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October 2, 2009
CHRISTIANA FATIREGUN, PLAINTIFF,v.CITY OF PHILADELPHIA, DEFENDANT.
Presently before the Court are (1) Defendant's Motion for Reconsideration of the Court's Order Denying, in Part, Defendant's Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6) or in the Alternative to Certify an Interlocutory Appeal (Doc. 7) ("Defendant's Motion for Reconsideration"); (2) Plaintiff's Motion for an Enlargement of Time to Answer Defendant's Motion for Reconsideration of the Court's Order Denying, in Part, Defendant's Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6) or in the Alternative to Certify an Interlocutory Appeal (Doc. 8) ("Plaintiff's Motion for an Enlargement of Time"); and (3) Plaintiff's Answer to Defendant's Motion for Reconsideration of the Court's Order Denying, in Part, Defendant's Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6) or in the Alternative to Certify an Interlocutory Appeal (Doc. 9) ("Plaintiff's Response"). For the reasons set forth below, the Court will grant Plaintiff's Motion for an Enlargement of Time. Further, the Court will grant in part and deny in part Defendant's Motion for Reconsideration.
Plaintiff Christiana Fatiregun ("Plaintiff") was born in Nigeria. She began working for Defendant City of Philadelphia ("City") in 1998 in the position of Pharmacist I, and is currently employed by the City in that capacity. On May 12, 2008, Plaintiff filed her first action against the City, Fatiregun v. City of Philadelphia, 2:08-cv-02195 ("Fatiregun I"). In that action, Plaintiff alleged, in pertinent part, that (1) the City discriminated against Plaintiff by denying her the same rights as other white employees in violation of 42 U.S.C. § 1981 ("section 1981"); and (2) the City discriminated against Plaintiff on account of her race, color, and/or national origin in violation of section 9-1104(A) of the Philadelphia Code ("section 9-1104(A)"). In response to Plaintiff's allegations, the City filed a Motion to Dismiss on August 19, 2008 contending that (1) section 1981 does not provide Plaintiff with an independent cause of action against a state actor and (2) punitive damages are not recoverable against the City. Plaintiff did not respond to Defendant's Motion to Dismiss. Consequently, on October 9, 2008, the Court granted Defendant's Motion to Dismiss as unopposed, dismissing Fatiregun I with prejudice. Plaintiff's subsequent Motion to Vacate the Court's Order was denied because the Court deemed inexcusable the "inadvertence" of Plaintiff's counsel in failing to timely respond to Defendant's Motion to Dismiss.
Then, on February 11, 2009, Plaintiff filed the instant Complaint (Doc. 1) against Defendant ("Fatiregun II") based on facts which were at issue in Fatiregun I, namely, Defendant's alleged practice of discrimination and harassment against Plaintiff, and the hostile work environment arising from such practice. Specifically, Plaintiff alleged, in pertinent part, that (1) the City discriminated against Plaintiff on account of her race, color, and/or national origin in violation of 42 U.S.C. § 1983 ("section 1983") (Pl.'s Compl. ¶ 19); (2) the City discriminated against Plaintiff because of her race, color, and/or national origin, and retaliated against her with respect to the terms and conditions of her employment in violation of 42 U.S.C. § 2000e, et seq. ("Title VII") (Pl.'s Compl. ¶ 23); and (3) the City discriminated against Plaintiff because of her race, color, and/or national origin in violation of section 9-1104(A) (Pl.'s Compl. ¶ 27). The City responded to Plaintiff's allegations with a Motion to Dismiss (Doc. 3), arguing that (1) the claims raised by Plaintiff in Fatiregun II are barred by the doctrine of res judicata and (2) punitive damages are not recoverable against the City. (Def.'s Mem. Supp. Mot. to Dismiss 1-2.)
In the Court's May 30, 2009 Order (Doc. 6), the subject of Defendant's Motion for Reconsideration, the Court granted in part and denied in part the City's Motion to Dismiss, concluding that Plaintiff's claims are not barred by res judicata. Specifically, the Court noted that Plaintiff's Title VII claims were not asserted in Fatiregun I and, further, that Plaintiff's Title VII retaliation claim, in particular, was based on facts which occurred after the filing of Fatiregun I. The Court also concluded that Plaintiff's section 1983 claim for conduct in violation of section 1981, and state law claim under the Philadelphia Fair Practices Ordinance are not barred by res judicata because the Court's dismissal of Fatiregun I was based on the unavailability of a private right of action against Defendant under section 1981. Consequently, the Court concluded that its dismissal of Fatiregun I was not an adjudication on the merits but instead a "technical ruling" and, therefore, had no preclusive effect. The Court did, however, dismiss Plaintiff's punitive damages claims because punitive damages are not available against a municipality or against a local official acting in his official capacity. See, e.g., City of Newport v. Fact Concerts, Inc., 453 U.S. 247, 271 (1981). Therefore, the following claims still remain after the Court's consideration of Defendant's Motion to Dismiss and Plaintiff's response thereto: (1) Plaintiff's state law claim; (2) Plaintiff's section 1983 claim for conduct in violation of section 1981; (3) Plaintiff's Title VII claims; and (4) Plaintiff's purported claim under section 1981a.*fn1
The Third Circuit has held that the "purpose of a motion for reconsideration is to correct manifest errors of law or fact or to present newly discovered evidence." Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d Cir. 1985), cert. denied, 476 U.S. 1171 (1986). To prevail, the moving party must demonstrate one of the following: (1) an intervening change in the controlling law; (2) the availability of new evidence that was not available previously; or (3) the need to correct a clear error of law or fact to prevent manifest injustice. Max's Seafood Café v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999) (citing N. River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995)).
Motions for reconsideration should be granted sparingly "because courts have a strong interest in the finality of judgments." Douris v. Schweiker, 229 F. Supp. 2d 391, 408 (E.D. Pa. 2002) (quoting Cont'l Casualty Co. v. Diversified Indus., Inc., 884 F. Supp. 937, 943 (E.D. Pa. 1995)). Nevertheless, since the City seeks to direct the Court's attention to a manifest error of law, reconsideration of the Court's prior ruling is appropriate and the merits of the City's argument must be addressed.
The City moved the Court to reconsider its conclusion that its prior dismissal with prejudice of Fatiregun I was not an adjudication on the merits, and consequently, that Plaintiff's claims are not barred by res judicata. (Def.'s Mot. for Recons. 3-4.) The City also contends that the Court should have dismissed Plaintiff's section 1981a claim because section 1981a is the damages provision relating to claims under section 1981, and not an independent right of action. (Def.'s Mot. for Recons. 4.) The Court will proceed by addressing the threshold question of whether its dismissal in Fatiregun I constituted an adjudication on the merits for res judicata purposes.
Res judicata operates as a "bar to relitigation of an adjudicated claim between parties and those in privity with them." Transamerica Occidental Life Ins. Co. v. Aviation Office of Am., Inc., 292 F.3d 384, 392 (3d Cir. 2002) (citing CoreStates Bank, N.A. v. Huls Am., Inc., 176 F.3d 187, 194 (3d Cir. 1999)). The application of res judicata requires the confluence of three elements: (1) a final judgment on the merits; (2) the same parties or their privies in both suits; and (3) the same cause of action in both suits. See, e.g., Saudi v. Acomarit Mars. Servs., S.A., 114 F. App'x 449, 454 (3d Cir. 2004) (citing Lubrizol Corp. v. Exxon Corp., 929 F.2d 960, 963 (3d Cir. 1991)).
Plaintiff's contention that the dismissal of Fatiregun I with prejudice cannot constitute an adjudication on the merits is directly refuted by the Third Circuit's finding that "a dismissal with prejudice constitutes adjudication on the merits as fully and completely as if the order had been entered after trial." See, e.g., Gambocz v. Yelencsics, 468 F.2d 837, 840 (3d Cir. 1972) (citing Lawlor v. Nat'l Screen Serv. Corp., 349 U.S. 322, 327 (1955)). Pennsylvania courts have construed the phrase "on the merits" expansively, and prohibited relitigation even in the absence of a judicial decision finally adjudicating the merits of the case. See Kuhnle v. Prudential Sec., Inc., 439 F.3d 187, 190 (3d Cir. 2006) (citing McCarter v. Mitcham, 883 F.2d 196, 201 (3d Cir. 1989)) (holding that dismissal with prejudice was on the merits because dismissal was a sanction for untoward delay). See generally 18 James Wm. Moore et al., Moore's Federal Practice § 131.30 (2009) (noting that the term "on the merits" is misleading because "many dispositions short of trial are considered 'on the merits' for claim preclusion purposes even though the validity of some or all of the theories of liability, claims for relief, and defenses of the parties may remain undetermined."). Accordingly, the Court need not have reached the merits of the Plaintiff's claims in Fatiregun I in order for its ruling to be deemed "on the merits," and even a "technical ruling" can be accorded res judicata effect.
I. State Law Claim
Since Plaintiff's state law claim was dismissed with prejudice in Fatiregun I, and such a dismissal constitutes an adjudication on the merits, Plaintiff is barred from relitigating this claim in the present suit.
II. Section 1983 Claim for Violation of Section 1981
Res judicata bars claims that were asserted in a prior suit, as well as claims arising out of the same cause of action that could have been asserted but were not. Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981) (citations omitted) ("[A] final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action."); Allen v. McCurry, 449 U.S. 90, 94 (1980). Since the Third Circuit has not clearly defined "cause of action," courts are predisposed toward a broad view of what constitutes identity of causes of action. United States v. Athlone Indus., Inc., 746 F.2d 977, 984 (3d Cir. 1984). That broad view focuses on the central objective of res judicata to require plaintiffs "to present in one suit all the claims for relief that he may have arising out of the same transaction or occurrence." Id.
The determination of whether two suits involve the same cause of action turns on whether there is an "essential similarity of the underlying events" giving rise to the claims. See, e.g., Bd. of Trs. of Trucking Employees of North Jersey Welfare Fund, Inc. v. Centra, 983 F.2d 495, 504 (3d Cir. 1992); Athlone, 746 F.2d at 984. The Athlone court articulated several factors that indicate "an essential similarity of the underlying events," including: (1) whether the acts complained of and the demand for relief are the same; (2) whether the theory of recovery is the same; (3) whether the witnesses and documents necessary at trial are the same; and (4) whether the material facts alleged are the same. Athlone, 746 F.2d at 984 (internal citations omitted).
The underlying events giving rise to Plaintiff's section 1981 claim in Fatiregun I are essentially similar to those events giving rise to Plaintiff's section 1983 claim in Fatiregun II. Both claims for relief are based on the same alleged wrongdoing, namely, Defendant's discrimination against Plaintiff with respect to the terms and conditions of her employment. Moreover, both claims are based on the same underlying factual events alleged in Fatiregun I, including the routine denial of a promotion; unjustified discipline; a scheme to implicate Plaintiff in the theft of prescription drugs; unequal compensation; and the refusal to transfer Plaintiff from a floating to a permanent position. It is not significant that Plaintiff relies on two different statutory provisions because the essence of the cause of action remains the same; both claims rest on a single series of allegedly discriminatory incidents and the language of both claims is virtually identical. Furthermore, Plaintiff is likely to call the same witnesses and proffer the same documentary evidence at trial for both claims. Therefore, the Court is persuaded that Plaintiff has articulated only one cause of action even if she is relying on different theories of recovery, one of which was procedurally unavailable. See generally McGovern v. City of Philadelphia, 554 F.3d 114, 121 (3d Cir. 2009) ("[T]he express cause of action for damages created by § 1983 constitutes the exclusive federal remedy for violation of the rights guaranteed in § 1981 by state governmental units."). Accordingly, since Plaintiff's section 1983 claim in Fatiregun II arises out of the same transaction or occurrence that gave rise to her section 1981 claim in Fatiregun I, Plaintiff is precluded from raising her section 1983 claim in the instant suit.
In reaching this conclusion, the Court gives due consideration to the policy goals underlying the res judicata doctrine, which include avoiding excessive and duplicative costs and efforts of litigation, averting potential inconsistency in decisions, and conserving judicial resources. See, e.g., Marshall v. Park Plaza Condo. Ass'n, No. 98-2912, 1999 U.S. Dist. LEXIS 13666, at *9 (E.D. Pa. Sept. 3, 1999). After Defendant filed its Motion to Dismiss on August 19, 2008, Plaintiff had ample opportunity to amend her complaint and bring a section 1983 claim. During the almost two-month period after that Motion to Dismiss was filed and served, Plaintiff did not utter a single word in opposition or with respect to any difficulty meeting the deadline for filing a response. It was not until 19 days after the Court's entry of final judgment that Plaintiff responded at all by filing a Motion to Vacate. In that Motion to Vacate, Plaintiff argued that the Court should not have dismissed Fatiregun I with prejudice, but instead should have allowed her to amend her complaint to bring a section 1983 claim. (Pl.'s Mem. Supp. Mot. to Vacate 2.) That argument is not convincing because it assumes, unfairly to Defendant, that Plaintiff is excused for failing to comply with the deadlines set under the federal rules because of counsel's "inadvertence." Plaintiff did not adequately explain why she failed to amend her complaint when she had the opportunity to do so-during the ample stretch of time prior to the Court's entry of a judgment of dismissal.
Moreover, if Plaintiff was not satisfied with the Court's dismissal of Fatiregun I, then she could have availed herself of the opportunity to appeal the Court's order granting the City's Motion to Dismiss and the Court's denial of Plaintiff's Motion to Vacate. Plaintiff chose not to take advantage of any of the opportunities liberally provided within the federal judicial system to correct the error in her initial filing. After giving Plaintiff such broad latitude to plead all possible claims against Defendant, a further expansion of that latitude by allowing Plaintiff to bring her section 1983 claim would contravene the policy goals underlying the res judicata doctrine.
III. Title VII Claims
Res judicata does not bar claims that could not have been joined in the prior action. While a "judgment precludes recovery on claims arising prior to its entry, it cannot be given the effect of extinguishing claims which did not even then exist and which could not possibly have been sued upon in the previous case." Allegheny Int'l v. Allegheny Ludlum Steel Corp., 40 F.3d 1416, 1430 (3d Cir. 1994) (quoting Lawlor, 349 U.S. at 328); Alexander & Alexander, Inc. v. Van Impe, 787 F.2d 163, 166 (3d Cir. 1986) (citation omitted) (Res judicata "applies...only to claims arising prior to the entry of judgment. It does not bar claims arising subsequent to the entry of judgment and which did not then exist or could not have been sued upon in the prior action."). Therefore, a continuing series of wrongful conduct occurring after the entry of judgment in Fatiregun I is not within the scope of claim preclusion. It would defy logic and fairness to preclude a future claim based on such conduct.
Plaintiff raised Title VII claims of discrimination and retaliation with respect to the terms and conditions of her employment. Specifically, Plaintiff alleges that "[s]ubsequent to the filing of Fatiregun I, the City has continued to discriminate and retaliate against Plaintiff and subject her to a hostile work environment." (Pl.'s Compl. ¶ 9(f).) If the events giving rise to those Title VII claims occurred after the dismissal of Fatiregun I, then Plaintiff is not precluded from raising those claims in the instant suit. However, if those claims are grounded in events that occurred before Fatiregun I was dismissed, and Plaintiff could have asserted those claims before the entry of judgment, then Plaintiff may not bring those claims now.
Plaintiff's Title VII discrimination claim is based, at least in part, on events occurring at the time she filed Fatiregun I. Those events likely formed the nucleus of operative facts upon which Plaintiff relied in filing a Title VII charge of discrimination with the Equal Employment Opportunity Commission ("EEOC" or "Commission"). Plaintiff avers that she was "unable to assert any Title VII claim at the time the Court denied Plaintiff's Motion to Vacate the October 9, 2008 Dismissal because the EEOC had not yet issued the Notice of Right to Sue Plaintiff." (Pl.'s Resp. to Def.'s Mot. for Recons. 3.) That statutory notice must be received by a party who timely files an administrative charge with the EEOC before that party can initiate a Title VII discrimination claim in federal court. See, e.g., Tice v. Bristol-Myers Squibb Co., 325 F. App'x 114, 118 (3d Cir. 2009). Since Plaintiff did not receive such notice from the Commission prior to the dismissal of Fatiregun I, Plaintiff is not precluded from asserting her Title VII discrimination claim in the instant suit.
By contrast, there is some ambiguity concerning the preclusive effect of the prior dismissal on Plaintiff's Title VII retaliation claim because it is not clear whether the events giving rise to that claim occurred before or after the dismissal. Plaintiff's assertion that the retaliation took place "[s]ubsequent to the filing of Fatiregun I" is vague as it suggests that the wrongful conduct giving rise to Plaintiff's retaliation claim could have occurred any time after Plaintiff filed her initial complaint, whether before or after Fatiregun I was dismissed. If that claim is based on events occurring before Fatiregun I was dismissed, then Plaintiff should have attempted to raise the claim at that time. If, however, it is based on a separate series of events occurring after the dismissal of the prior action, then Plaintiff may bring the claim, provided that the additional allegations are fairly within the scope of the prior EEOC discrimination charge.
Compare Antol v. Perry, 82 F.3d 1291, 1295 (3d Cir. 1996) (current claim did not fall within scope of prior EEOC complaint) with Waiters v. Parsons, 729 F.2d 233, 237 (3d Cir. 1984) (current claim fell within scope of prior EEOC complaint). Without further clarification as to the timing of the alleged retaliatory acts, the Court is unable to determine whether Plaintiff is barred from bringing her Title VII retaliation claim. Therefore, the Court grants Plaintiff leave to amend her Complaint to clarify the circumstances giving rise to her Title VII retaliation claim.
IV. Section 1981a Claim
Section 1981a does not, either expressly or impliedly, create an independent cause of action for employment discrimination plaintiffs. See, e.g., McCormack v. Bennigan's, No. 93-1603, 1993 U.S. Dist. LEXIS 10424, at *7 (E.D. Pa. July 29, 1993). It merely sets forth additional remedies that may be available to such plaintiffs under Title VII. Id. Plaintiff does not argue that section 1981a constitutes a separate legal basis for a claim of employment discrimination. Rather, she argues that section 1981a sets forth the remedies available to Plaintiff under Title VII. (Pl.'s Resp. to Def.'s Mot. for Recons. 4.) This is entirely consistent with the principle that section 1981a cannot stand on its own, but expands upon relief available under Title VII. Therefore, Plaintiff cannot plead a cause of action under section 1981a separate and distinct from her cause of action under Title VII. However, if Plaintiff prevails under her Title VII claims, then she will be able to claim the remedies provided by section 1981a. Accordingly, to the extent that Plaintiff claims a separate and independent cause of action under section 1981a, then such a claim is dismissed, with the understanding that it will be subsumed under Plaintiff's Title VII claims.
For the foregoing reasons, the Court concludes that Plaintiff's claim under Philadelphia Code section 9-1104 and Plaintiff's section 1983 claim for conduct in violation of section 1981 are barred by res judicata, and therefore dismissed. However, Plaintiff's Title VII discrimination claim is not barred by res judicata, and therefore remains. Further, to the extent that Plaintiff raises an independent section 1981a claim, then such a claim is dismissed, with the understanding that any right to relief available under that section will be asserted in connection with Plaintiff's Title VII claims. In addition, the Court grants Plaintiff leave to amend her Complaint to clarify the events described in paragraph 9(f) that gave rise to her Title VII retaliation claim. All other provisions of the Court's May 30, 2009 Order shall remain in effect. A separate order will be entered in accordance with this Memorandum Opinion.
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The Anderson County High School swim team had a solid showing despite low numbers in a meet at the Shelby County Family Activity Center last Wednesday.
A team already low on numbers, the Swim Cats went into the meet more short-handed with several swimmers out due to sickness.
Other Anderson swimmers were just recovering from sickness. "They still stepped up and tried their hardest in their relays," said Anderson coach Karla Phillips, who added that several of her swimmers opted to scratch their individual events due to exhaustion.
Brennon Maxberry picked a good time to score his first varsity basketball points for Anderson County on Friday night.
The sophomore guard snared a missed free throw, then sank a short jump shot just before the final buzzer to give Anderson an 84-82 win at East Jessamine in double overtime. Trailing by one inside the final 10 seconds of the second overtime, Anderson got the ball to Christian Gritton, who was fouled as he drove the lane. The junior hit his first shot but missed his second.
Short post-season runs have not been common at Anderson County in the Mark Peach era.
"It's always a big adjustment," Peach said recently as he reflected on a season that ended in the first round of the state playoffs. Bullitt Central claimed an overtime win over the Bearcats to send the Bearcats to an early exit with a 4-7 record.
Anderson County saw where it is and what needs to be done to get where it can be in the first week of the girls' high school basketball season.
The Lady Bearcats can be very good, as shown in a 64-46 win at Thomas Nelson Tuesday night, saw just how big the gap they want to bridge to become elite when Louisville Mercy routed the Lady Bearcats, 75-35, the following night.
Anderson County resident Makenzie Cann earned her first start for the University of Kentucky women's basketball team Sunday when the 17th-ranked Wildcats traveled to archrival Louisville.
No. 7 Louisville pulled out a 69-67 win in overtime at the KFC Yum! Center, ending Kentucky's streak of five consecutive wins in the series.
Cann scored three points and pulled in four rebounds in 45 minutes of action. Cann and teammate Makayla Epps never exited the lineup.
A Lawrenceburg family's home at sustained heavy damage tonight when a fire broke out at 109 Bond St.
The owners were out of town when the fire began, but 17-year-old Jacob Daniels was sleeping inside, according to Lawrenceburg Fire Chief Bobby Hume.
"Fortunately, he smelled the smoke and was able to get out," Hume said.
Firefighters were able to knock down the blaze fairly quickly, but the home sustained what Hume said was "extensive" damage.
EDITOR'S NOTE: Our cooking guru offered us this valuable information for a safe and enjoyable Thanksgiving dinner. Some of it you may already have completed, but if you haven't, take note, and from all of us at The Anderson News, Happy Thanksgiving!
By Laura Hahnes, Cooking Columnist
What size turkey do I need?
By John A. Nelson, News staff
High winds kept Anderson County firefighters struggling for seven hours Saturday morning to contain a house fire at 1265 Ninevah Road.
Battalion Chief Brandon Brown said nine fire trucks were on the scene and used 64,000 gallons of water to fight what he called "a wind driven structure fire."
The Anderson County Middle School wrestling team placed sixth in the Woodford County Invitational Tournament, held on Nov. 19.
"This team has turned out more solid than expected," said first-year coach Dan Knight. "Everyone will continue to improve and we have a lot to look forward to."
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Baby Love
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"I saw this pattern and thought it would be great to go in my gift tins for my homemade spa sets for Christmas. I started the pattern but kept having trouble with the puff stitch. When I try to pull through the loop the hook gets stuck and pull a strand or two out making it look un-neat. Is there a way to prevent this? Could it be the yarn I am using?"
"I love this pattern for making dishcloths! It is so simple and it's so easy to remember. It makes a great,durable dishcloth. Does anyone tried this pattern with that new yarn that is made for making dishcloths? I think it might be a rayon blend. I'm going to try it next time I need dishcloths."
"This is a great beginner project, it was easy to follow and gave great instruction. I was able to work up several of these for co-workers who thought it was so cute. I am going to make several more for my home for company to use when they come over and have coffee."
"These spiral beaded trees are so pretty! For extra sparkle, I am going to place a battery tea light candle in the center of the spiral. Several of these trees would look great placed within a strand of twinkle or small rice lights on a mantle or table center piece!"
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Little Girl Tu Tu Tutorial
By: I heart naptime
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How adorable will your daughter look in this little skirt from Jamielyn Nye? Let the Tu Tu Tutorial show you how to create this one of a kind Tu Tu. She will be the hit of the party in this super cute sewing project.
- Elastic Band (1/2in - 1in)
- Tulle
- Ribbon
- First you'll need to start out with an elastic band (1/2 in – 1 in works best). These come in packs at Jo-Ann's for about $2. Measure your child's waist and cut the piece of elastic 1 in bigger. Then you will sew the ends together.
- Next you'll cut your tulle (use the kind on spools-found mine at HL). I cut mine 18 inches for a 3 month old. Decide how long or short you want yours and measure accordingly.
- Next you'll tie a double knot around the elastic. I did a pattern of white-pink-white polka dot- pink – white and so on until I got all the way around. You can get creative here and do as many colors as you'd like…however I prefer to stick to 2-3 colors. Also make sure to slide the knots real close together to get the puffy tu-tu.
- I wanted to add just a little bit of ribbon, so I tied a thin piece of ribbon next to the polka dot tulle. So it ended up being about a 5-1 ratio or tulle to ribbon. Again get creative here. Big fat ribbon looks super cute as well.
- That's all! Is that not the cutest thing you've ever seen!?
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suefontas 2754659
Sep 21, 2011
You might want to attach the tulle and ribbon as if attaching fringe on an afghan. It has a very neat appearance.
lhaddle 0196484
Jul 26, 2011
I am uncertain as to how to make a "double knot" when attaching the tulle to the elastic. Are you actually doubling the tulle as you attach it to the elastic (because it is on the front and the back sides of the elastic), or is the length after knotting the tulle on the elastic a single thickness?
StewiesMama 768505 4
Jun 07, 2011
this is just too precious!!! I don't know what is making giggle more- how sweet and easy these are to make or knowing how much money their mommies will save when I teach them how to make them for all our little ballerina girls!!! thanks so much for this [and so many other] patterns.
maeflowersjunebugs 4887228
May 29, 2011
In my experience, elastic stretches and so you need to actually cut the elastic smaller than the child's waist, or the tutu is going to fall off. A lot. I've had to take in the elastic quite a bit when making tutus for my daughter, and for the fairy costumes I sell. HTH.
May 20, 2011
I think we are being told to cut each piece of the tulle long enough that we can tie it on to the elastic, Then we line the tulle pieces up till the tutu has the fullness we want. At least that's how I plan to approach it. I agree that the directions could have been clearer.
May 20, 2011
I don't understand this. Can you be a little clearer with your directions and amounts of tulle and ribbon needed?
May 20, 2011
Very, very cute. Thank you for sharing. I'm going to make one for my daughter's baby hope chest.
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Holiday Inn Express Perrysburg: Find photos, reviews, information, amenities and compare prices for 3 stars hotels in Perrysburg, United States.
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ALL » Sports >> View Article
Boost Your Running With A Marathon Training Guide!By Expert Author: Bob Smith
Classifying Your Running Course
Running is a good sport in any man's book. All you need is a running shoe that would protect your running limbs and a course that would test your body's stamina. Its simplicity earns a spot in the hearts of sport enthusiasts and is a fruitful exercise attracting health zealots.
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APPEAL from the Circuit Court of Lawrence County; the Hon.
ROLAND J. DeMARCO, Judge, presiding.
In this appeal we consider a dispute between co-owners of the working interest of two oil and gas leases located in Lawrence County. One of the leases, the Gillespie, has 12 producing wells, and the other lease, the Benefiel, has two producing wells, or, with more precision, two sometimes producing wells. Apparently none of the wells are large producers and can be termed "strippers." The issues of the case can best be stated by a recital of the facts.
Plaintiff has been involved in several phases of the oil production business for approximately 40 years. Plaintiff personally supervised the drilling and development of the Gillespie lease in 1946. The Benefiel lease was purchased in 1954, already developed. A D.E. Burford, a resident of Missouri, acquired a three-fourths working interest in the Gillespie lease in 1954 and a one-half interest in the Benefiel lease sometime thereafter. Burford later assigned his interests in the leases to corporations which he, and, following his death, his wife, controlled.
By agreement with the Burfords the plaintiff served as the operator of the leases, receiving $800 per month for supervision and pumping of the wells. His method of handling the accounts was to forward monthly all bills representing the expenses incurred in operating the leases to Mr. Burford or to his widow after Burford's death. The Burfords would prepare a summary of the expenses, including the $800 for plaintiff's supervision and pumping, and allocate the total in proportion to the ownership, 75% to the Burfords and 25% to plaintiff.
The arrangement with the Burfords continued until about July 1973 when, according to plaintiff, defendant, a livestock dealer from Missouri, came to Lawrence County and advised plaintiff that he was checking on the operation of the leases for Mr. Burford. Defendant then suggested that he would operate the leases for three weeks of the month and plaintiff could operate them for one week of the month. Plaintiff refused the offer because the split responsibility for operation would be unworkable. It was defendant's testimony that he was in Lawrence County several times between January 1, 1973, and July 1, 1973, and on the latter date he came to take possession of the leases for Mrs. Burford. He then told plaintiff that "there would be no more pay for him," that he, the defendant, was going to operate the leases for three weeks of the month and plaintiff could operate one week.
Between July 1973 and the end of September 1974 plaintiff continued as operator of the leases. Plaintiff and defendant arranged the allocation of the expenses of the operation on the same 75%-25% ratio that previously had appertained but the $800 for supervision and pumping paid to the plaintiff was excluded.
Defendant acquired the Burford interests in both the Gillespie and Benefiel leases by assignment dated March 20, 1974. Plaintiff continued to operate the leases until October 7, 1974, when the defendant as majority interest holder "took over." On September 6, 1974, plaintiff had filed a complaint against defendant praying for a judgment for $600 per month for defendant's proportionate part of the $800 per month for supervision and pumping of the wells for the period from July 1, 1973, to the date of decree, for a lien against the interest of defendant in the leases and for foreclosure and sale of defendant's interests in the event the judgment was not paid. The complaint also asked for appointment of a receiver for the leaseholds pendente lite and for an injunction which would restrain defendant from interfering with plaintiff's operation. The Marathon Oil Company, the pipeline purchaser of the oil produced from the wells, was made a party defendant to the action, but their position in the cause is that of a "stakeholder" and they are not concerned with the merits of the suit.
On February 10, 1975, plaintiff filed an amended complaint which added a count II to the original complaint. Count II alleged the takeover of operations by defendant, that defendant was incompetent in his operations and that waste had resulted to plaintiff's interest because the defendant had permitted the production from the wells to decrease. Count II further alleged that plaintiff had continued during defendant's operation to pay electric bills for the leases that defendant as operator had failed to pay. Count II concluded with a prayer for judgment for damages by reason of the waste and the payment of the electric bills.
Defendant filed answers to both counts I and II which consisted of denials of the pertinent allegations.
Following a trial conducted by the court sitting without a jury a decree was entered which found plaintiff and defendant to be mining partners of the leases, that mining partners are not entitled to compensation for personal services rendered to the partnership unless agreed upon by all the partners, that defendant owed plaintiff for his proportionate part of operating expenses from March 1974 to date, that defendant (as the owner of three-fourths of the working interest) has the right to operate the Gillespie lease and the plaintiff and defendant have equal rights to operate the Benefiel lease, and that defendant has not incompetently operated the leases and plaintiff is not entitled to damage because of the nonoperation of certain of the wells. Plaintiff was then awarded judgment against defendant for $1,046.24, the receivership and an injunction were denied, defendant was awarded the operation of the Gillespie lease and the parties were ordered to reach an agreement on the operation of the Benefiel lease within 60 days or a receiver would be appointed by the court. Accumulated funds derived from production pendente lite were ordered applied to satisfaction of the judgment.
Plaintiff appeals from the decree asking from this court the relief he was denied by the trial court.
• 1, 2 Neither party seriously challenges the trial court's finding that a mining partnership of plaintiff and the Burfords was established under the facts presented, or that the mining partnership was continued between plaintiff and defendant after defendant acquired the Burfords' interests. The record supports the trial court's finding in this regard and accordingly the differences between these parties must be resolved by application of the legal principles that pertain to that unique entity that arises when more than one person has a hand in the ownership and operation of oil and gas leases or other mining properties. Descriptions of a mining partnership and some of the legal obligations and rights accruing to the partners are furnished by Illinois cases. From Harris v. Young, 298 Ill. 319, 131 N.E. 670:
"Where there is an association of individuals for producing oil or minerals from leasehold properties and the expenses of development and production and sale of the oil are divided or shared according to the holdings of the members of the association in the leasehold property, whether such division of expenses and profits is made with or without formal written or verbal agreement, a partnership exists. * * * In such a partnership, in the absence of a specific agreement, there is no delectus personae [the right to choose one's partner] as exists in ordinary commercial partnerships. In a partnership each co-partner has the right to sell his interest in the firm property whenever and to whomever he may choose. By such a sale he ceases to be a partner, and at the same time that he ceases to be such a partner his vendee or assignee becomes a partner in his stead with the remaining members of the firm. Such a sale does not dissolve the partnership, and death of a member does not dissolve it. The incoming partner will not be liable for the antecedent debts of the firm as between the partners, but he takes his interest subject to the payment of antecedent partnership debts. Each member has a lien upon the partnership property for the debts due to the creditors of the partnership, which lien he may enforce in equity. These liens exist only against the partnership property while it is distinctly such partnership property. Such liens on the oil itself in favor of the members only exist while it is the property of the firm. When it is separated or divided by division or sale and any part of the oil is set apart to the individual members of the firm as their distinct part or share, or such oil is sold and the proceeds divided among the individual members of the firm, no lien further exists either on the oil thus separated and divided or on the proceeds of that so sold and divided." 298 Ill. 319, 325-26.)
From Dunbar v. Olson, 349 Ill. App. 308, 110 N.E.2d 664:
"A mere tenancy in common, or joint ownership of the property, does not make the owners partners, * * *. (Summers Oil & Gas, Perm. Ed., Vol. 4, section 723, page 150; Tuck v. Downing, 76 Ill. 71, 83; Hand v. Allen, 294 Ill. 35, 53). The owner of a so-called working interest in an oil and gas lease has a duty to share in the expense in proportion to his interest, which is consistent with his co-tenancy relationship, but he does not become a mining partner by virtue of this fact (Summers Oil & Gas, Perm. Ed., Vol. 4, section 723, page 152) Before a mining partnership exists it must be shown not only that there is a joint ownership of the property, but also a joint working and a joint operation of the lease involved, which must be shown by competent evidence (Summers Oil & Gas, Perm. Ed., Vol. 4, section 922, page 145). By joint operation is obviously meant that each of the joint owners must have some choice and participation in control and management." (349 Ill. App. 308, 311-12.)
From Kinne v. Duncan, 383 Ill. 110, 48 N.E.2d 375:
"It seems to be one of the characteristics of a mining partnership that partners have only a lien on the social property for advances or balances due to them, but if they have divided the property or the product so that each owns his share in severalty no partnership lien may exist upon the property or product actually divided." 383 Ill. 110, 115-16.)
For a more detailed discussion of mining partnerships as applied to the operation of oil leases see 4 Summers, The Law of Oil and Gas, ch. 24, at 253 et seq. (1962).
• 3 Under the facts presented by the record we find no abuse of discretion upon the part of the trial court in its refusal to appoint a receiver to operate the wells or to issue an injunction prohibiting defendant from interfering with plaintiff's operation. The cited authorities support the court's decree in this regard and we will not overturn it.
• 4 Similarly, the record supports the court's refusal to render a judgment for plaintiff for damages for waste caused by defendant's allegedly improper or incompetent operation subsequent to his assumption of duties as operator. Expert opinion testimony was presented by both parties and, as might be expected, contradictory opinions were voiced. However, we agree with the trial court that the testimony from both sides was inconclusive and lacking in benchmark events to support either view. Especially is this so when the fugacious nature of oil and gas in place underground is considered, together with the fact that the operations in question here were secondary recovery by waterflood.
The principal address of plaintiff's appeal concerns the trial court's disallowance of plaintiff's claim for defendant's portion of the charge of $800 per month for supervision and pumping of the wells from July 1, 1973, until defendant assumed the operations on October 7, 1974.
It is defendant's position that plaintiff is not entitled to payment for personal services rendered to the partnership because (1) there was no agreement for payment for such services by the partners and (2) a partner is precluded from making a profit from the partnership, the only entitlement of a partner being that to a pro rata share of the partnership profits. The defendant also contends that in any event he is not liable for the portion of the claim for supervision and pumping that predated his acquisition of the Burfords' interests and becoming a partner on March 20, 1974. Defendant relies on Kinne v. Duncan and Dunbar v. Olson.
We note at the outset of our discussion that promptly upon his assumption of supervision and pumping of the wells on October 7, 1974, the defendant commenced charging plaintiff for his proportionate part of $800 a month for such services.
• 5 It is true that in the absence of an agreement by all the partners a partner of a mining partnership cannot make a profit in his dealing with and performing services for the partnership. (Kinne v. Duncan.) On the other hand each member of a mining partnership has a right to have the partnership property applied to the payment of the debts of the partnership due to third persons and to himself for advances made to the firm. (Harris v. Young; 4 Summers, The Law of Oil and Gas § 728, at 304 (1962).) The term "advance" connotes a contribution by a partner which exceeds the contributions by the other partners, but the proportionate interests in the partnership must be considered.
• 6 Although the plaintiff here is precluded from reaping a profit from his services in supervision and pumping of the wells, we do not read the rule to preclude any and all compensation whatsoever. Plaintiff is entitled to compensation for any advances made to the firm. And it is readily apparent here that the plaintiff did in fact make contributions of services and labor in the supervision and pumping of the wells upon the leases that constitute an advancement to the firm. He is accordingly entitled to the worth of his services, but not to a profit. The trial court disallowed all of plaintiff's claim for supervision and pumping with a finding "That a mining partner is not entitled to compensation for personal services rendered to the partnership, unless agreed to by all partners." We disagree with this as a statement of the law where the personal services constitute an advancement to the partnership. The evidence clearly established that plaintiff did all the supervision. Rather than hire a man to pump the wells plaintiff performed the pumping services largely by himself. Absent such services by the plaintiff it would have been necessary to hire a pumper in order to maintain production and preserve the value of the leases. Plaintiff is accordingly entitled to recompense for the value of the pumping services rendered by him, but not to a profit on those services. On the occasions when plaintiff did hire another to do the pumping (according to plaintiff, about 10% of the time) he made payment therefor from the $800 monthly charge. As to this expense there can be no question that it constituted an advance by plaintiff.
• 7 All supervision and pumping services were rendered by plaintiff while he was the owner of only a one-fourth interest in the Gillespie lease, with 12 wells, and a one-half interest in the Benefiel lease, with two wells. To deny plaintiff any compensation for the very substantial contribution to operation of the partnership property upon the basis that compensation for all plaintiff's services were a profit to him would work a severe inequity upon him, ignore basic tenets of the marketplace and bestow an undeserved windfall upon the defendant. Although defendant was the owner of the majority interest in the property and was a partner, his contributions during the period in question were minimal.
This same approach was taken in Kinne v. Duncan, cited by both parties. There Duncan, a driller, filed a claim for a statutory oil and gas lien and also a partnership lien against co-owners of the working interest in an oil and gas lease. The total amount claimed by Duncan was $15,200.83. The co-owners filed suit to remove the claims as a cloud on title. Following a hearing the trial court found that a mining partnership existed and further found that of the $15,200.83, $10,800 was profit and deducted it from the claim. The disallowance of the "profit" portion of the claim was affirmed by both the appellate and the supreme courts>. The statutory oil and gas lien was disallowed as inapplicable between partners of a mining partnership but the court attached a partners lien or equitable lien to the interests of the other partners for the advance by Duncan which consisted of that portion of his claim that was not profit.
• 8 As to the plaintiff's claim for payments advanced to Norris Electric Co-op for electric power to run the pumps there is no dispute. Plaintiff is clearly entitled to have the entire sum treated as an advance and to receive defendant's proportionate recompense therefor. The trial court gave plaintiff a judgment for $1,046.24. While it is not clear what the basis of the judgment was it is apparent that the advancement for the electric bills was the principal part.
• 9, 10 A portion of the debt claimed by the plaintiff accrued prior to the defendant's acquisition of ownership in the leases and he denies any liability therefor. We agree that he incurred no personal liability for the advancements by the plaintiff prior to his acquisition of ownership (Harris v. Young) but, nevertheless, the interests in the partnership property which defendant acquired by the assignment of March 20, 1974, must be available to plaintiff for recovery of the amount found to be due him.
Professor Summer states:
"Each member of a mining partnership is personally liable upon all partnership obligations arising out of contract or tort. One who purchases an interest in a mining partnership takes such interest subject to the liens existing in favor of the partners for debts due the creditors of the partnership, or advances made to the partnership, but he is not personally liable for existing partnership indebtedness, in the absence of an express or implied agreement to assume it." (4 Summers, The Law of Oil and Gas § 727, at 302 (1962).)
And in Kinne v. Duncan it was stated:
"The incoming partner will not be liable for the antecedent debts of the firm as between the partners, but he takes his interest subject to the payment of antecedent partnership debts. Each member has a lien upon the partnership property for the debts due to the creditors of the partnership, which lien he may enforce in equity. Harris v. Young, 298 Ill. 319." 338 Ill. 110, 114.)
Thus, the defendant, the incoming partner, takes the partnership property as he finds it. To paraphrase Summers, defendant took the interests of the Burfords subject to the lien of the plaintiff for advances to the partnership. Defendant is not thereby rendered personally liable for the portion of the advance to be borne by the interest he acquired. However, that interest may be reached by the plaintiff to satisfy his claim it is subject to the partnership lien, or an equitable lien. Defendant resists imposition of the lien from a poor posture. He had full knowledge of the claim which fathered it before he acquired the Burfords' interests. He was aware of the services plaintiff continued to render to the partnership in and about the supervision and pumping of the wells. It was defendant himself who told plaintiff "no more pay" and then, upon his assumption of the duties of operator of the leases, proceeded to assert the same charges he denied to the plaintiff. Under these circumstances we have no hesitation in finding plaintiff entitled to a partnership or equitable lien in defendant's interest in the leases.
The decree of the trial court is affirmed insofar as it denies a receivership and injunction and denies plaintiff damages for incompetent or inefficient operation by defendant. The decree is reversed insofar as it denies plaintiff compensation for the worth of his services rendered to the partnership for supervision and pumping of the leases for the period in question, and the cause is remanded to the trial court to determine the value of plaintiff's services and supervision and pumping the leases, but without the allowance of a profit. The value of such services thus determined shall be considered an advancement to the partnership by the plaintiff and the liability therefor shall be allocated between the partners proportionate to their ownership in the leases.
Affirmed in part, reversed in part and remanded.
EBERSPACHER and KARNS, JJ., concur.
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decided: July 23, 1970.
Freedman,*fn* Van Dusen and Adams, Circuit Judges.
Opinion OF THE COURT
ADAMS, Circuit Judge.
This case involves a "clash of jurisdiction" between two federal district courts*fn1 -- the District Court for the District of New Jersey, which has jurisdiction of Imperial "400" National, Inc., presently undergoing a Chapter X reorganization, and the District Court for the Western District of Michigan where Appellants here, Douglas I. Kuball and Mary Ellen Kuball, filed a bankruptcy petition on behalf of a partnership in which Imperial has a 75% interest and the Kuballs have a 25% interest.
The present appeal is from an order entered by Judge Shaw in the New Jersey District Court enjoining the Michigan bankruptcy proceeding and transferring that proceeding to New Jersey. Judge Shaw issued the injunction and transfer order in connection with the reorganization of Imperial, which was before his Court. He based jurisdiction for the transfer on the authority of sections 32(a) (11 U.S.C.A. § 55(a)) and 111 of the Bankruptcy Act (11 U.S.C.A. § 511). Before considering the precise issue raised in this appeal, it is necessary to examine the nature of Imperial's business organization and the history of the reorganization proceeding in the New Jersey District Court.
Imperial is a corporation whose principal business is the construction, furnishing and operation of a chain of motels throughout the United States. The chain consists of approximately 116 standardized motels located in 35 states and operated under the name "Imperial '400' Motels." Ninety-seven of these motels are owned by partnerships formed under partnership agreements between Imperial and co-owner operators; eight are completely owned by Imperial; eleven are operated under franchise and license agreements. In each of the ninety-seven partnership-operated motels, Imperial has at least a 50% general partners' interest.
This appeal concerns the Benton Harbor Imperial "400" Motel in Benton Harbor, Michigan. The Benton Harbor Motel is owned by a partnership formed pursuant to an agreement to form a limited partnership, executed October 11, 1963, in New Jersey. The Appellants, Douglas and Mary Kuball, own a 25% interest in the Benton Harbor partnership, as general partners; Imperial owns a 50% interest as a general partner and a 25% interest as a limited partner.*fn2
Imperial had previously, on September 21, 1962, obtained a sixty-five year lease on the land where the motel was later built, and pursuant to the partnership agreement assigned thirty-five years of such term by sub-lease to the partnership which Imperial had formed with the Kuballs.
The partnership agreement states that the "Co-owner operator," the Kuballs, and Imperial shall own their respective interests in the "Motel Business as tenants-in-common." The partnership agreement also provides that both the co-owner and Imperial may sell their respective interests in the "Motel Business."
On June 3, 1965, Imperial filed a petition for an arrangement under Chapter XI of the Bankruptcy Act in the New Jersey District Court. The petition was amended to comply with Chapter X when the New Jersey Court granted the Securities and Exchange Commission's motion to intervene and to dismiss the Chapter XI proceeding unless it was so amended. A Trustee who took over the operation of Imperial's business was appointed on February 21, 1966. The New Jersey District Court issued an order which restrained all actions against Imperial in law or in equity and the issuance of any process or conduct of any proceeding which would interfere with the Trustee's possession of Imperial's property.*fn3
More than three years after the appointment of the Trustee by the New Jersey Court, the Kuballs filed a petition on behalf of the partnership for partnership bankruptcy proceedings in the District Court for the Western District of Michigan.*fn4 The petition was filed without the prior knowledge of the Trustee in the New Jersey reorganization and without permission of the New Jersey District Court. A subpoena to nonjoining partners, dated April 24, 1969, summoned Imperial to appear and plead in the partnership bankruptcy proceedings. Because he was in California on Imperial's business, the Trustee filed a petition requesting a new date for such appearance. Following instructions from the New Jersey Court, the Trustee went to the Referee in Bankruptcy in the Michigan District Court and informed him and the Kuballs' counsel of the reorganization proceedings in New Jersey, and the restraints issued by the New Jersey Court.
The Referee in Michigan nevertheless issued a notice scheduling a meeting of creditors on June 6, 1969. On May 28, 1969, the Trustee filed in the New Jersey reorganization court a petition to restrain the prosecution of the partnership bankruptcy proceedings in the Benton Harbor Motel matter. On the same day, Judge Shaw issued a temporary restraining order and an order to show cause why the Kuballs should not be permanently enjoined from continuing the prosecution of the partnership bankruptcy proceedings in Michigan.
On June 9, 1969, the Kuballs appeared by counsel in New Jersey. The Kuballs stated that they believed the Michigan proceedings would continue on June 16, 1969. Judge Shaw continued the hearing until June 23, 1969, to allow all parties additional preparation time. On June 11, 1969, Judge Shaw filed an order continuing the restraints and enjoining the bankruptcy in Michigan until a further determination was made in the New Jersey Court. On the same day, the Trustee was informed by the Referee in Michigan that the hearing scheduled for June 16, 1969, in Michigan was to be held unless the Kuballs agreed to an adjournment. The Trustee then filed with the reorganization court a supplemental petition to restrain the partnership bankruptcy proceedings instituted in Michigan, and to transfer it to New Jersey. On June 12, 1969, Judge Shaw issued a temporary restraining order and an order directing the Kuballs to show cause on June 23, 1969, why the partnership bankruptcy proceedings should not be transferred to and consolidated in the New Jersey proceedings. At the direction of the New Jersey Court, the Trustee appeared before the Referee in Michigan on June 16, 1969. An offer was made by the New Jersey Trustee to pay in full all claims accruing at Benton Harbor after June 3, 1965. This same offer was also made before Judge Shaw. The offer was refused by the Kuballs. The Michigan Referee then adjourned the hearing until July 9, 1969.
The Kuballs failed to appear at a hearing before Judge Shaw. Scheduled for June 23, 1969. On June 27, 1969, Judge Shaw filed an order transferring the proceedings instituted in the Michigan District Court to the New Jersey District Court. On July 9, 1969, the Kuballs applied for a stay of the order of transfer, stating that notice of the proceedings to transfer, or of the order itself had not been given to partnership creditors. Judge Shaw filed a notice to creditors on July 16, 1969, with copies to the partnership creditors listed in the Kuballs' partnership petition. After considering the responses to the notice, the New Jersey reorganization court issued a Memorandum and Order dated August 12, 1969, affirming its order of transfer dated June 27, 1969.
The Kuballs appealed to this Court from Judge Shaw's order of June 27, 1969.*fn5 They advance two basic contentions: (1) the New Jersey reorganization court did not have jurisdiction to enjoin the Michigan bankruptcy proceeding because Imperial had no property interest in the assets of the Benton Harbor Motel partnership -- these assets they contend are the property of the partnership, an entity separate and distinct from each partner;*fn6 and (2) the New Jersey Court had no jurisdiction to transfer the Michigan proceeding to New Jersey under the language of section 32a of the Bankruptcy Act.*fn7
The problems in the case stem to a considerable extent from the form of Imperial's business organization. Imperial's principal business is operated through numerous partnerships in which Imperial has the controlling interests. The normal procedure of Imperial was to recruit a co-owner operator and enter into a partnership agreement for the operation of a motel, which Imperial would finance, construct (on a site selected by it and approved by the co-owner operator) and completely furnish in conformity with its chain standards and specifications. The motels are "uniform in architecture and design, color coordination and appearance." Operation of the motels is in keeping with the chain concept. Each co-owner operator attends a standard training course in all phases of motel operations given by representatives of Imperial. Imperial sets "standards, procedures, rates and operating budgets." One percent of gross revenues from each motel must be paid into a fund for "chain advertising and * * * room sales development and standardization to benefit all motels in the chain." There is a nationwide referral system and national advertising. Co-owner operators are given a license to use certain trade names, designs and slogans identifying the chain.
The Kuballs' contention that unless Imperial has title to the assets of the Michigan motel partnership the New Jersey reorganization court may not interfere with the proceeding, is a far too restrictive view of the jurisdiction of a reorganization court and of the general policy underlying Chapter X. A complete reorganization of the affairs of Imperial cannot be accomplished in one proceeding if each individual partnership must be liquidated in different courts.
A reorganization court is vested, under § 111 of the Bankruptcy Act, with "exclusive jurisdiction over the debtor and its property." The definition of property for bankruptcy purposes and the authority of a reorganization court over a debtor's property have been interpreted broadly. See e.g. In re International Power Securities Corporation, 170 F.2d 399 (3d Cir. 1948); In re Pittsburgh Rys. Co., 155 F.2d 477, 483-485 and n. 15 (3d Cir. 1946) cert. denied, sub nom. Philadelphia Co. v. Guggenheim, 329 U.S. 731, 67 S. Ct. 89, 91 L. Ed. 632. Cf. New Haven Inclusion cases, 399 U.S. 392, 90 S. Ct. 2054, 26 L. Ed. 2d 691 (1970). This Court's decision in International Power Securities explained the broad injunctive powers inherent in the reorganization court by virtue of its equity nature as a bankruptcy court. In that case, Judge Kalodner stated the standard which is appropriate for considering the propriety of the New Jersey Court's action:
"Bankruptcy proceedings are inherently proceedings in equity. Reorganization proceedings under the Bankruptcy Act are 'special' proceedings which seek only to bring about a reorganization. The tendency of judicial interpretation of the Act has been in the direction of progressive liberalization in respect of the operation of the bankruptcy power so as to meet the challenge of present day economics and business conditions. * * * Among the powers granted under the Act are the collection and distribution of the estates of bankrupts and the determination of controversies in relation thereto." 170 F.2d at 402.
See also Continental Illinois National Bank & Trust Co. of Chicago v. Chicago Rock Island and Pacific Ry. Co., 294 U.S. 648, 675, 55 S. Ct. 595, 79 L. Ed. 1110 (1935).
A prime consideration in determining whether a court may interfere with another proceeding which will affect the reorganization of the debtor, is the general policy of the reorganization statute: "that the entire administration of an estate should be centralized in a single reorganization court." Duggan v. Sansberry, 327 U.S. 499, 511, 66 S. Ct. 657, 662-663, 90 L. Ed. 809 (1946). See also In re Cuyahoga Finance Co., 136 F.2d 18, 21 (6th Cir. 1943). It is true, as the Kuballs contend, that "Congress did not give the bankruptcy court exclusive jurisdiction over all controversies that in some way affect the debtor's estate." Callaway v. Benton, 336 U.S. 132, 142, 69 S. Ct. 435, 93 L. Ed. 553 (1949); In re South Jersey Land Corp., 361 F.2d 610 (3d Cir. 1966). But, a "reorganization court can and should enjoin the prosecution of any suit which would take from it the decision of any question which it has the duty to decide in connection with the reorganization or which would hamper it in any way in exercising the power imposed upon it by Chapter X." First National Bank in Houston, Texas v. Lake, 199 F.2d 524, 528 (4th Cir.), cert. denied, 344 U.S. 914, 73 S. Ct. 337, 97 L. Ed. 705 (1952). The power of the reorganization court over the "estates of bankrupts and the determination of controversies in relation thereto" exists though the debtor does not have title to the property in question. In re International Power Securities Cor., 170 F.2d at 402. See also In re Burton Coal Co., 126 F.2d 447 (7th Cir. 1942).
In order to effectuate the purpose of Chapter X proceedings -- "to render the authority and control of the reorganization tribunal paramount and all-embracing to the extent required to achieve the ends contemplated by Chapter X; and to exclude any interference by the acts of others or by proceedings in other courts where such activities or proceedings tend to hinder the progress of reorganization" [6 Collier on Bankruptcy para. 3.03, p. 424 (14th Ed.)] -- this Court has indicated that traditional concepts of property, title and separate entities may Co., 155 F.2d at 485; New York Trust Company v. New York and Greenwood Lake Ry. Co., 156 F.2d 701 at 704.*fn8
A liquidation of the partnership in Michigan -- the sole business of which is the Benton Harbor Motel -- would undoubtedly affect the debtor's estate and its reorganization prospects. Imperial has a 75% interest in the partnership and, as Judge Shaw noted, a liquidation of the partnership would necessarily result in the distribution of Imperial's interest. As a partner, Imperial would be liable for partnership debts which cannot be paid from partnership assets. Such a liquidation or similar liquidations of other motel partnerships in other bankruptcy courts would also break the chain of motels which constitute Imperial's principal business. Thus even though it may be argued that Imperial does not have title under the traditional concept of partnership property to the partnership assets, which consist solely of the motel business, the situation is one where the entire business organization should be treated as "one entity for purposes of reorganization." Pittsburgh Rys., 155 F.2d at 485.
The Kuballs maintain that the New Jersey court's exclusive jurisdiction over the "property" of Imperial under § 111 of the Bankruptcy Act extends only to the kind of property for which title passes to the trustee upon appointment in bankruptcy under § 70(a) of the Bankruptcy Act (11 U.S.C.A. § 110), and that Imperial does not have such title to the assets of the Michigan partnership. Section 70(a) (5) states that the trustee has title to "property, including rights of action, which prior to the filing of the petition * * * could by any means have [been] transferred * * * levied upon, or sold under judicial process * * *."
"The main thrust of § 70a(5)," the Supreme Court has said, "is to secure for creditors everything of value the bankrupt may possess in alienable or leviable form when he files his petition. To this end the term 'property' has been construed most generously and an interest is not outside its reach because it is novel or contingent or because enjoyment must be postponed." Segal v. Rochelle, 382 U.S. 375, 376, 379, 86 S. Ct. 511, 515, 15 L. Ed. 2d 428 (1966). Grappling with the word "property," the Supreme Court recognized that its meaning in the Bankruptcy Statute does not depend upon traditional concepts. In Segal the Court said: "'it is impossible to give any categorical definition to the word "property," nor can we attach to it in certain relations the limitations which would be attached to it in others.' Fisher v. Cushman, 1 Cir., 103 F. 860, 864, 51 A.L.R. 292. Whether an item is classed as 'property' by the Fifth Amendment's Just-Compensation Clause or for purposes of a state taxing statute cannot decide hard cases under the Bankruptcy Act, whose own purposes must ultimately govern." 382 U.S. at 379, 86 S. Ct. at 515.
If we interpret "property" in view of this standard and the purpose of the reorganization statute, Imperial has a property interest in the Michigan motel business which is within the exclusive jurisdiction of the reorganization court.
The Agreement between the Kuballs and Imperial states they are tenants-in-common in the "Motel Business." The Motel Business and the partnership are identical. Imperial had the unrestricted right to transfer its interest. Thus the interest is alienable and the language of section 70(a) (5) and Segal v. Rochelle is satisfied.*fn9
As previously noted, the "separate entity" concept does not invariably preclude a reorganization court's jurisdiction. Pittsburgh Rys. Co., supra, New York Trust Co. v. New York & Greenwood Lake Ry. Co.,*fn10, supra. The entity theory is not inflexible in a partnership. A partnership may be an entity for some purposes and not for others. See Charles Edward & Associates v. England, 301 F.2d 572, 574 (9th Cir. 1962);*fn11 Mason v. Mitchell, 135 F.2d 599, 600 (9th Cir. 1943). When, as in this case, the partnership business is an integral part of the debtor's entire business operation and the creditors of the partnership are also creditors of the debtor, the artificial concept of a separate entity should not hinder the reorganization of the debtor in a single proceeding.
The Bankruptcy Act contemplates jurisdiction of the partners and partnership in the same court. Section 5(c) of the Bankruptcy Act (11 U.S.C. § 23(d)) provides: "The court of bankruptcy which has jurisdiction of one of the general partners may have jurisdiction of all the general partners and of the administration of the partnership and individual property." The Kuballs' argument that there is no jurisdiction in the New Jersey Court over the partnership or partnership property is therefore without merit. The New Jersey Court in the Chapter X proceeding had jurisdiction of Imperial, a partner; it also had jurisdiction of each of the partnership motels.
The Kuballs' construction of § 32(a) of the Bankruptcy Act is also without merit. This section provides that when petitions are filed by or against different members of a partnership in different courts of bankruptcy each of which has jurisdiction, "the cases shall by order of the court first acquiring jurisdiction be transferred to and consolidated in the court which can proceed * * * with the greatest convenience of parties in interest."
The Kuballs contend that the Michigan bankruptcy petition was filed by or against the partnership, and the reorganization petition by a partner, Imperial. Therefore, there were not two petitions by or against different members of a partnership. The fact, however, is that the bankruptcy petition was filed by the Kuballs, a partner, and the reorganization petition by Imperial, a partner. Thus, petitions were filed "by or against different members of a partnership in different courts."*fn12 Accordingly, the Court first acquiring jurisdiction properly "transferred to and consolidated" the proceedings for the "greatest convenience of the parties in interest."
The Kuballs do not press the argument that the transfer was not for "the greatest convenience of the parties," and we can find no reason to upset the determination of the New Jersey District Court that this was so.
The order of the District Court will be affirmed.
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Bear Stearns settlement16 Dec 2005
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Bear Stearns agrees to pay $250m in fund case
Bear Stearns said on Thursday that it would pay $250m (€208m) to regulators to settle accusations that it engaged in abusive mutual fund trading practices.
The settlement caps lengthy and arduous negotiations among the firm, the Securities and Exchange Commission and the New York Stock Exchange, and makes Bear Stearns the last major Wall Street firm to pay fines in connection with improper fund trading practices first uncovered by Eliot Spitzer, the New York attorney general, in 2003.
The fine is a steep one, representing more than half of the firm's net profit for the fourth quarter, which it reported on Thursday as $407m, or $2.90 a share, an increase of 15% over the quarter a year ago. Robust trading results helped drive the firm's gains.
Bear's its revenue from investment banking fell 46% to $231.2m from $424.7m. The reason for the drop: In the year-ago quarter, it logged almost $200m in merchant-banking revenue, primarily from the sale of shares in New York & Co.
The bank's fixed-income capital-markets net revenue was $838.6m, up 18% from a year ago and 13% from the previous quarter. Its institutional-equities net revenue was $372.6m, up 25% and 12%, respectively.


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Score +61
Deal DetailsLast Edited by widgit September 20, 2015 at 03:49 PM
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But then again, the 2nd gen moto 360 didn't resolved the flat tire issue so I guess it's here to stay... the only iffy thing is the CPU. Like seriously, why did they chose that while everyone else had a reasonable mind to get the more current SnapDragon 400?


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8 posts tagged with campaign and CampaignFinance.
Displaying 1 through 8 of 8. Subscribe:
Koch Brothers, where art thou?
In case you were wondering about [a conspicuous lack of] the Koch Brothers' involvement in the 2016 US political elections, here is the inside scoop. [more inside]
How 'Dark Money' Shapes US Politics
Jane Mayer takes on the Koch Brothers [1,2,3] - "For decades, billionaire libertarians Charles and David Koch have spent millions trying to reduce the size of government and slash regulations, making the brothers a target of the political Left and campaign finance reformers. But few people have dug deeper into the Koch empire and family history than New Yorker staff writer Jane Mayer, author of the new book 'Dark Money'. Among other revelations, she alleges that the brothers hired private detectives to investigate her after she published articles critical of them. We talk to Mayer about the book and about what the rise of Donald Trump means for the Kochs and their allies." (previously)
'We Are Koch'
Kochs Plan to Spend $900 Million on 2016 Campaign - "an unparalleled effort by coordinated outside groups to shape a presidential election that is already on track to be the most expensive in history... These donors represent the largest concentration of political money outside the party establishment, one that has achieved enormous power in Republican circles in recent years. Now the Kochs' network will embark on its largest drive ever to influence legislation and campaigns across the country, leveraging Republican control of Congress and the party's dominance of state capitols to push for deregulation, tax cuts and smaller government."
McCutcheon v. FEC
Supreme Court to consider lifting campaign contribution limits. Reversing McCutcheon v. Federal Election Commission would allow unlimited individual campaign contributions.
Follow the money. I'll keep you in the right direction if I can, but that's all. Just... follow the money.
It's time to find out who owns your democracy, and how they bought it. Do you feel like US campaign finance is hopelessly shrouded in mystery? Fear not citizen, there's a website for that: The Center for Responsive Politics has made available a well-organized, highly detailed database of their analysis of US campaign finance to shine a bright nonpartisan light on the green underbelly of US democracy. [more inside]
Campaign Finance Bites the Hand That Made It
Last year, as McCain's campaign seemed stumbling into the grave, it applied for federal matching funds for the primary season. After Super Tuesday, McCain withdrew from the system. Or did he? If he didn't, he's capped at $54 million to spend till September -- and he's already spent $50 million of it. Former FEC Chairman Brad Smith tells, in bravura detail, the whole whirling story. (via Election Law Blog) [more inside]
New Supreme Court Opinions
A very big day for the Supreme Court. In Morse v. Fredrick, the Court ruled that a school could suspend a child for holding up a "Bong HiTs for Jesus" banner. (Previous post here). In Hein v. Freedom from Religion, the Court held that taxpayers lacked standing to challenged Faith Based Initiatives (previous discussions). In Wilke v. Robbins, the Court held that land owners do not have Bivens claims if the federal government harasses landowners for easements. In FEC v. Wisconsin Right to Life, the Court held that the portion of the campaign finance law which had blackout periods before elections on issue advocacy advertising was an unconstitutional restriction of speech (other). This Thursday, the Justices will deliver their last opinions of the term, including a death penalty case and the school assignment cases. (Opinions are .pdfs)
Is this a real chance at campaign finance reform
Is this a real chance at campaign finance reform or are we just in for more partisan back and forth that in the end won't change much of anything? (NY Times link) And how long will the "Enron effect" last?
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