioned above and have been unsuccessful and if we have elected to take an additional year for such curative effort on our part, then in the event that we are unable to perfect leasehold title to that ¾ of the minerals, title to which is presently unsatisfied, then upon completion of our efforts and the securing of such leases and other instruments as are adequate to vest in us leasehold title to that particular ¾ of the minerals, we agree to make payment to you for the additional ¾ leasehold interest at the same rate of $16.50 per acre hereinabove mentioned. If at the end of this company's efforts to perfect title during the second year we are unable to do so, then at the end of that year we agree to reassign and relinquish to you the leases the acreage hereinabove described except to the extent of the ¼ interest title to which has been approved and for which we have made payment to you.
"5. Notwithstanding any provision hereof indicating to the contrary, if, during the curative periods above allotted each of us, you or we should perfect title to an interest in addition to the ¼ leasehold interest now approved and paid for, we shall, upon delivery to us of such instruments as our attorneys require, make payment to you for such additional leasehold interest at the rate of $16.50 per net lease acre and in such event our respective covenants above relative to ¾ interest will necessarily apply to that fractional portion of the leasehold title still remaining unapproved and for which payment has not then been made to you."
The court filed findings of fact and conclusions of law, including findings that the Tracys, Lion and others agreed upon what was to be done to perfect title so that all the Marchbanks' minerals could be leased; that at a meeting of said parties on January 8, 1949, they agreed to institute suit in the District Court to have the will of R. P. Marchbanks construed and have determined the title to the mineral estate devised and who, if anyone, had authority to lease the same and to obtain from the probate court authority for the guardian to execute a lease conveying the minor's interest; that Lion paid the Tracys $3,052.50 in accord with their letter agreement of December 28, 1948, for a one-half interest in the minerals (which was in addition to the one-fourth interest, title to which had been previously accepted and which had been paid for by Lion); that the Tracys and Lion then both believed that the Tracys had actually conveyed to Lion only a three-fourths interest and that Lion was paying for such interest and that at that time the Tracys represented to Lion that they had received from Lion $16.50 per acre for a three-fourths interest in the leasehold and agreed to continue their efforts to make title acceptable to Lion to the remaining one-fourth.
The court found that, pursuant to said letter agreement and the agreement of January 8, 1949, as to how they would proceed to clear title to the remaining one-fourth, on January 31, 1949, suit was filed for all of said parties in the name of Maggie and Robert Marchbanks against Lindsey Marchbanks et al., in the District Court of Scurry County to construe the will and have determined the title to said minerals and who had authority to lease the same; that, in March, 1949, said case was tried and George Tracy, Lindsey Marchbanks, representatives of Lion and said minor were present and participated in the trial and the court signed the judgment and delivered it to the Clerk of the District Court of Scurry County. The Court found that the Tracys and Lion were interested in, initiated, identified themselves with and participated in said litigation in which the *567 matters aforesaid were determined; that, pursuant to said plans and agreements, they caused the guardian to file an application for authority to lease said minor's "vested remainder in an undivided one-fourth (¼th) of the * * * minerals"; that said application recited that the minor owned said interest in fee simple and that a lease should be executed for the minor in order to create a complete leasehold estate; that George Tracy, representing himself and H. H. Tracy, and Lion agreed to bid in the name of Lion at the sale of the guardian's lease, for their joint benefit; that at the hearing of said application George Tracy and representatives of Lion were present and they attended the guardian's sale and bid for their mutual benefit in the name of Lion; that the lease was sold to Humble, the highest bidder; that immediately prior to the acceptance of Humble's bid, Lion's representative conferred with George Tracy, told him that Lion would make no further joint bid and tendered Tracy the opportunity to continue the bidding, which he declined. The court found that the Tracys and Lion were interested in, initiated and participated in the guardianship proceedings which resulted in the guardian's lease to Humble; that they invoked the jurisdiction of the probate court and took the position therein that said minor had a vested remainder in an undivided one-fourth of the minerals available for leasing and that the Tracys and Lion did not have a lease on the minor's interest, which position is inconsistent with the Tracys' position in this case. The court found that after said hearing, acting under the order of the probate court, the guardian executed a lease to Humble on the minor's vested remainder in an undivided one-fourth of the minerals; that, in accord with the letter agreement and later plans, an application was filed in said guardianship to authorize the guardian to ratify the leases from Maggie, Lindsey and Robert Marchbanks to Cannon and from Mrs. Marchbanks and Lindsey Marchbanks, executor, to Lion and the Tracys. In said application it was represented to the probate court that said leases were originally intended to cover the entire mineral estate but that they were found not to include "the vested remainder interest of Charles Lindsey Marchbanks in an undivided ¼th of the mineral estate". The court found that the probate court authorized the ratification of said leases with the express provision that it should not include the vested remainder of the minor in the undivided one-fourth of the minerals leased to Humble; that, pursuant to said application and order, the guardian executed said ratification but specifically stated therein that it did "not cover the vested remainder of the ward in an undivided ¼th interest in the mineral estate * * * which was covered by and embraced in the lease executed by the Guardian to Humble." The court found that this instrument was received and accepted by the Tracys and Lion and recorded by them; that on April 8, 1949, the Tracys executed to E. E. Fogelson a royalty deed in which they stated, in effect, that they had assigned to Lion only a three-fourth's interest; that on October 16, 1951, George Tracy wrote Lion that they had delivered to it a three-fourth's interest in the Marchbanks's lease and that the other one-fourth had been awarded to Humble, and the Tracys asked to be released from any further obligation to Lion; that, throughout their trade and working together, until February 1, 1952, Lion and the Tracys believed and understood that Lion owned only a three-fourth's interest for which Lion had paid them $16.50 per acre; that the Tracys abandoned any equitable rights they had under the letter contract to a reconveyance of any part of the leasehold and that, shortly before February 20, 1952, the Tracys' attorney wrote Lion that it then owned three-fourths of the lease and Humble owned one-fourth.
The court found that Lion and Humble were jointly operating the leases under a contract providing for Humble's ownership of one-fourth and Lion's three-fourths; that the Tracys, knowing all the facts incident to their claim, did not advise *568 Humble of their claim and for nearly five years Humble relied to its detriment on the Tracys' silence and their representations to the probate court and their position therein that the minor had a vested remainder in one-fourth of the minerals available for leasing and that the Tracys and Lion did not have a lease on that interest.
The court concluded as a matter of law that the Tracys had failed to prove title except to the admitted interest heretofore stated; that Humble had established its ownership of one-fourth of the leasehold and Lion had established its ownership of three-fourths. The court concluded that the judgment of the District Court was res adjudicata of the Tracys' claims; that the Tracys were estopped to assert that the probate court could not authorize the guardian's lease to Humble, to deny its validity or assert they had assigned more than a three-fourths interest to Lion and, further, that the Tracys had ratified the guardian's lease and confirmed Lion's ownership of a three-fourths interest. We sustain these conclusions and hold that the findings of fact on which they are based are sustained by the evidence.
It is undisputed that the Tracys purported to convey to Lion all of the leasehold but that Lion only approved the title to and paid for a three-fourths interest. The Tracys appear to contend that if Lion could have bought the one-fourth interest at the guardian's sale by outbidding Humble it had the duty to do so and, after paying the guardian, to also pay the Tracys for the same thing and give them an overriding royalty on said one-fourth. We do not so construe the contract. They seem to contend that, after Lion had approved the title to and paid for all the remaining three-fourths, Lion was required by said letter contract to reconvey all but the one-fourth interest first approved and paid for. In making this contention they ignore paragraph five which, we think, provides that it had the right to keep any additional interest title to which was approved and for which it paid $16.50 per acre, with the Tracys retaining an overrule. We do not think it can be reasonably contended that Lion had a duty to reconvey any part of the leasehold estate title to which it approved and for which it paid the Tracys. Since it is undisputed that Lion approved the title to and paid for a three-fourths interest, it cannot now be contended that Lion has the duty to reconvey three-fourths. In December, 1948, the Tracys were paid by Lion $1,526.25 for a one-fourth interest. On December 28, 1948, they executed the "letter contract". In February, 1949, they wrote Lion they had then conveyed to it a three-fourths interest in the leases and they then obtained from Lion an additional $3,052.50. If the Tracys intended to assert a duty under the letter contract to reconvey the minor's one-fourth interest purportedly conveyed by the guardian to Humble it is despite the fact that Lion would have had to outbid Humble, pay the minor more than $50,000 for his interest and also pay the Tracys for such interest and give them an override. It is undisputed that Lion did not approve the title to this one-fourth. If the Tracys acquired such an interest it was by virtue of the lease executed by the independent executor. The Tracys do not claim that the minor has executed a conveyance or done anything which entitles them to a lease on the interest devised to him. They say they are entitled to such an interest by virtue of leases executed by Maggie Marchbanks, the surviving wife, or by Lindsey Marchbanks, as independent executor.
Mrs. Marchbanks did not have authority as community survivor to lease the minor's interest. Her husband left a will appointing Lindsey Marchbanks independent executor of his estate. The will was probated and he qualified as independent executor before Mrs. Marchbanks executed a lease. Therefore, she had no authority to lease the minor's interest. The exclusive *569 right to administer said estate belonged to the independent executor. Lovejoy v. Cockrell, Tex.Com.App., 63 S.W.2d 1009, 1010; Huston v. Cole, Tex.Com.App., 139 Tex. 150, 162 S.W.2d 404, 406; Green v. Green, Tex.Civ.App., 244 S.W. 589; Hollingsworth v. Davis, 62 Tex. 438, 440; Matula v. Freytag, 101 Tex. 357, 107 S.W. 536. Appellants' contention that they acquired said title from Mrs. Marchbanks, as community survivor, must be overruled. For reasons hereafter stated, it is not necessary to determine whether the independent executor could have leased the mineral devised to the minor.
We have concluded that the Tracys cannot now say that they conveyed the minor's interest to Lion or that it was not conveyed by the guardian to Humble. There was evidence that George Tracy, acting for himself and H. H. Tracy, representatives of Lion and others met in the office of Lion's attorney on January 8, 1949, for the purpose of devising means of perfecting title to said one-fourth of the minerals; that the whole problem was discussed and they decided to file suit in the district court to have the will construed and have it judicially determined whether the minerals devised could be leased and who, if anyone, had authority to execute leases and to obtain a lease on the minor's interest through the probate court; that, in accord with their agreement, suit was filed and the district court held that the will did not prohibit leasing but that the minor's interest could only be leased by his guardian acting under orders of the probate court. There was evidence that a part of the plan agreed upon was to cause a lease of the minor's interest to be sold by a guardian acting under orders of the probate court. The probate court authorized a sale by the guardian to the highest bidder. There was evidence that it was agreed between the Tracys and Lion that they would bid in the name of Lion for their mutual benefit; that during the sale Lion and the Tracys concluded they had bid enough and were outbid by Humble. If the Tracys were virtual parties to said suits, in the application to lease they represented to the probate court that it was necessary that the guardian execute a lease for the minor "in order to create a complete leasehold estate" and that the minor's interest was a "vested remainder in an undivided ¼ of the oil, gas and other minerals" then in the possession of said guardian. There is evidence that during all the planning, suing and bidding, done for the purpose of acquiring a valid lease on the minor's interest, the Tracys never asserted that they had delivered title to Lion to more than a three-fourths interest or that the guardian could not lease the minor's interest and, further, that the Tracys then had their own lawyers, on whose advice they relied.
On April 18, 1949, the Tracys assigned an overriding royalty interest to Fogelson in which they said they had assigned the lease by Maggie, Lindsey and Robert Marchbanks, the lease by the Bishops to Cannon and the lease by Mrs. Marchbanks, and Lindsey Marchbanks, as executor, which leases had been ratified and "that the said leases and ratification taken together cover and embrace an undivided three-fourth's interest in the oil, gas and mineral estate in said lands * * *."
In March, 1949, Lindsey Marchbanks, as guardian of said minor, in conformity with an order of the probate court obtained by the Tracys, Lion and others, executed a ratification of the Marchbanks' leases which recited that:
"* * * this instrument specifically does not cover the vested remainder of the ward in an undivided ¼ interest in the mineral estate in the lands above described, which remainder interest is covered by and embraced in a recent lease executed by the Guardian to Humble Oil & Refining Company and this instrument shall never be construed or interpreted as in any way conflicting with or casting a cloud upon the said lease of Humble Oil & Refining Company."
*570 The court found that the Tracys and Lion received and accepted said instrument and had it recorded. See Greene v. White, 137 Tex. 361, 153 S.W.2d 575, 583, 136 A.L.R. 626, and Loeffler v. King, 149 Tex. 626, 236 S.W.2d 772, 774.
There is evidence that said suits were brought in furtherance of the Tracy-Lion letter contract of December 28, 1948, and their later agreement and plans of January 8, 1949, to perfect title to the one-fourth of the minerals, which Lion had not approved nor paid for, so that it could be leased. We sustain the conclusion that the Tracys were virtual parties to and bound by said judgment. American Indemnity Co. v. Fellbaum, 114 Tex. 127, 263 S.W. 908, 910, 37 A.L.R. 633; Pelton v. Trico Oil Co., Tex.Civ.App., 167 S.W.2d 625, 628; Ex parte Foster, 144 Tex. 65, 188 S.W.2d 382, 384; Mims v. Hearon, Tex. Civ.App., 248 S.W.2d 754, 757. We conclude that said judgment is res adjudicata of the claims of the Tracys that the guardian's lease to Humble did not convey one-fourth or that Lion was bound to reconvey said one-fourth. The Tracys had been paid for three-fourths and had agreed to continue to exert their best efforts, in accord with the advice and assistance of Lion, to make title acceptable to Lion to the remaining one-fourth interest. They joined Lion and the minor in their plans for trials in the district and probate courts; they obtained a judgment of the district court that the minor's interest could be leased only by his guardian acting under the order of the probate court; they obtained a judgment of the probate court authorizing a lease of said one-fourth interest to the highest bidder and they, through Lion, bid at that sale. The district court's judgment was not void because it was not signed in the district court room in Scurry County and it cannot here be collaterally attacked. Bridgman v. Moore, 143 Tex. 250, 183 S.W.2d 705, 708; Hannon v. Henson, Tex.Com.App., 15 S.W.2d 579, 584. Though not named parties, they planned said suits for their own benefit, helped prepare them, attended the trials and the guardian's sale, and, through Lion, bid for the minor's interest. They, in effect, represented to the court and other bidders that Lion and the Tracys did not have a valid lease on the minor's interest, and that the guardian could execute a valid lease thereon. The judgments were as to them decrees that the minor's interest was not leased and could only be leased by the guardian. We conclude that the Tracys are estopped by their judicial representations to claim a lease on the minor's interest. Spence v. State National Bank, Tex.Com. App., 5 S.W.2d 754, 756; Chicago, R. I. & P. Ry. Co. v. Lopez, Tex.Civ.App., 209 S.W. 192, 195 (Writ Ref.); Allen v. Berkmeir, Tex.Civ.App., 216 S.W. 647 (Writ Ref.).
Humble had no knowledge of the Tracy-Lion letter agreement. After making the aforesaid representations to the court, the Tracys, who were present and bidding through Lion, did not advise other bidders that they had already bought what was then being offered for sale, or that, by virtue of an unrecorded lease from the executor, who was then offering, as guardian, to lease the same, that they had already bought said one-fourth and transferred it to Lion. In purchasing the lease Humble paid attorney's fees for which the Tracys may have been liable under their letter agreement. Such purchase was made within one year after the date of the Lion-Tracy letter contract. Efforts to cure the title were then to be paid for by the Tracys. After the guardian's lease was executed the Tracys remained silent and did not claim the minor's interest for nearly five years while Humble and Lion spent a vast sum developing the lease and paid a large amount to said minor. See Dalton v. Rust, 22 Tex. 133; Rancher v. Franks, Tex. Civ.App., 269 S.W.2d 926.
We sustain appellees' counter-points to the effect that the Tracys have ratified the guardian's lease to Humble and are estopped to assert they obtained a lease on that interest or that Lion has the duty to *571 reconvey it to them. As a part of the general plan agreed to by the Tracys, the guardian made the application to the probate court for authority to execute a lease on the minor's interest. This was in conformity with the judgment of the district court, the letter agreement and the plans of the Tracys, Lion and others agreed to about January 8, 1949. The probate court granted permission and approved the lease. Thereafter, in conformity with the order of the probate court and said agreements, the guardian executed a ratification of the Marchbanks' leases under which the Tracys now claim and expressly recognized the validity of Humble's lease. This was received, accepted and recorded by Lion and the Tracys. The court found that said ratification was procured by the Tracys and Lion and accepted and recorded by them. On April 18, 1949, the Tracys sold an overriding royalty interest to Fogelson, which overriding royalty was created by their assignments to Lion of the Marchbanks' leases. They stated in the conveyance to Fogelson that the leases they had assigned to Lion "taken together cover and grant an individed 3/4th interest in the oil, gas and mineral estate." On October 16, 1951, George Tracy wrote Lion that the Tracys had delivered to Lion "a ¾th interest in the Marchbanks' lease. The other ¼th interest in the Marchbanks' lease was awarded to Humble Oil and Refining Company, by court action in Big Spring." In February, 1952, the Tracys' attorney wrote Lion that according to information obtained from Mr. Tracy and others, Lion "now owns 3/4th of the above lease and the Humble Oil & Refining Company owns an additional ¼th." On March 24, 1952, the same attorney wrote Lion that it was his information that no question had been raised as to the validity of the lease to Humble but that Lion could have acquired it by bidding higher than Humble. In 1951 the Tracys executed two division orders to Lion in which they stated that the leases assigned by them to Lion covered only a three-fourth's interest and that the Tracys' overriding royalty interest was reduced proportionately. We think the record supports the court's conclusions that the Tracys have ratified the lease to Humble and that they are estopped to claim a lease on the minor's one-fourth interest or demand a reconveyance thereof from Lion. Loeffler v. King, supra; Grissom v. Anderson, 125 Tex. 26, 79 S.W.2d 619; Van Deventer v. Gulf Production Co., Tex. Civ.App., 41 S.W.2d 1029 (Writ Ref.); Tex. & Pacific Coal & Oil Co. v. Kirtley, Tex.Civ.App., 288 S.W. 619 (Writ Ref.); Burnett v. Atteberry, 105 Tex. 119, 145 S.W. 582, 587; Humble Oil & Refining Co. v. Harrison, 146 Tex. 216, 205 S.W.2d 355.
The judgment is affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434599/
|
312 S.W.2d 722 (1958)
Opal Mae ELLEDGE, a Widow, et al., Appellants,
v.
GREAT AMERICAN INDEMNITY COMPANY, Appellee.
No. 13266.
Court of Civil Appeals of Texas, Houston.
April 17, 1958.
Rehearing Denied May 8, 1958.
Joseph Kirchheimer, Houston, for appellant.
*723 Kemper & Kemper, Houston, T. M. Kemper, Houston, of counsel, for appellee.
WERLEIN, Justice.
This is a workmen's compensation suit brought by appellants, Opal Mae Elledge Chriceol (formerly Opal Mae Elledge, widow of Hugh Edward Elledge), joined by her husband Walter Chriceol, individually and as next friend of her minor children, David Lee Elledge, Wayne Edward Elledge, and Gary Dean Elledge, and David Lee Elledge, 19 years of age and married, against Great American Indemnity Company to recover compensation insurance as a result of the death of the said Hugh Edward Elledge. Appellants alleged that Hugh Edward Elledge on or about September 4, 1956, while in the course of his employment with Ervine & Bishop, sustained injuries resulting in his death. He was found dead on the premises of Ervine & Bishop on the morning of September 4, 1956. The parties to the suit stipulated that he died of an accidental injury on September 4, 1956, while on the premises of Ervine & Bishop, and that his average weekly wage was $42. The trial was to a jury, and after appellants rested the trial court directed that the jury return a verdict for appellee. Appellants have duly perfected their appeal to this Court.
It was proved that Hugh Edward Elledge, deceased, was and had been an employee of Ervine & Bishop for fifteen years prior to his death. He was a maintenance man, who helped operate the mill, and he was also a general handyman around the place. He and Mr. Pfeiffer, the mill superintendent, were the only white men who worked at the plant of Ervine & Bishop. The average work day was from 7:30 a. m. to 4:30 p. m. However, Mrs. Chriceol testified that the present plant had been located at 100 Katy Road since 1954 and that her husband had gone up there and worked at night. She testified that she had taken Elledge to the plant but did not stay out there when he night-watched because she had children. She had seen him go out there and unload things at the plant, and he had brought home overtime money to her from his night work.
Mr. Weber, an accountant for Ervine & Bishop and also for the Ranger Chemical Company, testified that the plant on Katy Road had an automatic sprinkler system to control fires and that a short time prior to September 3, 1956, the system was not operating, but that it was operating after September 3rd and the tank had been repaired. Apparently, Mr. Weber later learned from the A. D. T. Company that the repair job was completed on September 2, 1956. There is nothing to indicate that the deceased Elledge was aware of such fact. City of Houston police officer C. B. Massey testified that he received instructions from Captain Frank Murray of the Homicide Division to go to the plant at 100 Katy Road, which was the plant of Ervine & Bishop and Ranger Chemical Company, and that he arrived at approximately 8:30 a. m. on September 4, 1956. He saw Elledge's body lying in a pasture or field at the rear of the building on the premises of Ervin & Bishop. He examined the body and found a 2-inch jagged wound inside the left elbow. There was a barbed-wire fence about 10 feet from the body. There were some blood spots on the barbs of the wire of such fence and several blood spots on the ground underneath the fence and leading away from the fence toward the body. The body had nothing on it except a pair of trousers and belt. There were no weapons and no flashlight near the body. The body was muddy as if it might have rolled on the ground, and it had dry blood on it. Officer Massey testified that in one of the warehouses he saw a cot that looked like it had been slept in. There was found on the body a black leather billfold containing miscellaneous papers, one set of keys and 15 cents in change.
Appellants' First and Second Points of Error are to the effect that the trial court *724 erred in refusing to permit Opal Mae Elledge Chriceol to testify as to certain statements made to her by the deceased on the night of September 3, 1956, preceding his death on the morning of September 4, 1956; and also in refusing to permit Barbara Jean Noack to testify to such statements, she having overheard them.
The statements were made by deceased to his wife about 11:00 or 11:30 p. m. on September 3rd. The deceased had called for his wife about 9:00 p. m. and the two drove to the home of their son around 11:00 or 11:30 p. m. Appellants perfected their bills of exceptions in the absence of the jury showing what both Mrs. Chriceol and Mrs. Noack would have testified. The following testimony was adduced in perfecting the bill covering the testimony that Mrs. Chriceol would have given:
"Q. Then what did you say?
"A. I said then let's go over to 2622 Roy Circle and spend the night.
"Q. And what did he say?
"A. He said: `No, I can't. I have to go back to the plant because they have hired me to watch out there on account of the automatic sprinkler being out.'"
Mrs. Noack would have testified, as follows:
"Q. The question I asked you was: Did you hear them have a conversation out there? A. Yes, sir.
"Q. Can you give us any idea as to how long they were outside the door after you laid down? A. About three or four minutes at the most.
"Q. Three or four minutes? A. I guess they said good night and talked a few minutes and then he left.
* * * * * *
"Q. What was the conversation you heard between Mr. and Mrs. Elledge? A. She was trying to get him in to spend the night and he said he couldn't, and she said: `Let's go over to Roy Circle and spend the night.' And he said he couldn't stay any place because the water tower was broken at the place and he had to stay up there."
In our opinion the excluded statements were admissible as res gestae for the purpose of showing where the deceased was going after leaving his wife and the purpose of the trip.
In Texas Employers' Insurance Ass'n v. Brumbaugh, Tex.Civ.App., 224 S.W.2d 761, 763, ref., n. r. e., numerous witnesses were permitted to testify as to statements made by the deceased as to the purpose of his trip and to show that his employer had sent him on a special mission to obtain employees. One of the witnesses was the widow of the deceased, who testified that two days prior to the fatal accident her husband called her by telephone from San Angelo and told her that his employer was sending him to Baird to get some men. The court said:
"The testimony was admissible as res gestae. Since the declarations were made by the deceased before the accident and resulting injuries, it is difficult to see how they could be considered as self-serving. No issue existed at that time between W. C. Brumbaugh and his employer or any one else as to whether or not he was acting in the course of his employment. The declarations of the deceased were contemporaneous with his trip to Baird and his action of seeking employees for Coffee. They were explanatory of such trip and actions. He was acting and talking as one with authority to solicit employees for his employer. The fact of his doing so in the absence of any apparent deliberate sign on his part is admissible as res gestae. Liberty Mut. Ins. Co. v. Nelson, 142 Tex. 370, 178 S.W.2d 514; Hartford Accident & Indemnity Co. v. *725 Bond, Tex.Civ.App., 199 S.W.2d 293, 296; * * * Maryland Cas. Co. v. Kent, Tex.Civ.App., 271 S.W. 929, 934; Royal Ind. Co. v. Hogan, Tex. Civ.App., 4 S.W.2d 93; Texas Employers Ins. Ass'n v. Shifflette, Tex. Civ.App., 91 S.W.2d 787, 790-91; Texas Employers Ins. Ass'n v. White, Tex.Civ.App., 68 S.W.2d 511, 513-514; Heaton v. Globe Ind. Co., Tex.Civ. App., 71 S.W.2d 328; Lehers v. Federal Underwriters Exchange, Tex.Civ. App., 79 S.W.2d 925, 926; Texas Employers Ins. Ass'n v. Bauer, Tex.Civ. App., 128 S.W.2d 840."
In Prater v. Traders & General Ins. Co., Tex.Civ.App., 83 S.W.2d 1038, 1039, no writ history, the trial court refused to permit the driver of the automobile to testify that deceased, about 8 o'clock at night, came to the lease where he was working and told him that his pump had broken down and he had to go and get some parts for it, and asked the witness if he would carry him to Arp in his automobile. The witness met the deceased about 11:30 p. m., at which time they ate something at the home of the deceased and the deceased then told his wife that they were going to Arp to get some parts for the pump. The accident occurred enroute. The court said:
"It has long been a rule of evidence that the declarations made by a party at or about the time of his departure on a journey are admissible to establish the destination or purpose of the journey. 22 C.J. p. 286, par. 307; Jones Commentaries on Evidence (2d Ed.) vol. 3, p. 2243, § 1220; Wigmore on Evidence (2d Ed.) Vol. 3, p. 696, par. 1725.
"Some of the authorities hold that such evidence is admissible under the res gestae rule. Texas Employers' Ins. Ass'n v. White (Tex.Civ.App.) 68 S.W.2d 511, par. 7; Wallace v. Byers, 14 Tex. Civ. App. 574, 38 S.W. 228; Jim West v. State, 2 Tex. 460; Koonse v. Missouri Pacific R. Co., 322 Mo. 813, 18 S.W.2d 467, par. 14; Central of George Ry. Co. v. Bell, 187 Ala. 541, 65 So. 835, par. 7; Chicago, M. & St. P. Ry. Co. v. Chamberlain, Tex.Civ.App., 253 F. 429; Tilley v. Commonwealth, 89 Va. 136, 15 S.E. 526; State v. Garrington, 11 S.D. 178, 76 N.W. 326, par. 3; Harris v. State, 96 Ala. 24, 11 So. 255; State v. Cross, 68 Iowa, 180, 26 N.W. 62; Territory v. Couk, 2 Dakota 188, 47 N.W. 395.
"We believe, however, that the evidence is admissible independently of the res gestae rule, for the simple and sufficient reason that it is the best evidence available to prove the fact at issue. In such cases the fact at issue is the purpose of the journey. The purpose of the journey is wholly dependent on the state of the mind of the declarant, and the declarations made by him are the best evidence of the state of his mind. It is the natural and usual thing for one who is preparing to go on a mission to declare to his associates the purpose of his errand. Such declarations are relied on daily in the business and social world."
In the case of Heaton v. Globe Indemnity Company, Tex.Civ.App., 71 S.W.2d 328, 329, the deceased Heaton at about 9:00 o'clock at night told his son that he wanted to see Harrison about going to work since Jack Larson, his boss, wanted Harrison back on the job, saying: "Jack wanted me to get him to come back to work." The deceased Heaton drove off next morning and met Harrison about 5:30 in the afternoon, at which time Heaton was shot and killed by a bullet intended for Harrison. The court, in holding that the statement made by Heaton to his son the night before he was killed, was res gestae, quoted as follows from the case of McGowen v. McGowen, 52 Tex. 657, at page 664:
*726 "`The res gestae differs according to the circumstances of the particular case. It may be embraced within the brief compass of time which comprises the duration of the principal act or transaction itself, or it may extend over a much longer period of time, if the transaction be one of a continuing character.'"
The court further stated: "The tendency of recent adjudications is to extend rather than to narrow the scope of the introduction of evidence as part of the res gestae."
We think the cases cited by appellee, including American General Ins. Co. v. Jones, 152 Tex. 99, 255 S.W.2d 502, 505, are distinguishable from the instant case and the cases hereinabove mentioned. In the Jones case the Court made the following statement:
"The claimant says that it was offered to prove mental state. These conversations were not made about the very trip on which he was injured and offered as declarations of his immediate purpose on that night. The mental state of the deceased on other occasions is not in issue."
Moreover, in the Jones case the latest of the conversations relied on was four days before the accident, and such statement then was only with respect to the general duties of the deceased in connection with his employment. In the instant case the statement made by the deceased to his wife was made just before the deceased left her to go to the plant of his employer and it explained where he was going, and the purpose and nature of the trip.
Appellee argues strenuously that there was no direct evidence to show that Paul A. Pfeiffer, the mill superintendent, hired deceased to do any night-watching on the occasion in question, and that the statement that the deceased made to his wife did not identify anyone and merely stated that he had to go back to the plant "because they have hired me to watch out there on account of the automatic sprinkler being out." (Emphasis ours.) It was shown that the deceased Elledge had never worked for the Ranger Chemical Company and had worked about fifteen years for Ervine & Bishop; that Pfeiffer was the mill superintendent and vice-principal of Ervine & Bishop, with the power to hire and fire employees; that the deceased took his directions and orders from Pfeiffer; that Pfeiffer actually superintended the operation of the mill itself and also the employees engaged in the operation; and that the deceased, upon leaving his wife, drove to the premises of Ervine & Bishop and was found the next morning dead upon such premises as the result of an accidental injury. We think this sufficiently identifies "they" as Ervine & Bishop, the employer of the deceased.
Appellants' Third and Fourth Points of Error are to the effect that the court erred in excluding res gestae statements made by Paul A. Pfeiffer in the presence of the son of the deceased, David Lee Elledge, and Houston Homicide detective, C. B. Massey, within approximately 30 minutes from the time they arrived at the premises of Ervine & Bishop, and at a time when the body of the deceased was lying out in the mud on the premises of his employer.
The appellants perfected their bills of exceptions as to the testimony the police officer, C. B. Massey, and also David Lee Elledge would have given concerning the alleged res gestae statements made in their presence by Paul A. Pfeiffer. It was shown that Officer Massey would have testified that the following statement was made in his presence:
"The water tower was being repaired and due to the fire hazard the company needed someone at the plant at all hours, and this man agreed to sleep there. He was having family trouble temporarily and it worked out well."
*727 It was also shown that David Lee Elledge, if permitted to testify, would have made the following statement:
"Well, Mr. Massey walked up and introduced himself to us and Mr. Pfeiffer told Mr. Massey that my dad had been working there, about his epileptic seizures, and he also told him about the tower being repaired, and they needed somebody to stay there and watch, and he said my dad agreed to stay there temporarily and sleep there."
While it is true that Officer Massey testified that he could not state whether the above statement was made by Pfeiffer or by David Lee Elledge, it was clearly shown by the statement made by David Elledge that it was Pfeiffer who made the statement.
David Elledge also testified that he got to the premises between 8:30 and 9:00; that he had been there about five minutes when Officer Massey came over to where he and Mr. Pfeiffer were, and at such time his dad's body was still lying there with a sheet over it. He further testified that he knew Mr. Pfeiffer well and had seen him quite often and that on this particular morning Mr. Pfeiffer looked like he was nervous and in a hurry. "He wasn't like I have seen him before."
We have concluded that the statement made by Paul A. Pfeiffer in the presence of Officer Massey and David Lee Elledge was res gestae and that the testimony of David Lee Elledge and Officer Massey as to such statement should not have been excluded. The statement was made by the immediate superior of the deceased. It was a spontaneous statement explaining the presence of the dead man on the premises of Ervine & Bishop. The body of the dead man was lying out in the mud with blood on it. We believe that this constituted the required startling event which gave to the statement spontaneity. There is no question but that because of the presence of this trusted employee lying in the field dead under such gruesome circumstances, the declarant Pfeiffer was under the influence of excitement or emotion. He had no reason for fabrication. His statement was not self-serving in any way. It was as if the deceased were speaking through him, explaining his presence on the premises of his employer.
The basis for the admission of such declarations is such spontaneity as precludes design. McCormick and Ray, Vol. 1, Section 915, suggests that an exclamation made by a mother upon seeing a picture of her long-lost son might be as spontaneous as any declaration evoked by the sight of a collision or murder. In our opinion, at least in so far as Pfeiffer was concerned, there was an exciting, startling event which resulted in an emotional response and the existence of an excited state of mind, as corroborated by his appearance and nervousness as testified to by David Lee Elledge.
In one of the leading cases, International & G. N. R. Co. v. Anderson, 82 Tex. 516, 17 S.W. 1039, 1040, the Supreme Court said:
"Another rule, applied in many of the American courts at least, is to admit as parts of the res gestae not only such declarations as accompany the transaction, but also such as are made under such circumstances as will raise a reasonable presumption that they are the spontaneous utterance of thoughts created by or springing out of the transaction itself, and so soon thereafter as to exclude the presumption that they are the result of premeditation or design. Travellers Insurance Co. v. Mosley, 8 Wall. 397, 19 L. Ed. 437; Com. v. McPike, 3 Cush., Mass., 181; Hanover Railroad Co. v. Coyle, 55 Pa. 396; Elkins v. McKean, 79 Pa. 493; Monday v. State, 32 Ga. 672; People v. Vernon, 35 Cal. 49; Little v. Com., 25 Grat., Va., 921; Harriman v. Stowe, 57 Mo. 93. In most of the cases cited *728 the declarations admitted were the relation of past occurrences. This line of decision has been followed in this court, (City of Galveston v. Barbour, 62 Tex. 172,) and, in view of the great array of authority in support of that ruling, we deem it best to adhere to it in this case."
In Harris v. Allison, Tex.Civ.App., 11 S.W.2d 821, 823, error dism., the appellants, defendants in the trial court, offered to prove by a policeman that he received a call to go to the scene of the accident and that some 20 to 25 minutes after the accident he had a conversation with one Jacobs, the driver of the car. The officer asked Jacobs why his car was on the west side of the streetcar track. The answers of Jacobs were excluded by the trial court. The appellate court held:
"However that might be, the statements of Jacobs were res gestae. They occurred in less than 30 minutes after the accident and were voluntarily made in the first statements made by Jacobs and before he had left his car. There could have been no design at the time, but it seems to have been a voluntary declaration as to the facts. It certainly was not self-serving, but it was inculpatory, and the circumstances would preclude the idea of his making false statements that tended to show his own negligence.
"Each case of res gestae must be tested by its own peculiar facts, and it follows that decisions cannot be made guides except in their expressions of general and fundamental rules governing the doctrine of res gestae."
In Martin v. City of Corsicana, Tex. Civ.App., 130 S.W.2d 405, error dism., judgment correct, statements made by the mother of the injured minor plaintiff some 40 to 60 minutes after the injury were held admissible, although the mother was financially interested in the outcome of the matter.
See also Pilkenton v. Gulf, C. & S. F. Ry. Co., 70 Tex. 226, 7 S.W. 805, 808, in which the court made the following statement:
"To be a part of the res gestae the declarations are not required to be precisely concurrent in point of time with the principal transaction, if they spring out of it, are voluntary and spontaneous, and are made at a time so near as to preclude the idea of deliberate design. McGowen v. McGowen, 52 Tex. 657. The rule is very latitudinous, and its application must be left largely to the judicial discretion of the trial court. Where the circumstances of the case render it probable that a statement offered as res gestae is the result of premeditation or deliberate design to effect a certain purpose, it should not be received."
It is now recognized by our courts that the question whether or not evidence is admissible as res gestae is a law question which an appellate court has the same power to pass on that it has to pass on any other law question. See Pacific Mutual Life Ins. Co. of Cal. v. Schlakzug, 143 Tex. 264, 183 S.W.2d 709.
In City of Austin v. Johnson, Tex.Civ. App., 195 S.W.2d 222, 229, error ref., n. r. e., statements made by one Higgins, the superintendent in charge of the substation work, some 15 to 20 minutes after the accident, were held admissible as res gestae in explanation of how the accident occurred. The statements made by Higgins to one Ashford over the telephone and at the hospital, while the injured man was receiving artificial respiration, were also held admissible. The court made the following statement:
"The rule has been applied to statements made one, two, four, or even five hours after the occurrence of an accident. Texas Employers Ins. Ass'n v. Shifflette, Tex.Civ.App., 91 S.W.2d 787 (writ dismissed); Worley v. International *729 Travelers Assurance Co., Tex.Civ.App., 110 S.W.2d 1202; Houston & T. C. Ry. Co. v. Brooks, Tex.Civ. App., 294 S.W. 282; 18 Tex.Jur. 301, § 185. The foregoing statements of Higgins each related to the manner or cause of the happening of the accident, and were each a continuation of that event, and the startling event was simply voicing itself through the witness. The statements were admissible under the rule of res gestae as fully reviewed and reiterated in the recent case of City of Houston v. Quinones, 142 Tex. 282, 177 S.W.2d 259."
See also Southwestern Freight Lines v. McConnell, Tex.Civ.App., 269 S.W.2d 427, error ref., n. r. e.; Texas Employers Ins. Ass'n v. Noel, Tex.Civ.App., 269 S.W.2d 835, error ref., n. r. e.; Harris v. Allison, Tex.Civ.App., 11 S.W.2d 821.
The statement made by Mr. Pfeiffer accounted for the presence of the deceased on the premises of Ervine & Bishop, lying in the mud, clad only in a pair of trousers and a light leather belt. It did not show, of course, in what manner the deceased met his death nor that he died of accidental injuries, but it did explain why he was there, and corroborated the statement made by the deceased to his wife in which he stated where he was going and the purpose for which he was going to the premises of his employer.
Appellants' Fifth Point of Error is that the court erred in directing the jury to return a verdict for appellee.
Even if the foregoing res gestae statements had been admitted, there still would not have been sufficient evidence to show that the deceased met his death as the result of an accident, except for the stipulation of counsel that he died on the premises of Ervine & Bishop as the result of an accident. The question remains as to whether there is sufficient circumstantial evidence to show that he died while in the course of his employment for his employer, Ervine & Bishop.
In Texas Employers' Ins. Ass'n v. Shipley, Tex.Civ.App., 260 S.W. 646, 650, error dism., the deceased employee was found dead on the premises of his employer. It was shown that it was customary for the said employee, who was a foreman, to get to work between 6:10 and 6:30 a. m. in order to see that everything was ready for the other employees by 7:00 o'clock. The employee had no duty at the place where his body was found that he could perform in the interest of his employer. The court held, however, that the circumstances of his being where he was on the premises of the employer as was his custom, were sufficient to raise the question for the jury as to whether the deceased was acting in the performance of his duties. The court stated:
"We understand that all courts and all jurisdictions have held that the Workmen's Compensation Act should be liberally construed, and we believe that to hold that Shipley must necessarily have been in actual performance of some service which was in furtherance of his employer's interests at the very moment of his injury would be to give too strict a construction to the act. Unquestionably, he had come to the premises for the purpose of prosecuting his employer's business, in accordance with the custom of several years, as shown by the positive and undisputed testimony."
See Associated Employers Lloyds v. Wiggins, Tex.Civ.App., 208 S.W.2d 705, 706, error ref., n. r. e. The court stated that there was nothing to show that the deceased employee was on a mission of his own at the time he was struck by a bottle while traveling a route customarily traveled in the performance of his duties, although he often went across the street to a drug store or to a cafe. The court quoted from 120 A.L.R. 683, 684, stating:
"`It is generally held that when it is shown that an employee was found dead at a place where his duties required *730 him to be, or where he might properly have been in the performance of his duties during the hours of his work, in the absence of evidence that he was not engaged in his master's business, there is a presumption that the accident arose out of and in the course of the employment within the meaning of the compensation acts."'"
The court further stated:
"But even if he had temporarily left his work to go to the cafe or drug store or to run some errand not connected with his employment, we are not prepared to hold as a matter of law that his fatal injuries were not received in the course of his employment. He was struck by the bottle at a place where he often was and would be in carrying out the duties of his employment."
See also American General Insurance Co. v. Jones, Tex.Civ.App., 250 S.W.2d 663, reversed on other grounds 152 Tex. 99, 255 S.W.2d 502.
In the instant case there is nothing to show that the deceased ever left the premises of his employer. He was there, if the res gestae statements are believed, for the purpose of watching, and to protect the premises from fire hazard. It was not necessary for him to be armed or to have a flashlight for that kind of watchman service. The cot showed it had been used. As such watchman he might be inside or outside the buildings; indeed, under certain circumstances he might obtain a better view of any possibile fire from outside than from inside. In light of the res gestae statements and the stipulation of counsel, and the attendant circumstances, there is a strong presumption that the deceased sustained his accidental injury while in the course of his employment for Ervine & Bishop. We find nothing in the record that rebuts such presumption. This appeal is from a directed verdict.
We have concluded that there was sufficient evidence from which the jury could find that the fatal injury sustained by the deceased arose out of his employment while in the furtherance of his employer's business.
The judgment of the trial court is reversed and the case is remanded for a new trial.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434600/
|
435 F. Supp. 2d 266 (2006)
Peter MIONE and Anne Mione, as parents and natural guardians of Alexis Mione, an infant and John Mione, an infant, Plaintiffs,
v.
Kevin McGRATH, Tonya Hernia, Sullivan County Sheriff's Department, Villa Roma Resort Hotel, Sullivan County and "John Doe" and "Jane Doe," full names unknown but believed to be individuals involved in the acts complained of herein, Defendants.
No. 05 Civ. 2211(WCC).
United States District Court, S.D. New York.
June 1, 2006.
*267 Peter Mione and Anne Mione, Old-bridge, NJ, Plaintiffs Pro Se.
Napierski, VanDenburgh & Napierski, L.L.P., Shawn T. Nash, Esq., of Counsel, Albany, NY, for Defendants Kevin *268 McGrath, Tonya Bernitt and Villa Roma Resort Hotel.
Michael Frey, Esq., Barryville, NY, for Defendants Sullivan County Sheriffs Department and Sullivan County.
OPINION AND ORDER
WILLIAM C. CONNER, Senior District Judge.
Plaintiffs Peter Mione ("Mione") and Anne Mione, on behalf of themselves and apparently their minor children, A.M. and J.M., bring the instant action against defendants Sullivan County (the "County"), the Sullivan County Sheriff's Department (the "Department"), the Villa Roma Resort Hotel (the "Hotel"), Hotel employees Kevin McGrath and Tonya Bernitt, as well as John Doe and Jane Doe for alleged violations of plaintiffs' civil rights under 42 U.S.C. §§ 1981, 1983, 1985 and 1986. Defendants now move to dismiss the action for failure to state a claim upon which relief can be granted pursuant to FED. R. CIV. P. 12(b)(6). For the following reasons, defendants' motion is granted.
BACKGROUND
According to the limited information that can be gleaned from the woefully deficient Complaint, plaintiffs' action stems from "the unlawful and improper detention of plaintiffs child and subsequent prosecution" of plaintiff on charges of abuse and endangering the welfare of a child in Sullivan County Court. (Complt. ¶ 1.) The Complaint states that on November 27, 1998, while plaintiffs were guests of the Hotel, Mione "was caused to reprimand" J.M. (Id. ¶ 13.) His actions prompted McGrath and Bernitt to notify the Department and, after an investigation, the Department, in conjunction with the County, instituted neglect and endangerment proceedings against Mione.[1](Id. ¶¶ 15-16.)
The Complaint alleges that defendants proceeded to prosecute these charges despite lacking probable cause to believe any harm had befallen Mione's son and despite "the existence of clear exculpatory evidence." (Id. ¶¶ 18-20, 22, 25.) Defendants are accused of failing "to properly investigate the facts surrounding the injury to" J.M. (Id. ¶¶ 23-24.) As a result of the continued prosecution, "[p]laintiffs were forced to make numerous appearances in Court." (Id. ¶ 27.) On February 5, 1999, the charges against Mione were dismissed by the county court. (Id. ¶ 29.)
Plaintiffs, with the assistance of counsel, subsequently filed two separate actions in state court. The first, filed on or about February 23, 2000, alleged libel, slander, emotional distress, false arrest and false imprisonment. That action was dismissed by Decision and Order of Judge Meddaugh of the New York State Supreme Court for Sullivan County, dated January 8, 2003, for failure to timely serve the defendants in accordance with C.P.L.R. 3012(b). (Nash Decl., Ex. E.) The second, filed in and around June 2003, also was dismissed on the same grounds. (Id., Ex. F.) Plaintiffs, through their attorney, then filed this Complaint on November 13, 2003 in the United States District Court for the Eastern District of New York, and the case was transferred pursuant to 28 U.S.C. § 1404(a) and assigned to this Court.[2](Id., Ex. D.)
*269 DISCUSSION
I. Standard of Review
On a motion to dismiss pursuant to FED. R. Civ. P. 12(b)(6), the issue is "whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S. Ct. 1683, 40 L. Ed. 2d 90 (1974), overruled on other grounds, Davis v. Scherer, 468 U.S. 183, 104 S. Ct. 3012, 82 L. Ed. 2d 139 (1984). A court's task in determining the sufficiency of a complaint is "necessarily a limited one." Id. A complaint should not be dismissed for failure to state a claim "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Padavan v. United States, 82 F.3d 23, 26 (2d Cir.1996) (quoting Hughes v. Rowe, 449 U.S. 5, 10, 101 S. Ct. 173, 66 L. Ed. 2d 163 (1980)). Generally, "conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss." 2 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE § 12.34[1][b] (3d ed.1997); see also Hirsch v. Arthur Andersen & Co., 72 F.3d 1085, 1088 (2d Cir.1995).
"In assessing the legal sufficiency of a claim, the Court may consider those facts alleged in the complaint, documents attached as an exhibit thereto or incorporated by reference . . . and documents that are `integral' to plaintiffs claims, even if not explicitly incorporated by reference." John v. N.Y.C. Dep't of Corrs., 183 F. Supp. 2d 619, 627 (S.D.N.Y.2002) (Conner, J.) (internal citations omitted). On a motion to dismiss pursuant to Rule 12(b)(6), a court must accept as true all of the well-pleaded facts and consider those facts in the light most favorable to the plaintiff. See Hertz Corp. v. City of New York, 1 F.3d 121, 125 (2d Cir.1993); In re AES Corp. Sec. Litig., 825 F. Supp. 578, 583 (S.D.N.Y.1993) (Conner, J.).
II. Statute of Limitations
According to the Complaint, the events giving rise to plaintiffs' allegations are confined to the period of November 27, 1998 to February 5, 1999. In New York, the statute of limitations for § 1983 claims is three years from the date of accrual. See, e.g., Patterson v. County of Oneida, 375 F.3d 206, 225 (2d Cir.2004). Section 1983 claims accrue when a plaintiff learns or has reason to learn of the alleged injury that forms the basis of the action. See, e.g., Eagleston v. Guido, 41 F.3d 865, 871 (2d Cir.1994). Section 1985 claims also have a three-year statute of limitations. See, e.g., Paige v. Police Dep't of City of Schenectady, 264 F.3d 197, 199 n. 2 (2d Cir.2001). Section 1981 actions, however, have a four-year statute of limitations. See Henderson v. State of New York, 423 F. Supp. 2d 129, 141 (S.D.N.Y. Mar.14, 2006) (citing Jones v. R.R. Donnelley & Sons Co., 541 U.S. 369, 124 S. Ct. 1836, 158 L. Ed. 2d 645 (2004)). Finally, § 1986 expressly provides for a one-year statute of limitations from when the cause of action accrued. See 42 U.S.C. § 1986; see also Powers v. Karen, 768 F. Supp. 46, 50 (E.D.N.Y.1991).
To the extent plaintiffs assert claims for false arrest, that claim accrued on the date of the arrest, or November 27, 1998. However, Mione's claim for malicious prosecution accrued on the date of dismissal, or in this case February 5, 1999. See Stephenson v. Rosa, No. 03 Civ. 8503, 2006 WL 464081, at *2 (S.D.N.Y. Feb.24, 2006). Regardless, plaintiffs filed their action on November 13, 2003, nearly five years after their alleged injuries accrued *270 and well past the time allowed by all the applicable statutes of limitation.
The fact that plaintiffs are now proceeding pro se is of no moment. "[S]tatutes of limitations are strictly enforced, `even where the plaintiff is pro se.'" Garland-Sash v. City of New York, No. 04 Civ. 0301, 2005 WL 2133592, at *3 (E.D.N.Y. Sept. 1, 2005) (quoting Hamilton v. Wilson, 2004 WL 169789, at *4, 2004 U.S. Dist. LEXIS 957, at *11 (S.D.N.Y. Jan. 28, 2004)). Nor does the fact that plaintiffs had filed state court actions change this outcome. See Perez v. City of New York, No. 87 Civ. 4862, 1988 WL 7786, at *1, 1988 U.S. Dist. LEXIS 417, at *1 (S.D.N.Y. Jan. 25, 1988) (citing Bd. of Regents of the Univ. of the State of N.Y. v. Tomanio, 446 U.S. 478, 491, 100 S. Ct. 1790, 64 L. Ed. 2d 440 (1980)) ("Under New York law, [a § 1983 claim] is not tolled while a state action is underway."); see also Plumey v. New York State, 389 F. Supp. 2d 491, 497 (S.D.N.Y.2005).
However, to the extent the Complaint could be found to assert a cause of action on behalf of J.M. or A.M., both minors, those claims would not be time barred because N.Y.C.P.L.R. § 208 tolls the normal statute of limitations during infancy. See Velez v. Reynolds, 325 F. Supp. 2d 293, 311 (S.D.N.Y.2004).
III. Dismissal Under FED. R. CIV. P. 8
"Allegations that are so conclusory that they fail to give notice of the basic events and circumstances of which the plaintiff complains are insufficient as a matter of law." Fieldcamp v. City of New York, 242 F. Supp. 2d 388, 389 (S.D.N.Y. 2003) (Conner, J.); see also Martin v. N.Y. State Dep't of Mental Hygiene, 588 F.2d 371, 372 (2d Cir.1978). Under the relaxed federal pleading requirements, it is enough that the pleading "contain `a short and plain statement of the claim' sufficient to put, the [adverse party] on notice of the grounds for which the [claimant] seeks relief." Reuben H. Donnelley Corp. v. Mark I Mktg. Corp., 893 F. Supp. 285, 291 (S.D.N.Y.1995) (Conner, J.) (quoting FED. R. Cry. P. 8(a)(2)). "[T]he principal function of pleadings under the Federal Rules is to give the adverse party fair notice . . . so as to enable [that party] to answer and prepare for trial." Salahuddin v. Cuomo, 861 F.2d 40, 42 (2d Cir.1988) (dismissal under Rule 8 "is usually reserved for those cases in which the complaint is so confused, ambiguous, vague or otherwise unintelligible that its true substance, if any, is well disguised"). Although the pleading requirements are construed liberally, "[l]iberal construction has its limits, for the pleading must at least set forth sufficient information for the court to determine whether some recognized legal theory exists upon which relief could be accorded the pleader. If it fails to do so, a motion under Rule 12(b)(6) will be granted." 2 MOORE'S FEDERAL PRACTICE § 12.34[1][b], at 12-60 (3d ed.).
First, we note that the Complaint makes no mention whatsoever of plaintiff A.M., thus negating any cause of action on her behalf. Second, the Complaint's single allegation relating to Anne Mione is that she "was deprived of her usual and customary vocation and avocation as a result of the aforesaid actions of defendants, has sustained economic loss and will sustain economic loss in the future." (Complt. ¶ 33.) We can discern no basis for a constitutional violation based on that statement. Third, the Complaint contains no factual allegations supporting its initial allegation in the "Nature of the Action" section that J.M. was the subject of "unlawful and improper detention." (Complt. ¶ 1.) Consequently, plaintiffs have failed to put forth sufficient information to establish the existence of a justifiable legal action. *271 However, it appears that Mione has satisfied the provisions of Rule 8 with allegations sufficient to put defendants on notice of his claims rooted in the law of malicious prosecution.[3] Regardless, his cause of action is time-barred.
It remains unclear how or where the John Doe and Jane Doe defendants fit into plaintiffs' action. If these unnamed defendants are police officers or prosecutors, then issues of qualified immunity or prosecutorial immunity arise. Regardless, the Court sees no reason why these defendants should not be dismissed from the action given the fact that the Complaint fails to make any allegations of how their behavior contributed to the events of this action, or even to list them in the "Parties" section. See Wynder v. McMahon, 360 F.3d 73, 80 (2d Cir.2004) (Rule 12(b)(6) motion will "lie to permit each particular defendant to eliminate those causes of action as to which no set of facts has been identified that support a claim against him" (emphasis omitted)).
IV. Dismissal of Claims Under Sections 1981, 1985 and 1986
Plaintiffs' claims under §§ 1981, 1985 and 1986 likewise would fail even if they were not barred by the respectively applicable statutes of limitation or had been sufficiently pled under Rule 8. Section 1981 "prohibits discrimination that infects the legal process in ways that prevent one from enforcing contract rights, by reason of his or her race, [and it] covers . . . efforts to impede access to the courts or obstruct nonjudicial methods of adjudicating disputes about the force of binding obligations." Mian v. Donaldson, Lufkin & Jenrette Sec. Corp., 7 F.3d 1085, 1087 (2d Cir.1993). A § 1981 claim requires plaintiff to allege: (1) that he is a member of a racial minority; (2) that defendants had an intent to discriminate against him on the basis of race; and (3) that the discrimination concerned one or more of the activities enumerated in the statute, namely make and enforce contracts, sue and be sued, give evidence, etc. See id. To survive a motion to dismiss, plaintiff's complaint must assert "that the defendant[s'] acts were purposefully discriminatory . . . and racially motivated." Albert v. Carovano, 851 F.2d 561, 571-72 (2d Cir. 1988) (en banc). The Complaint is devoid of any allegations regarding race or racial discrimination. Accordingly, no § 1981 action has been stated.
For similar reasons, plaintiffs' § 1985 cause of action also must fail.[4] Narrower in scope than § 1983, see Blankman v. County of Nassau, 819 F. Supp. 198, 205 (E.D.N.Y.1993), under § 1985(3) a plaintiff must plead "`(1) a conspiracy; (2) for the purpose of depriving, either directly *272 or indirectly, any person or class of persons of equal protection of the laws, or of equal privileges and immunities under the laws; (3) an act in furtherance of the conspiracy; (4) whereby a person is either injured in his person or property or deprived of any right of the citizens of the United States.'" Fox v. City of New York, No. 03 Civ. 2268, 2004 WL 856299, at *9 (S.D.N.Y. Apr. 20, 2004) (quoting Mian, 7 F.3d at 1087-88). "A plaintiff states a viable cause of action under § 1985 [excepting clause 1 of § 1985(2)] only by alleging a deprivation of his rights on account of his membership in a particular class of individuals." Zemsky v. City of New York, 821 F.2d 148, 151 (2d Cir.1987) (modification in original). Here, plaintiffs' § 1985 claim "fails because [they] do not allege any facts that would permit the Court to conclude or infer that the named defendants were conspiring or that [plaintiffs were] targeted on account of [their] race." Amadasu v. Ngati, No. 05 Civ. 2585, 2006 WL 842456, at *7 (E.D.N.Y. Mar.27, 2006). Accordingly, this claim also is dismissed.
Lastly, plaintiffs' § 1986 fails because plaintiffs'"failure to state a claim under Section 1985 is fatal to [their] Section 1986 claim." Id. (citing Mian, 7 F.3d at 1088).
V. State Actor Requirement
Even if the statute of limitations did not bar the claims against the Hotel, McGrath and Bernitt, the claims against them still fail. "In order to state a claim under § 1983, a plaintiff must allege that he was injured by either a state actor or a private party acting under color of state law." Ciambriello v. County of Nassau, 292 F.3d 307, 323 (2d Cir.2002). A private actor acts under color of state law when the private actor "is a willful participant in joint activity with the State or its agents." Adickes v. S.H. Kress & Co., 398 U.S. 144, 152, 90 S. Ct. 1598, 26 L. Ed. 2d 142 (1970) (internal quotations omitted). A merely conclusory allegation that a private entity acted in concert with a state actor does not suffice to state a § 1983 claim against the private entity. See Spear v. Town of West Hartford, 954 F.2d 63, 68 (2d Cir.1992). Courts in the Second Circuit have repeatedly ruled that contacting the police to alert them to a potential or alleged crime falls short of § 1983's state action requirement. See, e.g., Johns v. Home Depot U.S.A., Inc., 221 F.R.D. 400, 405 (S.D.N.Y.2004) (collecting cases). Accordingly, plaintiffs are unable to allege a § 1983 action against the Hotel, McGrath or Bernitt.
VI. Supplemental Jurisdiction
"[B]ecause plaintiffs no longer have any viable federal claim, any remaining state law claims belong in state, rather than federal, court." Saclallah v. City of Utica, 383 F.3d 34, 40 (2d Cir.2004); see also United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 726, 86 S. Ct. 1130, 16 L. Ed. 2d 218 (1966) ("Certainly, if the federal claims are dismissed before trial, . . . the state claims should be dismissed as well."). Although we believe plaintiffs' state law claims are time-barred as well, we nevertheless must decline to exercise supplemental jurisdiction over plaintiffs' malicious prosecution and New York State constitution claims.
CONCLUSION
For all of the foregoing reasons, the motions of defendants Sullivan County (the "County"), the Sullivan County Sheriffs Department (the "Department"), Villa Roma Resort Hotel (the "Hotel"), Hotel employees Kevin McGrath and Tonya Bernitt, John Doe and Jane Doe to dismiss pursuant to FED.R.Civ P. 12(b)(6) are granted. The claims of plaintiff Peter *273 Mione and those of Anne Mione, if any, are dismissed with prejudice as to all defendants as a consequence of being past the relevant statute of limitations periods, and, in addition, as to the Hotel, McGrath and Bernitt for failure to meet, as a matter of law, the state actor requirement of § 1983. The claims of the minor children J.M. and A.M., if any, are dismissed without prejudice with leave to file an amended complaint at any time prior to the expiration of the presently tolled applicable statutes of limitation.
SO ORDERED.
NOTES
[1] The Complaint contains no facts regarding Mione's behavior, the nature of the investigation, or which Department and/or County officials were involved in the events giving rise to plaintiffs' action.
[2] The Complaint was drafted by plaintiffs' attorney, who subsequently was disbarred for reasons not relevant to this Opinion and Order. Plaintiffs now are proceeding pro se. Plaintiffs elected not to file papers opposing defendants' motion.
[3] In New York, § 1983-based malicious prosecution claims require a plaintiff to prove: "(1) the initiation or continuation of a criminal proceeding against plaintiff; (2) termination of the proceeding in plaintiff's favor: (3) lack of probable cause for commencing the proceeding; and (4) actual malice as a motivation for defendant's actions." Jocks v. Tavernier, 316 F.3d 128, 136 (2d Cir.2003) (internal quotations omitted). "There must be `a showing of some deliberate act punctuated with awareness of "conscious falsity" to establish malice.'" Brogdon v. City of New Rochelle, 200 F. Supp. 2d 411, 423 (S.D.N.Y. 2002) (quoting Caldarola v. DeCiuceis, 142 F. Supp. 2d 444, 452 (S.D.N.Y.2001)).
While the Court notes that Mione's claims against the County and the Department suffer from Monell pleading deficiencies, we feel it unnecessary to comment further on this topic given that his claims are time-barred. See, e.g., Monell v. Dep't of Social Servs. of City of N.Y., 436 U.S. 658, 98 S. Ct. 2018, 56 L. Ed. 2d 611 (1978).
[4] Although the Complaint does not specify, it appears to this Court that plaintiffs intended the action to fall under § 1985(3).
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434632/
|
312 S.W.2d 86 (1958)
Bessie A. WILBER, Respondent,
v.
Joel M. WILBER, Appellant.
No. 46151.
Supreme Court of Missouri, Division No. 1.
April 14, 1958.
Kenneth E. Bigus, Leon E. Bloch, Jr., Kansas City, for appellant.
Ruby D. Garrett, Thomas B. Welton,. Kansas City, for plaintiff-respondent.
*87 COIL, Commissioner.
Bessie and Joel Wilber, plaintiff and defendant below, were married in 1944, lived together until their separation in March 1954, and were divorced in October 1955. On June 1, 1948, title to real estate located at 3419 Troost Avenue in Kansas City was conveyed by warranty deed to plaintiff and defendant as tenants by the entirety under the circumstances hereinafter mentioned. In this suit, instituted subsequent to the divorce, plaintiff sought to be declared the sole owner of the property in question, while defendant claimed a one-half interest as a tenant in common. The trial court's judgment was that plaintiff was the sole owner of, and that defendant had no right, title, or interest in, the property.
It is plaintiff's theory that defendant, as cograntee in the warranty deed, held the interest conveyed to him upon a constructive trust for her. Defendant contends that plaintiff's evidence not only failed to support a conclusion that any trust arose but that, on the contrary, all the evidence showed the parties owned the property as indicated by the face of the deed, viz., as tenants by the entirety who became tenants in common by reason of their divorce.
We first state some undisputed facts. The Troost property consisted of apartments which, after being repaired and remodeled, were rented. The total purchase price was $14,000, of which $6,000 was paid in cash and $8,000 evidenced by a note to be paid monthly secured by a deed of trust. The note and deed of trust were signed by both plaintiff and defendant. The total purchase price had been paid prior to the institution of this suit. In 1936, prior to their marriage, the parties had purchased the Donner Transfer Company by each contributing the sum of $250 and had operated that business as a partnership until March 15, 1954. The Donner partnership bank account was the only one either party had at any of the times here pertinent. From 1927 until 1947, plaintiff operated a beauty shop and, after the purchase of the transfer company in 1936, also took care of telephone calls and inquiries and kept books and records for the partnership.
In 1946 plaintiff and her daughter purchased property on Holmes Avenue in Kansas City which, shortly after their marriage, plaintiff and defendant occupied as their residence until the acquisition of the property in litigation. Defendant had no interest, and claims none, in the Holmes property. In August 1949 plaintiff and her daughter sold the Holmes property, from which each received one half of a $3,000 down payment and each had received and was receiving at trial time one half of $110.32 monthly payments which were to continue until 1959.
We now state plaintiff's evidence as to the circumstances surrounding the acquisition of the Troost property. Between February and June 1948 plaintiff looked at the property several times and discussed its possible purchase with the owners. The original asking price was $16,000 which she persuaded sellers to reduce to $14,000. She intended to buy the property in her own name and her husband had nothing to do with the negotiations for its purchase except that he did look at it with her on one occasion. Shortly prior to the purchase, defendant told her that it had been embarrassing for him to have lived in the Holmes property and not to have had it in his name; that it would look better and suit him better and avoid embarrassment to him if plaintiff would have his name included in the deed; and that if she would do so, he would never make any claim to an interest in it, would convey it as she might direct at any time, and the property would always be hers. Acting upon and relying upon those representations, plaintiff had her husband's name inserted in the deed and, even though she did not consult with counsel as to the wisdom of so doing, she realized that the deed thereby showed that he had an interest in the property.
During the 20 years she had operated a beauty shop, plaintiff had accumulated about $8,000 which she kept in a safe-deposit box rented by her daughter. She *88 made the down payment of $6,000 in cash from that money and, in the presence of defendant, received a receipt from the sellers made to her as an individual. Plaintiff and defendant moved into the property some time in early August 1948 and continued to live there until defendant left in March 1954. Plaintiff made all the plans for the addition of kitchenettes and other remodeling and, in the main, furnished the materials and work which went into the improvement of the property and rented and collected the rent for each of the apartments. She used most of her half of the $3,000 down payment received from the sale of the Holmes property in improving the Troost property. She also used some of the $2,000 remaining in the safe-deposit box after payment of the $6,000 in refurbishing the property. She made all the monthly payments on the purchase price note from her separate funds (mainly rentals from the Troost property) until the entire balance of $8,000 had been paid. No part of any such payment came from any of defendant's funds.
As noted, the only bank account was the partnership account of Donner Transfer Company. Plaintiff received the rents from the Troost property and later the monthly payments from the Holmes property, sometimes made certain payments in cash, but, in most instances, deposited all those receipts in the Donner account and wrote checks on that partnership account to make the monthly payments on the note and to make all other payments to satisfy obligations pertaining to the Troost property. She sent one daughter a monthly check for one half the $110 received from Holmes and sent another daughter a monthly check for $50 out of the Holmes and Troost receipts. She kept a complete and accurate record of the amounts of the receipts from the two properties which were deposited in the Donner account and saw to it that only those amounts and none of the partnership (transfer company) funds were used to pay anything due on or in connection with the Troost property. Those records were not in her possession at trial time. They had disappeared from the premises of the transfer company (which was operated out of a portion of the Troost property) on the day defendant left.
Some of plaintiff's witnesses testified that defendant had stated during the time he lived in the Troost property that the home was his wife's and that he had no interest in it. Others testified to the fact of paying rent to plaintiff rather than to defendant and that defendant did nothing to improve the property while plaintiff worked diligently at it.
We now state defendant's evidence as to the circumstances surrounding the acquisition of the Troost property and its use and status thereafter. Defendant and plaintiff discussed the acquisition of the property and agreed that "we'd buy the house together, and pay for it together, and build the place up and make something out of it." Defendant did not suggest that he would be embarrassed if his name were not on the deed, or ask his wife to include his name in the deed for that reason, or ever agree to reconvey or to hold the property and do, with respect to it, whatever plaintiff asked him to do. Defendant said at one place in his testimony that the $6,000 down payment was made from funds which his wife had, some amount from the partnership account, and an amount which she was to borrow from her daughter and which latter amount he and his wife were to repay. At another place in his testimony he said that his wife furnished the $6,000 and that he did not furnish any part of it. (There was no evidence that any part of the $6,000 had been borrowed by plaintiff from her daughter and, at best, defendant's statement that some of the down payment came from partnership funds was so indefinite as to amount or other details as to be lacking in probative force.)
Defendant did not discuss with plaintiff the amounts of the monthly payments due on the note secured by the deed of trust but he did know at one time how much *89 they were but at trial time did not remember, and did not remember the amount received as monthly rents from the Troost property. Defendant's testimony supported the inference that his view was that the checks which plaintiff wrote on the partnership account to make the monthly payments on the $8,000 balance due on the house represented plaintiff's and defendant's joint income from the Troost rents and the transfer business. Defendant had never discussed with plaintiff the title to the property from the time the deed was signed until after their separation. He worked long and hard in the remodeling and repairing of the premises and paid from time to time, from receipts from the transfer business, for various materials that went into the property.
If he ever referred to the property as being his wife's, he did so in a joking way. He did tell the tenants that she would collect the rents because she was to do so and because she kept the books on the house as well as the books of the transfer business. When defendant left the Troost home in March 1954, he took the partnership trucks and checked out all the money in the partnership account, the sum of $671.86. He intended to take all the partnership records with him, but all he found were some cancelled checks and bank statements. Some of defendant's witnesses testified that he worked on the property and that it was referred to as "our" property.
The testimony, we think, satisfactorily establishes the proposition that plaintiff, from her own separate funds, supplied the $6,000 down payment on the property. At one point defendant admitted that plaintiff furnished the entire $6,000 and that he furnished no part of it. As noted, defendant's testimony that part of the $6,000 was to be borrowed by plaintiff from her daughter and that some undisclosed amount in the partnership account was used as part of the down payment, was so vague and indefinite as to furnish no sound basis for any finding of fact. Plaintiff admitted, however, that she directed that defendant's name be inserted in the deed (albeit the parties do not agree upon the circumstances under which plaintiff so directed). Thus, the evidence shows that plaintiff furnished the entire consideration for the $6,000 down payment, directed that her husband's name be inserted in the deed as a cograntee with her, and that both parties signed the note (and deed of trust securing it) for the $8,000 balance. Those facts would, but for defendant's further testimony, raise a rebuttable presumption that the wife intended that the tenant-by-entirety interest conveyed to defendant was a gift to him. Gaede v. Smith, 354 Mo. 738, 190 S.W.2d 931, 932 [1]; see annotation, 43 A.L.R. 2d 917. In this case, however, no such presumption can arise or exist because, as noted, defendant testified that he and his wife were to buy, and, the inference is, did buy, the property jointly and were to and did pay for it jointly. It is clear, therefore, that defendant did not at the trial and may not now rely upon a presumption of gift. Consequently, we need not deal with the question, argued by defendant, whether plaintiff satisfactorily rebutted such a presumption.
In our view, the only remaining fact questions are whether plaintiff adduced clear and unequivocal testimony sufficient to convince the trial chancellor and this court that defendant made the representations as claimed by plaintiff and, if so, whether his name was inserted in the deed solely as a result of those representations, and the subsidiary question of whether only the money from the rents of the Troost property and from plaintiff's share of the proceeds of the sale of the Holmes property and the balance of accumulated funds from the beauty shop operation were used to pay the purchase price balance and to pay for the repairs and remodeling of the Troost property.
There were no stated findings of fact or conclusions of law but it is apparent from the judgment that the trial chancellor found that plaintiff's evidence was convincing in *90 those respects. It is further apparent that those findings had to be based almost entirely upon the trial chancellor's judgment as to the credibility of plaintiff and defendant. That is because the decisive factual issues could be properly determined only by first deciding whether plaintiff or defendant was accurately relating the circumstances under which the property was acquired and, particularly, how it came to pass that defendant's name appeared in the deed as a cograntee.
We review this equity suit de novo, weigh the evidence, and reach our own conclusions. "Where, as here, however, there exists an irreconcilable conflict in the evidence on the essential fact issue involved, depending for determination on the credibility of witnesses, a situation prevails wherein the application of the rule of deference to the findings and conclusions of the trial chancellor is especially appropriate and necessary." State ex rel. Taylor v. Anderson, 363 Mo. 884, 254 S.W.2d 609, 615 [7-10].
Our independent review of the entire record convinces us that we should defer to the conclusion which the trial chancellor necessarily reached, viz., that plaintiff's testimony was true as to the circumstances under which the property was acquired, including the reason why defendant's name was inserted in the deed, and that also true was plaintiff's testimony as to the manner in which the balance of the purchase price was paid. Accepting plaintiff's testimony on those essential fact issues as true, we are of the further opinion that on the whole record plaintiff's proof was clear and convincing to the effect that plaintiff furnished the entire purchase price for the Troost property, and that she directed that defendant's name be inserted in the deed as a cograntee with her as a direct result of the representations and promise of defendant that he would make no claim to any interest in the property and would thereafter reconvey or otherwise act in connection with it in any manner plaintiff directed.
If defendant's promise to, in effect, hold the undivided half interest in the property conveyed to him in trust for plaintiff and to reconvey the land to her upon request was a representation of a present intention to perform a promise which he did not then intend to perform and thus was a false representation of fact, or if, at the time of the conveyance, a relationship existed between plaintiff and defendant which justified plaintiff in placing confidence in the belief that defendant would act with respect to a property interest as he said he would, then in either of those events a constructive trust should be imposed. Basman v. Frank, Mo., 250 S.W.2d 989, 993 [2] [3]; Thieman v. Thieman, Mo., 218 S.W.2d 580, 584, 585 [8] [9]. It has been said that the "subsequent refusal of the transferee to perform his promise, is evidence, though not conclusive evidence, that at the time of the transfer he did not intend to perform his promise." A.L.I., Rest., Restitution, § 182(a), pp. 732, 733. It is probable in this case that the entire evidence, considered in connection with the fact that defendant did repudiate his agreement, justifies the inference that defendant did not intend to perform his promise when he made it and that his inducing statements were thereby fraudulent and made for the purpose of obtaining an undivided half interest in the property.
We need not, however, determine that question or place our decision herein upon that proposition. There was a husband-wife relationship between plaintiff and defendant at the time the deed to the property was executed. The husband-wife relationship is such that one spouse is justified in placing confidence in the belief that the other spouse will act with respect to a property interest in the manner which he or she at the time promises to do. It is true that the fact alone of a husband-wife relationship does not establish a "fiduciary" *91 relationship within the meaning of a "confidential or fiduciary" (used synonymously) relationship, such as, for example, that relationship necessary to raise an inference of undue influence. Snell v. Seek, 363 Mo. 225, 250 S.W.2d 336, 342 [8]. It is equally true, however, that a proper and usual husband and wife relationship in and of itself denotes mutual confidence and is in that sense a confidential relationship. Snell v. Seek, supra. In other words, the husband-wife relationship in a given case may not measure up to a "fiduciary relationship" in the sense that one spouse transferring property to the other had customarily relied upon the judgment or advice of the transferee-spouse in business matters, but the husband-wife relation, standing alone, justifies one spouse in confidently believing that the other will act toward a property interest in the manner he has promised. "In these cases it is held that the constructive trust will be imposed even though at the time when he acquired the property the transferee intended to perform his promise and was not therefore guilty of fraud in acquiring it; and even though the transferee did not take improper advantage of the confidential relation in procuring the transfer and was not therefore guilty of using undue influence. The abuse of the confidential relation in these cases consists merely in his failure to perform his promise. A constructive trust is imposed even though there is no fiduciary relation such as that between attorney and client, principal and agent, trustee and beneficiary; it is sufficient that there is a family relationship or other personal relationship of such a character that the transferor is justified in believing that the transferee will act in his interest." Scott on Trusts, § 44.2, pp. 318-320; and see again, Basman v. Frank, supra, 250 S.W.2d 993 [3]
Our recent cases of Davis v. Roberts, Mo., 295 S.W.2d 152, and Jacobs v. Jacobs, Mo., 272 S.W.2d 185, on which defendant has placed reliance, deal exclusively with the question of resulting trusts. We have examined those cases and while the fact situations in them are in some respects similar to the facts in the instant case, we are of the opinion that nothing there said militates against the result here reached on the constructive trust theory.
The judgment is affirmed.
VAN OSDOL and HOLMAN, CC., concur.
PER CURIAM.
The foregoing opinion by COIL, C., is adopted as the opinion of the court.
All concur.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434846/
|
435 F. Supp. 2d 1237 (2006)
Lynn Harasin JOHNSON, Plaintiffs,
v.
GEORGIA TELEVISION COMPANY d/b/a WSB-TV, Defendants.
No. 1:04-cv-1320-WSD.
United States District Court, N.D. Georgia, Atlanta Division.
June 7, 2006.
*1238 Gary Richard Kessler, Andrew Holmes Stuart, Irvin Stanford & Kessler, Atlanta, GA, for Plaintiffs.
James Christopher Driver, Nancy E. Rafuse, Gregory R. Fidlon, Ashe Rafuse & Hill, Atlanta, GA, for Defendants.
ORDER
DUFFEY, District Judge.
This matter is before the Court in further consideration of Defendant Georgia Television Company d/b/a WSB-TV's ("WSB") Motion in Limine to Preclude the Introduction of Evidence Regarding Claimed Damages (the "Damages Motion") [97]. This motion preliminarily was addressed at the Pretrial Conference conducted on May 11, 2006.
BACKGROUND
In the Damages Motion, WSB seeks to limit damages to those allowed by 29 U.S.C. § 2617(a)(1) (2005), specifically, lost wages, salary or employment benefits or actual monetary losses resulting directly from a violation of the statute. (Damages Mot. at 1-2.) During the Court's consideration of this motion at the Pretrial Conference, counsel for Ms. Harasin stated that she seeks as damages amounts which were not paid to her as a result of her having to "go out on disability" around Thanksgiving of 2004. (Transcript of Pretrial Conference ("PTC Tr.") [114] at 18.) Plaintiff claims her disability was aggravated by WSB's wrongful assignment of her to the morning shift. (Id. at 18-19.) The assignment, Plaintiff claims, was in retaliation for requesting Family and Medical Leave Act ("FMLA") leave for her claimed fibromyalgia. (Id. at 8-9.) Plaintiff asserts this early morning work resulted in an aggravation of her fibromyalgia, which caused her to be disabled. (Id. at 19-20.) This disability, in turn, caused her to claim disability benefits which, under her disability plan, were not paid in January 2005 and which paid her only 70% of her salary beginning on April 26, 2005. (Id. at 18.) She argues this salary shortfall was a loss of wages which resulted from the wrongful retaliation she alleges. (Id. at 18-19.)
At the Pretrial Conference, counsel for Ms. Harasin announced that Plaintiff intends to call Dr. Wilson "for the purpose of talking about the impact of her working on the 3:00 a.m. shift and its effect on her health." (Id. at 19.) This testimony is intended to support Plaintiffs claim that the alleged retaliatory assignment resulted in her disability and her resultant loss of income. (Id. at 21.) Plaintiff claims this loss is compensatory economic damage. (Id.)
Although counsel had not discussed this damage theory in Plaintiffs submissions filed with the Court, counsel referred the Court to two cases upon which Plaintiff relies to support her damage theory and the introduction of Dr. Wilson's testimony at trial. (Id. at 20-25.) These cases are the Fourth Circuit's decision in Nichols v. Ashland Hosp. Corp., 251 F.3d 496 (4th Cir.2001) and the Northern District of Indiana District Court's opinion in Hite v. Biomet, Inc., 53 F. Supp. 2d 1013 (N.D.Ind. 1999).[1] The Court has reviewed these opinions, Plaintiffs damages theory, and the Defendant's response, and discusses them below.
DISCUSSION
In Nichols, plaintiff brought an action against her former employer arising from the plaintiff's termination of employment. Nichols, 251 F.3d at 499. The claims included *1239 an alleged violation of the FMLA. Id. Specifically, plaintiff claimed she was discharged from her employment as a result of her request for FMLA leave to recover from brain surgery. Id. A physician testified at trial regarding the health effects of her termination. Id. at 500. The evidence was introduced to explain why plaintiff had not sought employment to mitigate her back pay damages. Id.[2] The Court of Appeals in Nichols considered the physician's testimony only in connection with the limited issue presented by the defendant in the appeal: whether defendant "was entitled to a new trial because [plaintiff] produced no evidence to rebut [defendant's] defense that [plaintiff] failed to mitigate her damages by seeking other paid employment." Id. at 503. The Nichols court did not consider whether back pay can be awarded where an FMLA violation allegedly impacts a plaintiff's health such that the plaintiff is unable to work, resulting in a loss of income. That issue simply was not presented to the court in Nichols and thus Nichols does not support allowing Dr. Wilson to testify in support of Plaintiffs loss wages theory in this case.
In Hite, plaintiff claimed that upon her return from FMLA leave to recover from complications from a pregnancy, she was submitted to a hostile work environment which she contended was retaliation for taking leave. Hite, 53 F.Supp.2d at 1015. This retaliation, she alleged, caused her to suffer stress and anxiety resulting in her physician placing her on medical leave. Hite v. Biomet, Inc., 38 F. Supp. 2d 720, 726 (N.D.Ind.1999) ("Hite I").[3] While on subsequent medical leave, Plaintiff applied for and received disability benefits which were paid in the amount of 60% of her regular salary. Id. She claimed she was entitled to back pay for the 40% of the salary she lost when she took leave due to retaliation she allegedly suffered when she returned from leave for her problem pregnancy. Hite, 53 F.Supp.2d at 1024. In considering this claim, the Court in Hite summarily held: "While on the leave of absence, Hite received short-term disability payments which supplemented her normal paycheck at 60% of her normal salary. Thus, at a minimum, Hite is entitled to receive the 40% of her salary which she did not receive as a result of Biomet's retaliatory conduct." Id. at 1024-25. While this conclusory holding is confusing on its face,[4][5] Plaintiff here relies on it for the proposition that she is entitled to her salary for January 2005, and for the difference between her disability payments and her salary for the period May 26, 2005 through September 15, 2005.[6] (Damages Mot. at 3.) This decision, albeit confusing, can be interpreted as providing some theoretical support for Plaintiffs damages argument.
*1240 Defendants argue that Dawson v. Leewood Nursing Home, Inc., 14 F. Supp. 2d 828 (E.D.Va.1998) should apply. (Damages Mot. at 8.) In Dawson, plaintiff claimed that defendant violated her FMLA rights when defendant refused to allow her to reassume the position she had when she went on FMLA leave. Dawson, 14 F.Supp.2d at 830. This refusal, she claimed, was a major cause of severe and disabling cardiac and pulmonary symptoms she suffered, which precluded her from returning to work. Id. She alleged damages for "present and future lost wages and employment benefits" resulting from her resultant disability. Id. That is, she sought: "to recover future lost wages and employment benefits on the theory that the defendants' alleged failure to restore her to her position as [Director of Nursing] or to an equivalent position proximately caused her to become incapacitated, thereby losing her future earning capacity." Id. at 833. In denying plaintiffs recovery, the Court held: "[E]ven if we assume that plaintiff could actually prove causation, we find no legal authority within the FMLA upon which to allow her to recover for the injuries she sustained as a result of the [cardiac and pulmonary symptoms] she suffered on December 9, 1996." Id. at 834. Against the backdrop of the cases cited by the parties, the Court independently reviews the requirements of the FMLA statute and the damages it allows.
The FMLA provides for specific damages that may be recovered. The Act provides that an employer is liable for:
(A) for damages equal to
(i) the amount of
(I) any wages, salary, employment benefits, or other compensation denied or lost to such employee by reason of the violation; or
(II) in the case in which wages, salary, employment benefits, or other compensation have not been denied or lost to the employee, any actual monetary losses sustained by the employee as a direct result of the violation, such as the cost of providing care, up to a sum equal to 12 weeks of wages or salary for the employee;
(ii) the interest on the amount described in clause (i)
(i) calculated at the prevailing rate; and
(iii) an additional amount as liquidated damages equal to the sum of the amount described in clause
(i) and the interest described in clause (ii) . . .; and
(B) for such equitable relief as may be appropriate, including employment, reinstatement, and probation.
29 U.S.C. § 2617.
The Eleventh Circuit has not squarely addressed the issue Plaintiff presents, although it has generally considered what damages may be recovered under subsection 107(a)(1)(A)(i)(I) and specifically has stated they are limited. In Nero v. Industrial Molding Corp., 167 F.3d 921, 930 (5th Cir.1999), the Eleventh Circuit stated that damages under the subsection are "limited to an amount equal to the lost salary or wages, lost employment benefits, or any `other compensation' that is indicative of a quid pro quo relationship between an employer and an employee." The statute, and § 2617(a)(1) specifically, "does not provide for recovery of general or consequential damages." Id. A "plaintiff may not recover in the absence of damages." Graham v. State Farm Mutual Ins. Co., 193 F.3d 1274, 1284 (11th Cir.1999).
Viewing the retaliation alleged here, in the context of the quid pro quo of the employment relationship, the retaliation alleged did not result in any diminution of Plaintiffs income. Indeed, Plaintiff continued to be paid her full salary as quid *1241 pro quo for the services she was expected to perform, even if on a different shift. Viewed practically, even if there was retaliation, Plaintiff was paid her salary and thus did not suffer any damage when she was reassigned to her new shift. The Court further finds that the recovery Plaintiff seeks is in the nature of consequential damages which may not be recovered in an action under the FMLA. Accordingly, Dr. Wilson's testimony is not relevant and therefore is not allowed.[7][8]
Based on the analysis above,
IT IS HEREBY ORDERED that Defendant Georgia Television Company d/b/a WSB-TV's ("WSB") Motion in Limine to Preclude the Introduction of Evidence Regarding Claimed Damages [97] is GRANTED and Dr. Wilson's testimony is precluded as is any evidence of the difference between Plaintiff's salary and disability payments she received.
NOTES
[1] In Plaintiff's Response in Opposition to Defendant's Motion in Limine to Preclude the Introduction of Evidence Regarding Claimed Damages ("Resp. in Opp'n") [108], Plaintiff discussed these decisions, but only for the proposition that Plaintiff is entitled to front pay. (Resp. in Opp'n at 8-10.)
[2] This doctor testified that plaintiff was `unable to function' in a paying job" and he attributed this inability to depression and a panic disorder caused by her termination. Id. at 503. The Court noted that back pay was awarded at trial but did not discuss the basis for the award nor was it asked to evaluate whether it was allowed under the status e.
[3] The Court relied on the statement of facts in its earlier opinion, Hite I.
[4] The opinion is not clear as to why, it the payment "supplemented" her normal salary, she would be paid an additional 40%
[5] Plaintiff did not comply with Biomet's notification procedures while she was on her latest medical leave, and ultimately was terminated from her employment. Hite, 53 F.Supp.2d at 1017. Plaintiff claimed this termination also was retaliatory. Id. at 1016. The Court disagreed and held the termination prohibited plaintiff from claiming she was entitled to continue to receive damages as a result of the earlier retaliation. Id. at 1025.
[6] Plaintiff apparently alleges these back pay damages "start[ed] accruing again on December 15, 2005." (Damages Mot. at 3.)
[7] Even if there were an issue on which Dr. Wilson's testimony might be probative, its prejudicial effect otherwise requires it to be excluded under Rule 403 of the Federal Rule, of Evidence.
[8] Plaintiff's real complaint appears to be that WSB was aware of Plaintiff's alleged disability and, after repeated requests, refused to reassign Plaintiff to her former shift. What Plaintiff is alleging is that WSB refused to accommodate a disability of which it was aware. If a claim had been asserted under a different statute alleging the disability and a failure to accumulate it, Mr. Wilson's testimony might have been germane. There not being a disability claim here, Dr. Wilson's testimony is not relevant. Plaintiff cannot use the FMLA as a vehicle to seek damages for what is essentially a claim for disability discrimination. See S. Comm. on Labor & Human Servs., 103d Cong., Family and Medical Leave Act of 1993, S.Rep. No. 103-3, at 23 (1993). ("[T]he leave provisions of the Family and Medical Leave Act are wholly distinct from the reasonable accommodation obligations of employers covered under the Americans with Disabilities Act.")
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434864/
|
435 F. Supp. 2d 1090 (2006)
Radu RASIDESCU, Plaintiff,
v.
MIDLAND CREDIT MANAGEMENT, INC.; J. Brandon Black, Defendants.
No. 05CV1794 JAH (WMC).
United States District Court, S.D. California.
May 19, 2006.
*1091 *1092 *1093 Tomio B. Narita, Jeffrey A. Topor, Wineberg, Simmonds & Narita LLP, San Francisco, Counsel for the defendants.
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS WITH LEAVE TO AMEND; GRANTING PLAINTIFF'S REQUEST TO STRIKE; DENYING PLAINTIFF'S REQUEST FOR FULL AUDIT AND INJUNCTION [DOC. NO. 12]
HOUSTON, District Judge.
INTRODUCTION
Now before this Court is Defendants Midland Credit Management, Inc. and J. Brandon Black (collectively "Defendants") motion to dismiss pro se Plaintiff Radu Rasidescu's ("Plaintiff") first amended complaint pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6). Doc. No. 12. This Court, after careful consideration of the pleadings and relevant exhibits, GRANTS Defendants' motion to dismiss without prejudice, with leave for Plaintiff to file a second amended complaint.
BACKGROUND
1. Factual Background[1]
On September 16, 2005, pro se Plaintiff Radu Rasidescu filed a complaint, alleging that the "Defendants, did destroy the Plaintiffs, Radu Rasidescu, Credit negligently, knowingly, willingly and maliciously." See Cplt. at 2. The complaint also stated that "Defendants . . . did destroy the Plaintiffs Radu Rasidescu. Credit (sic), its history and score." Id. at 2. Plaintiff asked to "be awarded . . . all inclusive remedies in the amount of $50,000,000.00." Id. at 1. Plaintiff also asked for a preliminary injunction in the amount of $25 million. Id.
On January 19, 2006, Plaintiff filed a first amended complaint reiterating his request to enter a "Final Summary Judgment" based on the subject arbitration decision, as well as an entry of preliminary injunction against Defendants and remedies in the amount of $50 million. Doc. No. 11. Plaintiff alleged that Defendants "did destroy the Plaintiffs, Radu Rasiescu. Credit (sic), its history and score by committing fraud in fact and law . . . negligently. knowingly and maliciously." Id. at 1-2. Plaintiff further alleged that he "does not qualify for any loans, or mortgages" and he "does not qualify to get any credit from any financial institutions." Id. at 2.
2. Procedural Background
Plaintiff filed his original complaint on September 16, 2005. On October 5, 2005, Defendants filed a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) and 12(b)(1). Doe. No. 4. Plaintiff filed an opposition[2]one pro tunc on October 28, 2005. Doc. No. 7. Defendants filed a reply on November 4, 2005. Doc. No. 8. Oral argument was heard on November 17, 2005, with Mr. Jeffrey Topor appearing for Defendants and Mr. Radu Rasidescu appearing pro se. *1094 Doc. No. 9. The Court, at the hearing, granted Defendants' motion without prejudice, with leave to amend the complaint within sixty days. Id. The Court issued a written Order on November 23, 2005, dismissing the case. Doc. No. 10.
On January 19, 2006, Plaintiff filed a timely first amended complaint, reopening his case. Doc. No. 11. Defendant subsequently filed a motion to dismiss on January 27, 2006. Doc. No. 12. Plaintiff filed a notice of motion to strike and opposition nunc pro tunc on February 21, 2006. Doc. No. 15. Defendant filed a reply on March 21, 2006. Doc. No. 17. This Court took this matter under submission pursuant to CivLR 7.1(d.I). Doc. No. 16.
ANALYSIS
1. Legal Standard
A. Fed.R.Civ.P. 12(b)(1)
"A motion to dismiss for lack of subject matter jurisdiction may either attack the allegations of the complaint or may be made as a `speaking motion' attacking the existence of subject matter jurisdiction in fact." Thornhill Publishing Co. v. General Tel. & Elect., 594 F.2d 730, 733 (9th Cir.1979); see also Fed.R.Civ.P. 12(b)(1). Subject matter jurisdiction exists under 28 U.S.C. § 1332 (diversity jurisdiction) "where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of different states."
"Unlike a Rule 12(b)(6) motion, a Rule 12(b)(1) motion can attack the substance of a complaint's jurisdictional allegations despite their formal sufficiency, and in doing so rely on affidavits or any other evidence properly before the court." St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir. 1989). Thus, the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims. Id.
Defendants bring this motion as a "speaking motion" presenting a factual challenge to subject matter jurisdiction. Therefore, this Court may consider extrinsic evidence on whether jurisdiction exists and may resolve factual disputes if necessary. Thornhill, 594 F.2d at 733. Because Plaintiff bears the burden of establishing subject matter jurisdiction, no presumption of truthfulness attaches to the allegations of plaintiffs complaint and the Court must presume it lacks jurisdiction until plaintiff establishes jurisdiction. Stock West, Inc. v. Confederated Tribes, 873 F.2d 1221, 1225 (9th Cir.1989).
B. Fed.R.Civ.P. 12(b)(6)
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir.2001). Dismissal of a claim under this Rule is appropriate only where "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); Navarro, 250 F.3d at 732. Dismissal is warranted under Rule 12(b)(6) where the complaint lacks a cognizable legal theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir.1984); see also Neitzke v. Williams, 490 U.S. 319, 326, 109 S. Ct. 1827, 104 L. Ed. 2d 338 (1989) ("Rule 12(b)(6) authorizes a court to dismiss a claim on the basis of a dispositive issue of law."). Alternatively, a complaint may be dismissed where it presents a cognizable legal theory yet fails to plead essential facts under that theory. Robertson, 749 F.2d at 534.
C. Rule 9(b)
Rule 9(b) states in relevant part that "[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake *1095 shall be stated with particularity." Fed. Rules Civ. P. 9(b). Thus, Rule 9(b) requires that parties must "be specific enough to give defendants notice of the particular misconduct . . . so that they can defend against the charge and not just deny that they have done anything wrong." Vess v. Ciba-Geigy Corp., U.S.A., 317 F.3d 1097, 1106 (9th Cir.2003).
Under Ninth Circuit case law, Fed. Rules Civ. P. 9(b) imposes two distinct requirements on complaints alleging fraud. First, the basic notice requirements of Rule 9(b) require complaints pleading fraud to "state precisely the time, place, and nature of the misleading statements, misrepresentations, or specific acts of fraud." Kaplan v. Rose, 49 F.3d 1363, 1370 (9th Cir.1994); Vess, 317 F.3d at 1106 (A plaintiff must set forth " the who, what, when, where and how' of the alleged misconduct."). Second, the Rule requires that the complaint "set forth an explanation as to why the statement or omission complained of was false and misleading." Yourish v. California Amplifier, 191 F.3d 983, 993 (9th Cir.1999). A complaint may demonstrate the false or misleading character of a statement by identifying inconsistent contemporaneous statements made by the defendants or inconsistent contemporaneous information that was available to the defendants. Yourish, 191 F.3d at 994; DeMarco v. DepoTech Corp., 149 F. Supp. 2d 1212, 1223 (S.D.Cal.2001). A complaint may not, however, demonstrate that a statement was false or misleading when made "merely by pointing to later inconsistent statements or conditions." DeMarco, 149 F.Supp.2d at 1223.
2. Analysis
Defendants seek dismissal for failure to state a claim under 12(b)(6). Alternatively, Defendants seek dismissal under Rule 12(b)(1) for lack of subject matter jurisdiction. As with this Court's previous Order, see Doc. No. 10, because a federal court cannot reach the merits of any dispute until it confirms its own subject matter jurisdiction, see Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94-95, 118 S. Ct. 1003, 140 L. Ed. 2d 210 (1998), the merits of the Rule 12(b)(1) motion will be discussed first.
A. Subject Matter Jurisdiction
Defendants contend that Plaintiff cannot maintain a diversity action in federal court under 28 U.S.C. § 1332 because Plaintiffs claim of $50 + million in damages was "not made in good faith, but rather is stated for the sole purpose of attempting to manufacture jurisdiction." See Doc. No. 13 at 9. Plaintiffs opposition states that in his diversity case "[t]he remedies do exceed by far the $75,000.00 threshold." See Doc. No. 5 at 2. Plaintiff alleges state law claims for "fraud in fact and law" and unspecified tort damages. Because none of these claims invoke federal question jurisdiction, the only basis for subject matter jurisdiction is diversity jurisdiction.
It is well settled that a claim made in good faith in the complaint satisfies the jurisdictional requirement for diversity. St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-289, 58 S. Ct. 586, 82 L. Ed. 845 (1938). However, if "from the face of the pleadings, it is apparent, to a legal certainty, that the plaintiff cannot recover the amount claimed" then the suit must be dismissed. Id. at 289, 58 S. Ct. 586. "It is plaintiff's burden both to allege with sufficient particularity the facts creating jurisdiction, in view of the nature of the right asserted, and if appropriately challenged, or if inquiry be made by the court of its own motion, to support the allegation." Id. at 288 fn. 10, 58 S. Ct. 586, citing McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 182-189, 56 S. Ct. 780, 80 L. Ed. 1135 (1936). The party seeking diversity jurisdiction, *1096 thus, bears the burden of proof of demonstrating federal jurisdiction, and must support their claim with "competent proof." McNutt, 298 U.S. at 189, 56 S. Ct. 780; Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir.1996).
Therefore, where Plaintiffs complaint states an amount that is, to a legal certainty, less than the amount required to establish federal jurisdiction, the district court is justified in dismissing the action. St. Paul, 303 U.S. at 289, 58 S. Ct. 586. "Only three situations clearly meet the legal certainty standard: (1) when the terms of a contract limit the plaintiffs possible recovery; (2) when a specific rule of law or measure of damages limits the amount of damages recoverable; and (3) when independent facts show that the amount of damages was claimed merely to obtain federal court jurisdiction." Pachinger v. MGM Grand Hotel-Las Vegas, Inc., 802 F.2d 362, 363 (9th Cir.1986).
a. Actual Damages
Plaintiff claims "Tort & Actual Damages" as a result of Defendants' alleged contract claim, wherein Plaintiff claims he is "prejudiced" and apparently lacks the ability for the next twenty years to:
Obtain a mortgage for $2.75 million
Obtain car loans in the amount of $160,000
Obtain a position paying $5 million ($250,000/year for 20 years)
Purchase all-terrain vehicles worth $14,000[3]
Purchase two speedboats worth $50,000
Purchase snowmobiles worth $34,000
Travel overseas, worth approximately $144,000
Doc. No. 15 at 2. In addition, Plaintiff claims that as a result of his credit denial, he should be compensated for an unspecified reason in the amount of $500.00 for the next twenty years, totaling $10,000 in additional damages. Id.
Viewing the complaint in a light most favorable to Plaintiff, this Court finds that the allegations in Plaintiffs amended complaint on its face do not support Plaintiffs claim for relief in excess of the jurisdictional amount required. First, Plaintiff provides these damage values without any comment as to how he is entitled to these damages, or what connection these extremely large damages amounts have with the alleged claims in the first amended complaint. Plaintiff, for example, fails to provide any link or support of his ability to obtain a very high paying position at $250, 000/year with any alleged actions by Defendants. The damages claims instead depend upon the uncertain actions of a third party or the happening of an unlikely event that has not yet occurred, and is speculative at best. Agnew v. Parks, 172 Cal. App. 2d 756, 768, 343 P.2d 118 (1959). Plaintiff's claims, therefore, are not supported by any facts or allegations that would connect his damage claims to Defendants' alleged acts.
Likewise, Plaintiff also fails to demonstrate how any alleged damage to his credit would impact his ability to purchase two very high priced speedboats at $50,000, or how he would have, in the absence of Defendants' pursuit of the alleged credit card debt, been able to purchase the $2.75 million home or the vehicles and overseas trips worth over $400,000. Moreover, the arbitration hearing, which occurred to resolve a dispute between Plaintiff and Defendants over an unpaid $10,600.00 credit debt, awarded no fees or damages to either *1097 side. Plaintiff's claims cannot "be ascertained pursuant to some realistic formula." Moore v. Betit, 511 F.2d 1004, 1006 (2d Cir.1975). Accordingly, Plaintiffs claims for actual damages "appear to a legal certainty [as] really for less than the jurisdictional amount" of $75,000. See St. Paul Mercury, 303 U.S. at 288-89, 58 S. Ct. 586.
b. Fraud in Fact and Law Allegations
Plaintiff amends his original complaint by adding an allegation of "Fraud in Fact and Law" along with punitive damages, totaling $42 million in alleged damages. Doc. No. 15 at 2. To be awarded the $42 million in damages, and meet the legal certainty standard, Plaintiff must be able to prove that his damage claim is not limited by "a specific rule of law or measure of damages . . . [or] when independent facts show that the amount of damages was claimed merely to obtain federal court jurisdiction." Pachinger, 802 F.2d at 364.
Plaintiffs claims of $42 million in damages cannot meet the jurisdictional requirement under both California and Wisconsin law. In California, recovery under common law fraud is limited to "actual damages suffered by the plaintiff." Small v. Fritz Companies, Inc., 30 Cal. 4th 167, 195, 132 Cal. Rptr. 2d 490, 65 P.3d 1255 (2003), quoting Ward v. Taggart, 51 Cal. 2d 736, 741, 336 P.2d 534 (1959). "`Actual is defined as "existing in fact or reality," as contrasted with "potential" or "hypothetical," and as distinguished from "apparent" or "nominal." ' " Small, 30 Cal.4th at 195, 132 Cal. Rptr. 2d 490, 65 P.3d 1255, citing to Webster's Third New Internat. Diet. at 22 (1964). "It follows that `actual damages' are those which compensate someone for the harm which he or she has been proven to currently suffer or from which the evidence shows he or she is certain to suffer in the future." Id. Similarly, Wisconsin law requires plaintiff show actual damages in order to recover on a common law fraud claim. "Actual damage is harm that has already occurred or is `reasonably certain' to occur in the future." Tietsworth v. Harley-Davidson, Inc., 270 Wis. 2d 146, 158, 677 N.W.2d 233 (2004). "Actual damage is not the mere possibility of future harm." Id.
Plaintiff here cannot show that he suffers from damages that are "reasonably certain" to occur or that are "existing in fact or reality." Plaintiff makes no attempt to show or support in his amended complaint that he suffers from $42 million in damages as a direct or reasonably anticipated result of Defendants' alleged fraudulent actions. Plaintiff only characterizes his damages as $19 million each for alleged "Fraud-in-Fact" and "Fraud-in-Law" violations. As discussed, Plaintiffs claim for damages cannot be supported by the facts contained within his first amended claim, and therefore, to a legal certainty, does not overcome his burden of showing the required jurisdictional amount for this Court to assert federal jurisdiction in the instant matter.
c. Punitive Damages
Plaintiff also claims punitive damages of $4 million as a result of the alleged fraudulent behavior by Defendants. In determining whether diversity jurisdiction exists, a court is obligated to consider claims for both actual and punitive damages in determining the jurisdictional amount. Kahal v. J.W. Wilson & Assocs., Inc., 673 F.2d 547, 548 (D.C.Cir.1982). However, under both California and Wisconsin law, punitive damages are generally only available where defendant's actions are oppressive, fraudulent or malicious, or willful, wanton and/or in reckless disregard for the plaintiff. See Cal. Civ.Code § 3294[4] (West 2006); Lundin v. Shimanski, *1098 124 Wis. 2d 175, 196-97, 368 N.W.2d 676 (1985). Here, Plaintiff asserted that defendant did "falsely claim that since August 2001, the Plaintiff was owning [sic] them $10, 600.00[sic]." Doc. No. 11 at 2. Plaintiff further alleges that "defendants did maliciously pursue this false claim with the National Arbitration Forum, where their action was dismissed with prejudice for lack of factual evidence." Doc. No. 11 at 2. Although Plaintiff alleges that Defendant "falsely" accused Plaintiff of a $10,600 credit card debt, the punitive damages award sought "appears to have been made in bad faith" for the purpose of manufacturing jurisdiction. Srour v. Barnes, 670 F. Supp. 18, 20 (D.D.C.1987). Taking the facts of the complaint in the light most favorable to Plaintiff, his claim of $4 million in damages is constitutionally suspect due to the lack of actual damages incurred by Plaintiff as discussed, as well as the lack of any allegations of willful, malicious or intentional actions by Defendants. See BMW, Inc. v. Gore, 517 U.S. 559, 574-75, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996); Jeffers v. Nysse, 98 Wis. 2d 543, 547, 297 N.W.2d 495 (1980). Defendants' actions, instead, may have been improper at most, and is far from the wanton and malicious tortious action necessary for punitive damages in common law tort claims. Accordingly, Plaintiffs claim for $4 million in punitive damages is not supported by the factual evidence in the first amended complaint, and should be dismissed for lack of subject matter jurisdiction.
d. Conclusion
For the reasons stated above, Plaintiffs complaint again fails to support the amount in controversy requirement for diversity jurisdiction. Accordingly, this Court GRANTS Defendant's motion to dismiss under Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction.
B. Failure to State a Claim for Relief
Defendants argue that the Court should dismiss Plaintiffs first amended complaint with prejudice under Fed.R.Civ.P. 12(b)(6) because: 1) Plaintiff has not set forth with sufficient particularity the elements of the alleged fraudulent action claimed as required under Fed.R.Civ.P. 9(b); and 2) Plaintiff fails to support any alleged contractual basis for his claim under Rule 8 of the Federal Rules of Civil Procedure. See Doc. No. 13 at 6-7.
In his opposition, Plaintiff only states that the "two claims, of FRAUD in FACT and law, and TORT and ACTUAL DAAGES were simply stated and explained in the Plaintiffs AMENDED COMPLAINT FOR REMEDIES." See Doc. No. 15 at 2 (emphasis in original). Defendants reply that Plaintiff fails to explain the basis for a federal common-law fraud action, and fails to allege the necessary elements for a state law fraud claim. Doc. No. 17 at 3. Defendants add that Plaintiff "at most [sets] forth conclusory allegations that do not give defendants fair notice of the nature of his claim and the basis for it". Id. at 4.
As previously discussed in this Court's Order of November 23, 2005, Rule 8 provides that a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(20). The Federal Rules adopt a flexible pleading policy; however every complaint must, at a minimum, *1099 give fair notice and state the elements of each claim against each defendant plainly and succinctly. Jones v. Community Redevelopment Agency, 733 F.2d 646, 649 (9th Cir.1984); Kimes v. Stone, 84 F.3d 1121, 1129 (9th Cir.1996). While the court must construe pro se pleadings liberally and afford plaintiff the benefit of any doubt, even pro se plaintiffs must allege, with at least some degree of particularity, overt acts taken by each defendant which support his claims. Haines v. Kerner, 404 U.S. 519, 520, 92 S. Ct. 594, 30 L. Ed. 2d 652 (1972) (per curiam); Karim-Panahi v. Los Angeles Police Dept., 839 F.2d 621, 623 (9th Cir.1988).
In his first amended complaint, Plaintiff still fails to give each defendant "fair notice" of what they are being accused of. The plaintiff must "allege with at least some degree of particularity overt acts which defendants engaged in" that support the plaintiffs claim. Sherman v. Yakahi, 549 F.2d 1287, 1290 (9th Cir.1977), quoting Powell v. Workmen's Compensation Board, 327 F.2d 131, 137 (2d Cir. 1964). In terms of any alleged contractual claim against Defendants, Plaintiff again fails to identify the alleged contract between the parties, and the facts and circumstances surrounding the alleged breach of contract. Without such information, the claims in the first amended complaint fail to give fair notice to Defendants of the actions of which they are accused, in direct contravention to Rule 8 of the Federal Rules of Civil Procedure. As set forth in his amended complaint, Plaintiff's allegations, therefore, continue to be vague and unclear in violation of Rule 8(a).
In addition, Plaintiff fails to set forth in his amended complaint the essential elements of his fraud claim. In California, the elements of common law fraud are: 1) misrepresentation of a material fact; 2) knowledge of falsity by defendant of the material fact; 3) intent of defendant to defraud plaintiff; 4) justifiable reliance of plaintiff on the material fact; and 5) damages. City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 68 Cal. App. 4th 445, 481, "80 Cal. Rptr. 2d 329 (1998). Similarly, in Wisconsin, a showing of common law fraud requires that plaintiff prove: 1) misrepresentation of a fact, not opinion; 2) which was untrue; 3) defendants had knowledge of the falsity, or made the false statement with reckless disregard to plaintiff; 4) the false representation was made to induce plaintiff to plaintiff's detriment; and 5) plaintiff believed and relied on the misrepresentation. Grove Holding Corp. v. First Wisconsin Nat'l Bank of Sheboygan, 803 F. Supp. 1486, 1503 (1992). Plaintiffs complaint only alleges that Defendants made a false statement, but fails to establish whether Defendants had an intent to defraud plaintiff, or that Defendants had actual knowledge or made the statement with reckless disregard to Plaintiff. Accordingly, Plaintiff's complaint fails to adequately set forth a common law fraud claim against Defendants.
Finally, fraud claims, under the Federal Rules of Civil Procedure as well as California and Wisconsin state law, must be plead with sufficient particularity such that the complaint "state[s] precisely the time, place, and nature of the misleading statements, misrepresentations, or specific acts of fraud," as well as "why the statement or omission complained of was false and misleading." Fed.R.Civ.P. 9(b); Wis. Stat § 802.03(2); Lazar v. Superior Court, 12 Cal. 4th 631, 645, 49 Cal. Rptr. 2d 377, 909 P.2d 981 (1996); Kaplan, 49 F.3d at 1370; Vess, 317 F.3d at 1106 (A plaintiff must set forth "the who, what, when, where and how' of the alleged misconduct."); Yourish, 191 F.3d at 993; Tietsworth, 270 Wis.2d at 158, 677 N.W.2d 233. Plaintiffs first amended complaint fails to *1100 meet this heightened pleading standard by failing to precisely state the "time, place and nature" of the alleged false statements, or why the alleged false statements were "false and misleading." Plaintiffs complaint only conclusorily alleges that "defendant did falsely claim that since August 2001, the Plaintiff was owning [sic] them $10, 600.00[sic]." Doc. No. 11 at 2. Plaintiff fails to specifically identify who made the false statements, where the false statements were made and, most importantly, why the alleged false statements were false and misleading. Without such information, Plaintiff's first amended complaint fails to meet the heightened pleading requirements under Federal and State law.
Accordingly, this Court GRANTS Defendant's motion to dismiss under Rule 12(b)(6) for failure to state a claim.
C. Plaintiff's Motion to Strike
In his Opposition, Plaintiff requests:
An Order to Strike the Plaintiffs, Radu Rasidescu, Social Security number from the "SUMMARY OF ACCOUNT IFORMATION" of the Exhibit 1 of the Defendants' Memorandum from Oct. 4, 2005[sic] This is a very CONFIDETIAL matter between IRS and a taxpayer, and, as part of a public record, it can lead to IDENTITY THEFT. The Defendants acted MALICIOUSLY in their submission.
Doc. No. 15 at 1. Defendants do not oppose this request. See Doc. No. 17 at 5, fn. 2. This Court finds Plaintiffs request reasonable. Accordingly, the Court will Order the Clerk of the Court to file under seal the exhibits attached to Defendants' October 5, 2005 memorandum (Doc. No. 5).
D. Plaintiff's Request for Injunction and Audit
Plaintiff also requests in his opposition: 1) An "Order for a Full Audit" of Defendants' accounting and financial practices, to be paid by Defendants; and 2) An "Order for Injunction" for Defendants to "deposit $25 million dollars with this Court as security of costs." Doc. No. 11 at 1. Defendants oppose both requests. Doc. No. 15 at 5, fn. 2. This Court agrees with Defendants. Plaintiff provides no statute, law or rule from which to base his requests. Plaintiff, instead, asks this Court to circumvent established laws, rules and practices to obtain information and payment from Defendants for Plaintiffs sole benefit. This Court declines to do so, and therefore DENIES Plaintiffs request for an injunction and full audit.
3. Leave to Amend
This Court finds that, in light of Plaintiffs first presentation of fraud claims in his first amended complaint, Plaintiff should be provided the opportunity to again amend his complaint in order to overcome the amount in controversy requirement for diversity jurisdiction, as well as to plead with particularity and place Defendants on sufficient notice of the claims against them. As noted, Plaintiff must lay out the specific facts and circumstances that show Plaintiff has suffered damages exceeding the statutory requirement of $75,000. This includes the recitation of facts that are "existing in reality" within the body of the complaint to support any damages that Plaintiff seeks. Plaintiff must overcome this statutory threshold before this Court can exercise subject matter jurisdiction.
In order to meet the requirements under Fed.R.Civ.P. 8(a) and 9(b), Plaintiff must also specifically plead with particularity facts and circumstances of his fraud claims. In addition, Plaintiff must also plead with particularity under Fed. R.Civ.P. 8(a) facts and circumstances regarding any breach of contract claim that *1101 he may wish to bring. Regardless of the cause of action claimed, Plaintiff must, at a minimum, state sufficient facts to support any claim contained within the complaint, and how these facts apply to each defendant.
Once filed, the amended complaint supersedes the original: it must stand or fall on its own; jurisdictional and other allegations essential to the claim must be realleged; and the original complaint is rendered irrelevant unless the amended complaint incorporates by reference portions of the prior pleading. See CivLR 15.1; King v. Dogan, 31 F.3d 344, 346 (5th Cir.1994). An amended complaint that drops a defendant named in the original complaint effectively dismisses that defendant from the action. London v. Coopers & Lybrand, 644 F.2d 811 (9th Cir. 1981). Claims in the original complaint which are not realleged in the amended complaint are no longer before the court and are deemed waived. Id. at 814.
CONCLUSION AND ORDER
Based on the foregoing, IT IS HERBY ORDERED that:
1) Defendants' motion to dismiss is GRANTED without prejudice. The complaint is DISMISSED with leave to amend.
2) Plaintiff must file and serve an amended complaint that complies with the Federal Rules of Civil Procedure on or before June 30, 2006. If Plaintiff's amended complaint still fails to overcome the threshold amount for diversity jurisdiction and/or fails to state a claim upon which relief can be granted, it will be dismissed with prejudice and without any further leave to amend. See McHenry v. Renne, 84 F.3d 1172, 1177-79 (9th Cir.1996) (holding that court may dismiss action pursuant to Fed.R.Civ.P. 41(b) if plaintiff fails to comply with previous court order regarding amendment). If Plaintiff fails to file an amended complaint on or before June 30, 2006, the Clerk of the Court is directed to terminate this case.
3) Plaintiff's request to strike personal information from Defendant's October 5, 2005 memorandum is GRANTED. The Clerk of the Court is directed to file under seal all exhibits attached to Defendant's memorandum (Doc. No. 5).
4) Plaintiff's request for an injunction and full audit of Defendant's financial and accounting practices is DENIED.
IT IS SO ORDERED.
NOTES
[1] The following facts are taken from Plaintiff's first amended complaint.
[2] Plaintiffs document entitled "Plaintiff's Answer," was filed in response to Defendant's motion. "This Court accepted the document nunc pro, tunc, construing the document as an opposition to Defendant's motion to dismiss.
[3] Plaintiff's calculations for the all-terrain vehicle loss appears to be in error. At an estimated $3,500 value, the purchase of two allterrain vehicles every ten years would equal $14,000, not $15,000 as alleged.
[4] The statute states in relevant part:
In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.
Cal. Civ.Code § 3294(a). The statute goes on to define behavior indicative of oppression, fraud and malice.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434872/
|
435 F. Supp. 2d 608 (2006)
Shawn K. ODNEAL, TDCJ-CID # 917382
v.
Doug DRETKE, et al.
C.A. No. C-04-454.
United States District Court, S.D. Texas, Corpus Christi Division.
June 21, 2006.
*609 *610 Shawn K. Odneal, Beeville, TX, pro se.
Ginger R. Phillips, Office of the Attorney General Law Enforcement Defense Division Capitol Station, Austin, TX, for Bill Pierce, Robert Kibbe, and Ron Teel.
Timothy J. Flocos, Karen D. Matlock, Office of the Attorney General, Austin, TX, for Ron Teel.
ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
OWSLEY, United States Magistrate Judge.
This is a civil rights action brought by a state prisoner pursuant to 42 U.S.C. § 1983. Plaintiff, who is Native American, claims that defendants have interfered with the practice of his religion and that such interference is not justified by any prison security issue and is in violation of his constitutional rights. (D.E.1). He is suing Billy Pierce, the Director of the Chaplaincy Department of the Texas Department of Criminal Justice ("TDCJ") and Robert Kibbe, a Unit Chaplain at the McConnell Unit. For the reasons stated herein, the summary judgment motion of defendants Pierce and Kibbe is granted, and plaintiff's claims are dismissed with prejudice.
I. JURISDICTION
The Court has federal question jurisdiction over this civil rights action pursuant to 28 U.S.C. § 1331. Upon consent of the parties, (D.E.55, 58), this case was referred to a magistrate judge to conduct all further proceedings, including entry of final judgment. (D.E.59). See 28 U.S.C. § 636(c)(1).
II. PROCEDURAL BACKGROUND AND PLAINTIFF'S ALLEGATIONS
Plaintiff is an inmate in the Texas Department of Criminal Justice, Criminal Institutions Divisions ("TDCJ-CID"), and is currently incarcerated at the McConnell Unit in Beeville, Texas. He is a Native American and member of the Choctaw nation. He filed suit on August 30, 2004, pursuant to 42 U.S.C. § 1983, claiming that certain prison officials were violating his First and Fourteenth Amendment rights to practice his religion, as well as violating certain provisions of the Religious Land Use and Institutionalized Persons Act ("RLUIPA") of 2000, 42 U.S.C. § 2000cc-1(a).[1]
A Spears[2] hearing was held on October *611 20, 2004. At the hearing, plaintiff complained that defendants failed to employ either adequate clergy, security personnel, or volunteers to supervise Native American religious ceremonies, such that he has been denied regular access to religious ceremonies. He asserted that TDCJ-CID regulations authorize religious ceremonies twice a month for Native American inmates, but that he and the other eighteen Native Americans housed at the McConnell Unit were provided a faith ceremony only once every two to three months. He claims that there are nineteen units serving Native Americans, with only one Native American Chaplain to serve them. Plaintiff also complained that the TDCJ-CID prohibited him from possessing or wearing his medicine bag at any time except going to or from a religious ceremony, and he challenged the TDCJ-CID's hair length regulation that prohibited him from wearing a kouplock.
Following the Spears hearing, it was recommended that plaintiff's claims against the TDCJ Director Doug Dretke and his claims concerning his medicine bag and kouplock be dismissed, and that his claims against Mr. Pierce, Mr. Kibbe, and Ron Teel be retained. (D.E.7). On December 20, 2004, plaintiff's claims against Doug Dretke were dismissed, as were his claims concerning his medicine bag and kouplock. (D.E.32, 33).
On December 28, 2004, defendants Pierce, Kibbe, and Teel filed their answer, (D.E.36), and also sought a stay of the action based on the fact that the United States Supreme Court had granted certiorari in Cutter v. Wilkinson, 543 U.S. 924, 125 S. Ct. 308, 160 L. Ed. 2d 221 (2004). In Cutter v. Wilkinson, 349 F.3d 257 (6th Cir.2003), the Sixth Circuit found that the RLUIPA's section 3, which applies to institutionalized persons, violates the Establishment Clause. Id. at 267-69. The Seventh and Ninth Circuits had previously held that RLUIPA's section 3 is a valid exercise of Congressional spending power and did not violate the Establishment Clause or the Tenth Amendment. Charles v. Verhagen, 348 F.3d 601 (7th Cir.2003); Mayweathers v. Newland, 314 F.3d 1062 (9th Cir.2002). Concluding that resolution of the constitutionality of RLUIPA's section 3 was necessary, defendants' motion to stay was granted. (D.E.44). On May 31, 2005, the Supreme Court decided Cutter, holding that section 3 of the RLUIPA did not violate the Establishment Clause. Cutter v. Wilkinson, 544 U.S. 709, 712-14, 125 S. Ct. 2113, 161 L. Ed. 2d 1020 (2005). With this issue resolved, the stay was lifted. (D.E.50).
On May 10, 2006, defendant Teel filed a motion for summary judgment seeking to dismiss plaintiff's claims on the grounds of failure to exhaust, failure to allege a constitutional violation, failure to allege personal involvement, and qualified immunity. (D.E.85). On May 22, 2006, plaintiff filed a response to Mr. Teel's summary judgment motion, indicating that he was not opposed to the motion and requesting that it be granted. (D.E.92). By order and final judgment entered May 25, 2006, plaintiff's claims against defendant Teel were dismissed with prejudice. (D.E.95, 96).
Defendants Pierce and Kibbe filed their motion for summary judgment on May 8, 2006. (D.E.78). Plaintiff has filed a response in opposition. (D.E.93).
III. SUMMARY JUDGMENT EVIDENCE AND UNCONTESTED FACTS
In support of their motion for summary judgment, defendants offer the following evidence:
Ex. A: Affidavit of Billy Pierce, TDCJ Director of the Chaplaincy Department;
*612 Ex. B: Affidavit of Nathaniel Quarterman, TDCJ-CID Deputy Director for Prison and Jail Management;
Ex. C: Plaintiff's Native American Religious Designation records; and
Ex. D: McConnell Unit Chaplaincy Records from July 2001 through March 2006.
(D.E.78).
The following facts are not in dispute:
Plaintiff's designation as a follower of Native American religion within the TDCJ became effective on July 21, 2001. (PAC[3] at 2; DX-C at 1). In his Native American Questionnaire, plaintiff indicated that he had not been raised knowing the traditions of the Choctaw, but when a friend began teaching him of the Native American traditions, "it felt right." (DX-C at 3).
The McConnell Unit is a designated Native American unit within the TDCJ-CID, where services for the Native American religion are held. (PAC at 3; DX-C at 1-2).
Defendant Billy Pierce is the TDCJ Director of the Chaplaincy Department. (PAC at 2; DX-A at 1). According to Mr. Pierce, the TDCJ maintains a list of the most common religious preferences by offenders in TDCJ custody. (DX-A, Pierce Aff. at ¶ 5). As of September 15, 2005, there were approximately 136 faith preferences and approximately 160,381 offenders. Id. Providing weekly or even monthly religious services to all of these different faith groups would be "virtually impossible" due to the large number of faiths, the large number of offenders, security concerns, staffing and space limitations, and the large geographic expanse that the TDCJ covers. Id.
The extent and frequency for observance of any religious ceremony is determined by several factors, including, the significance of the ceremony, the availability of supervision, time and space requirements, and the security concerns of the facility. (DX-A, Pierce Aff. at ¶ 7; DX-A, Tab 2 "Procedures for Religious Programming"). Additional meeting times and space subsequent to an initial allotment for a faith group are provided based on an equitable pro rata formula, dependent on both the percentage of the offender population that the requesting faith group represents and the amount of time and space available for religious programming. (DA, Pierce Aff. at ¶ 7).
The TDCJ employs 94 chaplains who minister to offenders and conduct religious programs. Id. at ¶ 8. In addition, approved religious volunteers are utilized to help with religious programs, and make over 150,000 visits to units each year. (Id.; see also DX-A, Tab 2 at 9, ¶ VIII). The majority of the TDCJ Chaplaincy budget is allocated to administrative costs and the salaries of the chaplains and a few administrative employees. (DX-A, Pierce Aff. at ¶ 9). There are no funds to purchase religious materials or food. Id. Security for religious activities is provided by the TDCJ security budget, and is not a cost allocated to the Chaplaincy. Id.
The TDCJ allows all offenders to worship according to their faith preferences in their cells using allowed items such as sacred texts, devotional items, and other materials. (DX-A, Pierce Aff. at ¶ 6, ¶ 9; see also DX-A Tab 2 at 9, ¶ VI.B). In addition, an offender may meet with an approved spiritual advisor who represents his faith-preference sub-group twice a month for up to two hours per session. (DX-A, Pierce Aff. at ¶ 9).
*613 The TDCJ provides unit worship services on a generic basis to the five major faith group categories: (1) Christian non-Roman Catholic, (2) Roman Catholic, (3) Judaism, (4) Islam, and (5) Native American. Id. at ¶ 10. Within each major category there are subgroups; for example, under Christian non-Roman Catholic, there are Baptists, Lutherans, and Methodists. Id. The TDCJ cannot satisfy the requirements of each subgroup's distinct beliefs and worship practices. Id. Instead, the services are structured in such a manner to employ that which is common within the major faith group category so that participants experience some portion of the traditions specific to his sub-group. Id. Some groups, such as the Church of Jesus Christ of Latter Day Saints and the Jehovah's Witnesses, do not meet the criteria for inclusion in any subgroup of the five major distinctive religious groups. Id. at ¶ 11. Members of these groups are allowed to meet for study and fellowship if the need to do so is presented to the unit chaplain and if the resources are available without compromising the safety and security of the unit. Id.
As of September 15, 2005, the number of offenders designating their religious preference as Native American was 2,522, out of 160,381, accounting for less than two percent of the total prison population. (DX-A, Pierce Aff. at ¶ 13). To meet the needs of the inmates practicing Native American religions, the TDCJ has developed a comprehensive plan. (Pierce Aff. at ¶ 14 & Tabs 1, 2, & 3). In developing the plan, TDCJ officials consulted with experts in Native American religious practices. (DX-A, Pierce Aff. at ¶ 14). The plan includes employing a Native American chaplain who conducts prayer circles at certain units, and who recruits volunteers to assist him in conducting prayer circles at additional units. Id.
Mr. Pierce routinely sends letters and makes telephone calls to the sixty-plus known Native American resource groups in the region, but rarely gets a response or follow-up commitment from these tribes or organizations. Id. Despite his and other individuals' efforts, they have been unable to obtain sufficient volunteers for every unit. Id. at ¶ 15. It took Mr. Pierce almost two years to find and hire the two Native American Chaplains who are now under contract with the TDCJ at this time. Id. One of these chaplains contracted with the TDCJ in 2005, but the other started just four months ago, in January 2006. Id.
At the time plaintiffs claims arose, Mr. Teel was the only chaplain contracted with the TDCJ to conduct Native American ceremonies. (DX-A, Pierce Aff. at ¶ 15). He was responsible for covering all of the Native American designated units, except the Daniel Unit in Snyder, Texas, and the Neal Unit in Amarillo, Texas. Id. It took Mr. Teel one to two months to cover the entire circuit of units. Id. Due to the lack of chaplains and qualified volunteers, it was often impossible for Mr. Teel to conduct more than one ceremony per unit during a given month. Id.
Currently, Native American prayer circles are held at the following units: Hughes, Gatesville, Murray, Michael, Central, Mountain View, Stevenson, Daniel, Neal, Gurney, Ramsey III, and McConnell. (DX-A, Pierce Aff. at ¶ 16 & Tab 6). According to the plan, inmates may be transferred to units that have prayer circles, provided the transfer is not in conflict with any medical restrictions or security classification. (DX-A, Pierce Aff. at ¶ 16 & Tab 6). However, even if an inmate is not transferred to a unit where prayer circle is held, inmates are given the opportunity to practice their faith by possessing approved religious items and literature, and by meeting with a spiritual advisor. Id.
*614 Pursuant to TDCJ policy, all religious devotional items must be approved and used as authorized by the TDCJ. (DX-A, Pierce Aff. at ¶ 17). This limitation is imposed to ensure the safety and security of the facilities and to limit the trafficking and trading of items among offenders. Id. Offenders who do not follow the established procedure for obtaining approval and ownership, misuse a religious item, or present a security risk based on documented behavior may be denied devotional items. Id.
Native American religious practices are diverse among the 500 tribes recognized by the federal government; however, there are components of the religion that are common among many of the tribes. Id. at ¶ 18. The TDCJ has approved the following devotional items for Native American believers: (1) a headband (worn in cell and dorm, or to and from religious ceremonies or meetings); (2) natural objects consisting of sacred stones (seven marble size permitted), feather (one permitted), shell (one palm-size permitted), bone (subject to unit approval), tooth (subject to unit approval), and plant (sage, sweet grass, or cedar (subject to approval of the unit warden and chaplain)); (3) a medicine bag consisting of a two-inch square, animal skin pouch containing some natural objects such as a stone, piece of wood, animal parts, or herbs with leather or fabric throng worn around the neck (wear is limited to the cell and dorm area, or to and from religious services); and (4) a medicine wheel medallion. (DX-A, Pierce Aff. at ¶ 19 & Tabs 4, 7).
Nathaniel Quarterman is the TDCJ-CID Deputy Director for Prison and Jail Management. (DX-B, Quarterman Aff. at ¶ 1). He has worked in a variety of security-related positions for over twenty years. Id.
TDCJ created the Criminal Institutions Division in September 2003 through a merger of the Institutional Division, Operations Division, Private Facilities Division, and the State Jail Division. (DX-B, Quarterman Aff. at ¶ 3). The facilities must be operated in a fiscally sound manner. Id. As of August 31, 2004, the TDCJ held 150,709 offenders in 106 facilities. Id. Approximately M percent of those offenders were incarcerated for violent offenses including homicide, assault, rape, kidnaping, robbery, and sexual assault, while the remaining were incarcerated for drug, property, and other offenses. Id.
As of August 31, 2004, the TDCJ-CID employed 27,370 security staff to manage the offenders. Approximately 6,000 of the security staff members had less than one year of experience. (DX-B, Quarterman Aff. at ¶ 4). The average correctional officer, a CO III, earns approximately $2,400 per month. Id. Due to the low pay and stressful working conditions, TDCJ-CID has difficulty retaining employees. Id. It currently has approximately 2,900 job openings. Id. Some units may operate at 72 percent of their authorized staffing levels. Id.
The TDCJ does not have the staff, space, and time to comply with every request for meetings, classes, devotional items, special diets, and other privileges requested by members of the 150 faith groups represented in the prison system. (DX-B, Quarterman Aff. at ¶ 7). As a state agency, the TDCJ operates within a budget allocated by the Texas legislature. Id. Units are staffed to meet all primary and appropriate levels of supervision, and are not staffed to manage large numbers of indeterminate meetings, monitor large numbers of devotional items, provide special diets, and grant special privileges for religious reasons. Id. The TDCJ relies on donations for religious materials and devotional items. Id. Despite these limiting factors, the TDCJ held 65,651 religious *615 services with a total offender attendance of 2,798,946 in Fiscal Year 2004. Furthermore, approved volunteers provided 455,-287 hours of services in 102,935 visits. Id.
IV. SUMMARY JUDGMENT STANDARD
Summary judgment is proper if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). A genuine issue exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). The Court must examine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Id. at 251-52, 106 S. Ct. 2505. In making this determination, the Court must consider the record as a whole by reviewing all pleadings, depositions, affidavits and admissions on file, and drawing all justifiable inferences in favor of the party opposing the motion. Caboni v. Gen. Motors Corp., 278 F.3d 448, 451 (5th Cir.2002). The Court may not weigh the evidence, or evaluate the credibility of witnesses. Id. Furthermore, "affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." Fed.R.Civ.P. 56(e); see also Cormier v. Pennzoil Exploration & Prod. Co., 969 F.2d 1559, 1561 (5th Cir.1992) (per curiam) (refusing to consider affidavits that relied on hearsay statements); Martin v. John W. Stone Oil Distrib., Inc., 819 F.2d 547, 549 (5th Cir.1987) (per curiam) (stating that courts cannot consider hearsay evidence in affidavits and depositions). Unauthenticated and unverified documents do not constitute proper summary judgment evidence. King v. Dogan, 31 F.3d 344, 346 (5th Cir.1994) (per curiam).
The moving party bears the initial burden of showing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). If the moving party demonstrates an absence of evidence supporting the nonmoving party's case, then the burden shifts to the nonmoving party to come forward with specific facts showing that a genuine issue for trial does exist. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986). To sustain this burden, the nonmoving party cannot rest on the mere allegations of the pleadings. Fed.R.Civ.P. 56(e); Anderson, 477 U.S. at 248, 106 S. Ct. 2505. "After the nonmovant has been given an opportunity to raise a genuine factual issue, if no reasonable juror could find for the nonmovant, summary judgment will be granted." Caboni, 278 F.3d at 451. "If reasonable minds could differ as to the import of the evidence . . . a verdict should not be directed." Anderson, 477 U.S. at 250-51, 106 S. Ct. 2505.
The evidence must be evaluated under the summary judgment standard to determine whether the moving party has shown the absence of a genuine issue of material fact. "[T]he substantive law will identify which facts are material. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id. at 248, 106 S. Ct. 2505.
V. ANALYSIS
Plaintiff claims that defendants are denying him the opportunity to attend Native American religious ceremonies because they have (1) failed to hire an adequate number of Native American chaplains, or to enlist volunteers to conduct the ceremonies; *616 and (2) refused to let him conduct the ceremonies himself with prison personnel present when outside volunteers are not available. He contends that defendants' failure to accommodate his religious practices amounts to violations of his First and Fourteenth amendment rights, and violations pursuant to RLUIPA.
Imprisonment necessarily entails a loss of numerous rights and liberties. Muhammad v. Lynaugh, 966 F.2d 901, 902 (5th Cir.1992). A prisoner is not free to do that which he might wish to do, nor may he necessarily engage in permissible activities at a time and in a manner he might prefer. Id. Several constitutional rights are protected, however, including the right to practice one's religious beliefs. Id. Restrictions to an inmate's practice of religion must be reasonably related to legitimate penological interests. O'Lone v. Estate of Shabazz, 482 U.S. 342, 349, 107 S. Ct. 2400, 96 L. Ed. 2d 282 (1987); Turner v. Safley, 482 U.S. 78, 89-90, 107 S. Ct. 2254, 96 L. Ed. 2d 64 (1987). Turner established a four-factor "rational relationship" test for analyzing the constitutionality of regulations that burden a prisoner's fundamental rights. 482 U.S. at 89-91, 107 S. Ct. 2254. Under the Turner test, the court must consider: (1) whether there exists a valid, rational correlation between the prison regulation and the legitimate governmental interest advanced; (2) whether there are alternative means of exercising the rights that remain available to the inmates; (3) what is the impact on prison staff, other inmates, and the allocation of prison resources generally; and (4) whether there is an absence of ready alternatives to the regulation in question. Id.
A. Equal Protection Under the Fourteenth Amendment.
Plaintiff first complains that he is being denied equal protection under the Fourteenth Amendment because he is not permitted to meet with other Native American worshipers without a chaplain or volunteer present. The Fourteenth Amendment requires that all persons similarly situated shall be treated alike, but it does not demand "that every religious sect or group within a prison however few in numbers must have identical facilities or personnel." Cruz v. Beto, 405 U.S. 319, 322 n. 2, 92 S. Ct. 1079, 31 L. Ed. 2d 263 (1972) (per curiam); see also Plyler v. Doe, 457 U.S. 202, 216, 102 S. Ct. 2382, 72 L. Ed. 2d 786 (1982) (explaining that the Equal Protection Clause "does not require [people who] are different in fact or opinion to be treated in law as though they were the same."). The Fifth Circuit has held that ". . . disparate impact alone cannot suffice to state an Equal Protection violation; otherwise, any law could be challenged on Equal Protection grounds by whomever it has negatively impacted." Johnson v. Rodriguez, 110 F.3d 299, 306 (5th Cir.1997) (italics in original) (citing Washington v. Davis, 426 U.S. 229, 246-50, 96 S. Ct. 2040, 48 L. Ed. 2d 597 (1976)).
Prison administrators must provide inmates with "reasonable opportunities . . . to exercise the religious freedoms guaranteed by the First and Fourteenth Amendments." Cruz, 405 U.S. at 322 n. 2, 92 S. Ct. 1079. In order to succeed on his Equal Protection claim, plaintiff must prove that a defendant acted with a discriminatory purpose, which resulted in a discriminatory effect among persons similarly situated. Muhammad, 966 F.2d at 903 (no discrimination where prison chaplain refused to let plaintiff make copy of tape when it was chaplain's only copy). Discriminatory purpose in an equal protection context implies that the decision maker selected a particular course of action in part because of, and not simply in spite of, the adverse impact it would have on an *617 identifiable group. Johnson, 110 F.3d at 306.
In his amended complaint, plaintiff asserted that he was not receiving equal protection of the law because he is able to participate in a Native American religious ceremony only once every two or three months, while "Protestants have services ONCE a week, and the Catholics have Mass TWICE a week, the Jewish community has services ONCE a week and the Muslim community [sic] has services every week." PAC at 3. However, even if true, plaintiff has failed to offer any evidence to suggest, let alone prove, that either defendant acted with discriminatory purpose in failing to provide him with more religious ceremonies. In fact, Mr. Pierce lamented that he routinely wrote and called over sixty Native American resource groups in the region, but that he rarely got a response or commitment from these tribes or organizations. (DX-A, Pierce Aff. at ¶ 14). In addition, it took him over two years to hire the two Native American chaplains that are now under contract with the TDCJ, the last one being hired only four months ago. Id. at ¶ 15. When plaintiff filed suit, the TDCJ employed only Mr. Teel and, due to the large geographical area and the number of units he had to visit, it took him anywhere between one to three[4] months to complete the entire circuit, thus reducing the amount of ceremonies any one unit could have. Id.
In his summary judgment response, plaintiff argues that Mr. Pierce did not begin his efforts to search for a second Native American chaplain until after he filed suit, and that the lack of ceremonies has been an ongoing problem since 1991. (See PR at 4). However, he has presented no evidence to support this allegation. Moreover, even if it were true, he still fails to demonstrate discrimination. Mr. Pierce testified as to the TDCJ's preference for having Native American chaplains conduct the Native American services rather than enlist a non-Native American chaplain to preside over the religious ceremonies. By mere virtue of the Native American population being a small minority,[5] there are necessarily fewer Native American chaplains available to hire. Plaintiff has provided no evidence to counter Mr. Pierce's statement that the TDCJ preferred a Native American chaplain and that it was difficult to find such an individual, despite his due diligence in attempting to locate one.
Moreover, despite the recruiting problem, the TDCJ provides plaintiff and other inmates who practice the Native American religion with numerous, reasonable opportunities to exercise their religious freedoms. (See DX-A, Tabs 3-6). As with other faith groups, Native American followers may keep certain devotional texts and items in their cells and may meet with spiritual advisors. (DX-A, Pierce Aff. at ¶¶ 6, 9 & Tab 2 at ¶¶ VI IX). The TDCJ seeks to utilize religious volunteers as well as ministerial visitation. (DX-A, Tab 2 at ¶¶ VIII IX).
Plaintiff also complains that there is a lack of volunteers to conduct the Native American ceremonies, and that a solution *618 would be to allow the inmates themselves to perform the ceremonies with a TDCJ staff member present. (PAC at 6). However, Mr. Pierce testified that "[s]ecurity for religious activities is provided by the TDCJ security budget, and is not a cost allocated to Chaplaincy." (DX-A, Pierce Aff. at ¶ 9). Thus, Mr. Pierce does not have the authority to order additional security to monitor such meetings. Moreover, to hold meetings at the McConnell Unit, every religious group (with the exception of Muslims whose situation is governed by a separate court order)[6] is required to have outside volunteers present. See Adkins v. Kaspar, 393 F.3d 559, 566 (5th Cir.2004) (noting that all religious groups, except Muslims, must have a volunteer present, and that members of the Yahweh Evangelical Assembly ("YEA") were not denied equal protection when required to have a volunteer or church elder present at all meetings). Plaintiff's claim for equal protection fails. Accordingly, defendants are entitled to summary judgment in their favor on this claim, and plaintiff's Equal Protection, claim is dismissed with prejudice.
B. Right to Exercise Religion Under the First Amendment.
To establish a free exercise clause violation, plaintiff must demonstrate both that defendants have (1) "placed a substantial burden on the observation of a central religious belief or practice," Hernandez v. Commissioner, 490 U.S. 680, 699, 109 S. Ct. 2136, 104 L. Ed. 2d 766 (1989), and (2) that the defendants' conduct is not "reasonably related to legitimate penological interests." O'Lone, 482 U.S. at 349, 107 S. Ct. 2400.
In an analogous case, a Texas state inmate who belongs to the YEA sued the TDCJ officials arguing that he was substantially burdened by not being allowed to meet and assemble on every Sabbath and holy day in violation of the First Amendment. Adkins, 393 F.3d at 562. A YEA elder testified that the YEA requires its followers to meet together on every Sabbath and to congregate and make particular observations on specific holy days. Id. The elder further explained that he went to the Coffield Unit once a month to oversee Sabbath observances, but he was unable to attend more often because of the distance and the effect on his own personal and religious obligations. Id. Two volunteers testified that they had completed the volunteer program so that they could oversee Sabbaths at the Coffield Unit; however, neither one had yet been cleared by prison officials to lead meetings on their own. Id. at 563. The plaintiff testified that he had lay-in passes to attend Sabbath and holy days, but complained that he and other members had been denied the right to assemble and hold services on their own. Id. The prison official indicated that the plaintiff and other YEA members could meet as long as an accredited YEA volunteer was present. Id.
Employing the Turner four-part test, the Fifth Circuit held the prison policy permitting inmates to congregate for religious activities only when qualified free world volunteers were present did not place a substantial burden on the free exercise of religion. Id. at 563-64, 571. In considering the first step in the Turner analysis, the Fifth Circuit held:
[W]e must consider the impact of granting Adkins injunctive relief on "guards and other inmates, and on the allocation of prison resources generally." . . . Requiring *619 the defendants to accommodate every religious holiday and requirement of the YEA, regardless of the availability of volunteers, space or time, could "spawn a cottage industry of litigation and could have a negative impact on prison staff, inmates and prison resources."
Id. at 565 (quoting Freeman v. Texas Dep't of Criminal Justice, 369 F.3d 854, 862 (5th Cir.2004)).
Like the plaintiff in Adkins, plaintiff argues that he should be allowed to conduct the religious ceremony with security personnel present. The Fifth Circuit has found that the TDCJ need not make such an accommodation, and that there is no First Amendment violation. Adkins, 393 F.3d at 571 (the requirement of an outside volunteer which is a uniform requirement for all religious assemblies at the Coffield Unit with the exception of Muslims does not place a substantial burden on litigant's religious exercise).
Moreover, Mr. Quarterman testified that to allow inmates to conduct their ceremonies without an outside volunteer would raise serious security issues. (DX-B, Quarterman Aff. at ¶ 9). In particular, he explained that the accommodation for use of tobacco by Native Americans in their ceremonies has proved particularly problematic:
Offenders found in possession of tobacco products, paraphernalia or similar products may be charged with a disciplinary offense. Thus, its use in Native American religious ceremonies must be `carefully monitored, and only Native American chaplains or qualified volunteers may lead the ceremonies. We simply cannot permit offenders to conduct the ceremony on their own. Second, the Native American offenders are given a privilege no other offenders receive permission to violate a prison rule for religious reasons. To the best of my knowledge, no other offender has been accorded the right to violate a prison rule for religious reasons. For example, Catholic offenders are not permitted to take wine at Communion. This has created some resentment among offenders.
Id. at ¶ 11.
TDCJ's policy of requiring qualified chaplains or volunteers to conduct Native American religious ceremonies, instead of the inmates themselves, due to security, staff, and resource concerns meets the rational relationship standard set forth in Turner. Moreover, the Fifth Circuit has held that the first factor in the Turner test, whether there is a rational relationship between the regulation and the legitimate government interest advanced, is the controlling question, and the other factors merely help a court determine if the connection is logical. Scott v. Miss. Dep't of Corr., 961 F.2d 77, 81 (5th Cir.1992) (commenting that neither Turner nor O'Lone require courts to weigh evenly, or even consider the other three factors).
Moreover, in this case, defendants have provided evidence that plaintiff is afforded alternative opportunities to practice his religion when a qualified chaplain or volunteer is not available. (DX-A, Pierce Aff. at ¶¶ 16-19, & Tabs 4, 7). As the Fifth Circuit has noted, "[t]he pertinent question is not whether the inmates have been denied specific religious accommodations, but whether, more broadly, the prison affords the inmates opportunities to exercise their faith." Freeman, 369 F.3d at 861 (citation omitted). For example, plaintiff is permitted to maintain certain personal, religious devotional items in his cell which he may use to study and worship. (DX-A, Pierce Aff. at ¶¶ 6, 16). The Chaplaincy Records from the McConnell Unit show that plaintiff was able to attend Native American classes and numerous religious ceremonies, including mandatory Native American *620 holidays, from July 2001 through March 2006. (See DX-D).[7] Despite the lack of Native American chaplains, it cannot be said that defendants have denied plaintiff the right to exercise his faith. Therefore, defendants are entitled to summary judgment on plaintiffs first amendment claim.
C. Statutory Rights Pursuant To RLUIPA.
The Religious Land Use and Institutionalized Persons Act, 42 U.S.C. § 2000c-1(a), provides that no government shall impose a substantial burden on the religious exercise of a person residing in or confined to an institution even if the burden results from a rule of general applicability, unless the government demonstrates that the imposition of the burden on that person is in furtherance of a compelling governmental interest and is the least restrictive means of furthering that compelling interest. RLUIPA imposes the strict scrutiny test on prison regulations; however, the courts are to apply that standard with "due deference to the experience and expertise of prison and jail administrators in establishing necessary regulations and procedures to maintain good order, security and discipline, consistent with consideration of costs and limited resources." Cutter, 544 U.S. at 723, 125 S. Ct. 2113 (citation omitted). The Supreme Court specifically noted that "[l]awmakers supporting RLUIPA were mindful of the urgency of discipline, order, safety, and security in penal institutions." Id.; see also id. at 722, 125 S. Ct. 2113 (RLUIPA will be applied "in an appropriately balanced way, with particular sensitivity to security concerns."). The Court further explained that, while RLUIPA adopts a compelling governmental interest standard, "`context matters' in the application of that standard." Id. at 723, 125 S. Ct. 2113. Prison security, in and of itself, is a compelling state interest, and deference is due to institutional officials' expertise in this area. Id. at 724 n. 13, 125 S. Ct. 2113. RLUIPA does not elevate accommodation of religious observances over a prison's need to maintain order and safety, and any accommodation must be measured so that it does not override other significant interests. Id. at 722, 125 S. Ct. 2113. A prison is free to resist requests for religious accommodations that either impose unjustified burdens on other prisoners, or jeopardize the effective functioning of a prison. Id. at 726, 125 S. Ct. 2113.
The burden of proof is on plaintiff to demonstrate that the complained of government practice imposes a substantial burden on his religious exercise under RLUIPA. Adkins, 393 F.3d at 567. A governmental action or regulation creates a "substantial burden" on a religious exercise if it truly pressures the offender to significantly modify his religious behavior and significantly violates his religious beliefs. Id. 568-69 & n. 37. Specifically, the Fifth Circuit has determined:
[T]he effect of a government action or regulation is significant when it either (1) influences the adherent to act in a way that violates his religious beliefs, or (2) forces the adherent to choose between, on the one hand, enjoying some generally available, nontrivial benefit, and, on the other hand, following his religious beliefs. On the opposite end of the spectrum, however, government action or regulation does not rise to a level of a substantial burden on religious exercise if it merely prevents the adherent from enjoying some benefit that is not *621 otherwise generally available or acting in a way that is not otherwise generally allowed.
Id. at 570.
The Fifth Circuit has explained that "the Supreme Court's express disapproval of any test that would require a court to divine the centrality of a religious belief does not relieve a complaining adherent of the burden of demonstrating the honesty and accuracy of his contention that the religious practice at issue is important to the free exercise of his religion." Id. Subsequently, in Cutter, the Supreme Court came to a similar conclusion, finding that prison officials may appropriately question whether a prisoner's religiosity, asserted as the basis for a requested accommodation, is authentic: "Although RLUIPA bars inquiry into whether a particular belief or practice is `central' to a prisoner's religion, see 42 U.S.C. § 2000cc-5(7)(A), the Act does not preclude inquiry into the sincerity of a prisoner's professed religiosity." Cutter, 544 U.S. at 725 n. 13, 125 S. Ct. 2113 (citing Gillette v. United States, 401 U.S. 437, 457, 91 S. Ct. 828, 28 L. Ed. 2d 168 (1971) ("`[T]he "truth" of a belief is not open to question; rather, the question is whether the objector's belief's are `truly held.'") (quoting United States v. Seeger, 380 U.S. 163, 185, 85 S. Ct. 850, 13 L. Ed. 2d 733 (1965))).
In this case, TDCJ permits inmates to worship according to their faith preference in their cells using allowed devotional items, such as sacred texts and writings. (DX-A, Pierce Aff. at ¶ 6). Native Americans in particular are permitted to possess a headband, sacred stones, a feather, a shell, a medicine bag, and a medicine wheel medallion. (DX-A, Pierce Aff. at ¶ 19 & Tab 4). With Unit approval, a Native American inmate may also possess bone, tooth, and plant devotional items. (DX-A, Tab 4). The TDCJ regulations provide for group circle ceremony and pipe ceremony where "available space, appropriate supervision, and weather conditions permit." (DX-A, Tab 4 at 3). Private worship, including symbolic smudging without the smoldering plant, is authorized in an inmate's cell or immediate bunk area, and TDCJ personnel are instructed "to respect personal religious observance by offenders," although they may interrupt private observance for appropriate unit concerns. Id.
Both Mr. Pierce and Mr. Quarterman testified that the religious rights of all inmates are tempered by the security needs of the prisons. Mr. Quarterman stated:
Experience has shown us that meetings are used by offenders to organize gangs, pass information, make plans, and engage in illegal activities. Thus it is always necessary for security personnel, employees or qualified volunteers to monitor group activities, whether they be vocational, educational, recreational, or religious.
(DX-B, Quarterman Aff. at ¶ 9). The Fifth Circuit has held that the TDCJ did not substantially burden an offender's right to exercise his religion when it required an outside volunteer to be present at worship ceremonies based on security concerns. Adkins, 393 F.3d at 571. Plaintiffs situation is similar to the plaintiffs in Adkins: he has proposed an alternative means to increase the number of religious ceremonies he might attend, that is, having inmates practicing the Native American religion conduct the ceremonies themselves without either a chaplain or outside volunteer present, but only TDCJ personnel. Both Mr. Pierce, head of the Chaplaincy Department, and Mr. Quarterman, who has been in security for twenty years, testified that such an arrangement would be unadvisable and would pose unnecessary security risks. The Fifth Circuit *622 found that there was a valid rational correlation between the prison regulation of not permitting inmates to conduct ceremonies themselves and the legitimate governmental interest, that is, prison security. In addition, the undisputed evidence shows that Native American inmates are permitted to practice their religion in many ways. Thus, defendants are entitled to summary judgment on plaintiffs RLUIPA claim.
VI. CONCLUSION
The uncontested facts establish that the restrictions imposed on plaintiffs ability to exercise his religion are reasonably related to legitimate penological concerns such as security and safety of the staff and inmates, costs, and management of prison resources. In addition, the uncontested facts establish that plaintiff is able to exercise his religion through personal study and devotion in his cell, attendance at Native American classes, opportunities to visit the Native American library, and worship times in the Circle and pipe ceremonies when available. Although these ceremonies are not conducted as often as other faith preferences ceremonies, the discrepancy is not due to discrimination or any other constitutional violation. Accordingly, defendants' motion for summary judgment, (D.E.78), is GRANTED. Plaintiffs claims are dismissed with prejudice.
ORDERED.
NOTES
[1] The RLUIPA prohibits prison officials from imposing a substantial burden on the exercise of religion unless they can show that the burden serves a compelling interest and is the least restrictive means of advancing that interest. 42 U.S.C. § 2000cc-1(a).
[2] Spears v. McCotter, 766 F.2d 179 (5th Cir. 1985); see also Eason v. Holt, 73 F.3d 600, 603 (5th Cir.1996) (stating that testimony given at a Spears hearing is incorporated into the pleadings).
[3] "PAC" refers to plaintiff's amended complaint, (D.E.9), and "PR" refers to plaintiff's summary judgment response, (D.E.92). Reference to defendants' exhibits, (D.E.78), will be to "DX" followed by the exhibit letter, tab reference if appropriate, and page number.
[4] Plaintiff claims that services were available only once every two to three months, while defendants claim that Mr. Teel completed the circuit once every one to two months. Assuming as true that plaintiff was afforded religious ceremonious only once every three months, as discussed infra, he fails to demonstrate that the infrequency of the services was a result of discrimination.
[5] Approximately 1.5 percent of the United States population is reported as American Indian. http://factfinder.census.gov/servlet/QTTable?_bm=y & _geo_id= 01000US & _qr_name = DEC_2000_SF1_U_QTP5 & _ds_name = DEC_2000_SF1_U.
[6] Certain religious rights of TDCJ Muslim inmates are governed by a consent decree entered in Brown v. Beto, 4:74cv069 (S.D.Tex. 1977). In particular, the consent decree provides a formula that determines the number of Muslim chaplains based on the number of Muslim inmates. See Gooden v. Crain, 405 F. Supp. 2d 714, 719 (E.D.Tex.2005).
[7] Exhibit D is 474 pages and lists the dates and times plaintiff was given a lay-in pass to attend a Native American event such as a class, class set-up, library, library set-up, and Circle worship.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434703/
|
610 S.W.2d 502 (1981)
Elbert MISNER, Appellant,
v.
The STATE of Texas, Appellee.
No. 65405.
Court of Criminal Appeals of Texas, Panel 3.
January 21, 1981.
*503 Don W. King, Jr., Glenn B. Lacy, San Antonio, for appellant.
Bill M. White, Dist. Atty., and Dick Ryman, Roy Barrera and Monica L. Donahue, Asst. Dist. Attys., San Antonio, Robert Huttash, State's Atty., Austin, for the State.
Before ROBERTS and ODOM, JJ.
OPINION
ROBERTS, Judge.
On September 15, 1977, the appellant and Carl Byrom entered the Cottage Drive-In in San Antonio. Finding the complaining witness Jackie Arthur inside the establishment, Byrom pulled a shotgun from under his shirt and fired at Arthur, severely wounding him in the arm. The appellant was charged with attempting to cause the death of Arthur by shooting him, found guilty by a jury, and sentenced to fifteen years' confinement. His conviction rests solely upon proof that he was a party to the alleged offense. V.T.C.A., Penal Code, Sec. 7.01.
The appellant contends that the trial court's failure to submit the law of self-defense to the jury in response to his timely objection to the charge was error. Since he was guilty only as a party to the offense committed by Byrom, the appellant was entitled to a charge on self-defense if there was evidence that would have entitled Byrom to the requested charge. The State cannot rely upon the law of parties to sustain a conviction and then deny that the appellant was entitled to a charge on self-defense under the same principle of law. Roberson v. State, 479 S.W.2d 931 (Tex.Cr. App.1972).
With respect to the issue of self-defense, Byrom testified that a couple of weeks prior to the shooting he, Arthur and the appellant had been involved in a fight in which Arthur was stabbed. Byrom and the appellant went to the Cottage Drive-In on the night of the offense to talk to Arthur because Byrom had heard that Arthur was going to shoot him for the "cutting." As to what happened after he and the appellant arrived at the Cottage Drive-In, Byrom offered the following testimony:
"A. [W]hen I walked in the door I thought he was, he had a pistol, so I shot him.
* * * * * *
"Q. [D]id you have any reason to fear him?
"A. I had heard from different people he was supposed to be a pretty bad dude and he would shoot you without hesitation and things like that.
* * * * * *
"Q. [W]hat was it exactly that Jackie was doing and what did you observe or hear that made you think he was going for a gun?
"A. Well, when I walked in and he seen us he come off the bar and went for the middle of his back and at the same time that waitress was working there, she hollered, `Jackie, no.' When he went for the middle of his back I presumed that he was going for a gun."
In determining whether the evidence raised the justification of self-defense so as to require an instruction to the jury, the truth of the testimony presented is not an issue. "A defendant is entitled to an affirmative defensive instruction on every issue raised by the evidence regardless of whether it is strong, feeble, unimpeached, *504 or contradicted, and even if the trial court is of the opinion that the testimony is not entitled to belief." Warren v. State, 565 S.W.2d 931, 933-934 (Tex.Cr.App.1978). We cannot say, as the State contends, that as a matter of law there was no evidence of force threatened or attempted by the complaining witness. That would depend on the truth of Byrom's testimony and his reasonable belief that Arthur was "going for a gun." Those questions were for the jury.
We are of the opinion that Byrom would have been entitled to have a jury instructed on the law of self-defense. Accordingly the appellant, who was guilty only as a party to the offense committed by Byrom, was also entitled to the requested instruction. The trial court's failure to charge the jury on the law of self-defense constituted reversible error.
The judgment is reversed and the cause is remanded.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434671/
|
312 S.W.2d 388 (1958)
G. F. TURNER et al., Appellants,
v.
TEXAS SPORTSERVICE, Inc., Appellee.
No. 13314.
Court of Civil Appeals of Texas, San Antonio.
March 19, 1958.
*389 Boone, Davis, Cox & Hale, Corpus Christi, for appellants.
J. Marvin Ericson, Corpus Christi, for appellee.
BARROW, Justice.
Appellee, as plaintiff, sued upon an alleged written guaranty executed by appellants, guaranteeing the liquidated contractual obligation of the Robstown Baseball Club. The cause was tried to a jury upon one special issue which was found in favor of appellants.
The case was tried at the JulyJanuary term, 1956, which ended on the first Monday in January, 1957. The jury rendered the verdict on November 16, 1956
On November 20, 1956, appellee filed and presented to the court its motion for judgment non obstante veredicto, which was set for hearing on November 28, 1956. On November 28, 1956, the hearing on appellee's motion for judgment non obstante veredicto was passed for re-setting and it was still pending on June 26, 1957, when the court, without formally ruling thereon, rendered judgment for appellants and against appellee, upon the jury verdict.
On July 2, 1957, appellee filed its motion for a new trial. On August 5, 1957, appellee's motion for a new trial was called to the attention of the court, and by agreement of the parties was set for hearing for the week of August 12, 1957. At the same time, over appellants' objection, the court, on its own motion, re-set for hearing and further consideration appellee's motion for judgment non obstante veredicto for the week of August 12, 1957.
On August 13, 1957, all parties being present by their counsel, the court, on its own motion, set aside and vacated the judgment rendered on June 26, 1957, and announced that he would further consider appellants' motion for judgment on the verdict and appellee's motion for judgment non obstante veredicto, and set hearing thereon for September 3, 1957. On September 3, 1957, the court reset the hearing for September 19, 1957. On September 19, 1957, after hearing and considering all motions for judgment, the court granted appellee's motion for judgment non obstante veredicto, which judgment was reduced to writing, dated and signed on September 24, 1957. This appeal is from that judgment.
The case is before this Court without statement of facts, and we must presume that the evidence supports the judgment if the court had authority to render it at the time it was rendered. We are confronted with a question of procedure which amounts to a question of jurisdiction.
The 94th District Court operates with what is known as continuous terms, Art. 199, Subdivision 94, Vernon's Ann. Civ.Stats., and is governed by the provisions of Rule 330, Texas Rules of Civil Procedure.
Rule 330(j) provides:
"If a case or other matter is on trial, or in the process of hearing when the term of court expires, such trial, hearing or other matter may be proceeded with at the next term of court and no motion or plea shall be considered *390 as waived or overruled, because not acted upon at the term of court at which it was filed, but may be acted upon at any time the judge may fix or at which it may have been postponed or continued by agreement of the parties with leave of the court. This subdivision is not applicable to original or amended motions for new trial which are governed by Rule 329-b. Amended by order of July 20, 1954, effective Jan. 1, 1955."
The record shows that the case was heard and the jury verdict rendered at the JulyJanuary, 1956, term; that the judgment on the jury verdict was rendered at the JanuaryJuly, 1957, term, and that the judgment non obstante veredicto was rendered at the JulyJanuary, 1957, term. Thus the judgment was rendered at the second term after the term during which the case went to trial.
The Supreme Court in British General Ins. Co. v. Ripy, 130 Tex. 101, 106 S.W.2d 1047, 1048, in striking down a judgment rendered at the second term after the term at which the case went to trial, said:
"We are not in accord with the holding of the Court of Civil Appeals that it was not ground for setting aside the judgment of the trial court that two terms of the court had elapsed after the verdict was received before judgment was rendered thereon.
"The laws and rules governing practice and procedure in district courts prior to the passage in 1923 of the act (Acts 1923, c. 105 p. 215), governing practice and procedure in civil district courts in counties having two or more such courts and whose terms continue for three months or longer, were controlling in all district courts. A part of the 1923 act was subsequently incorporated in the 1925 revision of the statutes as articles 2092 and 2093. The court in which this case was heard is one of the class of courts covered by the act. Subdivision 28 of article 2092, as amended by Acts 1930, 5th Called Sess. c. 70, § 1 (Vernon's Ann.Civ.St. art. 2092, subd. 28), reads: `A motion for new trial filed during one term of court may be heard and acted on at the next term of court. If a case or other matter is on trial or in process of hearing when the term of court expires, such trial, hearing or other matter may be proceeded with at the next term of the court. No motion for new trial or other motion or plea shall be considered as waived or overruled, because not acted on at the term of court at which it was filed, but may be acted on at the succeeding term or at any time which the Judge may fix or to which it may have been postponed or continued by agreement of the parties with leave of the court. All motions and amended motions for new trials must be presented within thirty (30) days after the original motion or amended motion is filed and must be determined within not exceeding forty-five (45) days after the original or amended motion is filed, unless by written agreement of the parties in the case, the decision of the motion is postponed to a later date.'
"It will be noted that no provision is made by the foregoing section to govern the trial court as to the requisite procedure beyond the `next term of court' after that at which the trial began, when the case is on trial upon expiration of such term. By the terms of the provision of subdivision 28 set out in the second sentence thereof, the trial may be proceeded with at the `next term' of court, but beyond that no provision is made. The act is silent as to the requisite procedure in event the case is still on trial at a subsequent term after the trial begins, other than the `next term.'
*391 "The present case was on trial and had proceeded to the point that the verdict of the jury had been received, when the term at which the trial began expired. The trial judge took the case under advisement but did not render judgment at that term or at the next term. The case was consequently still on trial when the latter term expired, no judgment having been rendered. Stephenson v. Nichols, Tex. Com.App., 286 S.W. 197.
"The law with respect to proceeding with an unfinished trial when the time for the expiration of the term of court arrives, regardless of whether it is the term at which the trial began, or any subsequent term, is set out in article 1923, R.C.S. 1925, which reads: `Whenever a district court shall be in the midst of the trial of a cause when the time for the expiration of the term of said court arrives, the judge presiding shall have the power and may, if he deems it expedient, extend the term of said court until the conclusion of such pending trial. The extension of such term shall be shown in the minutes of the court before they are signed.' (Italics ours.)
"The law as declared in the foregoing excerpt was in existence when the act of 1923 was passed, and was applicable as the governing procedure in the contingency stated, in all district courts. The law as thus declared, as well as all laws and rules governing practice and procedure generally in district courts, was expressly continued in effect by the 1923 act to govern proceedings not provided for therein. Article 2093.
"The Legislature, in providing statutory extension of the term at which the procedure began, recognized that ordinarily a trial would be completed at the term at which it began, or the next term, and further that the then existing procedural law was adequate in case of an unfinished trial at the close of any term, regardless of whether it was the next after the trial began or any subsequent term. It did not intend thereby to provide an unlimited extension, or to abrogate the procedure provided in article 1923, supra, further than to obviate the necessity in the courts covered by the 1923 act of entering extension orders upon the minutes when trials were not completed during the terms at which they began. The legislative intention was doubtless to remove the necessity on the part of courts remaining constantly in session for frequent entry of orders of extension of terms, and to thereby facilitate the prompt disposition of causes.
"Our view just stated as to the legislative intent with respect to the provision of section 28 involved herein is in harmony with that expressed by this court in its construction of the provisions of the same section relating to the time within which motions for new trial must be acted upon by the trial court. See Dallas Storage & Warehouse Co. v. Taylor, 124 Tex. 315, 77 S.W.2d 1031; and Independent Life Insurance Company of America v. Work, 124 Tex. 281, 77 S.W.2d 1036.
"It follows from what has been stated that the rendition and entry of the judgment in the present case subsequent to the expiration of the next term after the trial began, in the absence of entry of an order extending the term, was without authority of law. As stated in Rouff v. Boyd, Tex. Civ.App., 16 S.W.2d 403, 407, a case in which judgment was rendered at a similar time as to court terms and also without entry of an extension order: `No rule of law is more firmly established in the jurisprudence of this state than that courts can only exercise their jurisdiction to hear and determine personal or property rights at the time and place fixed by the statute *392 or rules of court authorized by the statutes. We do not think the rendition of the judgment in this case on December 18, 1928, during the third term of the court after the term at which the case was heard and submitted, was authorized by any statute or court rule. The only statute under which such authority is claimed by respondents is subdivision 28 of article 2092, Revised Statutes 1925, fixing rules of practice for district courts in counties having two or more district courts with only civil jurisdiction, the terms of which continue three months or longer. * * * This statute only authorizes the court to proceed with the trial and hearing of a case at the next term of the court when the term of court at which the trial began ends before the completion of the trial or hearing.'"
Article 2092, which was construed and applied in British General Ins. Co. v. Ripy, supra, is now Rule 330(j), T.R.C.P., in identical language insofar as applicable to the question involved in this case, and we think it is controlling. See also, Coats v. Garrett, Tex.Civ.App., 283 S.W.2d 289, and Pelham v. Sanders, Tex.Civ.App., 290 S.W.2d 684, in which the rule pronounced by the Supreme Court has been applied since the adoption of Rule 330, T.R.C.P.
Appellants contend that, under the authorities above mentioned, the June 26th judgment in their favor was the last rendered at "the next term" of the court, that all proceedings thereafter occurred at a subsequent term, and therefore the court was without power to disturb said judgment. We overrule that contention. A motion for a new trial was timely filed by appellee, and the proceedings thereon are controlled by Rule 329-b, T.R.C.P. Under this rule the court had forty-five days within which to act on the motion or to set aside the judgment, "unless by written agreement of the parties in the case, the decision of the motion is postponed to a later date." The court has plenary power until (but not after) "the expiration of thirty (30) days after the date of judgment or after a motion for new trial is overruled," regardless of the expiration of a term of court during such period, to vacate, modify, correct or reform the same or to grant a new trial, according to the justice of the case. McDonald, Texas Civil Practice, Vol. 4, pp. 1420-1421, § 18.03. The judgment having been set aside within forty-five days after the filing of appellee's motion for a new trial, the order is valid.
Appellee contends that, in view of the fact that at the beginning of the July-January, 1957, term a motion for a new trial was pending, and that the June 26th judgment was set aside within the forty-five day period as provided by Rule 329-b, T.R.C.P., on August 13, 1957, the case was still on trial and could be continued on to the time the judgment non obstante veredicto was rendered, on September 19, 1957. We cannot agree with this contention. When the court on August 13, 1957, set aside the June 26th judgment, the status of the case was just the same as if judgment had not been rendered, and the motion for a new trial became functus officio.
The authorities cited by appellee in this connection do not in our opinion support its contention. In DeMoss v. Briggs, 145 Tex. 582, 201 S.W.2d 40, the case involved the 117th District Court, which at that time was not controlled by Rule 330(j), but by Article 1923, R.C.S. 1925. We will not lengthen this opinion with a discussion of the other cases cited.
We think it is jurisdictional that the trial court had no power on September 19, 1957, at the second term of the court succeeding the term at which the case went to trial, to render judgment non obstante veredicto, and that therefore the judgment is void.
The judgment is reversed and the cause remanded.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434799/
|
610 S.W.2d 446 (1980)
CITY PRODUCTS CORPORATION et al., Petitioners,
v.
Sydell BERMAN et al., Respondents.
No. B-8521.
Supreme Court of Texas.
December 10, 1980.
Rehearing Denied January 14, 1981.
*447 McMahon, Smart, Wilson, Surovik & Suttle, Stanley P. Wilson and Elizabeth Thompson, Jack Sayles, Abilene, Nunn, Griggs & Steakley, Charles R. Griggs, Sweetwater, for petitioners.
Berman, Fichtner & Mitchell, Harold B. Berman and Toby L. Gerber, Dallas, Mays, Moore, Dickson & Roberts, Johnny M. Moore, Sweetwater, for respondents.
POPE, Justice.
The question presented by this appeal is whether a covenant for noncompetition in a lease of the Ben Franklin Building in Colorado City, Texas, executed by the partners of A & I Levy Estates, a partnership, as lessors, was void because it violated the antitrust provisions of Section 15.02 of the Texas Business and Commerce Code. The trial court rendered judgment on a jury verdict, upholding the validity of the lease covenant. The court of civil appeals, with one justice dissenting, reversed the judgment in part and rendered judgment that the lease contract violated the antitrust laws. 579 S.W.2d 313. That court remanded the cause for the determination of damages on a crossaction. We reverse that part of the judgment of the court of civil appeals that held the covenant was void. We affirm that part of the judgment of the court of civil appeals holding that the plaintiffs cannot recover punitive damages.
In 1958 the Ben Franklin Building in Colorado City, Texas, was owned by the Estate of Abe Levy, the Estate of Ike Levy, and Max Berman. The owners executed a five-year lease on the building for use as a variety store. The lease contained this protective covenant:
(1) That the Landlord will not, during the term hereof, or any renewal or extension hereof, lease or permit to be used, any portion of the building in which demised premises are situated or any portion of any other building or premises controlled by the landlord located within one thousand (1000) feet of the herein demised premises, for any business similar to the business of the Tenant, that is to say, for any variety store or any business conducted under the name of a five and ten cent store, five cents to one dollar store, or similar name.
City Products Corporation was the successor in interest to Butler Brothers, the original lessee. City Products Corporation later subleased the store to Z. S., Inc. who intervened in this case on the side of the plaintiff, City Products Corporation. By supplemental agreements, the term of the original lease was extended three different times, the third agreement being executed on January 4, 1971.
The third supplemental agreement is the one that is brought into question by this suit as a combination in restraint of trade. That agreement contains a recital that the lessors and landlord had succeeded to all the right and title of those who had signed the original lease agreement. That document also recites that the landlord was nine named persons who were doing business as A & I Levy Estates, a Limited Partnership. Those nine named persons are Freda Levy, I. A. Loeb and Fannie Loeb, Max Berman and Sydell Berman, Morris L. Siegel and Helen Siegel, and William Sheridan and Hattie Sheridan. Each of the named persons signed the extension agreement as a general partner. Morris Siegel and William Sheridan signed the agreement as partners of A & I Levy Estates. They did not own any of the realty, but their wives owned an undivided separate estate in the property.
This controversy began when Max Berman, who had signed the supplemental agreement as one of its partners, leased a commercial building that he owned and which was located across the street from and within 1,000 feet of the Ben Franklin Building. In September, 1974, Max Berman leased the Berman Building to Perry Brothers, Inc. for the operation of a competing variety store.
City Products Corporation filed this suit to enjoin Berman and his tenant from violating the noncompetition agreement contained in the partnership's lease of the Ben Franklin Building. City Products Corporation also sued each of the partners who had *448 executed the lease of the Ben Franklin Building. The defense by Berman and his tenant, Perry Brothers, Inc. was that the noncompetition covenant in the lease to City Products Corporation was a combination which violated the Texas antitrust statute. Berman and Perry Brothers, Inc. also asserted a counterclaim against the plaintiffs and a cross-claim against each of those who had joined with him as landlords in A & I Levy Estates' partnership lease.
The trial court rejected the defense by Berman and Perry Brothers, Inc. that the lease was a violation of the antitrust laws, and as to that part of the defense granted a summary judgment. After a jury trial of the remaining issues, the court enjoined Berman and Perry Brothers, Inc. from operating the Perry Brothers variety store within 1,000 feet of the Ben Franklin Building. The trial court also rendered judgment for punitive damages to City Products Corporation for thirty thousand dollars and to Z. S., Inc. for fifteen thousand dollars.
Our first question is whether the court of civil appeals erred in its holding that the third supplemental agreement is void because it violated Section 15.04 of the Texas Business and Commerce Code. Section 15.04 says that a trust, as defined in Section 15.02 of the Code, is illegal, void and unenforceable in law or equity. Section 15.02(b) says:
(b) A "trust is a combination of capital, skill or acts by two or more persons to
(1) restrict, or tend to restrict trade, commerce, aids to commerce, the preparation of tangible personal property for market or transportation, or the free pursuit of a lawful business; ....
* * * * * *
(3) prevent or lessen competition in (A) the manufacture, transportation, sale or purchase of tangible personal property;
* * * * * *
(7) refrain from engaging in business, or from buying or selling personal property, partially or entirely in this state.
While a covenant which restricts competition on the part of the lessor evidences a combination which might violate Sections (1), (3), and (7) of Article 15.02(b) of the Code, there are exceptions to the broad prohibitions of the antitrust laws. See generally 54 Am.Jur.2d, Monopolies, Restraints of Trade, and Unfair Trade Practices, §§ 511-541 (1971). This court held in Schnitzer v. Southwest Shoe Corporation, 364 S.W.2d 373, 374-75 (Tex.1963), that two merchants who owned adjoining property could not impose restrictions upon the tenant of one of them. The court, however, recognized that restraints in some situations are permissible. The court wrote:
One of the exceptional situations is that in which an owner, lessor or one in control of premises agrees with another person that the other person shall have an exclusive right or privilege on the premises or that the other person will sell on the premises only the products or merchandise of the owner or lessor. [Citations omitted.] Contracts or agreements of this character are upheld when they are collateral or incidental to a lawful lease or grant of premises in which the lessor or grantor has a property interest.
Under the Schnitzer exception, a lessor may impose upon himself a covenant not to compete with the lessee. A lessor also may, by a reasonably limiting covenant, agree that he will not use or permit the use of his other property by others, in competition with his lessee. Karam v. H. E. Butt Grocery Co., 527 S.W.2d 481 (Tex.Civ. App.-San Antonio 1975, writ ref'd n. r. e.); Neiman-Marcus Co. v. Hexter, 412 S.W.2d 915 (Tex.Civ.App.-Dallas 1967, writ ref'd n. r. e.); Edwards v. Old Settlers' Ass'n, 166 S.W. 423 (Tex.Civ.App.-Austin 1914, writ ref'd); Wheatley v. Kollaer, 63 Tex.Civ. App. 459, 133 S.W. 903 (1910, no writ).
The lease in this instance was executed by the partners of A & I Levy Estates as partners, rather than as owners of the realty. This is crucial in deciding the validity of the noncompetition covenant in the lease, because Morris Siegel and William Sheridan, while signing the lease as partners, *449 were not owners of the realty. Their wives were owners, but they were not. The partnership was the landlord and lessor of the Ben Franklin Store. The partnership was composed of all of those who signed the 1971 extension of the lease agreement. In this case, the existence of the partnership was found by the trial court, and there is evidence which supports that finding. Moreover, Max Berman, as one of the parties who signed the third supplemental agreement as a general partner, was estopped to deny the fact of partnership or that he, along with the others, signed it as a partner in A & I Levy Estates, a partnership. See, Box v. Lawrence, 14 Tex. 545 (1855); Mathews v. Sun Oil Co., 411 S.W.2d 561, 564 (Tex.Civ.App.-Amarillo 1966), aff'd, 425 S.W.2d 330 (1968); Woldert v. Skelly Oil Co., 202 S.W.2d 706 (Tex.Civ. App.-Texarkana 1947, writ ref'd n. r. e.); 31 C.J.S., Estoppel § 36.
A partnership may exist for the purpose of leasing properties over which it has control even though the partnership does not own the realty. Texas City Dike & Marina, Inc. v. Sikes, 500 S.W.2d 953, 956 (Tex.Civ.App.-Houston [1st Dist.] 1973, writ ref'd n. r. e.). A partnership to deal with land, for example, may exist between persons when only some of them own the land. Some may furnish the use of property, and the other persons' membership in the partnership may consist of their contribution of services. Ownership of realty is not an essential element of every partnership. Logan v. Logan, 138 Tex. 40, 156 S.W.2d 507 (1941); Littleton v. Littleton, 341 S.W.2d 484, 489 (Tex.Civ.App.-Houston 1960, writ ref'd n. r. e.); Tex.Rev.Civ.Stat. Ann. art. 6132b, § 10. The partnership lease was for the use of the Ben Franklin building, and it in no way concerned title to the property.
We do not have here the vice in the noncompetition agreement that existed in either Schnitzer v. Southwest Shoe Corp., supra; or Kroger Company v. J. Weingarten, Inc., 380 S.W.2d 145 (Tex.Civ.App.-Houston 1964, writ ref'd n. r. e.). In Schnitzer, the noncompetition agreement was signed both by Schnitzer who owned the premises and by Alpard, who had no property interest, no control and no right to lease the premises. Schnitzer and Alpard were not partners. Alpard was only another neighbor merchant in the business community. In Kroger Company, the lease which imposed the noncompetition restriction was signed by Center Corporation, Realty Corporation, and Frank W. Sharp. The first two had a property interest in the lease, but Sharp, again, was just another neighbor businessman who held no legal interest in the leased premises.
We hold that Morris Siegel and William Sheridan were partners who owned an interest in the A & I Levy Estates' partnership lease of the Ben Franklin Store. Taylor v. Lewis, 553 S.W.2d 153, 158 (Tex. Civ.App.-Amarillo 1977, writ ref'd n. r. e.); Tex.Rev.Civ.Stat.Ann. art. 6132b, §§ 6, 16. That interest is a property interest which is a vendible interest. Kroger Co. v. J. Weingarten, Inc., supra, at 150; Tex.Rev.Civ. Stat.Ann. art. 6132b, §§ 26, 27. Under this court's decision in Schnitzer, the partnership was a lessor or one in control of the premises and, as such, could agree to bind its partners not to complete. Schnitzer holds that a noncompetition agreement will be upheld as to an "owner, lessor or one in control of the premises" when it is collateral or incidental to a lawful lease of premises.
The supplemental lease was, therefore, a valid extension agreement by A & I Levy Estates, a partnership. Max Berman was one of the partners who joined in and signed that supplemental agreement as a partner of A & I Levy Estates, and the noncompetition agreement was binding upon him. He violated that agreement when he leased the Berman Building to Perry Brothers, Inc. The partnership covenant prohibited his individual violation of the agreement that he had made as one of the partners. Raymond v. Yarrington, 96 Tex. 443, 73 S.W. 800 (1903); Welsh v. Morris, 81 Tex. 159, 16 S.W. 744 (1891); Uptown Food Store, Inc. v. Ginsberg, 255 Iowa 462, 123 N.W.2d 59, 1 A.L.R. 3d 765 (1963).
*450 We conclude, therefore, that the covenant which prohibited the competition was not a violation of the antitrust statutes. As held by the trial court, the covenant was valid and enforceable. The trial court thus correctly enjoined Berman and Perry Brothers, Inc. from leasing or permitting the use of the Berman Building as a variety store which competes with the business at the Ben Franklin variety store. We reverse the judgment of the court of civil appeals which dissolved that injunction.
The trial court, however, also rendered judgment against Berman and Perry Brothers, Inc. for punitive damages. It rendered judgment for City Products Corporation against those defendants for thirty thousand dollars, and it rendered judgment for Z. S., Inc. for fifteen thousand dollars. The jury made findings that neither City Products Corporation nor Z. S., Inc. had suffered any actual damages, but that the stated amounts should be awarded as punitive damages. When a distinct, wilful tort is alleged and proved in connection with a suit upon a contract, one may recover punitive damages, but even in that instance the complainant must prove that he suffered some actual damages. International Bankers Life Ins. Co. v. Holloway, 368 S.W.2d 567 (Tex.1963); A. L. Carter Lumber Co. v. Saide, 140 Tex. 523, 168 S.W.2d 629, 631 (1943); Fort Worth Elevators Co. v. Russell, 123 Tex. 128, 70 S.W.2d 397, 409 (1934); McDonough v. Zamora, 338 S.W.2d 507, 513 (Tex.Civ.App.-San Antonio 1960, writ ref'd n. r. e.); Briggs v. Rodriguez, 236 S.W.2d 510 (Tex.Civ.App.-San Antonio 1951, writ ref'd n. r. e.). See also, Southwestern Investment Co. v. Neeley, 452 S.W.2d 705, 707 (Tex.1970); Seegers v. Spradley, 522 S.W.2d 951, 957 (Tex.Civ.App.-Beaumont 1975, writ ref'd n. r. e.). The court of civil appeals was correct in reversing that part of the judgment.
We examined the other points that Berman and Perry Brothers, Inc. urged in the court of civil appeals to determine if there are factual matters which require our remand of the cause to that court. They have urged a number of factual insufficiency points, but our decision renders all of them immaterial. They are points which complain of the trial court's judgment against them for punitive damages, and we have held that neither Berman nor Perry Brothers, Inc. is subject to those damages. That part of the judgment of the court of civil appeals was correct in its reversal of the trial court's judgment.
We, therefore, reverse that part of the judgment of the court of civil appeals which dissolved the injunction ordered by the trial court and affirm that portion of the trial court's judgment. We affirm that part of the judgment of the court of civil appeals which reversed the trial court's judgment for punitive damages in favor of City Products Corporation and Z. S., Inc. Since both petitioners and respondents have in part prosecuted their appeals with effect, one-half of the costs in the trial court and on appeal are adjudged against City Products Corporation, Z. S., Inc., and A & I Levy Estates, a partnership. The other half of the trial and appellate costs are adjudged against the Estate of Max Berman and Perry Brothers, Inc. Commercial Standard Ins. Co. v. Ebner, 149 Tex. 28, 228 S.W.2d 507, 511 (1950); Tex.R.Civ.Pro. 501.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434688/
|
312 S.W.2d 59 (1958)
Cletis Leo MYERS, Plaintiff-Respondent,
v.
Roy Emerson MOFFETT, Defendant-Appellant.
No. 46221.
Supreme Court of Missouri, Division No. 1.
April 14, 1958.
*60 John J. McFadden, Kansas City, for appellant.
W. Raleigh Gough, Claude M. McFar and, Kansas City, for respondent.
VAN OSDOL, Commissioner.
In this action plaintiff sought recovery of $11,300 for personal injuries and property damage, and defendant by counterclaim sought recovery of $51,600 for personal injuries and property damage sustained when plaintiff's eastbound 1949 Chevrolet coach and defendant's westbound 1951 Plymouth coach collided at a point on U. S. Highway No. 24 six or seven hundred feet east of the intersection of that highway with Jackson County Highway 8-N. The issues of plaintiff's claim and of defendant's counterclaim were submitted to the jury. The jury found for defendant and against plaintiff on plaintiff's claim; and found for defendant and against plaintiff on defendant's counterclaim; awarding defendant damages in the amount of $6,000. Plaintiff filed a motion for a new trial which the trial court sustained (as to all issues) without specifying any ground for the sustention thereof. Defendant filed a motion for a new trial to be limited to the issue of defendant's damages only, which motion was overruled. Defendant has appealed.
Herein upon appeal, defendant-appellant contends the trial court erred in refusing to grant defendant a new trial as to the issue of damages only. Defendant asserts the amount of the award, $6,000, was grossly inadequate. And plaintiff-respondent has assumed the burden of supporting the trial court's action in granting plaintiff a new trial. Supreme Court Rule 1.10, 42 V.A. M.S., pp. 8-9. In supporting the trial court's order, plaintiff contends error in instructing the jury; and contends prejudicial effect of asserted misconduct of defendant's counsel in asking improper questions in the examination of witnesses, and in argument to the jury.
Each of the parties, plaintiff and defendant, had introduced evidence tending to support their respectively pleaded and submitted conflicting factual theories that the other was negligent in driving his motor vehicle on the wrong side of Highway 24.
At about seven-thirty in the evening of a Sunday in February, plaintiff, accompanied by his wife and two small children, one an infant in arms, and his young brother-in-law, was driving eastwardly on east-west Highway 24. Plaintiff crossed the intersection of that highway with north-south Jackson County 8-N; moved along the comparatively level crest of a hill east of the intersection and started down a slight grade, having observed defendant's westbound automobile approaching over the crest of a hill some twelve or thirteen hundred feet to the eastward. It was misting, and the concrete surface of the highway was wet. The visibility was not too good.
Plaintiff testified that his Chevrolet coach was at all times on its right-hand (south) side of Highway 24 and continued on the south side of the highway until the vehicles collided. He was driving thirty-five to forty miles per hour; no other vehicle was preceding him, and he had no occasion to pass around any car moving eastwardly on the highway. Plaintiff further testified that when he first saw defendant's vehicle it was on its right-hand (north) side of the highway; but he said, "They (defendant) started down this little grade and about the time they got to the low part of the grade they swerved over on my side of the road * * *. He (defendant) swerved over pretty fast." Defendant's car was probably seventy-five to one hundred feet away when it came over on plaintiff's side of the road.
Plaintiff's wife testified that her husband was driving on the south, right-hand, side of Highway 24, "and I was looking down at the baby and I looked up and I saw these two headlights coming toward us on our side of the road, and we didn't have time to do any stopping or anything, it was just so close and it was coming so fast."
*61 A witness for plaintiff was the first person to arrive at the scene after the vehicles collided. He had driven westwardly over the hill east of the scene, and had not met any eastbound vehicle.
Defendant testified that he was moving westwardly in his Plymouth coach and that, when he came over the hill east of the place where the vehicles collided, he observed headlights of an automobile (other than plaintiff's) moving eastwardly near the intersection of Highway 24 and Highway 8N. Defendant was traveling fifty-five to sixty miles per hour. He saw that the car approaching from the west was on its own (south) side of the road. He had moved down across the valley and was going slightly upgrade at the time of the collision. When he was approximately fifty feet from the eastbound vehicle he, for the first time, observed the lights of plaintiff's car. He testified that plaintiff's vehicle was "veering (from behind the preceding eastbound vehicle) out over the center line. * * * It (plaintiff's vehicle) came out just like it was passing." Plaintiff's car "got out right in front" of defendant's. "I put my right hand up to protect my eyes and turned my steering wheel to the right." Defendant could not say whether he had changed the course of his vehicle to the right before the impact of the collision.
Photographs of the damaged vehicles indicate the impact was of great force. The left fronts of both vehicles were demolished. Plaintiff's car, the Chevrolet coach, had come to rest headed northwestwardly with both front wheels north of the "black line" which indicated the center of the pavement. The right front wheel of plaintiff's Chevrolet was north of the "no passing" yellow line in the center of the westbound (north) lane of the pavement. Defendant's vehicle came to rest at a slight angle on the shoulder or berm north of the pavement. It was headed slightly south of west with its demolished left front and wheel resting on the shoulder three or four feet north of the pavement. The left side of the frame of defendant's Plymouth was thrust backwardly about six inches; the exhaust pipe was torn off; the drive shaft was torn loose from the transmission; most of the debris, particularly the "shake down" of mud was between the two vehicles, although small parts of the vehicles were scattered generally over the highway; and marks in the mud north of the pavement indicated the Plymouth had slid northwardly. A witness for defendant noticed counterclockwise "slide" or "mud" marks on the north half of the pavement which had been made by the front wheels of plaintiff's vehicle. The witness could not tell where these marks started. He "just saw the termination of them." There was evidence that defendant had drunk beer that evening; and witnesses stated defendant had a "heavy odor of alcohol on his breath" after the collision. Both plaintiff and defendant were injured in the collision, and plaintiff's infant and young brother-in-law were killed.
Plaintiff-respondent contends Instruction No. 8, given by the trial court at defendant's request, was erroneous. The instruction was as follows,
"The Court instructs the jury that in considering the testimony of any witness you should use your common sense, reason and judgment, so that if you find that the testimony of any witness as to facts surrounding the alleged accident is in conflict with physical facts, then you are instructed that you may take into consideration such conflict in determining what weight will be given to the testimony of such witness or witnesses so conflicting."
Plaintiff-respondent argues that the instruction was an unwarranted comment on the evidence and tended to overemphasize the evidence of the positions of the automobiles after the collision.
In the recent case of Roush v. Alkire Truck Lines, Mo.Sup., 245 S.W.2d 8, this court examined an instruction (No. 4 in that case) of almost identical language. Such an instruction is cautionary, and the *62 giving of the instruction is largely within the discretion of the trial court. The trial court's discretionary action in giving such an instruction is justified if the instruction is supported by evidence of physical facts which are in apparent conflict with the testimony of witnesses. Roush v. Alkire Truck Lines, supra; Phillips v. Vrooman, 361 Mo. 1098, 238 S.W.2d 355. In the instant case, in view of the evidence establishing the positions of the vehicles involved (particularly the position of plaintiff's vehicle) when they came to rest after the collision and the testimony of plaintiff and wife that plaintiff's vehicle was moving on the right side of Highway 24 when the collision occurred, we cannot say the trial court abused its discretion in giving Instruction No. 8. Roush v. Alkire Truck Lines, supra. Nevertheless, it is true that the instruction does bring into bold relief the fact that plaintiff's vehicle had come to rest partially over on the north side of the highway, and the incidence of an apparent conflict between such fact and the testimony of plaintiff and his wife. And, even though the trial court did not err or abuse its discretion in giving the instruction in this case, the fact that the instruction recognized such apparent conflict and instructed that the conflict might be taken into consideration in weighing the testimony of the witnesses so conflicting, in part supplied the foundation for the prejudicial effect of other, but untoward and improper, matters with which we treat infra. As we have implied, the fact or circumstance that plaintiff's vehicle was partly over on the north side of the pavement after the collision could be said to be an established physical fact, but such fact did not necessarily establish that plaintiff's vehicle, prior to and when the vehicles collided, was on the north side of the pavement. The fact that plaintiff's vehicle rested partly on the north side of the road after the collision was but a fact or circumstance for the jury's consideration and evaluation in weighing the circumstance together with the conflicting testimony of the witnesses as to where with reference to the center of the highway the respective vehicles were being driven prior to and when the vehicles collided, and with other shown circumstances of the case. Surely, each of the parties had the right to have his factual theory fairly considered and resolved by the jury without improper and prejudicial interrogation, conduct or argument on the part of counsel for the other.
Plaintiff's witness Closson, a state highway patrolman, had arrived at the scene a few minutes after the collision. In testifying, Closson described generally the scene of the tragedy and spoke in detail concerning the positions of the vehicles, debris and broken-off parts. He also identified photographs as fairly representing the positions in which the vehicles had come to rest after the collision. A photograph, identified as plaintiff's Exhibit 5, also identified as defendant's Exhibit 7, was examined by the witness who said the photograph correctly showed the positions of the two vehicles involved, and which photograph we have in part relied upon in reciting the facts, supra, relating to the positions in which the vehicles involved came to rest after the collision. The witness had not been qualified as an expert, and upon direct examination had not undertaken to give any opinion or conclusion relating to the way the collision had been brought about.
On cross-examination, defendant's counsel asked the witness Closson if he could form "a conclusion as to where the impact occurred between these vehicles." Compare Hamre v. Conger, 357 Mo. 497, 209 S.W.2d 242. Here was an apparent design to introduce incompetent opinion evidence by cross-examination of an adversary's witness. The witness was then asked if he found any marks on the south side of the pavement that would indicate this car (the Chevrolet) as having been pulled around from "the south side of the road over to the north side"; whether he found any kind of marks (on the south *63 side of the pavement) "swinging around over to the north side of the road"; and when two cars collide substantially head-on, "do the rear ends have a tendency to come up in the air ?" The witness was also asked, "Can you think of any manner, if this Chevrolet was on the south side of this highway and the way those vehicles are damaged to the front ends, of how that Chevrolet could possibly get over in that position"; would "it be logical, Officer, from your experience in investigation of accidents and studying about kinetic force, where objects come together, would it be logical in this case to assume that these cars collided almost head-on on the south side of the road and wind up in the position shown in those pictures"; and "if this Chevrolet was going over onto the north half of the road * * * and Moffett was pulling off onto the shoulder at the time they collided, can you explain how the cars would get in this position?" The trial court had sustained plaintiff's objections to all of these questions, and yet, as we have seen, counsel for defendant, consistently ignoring the trial court's consistent rulings, persisted in making such inquiries which were clearly intended to elicit conclusions of the witness and which improper questions tended to emphasize the position and to intimate a decisive probative effect of the circumstance of the position of plaintiff's vehicle.
Counsel for plaintiff requested that the trial court reprimand defendant's counsel "for continuing to make these insinuations when he knows that the evidence is inadmissible * * * it is just done for the purpose of prejudicing the jury against the plaintiff * * *." The trial court, but without the presence and hearing of the jury, told defendant's counsel to refrain "from asking any further questions touching upon his (Closson's) opinion or estimate as to where the cars were at the time or how they were traveling at the time of the collision." And presently, within the presence and hearing of the jury, the trial court orally advised that "it is the prerogative and function of the jury to determine how the collision took place and where it took place and whose fault it was."
Notwithstanding the admonition, counsel for defendant again asked the question"Where two portions of a car come together, where there are chrome portions of the car and those chrome portions drop down, generally do you expect to find the broken parts at or near the place where the cars collide, if they collide hard and stop there?" And counsel for defendant then referred to a report which had been prepared by the witness an hour or so after he was at the scene of the casualty. This report had not been introduced into evidence.
The first question was"When you got around to making up your report, did you realize that you had seen the left front of this Chevrolet clear over to the north of this yellow line in the center of the north half of the highway?" Counsel for defendant then further referred to the report (which apparently had indicated that the Chevrolet had come to rest on the south shoulder of the highway, or partially so) and the question was asked, "Now, at the time you made up that report did you have the benefit of seeing the pictures of the cars in the exact position that they were in when you first arrived there?" The further question was asked"When you made up the report, because of the darkness out there were you confused as to in what position of the highway you found these cars sitting when you first arrived there?" And again"Do these pictures, both that the plaintiff has introduced and that the defendant has introduced here, show that your recollection of where you found these cars when you arrived there was incorrect when you made up your report?"
As stated in Ryan v. Campbell "66" Express, Inc., Mo.Sup., 304 S.W.2d 825, if every case in which improper questions were asked was reversed, few verdicts *64 would stand. But, in the instant case, we have seen that, although the trial court had sustained objections to each and all of the questions (save one which upon objection was reframed) to which we have referred supra, counsel for defendant had persisted in pursuing the same lines of interrogationfirst, in asking for the conclusions of the witness as to the factual significance of the circumstance that the front of plaintiff's car projected northwardly over the center of the highway; second, by improperly referring to the officer's report, which we have stated was not introduced into evidence, and by which improper manner of interrogation the fact that plaintiff's car did extend over the center of the highway to the northward was intentionally re-emphasized and reimpressed upon the jury; that is, by overriding the trial court's rulings, defendant's counsel was, by his improper questions over and over again stressing and in effect insinuating or obliquely arguing to the jury a decisive probative effect of the position of plaintiff's vehicle.
Moreover, by these persistent lines of improper inquiry plaintiff's counsel was put in an apparent position before the jury of having persisted in causing the trial court to exclude testimony of plaintiff's own witness, which testimony the jury may well have believed would be of great value in determining the issues of the case. It has been said that perhaps with laymen, whether justified or not, the testimony of a highway patrolman carries with it the force and weight of his important official position. Meyers v. Smith, Mo.Sup., 300 S.W.2d 474. And here in the instant case the persistent questioning of the patrolman Closson implied that his answers, if admitted into evidence, would be favorable to defendant in tending to show a decisive factual significance of the position of plaintiff's vehicle. That is to say, plaintiff's counsel was forced, by the improper questions propounded by defendant's counsel, to be placed in the false light of suppressing material evidence by his own objections. It is recognized in given cases that a wilful attempt to force one's opponent to be placed in the light of suppressing facts by his own objections or an attempt to present improper matters to the jury may substantially influence a verdict, despite the action taken at the time by a trial court in sustaining objections or otherwise. Ryan v. Campbell "66" Express, Inc., supra; Moore v. Shelly Motors, Mo.App., 225 S.W.2d 953; McClendon v. Bank of Advance, 188 Mo.App. 417, 174 S.W. 203; Annotation 109 A.L.R. 1089; 53 Am.Jur., Trial, § 459, pp. 360-363.
As we have seen, the physical fact that plaintiff's automobile had come to rest partly across the center line of the highway and the testimony of defendant were in apparent conflict with the testimony of plaintiff and his wife in tending to support and refute the issue as to which of the parties had been driving his vehicle on the wrong side of Highway 24. Having emphasized the circumstance of the position of plaintiff's vehicle, after it had come to rest, by improper questions in his cross-examination of the witness Closson, and also, in effect, by the same improper questions, having detracted from the value and weight of the testimony of plaintiff and wife, it remained for defendant's counsel in his argument to the jury to improperly bolster the dependability, integrity and, by inference, the credibility of defendant as a witness.
Turning now to the transcript of the argument to the jury we quote excerpts from the argument of counsel for defendant, also the trial court's ruling on an objection thereto.
"Mr. McFadden (counsel for defendant): * * * Now, I have known Roy (defendant Moffett) for about eight years. I have had business for his family, little odds and ends for his family for ten years.
"Mr. Gough (counsel for plaintiff): I object to any personal statements of the attorney not in evidence in this *65 caseany personal experiences of the attorney are not in evidence.
"The Court: Objection overruled.
"Mr. McFadden: I know this family as a good, hard-working family, and Roy is one of the best of the outfit; and Roy, from my experiences with him, has been a very fair, honest, and dependable fellow. If it weren't for the fact that this man (defendant Moffett) had two beers out there, I don't think there would be a shadow of a doubt as to what happened, and I still, in my mind, I think there is no doubt that this accident not only happened on the wrong side of the road for Mr. Myers, but happened right over in here at a point approximately here (indicating) * * *."
There can be no doubt defendant's counsel was telling the jury that counsel personally believed defendant was a fair, honest and dependable fellow and, by inference, was personally assuring the jurors they could rely upon his testimony. It will be further noted that, for "over measure," defendant's counsel threw in his own personal opinion and conclusion as to where the collision occurred with reference to the center of Highway 24. Other argument of defendant's counsel was at least on the border line of impropriety in tending to inform the jury of the fact, as had been indicated on voir dire, that plaintiff had liability insurance, and in tending to suggest that the insurer, not plaintiff, would be required to pay such damages as might be awarded defendant. The argument was as follows: "We bear no malice toward Cletus Myers and his wife. I feel sorry for these people. We bear no legal malice toward them. But I want you to bring in a fair-sized verdict from them and leave it up to me as my client's attorney as to how I collect it." See and contrast Buehler v. Festus Mercantile Co., 343 Mo. 139, 119 S.W.2d 961; and Douglas v. Twenter, 364 Mo. 71, 259 S.W.2d 353.
We have the opinion that the cumulative prejudicial effect of matters with which we have treated suprathe conduct of defendant's counsel in the interrogation of witnesses and in argument to the jury, in combination affected the trial of the case in such a way as to have a substantial prejudicial influence on the verdict rendered by the jury in this case. State ex rel. S. S. Kresge Co. v. Shain, 340 Mo. 145, 101 S.W.2d 14; Moore v. Shelly Motors, supra; cases collated in the Annotation 109 A.L.R. 1089, supra. Although the trial court erred in failing to specify the ground or grounds on which plaintiff's motion for a new trial was sustained (Section 510.330 RSMo 1949, V.A.M.S.), and we do not presume the new-trial order was sustained on any discretionary ground or grounds (Supreme Court Rule 1.10, supra), these matters with which we have treated were called to the trial court's attention in plaintiff's motion for a new trial and they demanded the exercise of the trial court's sound judicial action; and we have the opinion these matters must have been so substantial in their influence upon the jurors in considering upon their verdict that a refusal to grant a new trial would have been, to say the least, an abuse of the trial court's discretion in this case.
Since the trial court's order granting plaintiff a new trial is upheld, the trial court did not err or abuse its discretion in overruling defendant's motion for a new trial to be restricted to the issue of defendant's damages.
The trial court's order awarding plaintiff a new trial as to all issues should be affirmed.
It is so ordered.
COIL and HOLMAN, CC., concur.
PER CURIAM.
The foregoing opinion by VAN OSDOL, C., is adopted as the opinion of the court.
All of the Judges concur.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2435167/
|
337 S.W.2d 617 (1960)
DALLAS TRANSIT COMPANY, Appellant,
v.
James TOLBERT et al., Appellees.
No. 13618.
Court of Civil Appeals of Texas, San Antonio.
June 29, 1960.
Rehearing Denied August 1, 1960.
*618 Turner, White, Atwood, McLane & Francis, Dallas, for appellant.
Carter, Gallagher, Jones & Magee, Ben T. Warder, Jr., Leachman, Gardere, Akin & Porter, J. Carlisle Dehay, Jr., Dallas, for appellees.
BARROW, Justice.
This is a damage suit filed by James Tolbert and Harold C. Richardson, Inc., against Dallas Transit Company, for personal injuries to Tolbert and property damages suffered by Richardson, Inc. The case was tried to a jury and upon the verdict judgment was rendered in favor of Tolbert for his damages against Dallas Transit Company, and in favor of Harold C. Richardson, Inc., for its damages against Dallas Transit Company.
The pertinent facts are as follows: On the morning of April 18, 1958, at about 9:15, James Tolbert, an employee of Roadway Express, was driving a truck-trailer combination vehicle leased by Roadway Express from Harold C. Richardson, Inc. on North Central Expressway in the City of Dallas, during a misting rain. The equipment and load weighed approximately 54,000 pounds.
The Expressway in the vicinity is a divided highway running north and south. On the west side it is composed of three lanes for southbound traffic, and on the east side, three lanes for northbound traffic. Between the lanes for the southbound and northbound traffic there is a concrete divider or median which is elevated above the level of the roadways and is bordered on each side by a concrete curb. On each side of the Expressway there is a service road which runs parallel therewith. These service roads are separated from the main Expressway by grass median strips with concrete curbs on each side. About a block north of the place of the accident the Expressway has an overpass which goes over Hall Street. From the Hall Street Overpass proceeding south there is a down-hill incline to the place of the accident at an inlet road running at a slight angle from the service road to the southbound expressway.
Immediately before the accident the truck was proceeding south on the most westerly traffic lane at about forty miles per hour. A bus belonging to and operated by appellant, Dallas Transit Company, was proceeding south on the service road west of the Expressway. The bus was ahead of the truck but was traveling slower and the truck was overtaking it, and when the bus reached the inlet road it turned thereon and entered the Expressway in front of the truck. Just as soon as the bus entered the Expressway, about fifty feet in front of the truck, Tolbert applied the truck brakes and attempted to turn to his left in order to avoid hitting the bus. The truck jackknifed, thus turning the tractor part completely *619 around until it faced in the opposite direction alongside the trailer part. In that condition the truck skidded diagonally down and across the southbound Expressway in a southwesterly direction, first striking the median island, then onto the northbound Expressway, until it collided with a northbound automobile driven by William L. Cowley in the middle traffic lane of the northbound Expressway.
By its first point appellant contends that the court erred, (1) in refusing to permit the reading of its Exhibit No. 11 to the jury, containing extracts from Dallas City Ordinances with reference to rules of right-of-way, and (2) in failing to instruct the jury as to the law with reference to the rules of right-of-way. The point must be overruled.
The court submitted to the jury only one right-of-way issue:
"Special Issue No. 10: Do you find from a preponderance of the evidence that at the time, place and occasion in question Plaintiff James Tolbert failed to timely yield right-of-way to defendant Dallas Transit Company's bus?"
In connection with this issue the court defined the term "timely yield right-of-way" as follows: "You are instructed that by `timely yield right-of-way' is meant the yielding of the right-of-way in such time as a person of ordinary care and prudence would have yielded it under the same or similar circumstances," being a substantial compliance with the statute. Art. 6701d, § 20, Vernon's Ann.Civ.Stats. Thus the court did not leave to the jury the determination of the mixed question of law and fact as to who had the right-of-way under the facts and circumstances, but determined as a matter of law that appellant's bus had the right-of-way. The question submitted assumes that the bus did have the right-of-way. The effect of the question is to so instruct the jury. Certainly, the appellant could not have suffered injury in any way by the court's action. Rule 434, Texas Rules of Civil Procedure.
Appellant argues that in any event it should have been permitted to read to the jury its Exhibit No. 11, in order to rebut the testimony of appellee Tolbert that he had the right-of-way, and that appellant's bus did not. Certainly, if appellees had proved by Tolbert, over appellant's objection, his conclusion of law as to who had the right-of-way, it would have been error. It is elementary that the jury receives the law from the court and not from the witnesses. However, here we find from the record that the conclusions of law of the witness Tolbert were first injected into the case by appellant on cross-examination of the witness. On numerous occasions throughout cross-examination the witness was asked by appellant's counsel not only for his opinion as to who had the right-of-way, but as to his rights and duties with reference thereto. It is apparent that appellant brought about its own predicament and is not in a position to complain. We are of the opinion that appellant's first point is without merit.
By its second point appellant contends that the court erred in refusing to submit to the jury its requested Special Issues Nos. 1-A, 1-B, 1-C, 2-A, 2-B, 2-C. Issue 1-A inquired if James Tolbert failed to yield the right-of-way to the automobile driven by William Cowley. One-B inquired if such failure was negligence. One-C inquired if such negligence was a proximate cause of the injuries complained of. Issue 2-A inquired if Tolbert drove the truck onto the left-hand side of the highway "instead of the right-hand side of the highway." Two-B inquired if such action was negligence. Two-C inquired if such action was a proximate cause of the injuries complained of.
The evidence conclusively establishes the fact that when the truck jack-knifed, with the driver riding backward in the cab, it skidded entirely out of control from that point on the southbound traffic roadway over to the left-hand side, and thence on and across the median island and onto the northbound traffic roadway where it collided with the Cowley automobile.
*620 The rule has been stated in 42 C.J. 932, Motor Vehicles, § 644, as follows:
"* * * an operator who has lost control of his car is not responsible for what happens thereafter unless his negligence in the management of the car was the cause of his loss of control." See also 60 C.J.S. Motor Vehicles § 298.
See Renner v. National Biscuit Co., Tex. Civ.App., 173 S.W.2d 332.
The evidence shows conclusively that at the time the truck jack-knifed and went out of control it was on the extreme right-hand side of the southbound roadway (his right-hand side). The evidence further conclusively shows that the truck jack-knifed as a result of the driver, Tolbert, attempting to turn to his left and at the same time applying the truck brakes, together with the wet slippery condition of the pavement. The trial court submitted to the jury all the acts of both parties which were alleged to have caused the jack-knifing. Thus the conclusion is inescapable that if Tolbert, the driver of the truck, is to be held responsible for the truck skidding over to the northbound traffic lanes, it must be because of some act of negligence which occurred prior to the jack-knifing of the truck.
Appellant relies principally on the opinion in Phoenix Refining Co. v. Powell, Tex. Civ.App., 251 S.W.2d 892. We do not regard that case as in point. In that case all the witnesses were killed in the collision. It was also shown that the truck gradually swerved over onto the left side of the road. The photograph of the scene showed a wide tire mark extending from the right over to the left side of the highway before the point of impact, which the court held raised the issue of fact as to whether the truck, being on the left side of the road, was beyond the control of the operator. In the instant case the evidence is undisputed. Moreover, if it could be said that the driver could have controlled, or resumed control of the truck before it hit the median island, the facts are undisputed that when the truck hit the island the driver was knocked loose from the steering wheel, out of his seat, and down onto the floor of the cab. There was no evidence to show that the driver had control at the time the truck went over to the left side of the road. See, Renner v. National Biscuit Co., supra. Therefore, it is apparent that the truck, both at the time it went over on the left-hand side of the highway and at the time it failed to yield the right-of-way to the Cowley car was out of control, and unless Tolbert's loss of control was due to some act of negligence on his part, which occurred prior thereto, he would not be responsible. The trial court having submitted to the jury issues covering every alleged act of negligence which could have brought about the jack-knifing of the truck, these issues submitted every act for which the driver of the truck could be responsible. The court did not err in refusing the requested issues.
In view of the fact that appellant's fourth point is closely related to its second point, above discussed, we shall next consider the fourth point wherein appellant complains of the ruling of the court in refusing to submit to the jury its requested special issues Nos. 3 and 5. Requested Issue No. 3 sought to inquire whether the sudden jack-knifing of the Tolbert truck was not the sole proximate cause of the collision of the truck and the Cowley automobile. Requested Issue No. 5 was identical in wording, except that it inquired whether the jack-knifing of the truck on the west street was not such sole proximate cause. These issues were properly refused.
The jury found in answer to special issues the following facts: (1) That the driver of the bus failed to keep a proper lookout. (2) That such failure was a proximate cause of the collision. (3) That the driver of the bus proceeded onto Central Expressway before it had become reasonably safe for him to do so. (4) That such action was negligence. (5) That such negligence was a proximate cause of the collision. (6) That the driver of the truck turned the truck to the left within such time as a person of ordinary *621 prudence would have turned it. (7) That the driver of the truck did not fail to timely apply his brakes. (8) That the driver of the truck did not fail to keep a proper lookout. (9) That the driver of the truck did not fail to keep the truck under proper control. (10) That the driver of the truck did not fail to timely yield the right-of-way to appellant's bus. (11) That the driver of the truck was not operating the truck at a speed which was excessive under the circumstances then existing. (12) That the injuries to appellee James Tolbert were not the result of an "unavoidable accident."
The well settled rule in Texas has been stated in International-Great Northern R. Co. v. Acker, Tex.Civ.App., 128 S.W.2d 506, 521, as follows:
"The issue of sole proximate cause of an injury as distinguished from a proximate cause simply does not arise when the suit is between the injured party or those in privity with him and the person inflicting the injury, but such an issue can only arise where it is claimed that the act of a third party was a proximate cause.
"It seems to us that such issue of sole proximate cause presupposes that the injury is attributable to a third party, unavoidable accident or extraneous happening, etc., and if the injury was attributable to such third party, or he was the sole proximate cause thereof, it would be immaterial whether the act as to the third party was negligence upon his part or not."
The rule was quoted and followed in Panhandle & Santa Fe Ry. Co. v. Ray, Tex. Civ.App., 221 S.W.2d 936.
As we have stated above, it is clear that the truck up to the time it jack-knifed was under the control of Tolbert, a party to the suit. Therefore, the jack-knifing was not the act of some third party. The requested issue obviously embraced a combination of the two causes, i. e., the wet street and the operation of the truck. In order for the issue to come within the rule above stated, it should refer only to the act of a third party on an extraneous happening. At most the issue should have been confined to the wet condition of the street as such a cause. The effect of the issue, as framed, was to inquire if some act of the truck driver, together with the wet condition of the street was the sole proximate cause. Moreover, we note that appellant did not request an issue inquiring if the wet pavement was the sole proximate cause. The issues requested by appellant were properly refused. We have not been unmindful of the rule stated by the Supreme Court in Schuhmacher Co. v. Holcomb, 142 Tex. 332, 177 S.W.2d 951, but we have considered the same in the light of conditions existing when the charge was given and not after the verdict.
By its third point appellant contends that the court erred in instructing the jury that they could award Tolbert money for future loss of earnings, because there was no pleading and insufficient evidence, or no evidence, that he would in reasonable probability suffer such loss; and that the jury's award is so grossly excessive as to show bias and prejudice.
The first contention must be overruled. It appears from the record that appellant did not except to the court's charge on such ground, therefore, the complaint is waived. Rule 274, T.R.C.P. As for the second contention, we have carefully examined the record and have reached the conclusion that the amount of the verdict, $17,120, for personal injuries to Tolbert, is not excessive.
The trial court instructed the jury that they might consider four elements of damages, i. e., past and future loss of earnings, and past and future pain and suffering.
Tolbert suffered a whiplash injury. The evidence shows that from the time of the injury, or shortly thereafter, he has suffered from constant pain in his head, base of skull, neck, shoulder and down his right arm. That he has received treatment from six different doctors; that on two occasions *622 he had to lay off his job and remain in traction for several days; that the pain is continuous except when he is under the effect of sleeping pills. That he lost a total of fifty-two days' work from the date of the accident until the date of trial, a period of fourteen months. That he has been driving the truck through necessity and against the advice of his doctors in order to provide for his family. That when he drives he has to wear a surgical collar. That he was earning the sum of $165 per week. Dr. Edward Krusen, who gave the only medical testimony in the case, testified that he examined Tolbert the last time one week before the trial, and the patient had a cervical syndron with muscular spasms, which would cause constant pain as stated by the patient; that he had a definite limitation movement of the neck, and would have flare ups when his condition would worsen, and that the condition would continue in the future.
Appellant's fifth point is without merit and is overruled.
Finding no reversible error, the judgment is affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2910240/
|
IN THE
TENTH COURT OF
APPEALS
No. 10-03-00114-CV
Mark Manly, Individually and d/b/a Agri-Safe,
Appellant
v.
CR Minerals Company,
Appellee
From the 74th District Court
McLennan County, Texas
Trial Court # 2000-2726-3
MEMORANDUM
Opinion
This
is an appeal of a suit on a sworn account.
See Tex. R. Civ. P. 185.
Because there is no evidence that Manly was acting in any capacity other
than as an employee in the purchase of the products from CR Minerals, we
reverse and render.
In
Manly’s second issue, he contends that the evidence was legally
insufficient. The trial court rendered
judgment against Manly, individually, and doing business as Agri-Safe. Manly pleaded that he was a stranger to the
transaction, and put on evidence to that effect. See
Weaver v. King Ready Mix Concrete, Inc., 750
S.W.2d 913, 914 (Tex. App.—Waco 1988, no writ).
Manly put on evidence that Agri-Safe was a marketing division of EPA
Distributors, a corporation owned by his father, by which Manly was employed
and in which he owned no interest. Manly
testified that he had never done business as Agri-Safe, did not purchase goods
from Appellee individually, and did not agree to be responsible for the
purchases. CR Minerals introduced
evidence that Manly had signed a license application on behalf of Agri-Safe in
which he affirmed that he was “authorized and empowered to act for the
operation for whom the license application is made.” CR Minerals also points to Manly’s testimony
that he placed the orders for the goods.
But as CR Minerals’ brief notes, its invoices that form the basis of its
sworn account name Agri-Safe as the purchaser.
Viewing the evidence in the light most favorable to the trial court’s
implied finding that Manly was a party to the transaction, and disregarding
disputed evidence to the contrary except for undisputed evidence, there is no
evidence that Manly was a party to the transaction. See St.
Joseph Hosp. v. Wolff, 94 S.W.3d 513, 519-20 (Tex. 2003);
Tiller v. McLure, 121 S.W.3d 709, 713 (Tex. 2003); Weaver
at 914. We sustain Manly’s second
issue. We reverse and render judgment
that CR Minerals take nothing from Manly, individually, and doing business as
Agri-Safe. We do not reach Manly’s other
issues.
TOM
GRAY
Chief Justice
Before
Chief Justice Gray,
Justice Vance, and
Justice Reyna
Opinion
delivered and filed January 26, 2005
Reversed
and rendered
[CV06]
|
01-03-2023
|
09-10-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/1994529/
|
21 B.R. 58 (1982)
In re Richard Kiyoshi YAMAMOTO and Larraine Leiko Yamamoto, Debtors.
Richard Kiyoshi YAMAMOTO and Larraine Leiko Yamamoto, Plaintiffs,
v.
CITY BANK OF HONOLULU, aka City Bank, Defendant.
Bankruptcy No. 81-0043.
United States Bankruptcy Court, D. Hawaii.
March 8, 1982.
Ralph E. Corey, Honolulu, Hawaii, for debtors.
S. Raymond Okuma, Honolulu, Hawaii, for City Bank of Honolulu.
MEMORANDUM OF DECISION DENYING MOTION FOR SUMMARY JUDGMENT
JON J. CHINEN, Bankruptcy Judge.
On June 2, 1981, Richard K. and Larraine L. Yamamoto, hereafter "Debtors", filed a Motion for Summary Judgment. A hearing was held on September 11, 1981, at which time Ralph E. Corey appeared on behalf of the Debtors and S. Raymond Okuma appeared on behalf of City Bank of Honolulu, hereafter "City Bank".
At the hearing, the Court ruled that the garnisheed wages of the Debtors are not voidable preferences under 11 U.S.C. § 547(b). The sole issue now before the Court is whether or not the Debtors may set aside the garnishee order under 11 U.S.C. § 522(f)(1), based on the facts agreed upon by counsel.
Briefly, the facts are as follows: On January 26, 1980, City Bank obtained a judgment against Debtors on a defaulted promissory note in the sum of $3,087.83. On March 1, 1980, Debtor Richard Yamamoto was duly served with an Immediate Post-Seizure Notice to All Judgment Debtors, which gave notice of Debtors' right to relief from the seizure of property. Debtors took no action and on March 10, 1980, City Bank sent to Debtor's employer, 7-Eleven Food Store, hereafter "Garnishee", a Garnishee Order After Judgment. Thereafter, between September 26, 1980 and January 1, 1981, Garnishee made deductions and paid City Bank the amount of $652.29. On December 24, 1980, Debtor filed a Chapter 7 bankruptcy petition.
Debtors assert that the garnishment order amounts to a judicial lien which can be avoided under 11 U.S.C. § 522(f). This section provides as follows:
(f) Notwithstanding any waiver of exemptions, the debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such lien impairs an exemption to which the debtor would have been entitled under subsection (b) of this section, if such lien is
*59 (1) a judicial lien; . . .
Initially the Court finds that the fact that Debtors did not claim the garnisheed wages as an exemption is irrelevant to the application of section 522(f). Under this section the debtor may avoid the fixing of a judicial lien to the extent that the lien impairs an exemption to which the debtor is entitled to exempt. Thus, actual exemption is unnecessary.
In Woodman v. L.A. Olson Co., Inc. (In re Woodman), 8 B.R. 686 (Bkrtcy.W.D.Wis. 1981), the court stated:
The debtor has suggested that because the lien created by service of the garnishee summons is in the nature of a judicial lien which would be voidable if in existence on the date of the order for relief in this case by operation of 11 U.S.C. § 522(f)(1), it should be deemed ineffective as a transfer. We find no merit to this contention and no basis in reason or legislative history for giving the lien avoidance provisions of 11 U.S.C. § 522(f)(1) such retrospective effect.
On May 5 and May 21 when the garnishment summons and complaints were served, Olson acquired a perfected lien and the employer became liable to Olson. The employer thereby parted with "an interest in property of the debtor." Those transfers were more than ninety days prior to the debtor's order for relief in Bankruptcy on August 25, 1980. Id. at 688.
Under Hawaii Revised Statutes § 652-2, the Court finds that following the service of the garnishee summons after judgment and the garnishee order, City Bank had perfected its lien and the garnishee became liable to pay City Bank. In effect the employer thereby parted with "an interest in property of the debtor".
Under section 522(f), the Debtors may avoid the fixing of a lien only on a property in which they have an interest. Once the garnishee lien was perfected, Debtors no longer had a legal interest in the garnished wages. Debtors may have had an equitable interest in the garnisheed wages, but proper steps to preserve that interest were not taken. Therefore, Debtors had no legal or equitable interest in the garnisheed wages and thus, no "interest in property" to which a judicial lien could attach under section 522(f).
Based on the foregoing,
IT IS HEREBY ORDERED that the Debtors' Motion for Summary Judgment is denied and judgment is in favor of City Bank.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434768/
|
610 S.W.2d 932 (1980)
UNION CARBIDE CORPORATION, Appellant,
v.
SWECO, INC., Appellee.
Court of Appeals of Kentucky.
October 3, 1980.
Discretionary Review Denied February 13, 1981.
*933 J. Gregory Wehrman, Wehrman & Wehrman, Chartered, Covington, for appellant.
J. Kenneth Meagher, Rendigs, Fry, Kiely & Dennis, Cincinnati, Ohio, for appellee.
Before HAYES, C. J., and BREETZ and GANT, JJ.
HAYES, Chief Judge.
Union Carbide Corporation, the defendant and third party plaintiff below, appeals from a partial summary judgment of the Kenton Circuit Court in favor of the third party defendant, Sweco, Inc.
On August 14, 1976, the plaintiff, Kenneth Hoffman, an employee of Sweco was injured as the result of an explosion which occurred while he was at work at Sweco's plant in Florence, Kentucky. Hoffman alleged that the explosion occurred when fumes from certain cleaning chemicals provided him by Sweco's ignited. Hoffman filed a workers' compensation claim against Sweco. Liberty Mutual Insurance Company, Sweco's insurer, has paid certain sums on the claim.
On August 10, 1977, Hoffman, Beverly Hoffman and Liberty Mutual filed a tort action against J. Daly Company, Inc., a distributor and vendor of chemical products, and Union Carbide Corporation, a manufacturer of chemical products. The complaint alleged that Daly and Union Carbide were negligent in failing to test the chemicals to determine their flammability and explosive nature and in failing to warn Hoffman of any such dangerous characteristics. Liberty Mutual asserted a subrogation claim for the amount it had been required to pay Hoffman on the workers' compensation claim.
On November 13, 1978, Union Carbide filed a third party complaint against Sweco alleging that Sweco was primarily and actively negligent in that it failed to instruct Hoffman regarding safety practices and procedures in its plant and in that it failed to provide Hoffman with a safe working area. Union Carbide's complaint sought indemnification from Sweco. The record reveals that there is an issue of fact concerning Sweco's alleged negligence. Sweco moved for dismissal or summary judgment on the grounds that Sweco is immune from such a claim under the provisions of KRS 342.690(1) which reads as follows:
If an employer secures payment of compensation as required by this chapter, the liability of such employer under this chapter shall be exclusive and in place of all other liability of such employer to the employe, his legal representative, husband or wife, parents, dependents, next of kin, and anyone otherwise entitled to recover damages from such employer at law or in admiralty on account of such injury or death. For purposes of this section, the term "employer" shall include a "contractor" covered by KRS 342.610, whether or not the subcontractor has in fact, secured the payment of compensation. The liability of an employer to another person who may be liable for or who has paid damages on account of injury or death of an employe of such employer arising out of and in the course of employment and caused by a breach of any duty or obligation owed by such employer to such other shall be limited to the amount of compensation and other benefits for which such employer is liable under this chapter on account of such injury or death, unless such other and the employer by written contract have agreed to share liability in a different manner. The exemption from liability *934 given an employer by this section shall also extend to such employer's carrier and to all employes, officers or directors of such employer or carrier, provided the exemption from liability given an employe, officer or director or an employer or carrier shall not apply in any case where the injury or death is proximately caused by the wilful and unprovoked physical aggression of such employe, officer or director. (Emphasis added).
The trial court granted Sweco's motion. This appeal followed.
Union Carbide argues that the immunity granted an employer under the terms of the Kentucky Workers' Compensation Act does not extend to indemnification claims such as the one before us.
In the case of Kentucky Utilities Company v. Jackson County Rural Electric Cooperative Corporation, Ky., 438 S.W.2d 788 (1969) the former Court of Appeals in determining the scope of KRS 342.015(1) which has since been replaced by KRS 342.690, held at 790 that "the common-law right to indemnity is a jural right which existed prior to the adoption of our Constitution and may not be abolished by the General Assembly." Sweco maintains that the Kentucky Utilities case has no application here because KRS 342.015 was superseded by the more strongly worded KRS 342.690. This position is not well-taken however. The common-law right of indemnity may not be emasculated by any language or act of the legislature no matter how worded.
In any event, an examination of KRS 342.690 reveals that the legislature did not seek to abolish indemnity actions but sought to limit the amount of recovery over against the employer. The statute states that an employer's liability to a third party indemnitee is limited to the amount paid under the Workers' Compensation Act. We do not find it necessary to examine the issue of whether such a provision constitutes an abolition, albeit partial, of the common-law right of indemnity. The only question presently before us is whether such an action may be maintained.
Sweco argues that even if an action for indemnity is maintainable that it must be based upon an independent duty of the employer to the third party. Sweco contends that the Kentucky Utilities case stands only for this proposition. We believe that such a reading too narrowly construes the concept of indemnity as recognized in this Commonwealth. Brown Hotel Co. v. Pittsburg Fuel Co., 311 Ky. 396, 224 S.W.2d 165 (1949) stated that a right of indemnity existed where the parties are not in pari delicto, the indemnitee being less culpable, although both parties are liable to the injured person. Such a right may be said to be based upon an implied contract of indemnity but is more properly characterized as an equitable remedy resting upon the concept that one is responsible for the consequences of one's own wrong. The law of this Commonwealth does not require a total absence of negligence on the part of Union Carbide to permit a claim for indemnification. We realize, and Sweco has ably demonstrated, that many jurisdictions do not hold this view. However, we do not feel compelled to abandon this Commonwealth's established principle of law.
The trial court erred when it granted judgment for Sweco. However we make no determination with respect to the negligence, if any, of Sweco. That issue remains the critical element of the case. Also, it would be premature to address the attempt of the legislature to limit indemnity liability in KRS 342.690. The question, being a constitutional one, would require notice to the Attorney General pursuant to CR 24.03.
The judgment of the circuit court is reversed and remanded.
All concur.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434779/
|
610 S.W.2d 250 (1980)
Van E. ADAMS, Appellant,
v.
PARKER SQUARE BANK, Appellee.
No. 18351.
Court of Civil Appeals of Texas, Fort Worth.
December 31, 1980.
James Q. Smith, Wichita Falls, for appellant.
Donald E. Short, Wichita Falls, for appellee.
OPINION
MASSEY, Chief Justice.
Van E. Adams sued Parker Square Bank (Bank) which had financed the purchase of a truck for Adams. Adams sued for penalties under the Texas Consumer Credit Code. Both sides moved for summary judgment. The trial court granted the summary judgment for Bank and denied the summary judgment for Adams. Adams appealed. (See also Ormsby v. Parker Square Bank, 610 S.W.2d 246 (Tex.Civ.App.) handed down this date. Background of the instant Adams appeal is nearly identical.)
We dismiss the appeal.
Strangely the appellant in this case could have but did not appeal from the summary judgment for appellee, but chose instead to limit his appeal to the denial of his own motion for summary judgment.
Of this we could not have been aware until appellant's brief was filed, because up until the time he became committed by his point of error it was to be assumed that his appeal would be predicated upon the action of the trial court in granting judgment for his opponent. (Adams waived all but the single point of error which is identical to the point in the appeal by Ormsby companion hereto.) It is by reference to his brief that we have found absence of any complaint of error by the trial court in having granted summary judgment for his adversary. This fact is evidenced by the point and by the language thereunder to which we have referred to seek to determine whether there was any such complaint of error in the summary judgment which was granted to the defendant bank. Rather than any such complaint we find that appellant Adams has confined himself to point of error and complaint thereunder of no more than the court's failure to grant the motion for summary judgment filed by him.
Could we have known of this at the time the clerk received the transcript in the case it would not have been filed, for an appeal does not lie from an order overruling a motion for summary judgment.
Obviously it is the theory of appellant that because both he and his adversary filed motions for summary judgment, followed by order of the court granting the motion of his adversary and denying his own motion, he can predicate his appeal solely upon the denial and disregard the motion granted. That is not the law.
Until there is successful attack made on appeal of the motion granted, with judgment entered in accord, the question does not exist as to whether the trial court should have granted the motion which was denied. In such a situation this court would lack authority to rule upon the contentions made of impropriety of the denial.
*251 It is after having made the holding that the trial court erred in granting a summary judgment that a complainant becomes entitled to have the appellate court review the court's action in overruling his own motion for summary judgment. If it were otherwise his appeal would be no different from the situation where it was only the appellant who had moved for summary judgment and had his motion overruled, and who attempted an appeal from the denial. In such a case it is settled that no appeal shall lie. Wright v. Wright, 154 Tex. 138, 274 S.W.2d 670 (1955).
Since Wright v. Wright a great deal has been written on the question, with the ultimate resolution of that upon which the appellate court has the power to decide, as we understand it, be in accord with what is written in the paragraph next preceding. See Tobin v. Garcia, 159 Tex. 58, 316 S.W.2d 396 (1958), and Ackermann v. Vordenbaum, 403 S.W.2d 362 (Tex.1966), and the authorities referred to in both opinions.
The appeal is dismissed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2822166/
|
******************************************************
The ‘‘officially released’’ date that appears near the
beginning of each opinion is the date the opinion will
be published in the Connecticut Law Journal or the
date it was released as a slip opinion. The operative
date for the beginning of all time periods for filing
postopinion motions and petitions for certification is
the ‘‘officially released’’ date appearing in the opinion.
In no event will any such motions be accepted before
the ‘‘officially released’’ date.
All opinions are subject to modification and technical
correction prior to official publication in the Connecti-
cut Reports and Connecticut Appellate Reports. In the
event of discrepancies between the electronic version
of an opinion and the print version appearing in the
Connecticut Law Journal and subsequently in the Con-
necticut Reports or Connecticut Appellate Reports, the
latest print version is to be considered authoritative.
The syllabus and procedural history accompanying
the opinion as it appears on the Commission on Official
Legal Publications Electronic Bulletin Board Service
and in the Connecticut Law Journal and bound volumes
of official reports are copyrighted by the Secretary of
the State, State of Connecticut, and may not be repro-
duced and distributed without the express written per-
mission of the Commission on Official Legal
Publications, Judicial Branch, State of Connecticut.
******************************************************
HOSPITAL OF CENTRAL CONNECTICUT v.
NEUROSURGICAL ASSOCIATES, P.C.
(AC 36272)
Gruendel, Prescott and Bishop, Js.
Argued March 5—officially released August 4, 2015
(Appeal from Superior Court, judicial district of New
Britain, Wiese, J.)
Robert D. Tobin, with whom were Emily Casey and,
on the brief, Thomas J. Riley and Paul Ciarcia, for the
appellant (plaintiff).
Edward T. Lynch, Jr., with whom was Stephanie P.
Antone, for the appellee (defendant).
Opinion
PRESCOTT, J. For several years, the plaintiff, the
Hospital of Central Connecticut, paid for emergency
neurosurgical coverage pursuant to a contract with the
defendant, Neurosurgical Associates, P.C. The central
issue in this case is whether, by continuing to make
monthly payments to the defendant after the plaintiff
had terminated the parties’ contract, the plaintiff
unjustly enriched the defendant or the defendant prop-
erly retained all sums paid by the plaintiff following the
termination because the defendant’s physicians contin-
ued to be placed on the plaintiff’s on call schedule and
provided the same on call coverage posttermination as
they had done during the pendency of the contract.
Following a one day bench trial, the trial court rendered
judgment in favor of the defendant on the plaintiff’s
unjust enrichment claim, from which judgment the
plaintiff now appeals.1
The plaintiff claims on appeal that the trial court
improperly concluded that the defendant was not
unjustly enriched in light of the fact that the defendant
continued to receive monthly payments from the plain-
tiff after the parties’ contract was terminated. More
specifically, the plaintiff challenges the court’s determi-
nation that, by continuing to place the defendant’s phy-
sicians on the on call schedule and continuing to pay
the defendant for services provided posttermination,
the plaintiff effectively agreed to continue the parties’
arrangement regarding payment for on call coverage.
The plaintiff also argues that the court failed to construe
properly a requirement in the plaintiff’s medical staff
bylaws, which mandates that all physicians with active
medical staff privileges are to provide emergency room
coverage, as creating a separate contractual obligation
that required the defendant’s physicians to provide on
call coverage without compensation. We conclude that
the plaintiff has failed to show that the court abused
its discretion in determining that the defendant was not
unjustly enriched and, accordingly, affirm the judgment
of the court.
The following facts, as found by the court in its memo-
randum of decision, and procedural history are relevant
to this appeal. The plaintiff has approximately 550 phy-
sicians on its staff, approximately one quarter of whom
are the plaintiff’s employees.
Beginning in the spring of 2004, one of the plaintiff’s
staff neurosurgeons retired, leaving the plaintiff with
only one neurosurgeon on its active medical staff. To
ensure that a neurosurgeon was always available to
attend to any urgent situation that might arise in its
emergency room or during inpatient care, the plaintiff
entered into a year long contract with the defendant
beginning on April 19, 2004.
Pursuant to the contract, the defendant agreed to
provide, through its physicians, on call neurological
services coverage for the plaintiff’s emergency depart-
ment and other areas of the hospital for two out of every
three days in accordance with a schedule maintained
by the plaintiff’s chief of surgery. The contract further
provided that, ‘‘[a]t no additional cost to the [plaintiff]
and at its sole discretion, the [plaintiff] may increase
[the defendant’s] on-call coverage obligations under this
[a]greement to twenty-four (24) hours per day, seven
(7) days per week (i.e. 3 out of 3 days) upon fifteen
(15) days prior written notice to the [defendant].’’ In
exchange for providing the specified on call coverage,
the plaintiff agreed to pay the defendant $8958.33 per
month. The contract also provided that each of the
defendant’s physicians ‘‘must apply for, receive, and
maintain a [m]edical [s]taff appointment and appro-
priate clinical privileges in accordance with the [m]edi-
cal [s]taff [b]ylaws, [r]ules and [r]egulations.’’
According to the plaintiff’s bylaws and the rules and
regulations promulgated thereunder, ‘‘courtesy staff’’
are ‘‘practitioners qualified for staff membership who
admit fewer than six patients to the hospital or to the
ambulatory surgery unit each year. Members of the
courtesy staff must be an active staff member of an
accredited hospital in the [s]tate of Connecticut.’’2
‘‘Active medical staff,’’ on the other hand, are permitted
to admit an unlimited number of patients and have
additional responsibilities as set forth in the rules and
regulations, including that they are ‘‘expected to cover
the emergency room for both staff service and unas-
signed private patients on a rotational basis as
assigned.’’
Prior to the execution of the contract in April, 2004,
none of the defendant’s physicians had ‘‘active medical
staff’’ privileges with the plaintiff; they all maintained
only ‘‘courtesy staff’’ privileges. To comply with the
defendant’s contractual obligations that its physicians
obtain active medical staff status with the plaintiff, the
defendant’s physicians each executed individual
agreements (staffing privileges agreements) with the
plaintiff, in which they agreed to abide by the plaintiff’s
bylaws, rules and regulations.3
The plaintiff, as a matter of policy, generally did not
pay its active medical staff for on call coverage because
it believed that on call coverage is a requirement of the
‘‘active medical staff’’ designation and that a physician’s
opportunity to bill directly those patients seen at the
hospital is adequate compensation. Additional compen-
sation for on call coverage, however, above and beyond
the other privileges associated with active medical staff
status, was not expressly prohibited under the medical
staff bylaws, rules and regulations or any provision of
the individual staffing privileges agreements.
On June 6, 2005, the parties entered into a second
year long contractual agreement in which the plaintiff
agreed to pay the defendant a monthly fee of $8333.33
for continued neurosurgical on call coverage. At the
end of August, 2006, the parties again renewed their
agreement for an additional one year period, subject
thereafter to automatic renewal unless terminated by
written notice.
At the beginning of August, 2007, the plaintiff, who
recently had hired an additional staff neurosurgeon,
sent the defendant notice that it wished to terminate
the on call agreement effective October 8, 2007. The
notice stated that the plaintiff would welcome the
defendant’s physicians’ ‘‘continued active participation
on our [m]edical [s]taff.’’ After taking action to termi-
nate the agreement, the plaintiff nevertheless continued
to put the defendant’s physicians on the monthly on
call schedule, the defendant’s physicians performed all
on call duties as assigned, and the plaintiff continued
to pay the defendant the same monthly fee it had paid
for on call coverage under the most recent contract.
Sometime in late 2007 or early 2008, the plaintiff’s
chief medical officer met with the defendant’s represen-
tative to discuss the defendant’s role in providing on call
coverage to the plaintiff. The defendant’s representative
made it clear that the defendant’s physicians would not
perform on call coverage without compensation, noting
that other hospitals, including the defendant’s primary
hospital, Saint Francis Hospital, paid it for on call work.
The plaintiff took the position that it was its policy not
to compensate its staff physicians for on call services.
Nevertheless, even after this meeting, the plaintiff con-
tinued to schedule the defendant’s physicians for on call
work and made monthly payments for those services for
several additional months. The defendant received its
last monthly payment on June 13, 2008. In total, from
the stated termination date of October 8, 2007, until
June 13, 2008, the defendant received $66,666.64 in pay-
ments from the plaintiff.
The plaintiff’s chief financial officer sent the defen-
dant a letter dated September 2, 2008, indicating that
the plaintiff had inadvertently paid the defendant from
October, 2007 through May, 2008, and demanding that
the defendant return $66,666.64 to the plaintiff. The
defendant refused to return the money, indicating in a
return letter: ‘‘We have provided coverage throughout
that time, having been placed on the [on] call schedule,
and have been appropriately reimbursed by the [plain-
tiff] for this service.’’ The plaintiff took the position
that, pursuant to its existing rules and regulations, the
defendant’s physicians’ continued participation as
members of the active medical staff came with an
expectation that the defendant’s physicians would pro-
vide on call coverage without compensation.
The plaintiff thereafter commenced the present
action. Following a one day trial, the court issued a
memorandum of decision finding in favor of the defen-
dant on the sole remaining count of the complaint,
which alleged unjust enrichment. See footnote 1 of this
opinion. The court stated that it reached its decision
on the basis of its examination of the circumstances
and the conduct of the parties and reasoned as follows:
‘‘The court finds that the payments made to the defen-
dant were not in error and were part and parcel of the
parties’ payment arrangement. Namely, the [plaintiff]
received the benefit of [the defendant’s] work and avail-
ability in exchange for paying it a monthly fee, in addi-
tion to allowing the use of its facilities and direct patient
billing. This is the same arrangement [the defendant]
operated under during the previous contract.
‘‘The credible evidence demonstrates the following.
The [plaintiff] continued to place the [defendant’s] phy-
sicians on call after the notice of termination. Addition-
ally, the [plaintiff’s] claim that it no longer needed [the
defendant’s] services is not credible. The [plaintiff]
knew that the [defendant’s] physicians obtained [active
medical] staff privileges only because of the contract
and for the sole purpose of being paid for their profes-
sional services. The [defendant’s] physicians did not
induce the [plaintiff] into making these assignments or
the continuing monthly payments. The [plaintiff] chose
to continue to assign the physicians to on call duty and
extend the mutually beneficial paid on call arrangement
that the parties previously agreed to. In the meeting
between [the parties] held in late 2007 or early 2008,
[the defendant’s principal] set forth [the defendant’s]
unequivocal position that no services would be per-
formed without financial compensation. Nevertheless,
the payments continued and the [plaintiff] continued
to put [the defendant] on its schedule, fully aware of
[the defendant’s] payment demands in accordance with
the previous arrangement. In so doing, the [plaintiff]
received all the benefits of [the defendant’s] work.’’
The plaintiff filed a motion for reargument in which
it contended that (1) the court’s conclusion that the
payments were ‘‘part and parcel of the parties’ payment
arrangement’’ was inconsistent with the undisputed fact
that the payment arrangement had been terminated, (2)
the court’s conclusion that the plaintiff intended or
chose to extend the ‘‘mutually beneficial paid on call
arrangement’’ was not supported by any evidence in
the record, and (3) the court’s finding that the plaintiff’s
claim that it no longer needed the defendant’s services
lacked credibility was inconsistent with its own factual
findings. The court issued an order on October 28, 2013,
stating that, after reviewing the motion for reargument
and the objection thereto, the court reconsidered its
decision, and the decision would ‘‘remain as articu-
lated.’’ This appeal followed.4
The plaintiff claims on appeal that the trial court
improperly concluded that the defendant was not
unjustly enriched, despite the fact that the defendant
kept payments that the plaintiff contends it inadver-
tently made to the defendant after the plaintiff had
terminated the parties’ contract for on call services,
and despite an independent contractual obligation of
the defendant’s physicians to provide emergency room
coverage without compensation pursuant to the individ-
ual staffing privileges agreements with the plaintiff. The
defendant responds that the court correctly determined
that it was not unjustly enriched because the payments
that it received from the plaintiff following the termina-
tion of their contract amounted to reasonable compen-
sation for the on call services that the defendant
continued to provide for the plaintiff, services that the
court specifically found the defendant’s physicians had
no independent obligation to provide free of charge.
We agree with the defendant.
‘‘A right of recovery under the doctrine of unjust
enrichment is essentially equitable, its basis being that
in a given situation it is contrary to equity and good
conscience for one to retain a benefit [that] has come
to him at the expense of another. . . . With no other
test than what, under a given set of circumstances, is
just or unjust, equitable or inequitable, conscionable or
unconscionable, it becomes necessary in any case [in
which] the benefit of the doctrine is claimed, to examine
the circumstances and the conduct of the parties and
apply this standard. . . . Unjust enrichment is, consis-
tent with the principles of equity, a broad and flexible
remedy. . . . Recovery [for unjust enrichment] is
proper if the defendant was benefited, the defendant
did not [perform in exchange] for the benefit and the
failure [to perform] operated to the detriment of the
plaintiff.’’ (Internal quotation marks omitted.) BHP
Land Services, LLC v. Seymour, 137 Conn. App. 165,
170, 47 A.3d 950, cert. denied, 307 Conn. 927, 55 A.3d
569 (2012); see also National CSS, Inc. v. Stamford,
195 Conn. 587, 597, 489 A.2d 1034 (1985) (‘‘it is contrary
to equity and good conscience for the defendant to
retain a benefit which has come to him at the expense
of the plaintiff’’ [internal quotation marks omitted]).
Our review of a trial court’s conclusion regarding
whether a defendant has been unjustly enriched is def-
erential. See New Hartford v. Connecticut Resources
Recovery Authority, 291 Conn. 433, 452, 970 A.2d 592
(2009). As explained by our Supreme Court, ‘‘[t]he
court’s determinations of whether a particular failure
to [perform] was unjust and whether the defendant was
benefited are essentially factual findings . . . that are
subject only to a limited scope of review on appeal.
. . . Those findings must stand, therefore, unless they
are clearly erroneous or involve an abuse of discretion.
. . . This limited scope of review is consistent with the
general proposition that equitable determinations that
depend on the balancing of many factors are committed
to the sound discretion of the trial court.’’ (Internal
quotation marks omitted.) Id.
‘‘We will reverse a trial court’s exercise of its equita-
ble powers only if it appears that the trial court’s deci-
sion is unreasonable or creates an injustice. . . .
[E]quitable power must be exercised equitably . . .
[but] [t]he determination of what equity requires in a
particular case, the balancing of the equities, is a matter
for the discretion of the trial court. . . . In determining
whether the trial court has abused its discretion, we
must make every reasonable presumption in favor of
the correctness of its action. . . . Our review of a trial
court’s exercise of the legal discretion vested in it is
limited to the questions of whether the trial court cor-
rectly applied the law and could reasonably have
reached the conclusion that it did.’’ (Citation omitted;
internal quotation marks omitted.) Croall v. Kohler, 106
Conn. App. 788, 791–92, 943 A.2d 1112 (2008).
Having carefully reviewed the record in the present
case, we conclude that the court reasonably could have
concluded, on the basis of the facts and circumstances
presented, including the actions of the parties, that the
defendant was not unjustly enriched. Although the
plaintiff would have us view the present situation as a
simple matter of overpayment for which it should be
entitled to restitution; see 1 Restatement (Third), Resti-
tution and Unjust Enrichment, Benefits Conferred by
Mistake § 6, p. 59 (2011) (‘‘[p]ayment by mistake gives
the payor a claim in restitution against the recipient to
the extent payment was not due’’); such a view is not
borne out by the record as a whole.
It is undisputed that the plaintiff continued to make
monthly payments to the defendant, totaling $66,666.64,
for eight months after the plaintiff had terminated its
contractual obligation to make such payments in
exchange for on call coverage. Although the court made
no findings as to precisely why the plaintiff continued
to make those payments despite having terminated its
contract with the defendant, the court found that the
payments ‘‘were not in error and were part and parcel
of the parties’ payment arrangement.’’ We construe this
finding as an acknowledgement that the plaintiff contin-
ued to pay the defendant in the same manner that it had
done for years because the physicians of the defendant
continued to be placed on the schedule and provided
on call coverage as requested. As the court expressly
found, the defendant had done nothing to induce the
plaintiff to make the additional payments nor had it
sought to have its physicians placed on the monthly on
call schedules following the termination of the contract.
The plaintiff does not challenge those findings.
The continuation of payments by the plaintiff
undoubtedly amounted to a benefit conferred on the
defendant. For purposes of resolving the plaintiff’s
unjust enrichment claim, however, the court properly
focused its consideration not on the benefit conferred
by the plaintiff, but on whether the defendant had pro-
vided some reciprocal benefit to the plaintiff. In other
words, it considered whether the defendant was justi-
fied in retaining the benefit conferred by the plaintiff
because the defendant performed in exchange for that
benefit by continuing to provide the same on call ser-
vices that it had provided to the plaintiff for years pursu-
ant to the parties’ express contract. The court found
that the plaintiff’s argument that it no longer needed
the defendant’s services was not credible, and that find-
ing is supported by the simple and undisputed fact that
the defendant’s physicians continued to be placed on
the on call schedule. In sum, the court reasonably found
that the defendant’s physicians provided valuable and
necessary on call coverage as scheduled, and, therefore,
the plaintiff’s continued payments could not reasonably
be viewed as inequitable because they simply extended
the parties’ mutually beneficial relationship, a relation-
ship that was initiated by the plaintiff at the bargained
for rate.
The plaintiff nevertheless argues that it was entitled
to the very same on call services from the defendant’s
physicians without compensation and, thus, that any
payments retained by the defendant enriched the defen-
dant to the detriment of the plaintiff. In support of
its argument, the plaintiff references portions of the
individual staffing privileges agreements executed by
the defendant’s physicians in conjunction with the on
call agreement between the plaintiff and the defendant.
The staffing privileges agreements were not terminated
at the same time as the parties’ on call agreement and
remained in effect until the defendant’s physicians vol-
untarily terminated those agreements by reverting to
courtesy staff status when the dispute over on call com-
pensation arose. According to the plaintiff, the court
incorrectly concluded that there was no express
requirement in the plaintiff’s medical staff bylaws or
rules and regulations that mandated that all physicians
with active medical staff privileges had to provide on
call coverage without compensation, and that whether
a physician was compensated was a matter of policy,
not a contractual obligation. We agree with the
court’s conclusions.
‘‘The intent of the parties as expressed in a contract
is determined from the language used interpreted in
the light of the situation of the parties and the circum-
stances connected with the transaction. . . . [T]he
intent of the parties is to be ascertained by a fair and
reasonable construction of the written words and . . .
the language used must be accorded its common, natu-
ral, and ordinary meaning and usage [if] it can be sensi-
bly applied to the subject matter of the contract. . . .
[If] the language of the contract is clear and unambigu-
ous, the contract is to be given effect according to its
terms. . . . It is well established that [if] there is defini-
tive contract language, the determination of what the
parties intended by their contractual commitments is
a question of law. . . . It is axiomatic that a matter of
law is entitled to plenary review on appeal.’’ (Citations
omitted; emphasis omitted; internal quotation marks
omitted.) Crews v. Crews, 295 Conn. 153, 162, 989 A.2d
1060 (2010).
Pursuant to the staffing privileges agreements, the
defendant’s physicians unambiguously agreed to com-
ply with the plaintiff’s medical staff bylaws, rules and
regulations. Article III, section 3 (d) of the bylaws
requires that all applications for staff appointment con-
tain an acknowledgement of ‘‘every medical staff mem-
ber’s obligations . . . to participate in staffing the
emergency service area and other special care units.’’
Article IV, section 5 of the bylaws provides that all
active medical staff will ‘‘assume all the functions and
responsibilities of membership on the active medical
staff, including, where appropriate, emergency service
care and consultation assignments.’’ (Emphasis added.)
Finally, section II, subsection H of the medical staff
rules and regulations provides: ‘‘Each member of the
active [medical] staff is expected to cover the emer-
gency room for both staff service and unassigned pri-
vate patients on a rotational basis as assigned.’’
Compensation, however, is not addressed in any of
the previously quoted provisions. The plaintiff has
pointed to no language that reasonably can be con-
strued as creating a contractual obligation on the part
of the defendant or its physicians to provide emergency
on call coverage free of charge. Indeed, the bylaws are
silent as to how often an active medical staff member
would be obligated to provide on call services at the
hospital, a fact that any physician with a busy private
practice would undoubtedly wish to know before com-
mitting to such an agreement. As the court found in its
decision, and as acknowledged by the plaintiff’s chief
medical officer at trial, nothing in the staff privileges
agreements addresses whether a physician will be paid
for providing on call services; that is a matter of policy
left to the discretion of the plaintiff. The plaintiff was
well aware of the defendant’s position that it expected
to be paid for on call coverage. Prior to execution of
the on call agreement, the defendant’s physicians were
members of the plaintiff’s courtesy staff and had no
emergency coverage obligations with the plaintiff. They
joined the hospital’s active medical staff in order to be
able to fulfill their staffing obligations under the on call
agreement, pursuant to which they were to be paid
for on call coverage. The plaintiff had no reasonable
expectation that the defendant’s physicians would
remain on the active medical staff if they were no longer
compensated for on call services and, in fact, when the
plaintiff stopped paying for those services, the defen-
dant’s physicians immediately reverted to courtesy
status.
We conclude that the plaintiff has failed to show that,
in balancing the equities, the court abused its discretion
by concluding that the defendant had not been unjustly
enriched. Although, as a general rule, ‘‘one who pays
money to another by mistake as to the existence of the
obligation or the validity of it, in such circumstances
that the payment does not amount to a waiver, is entitled
to recover the amount paid’’; 66 Am. Jur. 2d 779, Restitu-
tion and Implied Contracts § 124 (2011); the trial court
did not abuse its discretion by determining that the
defendant in the present case did not enrich itself to the
detriment of the plaintiff by retaining what the plaintiff
alleged were inadvertent payments, because it provided
a return benefit of equal value to the plaintiff in the
form of continued on call coverage.
The judgment is affirmed.
In this opinion the other judges concurred.
1
This matter previously was before us on an appeal by the plaintiff from
the trial court’s granting of summary judgment on the two count complaint
in favor of the defendant. We affirmed the court’s decision to grant summary
judgment with respect to the plaintiff’s count alleging statutory theft pursu-
ant to General Statutes § 52-564. See Hospital of Central Connecticut v.
Neurosurgical Associates, P.C., 139 Conn. App. 778, 788, 57 A.3d 794 (2012).
We reversed, however, the court’s decision to grant summary judgment with
respect to the plaintiff’s unjust enrichment count. See id.
2
The trial court found that the defendant’s physicians were all active
medical staff members of Saint Francis Hospital in Hartford.
3
The staffing privileges agreements comprise a reapplication for appoint-
ment to the medical staff signed by the physician and a letter signed by the
plaintiff’s agent accepting the application for a specified appointment period.
The reapplication contains a provision in which the physician agrees ‘‘to
abide by the [m]edical [s]taff [b]ylaws and [r]ules and [r]egulations of the
[plaintiff] and to comply with the requirements of my medical staff appoint-
ment for meeting attendance, continuing education credits, participation in
teaching activities and committee assignments as outlined in those doc-
uments.’’
4
We note that on June 12, 2014, the plaintiff filed a motion for articulation
asking the trial court to answer (1) whether the parties’ on call agreement
was terminated by the plaintiff’s August, 2007 notice letter, (2) whether
coverage of the emergency room as set forth in the plaintiff’s bylaws, rules
and regulations was solely a matter of policy or a contractual obligation
that a doctor assumed under the staffing privileges agreement, and (3)
whether the staffing privileges agreement survived the termination of the
on call agreement. The court denied the motion, stating that its ‘‘memoran-
dum of decision is fully articulated.’’ The plaintiff did not file a motion
pursuant to Practice Book § 66-7 asking this court to review that decision.
|
01-03-2023
|
07-30-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/2434910/
|
610 S.W.2d 572 (1981)
Ricky Gene FERRELL et al, Appellants,
v.
Frank Jack WHITTINGTON, Appellee.
No. 80-260.
Supreme Court of Arkansas.
January 26, 1981.
*573 Pickens, Boyce, McLarty & Watson by James A. McLarty, Newport, for appellants.
Barrett, Wheatley, Smith & Deacon, Little Rock, for appellee.
GEORGE ROSE SMITH, Justice.
In this action for personal injuries and property damage suffered by the appellants in a traffic collision, judgment for the defendant, Whittington, was entered pursuant to a jury verdict apportioning negligence in the ratio of 60% in Ferrell, one of the drivers, and 40% in Whittington, the other driver. A motion for a new trial, on the ground that the verdict was against the preponderance of the evidence, was denied. This appeal is solely from that denial and comes to this court as a tort action. Rule 29 (1)(o).
The case is argued as if the test on review were whether the trial court abused its discretion in denying the motion. True, that is the test when the trial judge grants such a motion, finding the verdict to be contrary to the preponderance of the evidence. Smith v. Villarreal, 253 Ark. 482, 486 S.W.2d 671 (1972). But the trial judge is in a far better position than we to weigh the evidence, which he has heard; so if he denies the motion we determine only if the verdict is supported by substantial evidence. Brady v. City of Springdale, 246 Ark. 1103, 441 S.W.2d 81 (1969). The grounds for a new trial were not changed by the Rules of Civil Procedure. Rule 59 and its Reporter's Note 2.
The collision occurred at the intersection of U.S. Highway 64 and State Highway 5, in White county. Whittington was traveling south on Highway 5 and unquestionably stopped in obedience to a stop sign and a flashing red light. Such signals require a motorist to stop and indicate that the other street has the preferential right of way. Ark.Stat.Ann. §§ 75-506(1) and 75-645 (Repl. 1979). There was also a flashing yellow light facing traffic on Highway 64, requiring Ferrell, who was approaching from Whittington's left, to proceed through the intersection with caution. § 75-506(2).
Whittington and his passenger both testified that, after stopping, they looked to their left and saw nothing and looked to their right and saw a car some distance away. Whittington testified he had plenty of time to get across and entered the intersection. He did not see Ferrell's car until he heard the squealing of brakes. The front of Ferrell's car struck the side of the Whittington car with such force that Ferrell's car was "totaled." Whittington testified that he had no way of knowing Ferrell's speed, as he did not see the car, but he said he believed "if the speed had been within the range of the sign down the road, 40 miles per hour, that he could have stopped or gone back of me." After the collision, which momentarily lifted the Whittington car on two wheels, the front of that car was six feet past the center of the intersection.
Ferrell, as the plaintiff, had the burden of proof, but his own testimony, even if accepted, did not negative the possibility of negligence on his part. He said he did not see a speed limit sign as he approached the intersection. A police officer had testified that the yellow caution light was visible from a distance of 500 feet or more. Ferrell said he was traveling 50 to 55 miles an hour when he saw the caution light and *574 began to reduce his speed, but he made no attempt to say how far from the light he was when he saw it. He could not say to what speed he had slowed when he saw the other car begin to cross the highway. He did say, three times, that at that point he "got on" his brakes, but he could not avoid the collision. His car left only 66 feet of skid marks.
The appellant designated an abbreviated record, without the court's instructions, but we must assume that the jury was correctly instructed. Under AMI 905 Whittington, after stopping, was required to yield the right of way to vehicles which were approaching so closely "as to constitute an immediate hazard." If Whittington so yielded and had time to cross the highway (as he testified), the drivers of other vehicles were required to yield the right of way to him. AMI Civil 2d, 905 (1974); see also Brown v. Parker, 217 Ark. 700, 233 S.W.2d 64 (1950); Casenote, 7 Ark.L.Rev. 413 (1953). Moreover, under AMI 907 the jury were presumably told that a driver cannot obtain the right of way by negligent conduct.
We do not review a jury's apportionment of comparative negligence if fairminded men might differ about it (which is essentially the same test as that of substantial evidence). McDonald v. Hickman, 252 Ark. 300, 478 S.W.2d 753 (1972). Here the jury could reasonably have found that Ferrell was negligent in not seeing the 40-mile sign, that he did not reduce his speed sufficiently when he should have seen the caution light, that he did not apply his brakes at all until it was far too late, and that the "totaling" of his car indicated that he was still traveling at high speed when the collision occurred. On the other hand, Whittington could be found to have entered the intersection with some care after he had first stopped. There is ample substantial evidence to support the jury's conclusion that Ferrell's negligence was greater than Whittington's.
Affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434915/
|
610 S.W.2d 173 (1980)
TEXACO, INC., Appellant,
v.
Louis M. LeFEVRE, Appellee.
No. 17765.
Court of Civil Appeals of Texas, Houston (1st Dist.).
October 30, 1980.
Rehearing Denied November 27, 1980.
*174 John D. White, Houston, for appellant.
Lieberman & Tratras, Richard P. Greenberg and Murray L. Lieberman, Houston, for appellee.
Before PEDEN, EVANS and WARREN, JJ.
WARREN, Justice.
This is an appeal from an order overruling a motion to dissolve a temporary injunction which prohibits Texaco from withholding sums from appellee's salary as ordered by an out-of-state judgment.
The question for our determination is whether the trial court should have dissolved an existing temporary injunction which was in conflict with a judgment entered by a federal district court of New York, in an interpleader action to which appellee and appellant were parties.
In March of 1974, Louis LeFevre filed suit for divorce against Lillian LeFevre in the Supreme Court of Nassau County, New York. At that time, both Mr. and Mrs. LeFevre were residents of Nassau County and Mr. LeFevre was an employee of Texaco, Inc. On September 19, the court dismissed the suit for divorce, but pursuant to New York law entered a judgment for alimony directing that appellee pay Lillian LeFevre $60.00 per week, all of her medical and dental expenses and the carrying charges on the marital residence occupied by her.
Thereafter, appellee moved to Texas, filed a suit for divorce and on July 23, 1976, a decree was entered in a Domestic Relations Court of Harris County, which dissolved the marriage, awarded the marital residence to Mrs. LeFevre and directed that she be responsible for the carrying charges on the home.
*175 On October 17, 1978 an order was entered in a Supreme Court of Nassau County, New York granting to Mrs. LeFevre a money judgment for $20,901 against appellee for arrearage on the alimony payments ordered by the court in the September 19, 1974, decree. The October 17 order further directed that Texaco, Inc., appellee's employer, deduct the total of $155 per week from the wages of appellee until such time as the arrearage was satisfied.
After Texaco, Inc. had made deductions pursuant to the New York order of October 17, appellee on November 29 filed suit in a District Court of Harris County seeking a temporary injunction prohibiting Texaco from withholding any amounts from his salary as ordered by the New York decree. On December 22, a temporary injunction was granted enjoining Texaco from withholding any sum of money from appellee's salary to satisfy the New York judgment.
On January 8, 1979, Mrs. LeFevre obtained an order in the New York Supreme Court requiring Texaco to appear on January 22, and show cause why it should not be held in contempt for failing to obey the October 17, 1978, order which directed it to withhold sums from appellee's salary to satisfy the alimony arrearage.
On January 19, Texaco filed a sworn interpleader in a federal district court in the Eastern District of New York, stating that it was a disinterested stakeholder, that the corpus was being claimed by citizens of two different states and that it was in peril of being held in contempt because of conflicting orders issued by courts of two different states. Texaco prayed for an injunction prohibiting appellee and Mrs. LeFevre from instituting any further legal actions against Texaco and discharging Texaco from any liability for violation of either of the state court orders. The federal court granted a temporary restraining order as prayed for by Texaco and on November 9 a final judgment was entered in the interpleader action decreeing that: (1) the New York Supreme Court had in personam jurisdiction over the parties when it rendered the decree of September 19, 1974, ordering appellee to pay alimony; (2) the judgment of September 19, 1974 was entitled to full faith and credit; (3) the Court of Domestic Relations No. 5 of Harris County did not have in personam jurisdiction over the parties when it granted the divorce on July 23, 1976, and this order was null and void and was not entitled to full faith and credit as to any property rights existing between the parties, and (4) there was no proper basis for the District Court of Harris County to enjoin Texaco from complying with the October 17, 1978 order of the Supreme Court of New York, which mandated a deduction from the wages of appellee.
The order: (1) enjoined the District Court of Harris County from enforcing its contempt order prohibiting Texaco from withholding sums from appellee's wages, (2) discharged Texaco from any liability for claimed violations of the New York court order, (3) ordered a distribution of the money being held by Texaco and enjoined the parties from bringing other actions affecting the subject matter except in the state court of New York.
At the contempt hearing in our case the district court refused to hold Texaco in contempt but also refused to dissolve the injunction.
In two points of error appellant contends: (1) that the trial court erred in overruling its motion to dissolve the temporary injunction because as a matter of law Texaco had a right to rely on the judgment of the federal district court for the Eastern District of New York thereby rendering the temporary injunction void and of no effect and, (2) as a matter of law the order of the supreme court of New York was entitled to full faith and credit.
After being confronted with conflicting orders from different states concerning whether it should or should not withhold sums from the wages of appellee, appellant filed the interpleader action in the federal district court as authorized by 28 U.S.C., Sections 1335, 1397 and 2361. Section 2283 provides that "a court of the United States may not grant an injunction to stay proceedings in a state court except as expressly *176 authorized by an Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments." Section 1335 grants jurisdiction to the federal district courts over an interpleader action provided the value of property or the amount in custody of the person or entity filing the interpleader is in excess of $500, if two or more adverse claimants of diverse citizenship are claiming such money or property and if the plaintiff-custodian has deposited such money or property into the registry of the Court, there to abide the judgment of the court or has made sufficient bond payable to the Clerk of the court, conditioned upon the compliance of plaintiff-custodian with the future orders of the court with respect to the subject matter of the controversy.
The facts of our case show that appellant was entitled to avail itself of the provisions of these statutes so that it could once and for all extricate itself from the certain liability it faced whether it withheld wages or refused to withhold them. Venue was proper under section 1397 which permits an interpleader action to be filed in the federal judicial district where one or more of the claimants reside.
Section 2361 expressly authorizes the federal district courts to enjoin the claimants in an interpleader action from pursuing other actions which might affect the property or obligation involved in the interpleader. The statute further empowers the court to "make all appropriate orders to enforce its judgment." The power of the federal district courts to issue such orders has been consistently upheld. Holcomb v. Aetna Life Ins. Co., 228 F.2d 75 (10th Cir. 1955) cert. denied 350 U.S. 986, 76 S. Ct. 473, 100 L. Ed. 853, rehearing denied 350 U.S. 1016, 76 S. Ct. 657, 100 L. Ed. 875; Austin v. Texas-Ohio Gas, 218 F.2d 739 (5th Cir. 1957); Francis I. duPont Co. v. Sheen, 324 F.2d 3 (3rd Cir. 1963). The need for such statutes is more clearly demonstrated in our case than any of those reported. The propriety of one trial court enjoining another is questionable, but a discussion of this would serve no purpose since it is not necessary to our decision.
Appellee contends that the interpleader action brought by Texaco in the federal district court in New York constituted a collateral attack on the divorce decree rendered by the Court of Domestic Relations No. 5 of Harris County. A collateral attack on a judgment is an effort to avoid its binding force in a proceeding, instituted not for the purpose of correcting, modifying, or vacating it, but in order to obtain specific relief against which the judgment stands as a bar. 34 Tex.Jur.2d Judgments § 286.
The interpleader action brought by Texaco in the federal district court did not constitute a collateral attack on any Texas judgment. The relief sought was for the determination of the rightful owner of the funds held by Texaco and the absolution of Texaco from past and future claims and lawsuits arising from the fact that it was the custodian.
We hold that Texaco was entitled to submit the cause to the federal district court, that that court was empowered under the above mentioned statutes to determine the questions involved and that our state court was bound to follow the decision of the federal district court even if the effect would be to allow the garnishment of wages, which our state court could not do because of the prohibition of art. 3836 and art. 4099, V.A.C.S., and art. 16, § 28 Constitution of the State of Texas.
As this holding is determinative of the cause, we do not reach the question of full faith and credit.
The judgment is reversed and the injunction is ordered dissolved.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434944/
|
610 S.W.2d 849 (1980)
PRAIRIE CATTLE COMPANY, Appellant,
v.
Gary FLETCHER and T. L. H. Cattle Company, a Partnership, Appellees.
No. 9198.
Court of Civil Appeals of Texas, Amarillo.
December 31, 1980.
Rehearing Denied January 28, 1981.
*850 Cox & Hurt, Joe L. Cox, Plainview, Jennings & Bookout, Tulia, for appellant.
LaFont, Tunnell, Formby, LaFont & Hamilton, Larry McEachern, Plainview, for appellees.
*851 COUNTISS, Justice.
This is a suit under the Deceptive Trade Practices Consumer Protection Act, sections 17.41, et seq. Tex.Bus. & Com.Code Ann. (Vernon Supp. 1980-1981).[1] We have concluded that reversible error was not preserved in the trial court; accordingly, we affirm.
In July of 1977, appellees Gary Fletcher and T. L. H. Cattle Company (hereinafter "Fletcher" and "T. L. H.") purchased approximately 480 head of cattle and placed them in a commercial feedlot owned by appellant Prairie Cattle Company (hereafter "Prairie"). The cattle were placed in Prairie's feedlot for several months of feeding, fattening, and conditioning preparatory to their sale to a commercial meat processor. Prairie was responsible for the feeding and care of the cattle and billed the cost to Fletcher and T. L. H. on a monthly basis.
The dispute in the case concerns the cost of feeding the cattle. Fletcher and a T. L. H. representative testified to the following sequence of events. Fletcher discussed the "cost of gain"[2] with a Prairie representative, Mr. Mancini, when the cattle were sent to the feedlot and was told the cost would be thirty-four and one-half cents to thirty-six and one-half cents. When Fletcher and T. L. H. were billed by Prairie for the July costs, Fletcher determined that the cost of gain was thirty-eight and one-half cents to forty-two cents. He then contacted Mancini and told him the cattle were costing more than thirty-four and one-half cents to thirty-six and one-half cents. Mancini responded, "No, they're not," and told Fletcher his method of figuring the cost of gain was erroneous.
When the August bill arrived, Fletcher determined that the cost of gain was even higher than in July, and he again contacted Mancini. Mancini again insisted that the cattle were feeding for thirty-four and one-half cents to thirty-six and one-half cents and told Fletcher that he [Fletcher] didn't know what he was doing.
The September bill indicated a cost of gain of over forty cents. Fletcher and T. L. H. then sold the cattle, earlier than originally intended, to a commercial meat processor. The purchaser left the cattle in the feedlot for several more weeks. Fletcher's exhibits indicate that the average cost of gain during the entire time the cattle were in the feedlot was approximately forty cents per pound gained per animal.
Prairie's representative, Mancini, controverted many aspects of the foregoing testimony. He specifically denied telling Fletcher that the cost of gain for the cattle would be thirty-four and one-half cents to thirty-six and one-half cents or that the cattle were feeding for that cost while they were in the lot.
Fletcher and T. L. H. filed this suit seeking damages for the difference between the actual cost of gain and the cost of gain they contend Prairie, through Mancini, told them they would incur. After stating that the suit was for damages for the commission of deceptive trade practices under the Act, and enumerating various other theories of recovery, they alleged:
Defendant ... also committed violations of section 17.46 of the Act, to-wit:
(a) passing off cattle as feeding for 35 cents when in fact they were feeding for approximately 40 cents per pound;
* * * * * *
(d) causing confusion and misunderstanding as to how much these pens of cattle were feeding for.
*852 The case was tried and submitted to the jury on the theories represented by the above-quoted allegations. Special issues one and two, and the jury's answers, are as follows:
SPECIAL ISSUE NO. 1
Do you find from a preponderance of the evidence that agents and employees of the Prairie Cattle Company passed off these cattle in question as feeding for 34½¢ to 36½¢ when they were actually feeding for approximately 40¢ per lb.
Answer "yes" or "no"
Answer: yes
SPECIAL ISSUE NO. 2
Do you find from a preponderance of the evidence that agents and employees of Prairie Cattle Company caused confusion or misunderstanding as to how much these pens of cattle in question were feeding for?
Answer: "They did cause" or "They did not cause"
Answer: They did cause
No issue was submitted inquiring whether the acts inquired about in issues one and two were deceptive trade practices. On the basis of the jury's answers to the foregoing and other issues, the trial court rendered judgment awarding Fletcher and T. L. H. $15,000 plus attorneys fees.[3]
In this court, Prairie presents three general points, asserting error by the trial court in overruling its exceptions to pleadings, its exceptions and objections to the charge and its motion for judgment notwithstanding the verdict. Fletcher and T. L. H. point out, correctly, that the points of error do not comply with Rule 418.[4] However, we are able to ascertain the specific errors asserted by Prairie in its argument. We are, therefore, required to pass on them. Fambrough v. Wagley, 140 Tex. 577, 169 S.W.2d 478 (1943).
Prairie presents a four-step argument. It says the two acts alleged by Fletcher and T. L. H. and found by the jury are not per se violations under the section 17.46(b) "laundry list." Therefore, if the acts are to be treated as deceptive trade practices, they must come under the general provisions of section 17.46(a). Under that section, however, the jury must find (1) that the act occurred and (2) that it was a deceptive trade practice. Since the jury was not asked whether the acts were deceptive trade practices, Prairie contends Fletcher and T. L. H. failed to obtain a jury finding on an element essential to their recovery and thus cannot prevail.
Prairie's argument is essentially correct. As will be demonstrated in the final portion of this opinion, however, a missing element that will support the judgment of the trial court must be deemed found under Rule 279 because Prairie did not properly object to the charge.
During the dates pertinent to this case, the portions of section 17.46 applicable here read as follows:
§ 17.46. Deceptive Trade Practices Unlawful
(a) False, misleading, or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.
(b) The term `false, misleading, or deceptive acts or practices' includes, but is not limited to, the following acts:
(1) passing off goods or services as those of another;
(2) causing confusion or misunderstanding as to the source, sponsorship, approval, or certification of goods or services;
The Act does not define a deceptive trade practice. In Spradling v. Williams, 566 S.W.2d 561, 562-64 (Tex.1978), however, the Texas Supreme Court approved an instruction defining deceptive trade practices as:
Any false, misleading or deceptive acts or practices in the conduct of any trade or commerce. You are instructed that the term "false, misleading, or deceptive acts or practices" means an act or series of acts which has the capacity or tendency *853 to deceive an average or ordinary person, even though that person may have been ignorant, unthinking, or credulous.
Spradling v. Williams also outlines the proper method of submitting a section 17.46 case to the jury. If the act or practice in dispute is one of those specifically listed under section 17.46(b), the jury is asked if the act or practice occurred. It is not, however, asked if the act or practice is a deceptive trade practice. If the jury finds the act or practice did in fact occur, the act or practice is a deceptive trade practice as a matter of law, because section 17.46(b) declares the practice to be unlawful.
If the act or practice in dispute is not specifically listed under section 17.46(b) it may still be a deceptive trade practice under section 17.46(a). In that case, however, the jury is given the definition of a deceptive trade practice, asked if the act or practice occurred and also asked if the act or practice is a deceptive trade practice. 566 S.W.2d at 563-564. Thus, whether an act or practice found under section 17.46(a) is a deceptive trade practice is a question of fact.
Appellees Fletcher and T. L. H. defend the favorable judgment by arguing that the finding by the jury that Prairie passed off the cattle as feeding for thirty-four and one-half cents to thirty-six and one-half cents when they were actually feeding for forty cents is a finding of an act or practice that is a deceptive trade practice as a matter of law under section 17.46(b)(1). They further contend that the finding that Prairie caused confusion or misunderstanding on the amount for which the cattle were feeding is a finding of an act or practice that is a deceptive trade practice as a matter of law under section 17.46(b)(2).
We do not agree that the acts found by the jury are section 17.46(b) violations. Section 17.46(b)(1) pertains to the passing off of goods or services as those of another. It is primarily concerned with deception in the identity of a good or service, as when a different brand of good or service is substituted for the one requested by the consumer. Bragg, Texas Consumer Litigation § 3.06 (1978). The act found by the jury in special issue number one could reasonably be related to deception in the cost of a service but it is not deception in the identity of the service.
Section 17.46(b)(2) pertains to the causing of confusion or misunderstanding as to the source, sponsorship, approval or certification of goods or services. It is primarily concerned with deception in the origin or endorsement of a good or service. Texas Consumer Litigation, id., at § 3.07. The act found by the jury in special issue number two, as in special issue number one, could reasonably be related to deception in the cost of a service. It is not, however, deception in the origin or endorsement of the service.
The two acts found by the jury are not deceptive trade practices as a matter of law. We are satisfied, however, that they are acts of a false, misleading or deceptive nature that have the capacity to deceive an average or ordinary person. Thus, they are acts that the jury could have found to be deceptive trade practices as a matter of fact under section 17.46(a), had that issue been submitted to the jury.
The final inquiry, then, is whether the failure of Fletcher and T. L. H. to secure a fact finding on the second element of their causes of action, i. e., that the acts were deceptive trade practices as a matter of fact, is fatal to their recovery. We conclude that it is not because of the provisions of Rule 279.
Prairie objected to the court's charge on numerous grounds. We do not find, however, an objection to the failure to submit an issue inquiring whether the act inquired about in special issue number one is a deceptive trade practice.[5] Rule 279, as pertinent here, states:
*854 [W]here such ground of recovery or of defense consists of more than one issue, if one or more of the issues necessary to sustain such ground of recovery or of defense, and necessarily referable thereto, are submitted to and answered by the jury, and one or more of such issues are omitted, without such request, or objection, and there is evidence to support a finding thereon, the trial court, at the request of either party, may after notice and hearing and at any time before the judgment is rendered, make and file written findings on such omitted issue or issues in support of the judgment, but if no such written findings are made, such omitted issue or issues shall be deemed as found by the court in such manner as to support the judgment.
See also Allen v. American National Ins. Co., 380 S.W.2d 604, 609 (Tex.1964).
The missing issue, inquiring whether the act inquired about in special issue number one is a deceptive trade practice, is a controlling issue that is one of a cluster of issues embodying a theory of recovery. It should have been submitted. Since no objection was made to its omission, however, and there is evidence to support a finding that the act was a deceptive trade practice, we must deem it found by the trial court "in such manner as to support the judgment" under the clear language of Rule 279.
Points of error one, two and three are overruled. The judgment of the trial court is affirmed.
NOTES
[1] All references hereafter to sections 17.41, et seq., or to "the Act" refer to the Deceptive Trade Practices Consumer Protection Act as amended in 1977. 1973 Tex.Gen.Laws, ch. 143 § 1, at 322; 1977 Tex.Gen.Laws, ch. 216, § 1, at 600; 1977 Tex.Gen.Laws, ch. 336, § 1, at 892. Numerous references will be made to the 1977 version of section 17.46 of the Act.
[2] "Cost of gain" is a term of art in the cattle industry and refers to the cost of putting weight on the animal. It is usually used in the context of a "per pound" basis; thus, a statement that the cost of gain was thirty-five cents means it cost the owner of the animal thirty-five cents to add one pound to the animal's weight. The lower the cost of gain, the greater the return on the investment for the owner of the cattle.
[3] The jury found total actual damages of $5,000 and the trial court trebled the damages under section 17.50 of the Act.
[4] All references to rules are to the Texas Rules of Civil Procedure.
[5] There is an objection that could be construed as preserving error because of the failure to inquire whether the act inquired about in special issue number two was a deceptive trade practice. Since either act is sufficient to support the judgment, we will not further discuss the second act.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434946/
|
610 S.W.2d 735 (1980)
Ward BURNETT et al., Petitioners,
v.
Charles MOTYKA, Respondent.
No. B-9623.
Supreme Court of Texas.
November 5, 1980.
*736 Lawrence L. Mealer, Dallas, for petitioners.
Herbert Garon, Jr., Dallas, for respondent.
PER CURIAM.
In a negligence suit, Charles Motyka sought to recover property damages against Ward Burnett and Wanda Burnett, his daughter. Damages were stipulated, leaving only the liability issue for trial. In a nonjury trial, judgment was rendered against the Burnetts. The Burnetts then appealed without requesting findings of fact or conclusions of law, challenging the factual and legal sufficiency of the evidence to support the trial court's judgment. The court of civil appeals affirmed. 599 S.W.2d 671. We reverse the judgment of the court of civil appeals and remand the cause to that court.
In a nonjury trial, where no findings of fact or conclusions of law are filed or requested, it will be implied that the trial court made all the necessary findings to support its judgment. Goodyear Tire and Rubber Co. v. Jefferson Construction Co., 565 S.W.2d 916 (Tex.1978); Lassiter v. Bliss, 559 S.W.2d 353 (Tex.1978). These implied findings may be challenged by "insufficient evidence" and "no evidence" points the same as jury findings and a trial court's findings of fact. In the court of civil appeals, the Burnetts sought to challenge the trial court's implied findings on both of these grounds. In purporting to resolve these points, the court stated:
In determining whether there is any evidence to support the judgment and the implied findings of fact incident thereto, the appellate court can only consider that evidence that is favorable to the judgment and must disregard entirely that which is opposed to it.
599 S.W.2d at 673. It then proceeded by considering only that evidence favorable to the trial court's judgment. The court's opinion ended: "The evidence viewed in its most favorable light was sufficient to support the trial court's judgment. The judgment of the trial court is affirmed." Id. at 673.
We recognize that the above rule announced by the court of civil appeals is the correct rule to be applied to "no evidence" points. However, we have on numerous occasions held that a different rule must be applied to "insufficient evidence" points. In determining that question the court must consider and weigh all the evidence, including any evidence contrary to the trial court's judgment. In re King's Estate, 150 Tex. 662, 244 S.W.2d 660 (1952); Harrison v. Chesshir, 159 Tex. 359, 320 S.W.2d 814 (1959); Watson v. Prewitt, 159 Tex. 305, 320 S.W.2d 815 (1959).
In this case, it is clear that the court of civil appeals, in applying only the no evidence rule, failed to consider and weigh all the evidence, thereby failing to properly rule on the Burnetts' "insufficient evidence" points. We conclude that this cause therefore must be remanded to that court for consideration of these points.
Pursuant to Rule 483, Texas Rules of Civil Procedure, the application for writ of error is granted, and without hearing oral argument, we reverse the judgment of the court of civil appeals and remand the cause to that court for a determination not inconsistent with this opinion.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434948/
|
610 S.W.2d 375 (1980)
Joseph D. SORBELLO, Appellant,
v.
CITY OF MAPLEWOOD, Missouri, Respondent.
No. 41623.
Missouri Court of Appeals, Eastern District, Division Three.
December 9, 1980.
*376 Arthur S. Margulis, St. Louis, for appellant.
R. Jon Bopp, Ballwin, for respondent.
REINHARD, Judge.
Petitioner Joseph D. Sorbello appeals from a judgment of the circuit court upholding the decision of the City Council of the City of Maplewood discharging him from his position as a police officer of the City of Maplewood.
The petitioner was employed as a lieutenant in the Maplewood Police Department before his discharge on May 13, 1977. The discharge letter read as follows:
Sir,
Effective this date, May 13, 1977, you are hereby discharged as a lieutenant from the Maplewood Police Department. Cause for dismissal: Disobedience of a direct order on the 5th day of May, 1977. Subject: Refusal to submit to a polygraph test on the James Ludwig matter as an internal affairs investigation being conducted by this department.
You have five days in which to file an appeal of this decision.
Very truly yours,
Raymond Heberer, Chief
Maplewood Police Department
Petitioner subsequently filed with the City Council a notice of appeal from his dismissal. A hearing was held before the Council on August 23, 1977, following which the Council made findings of fact and conclusions of law, and affirmed the dismissal of petitioner. Petitioner then appealed to the circuit court from whose order this appeal arises.
On appeal, petitioner contends that the charges stated for his dismissal in the letter from Chief Heberer were vague and indefinite. In support of this argument, however, he relies upon cases pertaining to criminal indictments and civil pleadings. These cases obviously deal with judicial proceedings, and they are not controlling in administrative proceedings. The charges made against a public employee in an administrative proceeding, while they must be stated specifically and with substantial certainty, do not require the technical precision of a criminal indictment or information. See Giessow v. Litz, 558 S.W.2d 742, 749 (Mo.App.1977). It is sufficient that the charges fairly apprise the officer of the offense for which his removal is sought. Schrewe v. Sanders, 498 S.W.2d 775, 777 (Mo.1973).
Here, the charge made against petitioner in Chief Heberer's letter was specific and certain as to the time and nature of the incident. Petitioner could have had no uncertainty as to the act with which he was charged, and the reason for his dismissal.[1] We therefore rule this point against petitioner.
Petitioner's second point is that he "was not afforded a proper hearing by the City of Maplewood in accordance with the requirements of the merit system and civil service system to the extent they existed in the City of Maplewood at the time of this procedure for the reason that no merit system board or civil service system board existed for such purpose in accordance with the Code of the City of Maplewood and [petitioner] was prejudiced thereby." In support of this point, petitioner relies entirely upon Reid v. City of Maplewood, 598 S.W.2d 171 (Mo.App.1980).
Petitioner, however, raises no points requiring us to consider the procedures in the city's review of his dismissal. The sufficiency of the charge had nothing to do with *377 the forum of the hearing. There is no contest here as to the sufficiency of the evidence. Petitioner does not challenge that the order was made, and admits that he refused to take the polygraph test. Further, it was petitioner who appealed to the city council, and he made no complaint as to the propriety of that forum before the council or before the circuit court. Under all the circumstances of this case, we see no need to remand as in Reid.
Judgment affirmed.
CRIST, P. J., and SNYDER, J., concur.
NOTES
[1] Petitioner has made no challenge to the reasonableness of the order he was given. Further, § 85.561.2, RSMo 1969, provides in part that "the deputy chief of police and all other members of the police department shall be subject to the orders of their superiors in the police department ...."
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434963/
|
610 S.W.2d 740 (1980)
Roberta DUHART et al., Petitioners,
v.
The STATE of Texas, Respondent.
No. B-9563.
Supreme Court of Texas.
December 31, 1980.
*741 Latham & Patterson, B. Mills Latham, Corpus Christi, for petitioners.
Mark White, Atty. Gen., Joe D. Jarrard, Jr., Asst. Atty. Gen., Austin, for respondent.
BARROW, Justice.
The widow and children of Thomas James Duhart, deceased, sued the State for exemplary damages. State claimed sovereign immunity and filed a Special Exception and a Plea in Abatement which were sustained. The trial court dismissed the cause for want of jurisdiction after plaintiffs refused to amend. The court of civil appeals affirmed the judgment of the trial court. 598 S.W.2d 679. The question presented is whether the State has waived its sovereign immunity as to a suit for gross negligence causing the death of a highway department employee. We hold that it has not and affirm the judgments of the lower courts.
Duhart was employed by the Texas Department of Highways and Public Transportation. On April 27, 1977, he fell to his death while performing maintenance duties on the Harbour Bridge in Corpus Christi. The widow and children of Duhart brought this suit to recover exemplary damages because of the alleged gross negligence of State.
In Lowe v. Texas Tech University, 540 S.W.2d 297 (Tex.1976), this Court reaffirmed the rule that the State is not liable for torts of its officers or agents in the absence of a constitutional or statutory provision therefor. We there adhered to the rule that the waiver of governmental immunity is a matter addressed to the Legislature. See also: Texas Highway Department v. Weber, 147 Tex. 628, 219 S.W.2d 70 (1949); Greenhill and Murto, Governmental Immunity, 49-1 Tex.L.Rev. 462 (1971). Thus, the State is immune unless the Legislature has consented to such suits.
The 61st Legislature by enactment of the Texas Tort Claims Act (Article 6252-19)[1] waived governmental immunity for certain stated types of causes of action. It did not waive governmental immunity in a suit for exemplary damages. Section 4 of the Act provides:
"To the extent of such liability created by Section 3, immunity of the sovereign to suit, as heretofore recognized and practiced in the State of Texas with reference to units of government, is hereby expressly waived and abolished, and permission is hereby granted by the Legislature to all claimants to bring suit against the *742 State of Texas, or any and all other units of government covered by this Act, for all claims arising hereunder."
Section 3 provides for waiver of governmental immunity in three general areas: use of publicly owned automobiles, premises defects, and injuries arising out of conditions or use of property. Section 3 expressly DOES NOT extend to punitive or exemplary damages. Therefore, there is no waiver of governmental immunity for this suit for exemplary damages under the Texas Tort Claims Act.
It is urged by petitioners that the 61st Legislature created a cause of action for exemplary damages by incorporating Article 8306, Section 5 of the Texas Workers' Compensation Law into Article 6674s. This conclusion is not supported by a proper construction of either of these statutes or by the application of established case law.
It should be recognized at the outset that this is not a suit under the Texas Workers' Compensation Law. Rather, this is an original suit to recover exemplary damages for the death of the employee. Presumably, it was filed under the provisions of the Texas Wrongful Death Act, Article 4671, et seq.,[2] although Article 4671 does not authorize such a suit against the State of Texas.
The stated purpose of the Legislature in enacting Article 6674s was to provide for Workers' Compensation Insurance for employees of the State Highway Department. This statute, and particularly Section 11 thereof, consents for the State to be sued by "[a]ny interested party who is not willing and does not consent to abide by the final ruling and decision of said Board [Industrial Accident Board] ...." This statute does not make any reference to a suit for exemplary damages, much less consent to such a suit against the State.
Section 5 of Article 8306 was incorporated into Article 6674s as one of the 59 sections of the Workers' Compensation Law included in an amendment to Section 7 of Article 6674s by an act of the 61st Legislature. There is no reference in the amendment or its enabling clause which indicates an intent to create or recognize a cause of action against the State for exemplary damages.
It is a well-established rule that for the Legislature to waive the State's sovereign immunity, it must do so by clear and unambiguous language. Texas Prison Board v. Cabeen, 159 S.W.2d 523 (Tex.Civ. App. Beaumont 1942, writ ref'd). It was urged in Cabeen that the Legislature, by enacting Article 6166z10 to authorize the Texas Prison System to purchase liability insurance on its vehicles, must have intended to waive the State's governmental immunity for suits arising out of the negligent operation of these vehicles. Claimants' argument there was very similar to that made in our case. They urged:
"The Legislature is not to be credited with doing or intending a foolish or vain thing, nor with requiring a futile, impossible or useless thing to be done...."
This argument was rejected by the Cabeen court with the following language:
"The doctrine of Welch v. State, Tex.Civ. App., 148 S.W.2d 876, 879, writ refused, is that a statute authorizing suits or claims against the state `does not render the state liable in tort for the negligence or misconduct of officers or agents of the state unless the state has, by statute, expressly agreed to be held liable on such claims.' Certainly, it cannot be said that Art. 6166z10 `expressly' created a liability against the state."
This holding has been uniformly followed. See Barr v. Bernhard, 562 S.W.2d 844 (Tex. 1978); Jones v. Texas Gulf Sulphur Co., 397 S.W.2d 304 (Tex.Civ.App. Houston 1965, writ ref. n. r. e.).
We do not agree with petitioners that the 61st Legislature intended to create a cause of action for exemplary damages by the incorporation of Section 5 of Article 8306 *743 into Article 6674s. That same 61st Legislature expressly provided that exemplary damages could not be recovered against the State under the Tort Claims Act. This affirmative action would certainly negate any implied intent to permit only one class of claimants, i. e., Highway Department employees, to recover exemplary damages from the State.
A more meaningful construction is shown by the provision of the amendment that these 59 sections were incorporated as they then existed or as they might thereafter be amended. It may be that a future Legislature will waive the governmental immunity of the State for exemplary damages.[3]
In any event, Section 5 of Article 8306 does not create a cause of action for exemplary damages, but merely saves an existing one to the extent allowed by law. Section 5 provides in part:
"Nothing in this law shall be taken or held to PROHIBIT the recovery of exemplary damages by the surviving husband, wife, heirs of his or her body, or such of them as there may be of any deceased employé whose death is occasioned by homicide from the wilful act or omission or gross negligence of any person, firm or corporation ... causing the death of the latter...." (Emphasis Added)
In Fort Worth Elevators Co. v. Russell, 123 Tex. 128, 70 S.W.2d 397 (1934), we held that the purpose of Section 5 was not to create a cause of action for exemplary damages, but rather to leave the law as it was before the passage of the compensation act. See also Trinity County Lumber Co. v. Ocean Accident & G. Corp., 228 S.W.2d 114 (Tex.Com. App.1921, opinion adopted). As pointed out heretofore in this opinion, a suit for exemplary damages for wrongful death is not permitted against the State under any other statute.
A somewhat similar question was presented in Lyons v. Texas A & M University, 545 S.W.2d 56 (Tex.Civ.App. Houston [14th Dist.] 1976, writ ref'd n. r. e.). There, a seaman on a ship operated by Texas A & M sought to bring suit against the University under the general maritime law for injuries sustained by him in the course of his employment. In denying this relief, the court held that the Legislature had not waived governmental immunity in tort suits by state employees. Rather, it had retained the immunity and provided an alternative remedy through workers' compensation insurance.
Here the representatives of the deceased Texas Highway Department employee recovered benefits under the Workers' Compensation Law. The State has not waived its sovereign immunity for this suit to recover exemplary damages for the wrongful death.
We affirm the judgments of the courts below.
CAMPBELL, J., dissents in which RAY, J., joins.
CAMPBELL, Justice, dissenting.
I dissent.
In 1937, the 45th Legislature passed Article 6674s which provided workers' compensation coverage for State Highway Department employees. Section 11 of that Article provides a waiver of sovereign immunity by allowing employees to bring suit against the Department if they are not willing to abide by the final ruling of the Industrial Accident Board. Thus, Article 6674s provides a general waiver of immunity to employees of the Department who are killed or injured in the course and scope of employment.
In 1969, Section 5 of Article 8306 (Workers' Compensation Act) was specifically incorporated into Article 6674s. Section 5 provides:
Nothing in this law shall be taken or held to prohibit the recovery of exemplary damages by the surviving husband, wife, heirs of his or her body, or such of *744 them as there may be of any deceased employé whose death is occasioned by homicide from the wilful act or omission or gross negligence of any person, firm or corporation from the employer of such employé at the time of the injury causing the death of the latter. In any suit so brought for exemplary damages the trial shall be de novo, and no presumption shall exist that any award, ruling or finding of the Industrial Accident Board was correct. In any such suit, such award, ruling or finding shall neither be pleaded nor offered in evidence.
Article 6674s, § 7(b) provides that the word "employer" shall be construed to and shall mean "the Department."
Article 6674s applies only to State Highway Department employees. Amending the Act to adopt Section 5 would be meaningless if it were not intended to allow suits to recover exemplary damages for gross negligence resulting in death of the employee. Even a strict construction of the phrase "in any suit so brought for exemplary damages, the trial shall be de novo" requires a determination that the Legislature intended to and did provide an existing legal claim for survivors of Department employees whose death resulted from gross negligence of the employer (The Department).
It has been held in Fort Worth Elevators Co. v. Russell, 123 Tex. 128, 70 S.W.2d 397 (1934) and Trinity County Lumber Co. v. Ocean Accident & Guaranty Corp., 228 S.W.2d 114 (Tex.Comm'n App.1921, jdgm't adopted) that Section 5 of Article 8306 was a savings clause and that its purpose was to leave the law as to exemplary damages the same as it was before the passage of the Workers' Compensation Act. However, those cases involved suits by employees of private employers and the construction of Section 5 as it applied to Article 8306. Those cases are not controlling in this case.
Here, we must determine the purpose of the Legislature in incorporating Section 5 into Article 6674s. As was stated in State v. Hale, 136 Tex. 29, 146 S.W.2d 731 (1941): "We do not believe that the Legislature intended to do a useless thing, by authorizing plaintiffs to file a suit based on the ground that is prohibited by law nor do we believe that this Act should be given such a narrow and technical construction that would prohibit the filing of a suit for an existing legal claim...."
There is no constitutional authority for the filing of a suit by the survivors of a deceased employee whose death resulted from gross negligence of the employer (The Department). However, reading Section 5 as it applies to Article 6674s, substituting "the Department" for "employer," considering the last half of Section 5, and with the presumption that the Legislature did not intend to do a useless thing, I would hold that Section 5 as incorporated in Article 6674s creates such a cause of action.
After the State has waived its sovereign immunity in a suit for gross negligence causing the death of a Highway Department employee, it is an ordinary employer subject to the Workers' Compensation Act. Under these circumstances, heirs of employees of the Department of Highways and Public Transportation may sue the State in its capacity as an employer. I would hold the Duharts have a cause of action for gross negligence against the State.
RAY, J., joins in this dissent.
NOTES
[1] All statutory references are to Texas Revised Civil Statutes Annotated.
[2] A cause of action for wrongful death did not exist at common law. Therefore, it is only by virtue of statutory authority that such suits can be maintained. Marmon v. Mustang Aviation, Inc., 430 S.W.2d 182 (Tex.1968).
[3] The initial version of the bill which enacted the Tort Claims Act did not call for an unrestricted waiver of immunity. House Bill 456, 61st Legislature.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434968/
|
337 S.W.2d 852 (1960)
Isaac CARTER, Administrator of the Estate of R. C. Woollard, Appellant,
v.
B. H. FERRIS, Appellee.
No. 6970.
Court of Civil Appeals of Texas, Amarillo.
June 20, 1960.
Rehearing Denied September 6, 1960.
*853 Simpson, Adkins, Fullingim & Hankins, Amarillo, Chas. H. Dean, Plainview, for appellant.
Ross H. Scott, Dallas, for appellee.
CHAPMAN, Justice.
This is an appeal from a judgment rendered upon a jury verdict for B. H. Ferris in a common law negligence action for personal injuries, following a holding by this court (Traders & General Insurance Co. v. Ferris, 312 S.W.2d 311, writ refused) that he was an independent contractor and not an employee.
B. H. Ferris, appellee, while engaged in laying construction blocks for a filling station being constructed by R. C. Woollard, fell into a hole in the ground that had been dug for a grease rack lift. During the two weeks following the digging of the hole it had been barricaded. The evidence shows that shortly before the injury Mr. Woollard had removed one of the barricades. Appellee, having become accustomed to working around the hole with the barricades and not knowing one of them had been removed stepped backward and fell into the hole, sustaining the injuries from which he recovered the judgment here appealed from. Mr. Woollard is now deceased and the suit is prosecuted against Isaac Carter, Administrator of his estate.
It appears that Mr. Woollard, following appellee's injury, made an "Employer's Report of Injury" and Traders & General Insurance Company, based upon such report, commenced paying weekly compensation. After appellee had been paid several *854 weeks compensation he received forms from the Industrial Accident Board, which a representative of Traders & General Insurance Company filled out, based upon disclosure of facts such representative learned by questioning appellee. It appears said representative also filled in some statements not made by appellee. After the insurance carrier had paid appellee $1,325 in compensation ane medical bills in the amount of $1,914.20 they ceased making payments. It was not until after the Industrial Accident Board had made an award in the case and suit was filed that the question was raised as to Mr. Ferris not being an employee. Thus, the question before us, which we believe to be of first impression in this state, is whether an injured workman can recover in a common law action after he has first prosecuted unsuccessfully a cause of action for the same injury under the Workmen's Compensation Act. Vernon's Ann.Civ.St. art. 8306 et seq., when the claim for Workmen's Compensation was initiated by the insurance carrier and/or the subscriber, and after it has been judicially determined that the injured party is an independent contractor and not an employee.
Appellant is before us upon three points of error. In its first point it asserts appellee is judicially estopped from asserting the present cause of action. For authority upon the point he cites Long v. Knox, 155 Tex. 581, 291 S.W.2d 292 and Jones v. Jones, Tex.Civ.App., 301 S.W.2d 310. The facts in the former, by our Supreme Court, are not even analogous to the facts of our case. There a daughter of W. C. Knox was claiming as an heir of her father land which her father had saved from execution by sworn pleadings to the effect that the property in question belonged solely to his wife as her separate estate and that he had no interest whatsoever in the property. The court quoted with approval from another authority as follows [155 Tex. 581, 291 S.W.2d 295]:
"Under the doctrine of judicial estoppel, as distinguished from equitable estoppel by inconsistency, a party is estopped merely by the fact of having alleged or admitted in his pleadings in a former proceeding under oath the contrary to the assertion sought to be made." (Emphasis added.)
There the allegation was made under oath. In the instant case appellee testified that in the Workmen's Compensation case:
"I always said I was laying by the block. I said I didn't know whether I was a private contractor I said I didn't know whether I was a contractor or employee, that was a matter of the courts."
The testimony further shows:
"Q. * * * Throughtout the trial of that other law suit when you were testifying did you ever say whether you were a contractor or whether you were an employee from your own lips from the witness stand.
"A. No, sir, I never did.
* * * * * *
"Q. And didn't you further testify in that law suit that you didn't know whether you were an employee or contractor because that question was a question of law.
"A. That's right."
The record shows, of course, that the attorney drew the pleadings in the workmen's compensation case. It is without contradiction that they were not sworn to by appellee. The record also shows that he did not himself initiate the claim for workmen's compensation benefits but that the subscriber and/or insurance carrier did so for him at a time when he did not have legal counsel. His attorney, obviously for the purpose of preventing limitation from running against a common law action in the event appellee was found to be an independent contractor and not an employee, filed the present suit and let it lie dormant on the docket pending the outcome of the workmen's compensation case. To say now, from the state of this record that appellee is *855 judicially estopped to claim damages for serious permanent injuries found by the jury to have been caused by Mr. Woollard's negligence would be to deny him any relief whatsoever and would in our opinion be a rank miscarriage of justice against a person whose only wrong consisted of having employed an attorney who misjudged his client's cause of action and continued the prosecution of the Workmen's Compensation claim initiated at least in part by Mr. Woollard himself, he having given notice to the insurance carrier of appellee's injury.
We do not believe the Jones case above cited is in point in our case either. Mrs. Jones accepted benefits under a will probated in Louisiana and while still acting as executrix under this will sought to contest the will in Texas under Texas law. No benefits ever accrued to appellee in our case from the Workmen's Compensation suit and we find no place in the record where he ever made a judicial admission that he was an employee of Woollard. Both attorneys admit this is a case of first impression in Texas on the particular questions involved, and in our search we have been unable to find one exactly in point. In a very recent case involving election of remedies, in which an injured party accepted benefits under a voluntary compensation policy and then brought a suit at common law against his employer, our Supreme Court has said:
"To hold with petitioner we must say that as a matter of law Hare knew at the time he accepted the compensation checks that the remedy of a suit at common law against his employer was available to him." Leonard v. Hare, Tex., 336 S.W.2d 619.
Our record shows clearly that appellee did not know as a matter of law that he had a cause of action against Mr. Woollard at common law but that he simply testified to the facts and left the matter up to the courts. If any analogy could be drawn from the case just cited we believe it favors the position of the appellee herein. Appellant's Point 1 is overruled.
In his second point appellant contends appellee is equitably estopped from asserting the present cause of action. To this contention we are unable to agree. It has been textually stated that:
"In order to constitute an equitable estoppel or estoppel in pais there must exist a false representation or concealment of material facts; it must have been made with knowledge, actual or constructive, of the facts; the party to whom it was made must have been without knowledge or the means of knowledge of the real facts; it must have been made with the intention that it should be acted on; and the party to whom it was made must have relied on or acted on it to his prejudice." 31 C.J.S. Estoppel § 67, p. 254.
As may readily be seen the facts of our case fall far short of the conditions just quoted as constituting equitable estoppel. It appears that the workmen's compensation payments were voluntarily made, and that they were initiated by Mr. Woollard giving notice of injuries or by the insurance carrier filling out the claim forms for him. It would be harsh indeed to say appellee was estopped to pursue his present cause of action on account of such payments. Carter v. Uhrich, 122 Kan. 408, 252 P. 240.
The third and last point asserts error of the trial court in refusing to credit the judgment in the present case against Mr. Woollard's estate with the amount of money paid in compensation and medical bills by Traders & General Ins. Co. to appellee. Again we are unable to follow appellant's reasoning. Traders & General Ins. Co. had a perfect right to intervene and ask for recovery on any judgment recovered by appellee to the extent of the amount of money they had paid him. For some reason not shown in the record the insurance carrier did not do so. We do not know of any authority nor have we been cited to any that would entitle appellant to be credited with the amount of money voluntarily paid to appellee by a complete stranger to this suit. *856 Appellant has paid appellee nothing and we believe he is not entitled to any offset. Incidentally, the record shows that appellee's petition in the present suit did not even ask for recovery of any medical expenses so we would have to assume there was no special issues submitted on that question to the jury and hence no recovery for that item.
Accordingly, the judgment of the trial court is in all things affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434971/
|
337 S.W.2d 206 (1960)
CITY OF SHERMAN, Appellant,
v.
Chester M. GNADT et al., Appellees.
No. 15655.
Court of Civil Appeals of Texas, Dallas.
May 27, 1960.
On Rehearing July 1, 1960.
Rehearing Denied July 8, 1960.
*208 Joe P. Cox, Jr., City Atty., and Stephen Davidchik, Sherman, for appellant.
Slagle, Hughes & Kennedy, Sherman, for appellees.
DIXON, Chief Justice.
This litigation began on May 29, 1958 when appellee Chester M. Gnadt filed suit in a District Court against the City of Sherman, Texas for $16,958.63 for ordinary damages and $10,000 for exemplary damages alleged to have been caused by the City's refusal to issue to Gnadt a permit for the alteration and improvement of a tourist court, or motel owned by appellee on Highway No. 75 in the City of Sherman. Such was the beginning of the litigation, but before the case was tried, it took on an entirely different look.
In view of subsequent events we think it is appropriate briefly to state the substance of Gnadt's original petition. He alleged that on January 3, 1955 he bought the motel from E. A. Murrell, and shortly thereafter reconditioned, altered and improved the property. In March 1955 in an election called for that purpose bonds were voted by the City for the purchasing of a *209 right-of-way for a proposed expressway through the City. On February 6, 1956 the City passed an ordinance establishing the location of said proposed expressway, and prohibiting for a period of eighteen months, improvements, alterations, and repairs (except necessary maintenance repairs) of property lying within the limits of the described right-of-way. Part of appellee's motel lay within said limits.
Appellee further alleged that after passage of said ordinance the City was derelict in its duty in that for a period of twenty-eight months appellee had not been approached with an acceptable offer for the purchase by the City of his property, despite his efforts to cooperate with City officials. On February 13, 1957 appellee filed his application for a building and improvement permit, which permit was refused by the City with the notation "this property is in proposed expressway and is prohibited by ordinance". As a result of said refusal appellee lost the revenues of two units, to his damage in the sum of $3,908.63; he was not permitted to install television sets, to his damage in the sum of $5,785; he was deprived of the use and enjoyment of his property, to his damage in the sum of $5,000; and he was not permitted to make other improvements, to his damage in the sum of $2,265.
On September 24, 1958 the City filed its amended answer and cross-action. This pleading contained numerous exceptions to appellee Gnadt's petition. In its cross-action the City sued for condemnation of a portion of appellee's property for use as a part of the expressway heretofore mentioned. Under similar circumstances it has been held that the District Court had jurisdiction of cross-action for condemnation. City of Dallas v. Megginson et ux., Tex. Civ.App., 222 S.W.2d 349.
The City brought in two new parties as cross-defendants: Mrs. Antonia Gnadt, wife of Chester M. Gnadt, and E. A. Murrell, owner of vendor's lien notes against the property.
In answer to the City's cross-action appellee Gnadt, his wife, and E. A. Murrell, admitted (1) the City had a right to condemn appellees' property as described in the cross-action; (2) the legality of the procedure adopted by the City; (3) all formalities required by law had been followed; (4) the court had jurisdiction over the matters involved; and (5) the only issue remaining to be determined was the amount of money which should be paid to appellees for their loss and damage by reason of such condemnation and the taking of their property and business. Appellee Gnadt also pled for special damages in the amount of $15,000 for the cost, expense and actual damage which he would suffer by reason of being forced to close his motel and move from the premises.
On January 12, 1959 the court sustained the City's exceptions, thus eliminating Gnadt's entire cause of action as set out in his original petition.
Upon trial a jury found the market value of the land to be taken considered as severed land to be $27,000; the market value of the property, exclusive of the strip of land condemned, immediately before the taking to be $40,500; and the market value of the remainder immediately after the taking to be $5,000. On March 28, 1959 judgment was rendered in favor of appellees, the Gnadts and E. A. Murrell for $62,500.
Facts.
The testimony shows that the motel is in an area zoned for commercial uses. It consists of sixteen frame buildings containing eighteen rental units. The largest building, at the front of the property, contains the motel offices, and back of the offices the living quarters of the Gnadts. Six of the buildings, including the office and living quarters, were taken by the condemnation, but others were left too close to the highway to be suitable for motel purposes.
Gnadt testified that he bought the motel in January 1955 from E. A. Murrell for a consideration of $57,500 plus a fee of *210 $1,000 to his, Gnadt's real estate agent. In connection with his purchase he paid $11,000 cash, and executed vendor's lien notes for the balance of the purchase price, on which notes there was a balance due Murrell at the time of trial of slightly less than $34,000. Since purchasing the property Gnadt had spent $6,300 for repairs and improvements.
After construction of the expressway, Gnadt's property will not about the main part of Highway No. 75 as it did before the taking. It will abut a dead end access road. Motorists on the highway travelling north will have to pass beyond the motel and double back along the access road to get to the motel. Motorists traveling south will have to make a left turn across the highway to the access road to get to the motel.
As to the effect of the dead end access road we quote the testimony of Gnadt:
"A. It ruins it for tourist court or any other operation, retail operation that would depend on the business from the highway, from the main highway. Q. And the northbound traffic in no way could get over to you there at all, could they? A. Not in the vicinity of our court. It would have to go clear beyond the Katy railroad up to some point where they could turn around, come back south and pass us and then circle back to the right and eventually would find us if they didn't get lost."
Testimony as to market value shows these variations in opinion:
(a) Whole property, from $75,000 to $48,000.
(b) Part taken, from $40,000 to $17,380.
(c) Remainder before taking, from $40,000 to $29,255.
(d) Remainder after taking, from $13,300 to $2,250.
The evidence, including the testimony of appellant's two valuation witnesses, is undisputed that the remainder after the taking will not be adaptable for use as a motel. As one witness put it referring to the effect of the taking on the remainder, "I think it would entirely kill the spot for a location for a motel."
One witness thought the remainder after the taking might be adaptable for use as the site for a warehouse. Others thought it might be adaptable for use as a doctor's, or lawyer's, or a real estate agent's office; or a flower shop; or an eating place; or a washateria. None of the witnesses testified to facts adequately supporting their opinions as to the adaptability of the property and the reasonable probability of its future use for other purposes than its present use.
Gnadt testified that in 1955 his gross income from the motel was $19,272 and the net income was $9,985; in 1956 the gross income was $15,640.50, the net income, $8,738; in 1957 the gross income was $12,684, the net income $4,556; and in 1958 the gross income was $10,762.25.
Gnadt also testified that the motel was in operation twenty-four hours each day, and that either he or his wife was present and in charge at all times. The net income figures above shown apparently did not take into account any allowance for depreciation of the property, or any charge for the work and management services of Gnadt and his wife.
Gnadt admitted that the large gross income in 1955 was due in part to an oil boom in Grayson County that year. But the steady decline in gross income in recent years he attributed to his inability to make improvements because of the City's refusal to grant him a permit for that purpose. He testified that he was denied permission to install television sets, kitchenettes and to make other improvements with the result that he could not keep pace with competitors and business left him to go to his competitors.
Opinion.
In its first six points on appeal appellant complains of the alleged erroneous *211 admission of testimony over its objection, which testimony appellant says was prejudicial and calculated to cause the jury to return an excessive verdict.
More specifically appellant asserts in its first six points that on direct examination appellee Chester M. Gnadt was permitted to testify that (1) he was prohibited by City Ordinance from making improvements to his property, and that this prohibition caused him to fail to meet competition in the motel field in Sherman, Texas; and (2) he suffered a decline in revenue due to his being prohibited by City Ordinance from adding television sets to his property. Appellant says that it was error to admit the above testimony because such testimony was (a) the subject of special exceptions which had been sustained prior to trial; (b) too remote and speculative and not consistent with facts as they existed at the time of the taking; and (c) concerned damage suffered by the community as a whole.
The conclusion of appellant's argument in its brief under its first eight points, including the six points here involved, is as follows:
"It is respectfully submitted that the admission of testimony relating to an existing City Ordinance and the exercise of the police power of a political municipality, as hereinabove complained of caused the jury to be mislead, confused, and to place improper valuation on the property sought to be condemned, and so prejudiced the appellant herein that it cause the rendition of an improper, and excessive verdict. * * *".
Appellees strenuously object to our consideration of the first six of appellant's points on appeal. In each of these points appellant alleges that Gnadt was permitted to testify that he was prohibited by City Ordinance from doing certain things. Appellees say that in said points appellant incorrectly states the facts and the record; that upon examination of the portion of the record pointed out by appellant it will be found that Gnadt did not make any reference to the City Ordinance.
Appellant's statement in its brief under these points contains a copy in full of the City Ordinance passed February 6, 1956. The testimony of Gnadt which is the subject of attack is not quoted in appellant's brief, but our attention is directed to three different places in the statement of facts where, according to appellant, the objectionable evidence may be found. We have studied the record at the places to which appellant has directed our attention. The record does not support appellant's contention. In none of the three places to which we are referred does Gnadt's testimony make mention of the City Ordinance. Under the circumstances we are not required to consider appellant's first six points on appeal. Burke v. Burke, Tex.Civ.App., 309 S.W.2d 247, 250; Dale Truck Line, Inc., v. R & M Well Servicing & Drilling Co., Tex.Civ.App., 286 S.W.2d 446, 450; Saldana v. Garcia et vir, 155 Tex. 242, 285 S.W.2d 197.
Nevertheless we have studied the whole record in connection with appellant's first six points and have concluded that the points should be overruled for reasons hereinafter stated.
Gnadt was permitted to testify without objection as follows:
"Q. In the last two years particularly you have had a decline in your overall gross revenue from room rents, and to what do you attribute that, please sir? A. Well, it's attributed almost entirely to the fact that I have been prohibited by City Ordinance from making improvements that I needed to make in order to keep up with my competitors in the motel field here in Sherman. And through, by economic reasons there are certain improvements in equipment that I would have added if I had not known that, or been assured that they were going to take our business away from us.
*212 "Q. Since July of 1956 you have been on notice that you, on most any kind of notice you were liable to be out of business. Is that correct? A. Yes. That is true, and to add additional equipment, I'm speaking now about the economic part of it, I wanted to add televisions to most of our rooms. We need them in about seventy-five percent of our rooms. As I stated, I only have three sets. Two of them were not purchased until November of 1957, and the third one was not purchased until about three or four months ago, in the latter part of 1958.
"Q. Have you refrained from purchasing additional television sets because you did not know how long you would be operating the business? A. Yes sir. That's true. That would cost in the neighborhood of $3,000.00 to buy as many television sets as I had need for, and at no time have I been assured that I would be operating for more than six months."
Without passing on the question whether testimony was admissible in connection with the income approach to market value, we point out that no objection was made to its reception, and no motion was made asking the court to instruct the jury to disregard the testimony. Further we must point out that appellant vigorously and at length cross-examined Gnadt as to the improvements which Gnadt says he was not permitted to make. Under the circumstances we must hold that the admission of the testimony does not constitute reversible error. Poole et al. v. State Highway Department et al., Tex.Civ.App., 256 S.W.2d 168; Hooper v. Courtney, Tex.Civ.App., 256 S.W.2d 462; Traders & General Ins. Co. v. Stone, Tex.Civ.App., 258 S.W.2d 409; 3-B Tex.Jur. 294, 664. Appellant's first six points on appeal are overruled.
In its seventh and eighth points the City again complains of the erroneous admission of certain testimony which was prejudicial and calculated to cause the jury to return an excessive verdict. More specifically the City says that the court erred in admitting the testimony of Gnadt on redirect examination to the effect that (7) the lack of kitchenettes and television sets caused diminution of income from the property, and that lack of same was due to the refusal of the City to grant a permit; and (8) the lack of kitchenettes made the subject property lose business and caused Gnadt to refer many persons to other motels with kitchenettes. Appellant alleges that this testimony was inadmissible because (a) it was the subject of pleadings to which special exceptions were sustained prior to the trial; and (b) it was immaterial to the issue of fair market value.
Appellant in its brief grouped its seventh and eighth points with its first six points in its statement, argument and citation of authorities.
The record shows that appellant itself on cross-examination of Gnadt brought out the testimony in regard to the lack of kitchenettes. We quote from Gnadt's testimony:
"Q. Now the, the economic pressure of the improvements at Nowlins and the other motels has actually contributed to, as much to your loss of revenue as this idea that the highway is going to come through there, hasn't it? A. The idea of the highway coming through, so far as I know, hasn't affected any of our customers. We haven't lost any of our regular customers just because they think we're going out of business.
"Q. And you A. It's the improvements in other motels that have attracted some away from us. Not only our old customers, but new ones that we might hope to obtain.
"Q. In other words, they left because the other boys were making improvements and you were not? A. We lost a lot of business on account of *213 television sets and another great loss was on account of not being able to furnish kitchenettes."
Appellant did not object to the above testimony, or move that the jury be instructed to disregard it. In view of Gnadt's testimony without objection on direct examination about improvements (which we have quoted) and further in view of the testimony about kitchenettes brought out on cross-examination by the City, we do not believe it was reversible error for Gnadt to testify on redirect examination of the City's refusal to permit him to install kitchenettes. Appellant's seventh and eighth points are overruled.
In its ninth to twelfth points inclusive appellant again complains of the alleged erroneous admission of testimony which was prejudicial and calculated to cause the jury to return an excessive verdict. According to appellant Gnadt was permitted to testify about delay between the time of negotiations between himself and the City and the time actual condemnation proceedings commenced.
We have again read the testimony as it appears in the statement of facts at the places to which appellant in its brief directs our attention. We do not find any such testimony as that about which appellant complains. Consequently we cannot sustain these points. Saldana v. Garcia et vir, 155 Tex. 242, 285 S.W.2d 197; Burke, v. Burke, Tex.Civ.App., 309 S.W.2d 247, 250. Appellant's ninth to twelfth points inclusive are overruled.
In its thirteenth to seventeenth points inclusive appellant again complains of the alleged erroneous admission of testimony which was prejudicial and calculated to cause the jury to return an excessive verdict.
More specifically, appellant says that in admitting testimony in regard to the value of the remaining portion of appellees' property after the taking, the court erred in allowing five witnesses in behalf of appellees to testify about the change in flow of traffic due to the building of a dead end access road in front of the said remaining portion, with the resultant loss in business.
Accessibility is a factor which may be taken into consideration in determining the market value of remaining property after a taking under eminent domain. The State of Texas v. Meyers et al., Tex.Civ. App., 292 S.W.2d 933, 938; Brazos River Conservation & Reclamation District v. Costello et al., Tex.Civ.App., 169 S.W.2d 977, 987. Consequently we think it was proper to admit testimony showing that the value of the remaining after the taking was affected by the fact that the remainder was left fronting on a dead end access road. As we pointed out earlier in this opinion, the witnesses, even appellant's witnesses, testified without objection that the effect of the taking was to destroy the adaptability of the remainder for use as a motel site. The testimony of which appellant complains was not so much about a change in flow of traffic as it was an impairment of accessibility.
In the landmark case of State v. Carpenter et al., 126 Tex. 604, 89 S.W.2d 194, at page 200, 979 the Court says: "Generally, it may be said that it is proper as touching the matter of value and depreciation in value to admit evidence upon all such matters as suitability and adaptability, surroundings, conditions before and after, and all circumstances which tend to increase or diminish the present market value." (Emphasis ours.) Appellant's thirteenth to seventeenth points inclusive are overruled.
In its eighteenth point on appeal appellant says the court erred in sustaining appellees' objection and refusing to allow Gnadt on cross-examination to answer the question of what would be a proper rendition for the subject property assuming it is valued for tax purposes at 36% of its cash market value. It is appellant's contention that this testimony was admissible for impeachment purposes.
*214 Gnadt on cross-examination testified that in 1957 and 1958 he voluntarily rendered the property to the City for tax purposes at $10,000.00 valuation, and to the School District at $11,000.00.
We agree that evidence of the value placed voluntarily upon property by an owner for tax purposes is admissible to show that the property is of less value than that claimed by the owner in his testimony during a condemnation hearing. But the rule is not applicable in this instance for these reasons: (1) The testimony was sought in answer to a hypothetical question, and there is no evidence in the record to support the assumption that property in Sherman, Texas, is valued for tax purposes at 36% of its market value; (2) The question calls for a mere exercise in arithmetic which the jury was as well able to do as the witness; (for example: if 36% of market value is $11,000, what is 100% of market value?); (3) The question as phrased called for the witness to say what a "proper tax rendition, tax value" would have been, so called for a legal conclusion; and (4) No bill of exception appears in the record to show what the witness would have answered. Appellant's eighteenth point is overruled.
In its nineteenth, twentieth and twenty-first points appellant says that the court erred in overruling the City's exception to certain pleadings, and in failing to instruct appellees not to read said pleading to the jury.
Gnadt's answer to appellant's cross-action contained this allegation:
"That said amount proposed to be paid by cross-plaintiff, the City of Sherman, to cross-defendant does not compensate this cross-defendant, or, alternatively, does not adequately compensate this cross-defendant for the cost and expense and the actual damage which he will suffer by reason of being forced to close and move from the aforesaid premises a going business now earning him a sum in excess of Fifteen Thousand And No/100 ($15,000.00) Dollars annually."
Appellant levelled a special exception at said pleading. We do not find in the transcript of the record a copy of any order overruling the said exception. However appellant and appellees in their briefs treat the exception as having been presented and overruled, so we shall do the same.
Appellant argues that it was error to overrule its exception because the pleading does not allege a proper element of market value of property taken, or damage to the remainder in a condemnation. In support of its contention appellant cites us to State of Texas v. Villarreal, Tex. Civ.App., 319 S.W.2d 408; Marshall v. City of Amarillo, Tex.Civ.App., 302 S.W.2d 943; State of Texas et al. v. Parkey, Tex. Civ.App., 295 S.W.2d 457; and Herndon v. Housing Authority of City of Dallas, Tex.Civ.App., 261 S.W.2d 221.
The first three of the above cited cases are not in point since (1) they involve a whole taking rather than a partial taking of property; and (2) they involve questions relating to the admission of testimony, rather than the mere reading of a portion of a pleading to a jury. The fourth of the cited cases, the Herndon case, supra, seems to us to be more authority against than for appellant's contention. As will be seen from a reading of a portion of the opinion on page 223 of the Reporter this Court took notice of the difference in the rules applicable in a whole taking and in a partial taking.
It has been held that in a partial taking, resulting injury to a business may be considered not as a separate item of damage, but as affecting market value of the remaining land and improvements for uses to which they were adapted and were being put. State v. Meyers et al., Tex.Civ. App., 292 S.W.2d 933; City of Dallas v. Priolo et ux., 150 Tex. 423, 242 S.W.2d 176, 179; Milam County v. Akers, Tex.Civ.App., 181 S.W.2d 719; and State v. Blair et al., *215 Tex.Civ.App., 72 S.W.2d 927, 929; 65 A.L. R. 455.
It has also been held that in determining market value a jury may take account of the fact that the removal of structures is necessitated in a partial condemnation. City of Denton v. Chastain et ux., Tex.Civ.App., 156 S.W.2d 554; State v. Blair, Tex.Civ.App., 72 S.W.2d 927, 929; State v. Lowrie et ux., Tex.Civ.App., 56 S.W.2d 676, 678; Pillot et al. v. City of Houston, Tex.Civ.App., 51 S.W.2d 794, 797; 16 Tex.Jur. 529.
On other grounds we are convinced that it was not reversible error to overrule appellant's exception. (1) The testimony was undisputed that the remainder after taking was not suitable for motel purposes. There was testimony received without objection as to the salvage value of the cottages remaining. This would include the cost of removing them. There was also testimony received without objection pertaining to the income produced by the motel and its effect on market value. Some of this testimony came from one of appellant's witnesses. Under the circumstances the error in overruling appellant's exception, if it was error, must be considered harmless. Brandtjen & Kluge, Inc., v. Hughes, Tex.Civ.App., 236 S.W.2d 180 (Syl. 4); Rule 434, Texas Rules of Civil Procedure.
This view is further strengthened by the fact that the court instructed the jury that in arriving at its decision as to market value, it was not to consider the value of any movable personal property, or the loss of future profits, or the cost of moving the business. Pittman v. Baladez, Tex.Civ. App., 304 S.W.2d 601, 606 (Syl. 5), reversed on other grounds Tex., 312 S.W.2d 210.
Appellant's nineteenth, twentieth and twenty-first points are overruled.
The judgment of the trial court is affirmed.
CRAMER, J., not sitting.
On Rehearing
DIXON, Chief Justice.
As indicated in our main opinion the record in this case contains testimony in support of these valuations: part taken, $40,000; remainder before taking, $40,000; and remainder after taking, $2,250. Based on such testimony and figures the jury could have made findings which would have supported a judgment in excess of the $62,500 awarded in this case.
But in one particular we must hold that the finding of the jury was excessive because it went beyond the maximum value for which there is support in the evidence. The jury in answering special issue No. 2 found that the value of appellees' land, exclusive of the strip of land condemned, immediately before the strip was taken, was $40,500. The highest valuation we find in the testimony as to the value of appellees' land, exclusive of the strip of land condemned, immediately before the strip was taken is $40,000, which was the valuation testified to by the witness Joe P. Treece. The jury's finding in this particular was $500 in excess of the highest valuation which finds support in the evidence.
In our opinion the judgment of the trial court is excessive in the amount of $500 as above indicated, and should be reversed for that reason only. However if appellee or his attorneys will file a remittitur of $500 within ten days from this date we shall reform the court's judgment accordingly and affirm the judgment as reformed. Rule 440, T.R.C.P. If such remittitur is not filed the judgment will be reversed and remanded for another trial.
CRAMER, J., not sitting.
On Remittitur.
Appellee has filed a remittitur in the sum of $500. Therefore the judgment of *216 the trial court will be reduced from $62,500 to $62,000. The judgment as so reformed is affirmed.
Appellant's motion for rehearing is overruled.
CRAMER, J., not sitting.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434978/
|
337 S.W.2d 134 (1960)
J. J. RICHTER et al., Appellants,
v.
J. C. MARTIN, Jr., Mayor of the City of Laredo, Appellee.
No. 13586.
Court of Civil Appeals of Texas, San Antonio.
April 13, 1960.
Rehearing Denied June 1, 1960.
*135 John Fitzgerald Ryan, Laredo, for appellants.
Gerald Weatherly, William W. Allen, Philip A. Kazen, Laredo, for appellee.
POPE, Justice.
This is an election contest. The case concerns the constitutionality of Section 5, Article 1269l-3, known as the Urban Renewal Act. Section 5 limits voting privileges to "qualified voters residing in said city, owning taxable property within the boundaries thereof, who have duly rendered the same for taxation." Contestants, J. J. Richter et al., attack the validity of an election in Laredo because only property owners were permitted to vote at an election. The trial court upheld the election. The case was submitted to the court and tried on pleadings and agreements without objections, and the parties have joined issue upon this controlling constitutional matter. After the appeal was perfected contestees filed a motion which asserted that contestants had no justiciable interest. Apart from its tardy filing, we overrule the motion. DeShazo v. Webb, 131 Tex. 108, 113 S.W.2d 519.
The Laredo City Council, in accord with Section 5, Art. 1269l-3, prepared a resolution[1] finding a necessity for the adoption of the Urban Renewal Act. City then conducted an election on June 27, 1959, so that the voters could determine whether *136 the City Council should adopt the resolution. At the election, 2,072 persons voted against the proposal and 1,855 persons voted for it. Contestants urged that the resolution was submitted to the wrong electorate, since the ordinance which ordered the election limited the voting to "legally qualified voters residing within the corporate limits of the City of Laredo, owning taxable property within said corporate limits, who have duly rendered such property for taxation." It was agreed that the election notices and widespread publicity limited the election to property owners. Contestants urged that under Section 2, Article 6 of the Constitution, Vernon's Ann.St., all qualified voters, without regard to property ownership, should have been permitted to vote and that Sections 3 and 3a of Article 6 are inapplicable.[2]
In determining the eligibility of the voters, constitutional voting qualifications control over statutes and ordinances. Cameron v. Connally, 117 Tex. 159, 299 S.W. 221; McCutcheon v. Wozencraft, 116 Tex. 440, 294 S.W. 1105. An election on the issuance of bonds, the lending of credit, expending money, or assuming a debt, may constitutionally be limited to voters who own property and who have duly rendered it for taxation. Art. 6,§ 3a, Tex. Const. But an election to determine a matter of policy is open to all qualified voters within the voting district. A decision whether an election is for the one purpose or the other is sometimes more difficult than the mere statement of the general rules. In City of Richmond v. Allred, 123 Tex. 365, 71 S.W.2d 233, property ownership as a voting qualification was approved even though the election was to determine whether the City should issue revenue bonds for the purchase of a utility system.
An election which does not concern the expenditure of money is open to all qualified voters. In King v. Carlton Independent School District, 156 Tex. 365, 295 S.W.2d 408, 411, qualified voters, without regard to property ownership, were permitted to vote on the adoption of a law which empowered trustees of a school district to levy and collect maintenance taxes and to issue bonds. The actual levy and collection, however, could not occur until the matter was directly submitted to a vote of the property taxpaying qualified voters of the district whose property had been duly rendered for taxation. The Supreme Court held that the initial election of whether the act itself should be adopted should be submitted to the qualified voters, and not limited to those owning property. The Court said: "Since no taxes can be levied, money expended, or bonds issued based alone upon the results of an election to adopt the Act, it is our conclusion that Section 3 of the Act does not offend against the provisions of the section of the Constitution under consideration." The fact *137 that a policy, once adopted, will cost money is not the controlling test. This is illustrated by Taxpayers' Ass'n of Harris County v. City of Houston, 129 Tex. 627, 105 S.W.2d 655. The City of Houston submitted to the qualified voters, without regard to property ownership, the matter of the adoption of a minimum-wage law for certain city employees. A vote for the adoption necessarily would entail the expenditure of money, but the Court distinguished City of Richmond v. Allred, saying that it involved principally a matter of public policy. See Bradshaw v. Marmion, Tex.Civ.App., 188 S.W. 973, 975. Again, in Moreland v. City of San Antonio, Tex.Civ.App., 116 S.W.2d 823, 825, the City submitted to all qualified voters the proposition of amending the City Charter to authorize an advertising tax not to exceed five cents on every $100.00 valuation. The Court treated this as an enlargement of the municipal powers to permit advertising and held that it was not "for the purpose of * * * expending money." The Court reasoned that the City already possessed the power to tax but did not possess the power to advertise. Hence, the issue was whether the City powers should be enlarged, and the taxation was only incidentally involved. From these cases, and particularly the statements in Taxpayers' Ass'n of Harris County v. City of Houston, supra, the line between the two electorates seems to rest upon a decision whether the election involved directly the expenditure of money or whether the election principally concerned a matter of public policy.
The Laredo Resolution upon which the voters were expressing their wishes, does not contain anything which could be called a vote for a direct expenditure of money. On the other hand, it does show that it concerned matters of general policy. Should the City of Laredo undertake the rehabilitation, conservation, or slum clearance and redevelopment of slum or blighted areas? Should the voters vest in the City the powers granted by the Urban Renewal Law, with some exceptions? Should the Project Powers be exercised by an Urban Renewal Agency? The adoption of these matters may or may not eventually entail expenditures of money within the meaning of Secs. 3 and 3a, Art. 6 of the Constitution, but before decisions about expenditures can even be reached, the City first must possess powers it does not have until after an election approving the resolution. It was the purpose of the election to determine whether the City should possess these additional powers, and those are policy matters. See Davis v. City of Lubbock, Tex., 326 S.W.2d 699, 701.
Contestees seek to uphold the election which was limited to property owners because Section 9 of the Urban Renewal Law enumerates many powers, the exercise of which will require the expenditure of funds. However, Section 9(j) of the Act expressly provides that "no taxes or assessments shall be levied under authority or for the purposes of this Act unless and until such levy shall first have been submitted to a vote of the property-owning taxpayers of said city * * *." Section 15(b) vests in the City Council the power to issue general obligation bonds, and Section 15(d) empowers the Urban Renewal Agency to issue bonds to finance the project. These powers require a second election, and they, of course, will be limited to property-owning taxpayers of the City, under the Constitution as well as the statute.
That part of Section 5 of the Urban Renewal Law, with respect to the election on the initial policy matter of adopting the resolution, which limits the voting to "qualified voters residing in said city, owning taxable property within the boundaries thereof, who have duly rendered the same for taxation," is unconstitutional. But the whole act does not fall for the reasons discussed in King v. Carlton Independent School District, 156 Tex. 365, 295 S.W.2d 408, 412. All the language just quoted, following the words "qualified voters residing in said city" is in conflict with the *138 provisions of Article 6, Section 2, of the Constitution, and should be stricken from the Act.
Inasmuch as the election was closed to voters who were "qualified", the contest should have been sustained. Judgment is rendered in favor of contestants that the election was void.
On Motion for Rehearing
In our original opinion we stated that Section 15(d), Article 1269l-3, Vernon's Ann.Tex.Stats., empowered the Agency to issue bonds after a prior election. Actually, the Act authorizes the Agency to "issue bonds from time to time in its discretion to finance the undertaking of any urban renewal project * * *." The bonds "shall not be subject to the provisions of any other law relating to the authorization, issuance or sale of bonds." They "shall be authorized by resolution or ordinance of the governing body of the urban renewal agency * * *." The Act itself, therefore, does not require an election prior to the Agency's issuance of revenue bonds.
City of Dayton v. Allred, 123 Tex. 60, 68 S.W.2d 172, 177, held that Article 1112, Vernon's Ann.Tex.Stats., did not require an election prior to the issuance of revenue bonds for the purchase money of a utility system, but when that same City undertook to encumber the income from another City utility system, the statute was not applicable and an election was necessary. When no constitutional provision is violated, a statute may excuse an election. Brazos River Conservation and Reclamation Dist. v. McCraw, 126 Tex. 506, 91 S.W.2d 665; Lower Colorado River Authority v. McCraw, 125 Tex. 268, 83 S.W.2d 629; City of Houston v. Allred, 123 Tex. 334, 71 S.W.2d 251; City of Dayton v. Allred, 123 Tex. 60, 68 S.W.2d 172; McCann v. Akard, Tex.Com.App., 68 S.W.2d 1033.
City of Richmond v. Allred, 123 Tex. 365, 71 S.W.2d 233, concerned the issuance of bonds to purchase an existing water plant, but, as in City of Dayton v. Allred, supra, the bonds were to be secured by a lien and pledge of revenues from the city's entire water system, and Article 1112 was not applicable to excuse an election. The case, however, goes further and holds that the issuance of such bonds is for the determination of the expenditure of money within the meaning of Sections 3 and 3a, Article 6 of the Constitution, which required an election by the qualified voters owning taxable property, who had rendered the property for taxation.
The reason, however, that City of Richmond v. Allred does not control this case is stated by the Supreme Court in Taxpayers' Ass'n of Harris County v. City of Houston, 129 Tex. 627, 105 S.W.2d 655, 659: "We think that the holding in the City of Richmond Case, supra, cannot be said to support the contentions of the association et al. here. In other words, we think there is a vast difference between voting on revenue bonds to raise funds, the proceeds of which are to be expended to purchase a municipal water plant, and the mere voting of an ordinance for fixing minimum wages for city officers and employees. The first-mentioned enterprise involved directly the expenditure of money. The second involved principally a matter of public policy." The direct question put to the voters in the Laredo election was whether they favored or were against the adoption of the resolution stated in the footnote. It did not concern a direct expenditure of money.
It should be further observed that this action is an election contest which we conclude should have been upheld. We express no opinion with respect to the effect of an urban renewal election which is not contested.
The motion for rehearing is overruled.
NOTES
[1] "Resolution Making Certain Findings, Determinations, and Elections Under and Pursuant to the Urban Renewal Law of Texas
"Be It Resolved By the City Council of the City of Laredo, Texas as follows:
"Section 1. It is hereby found and determined that one or more slum or blighted areas exists in the City of Laredo.
"Section 2. It is hereby further found and determined that the rehabilitation, conservation, or slum clearance and redevelopment, or a combination thereof, of such slum or blighted area or areas, is necessary in the interest of public health, safety, morals or welfare of the residents of said City.
"Section 3. It is hereby further determined that the City of Laredo shall exercise the powers granted to the City by the Urban Renewal Law of the State of Texas, except the Urban Renewal Project Powers as defined in said Urban Renewal Law.
"Section 4. It is hereby further determined to be necessary and in the public interest that the City of Laredo elect, and accordingly, the City hereby elects to have said Urban Renewal Project Powers exercised by the Urban Renewal Agency of the City of Laredo, which Agency is created by said Urban Renewal Law.
"Section 5. The findings, determinations, and elections herein made are made in accordance with the various terms used herein are used in the same sense as used or defined in said Urban Renewal Law."
[2] "Sec. 3. All qualified electors of the State, as herein described, who shall have resided for six months immediately preceding an election, within the limits of any city or corporate town, shall have the right to vote for Mayor and all other elective officers; but in all elections to determine expenditure of money or assumption of debt, only those shall be qualified to vote who pay taxes on property in said city or incorporated town; provided, that no poll tax for the payment of debts thus incurred, shall be levied upon the persons debarred from voting in relation thereto."
"Sec. 3a. When an election is held by any county, or any number of counties, or any political sub-division of the State, or any political sub-division of a county, or any defined district now or hereafter to be described and defined within the State and which may or may not include towns, villages or municipal corporations, or any city, town or village, for the purpose of issuing bonds or otherwise lending credit, or expending money or assuming any debt, only qualified electors who own taxable property in the State, county, political subdivision, district, city, town or village where such election is held, and who have duly rendered the same for taxation, shall be qualified to vote and all electors shall vote in the election precinct of their residence. Added Nov. 8, 1932."
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2434985/
|
337 S.W.2d 872 (1960)
Buel NEELY et al., Appellants,
v.
Jack R. JONES et ux., Appellees.
No. 5-2170.
Supreme Court of Arkansas.
September 12, 1960.
*873 Howard & McDaniel, Barrett, Wheatley, Smith & Deacon, Jonesboro, for appellants.
Frierson, Walker & Snellgrove, Jonesboro, for appellees.
GEORGE ROSE SMITH, Justice.
This boundary line dispute involves the ownership of a strip of land, less than an acre, lying between the appellants' property to the east and the appellees' property to the west. The case began as an action in ejectment but was later transferred to equity. At the close of the plaintiffs' proof the chancellor sustained a demurrer to the evidence, and this appeal is from the ensuing order of dismissal. The only question is whether the demurrer to the evidence was properly sustained. This depends, under our holding in Werbe v. Holt, 217 Ark. 198, 229 S.W.2d 225, upon whether the proof, viewed in its most favorable light, would have presented a question of fact for the jury if the case had been tried at law.
The appellees have record title to a tract of about ten acres, which includes the strip now in controversy. Some twenty or more years ago their predecessors in title erected a fence near their eastern boundary, but for some reason not disclosed by the record the disputed strip was left outside the fence. The appellants' land, a three or four acre tract, lies just east of the strip in question and includes a dwelling house that has been occupied by the appellants and their predecessors in title. Except for a few isolated acts neither the appellants' actual possession nor that of their predecessors has extended to the disputed strip, which is largely made up of gullies not suited to cultivation or other use. This litigation arose in 1959 as a result of the appellees' having moved the fence over to the true line and having thereby attempted for the first time to exercise dominion over the area in controversy.
We are of the opinion that the demurrer to the evidence should have been overruled, for the appellants' proof raised a question of fact as to the existence of a boundary by acquiescence. As we said in Tull v. Ashcraft, Ark., 333 S.W.2d 490, 491: "We have frequently held that when adjoining landowners silently acquiesce for many years in the location of a fence as the visible evidence of the division line and thus apparently consent to that line, the fence line becomes the boundary by acquiescence. [Citing cases.]" In such cases the existence of a boundary line by acquiescence is an issue of fact, to be determined upon the evidence in each individual case. Thompson on Real Property (Perm. Ed.), § 3309. In the record now before us there is substantial evidence to support the *874 view that the landowners' tacit recognition of the fence line for more than twenty years created a new boundary line.
The appellees rely principally upon Cossey v. House, 227 Ark. 100, 296 S.W.2d 199, 200, where we said that "a landowner who puts his fence inside his boundary line does not thereby lose title to the strip on the other side. That loss would occur only if his neighbor should take possession of the strip and hold it for the required period of years." We adhere to the basic principle followed in the Cossey case, but there are at least two important points of distinction between that case and this one. First, there the adjoining land on the far side of the fence was wild and unimproved, so that its owner could hardly be regarded as having consciously acquiesced in the fence as a boundary line. Here the fact that both tracts have been improved and occupied might well support an inference that the fence has been accepted as the line. Secondly, the Cossey case was tried upon its merits; the question on appeal was where the preponderance of the evidence lay. Here the trial court's action in sustaining a demurrer to the evidence can be affirmed only if the plaintiffs offered no substantial testimony upon the controlling question of fact. We are unable to say that their proof falls completely short of establishing a prima facie case.
Reversed and remanded.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1801824/
|
831 F.Supp. 1471 (1993)
Stephen ADAMS
v.
RTC as Receiver for Midwest Federal Savings and Loan Association, H. Greenwood, Jr., et al.
MIDWEST SAVINGS ASSOCIATION, F.A.,
v.
Donald ZIETLOW
v.
RTC as Receiver for Midwest Federal Savings and Loan Association, H. Greenwood, Jr., et al.
NORTHWEST RACQUET SWIM & HEALTH CLUBS, INC.
v.
H. GREENWOOD, Jr., et al.
William FINE
v.
RTC as Receiver for Midwest Federal Savings & Loan Association, Green Tree Acceptance, Inc., et al.
LENERTZ, INC., et al.
v.
Thomas J. RESCH, et al.
RESOLUTION TRUST CORPORATION
v.
Harold GREENWOOD, et al.
Richard K. NELSON, et al.
v.
AMERICAN CASUALTY COMPANY.
John KENNA, et al.
v.
AMERICAN CASUALTY COMPANY.
J.E. MARLIN, et al.
v.
AMERICAN CASUALTY COMPANY.
Nos. 4-89-CV-330, 4-90-CV-345, 4-90-CV-930, 4-90-CV-973, 4-92-CV-088, 4-92-CV-002, 4-92-CV-838, 4-92-CV-783 and 3-92-CV-604.
United States District Court, D. Minnesota.
August 24, 1993.
*1472 *1473 Timothy Desmond Kelly, Wendy A. Snyder, Kelly & Berens, Minneapolis, MN, for Stephen Adams.
Gary W. Hoch, Randy Alan Sharbono, Meagher & Geer, Minneapolis, MN, for American Cas. Co. of Reading, PA.
Robert J. Sheran, Carol T. Rieger, Thomas E. Glennon, Lindquist & Vennum, William Joseph Mauzy, Mauzy Law Office, Minneapolis, MN, for Harold W. Greenwood Jr.
E. Martin Stapleton, Stapleton Nolan & McCall, St. Paul, MN, for Thomas J. Resch in No. 4-89-CV-330.
J. Thomas Vitt, David Joseph Lauth, Peter Scott Hendrixson, Dorsey & Whitney, Minneapolis, MN, for Lawrence M. Coss.
John Eugene Yanish, John Paul Martin, Petersen Tews & Squires, Minneapolis, MN, Mark S. Bernstein, Barack Ferrazzano Kirschbaum & Perlman, Chicago, IL, Ray G. Rezner, Wendi Sloane Weitman, Elyse M. Tish, Meribeth Mermall, Barack Ferrazzano Kirschbaum & Perlman, Chicago, IL, April A. Breslaw, Resolution Trust Corp., Washington, DC, for Resolution Trust Corp.
Bruce A. Rasmussen, Scott R. Carlson, Rasmussen & Assoc, Minneapolis, MN, for John Barry.
William Richard Busch, Busch Law Office, St. Paul, MN, for Thomas P. FitzGibbon, Sr., John J. Kenna.
Susan Greenwood-Olson, pro se.
Dylan J. McFarland, Fred Burstein, Fred Burstein & Assoc, Minneapolis, MN, for F. William Johnson.
Robert Mampel, pro se.
Steven Z. Kaplan, Wayne A. Hergott, Moss & Barnett, Minneapolis, MN, for J.E. Marlin, Lloyd K. Peterson, H. Vincent Hagstrum, Arne D. Rydland, William H. Sipple, Martin J. Kilroy, in Nos. 4-92-CV-002, 4-92-CV-088, 3-92-CV-604.
Richard K. Nelson, pro se.
E. Martin Stapleton, Mark Murray Nolan, Stapleton Nolan & McCall, St. Paul, MN, for Thomas Resch in Nos. 4-92-CV-002, 4-92-CV-088, 4-92-CV-838.
William Sipple, pro se.
Donald Snede, pro se.
Lindsay G. Arthur, Jr., Katherine L. MacKinnon, Paula Duggan Vraa, Arthur Chapman McDonough, Kettering & Smetak, Minneapolis, MN, for Shenehon & Associates.
Timothy Desmond Kelly, Andrea Lillie Sahlin, Kelly & Berens, Minneapolis, MN, for Lenertz, Inc., Frederick G. Lenertz, Lawrence L. Lenertz, Jr.
Joe A. Walters, O'Connor & Hannan, Minneapolis, MN, for John P. Farry, Muriel Humphrey Brown in No. 4-92-CV-088.
Michael C. Flom, Gray, Plant, Mooty, Mooty & Bennett, Minneapolis, MN, for William I. Fine.
J. Thomas Vitt, David Joseph Lauth, Peter Scott Hendrixson, Dorsey & Whitney, Minneapolis, MN, Richard Gwilym Evans, Green Tree Acceptance Inc., St. Paul, MN, for Green Tree Acceptance, Inc.
Joe A. Walters, Robert Arthur Brunig, O'Connor & Hannan, Minneapolis, MN, for Muriel Humphrey Brown, John P. Farry in No. 4-90-CV-973.
Louis Joseph Speltz, Moss & Barnett, Minneapolis, MN, for Martin J. Kilroy and Thomas H. Tipton in No. 4-90-CV-973.
Louis Joseph Speltz, Steven Z. Kaplan, Wayne A. Hergott, Mitchell H. Cox, Moss & Barnett, Minneapolis, MN, for H. Vincent Hagstrum, J.E. Marlin, Arne D. Rydland, and William H. Sipple in No. 4-90-CV-973.
Louis Joseph Speltz, Steven Z. Kaplan, Wayne A. Hergott, Moss & Barnett, Minneapolis, MN, for Lloyd K. Peterson in No. 4-90-CV-973.
Stephen Carl Rathke, James M. Lockhart, Ronald L. Haskvitz, Phillip Allen Cole, Barry A. O'Neil, Lommen Nelson Cole & Stageberg, Minneapolis, MN, for Northwest Racquet.
Joseph Stuart Friedberg, Friedberg Law Office, Minneapolis, MN, for Charlotte Elizabeth Masica.
*1474 Stephen Carl Rathke, Phillip Allen Cole, Lommen Nelson Cole & Stageberg, Minneapolis, MN, for Donald James Snede.
Earl Paul Gray, Gray & Malacko, St. Paul, MN, for Robert Arnold Mampel.
Joe A. Walters, Kirk Wilson Reilly, O'Connor & Hannan, Minneapolis, MN, for Muriel Humphrey Brown and John P. Farry in No. 4-90-CV-930.
Steven Z. Kaplan, Wayne A. Hergott, Mitchell H. Cox, Moss & Barnett, Minneapolis, MN, for H. Vincent Hagstrum, Martin J. Kilroy, J.E. Marlin, Lloyd K. Peterson, Arne Rydland, William H. Sipple, Thomas H. Tipton, in No. 4-90-CV-930.
Timothy Desmond Kelly, Wendy A. Snyder, Kelly & Berens, Minneapolis, MN, for Donald Zietlow in No. 4-90-CV-345.
Edward R. Soshnik, Minneapolis, MN, for Donald J. Snede.
Gerald Conrad Rummel, Rummel Law Office, St. Paul, MN, for Patrick T. Stead.
ROSENBAUM, District Judge.
I. Introduction
The saga of the collapse of Midwest Federal continues. The detailed procedural history of these consolidated matters need not be recounted here. It is set forth in this Court's order dated May 19, 1993, 1993 WL 181303.[1] The parties have now filed eight additional dispositive motions. A hearing was held July 9, 1993.
Five of the eight motions were disposed of, or continued, at the hearing. The Court disposed of these motions as follows. The RTC's motion to stay was denied. The RTC's motion to strike the affirmative defenses of Shenehon & Associates ("Shenehon"), in RTC v. Greenwood, was taken under advisement until the time of trial. The summary judgment motions of the director defendants in Fine v. RTC, and Shenehon in RTC v. Greenwood, were denied, as the Court has determined that genuine issues of material fact remain. American Casualty Company's summary judgment motion in the declaratory judgment actions, seeking to exclude the directors from recovering attorneys' fees, was denied. The three remaining motions are addressed, infra.
Background
In the remaining actions, William Fine and the Resolution Trust Corporation (RTC) seek to recover losses they claim to have sustained as a result of the demise of Midwest Federal Savings and Loan Association (Midwest) in 1989. Midwest was a federally chartered mutual membership association headquartered in Minneapolis, Minnesota. It was placed in conservatorship on February 13, 1989.
On May 4, 1989, the Federal Savings and Loan Insurance Corporation ("FSLIC"), as receiver for Midwest, entered into an Acquisition Agreement ("the Agreement") with a new mutual savings and loan association, Midwest Savings Association ("Midwest Savings"). The FSLIC was appointed as receiver of Midwest Savings. Under the agreement, certain assets and liabilities of Midwest were transferred to Midwest Savings. The Agreement, however, excluded certain liabilities from this transfer. Section 2 of the Agreement provides, in pertinent part, that:
The ACQUIRING ASSOCIATION [Midwest Savings] hereby expressly assumes and agrees to pay, perform, and discharge all of the CLOSED ASSOCIATION'S [Midwest's] liabilities ... The term "liability" as used in this section does not refer to any obligation of the CLOSED ASSOCIATION to its stockholders arising out of or related in any way to their stock holdings (including claims for damages or rescission arising from the purchase or sale of such stock holdings) or any obligation to indemnify controlling persons, directors, officers or other persons as a result of suits arising from claims of the CLOSED or ACQUIRING ASSOCIATION, and the ACQUIRING *1475 ASSOCIATION specifically does not assume ... any such obligations to the stockholders or for such indemnification. For the purposes of this Agreement, "stockholder" means ... subordinated debt issued by the CLOSED ASSOCIATION.
(Bernstein Aff., Ex. A § 2).
In August, 1989, The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) became law. Pub.L. No. 101-73, 103 Stat. 183. Under the terms of that act, the RTC replaced the FSLIC as receiver of Midwest Savings.
a. The Fine Action
Prior to its collapse, Midwest sold a series of subordinated debentures to investors. On January 29, 1988, Midwest sold Fine a total of $1 million in subordinated debt securities, all dated January 29, 1988. (Compl. ¶ 38). On April 2, 1991, Fine filed his five count complaint (the Fine action) against the RTC, Green Tree Acceptance, Inc. ("Green Tree"), and 15 of Midwest's former director and officers.[2]
Fine claims that Green Tree aided and abetted Midwest in its violations of § 10(b) of the 1934 Securities and Exchange Act ("the Act"), 15 U.S.C. § 78j(b), and Rule 10b-5 of the Securities and Exchange Commission, 17 C.F.R. § 240.10b-5. Fine further claims that Green Tree is secondarily liable for Midwest's actions because it is a "controlling person" under § 20 of the Act, 15 U.S.C. § 78t (Count I).[3] Fine makes parallel allegations against Green Tree under the Minnesota Securities Act, Minn.Stat. § 80A.01, et seq. (Count II).[4]
Midwest had originally formed Green Tree as a wholly-owned subsidiary in 1975. Green Tree is a Minnesota corporation whose primary business is the financing of manufactured homes. In 1983, Midwest surrendered some of its stock to Green Tree. Green Tree sold these shares in a public offering.
Green Tree grouped its manufactured housing loans into "loan pools," which were then sold to investors. (Second Amended Compl. ¶ 23). Under this "Investor Sale Program," Green Tree continued to service the loans, forwarded the interest and principal to investors, and maintained its own "Loan Loss Reserve" to cover bad loans. Green Tree's profit from the "Investor Sale Program" was referred to as the "Loan Servicing Spread" or "Finance Income Receivable" ("FIR"). In 1985, Midwest purchased the FIR asset from Green Tree for $192 million. Green Tree continued to perform the loan servicing function on the FIR asset. The value of the FIR asset subsequently declined and, as of December, 1987, the projected shortfall was estimated at $61.7 million. (Second Amended Compl. ¶ 35).
In 1985, at the time of Midwest's purchase of the FIR asset, Midwest owned approximately 20 percent of Green Tree's stock. In 1987, Midwest sold the remainder of its Green Tree stock. (Vitt Aff., Ex. B).
Defendant Harold Greenwood, Jr., ("Greenwood") was the chief executive officer and chairman of the board of Midwest until its demise in 1989. Greenwood was the first chairman of Green Tree's board, and remained in that position until October, 1987. Greenwood left this position when Midwest sold its remaining shares of Green Tree stock. (Vitt. Aff., Ex. C; Greenwood Depo. at 167). After his departure, Greenwood continued to receive compensation from Green Tree under a "consulting agreement" contract. Under this contract, Green Tree paid Greenwood until May, 1988. It is acknowledged that Greenwood never performed any services for Green Tree pursuant *1476 to the consulting agreement, nor were any services requested. (Vitt. Aff., Ex. C; Greenwood Depo. at 173).
After Greenwood's departure, Lawrence Coss became the president and chief executive officer of Green Tree. Coss sat on Midwest's board until May, 1986.
At the time of the FIR purchase, several Midwest officers raised concerns over the manner in which the FIR transaction was conducted. In 1985, Donald Snede, chief financial officer, recommended that, rather than using Green Tree's accountants and lawyers, Midwest should supply its own. (Wittrock Aff., Ex. S; Snede Depo. at 279). David Kuebelbeck, then in-house general counsel for Midwest, testified that the loans purchased from Green Tree were neither acquired at market rates nor acquired in the manner Midwest would typically use to purchase loans from another seller. (Wittrock Aff., Ex. M; Kuebelbeck Depo, 394-95, 402-03). In September, 1988, Midwest sued Green Tree over the FIR transaction, claiming fraud, breach of warranty, and breach of contract.[5]
Green Tree seeks summary judgment on Fine's claims that it had control over Midwest's affairs, and aided and abetted Midwest's securities law violations.
The RTC Action
On January 6, 1992, the RTC filed a separate action against Shenehon & Associates,[6] and 16 of Midwest's former directors and officers,[7] claiming breach of fiduciary duty, negligence, gross negligence, and unjust enrichment.[8] Defendants Kenna, FitzGibbon, Sipple, and Snede asserted counterclaims against the RTC seeking indemnification for damages, costs, and attorneys' fees which may be incurred in the RTC action.[9] The RTC now moves for summary judgment dismissing the indemnification counterclaims.
The Declaratory Judgment Actions
On September 4, 1992, officers/directors Richard K. Nelson and Thomas Resch, along with the RTC, filed their declaratory judgment action against American Casualty Company ("ACC") and the previous insurer, MGIC Indemnity Corporation (MGIC).[10] All claims raised by the plaintiffs in the Nelson action relate to coverage for any judgment or fees incurred by the directors in the case of RTC v. Greenwood.
On August 20, 1992, outside directors John J. Kenna and Thomas FitzGibbon, Sr., filed their declaratory judgment action against ACC.[11] These outside directors seek a declaration that ACC is obligated to defend, indemnify, and pay attorneys' fees in both the subordinated debenture cases and the RTC v. Greenwood action.
*1477 On September 3, 1992, outside directors J.E. Marlin, Lloyd K. Peterson, H. Vincent Hagstrum, Arne Rydland, William H. Sipple, and Martin J. Kilroy filed their declaratory judgment action against ACC.[12] These outside directors seek a declaration that ACC is obligated to defend, indemnify, and pay their attorneys' fees in both the subordinated debenture litigation and in the RTC v. Greenwood action.
On May 19, 1993, this Court ruled that the RTC could not claim the proceeds of the 1988 Directors and Officers policy ("the D & O policy") under the terms of that policy's regulatory exclusion. In this motion, ACC seeks summary judgment in all three declaratory judgment actions based on this Court's May 19, 1993 ruling.
Analysis
The familiar summary judgment standard is applicable to all three motions before the Court. Summary judgment is appropriate when there is no dispute of material fact, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). The question is whether factual issues exist which may reasonably be resolved in favor of either party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). The party opposing summary judgment may not rest upon the allegations set forth in its pleadings, but must produce significant probative evidence demonstrating a genuine issue for trial. Id. at 248-49, 106 S.Ct. at 2510. If the opposing party fails to carry that burden, or fails to make a sufficient showing to establish the existence of an element essential to its case and upon which that party will bear the burden at trial, summary judgment should be granted. Celotex, 477 U.S. at 322-23, 106 S.Ct. at 2552; Mt. Pleasant v. Associated Electric Cooperative, Inc., 838 F.2d 268 (8th Cir.1988). In reviewing the evidence, the Court must view the facts in the light most favorable to the non-moving party, and give that party the benefit of all reasonable inferences to be drawn from the facts. St. Paul Fire & Marine Ins. Co. v. F.D.I.C., 968 F.2d 695, 699 (8th Cir.1992).
RTC's Motion to Dismiss Directors' Counterclaims
The RTC moves for summary judgment on the directors' counterclaims for indemnification, pursuant to 12 C.F.R. § 545.121. This regulation provides, in pertinent part:
A federal savings association shall indemnify its directors ... in accordance with the following requirements:
. . . . .
(b) General. Subject to paragraphs (c) and (g) of this section, a savings association shall indemnify any person against whom an action is brought ... because that person is or was a director ... of the association.
12 C.F.R. § 545.121 (1993).
Paragraph (g) provides that the indemnification provided in paragraph (b) is "subject to and qualified by 12 U.S.C. § 1821(k)." Section 1821(k) provides, in pertinent part:
A director ... of an insured depository institution may be held personally liable for monetary damages in any civil action by, on behalf of, or at the request or direction of the [Resolution Trust] Corporation, which action is prosecuted wholly or partially for the benefit of the Corporation ... acting as ... receiver of such institution.
12 U.S.C. § 1821(k).
Paragraph (c) sets forth the procedural requirements for a party seeking indemnification. "Mandatory" indemnification is required only if the director has received "[f]inal judgment on the merits in his or her favor...." 12 C.F.R. § 545.121(c)(1). If final judgment is entered against the directors, or the case is concluded other than on the merits, "permissive" indemnification is *1478 available. Such indemnification is available "if a majority of the disinterested directors ... determine that" the director seeking indemnity "was acting in good faith within the scope of his or her employment ... for a purpose he or she could reasonably have believed under the circumstances was in the best interest of the savings association." 12 C.F.R. § 545.121(c)(2)(i)(ii)(iii).
In the case of both mandatory and permissive indemnification, the association must give the Office of Thrift Supervision 60 days notice of its intent to indemnify. 12 C.F.R. § 545.121(c). The notice must "state the facts on which the action arose, the terms of any settlement, and any disposition of the action by a court." Id.
The RTC denies, on several alternative grounds, that it must provide indemnification. It contends that any obligation which Midwest may have had to indemnify the directors was disavowed by Midwest Savings under § 2 of the Acquisition Agreement. The RTC, therefore, contends that Midwest is the only party to whom the directors may look, and the RTC is simply the wrong party. The RTC argues that, because Midwest has no assets from which to provide indemnification, the counterclaims are barred by the doctrine of prudential mootness. See Adams v. RTC, 927 F.2d 348, 354 (8th Cir.), cert. denied, ___ U.S. ___, 112 S.Ct. 66, 116 L.Ed.2d 41 (1991). In the alternative, the RTC contends that the defendants have failed to comply with the procedural requirements for indemnification and have failed to exhaust their administrative remedies under FIRREA, 12 U.S.C. § 1821(d)(5)-(14). The directors respond that if § 2 of the Acquisition Agreement is considered valid, it does not bar Midwest Savings's obligation to indemnify the directors in Fine v. RTC. The directors concede that their counterclaims are not ripe because final judgment has not been entered, but oppose dismissal of those counterclaims. The directors also oppose application of FIRREA's exhaustion requirements.
The Court finds that the RTC is entitled to summary judgment on the indemnification counterclaims by operation of § 2 of the Acquisition Agreement. These counterclaims are specifically asserted in the RTC v. Greenwood case, against the RTC in its capacity as receiver of Midwest Savings. See, e.g., Answer and Counterclaim of Thomas FitzGibbon at ¶ 27.[13] Section 2 of the Acquisition Agreement specifically excludes "any obligation of the CLOSED ASSOCIATION [Midwest] to indemnify controlling persons, directors, officers or other persons as a result of suits arising from claims of the CLOSED or ACQUIRING ASSOCIATION...." The Court finds that Midwest Savings declined to assume Midwest's obligation to indemnify the directors.[14]
The Court further finds that § 2 of the Acquisition Agreement does not contravene the mandatory indemnification requirements of § 545.121. To read the regulation as the directors suggest would lead to the absurd result that the RTC could succeed in a suit against the perfidious directors, and then recover from itself. The regulation was apparently created for the legitimate purpose of protecting the faithful director who is sued by a third party.[15]
This Court further concludes that the directors' indemnification counterclaims are barred by the clear language of the regulation itself, as supplemented by FIRREA. Paragraph (b) of § 545.121, which provides for mandatory indemnification, is subject to paragraph (g). Paragraph (g) provides that indemnification by the savings association is *1479 subject to and qualified by 12 U.S.C. § 1821(k). Section 1821(k) provides for personal liability on the part of the directors in any civil action by the RTC acting as a receiver of an insured depository institution.
Reading these provisions together, when the RTC sues the directors for their wrongful conduct against the institution, indemnification is simply unavailable. Accordingly, the RTC's motion for summary judgment on the director defendants' indemnification counterclaims is granted.
Green Tree Motion in Fine v. RTC
Fine claims that Green Tree is secondarily liable for Midwest's violations of section 10(b) of the 1934 Act, 15 U.S.C. § 78j. Fine sets forth theories of "aiding and abetting" and "controlling person" liability. Green Tree moves for summary judgment on both claims.
a. Aiding and Abetting Liability
To establish aiding and abetting liability, Fine must demonstrate:
(1) the existence of a securities law violation by the primary party [Midwest];
(2) "knowledge" of the violation on the part of the aider and abettor; and
(3) "substantial assistance" by the aider and abettor in the achievement of the primary violation.
Metge v. Baehler, 762 F.2d 621, 624 (8th Cir.1985), cert. denied, 474 U.S. 1057, 106 S.Ct. 798, 88 L.Ed.2d 774 (1986); Camp v. Dema, 948 F.2d 455, 459 (8th Cir.1991).[16] "The factors particularly the second and third are not to be considered in isolation, but should be considered relative to one another ... `where there is a minimal showing of substantial assistance, a greater showing of scienter is required.'" Metge, 762 F.2d at 624 (quoting Stokes v. Lokken, 644 F.2d 779, 782-83 (8th Cir.1981)).
The "knowledge" required to establish liability "remains flexible and must be decided on a case-by-case basis." Camp v. Dema, 948 F.2d at 459. One who engages in atypical business transactions, or actions which lack business justification, may be found liable as an aider and abettor with a minimal showing of knowledge of the primary securities law violation. Id. "Recklessness satisfies the knowledge requirement where the defendant owes a duty of disclosure to the plaintiff." Id.
To prove "substantial assistance," Fine bears "the burden of showing that the secondary party proximately caused the violation." Metge, 762 F.2d at 624. "[I]f the aider and abettor owes the plaintiff an independent duty to act or to disclose, inaction can be a proper basis for liability under the substantial assistance test." Id. at 625. But absent such a duty, an aider-abettor case predicated on inaction must meet a high standard of intent "inaction must be accompanied by actual knowledge of the underlying fraud and intent to aid and abet a wrongful act." Id.
*1480 Green Tree contends that it had only passing knowledge of Midwest's subordinated debenture sale to Fine, and provided no assistance in aid of Midwest's primary violation.[17] Fine asserts that Green Tree had knowledge of Midwest's primary violation[18] through Greenwood, who sat on the boards of both entities. In Fine's view, any information known to Greenwood must be imputed to Green Tree. Fine further claims that, at the time of the subordinated debenture sale, Green Tree failed to disclose that the FIR asset was seriously impaired when Midwest was representing the FIR asset's value at $207,592,000. (Amended Compl. ¶ 42). Fine contends that Green Tree's inaction in this regard is sufficient to fulfill the substantial assistance requirement.
The Court finds that Fine has failed to produce sufficient evidence of Green Tree's actual knowledge of the underlying fraud and concomitant intent to aid and abet a wrongful act to withstand summary judgment. Despite pages of interrogatories and hours of depositions, there is insufficient evidence to justify a trial of the issue. The Court determines that no jury could find for the plaintiffs on this issue.
Green Tree does not dispute that it knew of Midwest's subordinated debenture offering. Fine, however, has failed to produce any evidence demonstrating that an employee, officer, or director of Green Tree had actual knowledge of any misrepresentations contained in, or omissions made from, the debenture offering documents. Furthermore, Greenwood's knowledge of the violations cannot be imputed to Green Tree. The sale to Fine took place in January, 1988. Although Greenwood was under contract to Green Tree as a consultant, and received a salary until May, 1988, Greenwood did no work for the company, nor was any requested. There is no showing whatsoever that Greenwood's continuing compensation was anything other than the tail end of a buy-out transaction.
Although the 1985 FIR transaction may, in some way, be tangentially related to the 1988 subordinated debenture sale, there is no evidence that Green Tree failed or was required to disclose the status of the FIR asset to Fine. This fact does not meet the requisite showing of scienter. Green Tree's motion for summary judgment on the plaintiff's aiding and abetting claim is granted.
b. Controlling Person Liability
To prevail on his claim that Green Tree was a "controlling person," Fine:
Must establish, first, that the defendant ... actually participated in (i.e., exercised control over) the operations of the corporation in general; then he must prove that the defendant possessed the power to control the specific transaction or activity upon which the primary violation is predicated, but he need not provide that this later power was exercised.
Metge v. Baehler, 762 F.2d 621, 624 (8th Cir.1985) (citations omitted) (emphasis in *1481 original).[19]
Fine contends that Green Tree's control over Midwest is reflected in the FIR transaction. In his view, this transaction was clearly disadvantageous to Midwest. He further asserts that Green Tree controlled Greenwood by virtue of the continuing compensation agreement. Fine also argues that Green Tree's control over Midwest was manifested in the $1.5 million bonus Midwest paid to Green Tree's CEO, Lawrence Coss, at the time of the 1985 FIR transaction. Fine further notes that Midwest and Green Tree each used the same attorneys and public accounting firm. The plaintiff argues that this evidence supports an inference that Green Tree had the power to control the debenture sale, even if it did not actually exercise that power.
The Court finds that the plaintiff has failed to carry his burden of producing probative evidence that Green Tree actually exercised control over the operations of Midwest in general as of January, 1988. There is no evidence that the FIR transaction was anything other than a deal which was advantageous to one side, and disadvantageous to the other. Furthermore, there is no showing that the timing of Greenwood's compensation, which continued until May, 1988, in conjunction with the Fine subordinated debenture purchase in January, 1988, was anything other than happenstance. See Metge, 762 F.2d at 632. Mere speculation that Green Tree exercised control over Midwest as of January, 1988, is insufficient to withstand Green Tree's summary judgment motion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-250, 106 S.Ct. 2505, 2510-2511, 91 L.Ed.2d 202 (1986). Because Fine has failed to provide sufficient evidence concerning an essential element of controlling person liability, summary judgment must be entered in favor of Green Tree. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).
ACC's Motion for Summary Judgment in the Declaratory Judgment Actions
ACC moves for summary judgment in all three declaratory judgment actions based upon this Court's order of May 19, 1993. In that order, this Court found that the RTC was not entitled to claim the proceeds of the D & O policy issued by ACC to Midwest by virtue of the "Regulatory" exclusion contained in that policy. Northwest Racquet Swim & Health Clubs, Inc. v. Greenwood, U.S.D.C., D.Minn. 4-90-CV-930, slip op. at 20, 1993 WL 181303 (May 19, 1993). ACC contends that resolution of the RTC's right to coverage disposes of the issues raised in all three declaratory judgment actions. ACC is incorrect.
This Court now determines, however, that its previous order completely disposes of the issues raised in Nelson v. ACC, 4-92-CV-838. The Nelson case seeks declarations related to coverage in the RTC v. Greenwood case. Because this Court has already determined that the RTC may not reach the proceeds of the D & O policy, Nelson is dismissed with prejudice. To the extent that the plaintiffs in Marlin v. ACC, 4-92-CV-1090, and Kenna v. ACC, 4-92-CV-783, seek coverage for the claims asserted by the RTC in RTC v. Greenwood, those claims are similarly dismissed. However, ACC's motion for summary judgment is denied to the extent that the plaintiffs in Marlin and Kenna seek declarations of coverage for the claims asserted in Fine v. RTC.
Accordingly, based upon the files, records, and proceedings herein, for the reasons set forth at the hearing held July 9, 1993, and for the reasons set forth above, IT IS ORDERED that:
1. The RTC's motion to stay these consolidated cases is denied.
2. The RTC's motion to strike Shenehon & Associates' affirmative defenses in the case of RTC v. Greenwood, 4-92-CV-2, is taken under advisement until the time of trial.
*1482 3. The RTC's motion to dismiss the directors' indemnification counterclaims in RTC v. Greenwood, 4-92-CV-2, is granted.
4. ACC's motion for summary judgment in Nelson v. ACC, 4-92-CV-838, is granted. Nelson v. ACC, No. 4-92-CV-838, is hereby dismissed with prejudice.
LET JUDGMENT BE ENTERED ACCORDINGLY.
5. ACC's motion for summary judgment in Marlin v. ACC, 4-92-CV-1090, and Kenna v. ACC, 4-92-CV-783, is granted in part and denied in part. Those claims seeking a declaration for coverage in the case of RTC v. Greenwood, 4-92-CV-2, are dismissed with prejudice. To the extent that the directors seek coverage for the claims asserted in Fine v. RTC, 4-90-CV-973, ACC's motion for summary judgment is denied.
6. ACC's motion for summary judgment to exclude the directors from recovering attorneys' fees in the declaratory judgment actions is denied. ACC's motion for reconsideration of this issue, filed July 13, 1993, is also denied.
7. The defendant directors' motion for summary judgment in Fine v. RTC, 4-90-CV-973, is denied.
8. Defendant Green Tree's motion for summary judgment in Fine v. RTC, 4-90-CV-973, is granted. Count I of plaintiff Fine's complaint is dismissed with prejudice as to defendant Green Tree. Count II is dismissed as to defendant Green Tree by stipulation of the parties.
9. Shenehon & Associates's motion for summary judgment in RTC v. Greenwood, 4-92-CV-2, is denied.
NOTES
[1] Since this Court's Order of May 19, 1993, four of the five subordinated debenture cases have been settled. The actions remaining for trial include Fine v. RTC, 4-90-CV-973, and RTC v. Greenwood, 4-92-CV-2. Three insurance declaratory judgment actions also remain, Marlin v. ACC, 4-92-CV-1090, Nelson v. ACC, 4-92-CV-838, Kenna v. ACC, 4-92-CV-783.
[2] See 4-90-CV-973. On April 24, 1991, the RTC filed a motion to dismiss Fine's claims. By order dated July 2, 1991, the Honorable Robert G. Renner, United States District Judge, dismissed the RTC from the Fine action.
[3] On July 2, 1991, Judge Renner denied Green Tree's Rule 12(b)(6) motion to dismiss Counts I and II, but granted the motion as to Counts III, IV, and V. (Docket # 32).
[4] The parties have stipulated to dismissal of these claims.
[5] Midwest Savings Association, F.A. v. Green Tree Acceptance, Inc., et al., U.S.D.C., D.Minn., 3-88-CV-669.
[6] Shenehon & Associates is a real estate appraisal firm located in Minneapolis, Minnesota. The RTC asserts claims against Shenehon for professional malpractice, and aiding and abetting Midwest directors' breach of fiduciary duty. These claims are premised upon two appraisals Shenehon prepared concerning two real estate properties located in Shakopee, Minnesota. Both appraisals were prepared at the request of, and at the direction of, Scottland Companies, a real estate developer located in Scott County, Minnesota.
[7] The named defendants include: Harold Greenwood, Jr., John Barry, Lawrence M. Coss, Thomas P. FitzGibbon, Sr., Susan Greenwood-Olson, F. William Johnson, John J. Kenna, Robert Mampel, J.E. Marlin, Charlotte E. Masica, Richard K. Nelson, Lloyd K. Peterson, Thomas Resch, William Sipple, Donald Snede, and Shenehon & Associates. The parties stipulated to the dismissal of Lawrence M. Coss on May 4, 1992. See Judgment entered May 4, 1992, Docket # 70, 4-92-CV-2. Default was entered against Charlotte Masica on June 19, 1992. On October 15, 1992, the RTC stipulated to dismissal of Counts I, II, and III against Donald Snede. Docket # 132, 4-92-CV-2.
[8] See 4-92-CV-2. This lawsuit was assigned to the Honorable Diana E. Murphy, United States District Judge.
[9] In an order dated July 21, 1992, Judge Murphy dismissed the defendant directors' affirmative defense seeking indemnification from the RTC. Relying upon Adams v. Resolution Trust Corp., 927 F.2d 348 (8th Cir.1991), Judge Murphy struck this defense on the grounds of prudential mootness, finding that Midwest lacked assets with which to indemnify.
[10] See 4-92-CV-838.
[11] See 4-92-CV-783.
[12] See 4-92-CV-1090.
[13] The Court expresses no opinion as to the defendant directors' indemnification counterclaims or affirmative defenses asserted in the subordinated debenture action, Fine v. RTC.
[14] The Court agrees with the RTC that, even if the counterclaims were asserted against Midwest, the claims would fail under the doctrine of prudential mootness, as Midwest lacks assets with which to satisfy such a claim. Adams v. RTC, 927 F.2d 348, 354 (8th Cir.), cert. denied, ___ U.S. ___, 112 S.Ct. 66, 116 L.Ed.2d 41 (1991).
[15] The Court's research has revealed few cases touching upon indemnification under § 545.121. See Harris v. Resolution Trust Corp., 939 F.2d 926 (11th Cir.1991); Atlantic Permanent Federal Sav. & Loan Ass'n, 839 F.2d 212 (4th Cir.1988); Waldoboro Bank v. American Cas. Co. of Reading, Pa., 775 F.Supp. 432 (D.Me.1991); RTC v. Nicholson, No. 3-88-0163 (E.D.Tenn.1991) (memorandum report and recommendation issued by United States Magistrate Judge Robert Murrian, adopted by United States District Judge James H. Jarvis).
Only the Nicholson opinion addresses indemnification by the RTC in an action by the RTC against the directors of a failed institution. The remaining cases involve claims asserted by third parties against the directors, who then sought indemnification from the institution or its insurer.
In Nicholson, the magistrate found that the director's indemnification claim was not yet ripe. The magistrate stated, in dicta, that Nicholson would be entitled to mandatory indemnification under § 545.121 if judgment were entered in his favor. The magistrate ignored the RTC's argument that indemnification in a suit by the RTC would lead to the absurd result of absolute immunity for the sued director. Nicholson, slip op. at 7. This Court declines to adopt the Nicholson dicta.
[16] For the purposes of this motion, the Court presumes a securities law violation by Midwest as the primary party. See Camp v. Dema, 948 F.2d 455, 459 (8th Cir.1991); K & S Partnership v. Continental Bank, N.A., 952 F.2d 971, 977 (8th Cir.1991), cert. denied, ___ U.S. ___, 112 S.Ct. 2993, 120 L.Ed.2d 870 (1992).
[17] Green Tree learned of the subordinated debenture sale through Midwest Officer Donald Snede, who proposed to Green Tree that it purchase some of the debentures. (Wittrock Aff., Ex. S; Snede Depo. at 522-25).
[18] Although atypical business transactions, or actions which lack business justification, may in some cases permit a plaintiff to proceed with only a minimal showing of knowledge, the Court finds that exception inapplicable here. Those cases which have permitted a minimal showing of knowledge generally involved atypical business transactions directly related to the primary violation. In those cases, the aider and abettor engaged in atypical transactions which perpetuated the primary violator's viability to continue in its wrongful acts. See FDIC v. First Interstate Bank of Des Moines, N.A., 885 F.2d 423, 426-428 (8th Cir.1989); Metge v. Baehler, 762 F.2d 621, 626 (8th Cir.1985). Furthermore, the aider-abettor generally receives some benefit from perpetuating the existence of the primary violator's business. See, e.g., K & S Partnership, 952 F.2d at 978; Metge, 762 F.2d at 629.
Here, it was Midwest, not Green Tree, which engaged in an atypical transaction. Fine does not contend, nor is there evidence, that Green Tree engaged in atypical transactions at the time of the subordinated debenture sale which benefited Green Tree and perpetuated Midwest's viability.
[19] Controlling person liability is predicated upon § 15 of the Securities Act of 1933, which provides, in pertinent part:
Every person who, by or through stock ownership, agency or otherwise ... controls any person liable under ... this title, shall also be liable jointly and severally with and to the same extent as such controlled person to any person to whom such controlled person is liable.
15 U.S.C. § 77o.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2435294/
|
964 N.E.2d 708 (2012)
358 Ill. Dec. 39
The PEOPLE of the State of Illinois, Plaintiff-Appellant,
v.
Michael E. SCOTT, Defendant-Appellee.
Nos. 5-10-0253, 5-10-0254.
Appellate Court of Illinois, Fifth District.
January 19, 2012.
Rehearing Denied February 10, 2012.
*709 Lisa Madigan, Attorney General, Chicago (Michael A. Scodro, Solicitor General, and Eugene N. Bian, Michael M. Glick, and Eldad Z. Malamuth, Assistant Attorneys General, of counsel), for the People.
Michael J. Pelletier, Johannah B. Weber, and John H. Gleason, State Appellate Defender's Office, Mt. Vernon, for appellee.
*710 OPINION
Justice STEWART delivered the judgment of the court, with opinion.
¶ 1 After a traffic stop for improper lane usage, the defendant, Michael E. Scott, was charged with possession of unstamped cigarettes in case number 09-CF-233 and with driving under the influence of drugs and possession of cannabis in case number 09-DT-338. He filed motions to suppress evidence and statements in both cases. After an evidentiary hearing, the court granted the motions. The State filed a certificate of substantial impairment and a timely notice of appeal. The two cases were consolidated for this appeal. We reverse and remand.
¶ 2 BACKGROUND
¶ 3 We summarize the pertinent evidence introduced at the hearing on the motions to suppress as follows. Effingham County sheriff's deputy Darin Deters, who had been a law enforcement officer for four years, was on duty in a marked squad car during the early morning hours of November 4, 2009. He testified that he had received training on how to conduct traffic stops and had made between 800 and 900 traffic stops as a law enforcement officer. In his training, he was taught to look for violations of the Illinois Vehicle Code when patrolling in his squad car.
¶ 4 Deputy Deters testified that he was patrolling northbound on Interstate 57 when he noticed a gray Kia passenger car that crossed over the white fog line on the right side of the interstate twice for a couple of seconds each time. He did not notice any other vehicles or pedestrians in the vicinity. Deputy Deters testified that both the front and rear right-side tires crossed over the fog line. At approximately 2:50 a.m., Deputy Deters began following three to four car lengths behind the Kia. The Kia exited the interstate. As Deputy Deters followed the car, both the front and rear right-side tires again crossed the fog line on the exit ramp, and this time both tires were over the fog line for about 250 feet. He estimated that the defendant was driving at about 50 miles per hour on the exit ramp. Deputy Deters testified that he suspected that the defendant might be impaired, sleepy, or distracted, all of which are safety concerns. The defendant testified that he was aware of the squad car following him, that it was not possible that his tires crossed over the fog line, and that he was going to a nearby truck stop for coffee and donuts when the officer pulled him over.
¶ 5 After he observed the Kia make a left turn from the exit ramp, Deputy Deters called in the traffic stop and his location to the dispatcher and activated his overhead emergency lights, which caused the driver of the Kia to pull over. Deputy Deters walked to the driver's door of the Kia and used his flashlight to look inside the vehicle and observe the defendant as he explained the reason for the stop and asked for identification and proof of insurance. Deputy Deters did not notice anything illegal in the interior of the car and did not smell any alcohol, cannabis, or other illegal drugs. He asked the defendant where he had been and where he was going. The defendant told him that he had traveled from Chicago to the St. Louis area to shop and that he was on his way back to Chicago, where he lived. The defendant showed the officer a bag he said contained a pair of long underwear he had purchased.
¶ 6 Deputy Deters testified that the defendant's behavior "stood out just a little bit" because he was more nervous than usual for a person pulled over for a traffic violation. He said that the defendant's "movements appeared almost mechanical *711 like they would jerk," that his movements were "very robotic," that his hand trembled, and that his carotid artery was pulsing. He testified that he thought the defendant's eyes were red and irritated but that he had not listed red or irritated eyes in his report. He did not think the defendant's explanation for his trip, that he traveled all the way from Chicago to the St. Louis area just to buy a pair of long underwear, made much sense. From his training, Deputy Deters was certain there was some type of illegal activity taking place in the defendant's vehicle. At that point, Deputy Deters returned to his squad car and called for an officer with a drug-detection dog to come to the scene to conduct a walk-around of the defendant's vehicle. While waiting, Deputy Deters completed a written warning for improper lane usage as a result of observing the defendant cross the fog line. Within a couple of minutes, Deputy Robert Rich of the Effingham County sheriff's department arrived with his narcotics-detection dog, Jaeger.
¶ 7 Deputy Rich had 22 years' experience with the sheriff's department and had been a canine handler since 2001. Deputy Rich testified about his and Jaeger's training and the procedures they employ when conducting a dog sniff of the exterior of a vehicle. Jaeger alerted to the driver's door, to the front passenger door, and again to the driver's door of the defendant's vehicle. Deputy Rich informed Deputy Deters that Jaeger had alerted on the vehicle, and he put the dog back in his squad car. Deputy Deters exited his squad car, went to the defendant's car, and asked him to get out. Deputy Rich began searching the interior of the defendant's car as Deputy Deters questioned the defendant. Deputy Rich testified that he was aware of Deputy Deters talking to the defendant, but he was searching the car and could not hear what they were saying. Deputy Deters testified that he told the defendant that Jaeger had alerted to the car, and Deputy Deters asked him if there was anything illegal in his car. The defendant told him there was a marijuana cigarette in an eyeglasses container in the car. Deputy Deters testified that he asked the defendant when he had last smoked marijuana, and the defendant replied that he had smoked it twice earlier in the day. The defendant acknowledged that he told Deputy Deters that he had smoked earlier that day, but denied that he had told him he smoked marijuana twice.
¶ 8 As Deputy Deters was talking to the defendant, Deputy Rich said that he had found a marijuana cigarette in the car. Deputy Rich then opened the trunk and found two large boxes of cigarettes. Deputy Deters opened one of the cartons of cigarettes and noticed that the top two cigarette packs were stamped with State of Missouri tax stamps, but not State of Illinois tax stamps. Deputy Deters testified that the defendant said times were tough, that he did not have a job, and that he was planning to sell the cigarettes. Deputy Deters placed the defendant under arrest for possession of cannabis and driving under the influence of drugs and placed him in the squad car. He then called for the defendant's car to be towed and began a tow inventory of the car. He took the marijuana and the cartons of cigarettes into custody and transported the defendant to jail. At the jail, Deputy Deters also issued the defendant a citation for possession of unstamped cigarettes.
¶ 9 In its ruling from the bench, the trial court commented on the credibility of the witnesses, but made no finding as to whether it believed the defendant's vehicle crossed the fog line. The court stated as follows:
*712 "Clearly if you read the definition of improper lane usage, there has been nothing provided by the State to show in any manner that someone was put in jeopardy because it does provide that the vehicle should not be moved from a lane until the movement can be made with safety. There is no testifying or testimony here that he almost impacted with anything or almost hit anyone.
* * *
So after having considered the testimony, judging the credibility of the witnesses, the Court finds that there was no probable cause for the stop initially and the Defendant's Motions to Suppress are granted."
¶ 10 ANALYSIS
¶ 11 A review of a trial court's ruling on a motion to suppress involves mixed questions of law and fact. People v. Jones, 215 Ill. 2d 261, 267, 294 Ill. Dec. 129, 830 N.E.2d 541 (2005).
"Findings of historical fact made by the circuit court will be upheld on review unless such findings are against the manifest weight of the evidence. This deferential standard of review is grounded in the reality that the circuit court is in a superior position to determine and weigh the credibility of the witnesses, observe the witnesses' demeanor, and resolve conflicts in their testimony. However, a reviewing court remains free to undertake its own assessment of the facts in relation to the issues presented and may draw its own conclusions when deciding what relief should be granted. Accordingly, we review de novo the ultimate question of whether the evidence should be suppressed." Id. at 268, 294 Ill. Dec. 129, 830 N.E.2d 541.
Although the defendant raised multiple grounds in support of his motions to suppress evidence and statements, the only ground relied upon by the trial court in granting the motions was a finding that the officer had no probable cause for the initial stop. Since this determination was based upon the court's interpretation of the improper-lane-usage statute, our review is de novo.
¶ 12 Vehicle stops are "subject to the fourth amendment requirement of reasonableness in all the circumstances." Id. at 270, 294 Ill. Dec. 129, 830 N.E.2d 541. We analyze the reasonableness of traffic stops under the principles set forth by the United States Supreme Court in Terry v. Ohio, 392 U.S. 1, 88 S. Ct. 1868, 20 L. Ed. 2d 889 (1968).
"Pursuant to Terry, a law enforcement officer may, under appropriate circumstances, briefly detain a person for questioning if the officer reasonably believes that the person has committed, or is about to commit, a crime. [Citation.] However, the investigative detention must be temporary and last no longer than is necessary to effectuate the purpose of the stop. [Citation.] This aspect of Terry has been codified in our Code of Criminal Procedure of 1963. 725 ILCS 5/107-14 (West 2000)." Jones, 215 Ill.2d at 270-71, 294 Ill. Dec. 129, 830 N.E.2d 541.
Thus, under Terry, the analysis involves a dual inquiry: (1) whether the officer's action was justified at its inception and (2) whether it was reasonably related in scope to the circumstances that initially justified the stop. People v. Al Burei, 404 Ill. App. 3d 558, 562-63, 344 Ill. Dec. 591, 937 N.E.2d 297 (2010). Because the trial court granted the motions on the ground that the traffic stop was not justified at its inception, we confine our analysis to the first part of the Terry inquiry.
¶ 13 The preliminary consideration, that the officer reasonably believes that the person has committed or is about to *713 commit a crime, is satisfied when the officer observes a violation of the vehicle code. Jones, 215 Ill.2d at 271, 294 Ill. Dec. 129, 830 N.E.2d 541 (the officer was justified in making the initial traffic stop when he observed the defendant driving with inoperable taillights, "a clear violation of our vehicle code"); see also People v. Smith, 172 Ill. 2d 289, 297, 216 Ill. Dec. 658, 665 N.E.2d 1215 (1996) (the officer had probable cause to arrest the defendant because he observed a violation of the improper-lane-usage statute). Therefore, in the case at bar, if Deputy Deters observed the defendant violate the improper-lane-usage statute, he was justified in effecting the initial traffic stop.
¶ 14 "Whether probable cause exists depends upon the reasonable conclusion to be drawn from the facts known" to the officer at the time he acts. Devenpeck v. Alford, 543 U.S. 146, 152, 125 S. Ct. 588, 160 L. Ed. 2d 537 (2004). We are required to focus our inquiry on the objective reasonableness of the officer's conduct at the moment of the arrest and to decide whether the facts and circumstances within his knowledge at that time were sufficient to warrant a prudent man to believe that the defendant had committed or was committing an offense. Carmichael v. Village of Palatine, Illinois, 605 F.3d 451, 457 (7th Cir.2010). "The reasonableness of the seizure turns on what the officer knew, not whether he knew the truth or whether he should have known more." Id.
¶ 15 The improper-lane-usage statute provides as follows:
"Whenever any roadway has been divided into 2 or more clearly marked lanes for traffic the following rules in addition to all others consistent herewith shall apply.
(a) A vehicle shall be driven as nearly as practicable entirely within a single lane and shall not be moved from such lane until the driver has first ascertained that such movement can be made with safety." 625 ILCS 5/11-709(a) (West 2010).
In Smith, the Illinois Supreme Court considered the defendant's argument that the arresting officer did not have probable cause to stop him for a violation of the improper-lane-usage statute because he had not endangered anyone by momentarily crossing over a lane line. Smith, 172 Ill.2d at 296, 216 Ill. Dec. 658, 665 N.E.2d 1215. The court rejected the defendant's argument, stating that the statute establishes two separate, exclusive requirements: (1) that a motorist must drive the vehicle as nearly as practicable entirely within one lane and (2) that a driver may not move from one lane of traffic until he or she has determined the move can be made safely. Id. at 296-97, 216 Ill. Dec. 658, 665 N.E.2d 1215. The court ruled that "when a motorist crosses over a lane line and is not driving as nearly as practicable within one lane, the motorist has violated the statute." Id. at 297, 216 Ill. Dec. 658, 665 N.E.2d 1215. The court determined that the officer's observation of the defendant crossing over the lane line, without any testimony or evidence concerning the safety of that maneuver, was sufficient justification to provide the officer with probable cause to arrest the defendant. Id.
¶ 16 Recently, the Third District Appellate Court interpreted the ruling in Smith when it affirmed a trial court's grant of a motion to suppress. People v. Hackett, 406 Ill.App.3d 209, 347 Ill. Dec. 723, 943 N.E.2d 13 (2010), appeal allowed, No. 111781, ___ Ill.2d ___, 350 Ill. Dec. 869, 949 N.E.2d 661 (Ill. Mar. 30, 2011). In Hackett, the arresting officer testified that he had observed the defendant cross over the lane divider twice for a matter of seconds each time. Id. at 211, 347 Ill.Dec. *714 723, 943 N.E.2d 13. A majority of the Hackett court, over a vigorous dissent, interpreted Smith to require that an officer observe a driver cross a lane line "for some reasonably appreciable distance" before he would have probable cause to stop the driver for improper lane usage. Id. at 214, 347 Ill. Dec. 723, 943 N.E.2d 13. The court held that the officer's observation of the defendant's vehicle crossing the lane line twice for a few seconds each time was insufficient cause to stop the defendant's vehicle. Id. at 215, 347 Ill. Dec. 723, 943 N.E.2d 13. We reject the analysis of the Hackett court as contrary to the holding in Smith. The supreme court did not interpret the improper-lane-usage statute to require that an officer observe a driver cross a lane line for a particular distance in order to have probable cause to stop the vehicle. Rather, the court plainly stated that "when a motorist crosses over a lane line and is not driving as nearly as practicable within one lane, the motorist has violated the statute." Smith, 172 Ill.2d at 297, 216 Ill. Dec. 658, 665 N.E.2d 1215.
¶ 17 It is apparent from the record that the trial court believed that a driver could only violate the improper-lane-usage statute if driving outside of a single lane endangered other persons on the roadway or their property. There was no claim in this case that the defendant's driving endangered anyone. Thus, credibility determinations played no role in the trial court's decision. Deputy Deters testified that he observed the defendant cross over the fog line twice for a couple of seconds each time while following him on Interstate 57. Each time, both right-side tires were over the fog line. This testimony was sufficient, if believed, to show that Deputy Deters reasonably believed that the defendant violated the improper-lane-usage statute and to provide the officer with probable cause to effect the initial traffic stop. The trial court did not reject Deputy Deters's testimony about these observations, but merely determined that there was no evidence that what he observed endangered anyone. Thus, the trial court's ruling that evidence of endangerment was essential to the finding of probable cause in this case was based upon an erroneous interpretation of the improper-lane-usage statute and must be reversed.
¶ 18 We note that the defendant testified that he did not cross the fog line while being followed by Deputy Deters, and the trial court never determined whether it believed the testimony of the officer or the defendant on this issue. The court simply determined that, in the absence of evidence of endangerment, probable cause for the initial stop did not exist. Further, the defendant asserted additional grounds for the suppression of evidence and statements which were not reached by the court. Accordingly, this cause must be remanded for further proceedings not inconsistent with this decision.
¶ 19 CONCLUSION
¶ 20 For all of the foregoing reasons, the trial court's order granting the defendant's motions to suppress evidence and statements is reversed, and this cause is remanded for further proceedings.
¶ 21 Reversed and remanded.
Justices WELCH and CHAPMAN concurred in the judgment and opinion.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2435056/
|
246 F. Supp. 2d 1093 (2003)
HUFFY CORPORATION, Plaintiff,
v.
OVERLORD INDUSTRIES; and (Ballistic) by U.S. International *1094 Co., Ltd.,[1] Defendants.
No. CV-S-02-1308PMP(RJJ)
United States District Court, D. Nevada.
February 24, 2003.
*1095 Joseph P. Hardy, Beckley Singleton, Chtd. (LV), Las Vegas, NV, Benjamin A. Kahn, Brownstein, Hyatt & Farber, Denver, CO, Peter J. Korneffel, Brownstein, Hyatt & Farber, Denver, CO, Dan R. Waite, Beckley Singleton, Chtd. (LV), Las Vegas, NV, for Huffy Corporation, Plaintiff.
Johnny C. Chiu, Miller & Chevalier Chartered, Washington, DC, Stephen L. Morris, Morris Pickering & Sanner, Las Vegas, NV, Matthew T. Reinhard, Miller & Chevalier Chartered, Washington, DC, Anthony J. Trenga, Miller & Chevalier Chartered, Washington, DC, for (Ballistic) By U.S. International Co., Ltd. Overlord Industries, Defendant.
ORDER
PRO, Chief Judge.
Presently before this Court is a Motion to Dismiss. Defendant Overlord Industries ("Overlord") filed a Motion to Dismiss (Doc. # 9) on November 19, 2002. Plaintiff Huffy Corporation ("Huffy") filed Response in Opposition to Overlord's Motion to Dismiss (Doc. # 12) on December 13, 2002. Huffy also filed Supplement of Original Signature to David B. Duffs Affidavit in Support of Defendant's [sic] Response to Overlord's Motion to Dismiss (Doc. # 18) on December 24, 2002. Overlord filed a Reply (Doc. # 19) on January 6, 2003.
I. BACKGROUND
Plaintiff Huffy, a bicycle manufacturer, is an Ohio corporation with its principal place of business in Ohio. (Compl.ś 4.) Defendants Overlord and U.S. International Co. ("US International") are allegedly Taiwanese corporations with their principal places of business in Taiwan. (Id. śś 6-7.)
Huffy contends that Overlord designs, manufactures, assembles, and distributes bicycle and bicycle components, and that U.S. International designs, manufactures, assembles, and distributes bicycles and bicycle components for Overlord. (Compl.ś ś 6-7.) Huffy alleges that its predecessor- in-interest, Royce Union Bicycle Co. ("Royce"), contracted with Overlord to purchase bicycles and/or bicycle component parts from Overlord. (Id. ś ś 5, 9.) Huffy alleges that either Overlord or U.S. International produced bicycles or bicycle component parts that were deficient and then sold the deficient parts to Royce or Huffy. (Id. ś 12.) Huffy also alleges that the contracts between Overlord and Royce and between Overlord and Huffy provided that Overlord would indemnify Huffy and Royce for any injuries or claims that arose from the bicycles or bicycle parts. (Id. ś 14.) Huffy further contends that, through similar contracts, U.S. International agreed to indemnify Overlord. (Id. ś 15.)
According to Huffy, eighteen people have brought claims against Huffy for alleged damages stemming from use of equipment that contained Overlord and U.S. International component parts. (Compl.śś 19-36.) As a result, Huffy has brought the present diversity action against Overlord and U.S. International for contract breach, breach of the implied covenant of good faith and fair dealing, indemnification, and declaratory relief. (Id. ś ś 40-61.)
II. LEGAL STANDARD
Under the Federal Rules of Civil Procedure, a court may dismiss an action for "lack of jurisdiction over the person." Fed.R.Civ.P. 12(b)(2). If a court lacks personal jurisdiction over the parties, the court's judgment is rendered void. Pennoyer v. Neff, 95 U.S. 714, 726-28, 24 *1096 L.Ed. 565 (1877); Veeck v. Commodity Enters., Inc., 487 F.2d 423, 426 (9th Cir. 1973). Once a defendant challenges personal jurisdiction, the plaintiff bears the burden of establishing that a court has personal jurisdiction over the defendant. Butcher's Union Local No. 498 v. SDC Inv., Inc., 788 F.2d 535, 538 (9th Cir. 1986) (citing KVOS v. Associated Press, 299 U.S. 269, 278, 57 S. Ct. 197, 81 L. Ed. 183 (1936)). Typically, federal courts have personal jurisdiction over defendants to the same extent as the state courts "in the state in which the [federal] district court is located." See Fed.R.Civ.P. 4(k)(l)(A). In Nevada, courts "may exercise jurisdiction over a party to a civil action on any basis not inconsistent with the constitution of this state or the Constitution of the United States." Nev.Rev.Stat. 14.065(1).
The courts have interpreted the Due Process Clauses of the Constitution to require that the defendant "have certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.' " International Shoe Co. v. State of Wash., 326 U.S. 310, 316, 66 S. Ct. 154, 90 L. Ed. 95 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S. Ct. 339, 85 L. Ed. 278 (1940)). See also Burger King v. Rudzewicz, 471 U.S. 462, 476, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1985) ("Once it has been decided that a defendant purposefully established minimum contacts within the forum State, these contacts may be considered in light of other factors to determine whether the assertion of personal jurisdiction would comport with `fair play and substantial justice.' ") (citing International Shoe, 326 U.S. at 320, 66 S. Ct. 154). Further, whether a defendant "should reasonably anticipate being haled into court" in the forum state is "critical to due process analysis." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S. Ct. 559, 62 L. Ed. 2d 490 (1980).
Courts may exercise general or specific personal jurisdiction over a defendant. "For a defendant to be subject to general in personam jurisdiction, it must have such continuous and systematic contacts with the forum that the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice." Reebok Int'l Ltd. v. McLaughlin, 49 F.3d 1387, 1391 (9th Cir.1995) (citing Core-Vent v. Nobel Indus. AB, ś F.3d 1482, 1485 (9th Cir. 1993)). See also Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 414, 104 S. Ct. 1868, 80 L. Ed. 2d 404 (1984). If a court cannot exercise general personal jurisdiction over a defendant, a court may still have specific personal jurisdiction if a three-part test is met:
(1) The nonresident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws;
(2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and
(3) the exercise must comport with fair play and substantial justice; i.e. it must be reasonable.
Reebok Int'l, 49 F.3d at 1391 (citing Core-Vent, ś F.3d at 1485).
III. DISCUSSION
Defendant Overlord has moved to dismiss the present action on the ground that this Court lacks personal jurisdiction over Overlord. Huffy responds that the Nevada long-arm statute confers jurisdiction over Overlord. Because this court "acts on a defendant's motion to dismiss under Rule 12(b)(2) without holding an evidentiary *1097 hearing, the plaintiff need make only a prima facie showing of jurisdictional facts to withstand the motion to dismiss." Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995) (citing sources). To establish a prima facie case, "the plaintiff need only demonstrate facts that if true would support jurisdiction over the defendant." Id. at 1498 (citing Data Disc, Inc. v. Systems Technology Assocs., 557 F.2d 1280, 1285 (9th Cir.1977)).
A. Nevada's Long-Arm Statutes
Huffy contends that both Nevada Revised Statute 14.065(1) and Nevada Revised Statute 14.080 give this Court jurisdiction over Overlord.
1. Nevada Revised Statute 14.080
According to Nevada Revised Statute 14.080:
Any company, firm, partnership, corporation or association created and existing under the laws of any other state, territory, foreign government or the Government of the United States, which manufactures, produces, makes, markets or otherwise supplies directly or indirectly any product for distribution, sale or use in this state may be lawfully served with any legal process in any action to recover damages for an injury to a person or property resulting from such distribution, sale or use in this state by mailing to the last known address of the company, firm, partnership, corporation or association, by registered or certified mail return receipt requested, a copy of the summons and a copy of the complaint.
Nev.Rev.Stat. 14.080(1) (emphasis added).
In interpreting 14.080, the Nevada Supreme Court[2] has held that 14.080 can be used to assert personal "jurisdiction over a foreign manufacturer of a product which it reasonably may expect to enter interstate commerce, which does enter interstate commerce, and because of an alleged defect, causes injury in Nevada to the plaintiff." Metal-Matic, Inc. v. Eighth Judicial Dist. Court, 82 Nev. 263, 415 P.2d 617, 619 (1966). The Nevada Supreme Court has repeatedly and uniformly limited 14.080 to service of process over foreign defendant corporations whose products allegedly caused tortious injury to plaintiffs in Nevada. See id. at 619. See also Judas Priest v. Second Judicial Dist. Court, 104 Nev. 424, 760 P.2d 137, 139 n. 2 (1988); Wilmack, Inc. v. Second Judicial Dist. Court, 97 Nev. 547, 635 P.2d 296, 298 (1981); Jacobsen v. Ducommun, Inc., 87 Nev. 240, 484 P.2d 1095, 1096 (1971); Drew Rentals v. First Judicial Dist. Court, 84 Nev. 201, 438 P.2d 253, 253 (1968); Jeppeson & Co. v. Eighth Judicial Dist. Court, 83 Nev. 329, 431 P.2d 260, 261 (1967); Gambs v. Morgenthaler, 83 Nev. 90, 423 P.2d 670, 672 (1967).
Nevada Revised Statute 14.080 is inapplicable to the case at bar for two reasons. First, Huffy does not allege in its Complaint that any of the claimants who have asserted personal injury claims against Huffy are either Nevada residents or were in Nevada at the time of their alleged injuries. Injury in Nevada is a prerequisite to proper service of process pursuant to 14.080. See, e.g., Judas Priest, 760 P.2d at 138 ("NRS 14.080 allows for service of process on any corporation which directly or indirectly supplies a product for distribution, sale or use when an injury results from such activity in the state [of Nevada]."); Wilmack, 635 P.2d at *1098 298 ("[T]his court has limited [14.080] to apply only to service of process upon a foreign corporation whose product has caused injury in this state.") (citing Metal-Matic, 82 Nev. 263, 415 P.2d 617). In fact, the Complaint does not allege any facts at all with respect to where the claimants were injured, or where they reside.
Second, Huffy does not sue in tort; Huffy sues in contract. Huffy asserts that because 14.080 applies to "damages for an injury to a person or property," Nev.Rev. Stat. 14.080, the statute is not limited to tort actions. Given the Nevada Supreme Court's consistent application of the statute to tort actions, this argument is clearly without merit. The plain language of the statute relates to products liability actions, which clearly fall under the rubric of tort law. Huffy provides a single case cite in reference to its assertion that 14.080 can apply to contract actionsâ Falen v. Cervi Livestock Co., 585 F. Supp. 627, 629 (D.Nev.1984). Falen, however, is a federal district court case and therefore not binding on this court. Further, the Falen ruling is unclear with respect to whether the claims at issue were contract or tort claims. Indeed, two other published decisions in the same case concern tort claims in whole or in part. See Falen v. Cervi Livestock Co., 581 F. Supp. 883, 885 (D.Nev.1984) ("The amended third-party complaint alleges that [defendant] Machart was negligent in performing brucellosis and pregnancy tests and that he fraudulently misrepresented the cattle to be brucellosis-free and pregnant."); Falen v. Cervi Livestock Co., 581 F. Supp. 885, 887 (D.Nev.1984) ("The pleading declares that Dixon fraudulently misrepresented the condition of the cattle, and also breached the implied warranties of merchantability and fitness for a particular use (cow-calf operations)."). For the reasons stated above, Huffy's argument that 14.080 confers jurisdiction on this Court over Overlord fails.
2. Nevada Revised Statute 14.065
Nevada Revised Statute 14.065(1) provides that courts "may exercise jurisdiction over a party to a civil action on any basis not inconsistent with the constitution of this state or the Constitution of the United States." Nev.Rev.Stat. 14.065(1). Thus, this Court must look to International Shoe and its progeny to determine whether exercising personal jurisdiction over Overlord would be proper. See generally International Shoe, 326 U.S. 310, 66 S. Ct. 154.
B. Personal Jurisdiction
1. General Jurisdiction
Huffy has failed to meet its burden of showing that Overlord has "continuous and systematic" contacts with Nevada such that the exercise of general personal jurisdiction over Overlord would be proper. See Helicopteros, 466 U.S. at 416,104 S. Ct. 1868; Reebok Int'l, 49 F.3d at 1391. In support of Huffy's assertion that this Court has general personal jurisdiction over Overlord, Huffy argues that Overlord does business in Nevada in two ways. First, Huffy asserts that Overlord "solicits] business contracts and relationships in Nevada every year at the annual Interbike trade show." (Pl.'s Response in Opp'n to Overlord's Mot. to Dismiss [hereinafter "Pl.'s Opp'n"] at 5.) Second, Huffy asserts that Overlord's practice of "selling products to national distributors ... with the expectation and understanding that Huffy would (and did) distribute the Overlord bicycles throughout the United States, including to Nevada retailers and consumers" constitutes sufficient support for this Court to exercise general personal jurisdiction over Overlord. (Id.) These contacts *1099 cannot be accurately described as "continuous and systematic."
In Helicopteros, the United States Supreme Court found that a Texas state court could not properly exercise personal jurisdiction over a Colombian corporation when that corporation did "not have a place of business" in the forum state and had "never been licensed to do business" there. 466 U.S. at 416, 104 S. Ct. 1868. The Court stated:
Basically, [the defendant's contacts with [the forum state of] Texas consisted of sending its chief executive officer to Houston for a contract-negotiation session; accepting into its New York bank account checks drawn on a Houston bank; purchasing helicopters, equipment, and training services from [the Fort Worth company of] Bell Helicopter for substantial sums; and sending personnel to Bell's facilities in Forth Worth for training.
Id. The Court found these activities insufficient to confer jurisdiction over the defendant. Id. at 418-19, 104 S. Ct. 1868.
Here, the alleged contacts do not even rise to the level asserted in Helicopteros. 466 U.S. at 416, 104 S. Ct. 1868. Huffy asserts that two of Overlord's activitiesâ attending the annual Interbike trade show, and selling products to national distributors with the understanding that those products would be sold in Nevadaâ are sufficient to confer jurisdiction on this Court. However, Huffy does not allege the extent of Overlord's involvement in the Interbike trade show. Huffy does offer evidence that "Overlord or its affiliates have [sic] marketed Overlord's products for years at the annual Interbike." (PL's Opp'n, Ex. Aff. of David Duff [hereinafter "Duff Aff."] ś 11.) However, Huffy does not explain its use of the phrase "for years"â "for years" could mean two years, ten years, or any other number of years. Without specific information about Overlord's alleged involvement at the trade show, this Court will not assume that Overlord's alleged involvement at the trade show constitutes contact with Nevada that is sufficient to justify this Court's exercise of general jurisdiction.
Further, the United States Supreme Court has stated in the context of specific personal jurisdiction that "[t]he placement of a product into the stream of commerce, without more, is not an act the defendant purposefully directed toward the forum State." Asahi Metal Indus. Co. v. Superior Court of Cal, 480 U.S. 102, 112, 107 S. Ct. 1026, 94 L. Ed. 2d 92 (1987) (discussing specific personal jurisdiction). General jurisdiction requires more substantial contacts with the forum state than specific jurisdiction requires. Thus, Overlord's alleged placement of products into the stream of commerce does not support this Court's exercise of general jurisdiction.
C. Specific Jurisdiction
In order for this Court to assert specific personal jurisdiction over Overlord, Huffy must aver facts that show that Overlord "purposefully direct[ed] his activities" toward Nevada, that the claims "arise out of or relate to [Overlord]'s forum-related activities," and that "exercise [of jurisdiction] comport[s] with fair play and substantial justice." Reebok Int'l, 49 F.3d at 1391.
1. Purposeful Availment
The facts alleged here do not indicate that Overlord "purposefully direct[ed its] activities" toward Nevada. See Reebok Int'l, 49 F.3d at 1391. Huffy does not allege that Overlord keeps an office in Nevada, is incorporated here, or has appointed a resident agent here. The only direct contact with Nevada alleged by Huffy occurred when Overlord allegedly attended the annual Interbike trade show. *1100 A corporation's attendance at a Las Vegas trade show once a year for an unspecified number of years is insufficient to support a finding that the corporation "purposefully availed" itself of conducting business in Nevada. Huffy also asserts that Overlord has purposefully availed itself of the laws of Nevada because Overlord has sold "products to national distributors ... with the expectation and understanding that Huffy would (and did) distribute the Overlord bicycles throughout the United States, including to Nevada retailers and consumers." (Pl.'s Opp'n at 5.) However, as stated above, "[t]he placement of a product into the stream of commerce, without more, is not an act of the defendant purposefully directed toward the forum State." Asahi Metal Indus. Co., 480 U.S. 102, 112, 107 S. Ct. 1026, 94 L. Ed. 2d 92 (1987). Further, Overlord does not even ship its materials to the United States; Overlord ships its products "on `free on board' ("F.O.B.") terms ... to the ports of Kaohsiung, Taiwan and Yien-Tien, China." (Memo, in Support of Def. Overlord's Mot. to Dismiss [hereinafter "Def.'s Mot. to Dismiss"], Ex., Tseng Aff. ś 5.) Overlord has not "purposely availed" itself of the laws of the state of Nevada. Reebok Int'l, 49 F.3d at 1391.
2. Claim's Relation to Forum-Related Activities
The Ninth Circuit "rel[ies] on a `but for' test to determine whether a particular claim arises out of forum-related activities and thereby satisfies the second requirement for specific jurisdiction." Ballard v. Savage, 65 F.3d 1495, 1500 (9th Cir.1995). Thus, the question here is whether Huffy's claims would have arisen "but for" Overlord's appearance at the Interbike trade show, or "but for" Overlord's indirect placement of its products into the stream of commerce in Nevada. The answer is "yes."[3]
Huffy's claims do not depend on Overlord's presence at the trade show. Huffy does allege that "Overlord and Royce/Huffy advanced their business relationship and negotiated the contracts at issue in the above-referenced case in part at the annual Interbike."[4](Duff Aff. ś 14.) However, alleging that Overlord advanced its business relationship with Huffy "in part" at Interbike does not translate into the conclusion that "but for" Overlord's appearance at Interbike, Huffy and Overlord would not have entered the contractual agreement that forms the basis of the present case.
Nor do Huffy's claims depend on the placement of Overlord's products into the stream of commerce of Nevada. Huffy does not allege that any of the eighteen people who have brought claims against Huffy for alleged damages stemming from use of defective bicycle equipment are Nevada residents or were injured in Nevada. (Compl.śś 19-36.)
Thus, Huffy does not meet the second requirement for the exercise of specific jurisdiction. `*1101
3. Fair Play and Substantial Justice
The Ninth Circuit uses a seven-factor balancing test to determine whether the exercise of personal jurisdiction over a defendant "comports with `fair play and substantial justice'":
In determining whether the exercise of jurisdiction over a nonresident defendant comports with "fair play and substantial justice," we must consider seven factors: (1) the extent of the defendants' purposeful interjection into the forum state's affairs; (2) the burden on the defendant of defending in the forum; (3) the extent of conflict with the sovereignty of the defendants' state; (4) the forum state's interest in adjudicating the dispute; (5) the most efficient judicial resolution of the controversy; (6) the importance of the forum to the plaintiffs interest in convenient and effective relief; and (7) the existence of an alternative forum.... None of the factors is dispositive in itself; instead, we must balance all seven.
Core-Vent Corp. v. Nobel Indus. AB, 11 F.3d 1482, 1487-1488 (9th Cir. 1993) (citations omitted). See also Ballard, 65 F.3d at 1500-02 (applying the Core-Vent factors). The question underlying the above seven-factor test is one of reasonableness. Core-Vent, ś F.3d at 1485. The court presumes that "an otherwise valid exercise of specific jurisdiction is reasonable." Ballard, 65 F.3d at 1500.
The presumption of reasonableness does not apply here because the exercise of specific jurisdiction is not "otherwise valid." Ballard, 65 F.3d at 1500. Because Huffy fails to meet its burden with respect to the first two prongs of the specific jurisdiction test, this Court has no need to examine the third prong. Huffy has not supplied this Court with facts that, if true, would support a finding of specific jurisdiction. See Ballard, 65 F.3d at 1498.
IV. CONCLUSION
IT IS THEREFORE ORDERED that Defendant Overlord Industries' Motion to Dismiss (Doc. # 9) is hereby GRANTED. Plaintiff Huffy Corporation's claims against Defendant Overlord are hereby DISMISSED without prejudice.
NOTES
[1] This case was originally filed under the title "Huffy Corporation v. Overlord Industries; and (Ballistic) by U.S. International Co., Ltd."
[2] This Court is bound to the Nevada Supreme Court's interpretation of 14.080. Greenspun v. Del E. Webb Corp., 634 F.2d 1204, 1207 (9th Cir.1980) (citing Data Disc Inc. v. Systems Tech. Assocs., Inc., 557 F.2d 1280, 1286 n. 3 (9th Cir.1977)).
[3] In Overlord's Motion to Dismiss, Overlord states: "The relevant inquiry is whether Huffy's claims against Overlord would have arisen `but for Overlord's bicycles being sold in Nevada (by Huffy), or Ms. Tseng's appearance at the Interbike trade show.' The answer is `no.' " (Def.'s Mot. to Dismiss at 9.) This cannot be what Overlord meant to say. If the answer to the questions posed is "no," then Huffy's claims against Overlord would not have arisen but for the sale of bicycles in Nevada and Tseng's appearance at the trade show. If that were the case, then the but for test would be satisfied, strengthening Huffy's argument that this Court should exercise personal jurisdiction over Overlord.
[4] Here, reliance on the Duff Affidavit is not problematic because this Court would reach the same conclusion regardless of reliance on the Affidavit.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2465165/
|
882 S.W.2d 121 (1994)
ALAGIA, DAY, TRAUTWEIN & SMITH, a partnership consisting of: D. Paul Alagia, P.S.C., Bernard H. Barnett, Charles D. Barnett, W. Gary Blackburn, S.E. Bland, Stanton Braverman, William A. Carey, James L. Coorssen, Joseph M. Day, Robin E. Freer, Richard F. Frockt, Ronald L. Gaffney, Sheldon G. Gilman, Richard A. Gladstone, Marion Edwyn Harrison, David M.F. Lambert, Michael E. Lannon, David B. Marshall, Malcolm Y. Marshall, Donald F. Mintmire, A. Paul Prosperi, L. Arnold Pyle, William H. Schroder, Hugh Scott, Barry L. Shillito, Allan B. Solomon, Gerald A. Smith, John L. Smith, Herman E. Talmadge, Richard M. Trautwein, Dandridge F. Walton, Antonio R. Zamora, and Rudy Yessin, Appellants,
v.
Smith D. BROADBENT, Jr. and Mildred H. Broadbent, his wife; and Robert K. Broadbent and Smith D. Broadbent, III, Appellees.
No. 93-SC-631-DG.
Supreme Court of Kentucky.
June 23, 1994.
Rehearing Denied September 29, 1994.
*122 Fred M. Goldberg, David A. Brill, Mary A. Maple, Goldberg & Simpson, P.S.C., Armer H. Mahan, Jr., Lynch, Cox, Gilman & Mahan, P.S.C., Louisville, for appellants.
W.R. Patterson, Jr., Louisville, Paul K. Turner, Turner & Underwood, Hopkinsville, for appellees.
LAMBERT, Justice.
The underlying claim in this litigation is for negligence in connection with legal advice given by an attorney with respect to estate planning and gift taxes. On grounds that when brought the claim was time-barred by KRS 413.245, the trial court granted appellants' motion for summary judgment. The Court of Appeals reversed the trial court and adopted the "continuous representation rule," a doctrine of law which tolls the legal negligence statute of limitations so long as the attorney continues to represent the client in the matter. We affirm the Court of Appeals but upon grounds other than those it selected.
In or about 1980, appellees, Smith D. Broadbent, Jr., and Mildred H. Broadbent, husband and wife, engaged the professional services of Bernard Barnett, a senior partner of Barnett and Alagia, a Louisville law firm and predecessor firm to Alagia, Day, Trautwein & Smith. A short time prior thereto, Mr. Broadbent had suffered a heart attack and he sought professional legal services for estate planning. After consultation with Mr. Barnett, it was determined that Mr. and Mrs. Broadbent would convey substantial acreages of farm land to their two sons with payment to be made over a period of several years. It was projected that as each of several annual promissory notes came due, the principal would be forgiven and the sons would be required to pay only the interest accrued on the indebtednesses. By this means, it was anticipated that the real property could be transferred to the sons without payment of gift taxes.
After the documents were prepared by Mr. Barnett and executed by the Broadbents, a period of three or four years passed uneventfully. However, in connection with an Internal Revenue Service audit of the Broadbents' income tax returns, it was discovered that the farm land transferred to the sons had been substantially undervalued. The valuation used was the agricultural use value as determined by the county property valuation administrator rather than the fair market value as required by the IRS. As a result of this, the IRS initially determined that as of 1985, Mr. and Mrs. Broadbent owed 3.5 million dollars for gift taxes, penalties and interest.
*123 Upon receiving a notice of tax deficiency, the Broadbents attempted to contact Mr. Barnett but were unable to do so. Instead, they contacted a Nashville attorney who was Mr. Broadbent's cousin, Ben Cundiff. The extent of Mr. Cundiff's participation is uncertain, but whatever the extent, it was of a short duration, from the end of April until the first of June, 1985. In June, the Broadbents were able to reach Mr. Barnett and his son, Charles D. Barnett, also an attorney in the law firm, and thereafter, until June of 1989, the Barnetts or some member of appellants' law firm represented the Broadbents in the tax matter.
It is unnecessary to fully recount the details of what transpired between June of 1985 and June 30, 1989, the date upon which all parties agree the representation came to an end. However, it appears that there were negotiations between the IRS and the law firm, and that members of the law firm reassured the Broadbents to a greater or lesser extent that their tax problems would be satisfactorily resolved. During this same period, Mr. Bernard Barnett died, Charles D. Barnett left the law firm, and Mr. Broadbent became incompetent by the onset of Alzheimer's disease.[1]
In the early part of 1989, the pace quickened. Letters to the Broadbents dated January 25, 1989, March 7, 1989, March 29, 1989, and April 3, 1989, from William C. Willock, Jr., the firm's attorney who was then handling the matter, revealed extensive negotiations with the IRS. According to the correspondence, the IRS had reduced its demand somewhat, alternatives for dealing with the problem were discussed, possible tax court litigation was reviewed, additional documents were requested, and the possibility of newly discovered evidence which would have changed the transfer date to 1984 was considered. From this correspondence and the deposition testimony, there is no doubt that appellants' law firm was actively representing the Broadbents. As emphasized by appellants, however, there is likewise no doubt that the January 25, 1989, letter brought forcefully to the Broadbent's attention that a substantial sum of money would be required by the IRS, but the exact amount remained uncertain. Finally, on June 30, 1989, the Broadbents met with Mr. Willock who informed them that a sum in excess of three million dollars would be required in five days. Upon that date, the attorney-client relationship was terminated. Thereafter, a new law firm was employed and the IRS claim was settled for 1.2 million dollars.
This suit was filed in the Jefferson Circuit Court on June 18, 1990, less than one year after the attorney-client relationship was terminated and less than one year after the final amount due was determined. However, June 18, 1990, was more than one year after the date of the original deficiency notice, more than one year after the consultation with Mr. Cundiff, and more than one year after the Willock letter of January 25, 1989, by which the Broadbents were definitely informed that some payment of money would be required.
In the opinions of the courts below, one encounters divergent views. Relying on Graham v. Harlin, Parker & Rudloff, Ky. App., 664 S.W.2d 945 (1983), and KRS 413.245, the trial court applied the discovery rule and determined that the one year period of limitation began when the Broadbents received the 1985 deficiency notice or assessment for back taxes. It recognized that at that time the damages occasioned by the negligent legal representation were uncertain, but suggested that a possible solution would have been to file suit promptly and then seek a stay while the tax negotiations or litigation progressed. The opinion considered the continuous representation rule as discussed in Gill v. Warren, Ky.App., 751 S.W.2d 33 (1988), but distinguished this case on the grounds that the attorneys here had not lied to the clients or concealed their actions. The trial court also considered the significance of the Broadbents' consultation with Mr. Cundiff and concluded that as a result, they lost that quality of "innocent reliance," an element it believed to be a foundation of the continuous representation rule. The trial court also found other difficulties with the rule and declined to apply it.
Reversing the trial court, a divided panel of the Court of Appeals applied the continuous *124 representation rule and held the Broadbents' claim to have been timely brought. Reasoning from our decision in Hibbard v. Taylor, Ky., 837 S.W.2d 500 (1992), the court held that proof of concealment or fraud was unnecessary; that based on the fiduciary relationship between the parties, there should be a presumption of reliance by the client upon the attorney's advice without any need to prove more. A significant feature of the Court of Appeals opinion appears to have been representations alleged by the attorneys that the matter would be taken care of and for the clients not to worry.
While this Court has faithfully observed legislative mandates by which claims not brought in the time required are held to be barred, we have shown no reluctance to construe such statutes in a manner which prevents parties from profiting by their own machinations.[2] We have acknowledged the value of statutes which bar stale claims arising out of transactions or occurrences in the distant past, despite their arguable conflict with various sections of the Constitution of Kentucky, but carved out exceptions, foremost among them being estoppel or some facet thereof, to prevent fraud or inequity. Such was the holding in Munday v. Mayfair Diagnostic Laboratory, Ky., 831 S.W.2d 912 (1992), wherein parties required to file a certificate of doing business under an assumed name were denied benefit of the applicable statute of limitation during the period of their noncompliance with the law. The Court reasoned that as the purpose of the assumed name statute was to inform the public of the identity of persons so engaged in business, their failure to comply should be regarded as an obstruction within the meaning of KRS 413.190(2) resulting in an estoppel.
The duty of full disclosure in a professional services relationship renders estoppel a useful theory for those seeking to avoid limitations statutes, but two major shortcomings in this context are the uncertainty of information given and the necessary breach of the professional relationship. Gill v. Warren, supra, identified many of the problems inherent in permitting statutes of limitations to run while a professional relationship is ongoing, but due to the posture of the case, remanded for a finding as to whether the deceit allegedly practiced was sufficient to result in estoppel. The Court pled, nevertheless, for adoption of the continuous representation rule:
The facts in this case . . . illustrate the compelling need for further protection for the unwary and unsophisticated than may be afforded by the discovery rule.
Id. at 35.
In recent years, a number of Kentucky appellate court decisions and a U.S. District Court decision applying Kentucky law have confronted KRS 413.245. For those with an interest in studying the progression of the law in this area, reference is made to Conway v. Huff, Ky., 644 S.W.2d 333 (1982); Graham v. Harlin, Parker & Rudloff, supra; Northwestern Nat. Ins. Co. v. Osborne, 610 F. Supp. 126 (E.D.Ky.1985); and Gill v. Warren, supra. For our purposes, however, it is sufficient to fully review only our two most recent decisions on point, Hibbard v. Taylor, Ky., 837 S.W.2d 500 (1992), and Michels v. Sklavos, Ky., 869 S.W.2d 728 (1994), as they take full account of the earlier cases.
In Hibbard, the action for legal malpractice was brought more than one year after the negligent act occurred, but within one year of the adverse appellate court decision which terminated the underlying litigation. The attorney contended that under the discovery rule, the client knew or should have known of the negligence on the date of the adverse trial court judgment. The client contended that he had no cause of action and thus could not have discovered one until the fact of the injury became final at the end of the appellate process. This Court agreed with the client's interpretation, in part, on the assumption that by having taken an appeal, the attorney placed the error on the *125 trial court and not on himself. Rhetorically, we asked whether laymen should be charged with knowledge of legal malpractice when legal counsel insists that the fault is with the trial court. The Court concluded with the view that only at the end of the appellate process was the client put on notice that negligence may have occurred and only then could he assert that the damage was caused by his counsel's error.
In Michels, this Court again confronted KRS 413.245, the statute at issue here. Analyzing the statute, we observed that there are actually two periods of limitation, the first being one year from the date of the occurrence and the second being one year from the date of discovery if it is later in time. The Court noted that if suit was brought within one year of the date of occurrence, the discovery date became irrelevant. We further stated that the statutory terms "occurrence" and "cause of action" are synonymous, and relying on Hibbard, held that there was no occurrence until finality of the underlying claim. We reasoned that until then, the mistake which might ultimately cause damage was speculative and that to construe it otherwise might cut off claims which had not yet accrued. The Court rejected the idea that discovery prior to finality of the underlying claim commenced the running of the statute, reasoning that proper defenses might not be asserted or that the court could reject the defenses. We said, "Until then [finality of the underlying claim], no damages flowed from such negligence if any there was." Id.
In Michels, the Court also discussed favorably the continuous representation rule, but noted its inapplicability to the facts because termination of the negligent legal counsel was more than one year before the malpractice action was commenced. Thus, the case was resolved on the occurrence rule by which the commencement of the statutory period was postponed until finality of the underlying litigation, when the injury had become irrevocable and non-speculative.
The parties have practiced this case and the courts below have decided it on the basis of the continuous representation rule. As such, and despite our view that it is not controlling here, we nevertheless deem it expedient to analyze the soundness of the rule.
The continuous representation rule is a branch of the discovery rule. In substance, it says that by virtue of the attorney-client relationship, there can be no effective discovery of the negligence so long as the relationship prevails. This recognizes the attorney's superior knowledge of the law and the dependence of the client, and protects the client from an unscrupulous attorney. We believe it to reflect the intent of the General Assembly with its enactment of the discovery rule. Moreover, we perceive a practical advantage in the continuous representation rule. In a proper case, a negligent attorney may be able to correct or mitigate the harm if there is time and opportunity and if the parties choose such a course. Without it, the client has no alternative but to terminate the relationship, perhaps prematurely, and institute litigation. Finally, without the continuous representation rule, the client may be forced, on pain of having his malpractice claim become time-barred, to automatically accept the advice of a subsequent attorney, one who may be mistaken, over the advice of the current attorney. In such a circumstance, the client may be without any assurance that the latter attorney's views are superior to those of the former, but must nevertheless choose between them.
These are sound theoretical and practical reasons for adoption of the continuous representation rule. If this was the decisive issue, appellees would prevail as their claim was brought within one year of the date appellants' representation came to an end. See Wall v. Lewis, 393 N.W.2d 758 (N.D.1986), for a comprehensive discussion.
Despite the foregoing, this case must be decided on the occurrence rule as discussed in Michels and urged by appellees, the Broadbents. Until the legal harm became fixed and non-speculative, the statute did not begin to run. As such, the statute was tolled until the subsequent law firm and the IRS settled the claim. This suit was brought on June 18, 1990, well within one year of this event. We hereby overrule Graham v. Harlin, Parker & Rudloff, Ky.App., 664 S.W.2d 945 (1983), to the extent it differs herewith.
*126 Four dates have been presented as possible dates for commencement of the statute of limitations. The first is the 1985 IRS notice and the virtually simultaneous consultation between the Broadbents and attorney Cundiff. This date is inapplicable for two reasons: At that time, there had been no occurrence because the negligence and damages were speculative and there could have been no discovery because of the continuous representation by appellants and the presumed reliance of the clients upon the advice given. The second date suggested is January 25, 1989, when attorney Willock wrote the Broadbents and informed them that a substantial payment would be required. This, too, is an improper date and for the above stated reasons. The third date, June 30, 1989, when the attorney-client relationship was terminated, has provoked intense legal debate. While the events of this date were sufficient to trigger commencement of the statute if there had been an occurrence, the discovery of negligence was ineffective as the final result was not yet known. Not until damages were fixed by the final compromise with the IRS was there an occurrence of the type required to commence the running of the statute.
It should not be overlooked that this is a negligence case. To recover for negligence, there must be, at a minimum, a negligent act or omission and legally cognizable damages. Hibbard and Michels explained the necessity of the damage element as follows:
Only then [when the adverse judgment became the unalterable law of the case] could he justifiably claim that the entire damage was proximately caused by counsel's failure, for which he might seek a remedy.
Michels at 733 quoting Hibbard at 502. This is in accord with our recent decision in Capital Holding Corp. v. Bailey, Ky., 873 S.W.2d 187 (1994), wherein we held that one who had been negligently exposed to a disease but had not yet contracted the disease was then without an action for damages. We relied on Saylor v. Hall, Ky., 497 S.W.2d 218 (1973), as follows:
A cause of action does not exist until the conduct causes injury that produces loss or damage.
Id. at 225. We concluded that any action for damages must await manifestation of the disease, but until such time, the applicable statute of limitations does not commence to run.
For these reasons, we affirm the Court of Appeals and remand this cause to the trial court for further proceedings consistent herewith.
STEPHENS, C.J., and LEIBSON, SPAIN, STUMBO and WINTERSHEIMER, JJ., concur.
REYNOLDS, J., concurs in result only.
NOTES
[1] Thereafter, pursuant to a general power of attorney, Smith D. Broadbent, III, commenced transacting business on his father's behalf.
[2] While deception or lack of full disclosure is not essential to our decision, there is evidence in the record that prior to termination of the attorney-client relationship, appellants recognized their probable negligence but failed to so advise the Broadbents. Appellants appear to have taken comfort in their belief that a legal malpractice claim against them was time-barred by KRS 413.245.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2465157/
|
882 S.W.2d 485 (1994)
COUNTY OF GALVESTON, Appellant,
v.
Ronnie D. MORGAN and Mercedes Morgan, Individually and as Next of Friends of Bronson C. Morgan, Amanda R. Morgan and Marissa E. Morgan, Appellees.
No. B14-93-00449-CV.
Court of Appeals of Texas, Houston (14th Dist.).
August 11, 1994.
Rehearing Denied September 8, 1994.
*487 Scott Lyford, Galveston, for appellant.
John T. McDowell, Beth McCahill, Gerard J. Kimmitt, II, Houston, Norma Venso, Fred D. Raschke, Anthony P. Brown, Galveston, John Kilpatrick, Houston, for appellees.
Before SEARS, LEE and JUNELL (Sitting by Appointment), JJ.
OPINION
SEARS, Justice.
Appellee, Ronnie Morgan, was injured when he fell from the raised bed of a dump truck positioned too close to a power line. He brought suit against Galveston County under the Texas Tort Claims Act. The jury found the County fifty percent negligent for the accident. The district court entered judgment for Appellees, their recovery limited by the provisions of the Texas Tort Claims Act. Appellant brings seven point of error. We affirm.
In March of 1987, Galveston County Road Department crews were helping repair road damage caused by Superior Oil Company. The gypsum used to resurface the road was provided by Mobil Mining and Minerals Company, in trucks selected by Mobil. Mobil hired Joe Brown Trucking to deliver the material. Joe Brown Trucking had a contract with Obaugh Trucking, Morgan's employer, to provide the trucks and drivers. The truck used for this kind of work was a tractor-trailer rig with a dump bed over thirty-seven feet long. A hydraulic ram raised *488 the dump bed in stages, so that as the truck slowly moved forward, the gypsum fell from the bed and was spread out evenly on the road. Galveston County supervised the job and provided front and rear spotters who signaled the truck drivers when to move forward and when to stop. Spotters are necessary because a dump truck driver can not see what is above him. Part of the spotters job was to watch for overhead obstructions, such as power lines, and to stop the trailer from getting too close to such dangers.
A trailer operated by Ronnie English, Morgan's co-worker, was approaching a hot 7200 volt power line. The County's front spotter directed English to move his truck too close to the power line. The top of the bed was within twenty-two inches of the line. The unloading process stopped, and the rear spotter signaled for a bulldozer to move the pile of gypsum from behind the trailer. When a trailer gets too close to a power line, such that it can not be lowered without touching the wire, the procedure is to move the material from behind the trailer, back up the trailer, and then lower the bed. Morgan's truck was the next in line, waiting to unload. He came over to see whether English's truck could be safely lowered without backing up the trailer.
Morgan climbed the trailer to gauge the distance from the bed to the power line and determine whether the bed would strike the wire. He placed his feet on a metal bar, and held onto the tarped top edge of the trailer. He was about "the third rib in the trailer from the nose," about six to eight feet below the top, when he was knocked to the ground. The next thing he recalled was waking up in the hospital. Morgan had received an electric shock. The plaintiffs and defendants presented conflicting testimony over the cause of Morgan's injuries. The plaintiffs contended that Morgan was injured when the power line touched the truck, and the electricity "shocked" Morgan off the trailer. The defendants contended that the wire never touched the truck, and that Morgan negligently came in direct contact with the line.
The plaintiffs presented medical testimony that Morgan's injuries were not consistent with someone who had come in direct contact with a power line, but were consistent with contact through insulating material. The electric shock caused entry and exit wounds on Morgan's hand and feet which were consistent with the plaintiffs' theory. Further, English testified that there was a mark on the truck, which was caused by the wire coming in direct contact with the trailer.
Joe Gonzales, a line foreman from HL & P, testified that the wire could not have touched the truck "due to the twenty-two inch" distance between the hot line and the trailer. He testified that Morgan had to touch the wire to receive the shock. Gonzales admitted, however, that coming in direct contact with a 7200 volt power line would do "pretty good damage" to an individual. However, the majority of Morgan's injuries were suffered as a result of his fall from the truck, not from the shock. The jury found Morgan and the County equally negligent.
In its first and second points of error, Appellant contends that there is no evidence, or in the alternative factually insufficient evidence, to support a finding of proximate cause. Appellant makes two claims: first, that the evidence is insufficient to support a finding that the wire touched the truck or the truck touched the wire; and second, even if they did touch, it was not foreseeable that someone would climb the truck and be shocked.
In reviewing a no evidence point, this Court will consider only the evidence and inferences which support the jury's finding, and will disregard all evidence to the contrary. Davis v. City of San Antonio, 752 S.W.2d 518, 522 (Tex.1988). In reviewing a factual insufficiency point, this Court must review the entire record, and will set aside the verdict only if it is so contrary to the overwhelming weight of the evidence that it is clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986). This Court is not called upon to summarily disregard evidence or to substitute our opinion for that of the fact finders. Loftin v. Texas Brine Corp., 720 S.W.2d 804, 805 (Tex.1986). The jury, as fact finder, was the sole judge of each witness' credibility and the weight to be *489 given his testimony. Winfield v. Renfro, 821 S.W.2d 640, 645 (Tex.App.-Houston [1st Dist.] 1991, writ denied). The jury was free to believe or disbelieve all or any part of any witness' testimony. Miller v. Kendall, 804 S.W.2d 933, 939 (Tex.App.-Houston [1st Dist.] 1990, no writ).
Although Joe Gonzales testified that the wire could not have touched the truck, the jury was free to judge his credibility and believe or disbelieve his testimony. He was a foreman for HL & P, and not an accident reconstructionist. Even Mr. Gonzales admitted that direct contact with a power line would cause more severe injury to a person. The medical testimony did not support a finding of direct contact. Dr. Strickland testified that the entrance and exit wounds were consistent with "indirect contact." The truck was "grounded" due to the lower end of the raised trailer bed being in contact with the pile of gypsum behind it. Dr. Oates testified that direct contact would have caused more serious injuries. In light of the conflicting testimony, the jury was free to conclude that the truck came in contact with the wire.
Appellant also complains that the accident was not foreseeable. Proximate cause consists of two elements: cause in fact and foreseeability. Travis County v. City of Mesquite, 830 S.W.2d 94, 98 (Tex.1992). "Cause in fact" means that without such negligence no harm would have resulted. El Chico Corp. v. Poole, 732 S.W.2d 306, 313 (Tex.1987). "Foreseeability" means that the actor, as a person of ordinary intelligence, should have anticipated the danger of his acts to others. Nixon v. Mr. Property Management Co., Inc., 690 S.W.2d 546, 549-550 (Tex.1985). The injury must be of such a general character as might reasonably have been anticipated, and the injured party be so situated with relation to the wrongful act that the injury to him or one similarly situated might reasonably have been foreseen. Id. However, foreseeability does not require that the actor foresee the particular accident or injury which in fact occurs. Trinity River Auth. v. Williams, 689 S.W.2d 883, 886 (Tex. 1985). Appellant contends that although the injury may be a type which could have been reasonably anticipated, (an electrical shock), the Appellee was not "so situated" that Appellant could have reasonably foreseen his injury. We disagree. It was the duty of the spotters to keep the trucks from contacting the overhead lines. The spotters failed to follow the proper procedures and allowed English's trailer to get too close to the "hot" line. It was common knowledge that if a trailer bed came in contact with a 7200 volt hot line, and the trailer bed was grounded, an individual touching the truck could be electrocuted. We find sufficient evidence to support a finding that the hot wire did contact the trailer. Morgan was a worker at the scene, he was on the trailer bed, and he was shocked. It does not matter that the County could not foresee the particular manner in which Morgan would come in contact with the truck. See, Brown v. Edwards Transfer Co., 764 S.W.2d 220, 224 (Tex.1988). The injury suffered was reasonably foreseeable. Appellant's first and second points of error are overruled.
In its sixth point of error, Appellant contends that the evidence is factually insufficient to support a finding that the County and Morgan were each fifty percent negligent. The County asserts that Morgan was over fifty percent negligent, thus barring a recovery under comparative negligence. See, TEX.CIV.PRAC. & REM.CODE ANN. § 33.001(a) (Vernon Supp.1994). Appellant claims that although the County may have created a risk, it was a risk which Morgan could have easily avoided. Appellant seems to be arguing the old law of "last clear chance," "discovered peril," or "assumption of the risk." Such doctrines have been subsumed into the law of comparative negligence. See, Exxon Corp. v. Tidwell, 816 S.W.2d 455 (Tex.App.-Dallas 1991), reversed on other grounds, 867 S.W.2d 19 (Tex.1993); French v. Grigsby, 571 S.W.2d 867 (Tex.1978). The existence of, and amount of, comparative negligence involved in a case is a question for the jury. Brown v. Edwards Transfer Co., 764 S.W.2d 220, 224 (Tex.1988). The jury considered comparative negligence in regard to Appellant's claim that Morgan's injuries were proximately caused by his irrational decision to climb the trailer bed, or by directly touching the hot line. Reasonable minds could have differed over *490 the degree of negligence to assign to each party. The evidence is sufficient to support a fifty-fifty verdict. Appellant's sixth point of error is overruled.
In its fifth point of error, Appellant contends that the district court erred in holding that the "spotters" would be personally liable to the Appellees. The Texas Tort Claims Act waives governmental immunity for injuries arising from the use or operation of a motor driven vehicle only if the governmental employee would be liable for the actions under Texas law. Tex.Civ.Prac. & Rem.Code Ann. § 101.021(1)(A) & (B) (Vernon 1986). This provision provides that the government's immunity is not waived if the governmental employee is shielded from liability through statutory or common law immunity. City of Houston v. Kilburn, 849 S.W.2d 810, 812 (Tex.1993); Harris County v. DeWitt, No. A14-92-01306-CV, 1993 WL 406752 (Tex.App.-Houston [14th Dist.] May 19, 1994, n.w.h.); City of Houston v. Newsom, 858 S.W.2d 14 (Tex.App.-Houston [14th Dist.] 1993, no writ). In this case, the County did not allege individual immunity on behalf of the spotters. Instead, the County claimed that the spotters would not be liable because their action of allowing the trailer to get too close to the power line was not a proximate cause of the accident. This Court has already found that there was sufficient evidence to support the findings of proximate cause and comparative negligence. Appellant's sixth point of error is overruled.
In its third and fourth points of error, Appellant contends there is no evidence, or in the alternative factually insufficient evidence, to support a finding that the accident arose from a county employee's use or operation of a motor driven vehicle. Appellant contends that the trailer was not a county truck, the driver was not a county employee, and the vehicle was not "in motion" at the time the accident occurred.
A governmental unit in this state is liable for:
property damage, personal injury, and death proximately caused by the wrongful act or omission or the negligence of an employee acting within his scope of employment if:
(A) the property damage, personal injury or death arises from the operation or use of a motor-driven vehicle or motor driven equipment; and
(B) the employee would be personally liable to the claimant according to Texas law.
TEX.CIV.PRAC. & REM.CODE ANN. § 101.021(1)(A) & (B) (Vernon 1986). There is no requirement that the vehicle in question be a county vehicle, only that a county employee "used" or "operated" the vehicle. LeLeaux v. Hamshire-Fannett Indep. School Dist., 835 S.W.2d 49, 51 (Tex.1992). "Operation" refers to "a doing or performing of a practical work," and "use" means "to put or bring into action or service; to employ for or apply to a given purpose." LeLeaux at 51. The spotters in question were county employees. They were a necessary part of the job. The spotters told the truck driver when to move forward, how far to move, when to raise his bed, how far to raise it, when to lower his bed, and when to stop. The movement of the truck and the laying of the gypsum was within the spotters' sole discretion. If a driver moved his truck contrary to the spotters' direction, he could be fired. Although the spotters were not the drivers of the trucks, the spotters "used or operated" the trucks by exercising complete control over their "use or operation."
Appellant maintains that even if the spotters were negligent in the manner in which they "used or operated" the vehicle, the injury did not occur when the vehicle was "in use or in operation." Appellant relies heavily upon LeLeaux v. Hamshire-Fannett Indep. School Dist., 835 S.W.2d 49, 51 (Tex. 1992) and Keetch v. Kroger Co., 845 S.W.2d 262 (Tex.1992).
In LeLeaux, a young girl hit her head on the top of a school bus door frame. The bus was parked, the motor was off, the bus was empty and the bus driver was not present when the accident occurred. No school related business was being performed or put into service when the young girl was injured. The Supreme Court held that the injury did not arise out of the "use or operation" of a *491 motor driven vehicle, and that the school bus was simply the "setting" for the accident.
In Keetch, a woman was injured when she slipped and fell in a grocery store. A store employee had sprayed some "Green Glo" on the floor, and had failed to clean it up. The trial court refused to submit an issue to the jury on negligent activity, and submitted instead a charge only on premises defect. Keetch argued that the trial court erred in not submitting her negligent activity theory. The Supreme Court held that Keetch was properly denied the charge, because she was injured by the condition of the floor due to the spraying of the Green Glo, and not the employee's activity of spraying Green Glo on the floor.
Appellant in this case argues that Morgan was not injured by the spotters' use or operation of the trailer, but instead was injured by a condition created by the spotters' use or operation of the trailer. The County notes that the truck was no longer dumping gypsum and was not moving when Morgan climbed the trailer. Although the truck was not in motion when Morgan climbed the trailer, the vehicle was still "in use." The county spotters had called for a bulldozer to clear out the gypsum that had been dropped in order to allow the vehicle to back up and continue the process of depositing gypsum on the road. The operation did not stop. The vehicle was still under the spotters' control. We hold there was sufficient evidence for a jury to conclude that the injury arose out of a county employee's use or operation of a motor vehicle. Appellant's third and fourth points of error are overruled.
In its seventh and final point of error, Appellant contends that the trial court erred in denying its requested jury instruction. Appellant requested that the following question and instruction be submitted:
Did the negligence, if any, of Galveston County proximately cause the occurrence in question; and did the injuries in question, if any, arise from the operation or use of a motor-driven vehicle by an employee of Galveston County?
Answer "Yes" or "No".
Answer_________
In considering the negligence, if any, of Galveston County, you may consider only whether its spotters failed to provide to the driver of the truck involved in the accident assistance in maintaining the truck at a safe distance from high voltage power lines, and whether that failure was negligence, and you may not consider any other acts by any other person.
The trial court submitted the following question and instruction:
Did the negligence, if any, of Galveston County proximately cause the occurrence in question; and did the injuries in question, if any, arise from the operation or use of a motor-driven vehicle by an employee of Galveston County?
As used herein:
"Operation" refers to "a doing or performing of a practical work"; and
"use" means "to put or bring into action or service; to employ for or apply to a given purpose."
Answer "Yes" or "No".
Answer________
Appellant claims that the failure of the court to give the requested instruction meant that "the jury did not have to find: 1) that the specific act pleaded was negligence; and 2) the required connection between that act and the use or operation of a motor vehicle by a county employee."
A cause of action is to be submitted on broadform questions whenever feasible. Tex.R.Civ.P. 277; Texas Dept. of Human Services v. E.B., 802 S.W.2d 647 (Tex.1990). This case was submitted under broadform, and accompanied by definitions of "use" and "operation." The question and definitions given properly limited the jury's consideration to the county's negligence in the use or operation of a motor vehicle. Appellant's expressed fear that the question allowed the jury to consider other acts of negligence is unfounded. We hold that the trial court properly submitted the case to the jury. Appellant's seventh point of error is overruled.
The judgment of the trial court is affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2822320/
|
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
BRENT ALLAN SMITH, )
)
Appellant, )
)
v. ) Case No. 2D13-4831
)
JODIE BEAR SMITH, )
)
Appellee. )
)
Opinion filed July 1, 2015.
Appeal from the Circuit Court for Manatee
County; Gilbert A. Smith, Jr., and Diana L.
Moreland, Judges.
Edward B. Sobel of Edward B. Sobel, P.A.,
Bradenton, for Appellant.
Angela D. Flaherty of Law Office of
Angela D. Flaherty, Sarasota, for Appellee.
PER CURIAM.
Brent Allan Smith appeals the final judgment dissolving his marriage to
Jodie Bear Smith. Mr. Smith raises numerous issues on appeal. We reverse as to one
of the vehicles included as a marital asset in the equitable distribution scheme; we
dismiss as premature Mr. Smith's appeal of the award of attorney's fees and costs. In
all other aspects, we affirm.
We review de novo a trial court's determination of whether an asset is
marital or nonmarital. Broadway v. Broadway, 132 So. 3d 953, 954 (Fla. 1st DCA
2014). Because the parties in this case did not enter into a marital settlement
agreement, the applicable date for determining whether assets and liabilities are
classified as marital or nonmarital is the date of the filing of the petition for dissolution of
marriage. See § 61.075(7), Fla. Stat. (2012). "Assets and liabilities not in existence on
that date should not be classified as marital." Fortune v. Fortune, 61 So. 3d 441, 445
(Fla. 2d DCA 2011).
In this case, the trial court included as marital assets in the equitable
distribution scheme both a Ford truck, which was owned by Mr. Smith at the time the
petition was filed but sold during the pendency of the divorce, and a Scion, which was
purchased by Mr. Smith after the date of filing but prior to the final judgment.1 We
conclude that it was error to include the Scion in the equitable distribution scheme. See
id. Accordingly, we reverse and direct the trial court to strike the Scion from the
equitable distribution scheme and reduce the equalizing payment owed to Ms. Smith by
$1500.
Mr. Smith also alleges that the trial court abused its discretion in awarding
attorney's fees and costs to Ms. Smith. The trial court's ruling on attorney's fees and
costs only addressed entitlement and did not set an amount. Thus, we lack jurisdiction
to review this issue. See Card v. Card, 122 So. 3d 436, 437 (Fla. 2d DCA 2013)
(dismissing for lack of jurisdiction the former wife's challenge to an award of attorney's
1
Mr. Smith testified that he sold the truck for approximately $3000 and
then, several days later, purchased the Scion for $3000 to replace the truck. There was
no contradictory testimony or evidence presented.
-2-
fees and costs where the final judgment determined only entitlement and not amount);
see also McIlveen v. McIlveen, 644 So. 2d 612, 612 (Fla. 2d DCA 1994) (holding "an
order which only determines the right to attorney's fees without setting the amount is a
nonappealable, nonfinal order"). Accordingly, we dismiss for lack of jurisdiction Mr.
Smith's challenge to the award of attorney's fees and costs.
Affirmed in part; reversed in part with directions; dismissed in part.
ALTENBERND, CASANUEVA, and KHOUZAM, JJ., Concur.
-3-
|
01-03-2023
|
07-30-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/2910652/
|
IN THE
TENTH COURT OF APPEALS
No. 10-06-00329-CR
Robert L. Chavez,
Appellant
v.
The State of Texas,
Appellee
From the 54th District Court
McLennan County, Texas
Trial Court No. 2005-1153-C
MEMORANDUM Opinion
Appellant has filed a
motion to dismiss this appeal under Rule of Appellate Procedure 42.2(a). See
Tex. R. App. P. 42.2(a); Crawford
v. State, 226 S.W.3d 688, 688 (Tex. App.CWaco 2007, no pet.) (per curiam). We have not issued a decision
in this appeal. Appellant personally signed the motion. The Clerk of this
Court has sent a duplicate copy to the trial court clerk. Id.
Accordingly, the appeal is dismissed.
PER
CURIAM
Before Chief
Justice Gray,
Justice Vance, and
Justice Reyna
Appeal
dismissed
Opinion
delivered and filed October 17, 2007
Do not
publish
[CR25]
'>Tex. R. App. P. 42.2;
McClain v. State, 17 S.W.3d 310, 311 (Tex. App.CWaco 2000, no pet.).
If Goddard expresses a desire to
proceed pro se, the trial court shall admonish him on the record “of the
dangers and disadvantages of self-representation.” Tex. Code Crim. Proc. Ann. art. 1.051(g) (Vernon 2005); see
also Fewins v. State, No. 10-04-00189-CR (Tex. App.—Waco September 7, 2005,
order). If the court determines that he has voluntarily and intelligently
waived his right to counsel, the court shall require him to execute a written
waiver of counsel which substantially complies with article 1.051(g). Id.
Because the trial court must
admonish Goddard on the record regarding his right to self-representation and
because the court must ascertain whether Goddard still desires to prosecute his
appeal and determine whether any waiver of counsel is voluntarily and
intelligently made, Goddard must be afforded an opportunity to personally
participate in the abatement hearing. This does not necessarily mean, however,
that he must personally appear at the hearing.
Frequently in civil litigation involving
prison inmates, trial courts permit the inmates to participate in hearings via
teleconference. See In re Z.L.T., 124 S.W.3d 163, 165-66 (Tex. 2003). We are aware of no reason why a similar procedure could not be employed here.
Cf. Webb v. State, 533 S.W.2d 780, 784 (Tex. Crim. App. 1976) (pro se
criminal appellant has no right to appear before appellate court and
present argument). Any paperwork (e.g., waiver of appeal or waiver of
counsel) could be completed through the mail. These of course are matters we
leave to the discretion of the trial court.
The trial court shall, within thirty
days after the date of this Order: (1) conduct the hearing; (2) cause a court
reporter to make a record of the hearing; (3) make appropriate orders and
findings of fact and conclusions of law; and (4) deliver any orders and
findings of fact and conclusions of law to the trial court clerk. The trial
court shall inform Goddard’s counsel, or Goddard himself if pro se, that
his brief is due within thirty days after the date of the hearing.
The trial court clerk shall: (1)
prepare a supplemental clerk=s record containing all orders and findings of
fact and conclusions of law which the trial court renders or makes; and (2)
file the supplemental clerk=s record with the Clerk of this Court within
forty-five days after the date of this Order.
The court reporter shall prepare and
file a supplemental reporter’s record containing a transcription of the hearing
within forty-five days after the date of this Order.
PER CURIAM
Before Chief Justice
Gray,
Justice
Vance, and
Justice
Reyna
(Chief
Justice Gray concurs with a note: Chief Justice Gray agrees to abate the case
pursuant to Rule 38.8(b). Any elaboration beyond that is advisory only and is
not joined in by Chief Justice Gray.)
Appeal abated
Order issued and filed
September 14, 2005
Do not publish
|
01-03-2023
|
09-10-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/2910862/
|
IN THE
TENTH COURT OF APPEALS
No. 10-07-00032-CV
In re
Letha Williamson
Original Proceeding
MEMORANDUM Opinion
Letha Williamson, the wife of a
prisoner, requests this Court to mandamus the Limestone County Sheriff to
furnish copies of arrest or offense reports to her which were apparently
forwarded to the Court of Criminal Appeals. Williamson also filed a motion for
leave to file her petition for writ of mandamus and a motion to proceed “in
forma pauperis.” This is her second petition for writ of mandamus on the same
subject.
Absent a specific exemption, the Clerk
of the Court must collect filing fees at the time a document is presented for
filing. Tex. R. App. P. 12.1(b);
Appendix to Tex. R. App. P.,
Order Regarding Fees (July 21, 1998). See also Tex. R. App. P. 5; 10th
Tex. App. (Waco) Loc. R. 5; Tex.
Gov’t Code Ann. § 51.207(b) (Vernon 2005). Under these circumstances,
we suspend the rule and order the Clerk to write off all unpaid filing fees in
this case. Tex. R. App. P. 2.
For the reasons expressed in our prior
opinion, the petition for writ of mandamus is dismissed for want of
jurisdiction. See In re Williamson, No. 10-06-00397-CV, 2006
Tex. App. LEXIS 10989 (Tex. App.—Waco Dec. 20, 2006, orig. proceeding).
Williamson’s motion for leave to file her petition is dismissed as moot.
Likewise, the motion to proceed without the advance payment of cost is
dismissed as moot.
TOM
GRAY
Chief
Justice
Before
Chief Justice Gray,
Justice
Vance, and
Justice
Reyna
Pet.
dismissed
Motions
dismissed
Opinion
delivered and filed February 14, 2007
[OT06]
otype";
color:black'>[1]
Also on December 14, the State filed with the Court of Criminal
Appeals a “Motion for Leave to File Motion to Stay the Premature Issuance of
Mandate by the Tenth Court of Appeals” and a “Motion to Stay the Premature
Issuance of Mandate by the Tenth Court of Appeals.”[2]
In a December 14 letter
order issued at approximately 5:10 p.m., we granted Abbott’s Motion to Issue Mandate Immediately, as follows:
The Court grants Appellant’s “motion to issue mandate
immediately.” The State appears to assert that issuing the mandate will
preclude its right to file a petition for discretionary review. We disagree.
In our December 12, 2007 opinion and judgment, we instructed the trial court to
immediately release Appellant from jail, and apparently the trial court has not
done so. Accordingly, the Clerk shall issue the mandate forthwith.[3]
The Clerk of this Court also issued the
mandate, and both it and the above letter order were prepared for delivery to
the parties and the trial court. However, a deputy clerk of the Court of
Criminal Appeals telephoned us around 5:15 p.m. to inform us that the Court of
Criminal Appeals was considering the State’s motion for stay and asked us to refrain
from issuing our mandate. To comply with the spirit of that request, we did
not transmit the order or the mandate, previously issued, to the trial court or
the parties. Around 6:15 p.m., the Court of Criminal Appeals clerk telephoned
again to tell us that the Court was granting the State’s motion to stay. At
7:01 p.m. on December 14 (a Friday), we received by telefax the Court of
Criminal Appeals’ per curiam order, which states in whole:
The State’s Motion for
Leave to File and Motion to Stay the Premature Issuance of the
Mandate by the Tenth Court of Appeals are Granted. The Court of Appeals for
the Tenth Judicial District is ordered to withhold issuance of the mandate
pending further action by this Court.
Abbott v. State, No.
PD-1816-07 (Tex. Crim. App. Dec. 14, 2007) (order) (per curiam).[4]
As a result of this order, we now withdraw our issued
but undelivered December 14 letter order granting Abbott’s motion and we recall
our issued but undelivered December 14 mandate.
PER CURIAM
Before
Chief Justice Gray,
Justice Vance, and
Justice Reyna
(Dissent to Order by Chief
Justice Gray)
Order
issued and filed December 19, 2007
Publish
[1] The State asserted that issuing our
mandate would preclude it from filing a petition for discretionary review.
Because Rule 18.1(c) allows for the early issuance of the mandate, it is
difficult to reconcile how early issuance could preclude a party from filing a
petition for discretionary review.
[2] Abbott received ten years’ community
supervision, but the trial court ordered him to serve 180 days in county jail
as a condition of community supervision. In its motion to stay, the State
asserted that issuance of the mandate would prevent it from filing a petition for
discretionary review (without citing any authority) and that the State would
suffer “irreparable harm by the release of Appellant from jail” (without
explaining the alleged irreparable harm). We note the obvious: if our
decision is reversed on the State’s petition for discretionary review, our
mandate can be recalled and Abbott can be ordered to complete his 180-day
incarceration. However, if our decision stands but Abbott has already
erroneously served the 180 days (he has already served two-thirds of it), it is
Abbott who will have been irreparably harmed. Also, whether Abbott is released
from jail now or in two months, he will still be under community supervision.
[3] Chief Justice Gray dissented to this
ruling.
[4] Rule of Appellate Procedure 67.2 requires
a signed order by a judge of the Court of Criminal Appeals to stay a court of
appeals mandate. See Tex. R.
App. P. 67.2 (“The order [staying the court of appeals’ mandate] must be
signed by a judge of the Court of Criminal Appeals.”). It is debatable whether
the order in this case to us to withhold issuance of the mandate comes
precisely within the purview of Rule 67.2, but the effect of the per curiam
order is the same.
|
01-03-2023
|
09-10-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/2435092/
|
337 S.W.2d 371 (1960)
CONTINENTAL DEVELOPMENT CORPORATION, Appellant,
v.
STATE of Texas, Appellee.
No. 16123.
Court of Civil Appeals of Texas, Fort Worth.
July 1, 1960.
*372 Friedman & Brown, and Richard Lee Brown, Fort Worth, for appellant.
Will Wilson, Atty. Gen., H. Grady Chandler, Wm. R. Hemphill, Richard O. Jones, and John B. Webster, Asst. Attys. Gen., for appellee.
MASSEY, Chief Justice.
This is a condemnation case in which the only question involved is the amount to be paid by the State to the owner because of property taken as of September 4, 1959. The appellant, Continental Development Corporation (Jack York, President, and Tom E. Purvis, Jr., Secretary-Treasurer), appealed from the Commissioners' award of $30,000, filed July 30, 1959, and after trial in the County Court at Law of Tarrant County, appealed from judgment therein entered in the amount of $31,500.
Judgment affirmed.
The land in question comprises approximately nine (9) acres out of a 118-acre tract purchased by the appellant Company as "raw" land in December of 1955, for approximately $129,000. A plat of the aforesaid acreage was filed of record February 29, 1956, as Carver Heights, a subdivision of the City of Fort Worth. On said plat the approximate 9 acres were shown as Blocks 27 and 28, being the only blocks of the subdivision which were not broken down into lots, and these blocks were divided by a street dedicated to the public incident to the subdivision of Carver Heights. *373 It was anticipated at the time that Block 27 and Block 28 would be taken by the State for highway purposes, specifically what was planned to be the Southeast Freeway Loop. Subsequently, after the promotion of the parts of the subdivision for homes had become a pronounced success, the appellants, on March 14, 1958, recorded a plat of the two blocks in question broken down into lots. Said action left Block 27 unchanged but divided Block 28 into two blocks, designated as Blocks 28-A and 28-B, with a street designated as Vel Drive intervening. No work was done on the ground, and said Blocks 27, 28-A and 28-B remained a "paper" subdivision. The action taken in platting them into Vel Drive and into lots occurred after officials of the appellant Company had failed to reach an agreement with the State Highway Department relative to the amount that would be paid for the property.
On July 7, 1959, over a year later, the State filed its petition for condemnation, describing the property to be condemned as "All of Block 27 * * * consisting of lots one through five, inclusive, * * * all of Block 28-A * * * consisting of lots one through fifteen * * * and all of Block 28-B * * * consisting of lots one through thirty-nine, inclusive, * * *." In other words, fifty-nine (59) lots and Vel Drive were platted upon what was originally Blocks 27 and 28 filed of record on February 29, 1956, as a part of the Carver Heights Subdivision, and it was so replatted that the State described the property in the condemnation proceedings.
Upon the trial, the first plat was introduced without objection, but upon the appellant's offer of the second plat, or replat, it was met with an objection as being nothing but a "paper" plat filed and recorded but without any subsequent activity with reference to the property in question. The attorney for the appellant pointed out that the pleadings of the State described the property condemned by lot and block as per the second plat, and then stated, "we offer it into evidence to designate the property subject to condemnation and to show the area that is being condemned." The State's attorney stated he had no objection to the same as so offered. The court limited the purposes for which the plat might be considered as admissible in accordance with the language quoted and ordered it received. There seems to have been no objection to such ruling on the part of the court and no "exception" was taken, at least at the time the exhibit was received. It could not be said that it is apparent in the record that appellant desired to tended the plat for a purpose other than stated.
During the course of the trial, evidence in behalf of the State was received over the objection of the appellant relating to values of the condemned property, opinions as to which were based in whole or in part upon sales of nearby land described as the Hicks property and the Duke property, which land appellant contends was not shown to have been comparable to that condemned. Further evidence was received, over objection, as to what Tom E. Purvis, Jr., and Jack York, officers of the appellant Company, paid for the Hicks land at about the same time the petition in condemnation was filed by the State. Additionally, appellant was denied the right to refer to the fact that the condemned property had been subdivided into lots, and to lot and block numbers. It also was denied any right to introduce evidence of a probable zoning change to commercial on part of the condemned property, and to introduce evidence as to the consideration paid for the purchase of individual lots in Carver Heights.
Relating to the matter of the appellant's having been denied leave to introduce evidence of a probable zoning change which would result in making a small part of the condemned property E-Commercial under the Zoning Ordinance of the City of Fort Worth, rather than for family residential purposes, as it was zoned at the time the property was taken by the State, *374 it is to be noted that the evidence proffered by the appellant was introduced before the court as a part of a bill of exceptions because of the exclusion of the evidence. It can be assumed that the appellant hoped to show an enhanced value of that part it believed should have and would have been changed to E-Commercial but for the condemnation. In introducing the evidence so that the court could determine whether or not said evidence should be admitted before the jury, and before the ruling of exclusion, the appellant never at any time offered testimony that a commercial use would be the highest and best use of that part of the condemned property to which its evidence related, nor did it offer any testimony to the effect that there would be any enhancement in value of such part or of the entire condemned area in the event of a change in zoning, or as of the time of the "taking' by the State because of any reasonably probable change to commercial within a reasonable time. Based upon the statements of Judge Calvert in the case of City of Austin v. Cannizzo, 1954, 153 Tex. 324, 267 S.W.2d 808, albeit constituting dicta, we are of the opinion that appellant's evidence, if produced before the jury, would not have been sufficient to entire it to go further and introduce testimony of the value of the property, or any part thereof, based upon a "prospective zoning change". In any event, it is not to be doubted that the denial of appellant's request to introduce the evidence before the jury, plus evidence of value for purposes other than residential, could not constitute an abuse of discretion on the part of the trial court.
It necessarily follows that if we are correct in holding that such evidence was properly rejected and withheld from the jury appellant could not have been entitled to the definition of the term "market value" which Judge Calvert said (in the Cannizzo case) would be proper in the event it was shown that the property was adaptable for a use other than that for which it was zoned at the time of the "taking", and which use it was or in all reasonable probability would have become available within the reasonable future. The court did not err in denying appellant's request for the definition of the Cannizzo case and in charging the jury by use of the usual and customary language defining "market value" in condemnation cases.
The court also refused the appellant's specially requested issues which inquired of the jury the "market value" of Blocks 27 and 28 in separate issues, and overruled appellant's exception to the submission of the single special issue inquiring as to the value of the property condemned. That the court submitted the single special issue upon the value of the condemned property could not have prejudiced the appellant. Under the evidence the jury would have been entitled to arrive at the value of Blocks 27 and 28 together or separately, and if separately arrived at the jury would have been required to total the two separate figures and write the same as its answer to the special issue. The jury was as competent to state the ultimate total as would have been the judge in making any necessary addition of figures which might have been returned as the jury's answers had separate special issues been submitted.
We do not believe the court erred in excluding the appellant's proffered testimony as to values by lot and block numbers within the blocks wholly belonging to appellant, or related evidence relative to the blocks having been platted into lots, or in excluding evidence showing the amount paid as consideration for lots in other blocks proximate to those condemned. Where the property condemned is a part of a single tract of land, all of which is owned by a person or persons, its value and the value of the part condemned is determinable as an entirety, or in any event by substantial parcels, in instances where there is a variation in value of such parcels. Where there is no occasion to consider the property by parcels, it should be and is properly considered in the aggregate and *375 not considered as divided into lots, particularly where such is tentative or speculative or prospective, and where there has been no actual division. Silliman v. Gano, 1897, 90 Tex. 637, 39 S.W. 559, 40 S.W. 391; Minyard v. Texas Power & Light Company, Tex.Civ.App., Fort Worth, 1954, 271 S.W.2d 957, writ ref. n. r. e., and cases cited.
One of appellant's points of error was based upon the complaint that in a question asked a witness the attorney for the State "assumed" the number of acres of appellant's property being condemned. This occurred at a time when there had been no prior evidence thereof adduced in the presence of the jury. It is noted, however, that exhibits theretofore introduced into evidence by the appellant included plats which showed dimensions of the condemned property. From said dimensions the acreage was readily calculable by the jury, and the number of acres "assumed" in the question of the State's attorney was not misleading or incorrect. Such could not have been error.
On the matter of the State's evidence relative to the Hicks and Duke properties, one lying almost adjacent to the condemned property to the southeast thereof and one lying immediately to the southwest thereof, and both in tracts which had not been subdivided either on the ground or on paper, it is to be observed in the evidence that except for the matter of practicability of sewering the Hicks property, and except for rather simple extension of other nearby utility lines, both were comparable to the property condemned. We believe that the showing by the State's witnesses of their estimates as to value of the condemned property having been in part based upon the consideration paid for such nearby property, at times proximate to the date of the State's "taking", was proper and that their testimony was not inhibited because thereof. Admissibility of such evidence cannot be determined by any hard and fast rule but rests largely in the discretion of the trial court. 17 Tex.Jur., p. 436, "Evidence Civil Cases", sec. 160, "Value", "In General"; 2 McCormick and Ray, Texas Law of Evidence, 2d. Ed., p. 371, "Circumstantial Evidence", "Similar Acts and Transactions", sec. 1524, "Sales of Similar property to Evidence Value"; 32 C.J.S. Evidence § 593, p. 444, "On Issue as to Value".
The same thing would be true as to the evidence relative to sales in Eastwood Addition, which addition is more than a mile southwest of the condemned property. We believe the determination as to the admissibility thereof was within the sound discretion of the trial court and that there was no abuse on its part in receiving the same.
The appellant complained because the court permitted the State's attorney to require of a witness who was an officer for appellant to state on cross-examination the amount paid per acre for the 118 acre tract (out of which the property condemned was a part) when it was acquired some four years before the State's "taking" of the condemned property. It is to be remembered that the testimony was elicited on cross-examination from a witness who had previously testified on direct examination as to the value of the property at the time it was taken. Furthermore, it has been held that such evidence would ordinarily be an element to be considered in a condemnation case, and in any event would not constitute reversible error. Reeves v. City of Dallas, Tex.Civ.App., Dallas, 1946, 195 S.W.2d 575, writ ref. n. r. e. In the instant case, we do not believe the transaction was too remote to be admissible. The monetary "inflation" which occurred between 1954 and 1959 is a matter of common knowledge and the record was rather complete upon the development in the vicinity of the condemned property which enhanced its value for residential purposes. All of these matters were proper to be taken into consideration by the jury along with the expert testimony upon value.
*376 In a final point the appellant contends that in the event the individual errors are in themselves not such as warrant reversal of the judgment below, the cumulative effect thereof was such as to be reasonably calculated to cause and probably did cause the jury to return a verdict contrary to what its action would have been but for the errors, and that in view of Texas Rules of Civil Procedure, rule 434, the cause should be remanded for another trial. We are not of the opinion that there were any individual errors. If we are wrong in this, certainly there were no errors which individually or collectively resulted in such harm to the appellant as would require a reversal of the trial court's judgment.
Affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2435215/
|
337 S.W.2d 252 (1960)
Pauline Grace CORP, Carl Eugene Corp, Paula Marie Corp and Sue Beth Corp, Appellants,
v.
JOPLIN CEMENT COMPANY and Phoenix Assurance Company of New York, Respondents.
No. 47588.
Supreme Court of Missouri, En Banc.
July 11, 1960.
*254 William C. Myers, Jr., Robert P. Warden, Webb City, for appellants.
Rex Titus, Joplin (Richart & Titus, Joplin, of counsel), for respondents.
STORCKMAN, Judge.
This is a proceeding for the recovery of the maximum death benefits under the Workmen's Compensation Law. The claimants are the widow and three dependent minor children of the deceased employee. The award of the Industrial Commission denied compensation and the claimants appealed to the circuit court where the award was affirmed. The claimants' appeal from the judgment of the circuit court is before us on transfer from the Springfield Court of Appeals. Corp v. Joplin Cement Co., Mo.App., 323 S.W.2d 385.
At the time the employee was killed, the maximum death benefits were $12,400. Section 287.240 RSMo 1949, V.A.M.S. The notice of appeal was filed in the trial court prior to January 1, 1960. Section 477.040, as amended Laws 1959, S.B. No. 7, § 2. Since dependent children, in addition to the widow, are claimants and the amount in dispute, exclusive of costs, exceeds $7,500, the supreme court has jurisdiction of the appeal. Gennari v. Norwood Hills Corporation, Mo., 322 S.W.2d 718.
The employee Carl Corp was regularly employed by the Joplin Cement Company as an "improver's helper" or "insulator's helper". For three weeks before his death he had been working on a job in Winfield, Kansas, about 175 miles west of Joplin. His normal work week was five days, Monday through Friday. Although he was paid travel time and expenses for only one-round trip to and from the job in Winfield, he usually came home each week end at his own expense, either driving his own automobile or riding with his foreman, Clyde Hymer, Jr.
On Friday night, June 15, 1956, Corp returned to his home in Purcell, Missouri, which is located a few miles north of Joplin. On Saturday morning, a little after 9 a. m., he left home in his automobile to go to the Company plant in Joplin. The purpose of the trip was to get his pay check and also to procure some building materials to take back to the job in Winfield on the following Monday. It was not necessary for him to go to the plant to get his pay check. His employer would have mailed it to his home or he could have received it on the job if he had so elected. He also went to the home of his foreman who had not been on the Winfield job the week before, during which time William Sill had acted as foreman.
At the employer's office Corp got his pay check, and building materials, consisting of a substantial quantity of canvas and a roll of sheeting, were loaded into his automobile. On his way home, he went through Webb City where he stopped at the Glass Bar and cashed his pay check. He drank three or four 12-ounce servings of beer, talked to the owner and another patron, played the juke box and left after about 45 minutes. A short time later, while traveling alone on a direct route from Webb City to Purcell, Mr. Corp was killed in a one-car accident. The building materrials belonging to his employer were found in and about his wrecked automobile. Other evidence and further details will be developed in the course of the opinion.
The final award of the Commission, with one of the three members dissenting, is as follows:
"We find from all the evidence that Carl D. Corp was a regular employee of Joplin Cement Company on and before June 16, 1956. We find from all the evidence that he sustained an accident on June 16th, 1956, while driving his own automobile, which *255 contained building materials (canvas and red sheathing) belonging to his employer, on a personal mission, that is, to go to his home in Purcell, Missouri, and pick up his wife.
"We further find from all the evidence that at the time of the accident he was not on a mission for his employer, nor on a `dual purpose' trip.
"We, therefore, find and conclude from all the evidence that the accident sustained by Carl D. Corp on June 16th, 1956, which caused his death that day, did not arise out of and in the course of his employment. (DaMore vs. Encyclopedia Americana [Mo.], 290 S.W.2d 105; Garbo vs. [P. M.] Bruner Granitoid Co. [Mo.App.], 249 S.W.2d 477, and Koder vs. Tough [Mo.App.], 247 S.W.2d 876).
"Therefore, compensation must be and same is hereby denied."
The Commission's findings of fact are meager and do not clearly show the theory upon which the Commission reached its decision, but in view of the nature of the issues and the state of the evidence in this case their sufficiency need not be determined. See Section 287.460; Scott v. Wheelock Bros., Inc., 357 Mo. 480, 209 S.W.2d 149, 152 [4]; Mershon v. Missouri Public Service Corp., 359 Mo. 257, 221 S.W.2d 165, 169 [9]; Groce v. Pyle, Mo.App., 315 S.W.2d 482, 491 [9, 10].
Whether the death of the employee was one arising out of and in the course of his employment is the question to be determined. This in turn depends upon whether the automobile trip in which Corp was engaged was undertaken for a strictly personal reason or was combined with a necessary business purpose of the employer.
The Commission in its award recognized the doctrine of "dual purpose" travel as have the courts of Missouri. A much cited case expounding this doctrine is Marks' Dependents v. Gray, 251 N.Y. 90, 167 N.E. 181, 183, an opinion by Judge Cardozo. Briefly stated, the doctrine is that if the work of the employee creates the necessity for the travel, he is in the course of his employment, even though he at the same time is serving some purpose of his own. This general statement based on the Marks' case has been approved by this court in O'Dell v. Lost Trail Inc., 339 Mo. 1108, 100 S.W.2d 289, 293 [5], and McMain v. J. J. Connor & Sons Const. Co., 337 Mo. 40, 85 S.W.2d 43, 44. See also Brown v. Weber Implement & Auto Co., 357 Mo. 1, 206 S.W.2d 350, 354.
In the recent case of Gingell v. Walters Contracting Corporation, Mo.App., 303 S.W.2d 683, 688-689, Judge Cave, in further explaining the doctrine and applying it to permit a recovery in a similar case, stated: "Some of the decisions have construed this doctrine to be applicable only when the primary purpose of the trip is on the employer's business, or sometimes referred to as the `dominant purpose' test. Judge Cardozo used no such language. He said it was sufficient if the business motive was a concurrent cause of the trip. He then defined `concurrent cause' by saying that it meant a cause which would have occasioned the making of the trip even if the private mission had been cancelled. As we understand this formula, it is not necessary that, on failure of the personal motive, the business trip would have been taken anyway by this particular employee at this particular time. It is enough that some one would have had to make the trip to carry out the business mission. If the trip would ultimately have had to be made, and if the employer got this necessary item of travel accomplished by combining it with the employee's personal trip, it would be a concurrent cause of the trip, rather than an incidental appendage or afterthought. There is no occasion to weigh the business and personal motive to determine which is dominant."
This is a sound exposition of the doctrine and is in keeping with the rule that the Workmen's Compensation Act should be liberally construed to effectuate its purposes. Blew v. Conner, Mo., 328 S.W.2d *256 626; Marie v. Standard Steel Works, Mo., 319 S.W.2d 871; § 287.800.
The Commission found that Corp was a regular employee of the Cement Company at the time of the accident and that he was carrying in his automobile building materials belonging to his employer. These findings are consistent with a mission for his employer, at least with dual purpose travel. However, the Commission further found that Corp was driving his automobile "on a personal mission, that is, to go to his home in Purcell, Missouri, and pick up his wife." Mrs. Corp testified that, although nothing definite was said on the day in question, she, her husband, and the children, usually went to Joplin on Saturday afternoon, had lunch, and did their shopping. The operator of the Glass Bar testified that Corp told him that he was going home and pick up his wife and come back to Webb City and do some shopping. While the finding that Corp intended to pick up his wife and go shopping after he got home is supported by the evidence, it is not controlling or persuasive of the purpose of the trip in question; that is, the trip from his home to the company plant and the return.
The pertinent inquiry is whether employee Corp was directed by his employer to pick up the building materials and transport them to the job site in Winfield and if the carriage of the material from the company plant to his home was an integral and reasonably expected part of that transportation.
Mr. Corp, his foreman Clyde Hymer, Jr., and William Sill, were the only employees on the Winfield job who lived in the Joplin area where the company plant was located. Mr. Sill had a room in Winfield and did not usually come home on week ends. Mrs. Corp testified her husband usually came home on week ends to get supplies and to visit his family. Both Corp's wife and his foreman testified that Corp had previously carried supplies to the Winfield job in his automobile. His wife had been with him on the previous week end when he picked up building materials at his employer's plant. Before Corp left home this Saturday morning, he told his wife he was going to the company plant to get materials to take back to Winfield and to pick up his pay check.
The employer's own evidence and the testimony of its officers tend to prove Corp's authority to pick up the supplies and carry them back to Winfield in his automobile. Admissions of L. B. Meyers, general manager of the Cement Company, made in his deposition, tended to prove that Corp picked up materials on the morning in question to take back to the job in Winfield, Kansas, that the material was necessary to the completion of the job in Winfield, and that if Mr. Corp had not taken the canvas back to the job, it would have to be sent there by a company truck, by rail, or some other means. The testimony of Mr. Hymer, the foreman of the Winfield job and Mr. Corp's immediate superior, was indefinite in some respects but tended to prove that either he or William Sill, he did not remember which, instructed Corp to pick up these building materials and take them back to Winfield; that he, Mr. Hymer, had the right to hire and fire and he further said in substance, that while Corp was not "required" to pick up and haul the material, if an employee does not do what he is told, the employer would be likely to get someone that would.
William O. Mauldin, sales manager of the company and in charge of insulation work, testified that Corp was not "required" or "obligated" to take any canvas or other materials to Winfield, that the foreman on the job was charged with the responsibility of notifying him of the need of supplies and that he, Mauldin, then "took the necessary steps to get the material to the job." This sort of testimony does not mitigate against the right and duty of Corp as an employee to follow the instructions of his foreman or immediate superior on the job. Ordinarily, an employee has a right to assume that he is authorized to act in accordance with the direction or command of his foreman or other superior employee under *257 whom he is directly working. See 35 Am. Jur., Master and Servant, § 273, p. 698; 56 C.J.S. Master and Servant § 280, p. 1043; and Moore v. James Black Masonry & Construction Co., Mo.App., 27 S.W.2d 765, 767 [4]. All of the evidence tended to prove that Corp was directed by his foreman or immediate superior to pick up the building materials and was on his way home with them at the time of the accident.
The remaining inquiry is whether taking the building materials from the cement plant to the employee's home was a necessary part and something reasonably to be expected in connection with the transportation of the supplies to their destination in Winfield. The employer knew that its employee Corp was going to spend the week end with his family and would not return to the job in Winfield until Monday morning. The employer is also bound to have known that Corp, in carrying out the request, would not go directly from the plant to Winfield but would carry the material to his home in the course of his transporting it to Winfield. Corp had to make the trip to the company plant on Saturday because the plant would be closed on Sunday and would not reopen before he left on Monday morning to return to Winfield. This is the only reasonable inference from the evidence. In these circumstances, the trip was within the contemplation of the employer and whether the employee intended to pick up his family when he got home or merely intended to stay there and rest until time to start back to Winfield was beside the point. He intended to return to his home in any event.
The building material involved was not trifling or insignificant, but substantial and, according to the testimony, necessary for the completion of the Winfield project. If perchance his pay check had been picked up by a fellow worker or friend and delivered to his house, Corp would still have had to make the trip to the company plant. If Corp had not agreed to carry the material or had failed to do so, it would have had to be sent by some other employee or by a carrier for hire. The task assigned to Corp by his employer necessitated the trip to and from the company plant and, under the dual purpose doctrine, it is not a valid objection that the employee was concurrently serving a purpose of his own. Gingell v. Walters Contracting Co., supra; Larson, Workmen's Compensation Law, Vol. I, §§ 18.00-18.24. In the Gingell case the employee was requested by his job superintendent to pick up some tarpaulins on his way home and bring them to the job when he came to work the next day and to check the luggage of another employee at the airport. It was held that the services requested by the employer converted the trip into dual purpose travel and that injuries sustained by the employee while so engaged arose out of and in the course of his employment.
It is further contended that even if Corp had been on a dual purpose trip, he "abandoned or stepped aside from his employment" when he went to Webb City and stopped at the Glass Bar, and that his continued trip home was solely for a personal purpose. In support of this contention, the employer cites: Brown v. Anthony Mfg. Co., Mo., 311 S.W.2d 23; Kinkead v. Management & Engineering Corp., Mo. App., 103 S.W.2d 545; and Duggan v. Toombs-Fay Sash & Door Co., 228 Mo.App. 61, 66 S.W.2d 973. These cases are not controlling or persuasive in this situation. The Brown case involved the scope of the employee's duties under the employment contract. In Kinkead and Duggan, the employee had deviated from his route for a personal reason and had not returned to the place where his duty required him to be.
The employee Corp had the choice of two routes from the company plant to his home in Purcell. He chose to go through Webb City which appears to be as direct as the other. In Webb City the employee stopped at the Glass Bar where he cashed his pay check and stayed for about forty-five minutes. He then continued towards Purcell on North Main Street. At the time he was *258 fatally injured he was travelling on the route he had originally chosen. It has not been demonstrated that there was any spatial deviation. Spradling v. International Shoe Co., 364 Mo. 938, 270 S.W.2d 28, 32 [4].
Nor is the fact that Corp stopped at the Glass Bar and delayed his homeward journey for about forty-five minutes sufficient to constitute an abandonment of his employer's service and make the remainder of the trip strictly a personal one. Brown v. Weber Implement & Auto Co., 357 Mo. 1, 206 S.W.2d 350, 354 [3,4]; McCoy v. Simpson, 346 Mo. 72, 139 S.W.2d 950, 952 [5]; Beem v. H. D. Lee Mercantile Co., 337 Mo. 114, 85 S.W.2d 441, 444 [3], 100 A.L.R. 1044.
In a Workmen's Compensation case, the function of the reviewing court is to determine if the award of the Industrial Commission is supported by competent and substantial evidence on the whole record, but it cannot substitute its own judgment on the evidence for that of the Commission. Nevertheless, the reviewing court can decide whether the Industrial Commission could have reasonably made its findings and reached its results on a consideration of all of the evidence before it and can set aside a decision of the Industrial Commission if it is clearly contrary to the overwhelming weight of the evidence. Brown v. Anthony Manufacturing Co., Mo., 311 S.W.2d 23, 27.
The Industrial Commission has the right to pass upon the credibility of witnesses, but where the record reveals no conflict in the evidence or impeachment of any witness, the reviewing court may find the award was not based upon disbelief of the testimony of the witnesses. Frazier v. National Bearing Division, American Brake Shoe Co., Mo., 250 S.W.2d 1008, 1011 [3,4]; Sanderson v. Producers Commission Ass'n, 360 Mo. 571, 229 S.W.2d 563, 566; Scott v. Wheelock Bros., 357 Mo. 480, 209 S.W.2d 149, 153 [5]. Neither the record nor the briefs contain any charge of incredibility or falsity and we conclude the Commission found none.
In Sanderson v. Producers Commission Ass'n, supra, the circuit court reversed an award of the Industrial Commission denying compensation and entered a judgment in claimant's favor for death benefits. On appeal this court affirmed the judgment of the circuit court stating, 229 S.W.2d 563, 567 [4]: "Now the Commission may not arbitrarily disregard and ignore competent, substantial and undisputed evidence of witnesses who are not shown by the record to have been impeached, and the Commission may not base their finding upon conjecture or their own mere personal opinion unsupported by sufficient competent evidence."
Where the evidentiary facts are not disputed, the award that should be entered by the Industrial Commission becomes a question of law and the Commission's conclusions are not binding on the appellate court. Maltz v. Jackoway-Katz Cap Co., 336 Mo. 1000, 82 S.W.2d 909; Rutherford v. Tobin Quarries, 336 Mo. 1171, 82 S.W.2d 918; Gantner v. Fayette Brick & Tile Co., Mo.App., 236 S.W.2d 415. The undisputed evidence compels the conclusion that the employee was on a dual purpose mission, that his work created the necessity for the travel and that the accident and fatal injury arose out of and in the course of his employment.
The award denying compensation is not supported by competent and substantial evidence on the whole record and is clearly contrary to the overwhelming weight of the evidence. Lunn v. Columbian Steel Tank Co., 364 Mo. 1241, 275 S.W.2d 298; Sanderson v. Producers Commission Ass'n, 360 Mo. 571, 229 S.W.2d 563; Cain v. Robinson Lumber Co., Mo.App., 273 S.W.2d 741, affirmed 365 Mo. 1238, 295 S.W.2d 388; Palm v. Southwest Missouri Wholesale Liquor Co., Mo.App., 176 S.W.2d 528; Stepaneck v. Mark Twain Hotel, Mo.App., 104 S.W.2d 761. In the Damore, Garbo and Koder cases, cited by the Commission in its award, supra, the evidence was conflicting *259 and strongly supported the award made in each case. Those decisions are not in point on the present factual situation.
The judgment of the circuit court affirming the final award of the Industrial Commission is reversed and the cause is remanded with directions to the circuit court to set aside its judgment and enter a new judgment reversing the award of the Industrial Commission and to remand the cause to the Industrial Commission for further proceedings consistent with the views expressed in this opinion.
All concur.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2435203/
|
337 S.W.2d 674 (1960)
Harold W. WALTON, Suing for Himself and on Behalf of All Other Citizens and Taxpayers of the Commonwealth of Kentucky Similarly Situated, Appellant,
v.
Henry H. CARTER, Secretary of State of Commonwealth of Kentucky, et al., Appellees.
Court of Appeals of Kentucky.
August 12, 1960.
*675 Raymond F. Bossmeyer, Louisville, for appellant.
John B. Breckinridge, Atty. Gen., Holland McTyeire, H. D. Reed, Jr., Asst. Attys. Gen., Cornelius W. Grafton, Louisville, for appellees.
CULLEN, Commissioner.
The appeal is from a judgment upholding the constitutionality of Senate Bill No. *676 251 of the 1960 General Assembly (Chapter 106 of the Acts of 1960) and answering various questions of interpretation. In main substance the Act provides for submitting to the voters of the state the question of issuing $100,000,000 in "general obligation bonds" of the state, from the proceeds of which $10,000,000 would be used for developing and improving state parks and $90,000,000 would be used for constructing and improving highways, bridges and tunnels under the federal cost participation program. The Act makes provision for payment of the park bonds from the established ad valorem tax levies, and for payment of the highway bonds from the established Road Fund taxes, subject to priorities for certain existing and future commitments against the Road Fund.
The first question presented is whether the Act relates to two subjects, with the result that it violates Section 51 of the Kentucky Constitution and would not provide for a fair and equal election as required by Section 6 of the Constitution. If it were considered that the provisions of the Act as to the use of the money are paramount there would be some strength in the argument that the Act does deal with two unrelated subjects, i.e., parks and highways. But in previous decisions this Court has firmly committed itself to the view that the issuance of the bonds is the single subject of an Act of this nature and that such an Act does not violate Section 6 or 51 of the Constitution even though the money is to be devoted to several distinct and unrelated purposes. See Allen v. Cromwell, 203 Ky. 836, 263 S.W. 356; Burke v. City of Louisville, Ky., 275 S.W.2d 899. We continue to adhere to that view and we concur in the conclusion of the circuit court that the Act does not relate to two subjects.
The second question grows out of the fact that the Act, in stating the form of the question to be submitted to the voters, identifies the Act as "House Bill No. ____," whereas the correct identification should be "Senate Bill No. 251." The circuit court held that in preparing the question for submission to the voters the Secretary of State and Attorney General should substitute "Senate Bill No. 251" in place of "House Bill No. ___." We think this ruling clearly was correct. The only purpose of the reference to a bill number was for convenient identification of the Act, and a simple clerical error was made. To correct such an error does not constitute "judicial legislation." See Neutzel v. Ryans, 184 Ky. 292, 211 S.W. 852; Ross v. County Bd. of Education, 196 Ky. 366, 244 S.W. 793; Fidelity & Columbia Trust Co. v. Meek, 294 Ky. 122, 171 S.W.2d 41.
The third question is whether the bonds to be issued will be payable only from the respective tax sources provided for in the Act. The circuit court answered this question in the negative and held that the bonds would be general obligations such as to require the Commonwealth to use other tax sources if necessary. While the Act makes provision for payment of the park bonds from ad valorem taxes, and of the highway bonds from Road Fund taxes, it further provides that the bonds shall be issued "with an irrevocable pledge of the full faith, credit, resources and unlimited taxing power of the Commonwealth." Furthermore, the form of the question to be submitted to the voters identifies the bonds as "general obligation bonds."
In Dalton v. State Property and Buildings Commission, Ky., 304 S.W.2d 342, it was held that the Highway Bond Issue of 1956 constituted a general obligation of the Commonwealth not limited in sources of payment to the particular Road Fund Revenues provided for in the Act of submission. Dissenting judges placed emphasis on the fact that the question submitted to the voters merely referred to the issuance of "bonds" without informing the voters that the proposal was to issue general obligation bonds. However, as pointed out above, the 1960 Act so frames the question as to give that information to the voters.
*677 The appellant suggests a reexamination of the doctrine of the Dalton case in the light of the fact that by virtue of the restrictive provisions of Section 230 of the Constitution, Road Fund taxes could not be used to pay off the park bonds, whereby (the appellant argues) the park bonds could not possibly be general obligation bonds. The fallacy in this argument is that it is not essential for the creation of a general obligation of the state that all conceivable tax sources be unrestrictedly pledged to the payment of the obligation. Certain tax sources or portions thereof may be excluded or excepted, by reason of previous commitment or otherwise, still leaving under pledge the remainder of the comprehensive taxing power. This is simply a matter of contract between the state and the buyers of the bonds. In the Dalton case it was recognized that certain tax revenues could be excluded from pledge without affecting the character of the bonds as general obligation bonds. We concur in the holding of the circuit court on this question.
The fourth question relates to the sufficiency of the notice of election. The Act provides for the publication of a notice of election, setting forth the ballot question and the full text of the Act, in five daily newspapers of bona fide general circulation published in different areas of the state, once a week for four consecutive weeks prior to the election. Provision is made also for the posting of a like notice at the courthouse door in each county. These notice provisions are more extensive than those of the 1956 Highway Bond Act which were held adequate in the Dalton case, and we agree with the circuit court that they are sufficient to give reasonable notice.
The fifth question is whether the Act violates Section 47 of the Constitution in that it was a "bill for raising revenue" and did not originate in the House of Representatives. A similar question was decided in the negative in the Dalton case. We adhere to the ruling in the Dalton case and affirm the holding of the circuit judge which followed it.
The sixth question is whether the Act violates Section 180 of the Constitution in that, in pledging the ad valorem tax revenues to payment of the park bonds, it attempts to divert such taxes from the purposes for which they were levied. By KRS 47.010 it is provided that all tax revenues, with certain exceptions, shall be credited to the General Fund of the state. The appellant argues that the ad valorem taxes thus have been levied for General Fund purposes, and cannot be diverted to park bond purposes. One answer is that when taxes have been levied for the General al Fund they are available for appropriation for any proper state purpose, of which payment of park bonds would be one, so there is in fact no diversion. Another answer is that Section 180 of the Constitution is concerned only with the expenditure of funds that have been received from a tax levy previously made, whereas the 1960 Act in effect makes provision for a new levy replacing the old levy, with new purposes, and does not purport to dispose of funds from the old levy. We concur in the ruling of the circuit court that there is no violation of Section 180.
The final question relates to a provision of the 1960 Act dealing with $30,000,000 of the 1956 Highway Bond Issue which at the time of passage of the 1960 Act remained unmarketed because the interest restrictions imposed by the 1956 Act were such as make the bonds unsalable in the current bond market. See Dalton v. State Property and Buildings Commission, Ky., 304 S.W.2d 342. The 1960 Act directed the State Property and Buildings Commission to exert every effort to sell these bonds, and provided that in the event such efforts were unsuccessful there should be submitted to the voters at the 1960 election a question embracing not only the proposition of issuing new bonds in the amount of $100,000,000, but also the proposition of *678 removing the interest rate limitation on the unsold $30,000,000 of the 1956 issue. The State Property and Buildings Commission was successful in selling the $30,000,000 of bonds in June, so the alternative ballot question will not need to be submitted. The appellant argues, however, that by virtue of the original inclusion of this contingent provision the Act violated the prohibition of Section 60 of the Constitution against the enactment of legislation to become effective "upon the approval of any other authority than the General Assembly."
It is a well settled rule that a legislature may make a law to become operative on the happening of a certain contingency or future event. 11 Am.Jur., Constitutional Law, sec. 216, p. 926. This Court has approved the power of the legislature to enact a law to take effect when certain conditions arise. See Clay v. Dixie Fire Ins. Co., 168 Ky. 315, 181 S.W. 1123; Duncan v. Smith, Ky., 262 S.W.2d 373, 42 A.L.R. 2d 754. Here the Act does not depend for its effectiveness upon any other "authority" but merely upon a general condition, namely, the status of the bond market, which is controlled by general economic factors. It might further be observed that Section 60, in prohibiting the enactment of legislation to become effective upon any other authority than the General Assembly, clearly does not exclude as an acceptable "other authority" the voting public in those instances where by express constitutional provision legislation is permitted or required to be submitted to the voters for approval. The contingent provision of the 1960 Act could in no event have any ultimate effect as law unless approved by the voters, so there could be no violation of the spirit of Section 60. We uphold the decision of the circuit court that the Act does not violate Section 60.
The judgment is affirmed.
MONTGOMERY, J., dissents to the extent that the holdings of this opinion are inconsistent with the views expressed by him in his dissenting opinion in Dalton v. State Property and Buildings Commission, Ky., 304 S.W.2d 342.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2435147/
|
337 S.W.2d 860 (1960)
Gloria Faye ENGLISH et vir, Appellants,
v.
H. H. HEGI et al., Appellees.
No. 6955.
Court of Civil Appeals of Texas, Amarillo.
June 13, 1960.
*861 Crenshaw, Dupree & Milam, Lubbock, Chas. H. Dean, Plainview, for appellants.
Richard F. Stovall, Floydada, for appellees.
DENTON, Chief Justice.
This suit was instituted by appellee, H. H. Hegi, individually and as next friend for his minor son, David Hegi, for property damages and personal injuries sustained by the 15 year old minor son, as a result of a collision at an intersection between an automobile driven by Gloria Faye English, appellant, and a motorcycle driven by the minor. The case was tried before a jury. Based upon the jury verdict, the trial judge entered a judgment awarding *862 damages to appellee H. H. Hegi individually in the amount of $598.63 and to David Hegi, the minor, the sum of $4,000.
The automobile-motorcycle collision occurred on June 6, 1958 at the intersection of 4th and Ash Streets in the City of Plainview. Mrs. English, defendant below, approached the intersection on 4th Street proceeding in an easterly direction, and appellee's son David Hegi was approaching the intersection on Ash Street proceeding in a northerly direction. A stop sign faced Mrs. English as she approached the intersection, and her uncontradicted testimony was that she stopped before proceeding into the intersection. She further testified she looked in both directions before entering the intersection, but that she did not see David Hegi until just before the impact which was 6 feet north of the south curb line of 4th Street and 26 feet east of the west curb line of Ash Street. The impact was in the southeast quadrant of the intersection. The motorcycle struck the English automobile in the right side just back of the right front fender. It is undisputed that the minor son of appellee was injured, having received a fractured skull as well as a concussion and lacerations about the head. He remained in a state of unconsciousness and semi-consciousness for several hours after the collision, and was confined to the hospital for a period of 7 days. The jury found the hospital and doctor bills amounted to $528.48.
In response to the special issues submitted, the jury found: that Gloria Faye English failed to keep a proper lookout; that such failure was a proximate cause of the collision; that Mrs. English drove into the intersection when David Hegi was approaching so closely as to constitute an immediate hazard; that Mrs. English failed to yield right of way; that such failure was negligence (the jury answered this issue "Partially, yes."); and that such negligence was a proximate cause of the collision. The jury further found that David Hegi was operating his motorcycle at an excessive rate of speed, but that such speed was not negligence; that he was not driving at a speed in excess of 30 miles per hour; that he did not fail to keep a proper lookout; that he could not have avoided the collision by turning to the right and that he did not fail to yield the right of way. In addition, the jury found that the collision was not the result of an unavoidable accident.
In appellants' first two points of error it is contended the damage issue as it pertained to future pain and suffering was not supported by any evidence or insufficient evidence. Appellants also challenge the court's instruction dealing with the appellee minor's reduced earning capacity after reaching his majority. After submitting the damage issue, the trial court properly confined the damages the jury was allowed to assess as those that would "in reasonable probability" be incurred as a result of the negligence of the appellant. Texas has long followed the so-called "reasonable probability" rule as to future personal injuries. Gulf, C. & S. F. Ry. Co. v. Harriett, 80 Tex. 73, 15 S.W. 556; Houston & T. C. Ry. Co. v. Fox, 106 Tex. 317, 166 S.W. 693; Galveston, H. & S. A. Ry. Co. v. Powers, 101 Tex. 161, 105 S.W. 491; Port Terminal Railroad Ass'n v. Ross, 155 Tex. 447, 289 S.W.2d 220. We are of the opinion the trial court correctly followed the law in the language used in the instructions complained of.
In reviewing the case in the light of appellants' contention that there is no evidence or insufficient evidence to support the future pain and suffering, and the future reduced earning capacity, we have carefully examined the statement of facts. Dr. Gilmer Johnson, who first treated the boy in the hospital emergency room, testified the minor suffered a fractured skull and a concussion and that five stitches were taken in his head. The doctor personally went with the Hegi boy in an ambulance to Lubbock to be examined and treated by a specialist there. X-rays revealed a fracture of the skull, and the doctor testified the fracture *863 had healed with a slight displacement and a slight depression in the skull. The boy's mother also testified in some length concerning his injuries, treatment and complaints from the time of the collision to the time of the trial.
The existence of physical pain and suffering may be presumed in cases where it is the natural consequence of an injury such as that received by the appellee here. 13 Tex.Jur., Sec. 285, page 478; Citizens' Ry. Co. v. Branham, Tex.Civ.App., 137 S.W. 403; Austin Road Co. v. Thompson, Tex.Civ.App., 275 S.W.2d 521. We are of the opinion the evidence of the injuries sustained by the minor was sufficient to support the special issue as submitted.
Another element of the court's instruction complained of dealt with the future earning capacity of David Hegi. Although he was a high school student at the time of the collision, he had worked afternoons and Saturdays for a local florist. The injuries prevented him from working for the remainder of the summer of 1958, but during the following school year he did work for the same employer to a somewhat reduced extent.
In a personal injury suit the amount which the plaintiff might have earned in the future is always uncertain, and must be left largely to the sound judgment and discretion of the jury. Proof is required to show the extent and amount of the damages. But the proof in such cases will very according to the peculiar facts of each case. International & G. N. R. Co. v. Simcock, 81 Tex. 503, 17 S.W. 47; McIver v. Gloria, 140 Tex. 566, 169 S.W.2d 710. Here the minor was primarily a student, therefore it would be extremely difficult to offer proof of his earning capacity. In such cases the jury must determine the value of his lost earning capacity from their common knowledge and sense of justice. Texas & P. R. Co. v. O'Donnell, 58 Tex. 27; Missouri, K. & T. Ry. Co. of Texas v. Johnson, Tex.Civ.App., 37 S.W. 771; McIver v. Gloria, supra. We are of the opinion the evidence and physical facts shown was sufficient to support the jury's answer to the general damage issue. The first two points of error are overruled.
Appellants' next two points deal with the trial court's refusal to submit special issues requested by appellants concerning failure of David Hegi to apply his brakes as soon as a person of ordinary prudence would have done, and whether David Hegi failed to keep his motorcycle under proper control. These two defensive elements were pleaded, and proper issues were timely requested.
It is the general rule that a party has a right to an affirmative submission to the jury of any fact or group of facts pleaded by him and supported by material evidence. On the other hand, Rule 279, Vernon's Ann. Texas Rules, requires the trial court to submit only the controlling issues raised by the pleadings and evidence. Various phases or different shades of the same issue are not required. The jury found David Hegi had not failed to keep a proper lookout, and even though he was driving at an excessive rate of speed it was not negligence. We are of the opinion that he submission of issues on proper lookout and excessive speed precludes the trial court from submitting the issue of proper control. Triangle Cab Co. v. Taylor, 144 Tex. 568, 192 S.W.2d 143; Texas & New Orleans Railroad Co. v. Pettit, Tex.Civ.App., 290 S.W.2d 730; Blaugrund v. Gish, 142 Tex. 379, 179 S.W.2d 266.
In answer to special issues Nos. 7 and 8, the jury found David Hegi could not have avoided the collision by turning to the right, and that he had the right of way. In view of these findings, we are of the opinion the issued requested by appellants concerning the failure of David Hegi to apply his brakes was not an ultimate issue. We do not think such an issue was controlling, and the trial court did not err in refusing to submit such an issue. Miller v. Miller, Tex.Civ.App., 304 S.W.2d 277, no writ history; *864 Booker v. Baker, Tex.Civ.App., 306 S.W.2d 767, refused n. r. e. Points of error 3 and 4 are therefore overruled.
By the last three points of error appellants contend the answers of the jury to the issues finding appellee David Hegi was not negligent in the various instances mentioned above was so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust.
No authorities need to be cited for the proposition that the jury is the exclusive judge of the facts presented and the weight to be given to the testimony, but the jury is not at liberty to disregard the undisputed evidence and decide issues merely in accordance with their personal wishes.
We have carefully considered and weighed all the evidence presented in this case in the manner required as we understand the rule laid down by the Supreme Court in the case of In re King's Estate, 150 Tex. 662, 244 S.W.2d 660. In applying the rule thus laid down, we have considered the evidence which supports the jury verdict and evidence that tends to be to the contrary. We conclude that the jury findings in this case are not so contrary to the overwhelming weight and preponderance of all the evidence as to be clearly wrong and manifestly unjust. We therefore overrule appellants' points of error 5, 6 and 7.
Being of the opinion that the record reveals no reversible error, the judgment of the trial court is affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2435151/
|
337 S.W.2d 453 (1960)
JACK COLE COMPANY
v.
Alfred T. MacFARLAND, Commissioner, etc.
Supreme Court of Tennessee.
June 6, 1960.
*454 Maclin P. Davis, Jr., Waller, Davis & Lansden, Nashville, for appellee.
George F. McCanless, Atty. Gen., Milton P. Rice and David M. Pack, Asst. Attys. Gen., for appellant.
This is a suit to recover $383.78, penalties and interest claimed to be due the complainant as a tax paid under protest.
This tax was paid pursuant to Chapter 252, Public Acts of 1959, which was declared unconstitutional and void by the Chancellor and this appeal by the State resulted.
It appears that complainant is engaged in the business of transporting freight by motor truck in interstate commerce. Its activities in Tennessee are exclusively in interstate commerce and it has never paid corporation excise or franchise taxes under Chapters 27 and 29, Title 67, Tennessee Code. The complainant realizes net earnings from transporting freight in Tennessee in interstate commerce. After the enactment of Chapter 252, Public Acts of 1959, the State demanded the sum of $383.78, penalties and interest.
On October 15, 1959, the complainant paid the tax, penalties and interest to the defendant under protest and then brought this suit for the recovery of the amount so paid as authorized by Section 67-2305, T.C.A. conceiving said assessment and collection to be unjust and illegal on the ground that said statute is unconstitutional and void.
The complainant claims that under Article II, Section 28, of the Constitution of Tennessee, all property must be taxed according to its value, and taxes must be equal and uniform throughout the State. The only exceptions relate to privilege taxes on income derived from stocks and bonds that are not taxed ad valorem.
It is contended that a tax purporting to be on the privilege of owning property or deriving income from property is, in substance and effect, a property tax and not a privilege tax within Article II, Section 28.
The statute under which the tax here involved was assessed and collected provides in part as follows:
"This tax shall not be construed as a tax on the privilege of carrying on business in Tennessee, the same being upon the privilege of being in receipt of or realizing net earnings in Tennessee * * *."
*455 It appears from the foregoing quotation that the tax levied by Chapter 252 of the Public Acts of 1959 undertakes to place a tax on income on net earnings in Tennessee, and complainant contends that said Chapter 252 seeks to impose a tax not authorized by but in violation of Article II, Section 28, of the Constitution of Tennessee.
The particular portion of Section 28, Article II, involved is as follows:
"The Legislature shall have power to levy a tax upon incomes derived from stocks and bonds that are not taxed ad valorem."
In the leading case of Evans v. McCabe, 164 Tenn. 672, 678, 52 S.W.2d 159, 160, the Court stated:
"The language is, not that the Legislature shall levy a tax upon such incomes, but shall have power to levy the tax.
"If the income tax is a property tax, the authority to discriminate between incomes arising from particular stocks and bonds and incomes arising from other sources makes of the income tax clause an exception to the equality and uniformity clause. If the income tax is a privilege tax, the authority to tax incomes upon prescribed conditions makes of the clause an exception to the unconditional and unlimited authority to tax privileges generally.
* * * * * *
"It therefore seems to us, treating the assailed tax as a property tax, upon principles too well established by authority to be challenged, that when the Constitution by way of exception to a general provision against inequality in taxation conferred upon the Legislature the power to tax incomes of only one class, that instrument necessarily denied to the Legislature the power to tax incomes of other classes. * * *"
"* * * That section of the Constitution, however, only authorized the Legislature to tax incomes in so far as they were `derived from stocks and bonds that are not taxed ad valorem.' If the Convention of 1870 contemplated an income tax as a privilege tax it must have included the income tax clause as a limitation on the power to levy such a tax. From such a viewpoint this clause is an exception or a proviso. The clause was certainly not designed to confer an additional power of privilege taxation. The preceding clause, in terms as broad as possible, had countenanced the power of the Legislature to tax every privilege. The intent, however, was that only the incomes mentioned should be taxed."
The defendant contends that the tax is a privilege tax because the Legislature has designated the receipt or realizing of earnings or income as a privilege. Defendant cites numerous cases supporting the contention that the Legislature can name anything to be a privilege and then tax it.
It cannot be denied that the Legislature can name any privilege a taxable privilege and tax it by means other than an income tax, but the Legislature cannot name something to be a taxable privilege unless it is first a privilege.
In the present case the statute itself provides that the tax shall not be construed as a tax on the privilege of carrying on a business in Tennessee, but expressly provides that the tax shall be upon the privilege or being in receipt of or realizing net earnings in Tennessee, which, it appears to us, is an income tax not authorized by Article II, Section 28 of the Constitution above referred to.
Realizing and receiving income or earnings is not a privilege that can be taxed.
"A privilege is whatever business, pursuit, occupation, or vocation, affecting the public, the Legislature chooses to declare and tax as such." Corn et al. *456 v. Fort, 170 Tenn. 377, 385, 95 S.W.2d 620, 623, 106 A.L.R. 647.
"Privileges are special rights, belonging to the individual or class, and not to the mass; properly, an exemption from some general burden, obligation or duty; a right peculiar to some individual or body." Lonas v. State, 50 Tenn. 287, 307.
Since the right to receive income or earnings is a right belonging to every person, this right cannot be taxed as privilege.
It results that we find no error in the decree of the Chancellor holding the Act in question invalid and it is affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2435155/
|
337 S.W.2d 522 (1960)
STATE AUTOMOBILE AND CASUALTY UNDERWRITERS, a Corporation, Appellant,
v.
David Royce REAGAN, Appellee.
No. 3763.
Court of Civil Appeals of Texas, Waco.
July 7, 1960.
Rehearing Denied July 29, 1960.
Naman, Howell, Smith & Chase, T. Geo. Chase, Waco, for appellant.
W. Lance Corsbie, Waco, for appellee.
McDONALD, Chief Justice.
This is a workmen's compensation case. Parties will be referred to as in the Trial Court. Plaintiff claimed total and permanent disability as a result of a back injury sustained on 3 August, 1954, when he fell from the roof of a house. Trial was to a jury, which found in answer to Special Issues: 1) Plaintiff sustained an injury on 3 August, 1954, 2) Which was accidental; 3) In the course of his employment; 4) That plaintiff sustained total disability following the injury; 5) That the injury was *523 a producing cause of the total disability; 6) That total disability began on 3 August, 1954; 7) That such total disability is permanent; 8) That plaintiff's weekly wages were $45; 9) That plaintiff's disability was not caused solely by poor posture; 10) That plaintiff's disability was not caused solely by congenital defect or condition; 11) That plaintiff's disability was not caused solely by a combination of poor posture and congenital defect or condition.
The Trial Court rendered judgment on the verdict in a lump sum of $10,568.23.
Defendant Insurance Company appeals, contending:
1) The jury's finding of total and permanent disability is against the great weight and preponderance of the evidence.
2) There is no evidence to support the finding of total and permanent disability from the date of the accident.
3) The finding of total and permanent disability from the date of the accident is against the great weight and preponderance of the evidence.
4) The Trial Court erred in admitting into evidence the hospital records which included the diagnosis of Dr. H. H. Trippett, on the grounds that such record contained the unsworn hearsay statement of Dr. Trippett giving his opinion of plaintiff's condition.
We revert to the finding of the jury that plaintiff suffered total and permanent disability, and to defendant's 1st contention, that such finding is against the great weight and preponderance of the evidence.
The record reflects that plaintiff was 16 years of age, and employed by his father, who was in the sheet metal business; that on 3 August, 1954, he was helping install duct work on a house and fell some 12 feet from the roof, striking the lower part of his back on concrete. He was taken to Dr. H. H. Trippett, who examined him. He was very sore and bruised, had pain, and couldn't get around, or climb; but reported for work the next day. He continued to work for about 3 weeks, went on a vacation, and entered school about 10 September but couldn't climb or lift, and continued to have pain in his leg. As September approached, the pain and condition grew progressively worse; the pain was more intense and finally it became so severe that plaintiff had to go to bed. Finally, on 5 October, 1954, the pain became so severe that plaintiff went to Dr. Trippett. He was out of town and his nurse referred plaintiff to Dr. Tom Oliver. Dr. Oliver X-rayed plaintiff and examined him; told him something was wrong with his back and sent him to Hillcrest Hospital, where he was hospitalized for 8 days. Dr. Oliver and then Dr. Trippett attended plaintiff at the hospital, where traction was applied to both of plaintiff's legs for 8 days. At the end of 8 days, plaintiff was released from the hospital and continued to attend Waco High School.
He was unable to engage in athletics, although previously he had played tennis and engaged in hiking. He was unable to mow the yard as he had previously done. His back and legs pained him constantly. After his injury his condition became such that he could not secure and retain a job at physical labor in the sheet metal business. Dr. Trippett saw plaintiff numerous times. After school was out the next summer, plaintiff was unable, on account of his back, to work as a laborer in the sheet metal business; and because of his limited physical ability, was put to work as a salesman by his father. Plaintiff attended Texas University for the next 3 years, making excellent grades. On 4 Feb. 1959, plaintiff filed the instant case. On 5 February, 1959, plaintiff commenced to go to Dr. Charles M. Henner for treatment and later went to Dr. Harry Slade, a neurosurgeon. Dr. R. K. Gassler examined plaintiff for the defendant Insurance Company. Dr. Henner testified that plaintiff had a ruptured disc; that in his opinion the condition was permanent, growing progressively worse, and *524 that plaintiff was incapable of performing physical labor. Dr. Slade testified that in his opinion the injury in 1954 caused a disc herniation; that plaintiff was physically unable to do labor, and in his opinion had been physically unable to do labor since confinement in the hospital 5 October, 1954; and that in his opinion in reasonable medical probability the plaintiff's condition was permanent. Dr. Gassler, who examined plaintiff for the defendant Insurance Company, testified that there was no question but that plaintiff had pain in his back; that he found nothing wrong with plaintiff as a result of an injury, but found plaintiff's complaints were based on improper posture.
There is no fixed rule of evidence by which a claimant is required to establish the fact that he has suffered an injury that caused total and permanent disability. The duration and extent of disability received from an injury is at best an estimate which must be determined by a jury from all the pertinent facts before it. The issue as to disability may be established by the plaintiff alone. Insurance Company of Texas v. Anderson, Tex.Civ.App., 272 S.W.2d 772, 773, W/E ref., n. r. e. Further, the test is: "Is his physical condition so impaired by the injury that he is unable to secure and hold employment on physical labor?" 45 T.J. 589.
It is true that plaintiff went to high school and college after his injury, and made good grades; and further true that he served as a lay minister in his Church; and further there is some evidence, including that of Dr. Gassler, which militates against the jury's finding of total and permanent disability to do labor. Nevertheless, from a careful review of the record as a whole, we conclude that the evidence is ample and sufficient to sustain the findings of the jury. See: Hood v. Texas Indem. Co., 146 Tex. 522, 209 S.W.2d 345; In re King's Estate, 150 Tex. 662, 244 S.W.2d 660; Harrison v. Chesshir, Tex., 320 S.W.2d 814.
Defendant's 2nd and 3rd points contend that there is no evidence or insufficient evidence to sustain the finding of total and permanent disability from the date of the accident (3 August, 1954). In this connection defendant points out that Dr. Slade testified that in his opinion the plaintiff had been totally and permanently disabled since the date of confinement in the hospital on 5 October, 1954.
The record reflects that plaintiff was injured on 3 August, 1954 by falling 12 feet to concrete from the top of a house; that he was taken to the doctor on that date; was very sore and bruised; that he went to work the next morning and thereafter for about 3 weeks; that he took a two weeks' vacation until he started to school about 10 September, 1954; that he worked for his father; that his father instructed the foreman to let plaintiff do only light work after the injury; that his back was sore and stiff; that he had severe pains in his leg; that his condition became progresively worse and his pains more intense until he finally entered the hospital on 5 October, 1954. That he was treated with traction, and that since his release from the hospital up to the time of trial, his condition has worsened; that he has a ruptured or herniated disc; suffers intense pain; and is totally and permanently disabled to labor.
We think the record as a whole ample and sufficient to sustain the finding of the jury that plaintiff's total and permanent disability commenced from the date of the accident. See: In re King's Estate, supra. Moreover, it is well settled that a workman is not necessarily precluded from recovering compensation for a period of time in which he was working following injury. See: Zurich Ins. Co. v. Graham, Tex.Civ. App., 335 S.W.2d 673; Consolidated Cas. Ins. Co. v. Baker, Tex.Civ.App., 297 S.W.2d 706, W/E ref., n. r. e. and cases therein collated.
Defendant's 4th contention is that the Trial Court erred in admitting into evidence *525 the hospital records which contained the notation of Dr. H. H. Trippett, as follows:
"Diagnosis: Sciatic neuritis on left, possibly due to a protruding disc."
The foregoing record was an official record of Hillcrest Hospital, kept in the regular course of its business of treating the sick and injured, and identified by the director of the library and official records custodian of the Hillcrest Hospital. It contained data showing plaintiff was admitted to the hospital on 5 October, 1954, and discharged on 12 October, 1954. It reflected his complaint of severe pain down the left leg; gave his blood pressure and heart sounds; stated:
"Back reveals considerable muscle spasm. Straight leg raising is positive, for sciatic irritation of the left."
The document then sets up the matter complained of:
"Diagnosis: Sciatice neuritis on left, possibly due to a protruding disc."
And then concludes:
"The patient admitted to the hospital where bilateral leg traction was applied for 5 days. His pain subsided. He was discharged ambulatory."
The complained of evidence was admitted by the Trial Court under Art. 3737e, Vernon's Ann.Civ.St., as a business record of the Hillcrest Hospital.
This whole problem is thoroughly discussed by the Austin Court of Civil Appeals in Travis Life Ins. Co. v. Rodriguez, 326 S.W.2d 256. In that case the court holds that Art. 3737e, R.C.S., should be interpreted and construed so as to authorize the admission in evidence of hospital records including a diagnosis of a medical doctor. Our Supreme Court in a per curiam opinion in such case in 328 S.W.2d 434 said:
"The only point brought to this Court assigns error to the construction by the Court of Civil Appeals of Article 3737e, Vernon's Texas Civil Statutes. It is our view that the statute has been correctly construed by that court in its opinion published in 326 S.W.2d 256. Accordingly, the application for writ of error is refused. No reversible error."
From the foregoing, we hold the hospital record admissible. See also 38 Tex.Law Review, 645, 648.
In any event, the diagnosis on its face reflected "possibly", and is deemed harmless in the light of the record as a whole; moreover, it is cumulative.
All of defendant's points are overruled and the judgment of the Trial Court is affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2435157/
|
337 S.W.2d 163 (1960)
T. E. NICKLAS, Appellant,
v.
AJAX ELECTRIC COMPANY, Inc., Appellee.
No. 10781.
Court of Civil Appeals of Texas, Austin.
June 15, 1960.
Rehearing Denied July 13, 1960.
Harris & Ball, Arlington, for appellant.
No appearance for appellee.
GRAY, Justice.
Appellant, T. E. Nicklas, a former representative or salesman for Ajax Electric Company, Inc. filed this suit against Ajax for unpaid commissions.
Ajax is a Pennsylvania corporation with its home office in Philadelphia and has never been issued a permit to do business in Texas. It manufactures heating furnaces for sale together with parts therefor.
Appellant's suit is founded on a written agreement between himself and Ajax wherein he is designated as representative for Ajax and its sole agent in the states of Texas, Louisiana and Oklahoma "for its industrial heat treating furnaces." Appellant was to be paid a commission based on the selling price of the individual units and a commission of five per cent on orders for spare parts. The agreement provided:
"(4) The Representative's services shall be available for performing any engineering service and maintenance in connection with furnace installations in the territory. The Representative shall also be responsible for starting and supervising the installation of all furnaces in the territory, as well as rendering continuing technical service after installation."
Appellant ceased to be the representative or salesman for Ajax and it had named or *164 appointed Southwest Engineering and Equipment Company, a Texas corporation with Fred Harmon as its president, as its representative or salesman.
Appellant alleged that Ajax was present and doing business in Texas through its agent Southwest and that service of citation may be had on said agent. Service of citation was had on Southwest.
On September 29, 1958, Michael J. McCloud, Jr., a practicing attorney, filed his request for:
"leave to appear before the Court as amicus curiae for the purpose of calling to its attention the fact that the Court is without jurisdiction to hear and determine the matters set forth in plaintiff's original petition on file in this cause for the reason that the named defendant above does not do business in the State of Texas, and proper service upon said above named defendant has not been obtained, and to await and serve the court's convenience as it may elect to avail itself of the service of your petitioner."
On the same day the trial court heard the request and entered the following order:
"leave requested by the said Michael J. McCloud, Jr., to appear before this Court in the capacity of amicus curiae for the purposes requested and for such other and further purposes as the Court may see fit to grant or extend, should be and the same is hereby granted in all things."
On the same day (September 29, 1958) the said attorney filed a suggestion of want of jurisdiction because Ajax does not do business in Texas "to enable the court to have jurisdiction over it" and because Southwest is not an agent of Ajax for service. This pleading was sworn to by McCloud on September 27, 1958.
At a hearing before the trial court evidence was heard, the suggestion of the amicus curiae was sustained and the cause was dismissed at appellant's cost.
Appellant's two points are that the trial court erred in finding that it had no jurisdiction over Ajax and in failing to find that Ajax had entered an appearance.
It is our opinion that the second point must be sustained. Such holding disposes of the first point.
At the hearing the amicus curiae called two witnesses. The first was Mr. Means, sales engineer for Southwest and assistant to its president. On cross examination he testified that when Southwest received the citation, above mentioned, that it was sent to Ajax and that Ajax "told us that we would cooperate with Mr. McCloud." The second witness, Mr. Harmon, president of Southwest, testified that he received the citation and immediately sent it to Ajax; that he called Ajax on the phone and talked to them about "this" lawsuit and was instructed to cooperate fully with Mr. McCloud.
In Burger v. Burger, 156 Tex. 584, 298 S.W.2d 119, 120, the court said:
"A true amicus curiae is without interest in the litigation in which he appears. He is a `bystander' whose mission is to aid the court, to act only for the personal benefit of the court. There are many authorities, but we deem it adequate to cite only a few." Authorities cited.
The record does not show any direct contact between Ajax and Mr. McCloud but it does show that he was known to Ajax, that it adopted his action and that it gave instructions to the officers of Southwest to cooperate fully with him. It also shows that two days prior to asking and being granted leave to appear as amicus curiae Mr. McCloud swore to a pleading suggesting lack of jurisdiction over Ajax. This pleading was filed on the date leave was granted to appear as amicus curiae. These facts show that the interest of Mr. McCloud in the litigation was aligned with *165 Ajax and was adopted by it. It shows he was not merely a bystander acting only for the personal benefit of the court.
The fact that leave was asked and was granted to Mr. McCloud to appear as amicus curiae does not prevent the facts supra from showing an appearance by Ajax because those facts show an appearance by Ajax through an attorney with whom it gave instructions for full cooperation in the lawsuit.
Amicus curiae cites, among other authorities, our own opinion in Roper v. Compania De Perforaciones Y. Servicio S. A., Tex.Civ.App., 315 S.W.2d 30, 34. Er. ref., n. r. e. The application for leave to appear as amicus curiae and the order granting leave to so appear in the above cause and the application and order in this cause are similar. However the facts are different. In the above cause we said that under facts different from the facts there "that an amicus curiae appearance may constitute a general appearance." The facts in the case now before us constitute such general appearance by Ajax and its submission to the jurisdiction of the court for all purpose.
It is our opinion that the facts before us show that McCloud was acting for the interest of Ajax rather than "for the personal benefit of the court" and that he asked and obtained an order and judgment of the court issued in the exercise of its judicial functions and that Ajax was in court for the exercise of all such judicial powers as the court was authorized to exercise in the suit. Burger v. Burger, supra, citing Pacific American Gasoline Co. of Texas v. Miller, Tex.Civ.App., 61 S.W.2d 1024. To hold otherwise under the facts here would permit the office of amicus curiae to be subversed to the use of a litigant in the case.
The judgment entered by the trial court was error. Accordingly that judgment is reversed and the cause is remanded with instructions that it be reinstated on the docket for a trial on its merits.
Reversed and remanded with instructions.
HUGHES, Justice (concurring).
If the majority opinion stands, the Trial Court, when it most needs a friend, will find none available.
I am also of the opinion that the majority holding is in conflict with our decision in Roper v. Compania, Tex.Civ.App., 315 S.W.2d 30, writ ref., N.R.E.
I find it advisable to copy more fully from the record than does the majority.
The application of Mr. McCloud to appear as amicus curiae reads:
"Now comes Michael J. McCloud, Jr., a practicing attorney of the Bar of the State of Texas, not as attorney for any party to the cause but as a friend and an officer of the Court, and respectfully requests leave to appear before the Court as amicus curiae for the purpose of calling to its attention the fact that the Court is without jurisdiction to hear and determine the matters set forth in plaintiff's original petition on file in this cause for the reason that the named defendant above does not do business in the State of Texas, and proper service upon said above named defendant has not been obtained, and to await and serve the court's convenience as it may elect to avail itself of the service of your petitioner."
The order granting this application reads:
"Be it remembered that on the 27th day of September, 1958, came on to be heard the application of Michael J. McCloud, Jr., a practicing attorney of the Bar of the State of Texas, to appear before this Court to advise in the capacity of amicus curiae, the Court having considered the same and having fully satisfied itself that the said Michael J. McCloud, Jr., can serve in *166 said capacity, and that the Court is of the opinion and so finds that the assistance of such friend and officer of the Court would be helpful to the Court and particularly appropriate in view of the nature of said cause. It is, therefore
"Ordered, Adjudged and Decreed by the Court that the leave requested by the said Michael J. McCloud, Jr., to appear before this Court in the capacity of amicus curiae for the purposes requested and for such other and further purposes as the Court may see fit to grant or extend, should be and the same is hereby granted in all things."
The order of dismissal reads:
"On this the 4th day of June, 1959, came on to be heard the amicus curiae's suggestion of want of jurisdiction in the above entitled and numbered cause wherein T. E. Nicklas is plaintiff and Ajax Electric Company, Inc. is defendant, and came the plaintiff by and through his attorney of record and came the amicus curiae in person and both announced ready to the Court. The Court, after reading the pleadings, hearing the evidence and argument of counsel, is of the opinion that the suggestion of the amicus curiae should be sustained and that this Court has no jurisdiction over the said defendant, Ajax Electric Company, Inc., a Pennsylvania corporation, and it is therefore
"Ordered, Adjudged and Decreed by the Court that the suggestion of the amicus curiae that this Court has no jurisdiction over the defendant, Ajax Electric Company, Inc., be and the same is sustained and that the Court does hereby dismiss said cause without prejudice all at plaintiff's costs for which let execution issue."
In Roper, supra, the question presented was whether or not a foreign corporation was doing business in Texas so as to authorize service under Art. 2031 and 2031a, Vernon's Ann.Civ.St. It was contended that such corporation was transacting business in Texas through specified agents. If these persons were not agents of the corporation, as the court found, then obviously it did not do business in Texas through them and service under Art. 2031 was not authorized. We quote from that opinion:
"The defendant did not appear and the trial court, by a signed order, authorized an attorney to appear and advise the court in the capacity of amicus curiae. The order recited that the court was of the opinion and found that the assistance of the amicus curiae would be helpful and appropriate in view of the nature of the case. The amicus curiae then suggested that the court did not have jurisdiction of the cause and that it should be dismissed. * * *
"Appellant says that the appearance of the amicus curiae constitutes a general appearance of defendant and urges us to so hold.
"Brantly Harris a member of the Houston Bar filed an application to appear `not as an attorney for any party to this cause but as a friend and officer of the court.' The order of the court granting leave to said attorney to appear as amicus curiae recites:
"`The court having considered the same and having advised itself that the said Brantly Harris can serve in such capacity, and the court is of the opinion and so finds that the assistance of such friend and officer of the court would be helpful to the court, and particularly appropriate in view of the nature of said cause, it is therefore ordered, * * *'
"In the final judgment rendered in this cause it is recited that:
"`* * * the Court proceeded to hear evidence upon said Amicus Curiae suggestions and did hear argument *167 of counsel and did cause the proceedings to be reported, and after said hearing the Plaintiff, Albert Roper, moved that the Court find that the Defendant Compania de Perforaciones Y Servicio, S. A. had in the amicus curiae proceedings entered a general appearance in this cause, which Motion was overruled by the Court; * * *'
"It clearly appears that the trial court first found that Harris could serve as amicus curiae and that such service would be of assistance and helpful to the court and particularly appropriate. And in the final judgment, after hearing evidence and argument, the trial court overruled appellant's motion to adjudge the amicus curiae's appearance as a general appearance by defendant.
"We are aware of course, upon facts different from the fact here, holding, properly we think, that an amicus curiae appearance may constitute a general appearance. However the facts recited by the trial court in his order granting leave to Harris to appear as amicus curiae and especially the recitals that he could so serve and that his assistance would be helpful and appropriate together with the findings made in the final judgment show that the trial court made at least two investigations of the matter and concluded that the appearance was proper and appropriate.
"We are unwilling to say that the busy trial court, who has shown himself to be cautious, was not entitled to assistance that he has found would be helpful to him and appropriate in the case."
It seems to me that the Court could have, and should have, used substantially the same language in this case as it did in Roper, unless the fact that Ajax was acquainted with Mr. McCloud and instructed Southwest, the alleged agent, to cooperate with him requires a contrary decision.
The only authority cited by the majority to sustain its holding is Burger v. Burger, 156 Tex. 584, 298 S.W.2d 119. That case is not factually in point because there the amicus curiae was not shown to have been authorized or requested by the Court to assist it and because he did not restrict his suggestion to a lack of jurisdiction over the person of the defendant, but he invoked the judicial functions of the Court to determine jurisdiction of the subject matter of the suit. It also appeared that the attorney making the suggestion was the paid attorney of the defendant.
I have examined all of the cases cited by the Supreme Court in support of the statement quoted from that opinion by the majority herein. In none of these cases does it appear that application was made to and granted by the Court, for anyone to appear as amicus curiae. In none of those cases did the Court, as here, find that the assistance of amicus curiae would be helpful.
I will not discuss those cases in detail but in most, if not all of them, the attorney styling himself as an amicus curiae did much more than merely suggest lack of jurisdiction over the person of a party.
It has been held that the appearance of a party's regular attorney as amicus curiae to object to the sufficiency of service of citation is not an appearance of the party. Elliott v. Standard Steel Wheel and Tire Armor Co., 173 S.W. 616, Texarkana Court of Civil Appeals. See also Anderson v. Service Life Ins. Co., 221 S.W.2d 398, by the same court.
The following quotation is taken from Chicago, R. I. & P. Ry. Co. v. Anderson and Co., 105 Tex. 1, 141 S.W. 513, 514:
"There is no suggestion in the record that the question of lack of service was obtruded upon the attention of the court, either for any sinister or improper purpose, or with any intent, or *168 that the same had the effect, to delay the proceedings. The fact that this suggestion was made by Mr. Harrison, who thereafter filed an answer for the railway company should not and does not, of itself, imply any such purpose. It must and should be assumed in favor of counsel, and also of the court below, and that their conduct in such matter was within the limits of professional propriety. * * * When a suggestion is made by one acting as amicus curiae, if same is covinous or corruptly done, or in such a manner as to deliberately trifle with the court, authority rests in the court to meet such an issue as it should be met, with all the power and authority the court possesses; but in the absence of such conditions, even if it be conceded that the persons making the suggestion were in error as to the facts or had misconceived the law, it certainly should not be the policy of the law to deprive his client of any hearing, and thus summarily dispose of his rights by a default judgment against him."
The Trial Court found no impropriety in the actions of Mr. McCloud. In fact, what he did was done with the Court's full acquiescence, consent and approval.
I find no impropriety in anything Mr. McCloud did.
The usefulness of amicus curiae after the parties have appeared in person and by counsel and after issue has been joined is much less than in cases of this character. There the Court has the assistance of able counsel. Here, the Court is likely to unknowingly render an invalid judgment, which no Court desires to do, unless someone, usually and quite naturally a friend, acquaintance of or attorney for the defendant, undertakes to inform the Court, the impending error will become a reality. I do not believe that, per se, such relationship between a person and the party disqualifies him as an amicus curiae. A friend of a party can also be a friend of the Court.
The other questions presented are whether or not Ajax was doing business in Texas and if so was Southwestern Engineering and Equipment Company, a Texas corporation of which Mr. Fred Harmon is president, its local agent for service under Art. 2031, V.A.C.S.
Servce of citation was had upon Mr. Harmon. I do not find the citation nor return of service in the record.
Ajax is a Pennsylvania corporation engaged in the sale of large industrial furnaces. Southwestern sells Ajax equipment and is paid for sales on a commission basis. Southwestern advertises Ajax equipment.
Mr. Tom Owen Means, sales engineer and assistant to the President of Southwestern testified that they take care of servicing Ajax equipment after selling it "although we haven't serviced any since we started to work for them."
Mr. Means also testified that Southwestern adjusted complaints and was on the mailing list of Ajax and received sales information as well as technical information from it.
Since some of the equipment is custom built by Ajax and ordinarily needs installing, Mr. Means stated that Southwestern cooperated with Ajax representatives in the installation and participated and aided in it.
The evidence shows that when Southwestern received the citation served on it as the agent of Ajax, it immediately forwarded the citation to Ajax, and that Mr. Fred Harmon, President of Southwestern, telephoned Ajax on this occasion.
I believe that the decisions in Gray Co. v. Ward, 145 S.W.2d 650, Waco Court of Civil Appeals, writ dism., cor. judgm., and Acme Engineers, Inc. v. Foster Engineering Co., 254 F.2d 259, 263, Fifth Circuit, *169 U. S. Court of Appeals, are excellent and adequate authority for holding that Ajax does business in Texas through its local agent Southwestern.[1]
I will not extend the length of this personal opinion by comparing the facts in those cases with those found here. I will state that they are strikingly analogous. The sound reasoning employed in those is applicable here, and while both opinions should be read in their entirety, I content myself by quoting the concluding paragraph in Acme:
"The important consideration is whether the `travelling salesman' occupies such a responsible representative status as to make it reasonably certain that he will turn over the process to his company. That he actually has done so may be considered as in the Gray case, supra. Here, the evidence clearly established that Gulf States sought to please Foster and to look after Foster's best interests. Process served on Gulf States would almost inevitably reach Foster, and was actually so passed on. We conclude that process on Foster might be served on Gulf States."
The relationship between Southwestern and Ajax made it reasonably certain that process served on Southwestern as agent for Ajax would be, as it actually was, forwarded to Ajax.
I concur in the judgment of the majority reversing and remanding this cause for trial.
GRAY, Justice (on the point of dissent).
I agree with Associate Justice HUGHES that service on Southwest constituted service on Ajax. Our decision might well be rested on this point. However our views differ on the question of the appearance by amicus curiae.
It is my opinion that the appearance of Mr. McCloud was not "within the limits of professional propriety" and that it was not the appearance of a "bystander" acting "only for the personal benefit of the court."
By asking leave to appear as amicus curiae Mr. McCloud was not dealing at arm's length with the court but he assumed the role of a true amicus curiae, "without interest in the litigation" and with a mission to aid the court.
I remain convinced that the appearance by Mr. McCloud was an appearance by Ajax.
NOTES
[1] See Sec. 4, Art. 2031b, V.A.C.S. (1959) providing that a foreign corporation "* * * shall be deemed doing business in this State by entering into contract by mail or otherwise with a resident of Texas to be performed in whole or in part by either party in this state. * * *" This statute is consistent with the opinions in Gray and Acme, supra modifying the meaning of "doing business."
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2435162/
|
337 S.W.2d 648 (1960)
John D. REID, Appellant,
v.
Mary E. KAROLEY, Appellee.
No. 5-2118.
Supreme Court of Arkansas.
May 23, 1960.
Rehearing Denied September 12, 1960.
*649 U. A. Gentry, Little Rock, for appellant.
Richard W. Hobbs and B. W. Thomas, Hot Springs, for appellee.
ROBINSON, Justice.
This is the fourth time the parties hereto have been before this Court as the result of a series of controversies arising out of a contract executed by them on November 13, 1951. At that time the parties were joint owners of certain real and personal property located in Little Rock. The agreement required appellee to relinquish her interest in this property to appellant in consideration for which appellant agreed to pay appellee $250 per month for the remainder of her life or until she married. The contract further required that should appellant predecease appellee, then a payment by his estate to appellee would be made in the sum of $10,000. Pursuant to the agreement appellee conveyed her interest in said property to appellant and the $250 monthly payments were commenced. Thereafter the validity of the contract was raised by appellant in a suit brought for arrearages and we held the contract was valid. Karoley v. Reid, 223 Ark. 737, 269 S.W.2d 322. Subsequently appellee was awarded a judgment totaling $8,500, but the lower court refused to grant appellee specific performance under the contract. This latter point was appealed and we held that since the body of the complaint did not state a cause of action for specific performance, such relief could not be granted. Karoley v. Reid, 226 Ark. 959, 295 S.W.2d 767.
In the meantime appellant had taken voluntary bankruptcy on September 14, 1955, and the above judgment and all future payments to become due under the contract were scheduled as a part of his liabilities. Appellee filed a claim in the bankruptcy proceeding for the amount of the judgment, but did not include in her claim any future payments to become due under the contract. Appellant was discharged in bankruptcy on November 13, 1956.
Appellee then filed the present suit in chancery court for further arrearages which had become due under the contract dating from appellant's adjudication as a bankrupt, and the lower court rendered appellee a judgment on the pleadings. This decision was reversed and the cause remanded for further proceedings. Reid v. Karoley, Ark., 313 S.W.2d 381. Appellee then filed an amended complaint. The case was tried on its merits and a judgment was rendered for appellee in the amount of $12,000. The present appeal is from that judgment.
Appellant contends that the chancery court did not have jurisdiction because appellee has an adequate remedy at law. The record reflects that the first real objection to the jurisdiction of the court on this ground was made orally immediately preceding the taking of testimony on the merits when appellant's counsel asked that the cause be transferred to circuit court. Appellant argues that the question of jurisdiction was raised prior to this time by the filing of a demurrer, but we have held a number of times that the proper method of procedure in this type situation is by a motion to transfer and not by demurrer *650 Church of God in Christ v. Bank of Malvern, 212 Ark. 971, 208 S.W.2d 770; Higginbotham v. Harper, 206 Ark. 210, 174 S.W.2d 668.
Further, it is well established that where a defendant has answered and not reserved any objection to the jurisdiction of the court on the ground that there is an adequate remedy at law, he cannot insist on it at the hearing unless the court is wholly incompetent to grant the relief sought. Cockrell v. Warner, 14 Ark. 345; Trapnall, Ex'r, etc., v. Hill et al., 31 Ark. 345.
The remainder of appellant's arguments for reversal are discussed together. Under the provisions of the U.S.Code a discharge in bankruptcy releases a bankrupt from all his provable debts, with some exceptions not applicable here. 11 U.S.C.A. § 35. Appellant contends that appellee's claim for future payments under the contract was provable; that it was scheduled by appellant in the bankruptcy action, and was therefore discharged.
Payments due under the contract can be terminated by either death of the appellee or her marriage; the first contingency can be calculated by reference to tables on life expectancy, yet it would be impossible to ascertain with any degree of certainty when the second or alternative contingency might occur. An analogous situation was presented in Dunbar v. Dunbar, 190 U.S. 340, 23 S. Ct. 757, 759, 47 L. Ed. 1084, where the court said: "Even though it may be that an annuity dependent upon life is a contingent demand within the meaning of the bankruptcy act of 1898, * * * yet this contract, so far as regards the support of the wife, is not dependent upon life alone, but is to cease in case the wife remarries. Such a contingency is not one which, in or opinion, is within the purview of the act, because of the innate difficulty, if not impossibility, of estimating or valuing the particular contingency of widowhood. A simple annuity which is to terminate upon the death of a particular person may be valued by reference to the mortality tables. * * * But how can any calculation be made in regard to the continuance of widowhood when there are no tables and no statistics by which to calculate such contingency? How can a valuation of a probable continuance of widowhood be made? Who can say what the probability of remarrying is in regard to any particular widow? We know what some of the factors might be in the question: inclination, age, health, property, attractiveness, children. These would, at least, enter into the question as to the probability of continuance of widowhood, and yet there are no statistics which can be gathered which would tend in the slightest degree to aid in the solving of the question."
The appellant further urges that whether this claim was provable can only be decided by the court in the bankruptcy action and therefore the chancery court could not delve into the problem. Appellant contends that since appellee failed to file a claim for the future payments under the contract in the bankruptcy proceeding, and have that claim ruled on there, the question is now res judicata. We do not agree. In order to properly adjudicate the rights of the parties, the court in which the action is pending must look to the characteristics of the claim upon which suit is brought to determine whether the nature of the debt is such that would make it dischargeable in bankruptcy. Raia v. Goldberg, 33 Ala.App. 435, 34 So. 2d 620, and Dick v. Dick, 11 N.J.Super. 533, 78 A.2d 580. As a matter of fact, a footnote to the order of discharge in the bankruptcy proceeding contains the following language: "The Court is not obligated and therefore does not rule as to the question whether future payments (after date of adjudication) due on the contract signed October, 1951, between the bankrupt and Mary Karoley, comes within the discharge granted herein." We hold that the chancery court was correct in taking up the question of whether the claim for future payments under the terms of the contract was the type of debt which could be *651 proved in appellant's proceeding in bankruptcy.
Under the authority of the Dunbar case cited above, we find the claim to be contingent and not provable within the requirements of the Bankruptcy Act, the debt was therefore not discharged, and the decree must be affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2435191/
|
337 S.W.2d 314 (1960)
J. G. CRISPI, Administrator of the Estate of Lloyd R. Day, Deceased, Appellant,
v.
A. V. EMMOTT, Appellee.
No. 13518.
Court of Civil Appeals of Texas, Houston.
July 14, 1960.
*315 Hill, Lowry, Lee & Koster, Ralph G. Koster, Houston, for appellant.
Clyde B. Meyer, Houston, for appellee.
WOODRUFF, Justice.
Appellee, A. V. Emmott, filed suit January 10, 1959 against J. G. Crispi, as Administrator of the Estate of Lloyd R. Day, to establish a claim for $937.75 alleged to be due on a $1,000 promissory note executed by Lloyd R. Day on December 29, 1953 payable to appellee on or before April 1, 1954. Appellee alleged extensions of the note, as hereafter stated. In a trial to the court without a jury, judgment was rendered in Emmott's behalf for $937.75 against Crispi as administrator and ordering that it be certified to the Clerk of the Probate Court. From this judgment the administrator has appealed. No findings of fact or conclusions of law were requested or made.
It was stipulated that Day died October 29, 1957 and on November 8, 1957 Crispi filed application to be appointed administrator of Day's estate. Crispi, having been appointed, qualified on February 2, 1958 by filing oath and bond, and on November 6, 1958 appellee filed his claim against Day's estate with Crispi as Administrator, who rejected it. Within 90 days Emmott filed this suit. See V.A.T.S., Probate Code, § 313; Decedents Estates, Sec. 608, Vol. 14-A Tex.Jur., p. 570.
Omitting the formal allegations, appellee alleged in his petition:
"* * * Lloyd R. Day at the time of his death was justly indebted and owed the Plaintiff the sum of $852.50, same being the balance due, less a credit of $147.50, on that certain promissory note dated December 29, 1953, due on April 1, 1954, and extended on several occasions as more fully appears from the endorsement thereon to April 1, 1958, executed by the said Lloyd R. Day and payable to the order of this Plaintiff in Houston, Texas in the principal sum of $1,000.00, and which note providing for 10% as attorney's fees, all now aggregating the sum of $937.75, principal and attorney's fees, now past due and unpaid * * *."
Attached to the petition was a copy of appellee's claim, accompanied by a photostatic copy of the note. On its reverse side under a column headed "Credits" appears the notation, "12/31/54 (Principal) $147.50. (Received Payment) Credit for work not completed." Under another *316 column headed "Endorsement" were the following handwritten notations:
"October 15, 1954 note and mtg. extended
to April 1, 1955
April 10, 1955 extended to 4/1/56
April 5, 1956 extended to 4/1/57
April 8, 1957 extended to 4/1/58
These extensions are taken from my
accts. Receivable ledgers of the
Lloyd R. Day accts. (Tax Acctg
System)."
Appellant Crispi, in addition to a general denial, answered by pleading in bar the four year statute of limitation, excluding the interval between Day's death and Crispi's qualifying as administrator.
After filing his answer, but before trial on the merits, appellant presented a motion for judgment on the pleadings, asserting the endorsements were taken from accounting records which constituted self-serving and unilateral attempts to extend payments on the note without any allegations of a valid consideration. The motion was overruled by the trial court and that ruling is assigned as appellant's first Point of Error.
In our opinion, the motion was properly overruled. Though Rule 90, Texas Rules of Civil Procedure, recites that defects in pleadings may be pointed out by motion or exception, it expressly provides that general demurrers shall not be used. Too, it is settled that special demurrers cannot be used to accomplish the purpose of a general demurrer. Maxwell v. Maxwell, Tex.Civ.App., 204 S.W.2d 32, n. r. e. It is equally clear, in our opinion, that Rule 90 does not contemplate the preliminary motion practice in lieu of a general demurrer. Gehrke et al. v. State of Texas, Tex.Civ.App., 315 S.W.2d 684; McDonald's Texas Civil Practice, Sec. 7.18, Vol. 2, p. 637.
Appellant's remaining five Points assign as error the action of the trial court in granting appellee judgment on oral extensions of the note without sufficient pleading or proof of any consideration or mutual agreement; in admitting in evidence over appellant's objections oral transactions between appellee and deceased Day in violation of Art. 3716, Vernon's Ann.Civ. St.; and in admitting entries from records which were neither properly qualified nor shown to be germane to such records.
Appellee Emmott was the only witness. Testifying in his own behalf, he stated he was in the book binding business. On December 29, 1953 he had a "business transaction" with Mr. Lloyd R. Day, who did tax work as "Tax Accounting System." When he was asked, "In the conduct of your business affairs with Mr. Day, did you have occasion to sell him any goods or commodities or furnish him any services?" Appellant objected because it involved a transaction with the deceased. The objection was overruled and Emmott was permitted to testify: "He was publishing some tax books and we were putting the binding on them, furnishing the labor and material." Upon Emmott's being asked, "Now, were any arrangements made for credit or extension of credit at this time?" Appellant again objected and requested, "May I have a continuing objection under the Dead Man's Statute?" Whereupon the court stated, "Your objection to this question, Counsel, might be good, but I don't know about the next one. He just asked him if he had some arrangements with him." The witness then answered, "Yes, sir, we did."
Appellee's counsel then asked, "In connection with your arrangements about the extension of credit with Mr. Lloyd R. Day, I will ask you whether or not he gave you this note for the sum of $1,000.00?" to which Mr. Emmott answered, "Yes, he did." Again appellant objected, "to the fact he gave him a note as a transaction with the deceased," and was overruled. Mr. Emmott confirmed his "counsel's" statement that the note was dated December 29, 1953, and was due in the sum of $1,000 "on or before April 1, 1954." Upon being asked if any payment or credit was *317 made on the note, Emmott stated, "He gave me the not knowing exactly how much the work we were going to do would be. We approximated it at $1,000.00." As to "This $1,000.00" Emmott stated Day owed $852.50 because "I gave him credit on the back of the note for $147.50 on December 31, 1954."
Appellee testified he handled the taking of the note. He, too, had made the entries thereon. After crediting $147.50, the balance due was $852.50 on December 31, 1954. No amount had been received thereafter. The note was made payable April 1, 1954 because the "main part of Day's income was from income tax work between January 1st and March 15th."
Appellee's counsel, addressing Mr. Emmott, then stated, "I am going to show you this note and looking on the back under `Endorsements' if you will tell us on the various days and dates on which you extended that note?" Mr. Emmott replied, "On Oct. 15, 1954 the note was extended to April 1, 1955. On April 10, 1955 it was extended to April 1, 1956. On April 5, 1956 it was extended to April 1, 1957. On April 8, 1957, it was extended to April 1, 1958," obviously reading from the endorsements on the back of the note. He said he made the endorsements "personally." At that point the court asked, "You say endorsements?" Appellee's counsel explained, "This writing on the back." The court then queried, "They constitute the extensions?" Replying, appellee's counsel stated, "Yes, sir, your Honor." The court continued, "Were they made at the time and date indicated?" and Emmott replied, "These notes were put on here from notes I took from my ledger sheets," his accounts receivable ledger which "was posted on every one of the occasions that bear the dates on the back of this note." These postings, he said, were made in the regular course of business.
Alluding to the ledger sheets (which were never tendered in evidence), Mr. Emmott was asked by his counsel to refer to the entry of October 14, 1954 and to read from the ledger "the exact words written with reference to the extension of the Lloyd R. Day note." Over appellant's "running objection" accorded appellant by the court, that the entries are not those normally made in the regular course of business and are not "to be taken in the same light as business entries," Mr. Emmott read from the sheets the entries which corresponded with those appearing on the back of the note and stated they were in his handwriting and made in the ordinary course of business. Upon his identifying the note, it was admitted in evidence over appellant's objection that the endorsements constituted an alteration of the note contrary to its terms.
Appellee takes the position that the $1,000 note executed on December 3, 1953 and payable on April 1, 1954 was only an arrangement for the extension of credit. Consequently, he argues, the note, though payable, under its terms, on April 1, 1954, was not really due until Mr. Emmott entered the credit of $147.50 for the work not completed on December 31, 1954, which was less than four years before he filed his claim with appellant on November 6, 1958, and therefore, it was not barred by limitation.
No such theory was pled by appellee and in fact it is actually repudiated by the affirmative allegations of his pleadings as well as his proof. He alleged the note was due on April 1, 1954 and was extended as appears "from the endorsements thereon", the first of which reads: "October 15, 1954, note and mtg. extended to April 1, 1955." Moreover, when Mr. Emmott was asked by his counsel "the various days and dates" on which the note was extended, he answered by reading the endorsements beginning with "October 15, 1954, note and mortgage extended to April 1, 1955" etc.
Mr. Emmott's testimony, as it was admitted in evidence on the trial with reference to the $147.50 credit and the four extension notations on the note, is of no *318 probative force to establish the terms of any parol agreement between him and the deceased Day with reference to any extension of payment of the note. McKenzie v. Lewis, Tex.Civ.App., 105 S.W.2d 451. Without question, it cannot be contended that such entries were proof that deceased Day agreed he would not pay the note before the expiration of the stated periods. Moreover, there is no proof that Day agreed to pay any interest during such periods. In fact, it appears from appellee's claim, which he filed with appellant as administrator, his petition in the trial court and his testimony during the trial, that he never claimed that the deceased Day had agreed to pay any interest during any of the periods of extension. This is confirmed by the judgment entered in appellee's behalf in omitting any recovery for interest prior to the date of the judgment though it did provide for 6% interest thereafter on $937.50 awarded to appellee, which obviously represented the sum of $852.50 which appellee alleged in his petition was due on the $1,000 note after applying the credit of $147.50 plus 10% attorney's fees provided in the note.
The law is settled that extensions of notes are founded on contract. If an extension agreement is in writing, it imports consideration but if it is in parol, in order to be valid and enforceable it must be supported by a valid consideration such as the payment of interest and the declaration of the extension must be for a definite period during which the maker binds himself not to make payment and the payee forbears his right to bring suit. Tsemelis v. Sinton State Bank, Tex.Com.App., 53 S.W.2d 461, 85 A.L.R. 319; McNeill v. Simpson, Tex.Com.App., 39 S.W.2d 835; Benson v. Phipps, 87 Tex. 578, 29 S.W. 1061; Tolbert v. McSwain, Tex.Civ.App., 137 S.W.2d 1051.
In our opinion, appellee's testimony was wholly insufficient to support a finding of any valid extension agreement and appellant's Points 2 and 3 are sustained.
In Point 4 appellant complains of the trial court's action in admitting Mr. Emmott's testimony relating to transactions with the deceased, over is objection that the evidence was in violation of Article 3716, V.A.T.S. As shown in the resume of the testimony heretofore stated, appellant at the very outset of Mr. Emmott's testimony objected under the "Dead Man's Statute" to his testifying to any transaction with the deceased Day. This objection was overruled. In fact, appellant made several objections thereafter on the same ground, all of which were overruled, and the testimony was admitted. It appears, too, that additional testimony of the same character was thereafter elicited from Mr. Emmott without appellant repeating such objection.
The rule is well settled that where a party makes a proper objection to the introduction of testimony of a witness and is overruled, he is entitled to assume that the judge will make the same ruling as to other offers of similar evidence and he is not required to repeat the objection. McCormick and Ray, Texas Law of Evidence, Sec. 27, p. 27; J. I. Case Threshing Machine Co. v. O'Keefe, Tex.Civ.App., 259 S.W.2d 222, error dism.; Ft. Worth & R. G. Ry. Co. v. Jones, 38 Tex. Civ. App. 129, 85 S.W. 37.
The law is also settled that the provisions of Article 3716, V.A.T.S., apply with equal force to books of account kept by a party who seeks to establish by his records a transaction with a deceased. Hedges v. Williams, 26 Tex. Civ. App. 551, 64 S.W. 76; Watson v. Dodson, Tex.Civ. App., 143 S.W. 329; McCoy's Estate v. Brown, Tex.Civ.App., 268 S.W. 241. In our opinion, the trial court erred in admitting in evidence, over appellant's objection any of Mr. Emmott's testimony following his first objection. Appellant's Points 4 and 5 are, therefore, sustained.
This cause is, therefore, reversed and remanded.
|
01-03-2023
|
10-30-2013
|
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.