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182 F.2d 316
GILBERT,v.UNITED STATES.
No. 13038.
United States Court of Appeals Fifth Circuit.
May 29, 1950.
Stovall Lowrey, Clarksdale, Miss., for appellant.
Chester L. Sumners, U.S. Atty., Oxford, Miss., for appellee.
Before HOLMES, McCORD and RUSSELL, Circuit Judges.
McCORD, Circuit Judge.
1
Appellant, L. Q. Gilbert, was indicted for an alleged violation of Section 876 of Title 18, U.S.C.A., the indictment charging in substance that on April 11, 1949, he deposited in the mails and caused to be delivered by the Post Office Department to one Howard Gurney a letter containing a threat to injure his reputation, with intent to extort money from him.1
2
On November 17, 1949, appellant was tried and convicted before a jury, and was thereafter sentenced to serve a two year term in the penitentiary. A motion for new trial was overruled.
3
The question confronting us on this appeal is whether there is substantial evidence in the record to support the verdict of the jury as to the guilt of appellant; or whether, as appellant contends, the evidence is wholly insufficient to sustain his conviction and sentence.
4
The material evidence reveals that on April 11, 1949, a letter was deposited in the post office at Clarksdale, Mississippi, and that it was delivered through the United States mail to Howard Gurney at the place where he worked in the same city. The letter charged Gurney with lewd and lascivious misconduct, and contained a threat to injure his reputation and expose him publicly unless he carried out certain instructions regarding the payment of money.2
5
Gurney testified that he received two unidentified telephone calls regarding the anonymous letter, one of which was received about two or three days before the letter was delivered, and the other on the day the letter arrived. He stated that in the second conversation the caller remarked, 'this is Frank'; that although the voice of that party and that of appellant were somewhat similar, he was not sure whether they were the same. In any event, shortly after receiving the letter, Gurney took it to the police headquarters at Clarksdale, and turned it over to the Chief of Police. This officer ordered one of his detectives, Ben Keesee, to go to the place designated in the letter at the appointed hour on the night of the suggested delivery, and to wait there in hiding until whoever was attempting the extortion arrived. It was arranged that Gurney would drive in his car to the appointed place at that time with a dummy package, and that the Chief of Police would follow.
6
In accordance with the above arrangement, Keesee went to the designated rendezvous a few minutes before the appointed time for delivery of the money. He secreted himself in the weeds behind the signboards about 8 o'clock in the evening. It was pitch dark and raining at the time he arrived. After he had been watching and waiting for approximately fifteen or twenty minutes, by means of the street lights and the lights from passing cars he was able to observe a man coming down the road in the direction of the signboards. He knew the defendant, but did not recognize him at that time because of the darkness. He watched him cross the Tenth Street Bridge, climb through a barbed wire fence along the side of the road, and go behind the signboards. There is a conflict in the testimony as to what happened thereafter, the defendant testifying that he went behind the signboard to 'take a leak' while on his way home, and that Keesee arrested him as soon as he arrived. The officer, however, testified that he waited for several minutes after the defendant arrived upon the scene and hid himself behind the signboards; that he did not flash his light upon the defendant and arrest him until he came out from behind the signboards upon the arrival of Gurney in his automobile. By that time the Chief of Police had arrived, and the defendant was searched. According to the testimony of the officers, the search of defendant's person revealed that he was carrying some groceries, keys, a knife, some coins, and a small piece of cardboard in his pocket upon which was written some words of similar import to the language of the extortion letters, as follows: 'fail to do this and we will ruin you in this town. You will not be bothered again. We have potential clientel that is sufficient at 200 per. Wed. night at 8:30 across tenth st. bridge.'
7
The defendant testified in his own behalf and denied that he wrote or mailed the Gurney letter; denied that he ever called Gurney over the telephone; and stated that the piece of cardboard with the above writing on it was not taken from his pocket, but intimated that it was probably placed there by the police officer, Keesee, who he claims was prejudiced against him because of some trouble between their families. In explanation of his presence behind the signboard at the appointed hour, he offered testimony to the effect that between 6:30 and 7 o'clock on the evening of his arrest, he had taken a taxi out to a grocery store not far from the signboards to read some magazines, and talk to the proprietor; that after he had been there an hour or more he tried to get a taxi to take him home, but that due to rain they were all busy; whereupon he decided to walk home; that around 8 o'clock or a little after he started walking away from the store and in the direction of the bridge and signboards, several hundred feet away; that upon approaching the signboards he felt the call of nature, and that he therefore climbed through the barbed wire fence in order to go behind the signboards and urinate; that as soon as he got behind the signboards, the officer Keesee apprehended him and kept him in custody at the point of a gun for several minutes until Gurney and the Chief of Police arrived. However, other Government testimony reveals that the defendant was the only person other than the police officers who showed up at the designated rendezvous at the time suggested in the extortion letter; that the defendant was unemployed at the time the letter was written and on the date of his arrest; that he did not travel by a direct route toward his home on the evening of his arrest, but traveled in almost the opposite direction, constantly moving toward the designated place for delivery of the money; and that, although in walking from the grocery store to the Tenth Street Bridge he had passed two filling stations, he then felt no desire to relieve himself, but found it necessary to turn off on a dark road and rainy night, and to crawl through a barbed wire fence and down a steep embankment, in order to arrive at the suggested place at almost the exact moment that one would have been there who had written and mailed the Gurney letter. Moreover, a search of the defendant's room after his arrest revealed that he possessed some envelopes purchased from a local ten cent store, of the same type as the envelope in which the extortion letter was mailed; and that he also kept a circular card in his room advertising for a fugitive whose first name was 'Frank', the same name used by the party who had made the second call to Gurney concerning the extortion letter.
8
The evidence in this case points unerringly to the guilt of this defendant, and we are not warranted in overturning the verdict. Holmes v. United States, 8 Cir., 134 F.2d 125, 130; Kowalchuk v. United States, 6 Cir., 176 F.2d 873, 876; Jelaza v. United States, 4 Cir., 179 F.2d 202; see also, Franks v. United States, 8 Cir., 164 F.2d 795; Battjes v. United States, 6 Cir., 172 F.2d 1, 5.
9
The charge of the trial court was in all respects full and fair, and substantially preserved for the jury every issue in the case. Moreover, no objection was made to such charge by the Government or the defendant.
10
We do not consider or pass upon the question of whether appellant should be granted a new trial on the ground of the alleged newly discovered evidence. The motion to remand upon this ground is therefore overruled, without prejudice to the right of appellant to have his motion presenting this issue considered and passed upon by the district court within the time allowed.
11
We find no reversible error in the record, and the judgment is accordingly
12
Affirmed.
1
The indictment reads as follows: 'On or about 11 April 1949, L. Q. Gilbert in Coahoma County, in the Northern District of Mississippi, with intent to extort money and other things of value from Howard Gurney, did knowingly deposit in the United States Post Office at Clarksdale, Mississippi, for delivery by the Post Office Department, and did cause to be delivered to Howard Gurney a communication, being a letter addressed to 'Mr. Howard Gurney, c/o Wason Nash Co., Clarksdale, Miss. Personal,' containing a threat to injure the reputation of the said Howard Gurney, and in violation of Section 876 of Title 18, United States Code.'
2
The letter reads as follows:
'Mr. Gurney
'We have been checking your movements for several months now and we are ready to collect from you, as we have from other prominent men which could not afford to have their rep. ruint. You have been keeping company with negro women you have made contact with these race women at 127-11th St. Cora Stantons. You were there last wk Tuesday in a new Nash. We know these negro women by name, we also know you want (and did) to go down on you. We know will ella.
'Now we have two letters wrote on typewriter, in case you fail to cary out instructions we will send one to Mr Wason and one to your inlaws. they go more in detail facts- places, actions, carno's such as 28-031-P etc.
'Go to bank tuesday get 200/pp in 10 & 20 bills, tuesday nite at 830 drive across 10th st bridge, go slow at the south end of bridge throw it out as far as you can in front of the second bill board on the right side of the hi-way.
'Have it in a white paste board box with a wate so you can toss it. My partner stand's ready to mail those typed letters if you fail. We only collect once, there are plenty more. we get one by one.
'Fail and we will see that you are ruint in this town.'
'F'
On the reverse of the second page of the letter was written:
'You are our 15th in one year'.
The envelope was small and white, with a 3 cents stamp attached. It was postmarked 'Clarksdale, Miss., Apr. 11, 1949, 12 M' and addressed to 'Mr. Howard Gurney, c/o Wason Nash Co., Clarksdale, Miss.' 'Personal'.
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FILED
United States Court of Appeals
Tenth Circuit
June 5, 2009
UNITED STATES COURT OF APPEALS
Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee, No. 07-2154
v. (D. of N.M.)
JUAN MANUEL CARBAJAL- (D.C. No. CIV-06-301-JC)
MORENO,
Defendant-Appellant.
ORDER AND JUDGMENT *
Before HENRY, TYMKOVICH, Circuit Judges, and LEONARD, District
Judge. **
Juan Manuel Carbajal-Moreno appeals the dismissal of his petition for
habeas corpus. The district court concluded the petition was untimely because
Carbajal missed the one year statute of limitation required under 28 U.S.C.
§ 2255. Because we conclude that Carbajal timely filed his petition within one
*
This order and judgment is not binding precedent except under the
doctrines of law of the case, res judicata and collateral estoppel. It may be cited,
however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th
Cir. R. 32.1.
**
The Hon. Timothy D. Leonard, United States District Court Judge for
the Western District of Oklahoma, sitting by designation.
year of the completion of his direct appeal, we REVERSE the district court’s
order and remand for further proceedings.
I. Background
Carbajal was indicted in 2001 on eight counts relating to drug possession
and distribution. A jury convicted him of all counts, and the district court
sentenced him to concurrent prison terms of 262 months on each count. Carbajal
timely appealed his convictions on two of the counts.
We reversed on one of the counts, a conspiracy charge, on double jeopardy
grounds, but affirmed a related continuing criminal enterprise conviction. We
remanded the case to the district court and ordered it to “vacate the conspiracy
conviction . . . and to adjust Carbajal-Moreno’s sentence accordingly.” United
States v. Carbajal-Moreno, 87 F. App’x 700, 706 (10th Cir. 2004) (Carbajal-
Moreno I).
During the time the case was before the district court on remand, and 35
months after the jury verdict, Carbajal filed a Rule 33 motion for new trial based
on newly discovered evidence, alleging that “sometime after his convictions were
entered he discovered that his trial attorney surrendered his Bar license prior to
trial,” United States v. Carbajal-Moreno, 136 F. App’x 163, 164, 167 (10th Cir.
2005) (Carbajal-Moreno II), and that his representation was therefore ineffective
under the Sixth Amendment. The district court denied the motion in July 2004,
-2-
reasoning that ineffective assistance of counsel claims are ordinarily best pursued
in collateral proceedings.
On August 4, 2004, the district court entered its amended judgment in the
remand proceedings, vacating the conspiracy conviction and sentencing Carbajal
to concurrent terms of 262 months for each of the remaining counts. 1 Carbajal
filed a notice of appeal on August 11, 2004, stating his “intent to appeal to the
United States Court of Appeals for the Tenth Circuit from the attached August 10,
2004 Amended Judgment and the July 28, 2004 order.” Dist. Ct. R. Doc. 457
(August 11, 2004). We affirmed the dismissal of Carbajal’s Rule 33 Motion in
June 2005, although our order did not specifically discuss the amended judgment.
Carbajal-Moreno II, 136 F. App’x at 164–67.
In April 2006, Carbajal initiated this § 2255 collateral action to pursue his
ineffective assistance of counsel claim. The magistrate judge recommended
dismissing the petition as time-barred. The district court adopted the magistrate
judge’s recommendation and dismissed the action. Carbajal now appeals.
II. Discussion
Carbjal’s § 2255 motion was timely because he filed it within one year of
the final judgment in his case. We review the district court’s determination that a
1
The district court filed an additional amended judgment on August 10,
2004, correcting a clerical mistake.
-3-
§ 2255 motion is time-barred de novo. See United States v. Cox, 83 F.3d 336,
338 (10th Cir. 1996).
A.
“A motion by a federal prisoner for postconviction relief under 28 U.S.C.
§ 2255 is subject to a one-year time limitation that generally runs from ‘the date
on which the judgment of conviction becomes final.’” Clay v. United States, 537
U.S. 522, 524 (2003) (citing § 2255). 2 In the context of post-conviction relief
and the Antiterrorism and Effective Death Penalty Act (AEDPA), “[f]inality
attaches when [the Supreme] Court affirms a conviction on the merits on direct
review or denies a petition for a writ of certiorari, or when the time for filing a
certiorari petition expires.” Id. at 527; United States v. Burch, 202 F.3d 1274,
1277 (10th Cir. 2000). In other words, a conviction becomes final upon the
completion of direct review. Burch, 202 F.3d at 1277.
Where a defendant does not file a petition for writ of certiorari, direct
review is completed and the decision becomes final when the time for filing a
certiorari petition expires—ninety days after the court of appeals issues its
judgment. Burch, 202 F.3d at 1279. Furthermore, when a defendant does not
appeal a district court judgment to the court of appeals, that judgment becomes
final when the time to appeal the judgment expires—ten days after the district
2
Section 2255 provides that the one-year period begins on the latest of four
events; the relevant event in this case, as is generally the case, is the date the
judgment of conviction became final. § 2255; Clay, 537 U.S. at 525.
-4-
court issues its judgment. See United States v. Prows, 448 F.3d 1223, 1227–28
(10th Cir. 2006); Moshier v. United States, 402 F.3d 116, 118 (2d Cir. 2005)
(“We . . . hold that, for purposes of § 2255 motions, an unappealed federal
criminal judgment becomes final when the time for filing a direct appeal
expires.”).
The question here is when Carbajal’s conviction became final: after we
reversed and remanded for resentencing, or after the district court issued its
amended judgment and any appeal thereof was complete. The government argues
the conviction became final ninety days after our February 5, 2004 decision
affirming in part and reversing in part his initial appeal. Carbajal-Moreno I, 87
F. App’x at 706. Carbajal, however, contends his conviction could not have
become final until after the district court issued its decision on remand since we
ordered the district court to “vacate the conspiracy conviction” and “adjust the
sentence accordingly.”
We agree with Carbajal. The Supreme Court recently considered a similar
question in Burton v. Stewart, 549 U.S. 147, 156 (2007). There, the Court
explained that a case on remand for resentencing was not final for purposes of
habeas proceedings arising from state court convictions until the resentencing and
the direct appeal thereof were complete: 3
3
The issue in Burton was whether the petitioner’s habeas petition should
be dismissed as an unauthorized successive petition pursuant to § 2244(b). 549
(continued...)
-5-
Burton . . . contends that had he not filed the 1998 petition when he did,
and instead waited until state review of his sentencing claims [—on remand
for resentencing and on direct appeal of the amended sentence—] was
complete, he risked losing the opportunity to challenge his conviction in
federal court due to AEDPA’s 1-year statute of limitations. . . . But this
argument misreads AEDPA. . . . Burton’s limitations period did not begin
until both his conviction and sentence ‘became final by the conclusion of
direct review or the expiration of the time for seeking such review.”
Id. (citation omitted) (emphasis added).
Other circuits have reached the same conclusion under § 2255. See United
States v. Messervey, 269 F. App’x 379, 381 (5th Cir. 2008) (addressing a motion
under § 2255 and concluding that “[i]n light of Burton, we hold that in cases in
which a defendant’s conviction is affirmed on appeal but the case is remanded for
re-sentencing, the defendant’s conviction becomes final for limitations purposes
under the AEDPA when [ ] both the conviction and sentence become final by the
conclusion of direct review or the expiration of time for seeking such review.”);
see also United States v. Lafromboise, 427 F.3d 680, 683–84 (9th Cir. 2005);
3
(...continued)
U.S. at 149. The Burton Court found that the petition was a successive petition
because the petitioner was contesting the same custody imposed by the same state
court judgment as he previously contested in a petition filed several years before.
See id. at 155–56. The Burton Court addressed the AEDPA limitations period in
response to the petitioner’s argument that if he had waited to file his first habeas
petition until state court review of his sentencing claims was complete, he risked
losing the opportunity to challenge his conviction in federal court pursuant to the
one-year statute of limitations. See id. at 156. The Court rejected the petitioner’s
argument, finding that the AEDPA limitation did not begin to run until direct
review of Burton’s conviction concluded. Id.
-6-
United States v. Colvin, 204 F.3d 1221, 1224-26 (9th Cir. 2000) (explaining legal
and policy rationale for clear rule of finality).
This logic is also consistent with our case law. For example, in United
States v. Burch we explained that “read in the context of the AEDPA, § 2255’s
use of ‘final’ plainly means ‘a decision from which no appeal or writ of error can
be taken.’” 202 F.3d at 1277 (citing Black’s Law Dictionary 629 (6th ed. 1990)).
But an appeal could arise from resentencing. Indeed, “where the appellate court
has not specifically limited the scope of the remand, the district court generally
has discretion to expand the resentencing beyond the sentencing error causing the
reversal.” United States v. Hicks, 146 F.3d 1198, 1200–02 (10th Cir. 1998)
(citation omitted) (explaining that simple commands such as “vacate,” “set aside,”
and “affirm” are not sufficiently specific to limit the district court’s discretionary
power); Ward v. Williams, 240 F.3d 1238, 1243–44 (10th Cir. 2001) (explaining
that under the sentencing packaging doctrine, when one of the counts upon which
a defendant has been convicted is set aside or vacated, the district court is free to
reconsider de novo the sentencing package unless the appellate court specifically
limited the district court’s discretion on remand). As we have clarified, “after we
vacate a count of conviction that is part of a multi-count indictment, a district
court ‘possesses the inherent discretionary power’ to resentence a defendant on
the remaining counts de novo unless we impose specific limits on the court’s
authority to resentence.” Hicks, 146 F.3d at 1202 (citation omitted) (noting that
-7-
the sentencing package doctrine generally permits the district court to resentence
a defendant on convictions that remain after he succeeds in getting one or more
convictions vacated—even if he did not challenge the convictions on which he is
resentenced).
Here, we did not limit the district court on remand. See id. at 1200–02
(holding that despite this court’s failure to remand for resentencing, the district
court had authority on remand to reevaluate the entire sentencing package when
we vacated Hick’s sentence as to one offense and remanded for a new trial on that
offense, but affirmed “in all other respects” the other convictions and sentences,
and nothing in the mandate indicated that we intended to limit the district court’s
ability to resentence on the remaining counts). Therefore, the judgment was not
final until after the district court issued its amended judgment. See United States
v. Johnson, No. 99-5091, 1999 WL 983094 (10th Cir. Oct. 29, 1999) (finding that
Johnson’s conviction became final for AEDPA purposes ten days after judgment
was entered at resentencing—the date on which the time expired to directly
appeal the district court’s order following this court’s affirmance in part, reversal
in part, and remand for resentencing).
B.
The government contends the remand here was merely ministerial,
however, and did not affect the conviction’s finality. The government points to
Burrell v. United States, 467 F.3d 160, 161, 164 (2d Cir. 2006), where the Second
-8-
Circuit deemed ministerial a remand when the court affirmed the conviction and
sentence on one count but remanded the case to the district court to “correct the
judgment to reflect dismissal” of another count. The circuit concluded that its
remand for the entry of an amended judgment was strictly ministerial—it required
a routine, nondiscretionary act by the district court that could not have been
appealed on any valid ground. Id. at 161, 165–66. Finding that “a ministerial
remand does not delay a judgment’s finality because the lower court’s entry of a
corrected judgment could not give rise to a valid appeal,” id. at 164, the court
concluded that Burrell’s conviction became final either when the Supreme Court
denied his petition for a writ of certiorari or when his time for filing a certiorari
petition expired. Id. at 166; see also Richardson v. Gramley, 998 F.2d 463, 465
(7th Cir. 1993); cf. United States v. Wilson, 256 F.3d 217, 218–20 (4th Cir. 2001)
(holding that the statutory period was not tolled by remand for vacatur of a
conviction on one count, after all other counts in judgment of conviction were
affirmed).
We are unpersuaded that these cases apply here. The remand in this case
was not so clearly ministerial that we could expect Carbajal to have concluded
that his conviction became final and his AEDPA limitation period commenced
after we issued our judgment. Instead, our mandate did not limit the district
court’s discretion, and it is possible the reversal of one of the counts of
conviction could have affected the district court’s overall view of the original
-9-
sentence. Our default rule in such cases is that the district court is free to
reconsider de novo the sentencing package unless the appellate court specifically
limited the district court’s discretion on remand. See Hicks, 146 F.3d at 1200–02;
United States v. Keifer, 198 F.3d 798, 801 (10th Cir. 1999); Ward, 240 F.3d at
1243–44.
C.
Consequently, we conclude that the conviction could not have become final
until after the appeal of the district court’s August 4, 2004 amended judgment.
Had Carbajal not filed a timely notice of appeal, his conviction would have
become final ten days after the amended judgment was issued. But Carbajal
timely filed a notice of appeal within ten days of the judgment, on August 11,
2004. His notice of appeal correctly designated the two orders being
appealed—both the denial of his Rule 33 motion and the amended judgment.
The filing of “a notice of appeal generally divests a district court of
jurisdiction over the issues on appeal,” although it retains jurisdiction to consider
certain collateral matters. Prows, 448 F.3d at 1228 (10th Cir. 2006) (citing
Lancaster v. Independent Sch. Dist. No. 5, 149 F.3d 1228, 1237 (10th Cir. 1998)
(sanctions); United States v. Meyers, 95 F.3d 1475, 1489 n.6 (10th Cir. 1996)
(release pending appeal)); see also Fed. R. App. P. 4(b)(5). Indeed, the “court of
appeals acquires jurisdiction of an appeal . . . upon the filing of a timely notice of
appeal.” United States v. Torres, 372 F.3d 1159, 1161 (10th Cir. 2004) (citation
-10-
omitted). Thus, once Carbajal filed his notice of appeal, we assumed jurisdiction
over his appeal of the amended judgment.
It does not matter that on appeal Carbajal ignored the amended judgment
and focused his appellate arguments on the district court’s dismissal of his Rule
33 motion. Under Federal Rule of Appellate Procedure 3(a)(2) “[a]n appellant’s
failure to take any step other than the timely filing of a notice of appeal does not
affect the validity of the appeal, but is ground only for the court of appeals to act
as it considers appropriate, including dismissing the appeal.” Fed. R. App. P.
3(a)(2); see also 20 James Wm. Moore et al., Moore’s Federal Practice
§ 303.31[3] (3d ed. 2009).
In sum, Carbajal filed a timely notice of appeal of both orders entered by
the district court. We completed our direct review on June 20, 2005, affirming
the district court’s denial of the Rule 33 motion. 4 See Burch, 202 F.3d at 1277
(explaining that a decision is not final for AEDPA purposes until direct review
has been completed). Accordingly, Carbajal’s conviction did not become final
until ninety days after our June 2005 decision. Consequently, Carbajal’s § 2255
motion, filed in April of 2006, was timely filed within one year of the date his
conviction became final.
4
Our opinion did not specifically discuss Carbajal’s appeal of the amended
judgment, but it would have been dismissed as a part of our order and judgment.
-11-
For the foregoing reasons, we REVERSE and remand to the district court
for further proceedings.
Entered for the Court
Timothy M. Tymkovich
Circuit Judge
-12-
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Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before any
court except for the purpose of
establishing the defense of res judicata,
collateral estoppel, or the law of the case.
Jan 30 2014, 9:47 am
ATTORNEYS FOR APPELLANT: ATTORNEYS FOR APPELLEE:
DONALD R. SHULER GREGORY F. ZOELLER
Barkes, Kolbus, Rife & Shuler, LLP Attorney General of Indiana
Goshen, Indiana
KATHERINE MODESITT COOPER
Deputy Attorney General
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
JOSEPH K. BUELNA, )
)
Appellant-Defendant, )
)
vs. ) No. 20A04-1305-CR-223
)
STATE OF INDIANA, )
)
Appellee-Plaintiff. )
APPEAL FROM THE ELKHART SUPERIOR COURT
The Honorable Thomas J. Ryan, Judge
Cause No. 20D03-0810-FA-52
January 30, 2014
MEMORANDUM DECISION – NOT FOR PUBLICATION
MATHIAS, Judge
Following a jury trial, Joseph K. Buelna (“Buelna”) was convicted in Elkhart
Superior Court of Class A felony manufacturing methamphetamine and sentenced to fifty
years in the Department of Correction, with twenty years of that sentence suspended.
Buelna appeals and presents three issues for our review:
I. Whether the trial court erred in admitting evidence found in a warrantless
search;
II. Whether the State presented evidence sufficient to support Buelna’s
conviction; and
III. Whether the sentence imposed by the trial court is inappropriate in light of
the nature of the offense and the character of the offender.
We affirm.
Facts and Procedural History
Phil Miller (“Miller”) purchased a house in Goshen, Indiana that had been
repossessed. Miller planned to refurbish and resell the house. As the house was vacant,
Miller boarded it up to prevent damage to the windows. Miller hired Nathan Slabach
(“Slabach”) to work on a detached garage adjacent to the house. Slabach later informed
Miller that he hired the defendant in this case, Buelna, as a subcontractor. Although
Miller saw Buelna working with Slabach, he never actually met Buelna, nor did he ever
give him permission to stay at the house when not working. He did, however, give
Slabach permission to keep some tools at the property. Despite not having permission to
do so, Slabach began to stay overnight at the house. He even kept a television and a few
chairs at the house. While there, he and Buelna also began to manufacture
methamphetamine.
2
One of Buelna’s friends, Kammi Pantoja (“Pantoja”) visited Buelna at the house
owned by Miller approximately ten times in two weeks and used methamphetamine with
Slabach and Buelna. Although the three would stay at the house through the night, they
did not sleep and instead smoked methamphetamine. On October 13, 2008, Pantoja went
to the home to smoke methamphetamine. When she arrived, Buelna and Slabach were
“cooking dope.” Tr. p. 642. Thereafter, Pantoja left with Slabach and drove to another
town, leaving Buelna alone for a few hours.
In the meantime, the police received a call from a concerned citizen informing
them of the manufacture of methamphetamine at the house. The caller told the police
that (s)he had entered the attic of the house and had seen items used to manufacture
methamphetamine, including chemicals, buckets, and bottles with tubing. In response to
this call, Elkhart Police Department Corporal Jeff Eaton arrived at the scene at
approximately 9:30 p.m. and noted the odor of ammonia, which he associated with the
manufacture of methamphetamine. Detective Tim Freel arrived shortly thereafter and
also noticed the odor. Detective Freel also observed that the house appeared to be vacant
and under some construction.
The officer first went to the front door, but noticed through a window that a board
had been set up beneath the doorknob inside the home to barricade the door. They then
went and knocked on the back door, announcing “police,” several times, but no one
answered. Tr. p. 116. As they went to the back of the house, the odor of ammonia
became very intense. They also observed another board inside the home barricading the
back door. They then saw a ladder leaning against the house leading to a second-story
3
window covered by a blue tarp. Inside the window was a light, and the officers could see
the shadow of a person inside.
Before climbing up the ladder, the officers called the police department because of
the strength of the ammonia smell. As Detective Freel climbed the ladder, the smell of
ammonia became so strong that his eyes began to water, and he was in a great deal of
discomfort. He also heard a noise come from inside the window, leading him to believe
that someone was inside. When Detective Freel got to the roof, the wind had blown back
part of the tarp covering the window. Inside, he saw Buelna sitting at a desk and hiding
his hands behind a countertop. Detective Freel drew his sidearm and ordered Buelna to
show his hands. Buelna began to do so but then turned and ran to the other end of the
attic. Detective Freel caught Buelna and handcuffed him.
Inside the attic, the officers discovered a “one-pot” methamphetamine lab in the
middle of the floor. The chemical smell was so strong that Detective Freel eyes watered
profusely, his throat burned, and he even had difficulty breathing. A search of the house
revealed no one else other than Buelna. The police then contacted the owner of the house,
Miller, who arrived at the scene approximately an half-hour later. Miller was not sure
who exactly Buelna was, but did say that he had seen him with Slabach. Miller gave the
police permission to search the property.
Inside the attic, the police found two reaction vessels, a pot, eight used reaction
vessels, pseudoephedrine, several hydrochloric acid generators, lithium batteries, a coffee
grinder, coffee filters, salt, cold packs, a fuel tank, and a pink plastic purse which
contained pseudoephedrine and zip-top bags. Inside the zip-top bags were coffee filters
4
containing a white residue. Also inside the attic was a television, a stolen handgun, and
lawn chairs. The one-pot lab had materials in it undergoing a chemical reaction and
bubbling. One of the other reaction vessels contained a mixture of ephedrine and
pseudoephedrine, and the other held a liquid containing methamphetamine. The liquid in
the reaction vessel was determined to weigh approximately thirteen grams.
As a result, the State charged Buelna on October 17, 2008, with Class A felony
manufacturing methamphetamine and Class B felony burglary. The State later amended
the charging information to allege the use of a firearm during the commission of a
controlled substance offense and alleged that Buelna was an habitual offender. On March
8, 2011, Buelna filed a motion to suppress the evidence seized during the search of the
attic. Buelna claimed that Slabach had been treating Miller’s property as his residence
and that, as Slabach’s guest, he had standing to challenge the search of the property. The
trial court disagreed and concluded that Buelna lacked standing to challenge the search
and further concluded that, even if Buelna did have standing, the warrantless search was
justified by exigent circumstances.
Buelna’s jury trial began on August 22, 2012. On August 24, 2012, the jury found
Buelna guilty of Class A felony manufacturing methamphetamine but acquitted him of
the charge of burglary. The State then dismissed the allegation regarding the use of a
handgun and the habitual offender enhancement. At a hearing held on September 13,
2012, the trial court imposed a sentence of fifty-years, with thirty years executed and
twenty suspended. Buelna now appeals.
5
I. Admission of Evidence Seized During Warrantless Search
Buelna claims that the trial court abused its discretion when it admitted into
evidence the items seized during the warrantless search of Miller’ house. When a
defendant challenges the propriety of a search following a completed trial, the issue is
one of whether the trial court properly admitted the evidence. Casady v. State, 934
N.E.2d 1181, 1188 (Ind. Ct. App. 2010). Questions regarding the admission of evidence
are left to the sound discretion of the trial court, and we review the court’s decision on
appeal only for an abuse of that discretion. Fuqua v. State, 984 N.E.2d 709, 713-14 (Ind.
Ct. App. 2013), trans. denied. The trial court abuses its discretion only where its decision
regarding the admission of evidence is clearly against the logic and effect of the facts and
circumstances before it, or if the court has misinterpreted the law. Id. Regardless of
whether the challenge is made through a pretrial motion to suppress or by an objection at
trial, our review of rulings on the admissibility of evidence is essentially the same: we do
not reweigh the evidence, and we consider conflicting evidence in a light most favorable
to the trial court’s ruling, but we also consider any undisputed evidence that is favorable
to the defendant. Id.
Subject to a few specifically established and well-delineated exceptions, searches
performed by government officials without warrants are per se unreasonable under the
Fourth Amendment. Holder v. State, 847 N.E.2d 930, 935 (Ind. 2006) (citing Katz v.
United States, 389 U.S. 347, 357 (1967)). A warrantless search requires the State to
prove the existence of an exception to the warrant requirement applicable at the time of
the search. Id. But to trigger the protections of the Fourth Amendment, the search must
6
arise out of an intrusion by a government agent upon an area in which the person
maintains a reasonable expectation of privacy. Id. (citing Katz, 389 U.S. at 360).
Accordingly, whether Fourth Amendment protections should be applied embraces a two-
part inquiry: (1) whether a person has exhibited an actual subjective expectation of
privacy; and (2) whether the expectation is one that society is prepared to recognize as
reasonable. Id. at 936 (citing Katz, 389 U.S. at 361).
Buelna claims that he has standing to challenge the search.1 Buelna acknowledges
that he did not have any ownership interest in the Miller house, but claims that the United
States Supreme Court has held that one need not have a formal property interest in the
premises to challenge a search. This statement is true. See Mancusi v. DeForte, 392 U.S.
364, 368 (1968) (“capacity to claim the protection of the [Fourth] Amendment depends
not upon a property right in the invaded place but upon whether the area was one in
which there was a reasonable expectation of freedom from governmental intrusion.”).
Buelna cites Jones v. United States, 362 U.S. 257 (1960), in support of his claim
that he has standing to challenge the search. In Jones, the court held that a visitor to a
friend’s apartment could challenge the search of that apartment. Id. at 267. However, the
so-called “automatic standing” rule of Jones was subsequently overruled by the Court in
1
As a matter of terminology, we have noted before that the United States Supreme Court has rejected the
rubric of “standing” in the context of the ability of a defendant to challenge a search under the Fourth
Amendment. See Allen v. State, 893 N.E.2d 1092, 1096 (Ind. Ct. App. 2008); Jackson v. State, 890
N.E.2d 11, 16 n.1 (Ind. Ct. App. 2008) (both citing Rakas v. Illinois, 439 U.S. 128, 140 (1978)). Instead,
the definition of Fourth Amendment rights is more properly placed within the purview of substantive
Fourth Amendment law than within that of standing. Jackson, 890 N.E.2d at 16 n.1 (citing Willis v. State,
780 N.E.2d 423, 427 (Ind. Ct. App. 2002)). Still, parties and courts often still refer to “standing” when
discussing whether a particular defendant has the right to challenge a search. See Allen, 893 N.E.2d at
1097 n.4 (Ind. Ct. App. 2008).
7
United States v. Salvucci, 448 U.S. 83, 84 (1980). Moreover, even in Jones, the court
noted that the Fourth Amendment does not protect those who are wrongfully on the
premises and therefore cannot invoke the privacy of the premises searched. Here, neither
Slabach nor Buelna had the consent of the owner to be staying in the Miller house; they
simply had permission to work on the garage, and Slabach had permission to store tools
in the house. In fact, Slabach, the only person with any rights concerning Miller’s
property, pleaded guilty to burglary of the house. See Tr. p. 98.
More recently, the Supreme Court has held that, although an overnight guest in
another’s home may challenge the search of the home, one who is merely present with
the consent of the householder may not. Minnesota v. Carter, 525 U.S. 83, 90 (1998).
Here, Buelna was present with the permission of Slabach, who himself did not have
permission to reside in the house. Miller testified that Buelna did not have his permission
to stay in the house and that he certainly did not give either Buelna or Slabach permission
to manufacture methamphetamine in the house.2
Under the facts and circumstances before us, we can only conclude that Buelna
has no standing to challenge the search of the Miller house. Miller owned the home, and
Miller hired Slabach to work on the home. At no time did he ever give Slabach or
anyone else permission to sleep or live in the attic, much less manufacture
methamphetamine. Slabach therefore had no right to be on the property or doing what he
2
Buelna’s citation to the recent decision of our supreme court in Clark v. State, 994 N.E.2d 252 (Ind.
2013), is also unavailing. In Clark, a police officer confronted two men who were living in a rented
storage unit. But the issue in that case was whether the police had a reasonable suspicion to conduct a
Terry stop; it had nothing to do with the reasonable expectation of privacy in a searched premises.
8
was doing at the time of the search. Buelna, who Miller did not even recognize, certainly
did not have Miller’s permission to be in his house. Buelna was essentially a trespasser
on Miller’s property and cannot claim to have a reasonable expectation of privacy in the
house.3 See Fox v. State, 983 N.E.2d 1165, 1168-69 (Ind. Ct. App. 2013) (holding that
defendant had no standing to challenge warrantless search of hotel room where defendant
was located because, although the defendant was an invitee of the hotel manager, he was
not a registered, overnight guest at the hotel and had just been in the room for the day).
Because we conclude that Buelna had no reasonable expectation of privacy, we
need not address whether there were exigent circumstances to justify the search. But
even if we assume arguendo that Buelna had standing to challenge the search, he would
not prevail because we agree with the trial court that there were exigent circumstances
present. In Holder, our supreme court agreed with those courts that have held that “a
belief that an occupied residence contains a methamphetamine laboratory, which belief is
found on probable cause based largely on observation of odors emanating from the home,
presents exigent circumstances permitting a warrantless search for the occupants’ safety.”
Holder, 847 N.E.2d at 939-40 (citing Kleinholz v. United States, 339 F.3d 674, 676-77
(8th Cir. 2003); United States v. Rhiger, 315 F.3d 1283, 1289-90 (10th Cir. 2003); United
States v. Walsh, 299 F.3d 729, 734 (8th Cir. 2002); United States v. Wilson, 865 F.2d
215, 217 (9th Cir. 1989)). Here, the police detected the strong odor of ammonia, which is
3
In his reply brief, Buelna argues that he had a subjective expectation of privacy. But this is not enough.
As noted in Holder, whether Fourth Amendment protections should be applied embraces a two-part
inquiry: (1) whether a person has exhibited an actual subjective expectation of privacy; and (2) whether
the expectation is one that society is prepared to recognize as reasonable. Holder, 847 N.E.2d at 936
(citing Katz, 389 U.S. at 361). Here, the expectation of privacy is one that is not reasonable.
9
associated with methamphetamine manufacturing, and observed that someone was in the
Miller house. Thus, even if Buelna had a reasonable expectation of privacy, the search
was justified by the existence of this exigent circumstance. See Holder, 847 N.E.2d at
939-40.
In short, the trial court did not abuse its discretion in admitting the evidence seized
during the search of the Miller house.
II. Sufficiency of the Evidence
Buelna next claims that the State failed to present evidence sufficient to support
his conviction for Class A felony manufacturing methamphetamine. When reviewing a
claim that the evidence is insufficient to support a conviction, we neither reweigh the
evidence nor judge the credibility of the witnesses; instead, we respect the exclusive
province of the trier of fact to weigh any conflicting evidence. McHenry v. State, 820
N.E.2d 124, 126 (Ind. 2005). We consider only the probative evidence and reasonable
inferences supporting the verdict, and we will affirm if the probative evidence and
reasonable inferences drawn from the evidence could have allowed a reasonable trier of
fact to find the defendant guilty beyond a reasonable doubt. Id.
The statute defining the crime of manufacturing methamphetamine provides in
relevant part that “(a) A person who . . . knowingly or intentionally . . . manufactures . . .
methamphetamine, pure or adulterated . . . commits dealing in methamphetamine, a Class
B felony, except as provided in subsection (b).” Ind. Code § 35-48-4-1.1(a). Subsection
(b) of this statute elevates the offense to a Class A felony if “the amount of the drug
involved weighs three (3) grams or more[.]” I.C. § 35-48-4-1.1(b)(1). Buelna claims that
10
the evidence is insufficient to show that he was actually involved in the manufacture of
the methamphetamine found in the house and that there was insufficient evidence to
establish that the amount of the methamphetamine found weighed more than three grams.
The first of these arguments is easy to dispose of. Buelna notes that Slabach
testified that Buelna was not involved with the manufacture of methamphetamine at the
house. However, Pantoja testified that Buelna was directly involved in the manufacturing
process. See Tr. p. 645 (“Joe [Buelna] was cooking methamphetamine”). Buelna now
claims that “the motivation and persuasion of the Pantoja [sic] is relevant when
evaluating her testimony.” Appellant’s Br. at 22. This is a bald request that we reweigh
Pantoja’s testimony and consider her to be less credible than Slabach. Of course, we will
not do so. See McHenry, 820 N.E.2d at 126. Pantoja’s testimony, when combined with
the fact that Buelna was found alone in an active methamphetamine lab, is sufficient to
prove that he was actually involved in the manufacture of the methamphetamine and not
merely present at the scene.
We also disagree with Buelna that there was insufficient evidence to establish the
amount of methamphetamine he manufactured. Buelna argues that because there was no
finished, solid methamphetamine, the only evidence for weight was for the liquid found
in one of the reaction vessel, which he admits weighed approximately thirteen grams.
Citing Judge Vaidik’s concurring opinion in Harmon v. State, 971 N.E.2d 674 (Ind. Ct.
App. 2012),4 Buelna claims that the use of the unit “grams” in the statute “indicates that it
4
The author of this opinion was the author of the lead opinion in Harmon.
11
is the solid drug that is intended to be measured, not the liquid that is used to manufacture
the drug.” Id. at 683 (Vaidik, J., concurring).
We agree that Judge Vaidik’s concurring opinion in Harmon raises some valid
policy issues; in fact, the statute as written has the potential to punish those who have
completed the manufacturing process and have a dry product less than those who have
yet to complete the process and have a heavier, liquid product. But the statute as written
punishes the possession of methamphetamine “pure or adulterated.” And this court has
held before that “where . . . the intermediate step is so near the end of the manufacturing
process that the final product is present in the chemical compound, that substance
qualifies as an ‘adulterated drug’ for purposes of our manufacturing statutes.” Hundley v.
State, 951 N.E.2d 575, 581 (Ind. Ct. App. 2011), trans. denied; see also Norwood v. State,
670 N.E.2d 32, 37 (Ind. Ct. App. 1996) (holding that the additional weight of water
added to pure cocaine in the process of manufacturing crack cocaine may be considered
when determining the weight of the cocaine); Traylor v. State, 817 N.E.2d 611, 620 (Ind.
Ct. App. 2004) (holding that evidence was sufficient to establish that defendant possessed
over three grams of methamphetamine where evidence showed that defendant was in the
process of producing methamphetamine, and the product in the reaction vessel weighed
well over three grams).
Here, there was evidence that the liquid in the reaction vessels contained the final
product, i.e., methamphetamine. And there was evidence that this liquid weighed well in
excess of three grams. Accordingly, the evidence was sufficient to support Buelna’s
12
conviction for possession of methamphetamine, pure or adulterated, in an amount in
excess of three grams.
III. Appellate Rule 7(B)
Buelna lastly claims that his sentence is inappropriate. Even if a trial court may
have acted within its statutory discretion in imposing a sentence, Article 7, Sections 4 and
6 of the Indiana Constitution authorize independent appellate review and revision of a
sentence imposed by the trial court. Trainor v. State, 950 N.E.2d 352, 355-56 (Ind. Ct.
App. 2011), trans. denied (citing Anglemyer v. State, 868 N.E.2d 482, 491 (Ind. 2007)).
This authority is implemented through Indiana Appellate Rule 7(B), which provides that
a court “may revise a sentence authorized by statute if, after due consideration of the trial
court's decision, the Court finds that the sentence is inappropriate in light of the nature of
the offense and the character of the offender.” Id.
Still, we must and should exercise deference to a trial court’s sentencing decision,
because Rule 7(B) requires us to give ‘due consideration’ to that decision and because we
understand and recognize the unique perspective a trial court brings to its sentencing
decisions. Id. While we have the power to review and revise sentences, the principle
role of our review should be to attempt to level the outliers, and identify some guiding
principles for trial courts and those charged with improvement of the sentencing statutes,
but not to achieve what we perceive to be a “correct” result in each case. Fernbach v.
State, 954 N.E.2d 1080, 1089 (Ind. Ct. App. 2011), trans. denied (citing Cardwell v. State,
895 N.E.2d 1219, 1225 (Ind. 2008)). Our review under Appellate Rule 7(B) should focus
on “the forest—the aggregate sentence—rather than the trees—consecutive or concurrent,
13
number of counts, or length of the sentence on any individual count.” Id. The
appropriate question is not whether another sentence is more appropriate; rather, the
question is whether the sentence imposed is inappropriate. Former v. State, 876 N.E.2d
340, 344 (Ind. Ct. App. 2007). And it is the defendant’s burden on appeal to persuade us
that the sentence imposed by the trial court is inappropriate. Childress v. State, 848
N.E.2d 1073, 1080 (Ind. 2006).
Buelna was convicted of a Class A felony. The minimum sentence for a Class A
felony is twenty years, the advisory sentence is thirty years, and the maximum sentence is
fifty years. Ind. Code § 35-50-2-4. Here, the trial court did impose the statutory
maximum of fifty years. The maximum possible sentences are generally most
appropriate for the worst offenders. Wells v. State, 904 N.E.2d 265, 274 (Ind. Ct. App.
2009), trans. denied. This is not, however, an invitation to determine whether a worse
offender could be imagined, as it is always possible to identify or hypothesize a
significantly more despicable scenario, regardless of the nature of any particular offense
and offender. Id. In stating that maximum sentences are ordinarily appropriate for the
worst offenders, we refer generally to the class of offenses and offenders that warrant the
maximum punishment. Id. But this encompasses a considerable variety of offenses and
offenders. Id. We concentrate less on comparing the facts of this case to others, whether
real or hypothetical, and more on focusing on the nature, extent, and depravity of the
offense for which the defendant is being sentenced, and what it reveals about the
defendant's character. Id.
14
Although the trial court did impose the statutory maximum sentence of fifty years,
it also chose to suspend twenty of those years. Our supreme court has held, when
reviewing the appropriateness of a sentence, appellate courts are not restricted to consider
only the aggregate length of the sentence and may also consider whether a portion of the
sentence is ordered suspended. Davidson v. State, 926 N.E.2d 1023, 1025 (Ind. 2010).5
That is, there is a difference between a fifty year executed sentence and a fifty year
sentence with only thirty years executed.
Considering the nature of Buelna’s offense, we note that he was caught in an
active and on-going methamphetamine lab in the attic of a house where he was
trespassing. Both he and Slabach, instead of assisting Miller in the rehabilitation of the
house, trespassed on it and used it to facilitate the dangerous activity of manufacturing
methamphetamine They also did so in a residential area and produced strong enough
fumes that neighbors could smell the associated odor of ammonia. Buelna also attempted
to flee when the police arrived. None of this helps Buelna meet his burden of showing
that his sentence is inappropriate.
Turning now to the character of the offender, we note that Buelna has a substantial
history of delinquent and criminal behavior. His juvenile record includes adjudications
for criminal mischief, burglary, and theft, and his adult criminal history includes four
prior felony convictions and eleven misdemeanor convictions. His felony convictions
5
Of course, “[t]his does not preclude a reviewing court from determining a sentence to be inappropriate
due to its overall sentence length despite the suspension of a substantial portion thereof. A defendant on
probation is subject to the revocation of probation and may be required to serve up to the full original
sentence.” Id.
15
include burglary, theft, resisting law enforcement, and maintaining a drug house in
Michigan, and his misdemeanor convictions include failure to appear, driving while
suspended, resisting law enforcement, check deception, false informing, criminal
recklessness, and possession of marijuana. When shown lenience in the past, Buelna has
not responded well; he has violated the terms of his probation four different times, once
for escaping while on work release. According to the presentence investigation report,
Buelna was even on probation at the time he committed the instant offense. Thus, Buelna
is a repeat offender who has responded poorly when shown lenience and who was caught,
while on probation, manufacturing methamphetamine in a house that he had no right to
be in. Under these facts and circumstances, Buelna has not persuaded us that trial court’s
sentence of fifty years with twenty years thereof suspended is inappropriate in light of the
nature of Buelna’s offense and his character.
Conclusion
The trial court did not abuse its discretion in admitting evidence seized from the
warrantless search of the house where Buelna was found because Buelna could have no
reasonable expectation of privacy in the house. The evidence was sufficient to establish
both Buelna’s participation in the manufacture of methamphetamine at the house and to
establish that Buelna manufactured more than three grams of pure or adulterated
methamphetamine. Lastly, Buelna’s sentence of thirty years executed and twenty years
suspended is not inappropriate in light of the nature of the offense and the character of the
offender.
Affirmed.
16
BRADFORD, J., and PYLE, J., concur.
17
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448 F.2d 729
Christopher MARTELLA, Appellant,v.MARINE COOKS & STEWARDS UNION, SEAFARERS INTERNATIONAL UNIONOF NORTH AMERICA, AFL-CIO, et al., Appellees.
Nos. 24578, 24579.
United States Court of Appeals,Ninth Circuit.
Sept. 13, 1971.
Ernest E. Sanchez (argued), of Fleming, Robbins & Sanchez, Los Angeles, Cal., for appellant.
Jay A. Darwin (argued), of Darwin & Riordan, San Francisco, Cal., Dennis Daniels, San Francisco, Cal. (argued), for Matson Nav. Co.
Before KOELSCH, DUNIWAY and WRIGHT, Circuit Judges.
PER CURIAM:
1
The district court, following a hearing, dismissed this action for plaintiff's failure to comply with several orders of the court relating to pretrial matters. These orders were based upon various of the Federal Rules of Civil Procedure and local court rules. Plaintiff did not appeal nor pursue any procedure to reinstate the cause until some five months after the dismissal when he filed a motion, ostensibly under Rule 60(b) (6) Fed.R.Civ.P., to be relieved of the judgment. The district court denied him relief, hence this appeal.
2
In order to bring himself within the limited area of Rule 60(b) (6) a petitioner is required to establish the existence of extraordinary circumstances which prevented or rendered him unable to prosecute an appeal. Klapprott v. United States, 335 U.S. 601, 69 S.Ct. 384, 93 L.Ed. 266 (1949); Ackermann v. United States, 340 U.S. 193, 71 S.Ct. 209, 95 L.Ed. 207 (1950). Plaintiff made no such showing.
3
Nor does the record reveal facts, or any fact, which would tend to show that plaintiff's failure to seek review was due to "excusable neglect," a ground for relief under Rule 60(b) (1). To the contrary, it discloses plaintiff's entire lack of diligence and attention to the matter.
4
60(b) motions are addressed to the sound discretion of the district court. Title v. United States, 263 F.2d 28 (9th Cir. 1959). As indicated above, denial of plaintiff's motion was well within that court's discretion. The judgment is therefore
5
Affirmed.
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878 N.E.2d 213 (2007)
LONG
v.
STATE.
Supreme Court of Indiana.
September 25, 2007.
Transfer denied. All Justices concur.
| {
"pile_set_name": "FreeLaw"
} |
OSCN Found Document:STATE v. BLACKSHER
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STATE v. BLACKSHER2016 OK CR 8Case Number: S-2015-801Decided: 04/04/2016STATE OF OKLAHOMA, Appellant, v. KEVIN DALE BLACKSHER, Appellee.
Cite as: 2016 OK CR 8, __ __
S U M M A R Y O P I N I O N
LUMPKIN, VICE-PRESIDING JUDGE:
¶1 Appellee Kevin Dale Blacksher was charged in the District Court of Lincoln County with Driving Under the Influence (DUI) - Felony, After Former Conviction of Two or More Felonies (Count I) (47 O.S.Supp.2013, § 11-902(C)(2)); Driving with a Suspended License (Count II) (47 O.S.2011, § 6-303(B))(misdemeanor); Failure to Carry Insurance/Security Verification Form (Count III) (47 O.S.2011, § 7-602)(misdemeanor) and Speeding (Count IV) (47 O.S.2011, § 11-801(B)) (misdemeanor), Case No. CF-2014-264. The State filed a Second Page Supplemental Information alleging seven prior convictions. Two of these prior convictions were misdemeanor convictions for DUI and were used to increase the DUI charge to Felony DUI. The additional prior convictions were for Second Degree Burglary, Felony Possession of Marijuana - Second Offense, and three convictions for Knowingly Concealing Stolen Property. With these five prior convictions, the State sought to enhance the range of punishment for the felony DUI charge pursuant to 21 O.S.2011, § 51.1.
¶2 The defense filed a Motion to Quash the second page arguing that the five prior non-DUI related convictions could not be used to enhance punishment as they did not fall under Title 47 and only prior convictions under Title 47 could be used to enhance the punishment for the felony DUI charge. The State responded that the non-DUI related prior convictions could be used for enhancement purposes under Section 51, the general sentence enhancement provision of the Habitual Offender Act, 21 O.S.2011, § 51.1. After hearing arguments, the trial court ruled the non-DUI related prior convictions could not be used to enhance the punishment for the felony DUI and granted the Motion to Quash, striking the second page of the Information.
¶3 The State now appeals from the District Court's decision pursuant to 22 O.S.2011, § 1053(1) and raises the following proposition of error:
I. The trial court erred in dismissing the Supplemental Information.
¶4 After thorough consideration of this proposition of error and the entire record before us on appeal including the original record, transcripts, and briefs of the parties, we find the ruling of the District Court granting the Motion to Quash is reversed and vacated and the matter is remanded to the District Court for proceedings consistent with this opinion.
¶5 In appeals brought to this Court pursuant to 22 O.S.2011, § 1053, we review the trial court's decision to determine if the trial court abused its discretion. State v. Hooley, 2012 OK CR 3, ¶ 4, 269 P.3d 949, 950. An abuse of discretion is any unreasonable or arbitrary action taken without proper consideration of the facts and law pertaining to the matter at issue or a clearly erroneous conclusion and judgment, one that is clearly against the logic and effect of the facts presented. Neloms v. State, 2012 OK CR 7, ¶ 35, 274 P.3d 161, 170.
¶6 This Court has not resolved this precise issue in a published opinion. Pursuant to Rule 3.5(C)(3), Rules of the Oklahoma Court of Criminal Appeals, Title 22, Ch. 18, App. (2016), Appellant has brought to our attention an unpublished opinion by Judge Chapel, VanWoundenberg v. State, F-2002-899 (not for publication, July 22, 2003).1 Appellant has affixed a copy of the unpublished opinion to its brief and argues that it resolves the issue before us. We have reviewed the opinion and find it well reasoned and applicable to the issue at hand. We liberally quote from it in arriving at our decision herein.
¶7 In VanWoundenberg, the defendant had three prior felony convictions for DUI and three prior felony convictions for non-DUI related offenses. This Court held the State properly used one of the prior DUI convictions to enhance the charge from a misdemeanor to a felony and the non-DUI felony convictions to enhance the range of punishment under § 51. In arriving at this conclusion, the Court relied on Cooper v. State, 1991 OK CR 26, 806 P.2d 1136.
¶8 In Cooper, the defendant was charged with drug offenses committed under the Uniform Controlled Dangerous Substances Act but had both drug related and non-drug related prior convictions. He claimed his sentence should have been enhanced only under the specific provisions found in the controlled dangerous substances statutes. We held that the prosecutor may elect enhancement under the general sentencing statute, § 51.1, or the specific drug statute, where a defendant had both drug-related and non-drug related prior convictions. Cooper, 1991 OK CR 26, ¶ 17, 806 P.2d at 1139. See also Novey v. State, 1985 OK CR 142, ¶ 14, 709 P.2d 696, 699-700 (where defendant has drug related and non-drug related prior convictions, prosecution may elect to enhance under either § 51 or the uniform controlled dangerous substance act, but not both); Hayes v. State, 1976 OK CR 113, ¶ 15, 550 P.2d 1344, 1348 (punishment for a drug related offense could be properly enhanced pursuant to § 51 if the prior offense alleged was a non-drug related felony).
¶9 The Appellant in VanWoundenberg and the Appellee in the present case assert this principle does not apply to the sentence enhancement of a DUI offense as this Court has noted the specific, controlling nature of the Title 47 DUI statutes citing Kolberg v. State, 1996 OK CR 41, 925 P.2d 66. In Kolberg, we said the specific provisions of Title 47 take precedence over the more general provisions of § 51. Despite this sweeping pronouncement, Kolberg does not interpret the sentence enhancement question as described in Cooper. Kolberg concerned the Title 47 requirement that a misdemeanor driving under the influence charge becomes a felony only where a defendant's prior conviction for driving under the influence is within ten years of the charged offense. This Court found that the explicit differing language in Title 47 specifically controlled over the general language of § 51, and held that a prior conviction under Title 47 must be within ten years, as the statute required. Kolberg, 1996 OK CR 41, ¶ 6, 925 P.2d at 68. This is a completely different issue from the case now before us and Kolberg does not apply to the issue of sentence enhancement for a DUI offense when a defendant has a variety of prior convictions.
¶10 The Appellee also directs us to Newlun v. State, 2015 OK CR 7, 348 P.3d 209. That case concerned a conflict within Title 47 regarding whether a first offense aggravated driving under the influence charge should be treated as a misdemeanor or a felony. This Court held that due to the conflict of specific provisions, and as the more specific aggravated section applied, nothing in Title 47 precluded a conviction for misdemeanor DUI after a felony DUI conviction. 2015 OK CR 7, ¶ 11, 348 P.3d at 212. Again, that is not the situation before us and Newlun is not applicable to the instant case.
¶11 While the charge in VanWoundenberg and this case is driving under the influence, rather than a controlled substance offense, we find the analysis in Cooper persuasive. In the absence of any authority prohibiting its application, we find the principle for enhancing the punishment of DUI related offenses to be the same as that for drug related crimes. Therefore, in the present case, the Appellee's sentence could not be enhanced under § 51.1 if all of his prior convictions were for DUI related offenses under Title 47. See Broome v. State, 1968 OK CR 77, ¶ 3, 440 P.2d 761, 763. However, as he also had prior convictions for non-DUI related felonies, those prior convictions could be used to enhance his sentence under the provisions of § 51.1.
¶12 Therefore, the District Court abused its discretion in granting the Motion to Quash and striking the second page of the felony information. The order granting the Motion to Quash is reversed and vacated and the matter is remanded to the District Court for proceedings consistent with this opinion.
DECISION
¶13 The ruling of the District Court granting the Motion to Quash is REVERSED AND VACATED and the case is REMANDED to the District Court for further proceedings consistent with this opinion. Pursuant to Rule 3.15, Rules of the Oklahoma Court of Criminal Appeals, Title 22, Ch.18, App. (2016), the MANDATE is ORDERED issued upon delivery and filing of this decision.
AN APPEAL FROM THE DISTRICT COURT OF LINCOLN COUNTY
THE HONORABLE CYNTHIA FERRELL ASHWOOD, DISTRICT JUDGE
APPEARANCES IN DISTRICT COURT
EMILY J. MUELLER
ASSISTANT DISTRICT ATTORNEY
811 MANVEL AVE., STE. 1
CHANDLER, OK 74834
COUNSEL FOR THE STATE
BARNEY K. BARNETT
P.O. BOX 365
CHANDLER, OK 74834
COUNSEL FOR APPELLEE
APPEARANCES ON APPEAL
RICHARD SMOTHERMON
DISTRICT ATTORNEY
EMILY J. MUELLER
ASSISTANT DISTRICT ATTORNEY
811 MANVEL AVE., STE. 1
CHANDLER, OK 74834
COUNSEL FOR THE STATE
BARNEY K. BARNETT
P.O. BOX 365
CHANDLER, OK 74834
COUNSEL FOR APPELLEE
OPINION BY: LUMPKIN, V.P.J.
SMITH, P.J.: Concur
LEWIS, P.J.: Concur
JOHNSON, J.: Concur
HUDSON, J.: Concur
FOOTNOTES
1 Rule 3.5(C)(3) provides:
In all instances, an unpublished decision is not binding on this Court. However, parties may cite and bring to the Court's attention the unpublished decisions of this Court provided counsel states that no published case would serve as well the purpose for which counsel cites it, and provided further that counsel shall provide opposing counsel and the Court with a copy of the unpublished decision.
Citationizer© Summary of Documents Citing This Document
Cite
Name
Level
None Found.
Citationizer: Table of Authority
Cite
Name
Level
Oklahoma Court of Criminal Appeals Cases
CiteNameLevel
1991 OK CR 26, 806 P.2d 1136, COOPER v. STATEDiscussed at Length
1996 OK CR 41, 925 P.2d 66, KOLBERG v. STATEDiscussed at Length
2012 OK CR 3, 269 P.3d 949, STATE v. HOOLEYDiscussed
2012 OK CR 7, 274 P.3d 161, NELOMS v. STATEDiscussed
2015 OK CR 7, 348 P.3d 209, NEWLUN v. STATEDiscussed at Length
1968 OK CR 77, 440 P.2d 761, BROOME v. STATEDiscussed
1985 OK CR 142, 709 P.2d 696, NOVEY v. STATEDiscussed
1976 OK CR 113, 550 P.2d 1344, HAYES v. STATEDiscussed
Title 21. Crimes and Punishments
CiteNameLevel
21 O.S. 51.1, Punishment for Second and Subsequent Offenses after Conviction of Offense Punishable by Imprisonment in State PenitentiaryDiscussed
Title 22. Criminal Procedure
CiteNameLevel
22 O.S. 1053, State or Municipality May Appeal in What CasesDiscussed
Title 47. Motor Vehicles
CiteNameLevel
47 O.S. 11-801, Basic Rule - Maximum Limits - Fines and PenaltiesCited
47 O.S. 11-902, Persons Under the Influence of Alcohol or Other Intoxicating Substance or Combination ThereofCited
47 O.S. 6-303, Driving While License Under Suspension or Revocation - Penalties - MotorcyclesCited
47 O.S. 7-602, Certification of Existence of Security - ExemptionsCited
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Jf n tbe Wntteb ~tates <!Court of jfeberal <!Claims
No. 16-815C
(Filed: July 22, 2016)
)
ANNAMALAI ANNAMALAI, ) Pro Se Complaint; Sua Sponte
) Dismissal; Frivolous.
Plaintiff, ) FILED
v. )
) JUL 2 2 2016
THE UNITED STATES, ) U.S. COURT OF
) FEDERAL CLAIMS
Defendant. )
)
Annarnalai Annamalai, Marion, IL, pro se.
David A. Levitt, Trial Attorney, Commercial Litigation Branch, Civil Division, United
States Department of Justice, for defendant.
ORDER OF DISMISSAL
CAMPBELL-SMITH, Chief Judge
On July 8, 2016, plaintiff, Annamalai Annamalai, filed a complaint in this court
appearing prose. ECF No. 1. Because plaintiff's complaint contained personal
identifiers for himself and a number of other individuals, the Office of the Clerk of Court
designated the complaint to be sealed. Plaintiff asserts a claim against two individuals
whom he identifies as "debtors" in relation to himself as "creditor. " 1 Compl. 1-2.
Plaintiff, who was prosecuted and found guilty of bank fraud, tax fraud,
bankruptcy fraud, money laundering, obstruction of justice, and conspiracy to defraud the
United States in connection with the formation and operation of the Hindu Temple and
Community Center of Georgia, Inc., is now serving time in the United States Penitentiary
in Marion, Illinois. See United States v. Annamalai, No. 1: 13-CR-437-1 (N.D. Ga. Nov.
Although plaintiff additionally asserts that both individuals are employees of the
Department of Justice, a search conducted by the court found that the individuals were in
fact employees of the United States Trustee's Office.
5, 2013); see al o Annamalai v. Reynolds, No. 1:16-CV-1373-TWT (N.D. Ga., July 8,
2016).
Plaintiff accuses the named defendants of conspiracy, fraud, and of taking trade
secret information pertaining to his former Hindu Temple business. Compl. passim. Over
time, plaintiff has pursued a variety of claims related to this specific Hindu
Temple. Based on a history of making such claims, plaintiff has been declared a
vexatious litigant by the 15 lst Civil Court, Harris County, Texas, and by the United States
District Court for the Northern District of Georgia. See Hindu Temple and Community
Center of High Desert, Inc. v. Kepner, 1:12-CV-294l(SCJ) (N.D. Ga. Mar. 28, 2013)
(ECF No. 111).
To deter plaintiff from further frivolous filings, the Northern District of Georgia
issued a Judgment and Commitment Order. In pertinent part, it provides:
The Court ORDERS that during the defendant's period of incarceration, ...
the defendant shall not file frivolous, abusive, or malicious lawsuits against
( l) former customers of the Hindu Temple and related entities, and victims
of his criminal schemes; (2) parties, creditors, the Trustee, lawyers, and court
personnel involved in the Hindu Temple's bankruptcy case; and (3)
attorneys, government agents, the jury, and court personnel involved in the
criminal case.
United States v. Annamalai, No. 1:13-CR-437-1 (N.D. Ga., July 16, 2015).
In contravention of the Judgment and Commitment Order, plaintiff has continued
to file lawsuits. He brought several actions this calendar year. See e.g., Annamalai v.
United States, No. 1:16-cv-00816-PEC (Fed. Cl., July 19, 2016) (dismissing as frivolous
and as violative of the district court's Judgment and Commitment Order); Annamalai v.
Rajkumar, No. 16-CV-4491 (CM) (S.D.N.Y., June 15, 2016) (dismissing as frivolous and
as violative of the district court's Judgment and Commitment Order); Annamalai v.
Reynolds, No. 1:16-CV-1373-TWT (N.D. Ga., July 8, 2016) (dismissing claim and
deeming plaintiff a "serial frivolous filer"); Annamalai v. Laird, No. 3: l 6-cv-00524-
DRH, ECF No. 15 (S.D. II., June 10, 2016) (dismissing case and ordering plaintiff to
show cause why he should not be sanctioned for filing a frivolous action).
An examination of plaintiffs complaint here indicates that again plaintiff has
violated the July 16, 2015 Judgment and Commitment Order, barring claims related to the
former Hindu Temple. Moreover, plaintiffs claims against individual federal actors do not
fall within the court's limited jurisdiction. See Shalhoub v. United States, 75 Fed. Cl. 584,
585 (2007). As such, the court cannot hear plaintiffs complaint.
2
Also attached to plaintiffs complaint is a document labeled as a "Writ of Praecipe."
ECF No. 3. The court construes that document to be an application to appear in forma
pauperis (IFP Application). By filing such a document, plaintiff seeks to proceed without
paying the court's filing fee. Id.
Although the court is permitted to waive filing fees under certain circumstances, the
court finds that plaintiffs history of filing frivolous, repetitive, and vexatious actions
weighs heavily against granting plaintiffs IFP application. See 28 U.S.C. § 1915(a)(l) and
(e); Neitzke v. Williams, 490 U.S. 319, 325 (1989) (defining when an action lacks an
arguable basis in law or fact). Furthermore, a prisoner who brings suit in a federal court is
subject to a limitation on proceeding in forma pauperis - a limitation commonly known as
the "three strikes rule."
In no event shall a prisoner bring a civil action or appeal a judgment in a civil
action or proceeding under this section ifthe prisoner has, on 3 or more prior
occasions, while incarcerated or detained in any facility, brought an action
or appeal in a court of the United States that was dismissed on the grounds
that it is frivolous, malicious, or fails to state a claim upon which relief may
be granted, unless the prisoner is under imminent danger of serious physical
mJury.
28 U.S.C. § 1915(g)(2012). 2 Plaintiff has plainly exceeded three strikes.
The IFP application is DENIED AS MOOT, and plaintiffs complaint
is DISMISSED as frivolous and as violative of the July 16, 2015 Judgment and
Commitment Order issued by the Northern District of Georgia. The Clerk of Court shall
enter judgment for defendant. No costs.
IT IS SO ORDERED.
ATRICIA E. CAMPBE
Chief Judge
A prisoner is defined as "any person incarcerated ... in any facility who is ...
convicted of, [and] sentenced for ... violations of criminal law." 28 U.S.C. § 1915(h).
3
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Slip Op. 08-137
UNITED STATES COURT OF INTERNATIONAL TRADE
VOLKSWAGEN OF AMERICA, INC.,
Plaintiff, Before: Richard W. Goldberg,
Senior Judge
v.
Court No. 96-00132
UNITED STATES,
Defendant.
ORDER
In accordance with the decision (Aug. 22, 2008) and mandate (Dec.
1, 2008) of the United States Court of Appeals for the Federal
Circuit, Appeal No. 2007-1518, affirming in part, and reversing in
part this Court’s judgment in Volkswagen of America, Inc. v. United
States, 31 CIT __, Slip Op. 07-47 (Mar. 28, 2007), it is hereby:
ORDERED that the portion of this Court’s order denying
Volkswagen’s claim to an allowance pursuant to 19 C.F.R. § 158.12 for
repairs made in response to government-mandated recalls is vacated;
and it is further:
ORDERED that:
(1) On or before January 16, 2009, the parties shall submit
supplemental briefing as to whether the defects remedied in
response to the FTC and state recalls existed at the time
of importation; and
(2) On or before January 30, 2009, the parties shall file a
proposed scheduling order for the submission of this action
for trial as to the remaining issue of verifying the
applicable allowance amounts.
IT IS SO ORDERED.
/s/ Richard W. Goldberg
Richard W. Goldberg
Senior Judge
Date: December 18, 2008
New York, New York
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901 F.2d 1110
Lorenz (Janice Grafton), Estate of Lorenz (Paul D.)v.Celotex Corporation
NO. 89-1136
United States Court of Appeals,Fifth Circuit.
APR 16, 1990
N.D.Tex., 896 F.2d 148
1
DENIALS OF REHEARING EN BANC.
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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
:
DARREN McINTYRE, :
:
Plaintiff, :
:
v. : Civil Action No. 11-1520 (RMC)
:
ISAAC FULWOOD, et al., :
:
Defendants. :
____________________________________:
OPINION
This matter is before the Court on Defendants’ motion to dismiss. For the reasons
discussed below, the motion will be granted.
I. BACKGROUND
Plaintiff is “a prisoner of the District of Columbia, in the custody of the Federal
Bureau of Prisons.” Compl. [Dkt. 1] at 2. He is serving a 30-year sentence imposed by the
Superior Court of the District of Columbia on February 12, 1999, upon his conviction for
aggravated assault. Id. at 3. The sentence runs “consecutive[ly] to a 1996 non-parolable federal
sentence of fifty-seven months for unlawful possession of a firearm by a convicted felon.” Id.
In anticipation of Plaintiff’s parole eligibility date of January 1, 2010, on October
28, 2009, Scott Kubic (“Kubic”), a hearing examiner of the United States Parole Commission
(“Commission”), conducted the initial parole hearing. Id. Kubic continued the hearing “due to
his concerns about [Plaintiff’s] involvement regarding a charge of conspiracy to commit
murder.” Id. Kubic’s experience led him to believe “that, often times, offenders agree to plead
guilty to lesser included offenses to minimize the length of their sentence[s], and not necessarily
because they were not involved in more serious conduct.” Id. at 3-4. Kubic obtained “a copy of
the Police Report and Grand Jury Indictment,” id. at 4, and based on this additional information,
Kubic concluded that “a new hearing [was] necessary to allow [Plaintiff] the opportunity to
respond to the information” in those documents.” Id.
“The indictment indicate[d] that between March 20, 1995 and December 13,
1995, members of the Stanton Terrace Crew, including [Plaintiff], conspired to murder members
of the Parkland Crew, who were viewed as competitor crack cocaine dealers, in order to seek
revenge for the killing of a former member of the Stanton Terrace Crew.” McIntyre v. Ebbert,
No. 3:10cv1739, 2011 WL 839544, at *1 (M.D. Pa. Mar. 7, 2011). Plaintiff “was indicted on
twelve counts and subsequently pled guilty to three counts of Aggravated Assault.” Id. The
assault charges arose from an attempt by members of the Stanton Terrace Crew to murder an
associate of the Parkland Crew, but the perpetrators only managed to shoot and wound three
bystanders --- two women and a child. Id. Kubic’s concern apparently arose because of
Plaintiff’s supposed participation in or responsibility for the March 13, 1995 murder of William
Zimmerman and the May 14, 1995 murder of Michael Thompson by members of the Stanton
Terrace Crew. See id.
Another hearing examiner, Joseph Pacholski (“Pacholski”), conducted a second
hearing on January 28, 2010. Id. According to Pacholski, during the hearing Plaintiff “admitted
[that] he was present for the two murders alleged in the indictment, and for the shooting of two
women and a child.” Id. Although Plaintiff “submitted a document indicating that . . . the
government [did not] allege that [Plaintiff] was present at the time of the murders,” id., Ex.
2
(Hearing Summary dated Jan. 28, 2010) (“Hearing Summary”) at 2, Pacholski made his decision
based on Plaintiff’s “own admission of being present at the time of the shooting of the child and
the two women.” 1 Hearing Summary at 3. 2 He recommended “[a] decision above the
guidelines,” referring to the 1987 parole regulations of the former District of Columbia Board of
Parole (“1987 Regulations”), for the following reasons:
Because the instant offense involved unusual cruelty to the victim
in that you were present and fired a weapon where there were
women and a child. You also were a member of a crew who
committed Murder. Additional time is needed for programming in
that you need to participate and complete the Victim Impact Group
in order to remain crime free in the community.
Id. at 3.
Executive Reviewer S. Husk (“Husk”) concurred with the decision to deny
Plaintiff parole, and to support his finding that Plaintiff’s behavior “involved exceptional cruelty
to the victims and reflects ongoing criminal behavior,” id. 4, he described Plaintiff’s criminal
history and his current offenses of conviction as follows:
[Plaintiff] has been serving the current sentence since 2/21/2000
but has been in continuous custody since 12/13/95. He served first
a 57 month federal sentence for Possession of a Firearm by a
Convicted Felon. The federal charge resulted from a search of
[Plaintiff’s] apartment on 12/13/95. During that search, a sawed-
1
Plaintiff attached an excerpt of the transcript of his sentencing hearing, during which the
prosecutor stated:
[Plaintiff] was charged under a liability with two of the murders that actually took
place, but the Government was not going to allege and does not allege that [he]
was present at the time of these murders.
Compl., Ex. (Sentencing Transcript) at 13:20-24.
2
According to the Hearing Summary, Plaintiff “stated that he did not fire at the females or the 4
year old child but he was firing his weapon at individuals in a different direction than the woman
and child.” Hearing Summary at 1.
3
off shotgun was recovered. . . . [A]lso recovered from the
apartment was a handwritten diary which described shootings and
armed robberies in which the shotgun was used. Also recovered
was a videotape from January of 1994 in which [Plaintiff] was
seen . . . demonstrating how to use a sawed-off shotgun and a
semi-automatic pistol and his four year old son was mimicking him
handling guns and crack cocaine . . . .
The Superior Court case for which he is being considered for
parole involved a shooting that occurred on 5/11/95. There were at
least three victims to the shooting including two women and a four
year old child. It does not appear that these three persons were the
intended victims. Instead, the intended victim was . . . an associate
with the Parkland Crew. [The victim] was shot at but there is no
evidence that any of the bullets struck him on 5/11/95.
The 5/11/95 shooting was the result of an ongoing conspiracy of
the Stanton Terrace Crew, of which [Plaintiff] was a member, to
murder members of the Parkland Crew in order to eliminate them
as competitors in the sale of crack cocaine. Also, revenge was
sought for the 3/20/95 murder of a member of the Stanton Terrace
Crew.
Initially, [Plaintiff] was charged with counts that included the
deaths of William Zimmerman on 5/13/95 and Michael Thompson
on 5/14/95. However, it appears that he pled guilty only to the
events related to the 5/11/95 shooting.
Id. at 3. Of particular note was Plaintiff’s alleged “admi[ssion] to being present during two other
shootings” on May 13, 1995 and May 14, 1995, “that resulted in the death of the victims. Those
murders were also carried out in furtherance of the illegal activity of the Stanton Street Crew.”
Id. at 4. From these and other factors, Husk concluded “that the instant offense involved
exceptional cruelty to the victims and reflects ongoing criminal behavior.” Id.
Citing, among other things, Plaintiff’s “presen[ce] when two other men were
murdered in furtherance of the illegal activities of the Stanton Street Crew,” the Commission
denied Plaintiff parole. Compl., Ex. (Notice of Action dated Mar. 13, 2010) at 1. Rather than
setting a rehearing date within 12 months as the 1987 Regulations would have allowed, the
Commission made an upward departure, continuing the matter “for a reconsideration hearing in
4
January 2013 after service of 36 months from [Plaintiff’s] parole eligibility date of January 1,
2010.” Notice of Action dated Mar. 13, 2010 at 1. Plaintiff’s “request[] that the Commission
reopen his case” was denied. Compl. at 6.
On August 19, 2010, Plaintiff filed a petition for a writ of habeas corpus in the
United States District Court for the Middle District of Pennsylvania, id., “challenging the
Commission’s departure from the [1987 Regulations] for District of Columbia offenders.”
McIntyre, 2011 WL 839544, at *3. That court reviewed “an audio recording of [Plaintiff’s]
January 28, 2010 remand hearing before Hearing Examiner Pacholski,” id. at *3, and concluded
that there was “no rational basis for the Commission’s departure from [1987 Regulations]”
because “the recording flatly contradicts Pacholski’s indication that [Plaintiff] admitted his
presence at the two murders in question,” id. at *6. The court granted Plaintiff’s habeas petition
and remanded the matter to the Commission “for further appropriate consideration in light of the
fact that record supports no finding that the petitioner was present at either murder.” Compl., Ex.
(Order, McIntyre v. Ebbert, No. 3:20cv1739 (M.D. Pa. Mar. 7, 2011)).
On remand, the Commission “determined that there is insufficient evidence to
conclude that [Plaintiff was] involved in [the] murders” committed on May 13, 1995 and May
14, 1995, but again denied parole for the following reasons:
The current sentence resulted from your conviction on three counts
of aggravated assault that occurred on May 11, 1995. In this
shooting, you were one of several individuals that planned to
retaliate against a rival crew member and proceeded to fire shots
toward persons that were standing outside of an apartment
building. The shots struck three individuals, including a 4 year old
child but missed the intended target. The Commission concludes
that your criminal activity was not limited to this one incident but
the conduct was indicative of your commitment to violent acts in
furtherance of your criminal lifestyle. Your commitment to crime
5
is evidenced by the fact that, for nearly three years prior to the
offense, you were a member of the Stanton Street Crew that was
involved in drug trafficking activities in the Southeast section of
the District of Columbia. You possessed weapons during that time
frame as evidenced by a videotape from January of 1994 . . . in
which you were demonstrating how to use a sawed off shotgun.
You continued to possess weapons and engage in drug trafficking
activities up until the May 11, 1995 shooting but also thereafter.
At the time of your arrest in December of 1995, a sawed-off
shotgun was recovered from your residence as was evidence of
your continued drug trafficking activities . . . and a diary
describing several violent crimes. Though you were involved in
only one shooting, the Commission finds that you were involved in
ongoing criminal behavior in the community, possessed weapons
in furtherance of that criminal behavior and were committed to
engage in violent acts if necessary to support that lifestyle. Thus,
the Commission concludes that you remain a risk to the
community.
Compl., Ex. (Notice of Action dated Apr. 14, 2011) at 1.
Plaintiff claims that Defendants have violated his rights to due process and equal
protection, arguing that he was denied a fair and impartial parole hearing. See Compl. at 14-15,
31. The Commission’s decision to deny parole was based on “[t]he deliberate fabrication of the
record,” he alleges, notwithstanding Plaintiff’s evidence that he was not present at the murders.
Id. at 25. In addition, he claims that Defendants failed to maintain Commission records with the
requisite level of accuracy, and that they relied on erroneous information in the records resulting
in a decision adverse to Plaintiff, that is, denial of parole. See id. at 26-27, 29. He brings this
action under 42 U.S.C. § 1983 against Isaac Fulwood (“Fulwood”), Chair of the Commission,
and hearing examiners Kubic, Pacholski and Husk in both their official and individual capacities,
and under the Privacy Act, see 5 U.S.C. § 552a, against the Commission. See Compl. at 2-3. He
demands a declaratory judgment, nominal and punitive damages, and injunctive relief. See id. at
34-35.
6
II. ANALYSIS
A. Res Judicata (Claim Preclusion)
Defendants move to dismiss on the ground that Plaintiff’s claims are barred under
the doctrine of res judicata. 3 “[U]nder res judicata, ‘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.’” Drake v. FAA, 291 F.3d 59, 66 (D.D.C. 2002) (quoting Allen v. McCurry,
449 U.S. 90, 94 (1980) (emphasis added)); see I.A.M. Nat’l Pension Fund v. Indus. Gear Mfg.
Co., 723 F.2d 944, 947 (D.C. Cir. 1983). The Court applies a three-part test to determine
whether res judicata applies:
(1) whether the claim was adjudicated finally in the first action; (2)
whether the present claim is the same as the claim which was
raised or which might have been raised in the prior proceeding;
and (3) whether the party against whom the plea is asserted was a
party or in privity with a party in the prior case.
Youngin’s Auto Body v. Dist. of Columbia, 711 F. Supp. 2d 72, 78 (D.D.C. 2010) (quoting
Patton v. Klein, 746 A.2d 866, 869-70 (D.C. 1999)).
“A judgment on the merits is one that reaches and determines the real or
substantial grounds of action or defense as distinguished from matters of practice, procedure,
jurisdiction or form.” Sheppard v. Dist. of Columbia, 791 F. Supp. 2d 1, 5 (D.D.C. 2011)
(internal quotation marks and citation omitted). Two cases “implicate the same cause of action
[if] they share the same ‘nucleus of facts.’” Drake, 291 F.3d at 66 (quoting Page v. United
3
For purposes of this Opinion, the Court presumes, without deciding, that service of process has
been effected properly on Fulwood, Kubic, Pacholski and Husk, and that the Court may exercise
personal jurisdiction over them. The Court therefore declines to address Defendants’ arguments
for dismissal of the complaint under Rule 12(b)(2) for lack of personal jurisdiction, under Rule
12(b)(4) for insufficient process, or under Rule 12(b)(5) for insufficient service of process.
7
States, 729 F.2d 818, 820 (D.C. Cir. 1984)). To determine whether two cases share the same
nucleus of facts, the Court considers “whether the facts are related in time, space, origin, or
motivation[;] whether they form a convenient trial unit[;] and whether their treatment as a unit
conforms to the parties’ expectations or business understanding or usage.” Stanton v. Dist. of
Columbia Court of Appeals, 127 F.3d 72, 78 (D.C. Cir. 1997). “A privy is one so identified in
interest with a party to the former litigation that he . . . represents precisely the same legal right
in respect to the subject matter of the case – in other words, a person who or entity that is in
privity with the party.” Wilson v. Fulwood, 772 F. Supp. 2d 246, 261 (D.D.C. 2011) (internal
quotation marks and citation omitted).
Plaintiff brings due process and equal protection claims against Defendants
arising from the Commission’s March 13, 2010 decision to deny parole based on Pacholski’s
statement – later proved wrong – that during the reconsideration hearing Plaintiff admitted his
presence at the murders committed on May 13, 1995 and May 14, 1995. These constitutional
claims arise from the same nucleus of facts as did the claims before the Middle District of
Pennsylvania on its consideration of Plaintiff’s prior habeas petition. The petition was decided
in Plaintiff’s favor by a court of competent jurisdiction. Although the respondent to the habeas
petition is not named a defendant to this civil action, he is considered in privity with Defendants
in this action. See Wilson, 772 F. Supp. 2d at 261 (“The government, its officers, and its
agencies are regarded as being in privity for claim-preclusive purposes.”). And
“preclusive effect may be had from claims and issues litigated in a habeas case to those in a §
1983 case.” Id. at 262; Christian v. McHugh, 847 F. Supp. 2d 68, 74-75 (D.D.C. 2012) (holding
that district court rulings in prior habeas actions challenging court martial from the U.S. Army
8
precluded subsequent civil action challenging authorized punishment imposed under Uniform
Code of Military Justice).
Plaintiff responds that the claims presented in this action differ from those raised
in his habeas petition because this case “is directed specifically at the named individuals in both
their official and individual capacities for their participation and wrongful actions against
Plaintiffs’ [sic] right[s] as provided under the [C]onstitution.” Pl.’s Opp’n [Dkt. 21] at 3. He
cannot avoid the preclusive effect of the habeas ruling simply by naming new parties,
particularly where these Defendants and the respondent to the habeas petition all are federal
government officials. See Sunshine Anthracite Coal v. Adkins, 310 U.S. 381, 402-03 (1940)
(“There is privity between officers of the same government so that a judgment in a suit between
a party and a representative of the United States is res judicata in relitigation of the same issue
between that party and another officer of the government.”); Warren v. McCall, 709 F.2d 1183,
1184-85 (7th Cir. 1983) (finding that Parole Commission officers were in privity with warden for
purposes of res judicata). Nor can Plaintiff exploit the fact that his habeas petition was filed
under a different federal statute, see 28 U.S.C. § 2241, than the statute under which he proceeds
in this case, see 42 U.S.C. § 1983. The doctrine precludes relitigation not only of claims that
already have been brought but also which could have been brought in the prior action, “even if
[Plaintiff] chose not to exploit that opportunity.” Hardison v. Alexander, 655 F.2d 1281, 1288
(D.C. Cir. 1981). Plaintiff alleges no new facts, and instead simply raises a new legal theory.
“This is precisely what is barred by res judicata.” Apotex, Inc. v. FDA, 393 F.3d 210, 217-18
(D.C. Cir. 2004).
9
The Court concludes that Plaintiff’s claims arise from the same nucleus of facts as
did the claims presented in his habeas action in the Middle District of Pennsylvania. The final
judgment on the merits of the habeas petition precludes this § 1983 action.
B. Immunity
Defendants are amenable to suit under § 1983 in both their individual capacities,
see Fletcher v. District of Columbia, 370 F.3d 1223, 1227 (D.C. Cir. 2004), vacated in part on
other grounds, 391 F.3d 250 (D.C. Cir. 2004), and in their official capacities insofar as Plaintiff
demands prospective declaratory and injunctive relief. See Sellmon v. Reilly, 551 F. Supp. 2d 66,
83 & n.12 (D.D.C. 2008). 4 Defendants move to dismiss on the ground that they are absolutely
immune from suit.
“Courts have extended absolute immunity to a wide range of persons playing a
role in the judicial process.” Wagshal v. Foster, 28 F.3d 1249, 1252 (D.C. Cir. 1994) (collecting
cases). The decision to grant this “quasi-judicial immunity” depends on three factors:
(1) whether the functions of the official in question are comparable
to those of a judge; (2) whether the nature of the controversy is
intense enough that future harassment or intimidation by litigants
is a realistic prospect; and (3) whether the system contains
safeguards which are adequate to justify dispensing with private
damage suits to control unconstitutional conduct
Id. The functions of Commissioners and other Commission officials generally meet this test.
See, e.g., Anderson v. Reilly, 691 F. Supp. 2d 89, 92 (D.D.C. 2010) (Commissioner and hearing
examiner); Mowatt v. U.S. Parole Comm’n, 815 F. Supp. 2d 199, 206 (D.D.C. 2006) (case
analyst); Pate v. United States, 277 F. Supp. 2d 1, 8 (D.D.C. 2003) (Chair of the former District
4
Fulwood, Kubic, Pacholski and Husk in their official capacities are not subject to suit for
money damages under § 1983. See Settles v. U.S. Parole Comm’n, 429 F.3d 1098, 1106 (D.C.
Cir. 2005); Mowatt v. U.S. Parole Comm’n, 815 F. Supp. 2d 199, 205 (D.D.C. 2011).
10
of Columbia Parole Board); Reynolds-El v. Husk, 273 F. Supp. 2d 11, 13 (D.D.C. 2002) (case
examiner). The Court finds no reason to depart from these holdings, and finds that Defendants
are protected by quasi-judicial immunity.
C. Privacy Act Claims
“The [Privacy] Act gives agencies detailed instructions for managing their records
and provides for various sorts of civil relief to individuals aggrieved by failures on the
Government’s part to comply with the requirements.” Doe v. Chao, 540 U.S. 614, 618 (2004).
Among other requirements, the Privacy Act directs:
Each agency that maintains a system of records shall maintain all
records which are used by the agency in making any determination
about any individual with such accuracy, relevance, timeliness, and
completeness as is reasonably necessary to assure fairness to the
individual in the determination.
5 U.S.C. § 552a(e)(5). “Whenever any agency . . . fails to maintain any record concerning any
individual with such accuracy, relevance, timeliness, and completeness as is necessary to assure
fairness in any determination relating to the qualifications, character, rights, or opportunities of,
or benefits to the individual that may be made on the basis of such record, and consequently a
determination is made which is adverse to the individual, . . . the individual may bring a civil
action against the agency.” Id. § 552a(g)(1)(C). If the Court “determines that the agency acted
in a manner which was intentional or willful,” it may award the individual “actual damages
sustained by the individual as a result of the refusal or failure” and attorney fees and costs. Id.
§ 552a(g)(4).
According to Plaintiff, Defendants’ decision to depart from the 1987 Regulations
occurred “without verification of all relevant factual evidence” and therefore “made an adverse
11
decision based on inaccurate information to the detriment of [Plaintiff’s] request for release.”
Compl. at 26. He claims that Pacholski made a “personal attempt of falsifying the record,” id. at
28, presumably by injecting as if it were a fact an admission that Plaintiff was present at the May
13, 1995 and May 14, 1995 murders. See Pl.’s Opp’n at 3 (stating that the Commission made
“an advers[e] decision . . . based on inaccurate records . . . the Plaintiff proved to be false, by
entering documentation of [the prosecutor’s statement] in open court . . . that the [C]omission
chose to ignore”). In this way, the Commission “acted in a manner which was intentional and
willful.” Compl. at 26. In other words, he contends that the Commission failed to maintain its
records with the requisite level of accuracy because it failed to verify Pacholski’s so-called fact –
that Plaintiff was present at the May 13, 1995 and May 14, 1995 murders – and relied on this
“fact” when denying his parole application. Plaintiff alleges that by ignoring the truth (that
Plaintiff did not admit that he was present at the murders), the Commission acted intentionally
and willfully and, therefore, Plaintiff insists he entitled to damages. 5
“Defendants do not dispute that they have some obligation to undertake efforts to
maintain accurate records.” Defs.’ Mot. [Dkt. 18] at 21. They argue that Plaintiff has not made
an adequate showing of an intentional or willful violation of the Privacy Act. Id. at 22. They
point to Plaintiff’s failure to mention the factual error in his April 30, 2010 letter asking the
Commission to reopen his case. Id. The significance of this omission is unclear, particularly in
this case. By then Plaintiff not only had denied his presence at the two murders but also had
produced an excerpt of the sentencing transcript to support his assertion.
5
For purposes of this Opinion, the Court presumes that Plaintiff named as a defendant a federal
agency covered by the Privacy Act, see 5 U.S.C. § 551(1) (defining “agency” to mean “each
authority of the Government of the United States”), because no Privacy Act claim can be brought
against an individual government employee. See Martinez v. Bureau of Prisons, 444 F.3d 620,
624 (D.C. Cir. 2006).
12
To prevail on his claim for damages, Plaintiff must show:
(1) he has been aggrieved by an adverse determination; (2) the
Commission failed to maintain his records with the degree of
accuracy necessary to assure fairness in the determination; (3) the
Commission's reliance on the inaccurate records was the proximate
cause of the adverse determination; and (4) the Commission acted
intentionally or willfully in failing to maintain accurate records.
Deters v. U.S. Parole Comm’n, 85 F.3d 655, 657 (D.C. Cir. 1996) (citations omitted). An
intentional or willful act requires a showing that the Commission “acted without grounds for
believing its actions were lawful or that it flagrantly disregarded the rights guaranteed under the
Privacy Act.” Laningham v. U.S. Navy, 813 F.2d 1236, 1242 (D.C. Cir. 1987) (internal
quotation marks and citation omitted).
It cannot be said that Kubic obtained a copy of the police report and grand jury
indictment and scheduled a new hearing without grounds for believing his actions were lawful.
Offense behavior was relevant to the Commission’s determination as to Plaintiff’s suitability for
release. See 28 D.C.M.R. § 204.18 (1987) (directing consideration of “whether the current
offense involved a felony in which the parole candidate caused, attempted to cause, or threatened
to cause death of serious bodily injury to another individual,” and “whether the current offense
involved a felony in which the parole candidate used a dangerous weapon,” among other pre-
incarceration factors, to determine whether the candidate should be paroled); cf. Griffin v.
Ashcroft, No. 02-5399, 2003 WL 22097940, at *1 (D.C. Cir. Sept. 3, 2003) (“Appellant offers no
support . . . for the proposition that the BOP may never rely on evidence of crimes of which a
prisoner was not convicted when making custody classification determinations.”). Nor can it be
said that Pacholski acted unlawfully, even if his belief in Plaintiff’s “admission” were wrong.
The Commission is not “strictly liable for every affirmative or negligent action that might be said
13
to violate the Privacy Act’s provisions.” Albright v. United States, 732 F.2d 181, 189 (D.C. Cir.
1984).
The Middle District of Pennsylvania noted:
[U]ltimately, the Commission may determine that reasons other
than the [Plaintiff’s] presence at the murders compel departure
from the guidelines -- such as [his] involvement in the May 11,
1995 shooting, his membership in a street crew, the artifacts of
drug distribution found in his home, or the Petitioner's diary
indicating his violence. Had the Commission indicated in its
statement of reasons that it would have departed from the
guidelines for any or each of these other stated reasons,
independent from the [Plaintiff’s] presence at the murders, the
court might have found that decision to have had a rational basis.
McIntyre, 2011 WL 839544, at *7. Here, the Commission based its decision on remand on
substantially these same reasons: Plaintiff’s membership in the Stanton Street Crew which was
involved in drug trafficking activities; the offenses of conviction arising from the May 11, 1995
shootings of three unintended victims in the course of what the Commission characterized as a
planned act of retaliation against a rival crew; and other evidence of Plaintiff’s “commitment to
violent acts in furtherance of [his] criminal lifestyle.” Compl., Ex. (Notice of Action dated Apr.
14, 2011) at 1. “[T]he Commission ceased reliance on the erroneous information,” Defs.’ Mot.
at 22, and has articulated a rational basis for its decision to deny Plaintiff parole.
III. CONCLUSION
Plaintiff’s claims are barred under the doctrine of res judicata and quasi-judicial
immunity, and he has failed to state a claim under the Privacy Act. Accordingly, Defendants’
motion to dismiss [Dkt. 18] will be granted. A memorializing Order accompanies this Opinion.
Date: September 25, 2012 /s/
ROSEMARY M. COLLYER
United States District Judge
14
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 12-2209
___________
MINDY JAYE ZIED-CAMPBELL; DENNIS JOHN CAMPBELL,
Appellants
v.
COMMONWEALTH OF PENNSYLVANIA; LINDA L. KELLY, OFFICE OF THE
ATTORNEY GENERAL; THOMAS W. CORBETT, JR., ATTORNEY GENERAL OF
THE COMMONWEALTH OF PA, IN HIS INDIVIDUAL CAPACITY AS
GOVERNOR AND OFFICIALLY & INDIVIDUALLY WHILE HE WAS IN
OFFICE AS THE FORMER ATTORNEY GENERAL, VOTED IN NOV 2004 AND
ON JAN 18, 2005 TOOK THE OATH OF OFFICE AS PA 5TH ELECTED ATT GEN;
PENNSYLVANIA DEPARTMENT OF PUBLIC WELFARE; GARY D. ANDERSON,
SECRETARY OF THE PENNSYLVANIA DEPARTMENT OF PUBLIC WELFARE;
THE PA CARLISLE DPW ASSISTANCE OFFICE; THE YORK COUNTY, PA
DPW ASSISTANCE OFFICE; PA DPW YORK COUNTY, PA - DOES 1-25; THE
PHILADELHIA,PA DPW BOULEVARD COUNTY ASSISTANCE OFFICE; PHILA,
DPW BOULEVARD COUNTY ASSISTANCE OFFICE DOES 1-25; THE
PENNSYLVANIA DEPARTMENT OF PUBLIC WELFARE HEARINGS & APPEALS
OFFICE; MICHAEL J. ASTRUE THE COMMISSIONER OF THE SOCIAL
SECURITY ADMINISTRATION; THE SOCIAL SECURITY ADMINISTRATION;
THE UNITED STATES COURT OF APPEALS FOR THE 3RD CIRCUIT (DOES 1-
25); PHYLLIS A. RUFFIN (PAR) CASE MANAGER OF THE U.S. CT. OF APPEAL
3RD CIRCUIT, (IN HER INDIVIDUAL CAPACITY UNDER BIVENS); PATRICIA S.
DODSZUWEIT CHIEF DEPUTY CLERK OF THE U.S. CT. OF APPEAL3RD
CIRCUIT, (IN HER INDIVIDUAL CAPACITY, UNDER BIVENS); JOEL M.
SWEET ASSISTANT UNITED STATES ATTORNEY, (IN HIS INDIVIDUAL
CAPACITY, UNDER BIVENS); JAMES J. WEST ATTORNEY AT LAW;
DEPARTMENTOF JUSTICE; UNITED STATES OF AMERICA
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civ. No. 11-cv-07544)
District Judge: Honorable Harvey Bartle, III
____________________________________
Submitted Pursuant to Third Circuit LAR 34.1(a)
February 15, 2013
Before: FUENTES, VANASKIE and VAN ANTWERPEN, Circuit Judges
(Opinion filed: February 19, 2013 )
_________
OPINION
_________
PER CURIAM
Mindy Jaye Zied-Campbell and Dennis John Campbell, wife and husband, appeal
pro se from the orders of the District Court dismissing their original and amended
complaints. We will affirm, with the clarification that the District Court’s dismissal is
without prejudice to plaintiffs’ ability to pursue certain state-law claims in state court.
I.
Zied-Campbell and Campbell, who allege that they suffer from various psychiatric
disorders, have a long history of litigating claims concerning the administration of their
federal and state medical and disability benefits. See, e.g., Zied-Campbell v. Richman,
428 F. App’x 224 (3d Cir. 2011), cert. dismissed, 132 S. Ct. 464 (2011); Campbell v.
Soc. Sec. Admin., 446 F. App’x 477 (3d Cir. 2011), cert. denied, 132 S. Ct. 274 (2011).
These efforts, which they have undertaken at times with the assistance of counsel, have
proven largely unsuccessful. In Richman, for example, we affirmed the District Court’s
judgment in favor of various Pennsylvania state defendants on Zied-Campbell’s claims
under the Americans With Disabilities Act and the Rehabilitation Act of 1973. Zied-
Campbell sought certiorari, but the United States Supreme Court dismissed her petition
2
under Supreme Court Rule 39.8. See Zied-Campbell v. Richman, 132 S. Ct. 464 (Mem)
(Oct. 17, 2011). That rule provides that the Court may deny a motion to proceed in forma
pauperis (“IFP”) if it is satisfied that the certiorari petition is “frivolous or malicious.”
Shortly thereafter, Zied-Campbell and Campbell (“plaintiffs”) instituted the civil
action at issue here by filing a motion for leave to proceed IFP along with a 247-page
complaint. By order entered March 2, 2012, the District Court granted them leave to
proceed IFP but dismissed their complaint pursuant to 28 U.S.C. § 1915(e)(2)(B).
Plaintiffs also filed a motion for leave to file an amended complaint. By order entered
March 6, 2012, the District Court dismissed that complaint pursuant to § 1915(e)(2)(B) as
well. Plaintiffs appeal from both orders. 1
II.
Plaintiffs’ complaints both repeat the claims against various state and federal
agencies they already have litigated and assert new claims allegedly arising from that
litigation. In dismissing the initial complaint, the District Court wrote that plaintiffs’
claims “are either totally lacking in merit or are frivolous,” noted the prolixity and
general incomprehensibility of the complaint, observed that it raises many claims that
have been rejected in plaintiffs’ fifteen other civil actions, and concluded that the
complaint “lacks an arguable basis either in law or in fact.” Neitzke v. Williams, 490
U.S. 319, 325 (1989). After reviewing plaintiffs’ sprawling and unnecessarily repetitive
1
We have jurisdiction under 28 U.S.C. § 1291. We read the District Court to have
dismissed plaintiffs’ complaint as frivolous under § 1915(e)(2)(B)(1), and we review that
ruling for abuse of discretion. See Denton v. Hernandez, 504 U.S. 25, 33 (1992).
3
complaint ourselves, we cannot say that the District Court abused its discretion in
dismissing it. The vast majority of plaintiffs’ claims and allegations are indeed devoted
to matters that already have been decided. Plaintiffs point out three exceptions in their
brief, but the dismissal of those claims was proper as well.
First, plaintiffs asserted various claims based on this Court’s alleged handling of
the Richman appeal and named this Court and certain of its current and former employees
as defendants. (E.g., Compl. ¶¶ 94-296, 479-543, 796-848.) Plaintiffs allege that the
manner in which those employees docketed and communicated with them about their
filings caused them emotional distress and somehow prevented them from prevailing on
appeal. Plaintiffs seek both monetary damages and other relief, such as reconsideration
of their prior appeals. Plaintiffs’ claims for damages are barred by judicial and quasi-
judicial immunity, see Gallas v. Supreme Court of Pa., 211 F.3d 760, 772-73 (3d Cir.
2000), and their claims otherwise constitute an improper collateral attack on this Court’s
previous judgments. We thus agree that these claims are frivolous.
Second, plaintiffs alleged that the Pennsylvania Department of Public Welfare
terminated Campbell’s Medicare benefits in 2011 in retaliation for their filing of
certiorari petitions, including in the Richman matter. (E.g., Compl. ¶¶ 763-776.)
Plaintiffs, however, have neither pleaded nor argued on appeal anything suggesting that
their allegations in this regard are plausible or that they could plead a plausible federal
claim in an amended complaint. See Capogrosso v. Supreme Ct. of N.J., 588 F.3d 180,
4
185 (3d Cir. 2009). 2
Finally, plaintiffs asserted state-law malpractice claims against the three attorneys
who represented them pro bono in the Richman matter. (E.g., Compl. ¶¶ 319-342, 680-
688; Am. Compl. ¶¶ 351(z)-351(aa).) Plaintiffs did not invoke the District Court’s
diversity jurisdiction or plead anything suggesting that it might exist. To the contrary,
plaintiffs allege that both they and these defendants are Pennsylvania residents. Thus, the
only potential basis for federal jurisdiction over these claims would be supplemental
jurisdiction under 28 U.S.C. § 1367. Because none of plaintiffs’ purported federal claims
survive the screening stage, however, there would have been no proper basis for the
District Court to have exercised supplemental jurisdiction over these claims. See
Borough of W. Mifflin v. Lancaster, 45 F.3d 780, 788 (3d Cir. 1995). Thus, the dismissal
of these claims ultimately was proper as well. 3
2
In a related vein, plaintiffs also allege that the Department wrongfully terminated their
daughter’s Medicare benefits in 2009 in retaliation for Zied-Campbell’s filing of a notice
of appeal in the Richman action. Plaintiffs, however, are not permitted to litigate pro se
on behalf of their daughter in federal court. See Osei-Afriyie v. Med. Coll. of Pa., 937
F.2d 876, 882-83 (3d Cir. 1991). Plaintiffs also appear to allege that the Department
violated state law in connection with the administration of Campbell’s and their
daughter’s benefits. Nothing in plaintiffs’ complaints suggests that they have a federal
claim in that regard, but our ruling is without prejudice to plaintiffs’ ability to assert this
state-law claim in state court to the extent they might not already have done so. We
express no opinion on the merits of these claims.
3
The dismissal of these claims too is without prejudice to plaintiffs’ ability to pursue
them in state court. We express no opinion on the merits of these claims, but we note that
there is no indication that their dismissal might prejudice plaintiffs’ ability to file a claim
within the statute of limitations. To the contrary, it appears that the limitations period
may have expired before plaintiffs filed their complaint. The Pennsylvania statute of
limitations for malpractice claims is two years and generally runs from the date of the
alleged breach of duty. See Knopick v. Connelly, 639 F.3d 600, 606-07 (3d Cir. 2011).
5
For these reasons, we will affirm. Appellees’ motion for leave to file a
supplemental appendix is granted. Appellants’ motion for leave to file a supplemental
appendix is denied as unnecessary, and their other motions are denied as well. 4
Plaintiffs’ allegations against one of their attorneys appear to concern events in 2005
through 2007 (Compl. ¶¶ 320-336), and plaintiffs allege that their other two attorneys
withdrew from the representation in 2005 (Am. Compl. ¶¶ 351(z)-351(aa)). Because we
hold that there was no basis to exercise federal jurisdiction over these claims, however,
we need not and do not decide that issue.
4
Only one of appellants’ motions warrants discussion. Appellants have filed a motion to
hold this appeal in abeyance pending the United States Supreme Court’s decisions in
Levin v. United States, S. Ct. No. 11-1351, and Milbrook v. United States, S. Ct. No. 11-
10362. The motion is denied because the questions on which certiorari was granted (the
waiver of sovereign immunity for claims against military medical personnel and prison
guards) have no conceivable bearing on the issues in this appeal.
6
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959 F.2d 243
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.UNITED STATES of America, Plaintiff-Appellee,v.Harry S. STONEHILL; Robert P. Brooks, et al.,Defendants-Appellants.Jerome S. Katzin, Receiver.
No. 91-35049.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted March 3, 1992.Decided April 7, 1992.
Before CYNTHIA HOLCOMB HALL, O'SCANNLAIN and LEAVY, Circuit Judges.
1
MEMORANDUM*
2
Harry Stonehill and Robert Brooks (collectively "Stonehill") appeal the district court's denial of their Federal Rule of Civil Procedure 60(b)(5) motion. Stonehill sought a declaration that the United States' judgment for income taxes entered October 14, 1980, was satisfied and that the receivership be terminated. See United States v. Stonehill, 420 F.Supp. 46 (C.D.Cal 1976), aff'd in part and rev'd in part, 702 F.2d 1288 (9th Cir.1983), cert. denied, 465 U.S. 1079 (1984). We have jurisdiction under 28 U.S.C. § 1291,1 see, e.g., Robertson v. Protective National Ins., 882 F.2d 421, 421 (9th Cir.1989), and we affirm.
3
While we recognize the magnitude and complexity of this ongoing dispute, the case is before us on the very narrow question of whether the district court properly denied Stonehill's Rule 60(b)(5) motion. We review the district court's denial of a Rule 60(b)(5) motion for an abuse of discretion. See Transgo, Inc. v. Ajac Transmission Parts Corp., 911 F.2d 363 (9th Cir.1990). "A district court abuses its discretion by making a clear error of law." United States v. Washington, 935 F.2d 1059, 1061 (9th Cir.1991). This court may affirm the district court on any grounds supported by the record even when that ground was not the basis for the district court's decision. See Swenson v. United States Postal Serv., 890 F.2d 1075, 1077 n. 1 (9th Cir.1989).
4
Stonehill contends he is not seeking a modification of Judge Solomon's determination of liability; rather, he is merely asking for a determination that the taxpayers have satisfied the judgment. In so doing, however, Stonehill asked the court to credit amounts allegedly paid prior to the judgment, and to recalculate the accrued interest.
5
In their brief, taxpayers state that the district court prevented them "from proving that the 1980 judgments were erroneous as to the amount actually owed to the [United States]." Taxpayers also assert that "[h]earings and correspondence leading up to the 1980 judgments confirm that, in entering the judgments, Judge Solomon did not consider any prior payments or credits." Contrary to their assertions, taxpayers are attempting to alter or amend the judgment entered by Judge Solomon. They argue, in effect, that if the 1980 judgment properly incorporated certain payments made, and taxpayers had received credit for those payments at the time they were allegedly made, the judgment is now satisfied. To grant relief under that theory, we would have to conclude that the judgment was erroneous, or rendered by mistake or inadvertence. At the time Judge Solomon entered the judgment, relief was available to the taxpayers on those grounds by way of a timely Rule 59(e) motion, or a timely Rule 60(b)(1) or (b)(2) motion, or on direct appeal.
6
Rule 60(b)(5) provides in pertinent part: "On motion and upon such terms as are just, the court may relieve a party ... from a final judgment, order, or proceeding for the following reason[ ]: ... the judgment has been satisfied...." Fed.R.Civ.P. 60(b)(5). Stonehill does cite any other authority as a basis of his motion. The rule simply does not extend to the situation before us. Generally, Rule 60(b)(5) is invoked by a party seeking relief from a judgment that has been satisfied due to events or payments occurring after it was entered. See, e.g., Redfield v. Insurance Co. of N.A., 940 F.2d 542 (9th Cir.1991); Dias v. Bank of Hawaii, 732 F.2d 1401 (9th Cir.1984). We note that courts have also granted relief under Rule 60(b)(5) because of satisfaction in situations where the judgment entered against the defendant had, in effect, been partially satisfied from an independent source. See Sunderland v. City of Philadelphia, 575 F.2d 1089 (3rd Cir.1978); Kassman v. American University, 546 F.2d 1029 (D.C.Cir.1976); Snowden v. D.C. Transit System, Inc., 454 F.2d 1047 (D.C.Cir.1971). Courts have refused to grant Rule 60(b)(5) relief in circumstances where the defendant is alleging the judgment is satisfied due to circumstances that could have been properly considered by a Rule 59(e) or 60(b)(1) motion, see William Skillings & Assoc. v. Cunard Transp., Ltd., 594 F.2d 1078 (5th Cir.1979), or should have been raised at trial. See Willits v. Yellow Cab Co., 214 F.2d 612 (7th Cir.1954). Significantly, Stonehill does not cite to any authority for the operation of Rule 60(b)(5) sought in this case. In rendering the judgment against taxpayers, Judge Solomon must have necessarily considered any payments allegedly made to the Government up to that point. Under these circumstances, we are unwilling to permit taxpayers to go behind that judgment to argue satisfaction of the judgment on the basis of a Rule 60(b)(5) motion filed ten years after entry of that judgment.
7
While taxpayers' precise contentions concerning payments are not altogether clear, it appears to rest almost entirely on payments allegedly made prior to the judgment. To the extent taxpayers are contending that payments were made post-judgment and not credited against the judgment, we find no evidence in the record of amounts paid other than what the Government concedes were paid. When given the opportunity in the district court, Stonehill failed to offer specific evidence to support the contention that there were unaccounted for post-judgment payments.
8
The district court's denial of Stonehill's Federal Rule of Civil Procedure 60(b)(5) motion is affirmed.
9
AFFIRMED.
*
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3
1
Our jurisdiction is not pursuant to 28 U.S.C. § 1292(a)(2). See S.E.C. v. American Principals Holdings, Inc., 817 F.2d 1349, 1351 (9th Cir.1987) (statute interpreted narrowly to apply only to orders refusing to take steps to accomplish purposes of winding up receiverships)
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704 F.2d 1167
83-1 USTC P 9330
BLISS DAIRY, INC., an Arizona corporation, Plaintiff-Appellee,v.UNITED STATES of America, Defendant-Appellant.
No. 79-3318.
United States Court of Appeals,Ninth Circuit.
Argued and Submitted Feb. 11, 1981.Decided April 28, 1983.
Karl P. Fryzel, Atty., Tax Div., Washington, D.C., argued, for defendant-appellant; Gilbert E. Andrews, Washington, D.C., on brief.
James Silhasek, Wales & Plattner, P.C., Phoenix, Ariz., for plaintiff-appellee.
Appeal from the United States District Court for the District of arizona.
Before FERGUSON and REINHARDT, Circuit Judges, and BONSAL,* District Judge.
PER CURIAM:
1
This court, in Bliss Dairy, Inc. v. United States, 645 F.2d 19 (9th Cir.1981), affirmed the granting by the district court of the motion of plaintiff Bliss Dairy, Inc. for summary judgment.
2
The Supreme Court, on March 7, 1983, reversed the judgment of this court and remanded the case to this court for further proceedings in conformity with the opinion of that Court. Hillsboro National Bank v. Commissioner of Internal Revenue, --- U.S. ----, 103 S.Ct. 1134, 75 L.Ed.2d --- (1983), rev'g Bliss Dairy, 645 F.2d at 19.
3
Upon due consideration, the judgment of the district court is reversed and the case is remanded for further proceedings in conformity with the mandate of the Supreme Court.
4
REVERSED AND REMANDED.
*
Honorable Dudley B. Bonsal, United States Senior District Judge for the Southern District of New York, sitting by designation
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518 So.2d 574 (1987)
Henry SENEZ
v.
GRUMMAN FLXIBLE CORP., et al.
No. CA-7448.
Court of Appeal of Louisiana, Fourth Circuit.
December 15, 1987.
Rehearing Denied January 14, 1988.
Writ Denied March 18, 1988.
*575 Lawrence J. Centola, Jr., Carmouche, Gray and Hoffman, New Orleans, for defendant-appellee, Bendix Corp.
Sidney D. Torres, III, Gregory J. Noto, Law Offices of Sidney D. Torres, III, Chalmette, for plaintiff-appellee, Henry Senez.
Madeleine Fischer (appeal counsel), Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, John A. Cvejanovich, Guinan and Cvejanovich, Springfield, Mass., for defendant-appellant, Grumman Flxible Corp.
James Maher, III, New Orleans, for defendant-intervenor-appellant, New Orleans Public Service, Inc.
Before BARRY, LOBRANO, and WARD, JJ.
WARD, Judge.
In this products liability suit, Grumman Flxible Corporation appeals a judgment in favor of Henry Senez which held that there was a design defect in the air brake system of a bus manufactured by Grumman and sold to New Orleans Public Service, Inc. NOPSI also appeals, seeking modification of the portion of the judgment granting reimbursement for worker's compensation benefits and medical expenses it paid to Senez. The suit was filed as the result of an accident which occurred on the evening of June 5, 1981 while Senez was performing his assigned duties as a service worker at the NOPSI bus "barn." Senez's job was to check the oil level and the tires on each bus as it was driven through his service aisle. As he was closing the engine compartment door at the rear of one bus, Senez turned around and saw Bus 315, with another NOPSI employee at the wheel, coming toward himabout an arm's length away. Senez attempted to jump onto the bumper of the approaching bus, but he was crushed between the two buses.
Senez sued Grumman, the manufacturer of NOPSI Bus 315, and Bendix Corporation, the manufacturer of components of the bus's air brake system, alleging that Bus 315 was unreasonably dangerous in normal use because of its propensity toward unexpected brake failure. NOPSI intervened in the suit for reimbursement of worker's compensation paid to Senez.
*576 A jury found Grumman liable for the defective design, manufacture or construction of the brake system on Bus 315. Bendix was found not liable. The Trial Judge rendered judgment in accordance with the $800,000.00 en globo verdict in favor of Senez. Out of this amount, NOPSI recovered reimbursement in the amount of $72,149.68.
In its appeal, Grumman assigns error in: (1) the Trial Judge's refusal to strike the jury venire after its members allegedly heard remarks prejudicial to Grumman; (2) the exclusion of certain photographs from evidence; (3) the Judge's failure to instruct the jury to assign negligence to NOPSI; and (4) the excessiveness of the damage award. Senez answered the appeal, requesting an increase in the damages. We affirm the Trial Court judgment but amend it to clarify NOPSI's reimbursement and credit for compensation payments.
In its first assignment of error, Grumman contends that it is entitled to a new trial because the entire jury venire allegedly heard prejudicial remarks made by a prospective juror during voir dire. The prospective juror, a former NOPSI employee, was asked by Grumman's counsel whether he had an opinion or bias concerning the safety of the Grumman buses. According to Grumman, instead of answering yes or no to the question, the man made a series of derogatory remarks about the Grumman buses. The Trial Judge excused the man for cause, and admonished the venire to disregard the remarks.
The voir dire was not recorded by the court reporter, and the parties were unable to agree upon a stipulation as to the content of the remarks or as to the circumstances surrounding them. After the incident, Grumman asked for a new venire. The Trial Judge denied the request, and Grumman made a general objection. On appeal, Grumman contends that the derogatory remarks were heard by the entire jury venire and that all the jurors were therefore prejudiced against Grumman's case.
In order to provide this Court with something more than its general objection to review, Grumman's appeal counsel moved to correct an omission of the trial record as permitted by Article 2132 of the Code of Civil Procedure:
A record on appeal which is incorrect or contains misstatements, irregularities or informalities, or which omits a material part of the trial record may be corrected even after the record is transmitted to the appellate court, by the parties by stipulation, by the Trial Court or by the order of the appellate court.
Claiming that the voir dire is an omission of a material part of the trial record, Grumman asks this Court to "correct" the omission because attempts to obtain a stipulation or to elicit a statement from the Trial Judge were unsuccessful. After the record has been transmitted to the appellate court, however, the general rule is that it can be corrected or supplemented only if the omitted evidence was actually introduced at trial. Bullock v. Commercial Union Insurance Co., 397 So.2d 13 (La.App. 3rd Cir. 1981). Not only was the voir dire not recorded in the Trial Court, but even Grumman's trial counsel makes only a generalized and conclusory statement of the incident. We are not presented with a specific and verified account of the incident which occurred during voir dire; hence we cannot construct the facts.
Moreover, having apparently failed to question other jurors about the effect the remarks had on them, Grumman has not proved that the jurors were influenced by the remarks. Also, Grumman has not shown that the Trial Judge's admonition plus his excusing the NOPSI employee for cause were insufficient to alleviate any potential prejudice. A trial judge is given broad discretion in defining the scope of voir dire, and his rulings will not be disturbed absent abuses of that discretion. Mobley v. General Motors Corp., 482 So.2d 1056, 1060 (La.App. 3rd Cir.1986). We find no abuse of discretion in the Trial Judge's refusal to strike the jury venire.
Grumman's second assignment of error is that the Trial Judge erred by excluding certain photographs from evidence. The photographs, taken two years after the *577 accident, showed improperly positioned valves on several NOPSI buses. Although the photographs did not depict Bus 315, Grumman argues that the photographs supported its defense that NOPSI did not properly maintain the buses and that improper maintenance, rather than a design defect, caused the brake failure.
There is testimony in the record indicating that NOPSI may not have always followed the manufacturer's specifications as to the positioning of the valves, but that evidence does not show that improper positioning of the valves would necessarily lead to brake failure. More important, there is testimony that a photograph of Bus 315 taken shortly after the accident shows its valves in the proper position. The photographs Grumman sought to introduce were therefore irrelevant and potentially misleading, and the Trial Judge correctly denied their admission into evidence.
Grumman's third assignment of error challenges the Trial Judge's refusal to instruct the jury on the doctrine of comparative negligence and his refusal to submit an interrogatory to the jury which would have required the jury to consider any negligence of NOPSI. The Trial Judge did not err in failing to give instructions on comparative negligence. Comparative negligence is applicable only when the plaintiff is negligent. La.C.C. art. 2323. There is neither allegation nor evidence that Senez was negligent. Cases cited by Grumman in brief and at oral argument in which the plaintiff was negligent are therefore distinguishable and inapplicable.
There is scarcely any evidence of negligence on the part of NOPSI, but even assuming that there was evidence of NOPSI's negligence sufficient to require submission of the issue to the jury, there was no legal basis for doing so because of NOPSI's status as an employer immune from tort liability. Franklin v. Oilfield Heavy Haulers, 478 So.2d 549 (La.App. 3rd Cir.1983), writs denied 481 So.2d 1330, 1331 (La.1986); Robertson v. Superior PMI, Inc., 791 F.2d 402 (5th Cir.1986).
Under the law as it existed at the time of Senez's accident, NOPSI's immunity, together with Grumman's position as a solidary obligor with any other tort feasor, make any assessment of NOPSI's negligence meaningless. Accordingly, these factors support the conclusion that the Trial Judge's rulings on jury instructions and interrogatories were correct.
In its final assignment of error, Grumman challenges as excessive the damages award of $800,000.00. As a result of the accident, Senez sustained severe pelvic injuries including broken bones and damage to internal organs. He underwent exploratory surgery and surgery to repair damage to his bladder and urethra, necessitating a two month hospital stay during which he was confined to bed. Eventually, the repair of Senez's urinary tract injuries was largely successful.
During Senez's convalescence, however, he began to experience leg and low back pain. The conservative treatment, which he initially received for what his doctor thought was a pinched nerve, evolved into the need for a myleogram and two back surgeries. At trial, Senez was still suffering from back pain and had experienced drastic changes in his lifestyle. His doctor assessed permanent disability at 30 to 40 percent and testified that Senez needed another myleogram and possibly another back surgery to arrest the continuing back pain. The doctor also testified that Senez most likely will require medication and the care of a physician for the rest of his life. At the time of trial, Senez had accrued medical expenses of approximately $43,000.00.
Although Senez is willing to seek employment, the testimony of the doctors, economist and vocational counselors showed it highly unlikely that Senez could obtain suitable employment. He will never be able to perform manual laborthe work for which he is best suited, and his back pain and related problems would interfere substantially with a sedentary job. The evidence, therefore, assessed Senez's future lost income at $240,374.93 to $307,399.41.
*578 Accordingly, we find no abuse of the jury's discretion in assessing damages. We also find no basis upon which the amount of damages could be raised; hence we reject Senez's sole assignment of error that the damages are inadequate.
We now consider NOPSI's appeal which seeks modification of the portion of the judgment awarding it reimbursement under R.S. 23:1103 for worker's compensation paid to Senez. Pursuant to a stipulation agreed upon during trial, the judgment granted NOPSI $42,280.28 for medical expenses and $29,869.40 for compensation benefits, a total of $72,149.68, to be paid out of Senez's $800,000.00 award. NOPSI now contends that this Court should amend the judgment: (1) to include an additional amount in reimbursement of benefits paid from the date of the stipulation until the date of finality of the judgment; and (2) to give NOPSI a credit for future compensation.
NOPSI is entitled to reimbursement from the third party tort-feasor for all worker's compensation, both medical expenses and weekly benefits actually paid, in preference over the damages recovered for these items by the injured employee. La.R.S. 23:1103. Hence, NOPSI may recover from Grumman in preference to Senez, not only the amounts which were stipulated, but also any other amounts which it has actually paid. NOPSI's first requested modification of the judgment is therefore unnecessary.
NOPSI's claim for reimbursement and its request for a credit are both limited, however, to the amounts which Senez recovered in the tort judgment for medical expenses and lost income. No reimbursement or credit may be taken against that portion of Senez's award which is attributed to damages for pain and suffering. Brooks v. Chicola, 514 So.2d 7 (La.1987). Furthermore, the employer's reimbursement or credit for payment of medical expenses may be taken only against the employee's tort recovery for medical expenses, and the employer's reimbursement or credit for weekly compensation benefits may be taken only against the employee's tort recovery for lost income. Because the jury, pursuant to interrogatories, returned a lump sum verdict, the judgment does not indicate which portion of Senez's award is subject to NOPSI's claims for reimbursement and for credit for future payments.
It is therefore apparent that Senez's lump sum judgment must be itemized before we can recognize NOPSI's claims. Rather than remanding the case to the Trial Court, we have examined the evidence in the record now before us and itemize Senez's $800,000.00 judgment accordingly:
GENERAL DAMAGES $384,220.53
Pain and suffering (not subject
to any claims by NOPSI)
SPECIAL DAMAGES
Lost income to date of trial $ 49,000.53
Post-trial lost income $307,399.41
Medical expenses incurred to
date of trial $ 42,779.53
Post-trial medical expenses $ 16,600.00
___________
TOTAL $800,000.00
NOPSI therefore shall recover from Senez's tort award in preference to Senez on the date the judgment becomes final, reimbursement of any medical expenses it has paid on behalf of Senez before trial up to $42,779.53, the amount of Senez's damages for pre-trial medical expenses. Any excess in Senez's award for pre-trial medical expenses over the amount paid to NOPSI shall be paid to Senez. Any medical expenses NOPSI has actually paid on behalf of Senez after trial shall be reimbursed to NOPSI in preference to Senez out of the damages awarded Senez for post-trial medical expenses. The remaining amount paid to Senez for post-trial medical expenses shall be credited to NOPSI's liability for payment of future medical expenses; NOPSI's liability for Senez's future medical expenses shall be deemed satisfied up to an amount equal to the payment made to Senez.
Likewise, on the date that the judgment becomes final, NOPSI shall be paid, out of Senez's tort award in preference to him, reimbursement of any weekly benefits it has paid to Senez before trial up to $49,000.53, the amount of Senez's damages for pre-trial lost income. Any excess in Senez's *579 award for pre-trial lost income over the amount paid to NOPSI shall be paid to Senez. The amount of any weekly benefits NOPSI has actually paid to Senez after trial shall be reimbursed to NOPSI in preference to Senez out of the damages awarded Senez for post-trial lost income. The remaining amount paid to Senez for post-trial lost income shall be credited to NOPSI's liability for future weekly benefits; NOPSI's liability for Senez's future weekly benefits shall be deemed satisfied up to an amount equal to the payment made to Senez.
Accordingly, the Trial Court judgment is affirmed as amended. All costs of appeal to be paid by Grumman Flxible Corporation.
AFFIRMED AS AMENDED.
LOBRANO, J., concurs with reasons.
LOBRANO, Judge, concurring.
I concur in the majority result. The evidence does not support any negligence on the part of NOPSI, therefore there was no error in refusing to charge the jury concerning NOPSI's negligence. However, I am not convinced, as a matter of law, that an employer's negligence cannot be considered by the jury in cases of this nature.
The majority cites Franklin v. Oilfield Heavy Haulers, 478 So.2d 549 (La.App. 3rd Cir.1983), writs denied 481 So.2d 1330, 1331 (La.1986). However, an opposite result was reached in Trosclair v. Terrebonne Parish School Board, 489 So.2d 1293 (La. App. 1st Cir.1986), writs denied 493 So.2d 644 (La.1986).
Where the employer is able to recover the compensation and medical benefits out of the judgment awarded its employee against a third party tort feasor, it seems reasonable to allow the tort feasor to reduce his liability by the proportionate fault of the employer. Otherwise, the employer pays nothing, the tort feasor is precluded from seeking contribution in accordance with Civil Code Articles 1804 and 1805, as amended in 1984, and thus is compelled to pay 100% of the damages where he may be less than 100% at fault.
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IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE
AT NASHVILLE FILED
JUNE 1999 SESSION
September 27, 1999
Cecil Crowson, Jr.
Appellate Court Clerk
STATE OF TENNESSEE, )
) C.C.A. No. 01C01-9808-CC-00334
Appellee, )
) Montgomery County
v. )
) Honorable Robert W. W edemeyer, Judge
CEDRON ORGAIN, )
) (Coercion of a Witness)
Appellant. )
FOR THE APPELLANT: FOR THE APPELLEE:
MICHAEL R. JONES PAUL G. SUMMERS
District Public Defender Attorney General & Reporter
110 Sixth Avenue West
Springfield, TN 37172 MARK E. DAVIDSON
Assistant Attorney General
425 Fifth Avenue North
Nashville, TN 37243-0493
JOHN WESLEY CARNEY, JR.
District Attorney General
C. DANIEL BROLLIER, JR.
Assistant District Attorney General
204 Franklin Street, Suite 200
Clarksville, TN 37040-3420
OPINION FILED: _______________________________
AFFIRMED
ALAN E. GLENN, JUDGE
OPINION
On April 27, 1998, a Montgomery County jury convicted the defendant, Cedron
Orgain, of one count of coercion of a witness. The trial court imposed an effective
sentence of four years, with six months to be served in the county jail and the remainder
of the sentence to be served in the Community Corrections Program. The defendant
timely appealed, challenging the sufficiency of the evidence. Based upon our review of this
matter, we affirm the decision of the trial court.
FACTS OF THE CASE
The defendant was charged with selling cocaine to a confidential informant. On
August 15, 1997, approximately two weeks before his scheduled trial for the cocaine sale,
the defendant encountered the informant at an Exxon station in Clarksville.
The confidential informant testified that he went to the Exxon station, which was
located next to his place of employment, and that as he walked into the store, he saw the
defendant coming toward the entrance of the store. The informant went into the store,
purchased a drink, and then left the store. He testified that the defendant had followed him
into the store and stayed behind him while he completed the purchase. The defendant
then followed him outside, and said to him, “We need to talk.” The informant asked the
defendant to leave, but the defendant refused. When the informant threatened to call the
police, the defendant said, “You are the police. You’re a narc . . . “I’d just as soon kill you.”
The informant then banged on the window of the store and asked the clerk to call the
police.
On cross-examination, the confidential informant testified that the defendant never
mentioned the upcoming trial or told the informant not to testify. Further, the defendant
neither struck the informant nor physically threatened him. The informant testified he had
been convicted of five prior felonies and then began working for the police as an informant.
2
The State introduced the testimony of Kim Chandler from the preliminary hearing
in General Sessions Court. Chandler was an employee of the Exxon store on August 15,
1997. Chandler stated she knew both the confidential informant and the defendant as
customers of the store, but did not know the defendant by name. Chandler heard the
confidential informant banging on the store window and calling for the police. She walked
outside and saw the two arguing. When the defendant tried to leave, the informant stood
behind his car and told him not to leave. Chandler stated that the defendant could have
bought a pack of cigarettes while in the store, but she did not know for sure.
The defendant testified that he lived about a half a block away from the Exxon store,
which he went to often. On August 15, 1997, he went to the store to buy cigarettes and
stated he did not know that the confidential informant was in the store when he purchased
the cigarettes. After his purchase, the defendant walked outside the store toward his car,
but then walked toward the pay phone because his pager went off. As he walked toward
the pay phone, he said “excuse me” to the informant who had blocked his way to the pay
phone. The defendant said he did not recognize the informant until he began yelling and
cursing at the defendant. The informant told the defendant to “get away or I am going to
call the police.” The defendant responded by saying, “You are the police” and “You’re a
narc.” He stated that the informant made motions suggesting he wanted the defendant to
hit him. After arguing with the informant, the defendant walked back to his car to leave, but
the informant blocked his way out of the parking lot. However, the defendant backed his
car out of the lot and went home. He testified that at no time did he threaten the informant
or mention the upcoming trial.
Sandy Olds, an officer with the drug task force which had utilized the informant,
testified in rebuttal for the State. Olds stated that the defendant and the informant were
in court at the same time for one of the defendant’s earlier appearances, prior to the trial
on the drug charges and, for a time, sat side by side in the courtroom. The State
introduced this testimony to show that the defendant could have recognized the informant
and known where he worked because of the informant’s distinctive uniform. Olds’s
3
testimony rebutted the defendant’s assertion that he did not recognize the informant until
he began yelling at the defendant.
After due deliberation, the jury found the defendant guilty of coercion of a witness.
The trial court sentenced him to four years. After six months in jail, he was to serve the
remainder of his sentence on Community Corrections. After denial of his post-trial
motions, he timely appealed.
DISCUSSION OF LAW
When a challenge is made to the sufficiency of the evidence, the standard for
appellate review is whether, after considering the evidence in a light most favorable to the
State, any rational trier of fact could have found the essential elements of the crime beyond
a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 99 S.Ct. 2781, 61 L.Ed.2d 560
(1979). The defendant's burden of showing insufficiency is heavy, since all conflicts in
testimony are resolved in favor of the State, and the State is entitled to the strongest
legitimate view of the evidence as well as all reasonable or legitimate inferences that may
be drawn therefrom. State v. Burns, 979 S.W.2d 276, 287 (Tenn. 1998).
To support a conviction for coercion of a witness, Tenn. Code Ann. § 39-16-507
requires the State to prove beyond a reasonable doubt the defendant
by means of coercion, influences or attempts to
influence a witness or prospective witness in an
official proceeding with intent to influence the
witness to:
(1) Testify falsely;
(2) W i t h h o ld any t ru t h f ul
testimony, truthful information,
document or thing; or
(3) E l u d e legal p r o ce s s
summoning the witness to
testify or supply evidence, or to
be absent from an official
proceeding to which the
witness has been legally
summoned.
4
Tenn. Code Ann. § 39-16-507 (1991). Coercion is defined as a threat, however
communicated, to commit any offense. Tenn. Code Ann. § 39-11-106(a)(3)(A) (1991).
After a review of the record and considering the evidence in the light most favorable to the
State, we find the State established all elements of the crime beyond a reasonable doubt.
The confidential informant testified that the defendant followed him into the store
and then confronted him outside the store. According to the informant, the defendant then
said, “I’d just as soon kill you.” Based upon this testimony, the jury could find that the
defendant threatened to commit an offense as contemplated in Tenn. Code Ann. § 39-16-
506.
Intent to influence a witness may be inferred from the actions of a defendant. State
v. Jonathan Moore, No. 03C01-9602-CC-00057, 1997 WL 65729, at *4 (Tenn. Crim. App.,
Knoxville, Feb. 13, 1997). The confidential informant had bought drugs from the defendant
and testified against him at a preliminary hearing. During the confrontation at the Exxon
station less than two weeks before the defendant’s trial, the defendant told the confidential
informant, “You are a narc” and “You are the police.” The defendant then said, “I’d just
as soon kill you.” A rational trier of fact could have inferred these actions were intended
to coerce the informant not to testify at the upcoming trial.
Based on our review, the evidence presented at trial was sufficient to support the
conviction for coercion of a witness. For this reason, we affirm the decision of the trial
court.
________________________________________
ALAN E. GLENN, JUDGE
CONCUR:
____________________________________
JOSEPH M. TIPTON, JUDGE
5
____________________________________
JOE G. RILEY, JUDGE
6
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26 So.3d 507 (2008)
RICHARD LINDSEY
v.
STATE.
No. CR-06-1739.
Court of Criminal Appeals of Alabama.
May 23, 2008.
Decision of the Alabama Court of Criminal Appeals Without Published Opinion Affirmed.
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Motion Granted; Dismissed and Memorandum Opinion filed April 22, 2014.
In The
Fourteenth Court of Appeals
NO. 14-13-00940-CR
QUINCY MICHAEL MCCRAY, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the 252nd District Court
Jefferson County, Texas
Trial Court Cause No. 10-10470
MEMORANDUM OPINION
A written request to withdraw the notice of appeal, personally signed by appellant,
has been filed with this court. See Tex. R. App. P. 42.2. Because this court has not
delivered an opinion, we grant appellant’s request.
Accordingly, we order the appeal dismissed. We direct the clerk of the court to issue
the mandate of the court immediately.
PER CURIAM
Panel consists of Justices Boyce, Busby, and Wise.
Do Not Publish — Tex. R. App. P. 47.2(b).
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542 F.2d 1181
Warlickv.U. S. District Court for Western District of Washington
No. 76-1775
United States Court of Appeals, Ninth Circuit
9/28/76
1
W.D.Wash.
REMANDED
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944 So.2d 358 (2006)
CAMPBELL
v.
STATE.
No. 2D06-1109.
District Court of Appeal of Florida, Second District.
December 1, 2006.
Decision without published opinion. Affirmed.
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67 S.W.3d 596 (2002)
76 Ark.App. 436
Pat JACKSON
v.
Dr. Dean DELIS, Ph.D., et al.
No. CA 01-735.
Court of Appeals of Arkansas, En Banc.
February 13, 2002.
Duncan & Rainwater, P.A., by: Virginia Trammell, Little Rock, for appellant.
Barber, McCaskill, Jones & Hale, P.A., by: John S. Cherry, Jr., and D. Keith Fortner, Little Rock, for appellee.
PER CURIAM.
Ms. Pat Jackson appeals from an order of dismissal granted by the Pulaski County Circuit Court that found it could not exercise personal jurisdiction over the defendant Dr. Dean Delis. Ms. Jackson raises two issues on appeal; however, because the order from which she appeals is not certified as a final judgment pursuant to *597 Rule 54(b)(1) and (2) of the Arkansas Rules of Civil Procedure, we must dismiss.
This dispute arose from a workers' compensation claim made by Ms. Jackson. In June 1996, Ms. Jackson, was involved in an automobile collision during the course of her employment. She sustained multiple injuries as a result of the collision, was treated by many doctors and psychologists, and began receiving workers' compensation benefits. Appellee Systemedic, Inc., (Systemedic) administered the details of Ms. Jackson's workers' compensation claim for her employer.
Approximately two years after Ms. Jackson's injury, Systemedic requested that appellee Dr. Delis, a California forensic consultant, review Ms. Jackson's medical records concerning whether Ms. Jackson had suffered a brain injury during her employment-related automobile accident. Ms. Jackson claims that, as a result of the findings made by Dr. Delis in his report, Systemedic stopped payment of her benefits.
Ms. Jackson sued Systemedic and Dr. Delis for negligence in Pulaski County Circuit Court, basing her claim on Dr. Delis's blatant disregard of the ethical rules of the medical profession in preparing his report and Systemedic's sole reliance on the report to discontinue her benefits. She later amended her complaint to add John Doe Systemedic Entity and John Doe Insurance Company as additional defendants. Dr. Delis answered and moved for dismissal of Ms. Jackson's complaint, alleging that the Pulaski County Circuit Court lacked personal jurisdiction over him. In its order entered March 16, 2001, the circuit court granted Dr. Delis's motion and dismissed the complaint against him. On March 30, 2001, the circuit court attempted to enter a final judgment pursuant to Rule 54(b) of the Arkansas Rules of Civil Procedure, but did not file a Rule 54(b) certification. In its order, the court noted that Ms. Jackson's claims and causes of action against defendant Systemedic remained pending before the court. Nevertheless, it held that there was no just reason to delay Ms. Jackson's appeal of the order dismissing Dr. Delis, stating that the appeal could be determinative of the entire case. The court then directed the entry of a final judgment from which an appeal could be taken.[1]
Rule 2(a)(1) of the Arkansas Rules of Appellate Procedure-Civil provides that an appeal may be taken only from a final judgment or decree entered by the trial court. Arkansas Rule of Civil Procedure 54(b) further provides that, when more than one claim for relief is presented in an action or when multiple parties are involved, an order that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties is not a final, appealable order. See Hambay v. Williams, 335 Ark. 352, 980 S.W.2d 263 (1998); South County, Inc. v. First W. Loan Co., 311 Ark. 501, 845 S.W.2d 3 (1993). Whether an order is final for purposes of appeal is a jurisdictional issue that this court is required to raise even if the parties do not. Hambay v. Williams, supra.
Rule 54(b) was amended by a per curiam of the supreme court that became effective February 1, 2001. See In re Arkansas Rules of Civil Procedure 4, 12, 15, 45, 54, 56, and 78: and Arkansas Rules of Appellate ProcedureCivil 2 and 4, 343 Ark. 858, 34 S.W.3d XV (2001). Rule 54(b) now provides that the court shall execute a certification of final judgment, as it appears in Ark. R. Civ. P. 54(b)(1), when it finds no just reason for delaying an appeal. *598 Subsection (2) of this rule further provides that, absent this required certification, any judgment, order, or other form of decision that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action.[2]
Because the court's March 30, 2001, judgment is not a final order as to all the parties, and there is not a Rule 54(b) certification that would justify an immediate appeal, this court is without jurisdiction to hear this case. Therefore, the appeal is dismissed without prejudice.
Appeal dismissed.
NOTES
[1] The order made no mention of the separate John Doe defendants.
[2] (b) Judgment Upon Multiple Claims or Involving Multiple Parties.
(1) Certification of Final Judgment. When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination, supported by specific factual findings, that there is no just reason for delay and upon an express direction for the entry of judgment. In the event the court so finds, it shall execute the following certificate, which shall appear immediately after the court's signature on the judgment, and which shall set forth the factual findings upon which the determination to enter the judgment as final is based:
Rule 54(b) Certificate
With respect to the issues determined by the above judgment, the court finds:
[Set forth specific factual findings.]
Upon the basis of the foregoing factual findings, the court hereby certifies, in accordance with Rule 54(b)(1), Ark. R. Civ. P., that it has determined that there is no just reason for delay of the entry of a final judgment and that the court has and does hereby direct that the judgment shall be a final judgment for all purposes.
Certified this ______ day of ______, ______.
____________
Judge
(2) Lack of Certification. Absent the executed certificate required by paragraph (1) of this subdivision, any judgment, order, or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the judgment, order, or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all of the parties.
Ark. Rule Civ. P. 54(b).
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201 Ga. App. 171 (1991)
410 S.E.2d 453
COOLEY
v.
THE STATE.
A91A1287.
Court of Appeals of Georgia.
Decided September 10, 1991.
W. Edward Nethery, John H. Tarpley, for appellant.
Robert E. Wilson, District Attorney, Barbara B. Conroy, Nelly F. Withers, Assistant District Attorneys, for appellee.
McMURRAY, Presiding Judge.
Defendant Cooley appeals his conviction of the offenses of rape, kidnapping with bodily injury, and robbery. Held:
1. Defendant's first enumeration of error raises the sufficiency of the evidence to authorize defendant's conviction on each charge. The evidence viewed in the light most favorable to upholding the verdict shows that the victim was staying temporarily with a friend, Acker. When the victim returned to Acker's apartment around 11:30 p. m., she found defendant present. After a conversation with the victim and defendant, Acker indicated that he was ready to go to sleep. The victim and defendant left the apartment at that time and went to the nearby apartment of defendant's mother. Defendant became embroiled in an argument with family members and the victim returned to Acker's apartment. Shortly thereafter, defendant returned to Acker's apartment and accused the victim of having taken some money from him. An argument began between the two and as it escalated Acker asked them to go outside. The victim and defendant continued to argue as they walked back to the vicinity of the apartment of defendant's mother. Defendant insisted that the victim proceed further and she refused at which point defendant knocked the victim unconscious causing her to suffer a broken tooth and various cuts and scratches about the face. The victim regained consciousness in a vacant apartment near defendant's mother's apartment; she had been disrobed. Defendant was lying on the victim as she regained consciousness and he proceeded by forcibly overcoming her resistance to have carnal knowledge of her. Afterwards, as the victim was fleeing the scene, defendant chased her down on the street and forcibly took her handbag from her.
Although defendant testified as to another account of the incident including that the sexual intercourse was consensual, the determination of credibility and resolution of conflicts in the evidence are for the jury. This Court does not reweigh the evidence but only determines its legal sufficiency. Holcomb v. State, 198 Ga. App. 547 (1) (402 SE2d 520). The evidence is sufficient to authorize any rational trier of fact to find defendant guilty beyond a reasonable doubt of the *172 offenses charged. Jackson v. Virginia, 443 U. S. 307 (99 SC 2781, 61 LE2d 560); Hunnicutt v. State, 198 Ga. App. 572, 575 (402 SE2d 534).
2. Defendant contends the trial court erred by admitting evidence of a similar transaction, a previous rape which like the crime at issue occurred late at night after defendant had been drinking and using marijuana. "In criminal cases, the rule admitting evidence of similar crimes is an exception to the general rule against prejudicially putting a defendant's character in issue. Millwood v. State, 164 Ga. App. 699 (296 SE2d 239). But where its relevance to show identity, motive, plan, scheme, bent of mind and course of conduct, outweighs its prejudicial impact, it is properly admitted. Hayes v. State, 175 Ga. App. 135, 137 (332 SE2d 917); McCarty v. State, 165 Ga. App. 241, 243 (299 SE2d 95). However, before it is admissible, two conditions must be satisfied. First, there must be evidence that the defendant was in fact the perpetrator of the independent crime. Second, there must be sufficient similarity or connection between the independent crime and the offense charged. Davis v. State, 249 Ga. 309, 311 (290 SE2d 273)." Anderson v. State, 184 Ga. App. 293, 294 (361 SE2d 270). Both of the conditions prerequisite to the admission of the evidence at issue were satisfied. Based on these similarities there was no error in the trial court's admission of this evidence. Colquitt v. State, 196 Ga. App. 817, 818 (2) (397 SE2d 164).
3. The trial court did not err in curtailing the cross-examination of a witness who was the victim in the similar transaction crime. The witness had already testified that she was not using any drugs on the night of the similar transaction crime, that no one present at that incident was smoking crack cocaine and that she was familiar enough with cocaine to recognize when others used it. It was within the trial court's discretion in controlling cross-examination to sustain the State's objection to an inquiry as to whether she had ever used cocaine since such evidence was neither relevant nor material. Williamson v. State, 186 Ga. App. 589, 590 (2) (367 SE2d 863).
Judgment affirmed. Sognier, C. J., and Andrews, J., concur.
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593 S.E.2d 629 (2003)
215 W.Va. 58
Nada D. (Stanley) SHAFFER, Plaintiff Below, Appellee,
v.
Wetzel Gary STANLEY, Defendant Below, Appellee, and
State of West Virginia Department of Health and Human Resources, Bureau for Child Support Enforcement, Appellant.
No. 31118.
Supreme Court of Appeals of West Virginia.
Submitted September 9, 2003.
Decided November 26, 2003.
Dissenting Opinion of Justice Davis December 4, 2003.
*632 David L. Hill, Esq., Hamlin, West Virginia, Attorney for W.G. Stanley.
Kimberly D. Bentley, Esq., Assistant General Counsel, West Virginia Department of Health and Human Resources, Bureau for Child Support Enforcement, Charleston, West Virginia, Attorney for WV DHHR, BCSE.
Bruce G. Perrone, Esq., Legal Aid of West Virginia, Attorney for Amicus Curiae, Nada Stanley. *630
*631 MAYNARD, Justice:
The appellant, the Bureau for Child Support Enforcement ("BCSE"), appeals the April 27, 2001, order of the Circuit Court of Lincoln County that holds the BCSE and Nada Stanley jointly and severally liable to pay to the appellee, Wetzel Garry Stanley, $19,837.96, which the court determined to be an overpayment of child support paid by Mr. Stanley.
I.
FACTS
The essential facts of this case gleaned from the record and the pleadings of the parties are as follows. The appellee, Wetzel Garry Stanley ("Mr.Stanley"), and Nada D. Stanley[1] were divorced in 1978. Nada Stanley was granted custody of the couple's two children, and Mr. Stanley was ordered to pay $200 per month child support.[2]
By order of August 1, 1980, Nada Stanley was granted judgment against Mr. Stanley in the amount of $1000 for unpaid child support. On or about June 16, 1981, a writ of execution and suggestion were filed in an attempt to execute the judgment award.
In 1982, the appellant, the Bureau for Child Support Enforcement ("BCSE"), intercepted the income tax refund of Mr. Stanley for tax year 1981 for unpaid child support. According to Mr. Stanley's counsel during oral argument before this Court, for the next several years Mr. Stanley "did what he could" to meet his child support obligation and occasionally made cash payments directly to Ms. Stanley. He admitted, however, that the total amount paid was "minimal." During this time, no official action was taken by the BCSE or Ms. Stanley to enforce Mr. Stanley's child support obligation, although Mr. Stanley apparently received regular billing statements and letters from the BCSE in an effort to collect child support. According to the BCSE, for the tax years 1989 through 1997, it regularly attempted unsuccessfully to intercept Mr. Stanley's income tax refunds.
In October 1993, Ms. Stanley filed a petition for contempt against Mr. Stanley for his *633 failure to pay child support. Later that month, the BCSE issued a "Notice To Source Of Income To Initiate Withholding" to the Social Security Administration to withhold specified amounts to meet Mr. Stanley's child support obligations. In December 1993, Mr. Stanley received a Social Security disability backpay award of about $20,000, from which there was no withholding.[3] Also in December 1993, Mr. Stanley filed a petition for determination of arrears. Although a hearing was held before a family law master[4] on the parties' petitions, no order was entered as a result of the hearing.
On March 11, 1997, the BCSE issued to the Workers' Compensation Division a "Notice To Employer/Source Of Income To Initiate Withholding." As a result, in March 1997, the BCSE intercepted $32,796.60 from a Workers' Compensation lump sum award to Mr. Stanley for the payment of child support arrearage. This money was then forwarded to Nada Stanley.
In October 1997, Mr. Stanley filed a petition for modification of child support in which he requested that the BCSE withholdings from his monthly Social Security check be terminated. After a hearing in February 1998, the family law master entered an April 9, 1998, order in which she rejected Mr. Stanley's claim that the statute of limitations barred collection of a portion of the arrearage.[5] She also gave Mr. Stanley a credit toward the arrearage for Social Security benefits paid directly to Nada Stanley on behalf of the couple's children in the amounts of $96 per month from February 1994 through November 1994; $98 per month from December 1994 through May 1995; and a lump sum payment of $2,745.90 in 1993. In addition, the family law master awarded to the BCSE a decretal judgment against Mr. Stanley in the amount of $2,896.76, as reimbursement of welfare benefits formerly paid to Nada Stanley. Finally, the family law master ordered that income withholding from Mr. Stanley's monthly social security check be limited to $300. This recommended order was erroneously entered on April 9, 1998, absent the opportunity afforded by the ten-day period in which to file exceptions to a recommended order of a family law master. Accordingly, by orders of November 23, 1998 and January 22, 1999, the circuit court set aside the order, and regarded it as a valid family law master's order to which exceptions could be filed within ten days.
Mr. Stanley filed exceptions to the family law master's recommended order based on its failure to apply the ten-year statute of limitations for the execution of judgments in W.Va.Code § 38-3-18. Subsequently, the circuit court held that Nada Stanley and the BCSE failed to pursue collection of child support between the writ of execution filed in 1981 and the contempt petition filed in 1993. Therefore, the ten-year statute of limitations barred collection of child support owed prior to October 1, 1983 which was ten years prior to Nada Stanley's contempt petition. Accordingly, the circuit court ordered the BCSE to recalculate the child support arrearage owed by Mr. Stanley.
Following the recalculation, the circuit court granted judgment to Mr. Stanley against Nada Stanley for an overpayment of child support in the amount of $17,855.49, plus interest. The BCSE was ordered to return any held monies to Mr. Stanley and cease collection activity.
Mr. Stanley subsequently filed a motion to clarify the circuit court's order requesting that the BCSE, in addition to Nada Stanley, also be held responsible for refunding the overpayment. The circuit court found the BCSE jointly and severally liable for the repayment because it breached its duty to forward the withholdings to the proper party.
It is now known that Nada Stanley received a discharge in bankruptcy of all debts *634 and claims, including the claim asserted by Mr. Stanley for child support overpayment. Accordingly, the BCSE is now solely responsible to Mr. Stanley for the overpayment of his child support obligations pursuant to the circuit court's order.[6]
II.
STANDARD OF REVIEW
In considering the circuit court's order now challenged by the BCSE, we are guided by our oft-stated rule that "[t]his Court reviews the circuit court's final order and ultimate disposition under an abuse of discretion standard. We review challenges to findings of fact under a clearly erroneous standard; conclusions of law are reviewed de novo." Syllabus Point 4, Burgess v. Porterfield, 196 W.Va. 178, 469 S.E.2d 114 (1996).
III.
DISCUSSION
A. Applicability of the Ten-Year Limitation Period
The first issue before this Court is whether the circuit court erred in its application of the time limitation for execution of judgments found in W.Va.Code § 38-3-18 (1923), which states:
On a judgment, execution may be issued within ten years after the date thereof. Where execution issues within ten years as aforesaid, other executions may be issued on such judgment within ten years from the return day of the last execution issued thereon, on which there is no return by an officer or which has been returned unsatisfied. An action, suit or scire facias may be brought upon a judgment where there has been a change of parties by death or otherwise at any time within ten years next after the date of the judgment; or within ten years from the return day of the last execution issued thereon on which there is no return by an officer or which has been returned unsatisfied. But if such action, suit or scire facias be against the personal representative of a decedent, it shall be brought within five years from the qualification of such representative.
The circuit court found,
that there is no exception to the 10-year statute of limitations set forth in West Virginia Code Section ... 38-3-18. In Zanke v. Zanke, 185 W.Va. 1, 404 S.E.2d 92 (1991), the Court reaffirmed this principal [sic]. Accordingly, it is ORDERED and ADJUDGED that ... the plaintiff and the State of West Virginia are barred by the statute of limitations from collecting any past due child support which was payable prior to October, 1983, including the 1980 judgment. The Child Support Enforcement Division shall recompute the defendant's arrearage beginning with a zero balance due on October 1, 1983[.]
Initially, we conclude that the manner in which the circuit court applied the time limitation in W.Va.Code § 38-3-18 is correct. There is no dispute that the limitation period in W.Va.Code § 38-3-18 applies to the collection of child support judgments. According to Syllabus Point 6 of Robinson v. McKinney, 189 W.Va. 459, 432 S.E.2d 543 (1993), "[t]he ten-year statute of limitations set forth in W.Va.Code, 38-3-18 [1923] and not the doctrine of laches applies when enforcing a decretal judgment which orders the payment of monthly sums for alimony or child support." In addition, it is well established that when a provision for periodic payments of child support is made in a divorce decree, these installments become decretal judgments as they become due. See Syllabus Point 1 of Goff v. Goff, 177 W.Va. 742, 356 S.E.2d 496 (1987) (holding that "[m]atured installments provided for in a decree, which orders the payment of monthly sums for alimony or child support, stand as `decretal judgments' against the party charged with the payments."). Finally, "[t]he limitation provided in Code, 38-3-18, applied to a decretal judgment payable in installments, commences to run when each installment becomes due, as to the part of said judgment then payable." Syllabus Point 3, *635 Korczyk v. Solonka, 130 W.Va. 211, 42 S.E.2d 814 (1947).
Applying these rules to the instant facts, because Nada Stanley filed her Petition for Contempt of Court in October 1993, and more than ten years had passed since she last attempted through court action to collect child support arrearages from Mr. Stanley, the amount collectable under W.Va.Code § 38-3-18 is that portion of the arrearages that accrued during the previous ten years. See Zanke v. Zanke, 185 W.Va. 1, 4, 404 S.E.2d 92, 95 (1991) (per curiam) (where on May 24, 1988, wife filed petition for contempt order and for judgment for arrearage which had accrued since May 20, 1976, divorce order, Court explained that under W.Va.Code § 38-3-18, "[a] proper calculation would be to take the date upon which suit was filed, May 24, 1988, and compute the alimony accrued during the previous ten years."
However, the BCSE raises several challenges to the application of the ten-year limitation period under the facts of this case. First, the BCSE avers that its attempts, beginning in 1989, to intercept Mr. Stanley's income tax refunds for the purpose of satisfying his past due child support obligations tolled the ten-year limitation period. In other words, the BCSE says, in effect, that the income tax intercepts constituted "executions" under W.Va.Code § 38-3-18, which served to toll the ten-year limitation period.
This issue is a matter of straightforward statutory interpretation. We have previously held that "[a] statutory provision which is clear and unambiguous and plainly expresses the legislative intent will not be interpreted by the courts but will be given full force and effect." Syllabus Point 2, State v. Epperly, 135 W.Va. 877, 65 S.E.2d 488 (1951). In addition, "[i]n the absence of any specific indication to the contrary, words used in a statute will be given their common, ordinary and accepted meaning." Syllabus Point 1, Tug Valley Recovery Center, Inc. v. Mingo Cty. Comm., 164 W.Va. 94, 261 S.E.2d 165 (1979). We conclude that the word "execution" in W.Va.Code § 38-3-18 is unambiguous, and that its common, ordinary and accepted meaning does not include income tax intercepts.
An execution upon a money judgment is defined as:
3. Judicial enforcement of a money judgment, usu. by seizing and selling the judgment debtor's property ....
4. A court order directing a sheriff or other officer to enforce a judgment, usu. by seizing and selling the judgment debtor's property....
Black's Law Dictionary 589-90 (7th ed.1999). It has also been defined as "[a] process of the court. Specifically ... a judicial writ issuing from the court where the judgment is rendered, directed to an officer thereof, and running against the body or goods of a party, by which the judgment of the court is enforced." 33 C.J.S. Executions § 2 (1998) (footnotes omitted). In West Virginia, the subject of executions is covered by statute. See W.Va.Code § 38-4-1, et seq.[7] Executions for the specific purpose of collecting matured, unpaid child support are provided for in W.Va.Code § 48-14-201 (2001)[8] which states:
*636 When an obligor is in arrears in the payment of support which is required to be paid by the terms of an order for support of a child, an obligee or the bureau for child support enforcement may file an abstract of the order giving rise to the support obligation and an "affidavit of accrued support," setting forth the particulars of such arrearage and requesting a writ of execution, suggestion[9] or suggestee execution.[10] The filing of the abstract and affidavit shall give rise, by operation of law, to a lien against personal property of an obligor who resides within this state or who owns property within this state for overdue support. (Footnotes added.).
"Upon receipt of the affidavit, the clerk shall issue a writ of execution, suggestion or suggestee execution[.]" W.Va.Code § 48-14-204(a) (Supp.2001). We conclude, therefore, that an execution necessarily involves a court process wherein a judicial writ is issued.
Concerning the obtainment of past due child support from federal tax refunds, also known as tax intercepts or tax offsets, W.Va. Code § 48-18-117 (2001) provides:
The [West Virginia Support Enforcement] commission shall, by legislative rule promulgated pursuant to chapter twenty-nine-a [§§ 29A-1-1 et seq.] of this code, place in effect procedures necessary for the bureau for child support enforcement to obtain payment of past due support from federal tax refunds from overpayments made to the secretary of the treasury of the United States. The bureau for child support enforcement shall take all steps necessary to implement and utilize such procedures.
Similarly, W.Va.Code § 48-18-118 (2001) provides that the State Tax Commissioner shall establish procedures for the Bureau for Child Support Enforcement to obtain payment of past due child support from state tax refunds wherein the Bureau may enforce a support order through a notice to the Commissioner which causes any refund of state income tax owed to the obligor to be reduced by the amount of overdue support owed by the obligor.[11]
A comparison of the traditional definition of and procedure for the execution of a judgment with the provisions for tax offsets indicates to this Court that a tax offset is not an execution in that it does not involve a process of the court that results in the issuance of a judicial writ. Rather, a tax offset is a purely administrative action initiated and carried out by executive agencies. Further, this Court does not find dispositive the cases cited by the BCSE for the proposition that actions other than executions may toll the limitation period in W.Va.Code § 38-3-18 because these cases are completely devoid of any analysis or citation of authority to support such a proposition. See Robinson v. McKinney, 189 W.Va. 459, 463, 432 S.E.2d 543, 547 (1993) (concluding that "the mother *637 is not barred by the statute of limitations from collecting child support from September of 1982 until May of 1989 ... since the mother began the collection process in early 1992 by a Notice to Employer/Source of Income dated February 18, 1992 and by a motion to establish arrearages dated March 12, 1992."); Clay v. Clay, 206 W.Va. 564, 568, 526 S.E.2d 530, 534 (1999) (stating that "the appellee began the collection process on August 27, 1998, by filing an Order/Notice to Withhold Income for Child Support[,]" therefore "the appellee may not collect child support for the time period prior to August 27, 1988."); and State ex rel. DHHR Schwab v. Schwab, 206 W.Va. 551, 554, 526 S.E.2d 327, 330 (1999) (finding that "[t]he motion to enforce the accrued child support payments was filed in February 1998[,]" therefore, "the appellees may only enforce support payments due after February 1988.").
Accordingly, we hold that the procedure utilized by the Bureau for Child Support Enforcement to obtain payment of past due child support from Federal and State tax refunds from overpayments made to the Secretary of the Treasury of the United States or the State Tax Commissioner, as provided in W.Va.Code § 48-18-117 (2001) and W.Va. Code § 48-18-118 (2001), does not constitute an execution of a judgment under W.Va.Code § 38-3-18 (1923) for the purpose of tolling the ten-year limitation period for the issuance of an execution on a judgment.[12]
The BCSE argues, however, that it was improper for the circuit court to apply the statute of limitations retroactively to arrears that had already been collected. According to the BCSE, the time limitation may apply only to unpaid debts on which no collection efforts have been taken in ten years. Otherwise, claims the BCSE, the circuit court lacks authority to retroactively modify an arrearage calculation. We do not believe that this argument withstands close scrutiny.
As noted above, the BCSE received $32,796.60 from Mr. Stanley's Workers' Compensation award by means of income withholding pursuant to W.Va.Code §§ 48-14-401 et seq. While such withholding requires notice to the obligor advising him, inter alia, of his right to challenge the amount of the withholding, significantly, income withholding is not stayed while the withholding is being contested in the court system. See W.Va. Code § 48-14-405(12) (Supp.2001) ("That while the withholding is being contested through the court, the income withholding may not be stayed, but may be modified."). If this Court were to accept the BCSE's position that the ten-year limitation period applies only to uncollected or unpaid arrearages, an obligor's statute of limitation defense to the withholding of income would always fail due to the fact that the arrearages at issue had already been collected by the time the challenge to the withholding is resolved. In short, the ten-year statute of limitation would be rendered void in cases in which the BCSE utilizes income withholding to collect child support arrearages. Accordingly, we reject the BCSE's argument on this issue.
The BCSE next contends that Mr. Stanley did not timely raise the affirmative defense of the statute of limitations, and cites Dept. of Health v. Robert Morris N., 195 W.Va. 759, 466 S.E.2d 827 (1995), and Rule 8 of the West Virginia Rules of Civil Procedure for the proposition that the statute of limitations defense should have been included in a written pleading filed by Mr. Stanley. According to the BCSE, although it intercepted the $32,796.60 on or about March 29, 1997, Mr. Stanley did not raise the statute of limitation issue until he did so orally at a February 5, 1998, hearing. Specifically, the BCSE opines in its brief to this Court that,
the only proper and timely assertion of this [time limitation] defense would have been made PRIOR to the interception of the Workers' Compensation proceeds. Garry *638 Stanley was sent a copy of the income withholding order sent to Workers' Compensation requesting the interception of said proceeds. The income withholding order included provisions for protest if Garry Stanley so desired. Garry Stanley filed no protest to the income withholding order. Therefore, Garry Stanley neglected to assert the affirmative defense in a timely manner.
The BCSE concludes that the doctrine of laches should apply to Mr. Stanley's failure to affirmatively assert the time limitation defense prior to the interception of the funds. We disagree.
This Court has held that "[l]aches is a delay in the assertion of a known right which works to the disadvantage of another, or such delay as will warrant the presumption that the party has waived his right." Syllabus Point 2, Bank of Marlinton v. McLaughlin, 123 W.Va. 608, 17 S.E.2d 213 (1941). We do not believe that any delay of Mr. Stanley's assertion of the ten-year statute of limitation worked disadvantage to the BCSE or warranted the presumption that Mr. Stanley waived his right. According to the BCSE, it issued its income withholding order to the Workers' Compensation Division on March 11, 1997, and sent a copy of the order to Mr. Stanley at the same time. On March 29, 1997, says the BCSE, it received the intercept of $32,796.60 from the Workers' Compensation Division and disbursed the money to Nada Stanley. This timetable indicates that Mr. Stanley had little time in which to raise the time limitation defense before the money was received by the BCSE and proffered to Ms. Stanley. Moreover, even if he had raised the defense prior to the actual withholding, as noted above, the withholding would not have been stayed pending the outcome of Mr. Stanley's challenge. Therefore, we do not believe that laches prevents Mr. Stanley's assertion of the statute of limitation defense.
Moreover, we do not believe that Rule of Civil Procedure 8 prevented consideration of Mr. Stanley's statute of limitation defense. Mr. Stanley's challenge to the income withholding was not a response to a pleading filed against him in circuit court, as contemplated by Rule 8. Rather, it was a response to an adverse administrative action. As noted above, the withholding occurred in March 1997, and Mr. Stanley apparently first raised the statute of limitation defense at a February 5, 1998, hearing. We conclude that Mr. Stanley's raising of the statute of limitation defense was not so untimely as to constitute a waiver.
Finally, the BCSE avers that Mr. Stanley's "unclean hands" based, inter alia, on his failure to pay past child support, including his failure to pay any portion of his $20,000 social security lump sum award, should prevent him from collecting any alleged overpayment from the BCSE. We find no merit in this argument. While this Court certainly does not condone Mr. Stanley's failure to meet his child support obligations, this failure did not prevent Nada Stanley and the BCSE from tolling the ten-year limitation period pursuant to W.Va.Code § 38-3-18. As a judgment debtor, Mr. Stanley enjoyed the same right as any other judgment debtor to avail himself of the statute of limitation defense. Accordingly, we reject the BCSE's challenges of the circuit court's application of the ten-year statute of limitation to Mr. Stanley's child support arrearages.
B. Constitutional Immunity of the BCSE/DHHR
The BCSE next asserts that the circuit court erred in granting judgment against it because it is constitutionally immune from suit. According to the BCSE, it is a State instrumentality established within the West Virginia Department of Health and Human Resources ("DHHR"), and any money it is compelled to refund to Mr. Stanley would come directly from public funds. The BCSE further contends that the exception to constitutional immunity recognized by this Court in Pittsburgh Elevator v. W.Va. Bd. of Regents, 172 W.Va. 743, 310 S.E.2d 675 (1983), which permits suits against the State alleging recovery up to the limits of the State's liability insurance coverage, is not applicable because Mr. Stanley seeks to collect the repayment directly from public funds and has filed no pleading alleging recovery from the State's liability insurance carrier. Finally, *639 says the BCSE, recovery under the Pittsburgh Elevator exception is not applicable here because its action in withholding a portion of Mr. Stanley's Workers' Compensation award was not tortious.
We agree with the BCSE that it enjoys constitutional immunity from suit. According to Article VI, § 35 of the West Virginia Constitution, in part: "The State of West Virginia shall never be made defendant in any court of law or equity[.]" The DHHR is an agency of the State, see W.Va.Code § 9-2-1a (2003), and the BCSE is a unit of the DHHR.[13]See W.Va.Code § 48-18-101(a) (2002). This Court has held that "[t]he constitutional immunity of the state from suit extends to its governmental agencies." Syllabus Point 2, in part, Stewart v. State Road Comm'n, 117 W.Va. 352, 185 S.E. 567 (1936). "[T]he policy which underlies sovereign immunity is to prevent the diversion of State monies from legislatively appropriated purposes. Thus, where monetary relief is sought against the State treasury for which a proper legislative appropriation has not been made, sovereign immunity raises a bar to suit." Mellon-Stuart Co. v. Hall, 178 W.Va. 291, 296, 359 S.E.2d 124, 129 (1987) (citations and footnote omitted).
We do not agree with the BCSE, however, that the Pittsburgh Elevator exception to constitutional immunity has no application to the facts of this case. This Court previously explained in Parkulo v. West Virginia Bd. of Probation, 199 W.Va. 161, 483 S.E.2d 507 (1996), that the State Board of Risk and Insurance Management is authorized, pursuant to W.Va.Code § 29-12-5(a) to purchase insurance providing coverage of all State "property, activities and responsibilities." In Syllabus Point 2 of Pittsburgh Elevator, this Court held that "[s]uits which seek no recovery from state funds, but rather allege that recovery is sought under and up to the limits of the State's liability insurance coverage, fall outside the traditional constitutional bar to suits against the State." Subsequently, in Syllabus Point 1 of Eggleston v. W.Va. Dept. of Highways, 189 W.Va. 230, 429 S.E.2d 636 (1993), we held:
W.Va.Code, 29-12-5(a) (1986), provides an exception for the State's constitutional immunity found in Section 35 of Article VI of the West Virginia Constitution. It requires the State Board of Risk and Insurance Management to purchase or contract for insurance and requires that such insurance policy "shall provide that the insurer shall be barred and estopped from relying upon the constitutional immunity of the State of West Virginia against claims or suits.
We conclude that the Board of Risk and Insurance Management had a statutory duty to purchase or contract for insurance to provide coverage for all of the DHHR's activities and responsibilities.[14] Further, the DHHR has a responsibility to refund to an obligor money collected in excess of what is owed by the obligor. Due to Mr. Stanley's successful assertion of the statute of limitation on the execution of judgments, it has been determined that the DHHR collected from Mr. Stanley in excess of what he owed. Therefore, Mr. Stanley is entitled to a refund of his overpayment of child support arrearages under and up to the limits of the State's liability insurance coverage for loss on account of the DHHR's activities and responsibilities.[15]
*640 The BCSE asserts, however, that it is not liable to Mr. Stanley for the repayment of any funds because it is merely a collection agency acting as a conduit between the obligor and the obligee. Therefore, when it acts in good faith upon valid orders, it is not liable for repayment to an obligor when an overpayment results. Again, we disagree.
The Legislature has provided procedures to obligors whereby they can contest income withholding, see W.Va.Code § 48-14-405(8)(11) (Supp.2001), and it also has directed in W.Va.Code § 48-14-407(b) (2002),[16] that "[t]he [West Virginia Support Enforcement] commission shall, by administrative rule, establish procedures for promptly refunding to obligors amounts which have been improperly withheld[.]" According to the Child Advocate Office Policy and Procedural Manual, Section 08010.20.20, effective November 1, 1993, which is incorporated by reference as a Legislative Rule,
In an income withholding case, if the overpayment to the caretaker resulted from a situation where the source of income withheld more than the allowable amount for the month or for whatever reason an amount was improperly withheld from the obligor's income, the [Child Advocate Office] must arrange to promptly refund the amount that was improperly withheld.
If too much money was paid to the caretaker as a result of such a situation, the overpayment must be recovered from the caretaker. (See 8010.20.05 and 8010.20.10). However, the [Child Advocate Office] will not wait for the caretaker to repay before paying the obligor, but will go ahead and refund the money to the obligor when the error is discovered. (Emphasis added.).
It is clear from the above that the Legislature has manifested an intent that the BCSE repay funds which were improperly withheld from an obligor's income. It is equally clear that the BCSE has recognized that it has such a duty. Moreover, simple fairness dictates that when a government entity exercises its considerable power to obtain a portion of an obligor's income through force of law, it cannot escape all responsibility when its actions result in an overpayment by the obligor. Accordingly, we conclude that the BCSE is liable to an obligor for repayment when it improperly withholds funds from his or her income.
C. The BCSE's Breach of Duty
Finally, the BCSE contends that the circuit court erred in its finding that the BCSE "breached its duty to pay the proceeds of the entire intercept to the proper persons." According to the BCSE, the notification of income withholding which it issued in March 1997 was in accord with the child support obligation ordered in the parties' divorce decree and the undisputed accounting of the BCSE. At that time, explains the BCSE, Mr. Stanley had not protested the withholding based on the statute of limitation, and he would not do so for another eleven months. Therefore, at the time of the withholding Nada Stanley was the only proper person to whom the sum of money was owed.
In its order, the circuit court found:
[T]he BCSE did not heed their OSCAR program[17] warning of possible laches and statute of limitation claim prior to sending the money to Nada Stanley, it merely disregarded the warnings, and apparently did not seek final disposition of the 1993 filings prior to distributing the workers compensation intercepted proceeds.
*641 7. The BCSE became the bailee of all the intercepted funds and by their own policy manual directive ... had the responsibility to see to it that the funds were properly delivered to the persons entitled to such funds as their proper destination, and the BCSE (DHHR) breached its duty to pay the proceeds of the entire intercept to the proper persons.
8. The BCSE perceived an equitable argument regarding the statute of limitations, however, a reasonable person would have known under the circumstances of this case that the statute of limitations as well as other law would and does apply to bar the arrearage claims of the Plaintiff/Respondent for judgment over 10 years old, and uncollected arrearages over 10 years old. (Footnote added.).
We do not believe that the circuit court erred in finding that the BCSE breached its duty to pay the proceeds to the proper persons. As noted by the circuit court, in 1993 Mr. Stanley filed a petition for a determination of arrears but no order was entered as a result of these proceedings. Despite unresolved questions concerning the amount of the arrearage, however, the BCSE transferred the entire amount of the Workers' Compensation intercept to Nada Stanley.[18] In addition, contained in the record is a copy of a 1995 "legal/policy update" memorandum sent to child advocate employees by the Assistant General Counsel of the Office of the Child Advocate[19] that informs employees that "there is a 10-year statute of limitations on enforcement of judgments. If the creditor... doesn't enforce the judgment, or renew it by getting a new writ of execution every 10 years, it dies." Finally, the original divorce decree in this case was entered in 1978, and the intercept of Mr. Stanley's Workers' Compensation award occurred in 1997, almost twenty years later. Therefore, we conclude that BCSE employees were aware of the ten-year statute of limitation on the execution of judgments. Further, the passage of time between the entry of the original divorce decree and the income withholding at issue put the BCSE on notice of potential time limitations on the collection of the arrearage.[20] Finally, despite this notice, the BCSE breached its duty to make further inquiry, and simply transferred the withheld funds to Nada Stanley.
*642 In sum, we find that the circuit court properly applied the ten-year limitation period for the execution of judgments. We also find that the DHHR, of which the BCSE is a part, is a State agency which enjoys constitutional immunity from suit. However, because the Pittsburgh Elevator exception to constitutional immunity applies, we find that Mr. Stanley can collect the amount he overpaid from the DHHR under and up to the limits of the State's liability coverage. Finally, we conclude that the DHHR breached its duty to pay the proceeds of the Workers' Compensation intercept to the proper persons.
IV.
CONCLUSION
For the reasons set forth above, the April 27, 2001, order of the circuit court is affirmed.
Affirmed.
Justice DAVIS concurs, in part, dissents, in part, and reserves the right to file a separate opinion.
DAVIS, J., dissenting in part:
(Filed Dec. 4, 2003)
The majority opinion has determined that the circuit court had jurisdiction to impose a monetary judgment against the Department of Health and Human Resources, Bureau for Child Support Enforcement (hereinafter referred to as "the DHHR"), even though the DHHR did not have liability insurance coverage for the claim and there was no express statutory waiver of its sovereign immunity by the legislature. As a result of the majority's ruling, every single activity engaged in and responsibility undertaken by state agencies must now have liability insurance coverage; and if such coverage does not exist, the agency can still be sued in circuit court and a recovery obtained. For the reasons set out below, I dissent.[1]
A. The Majority Opinion Has Grossly Misinterpreted Eggleston
In this proceeding the DHHR asserted that it did not have insurance coverage for the judgment imposed against it by the circuit court. In a sweeping and unprecedented manner, the majority opinion holds "that the Board of Risk and Insurance Management had a statutory duty to purchase or contract for insurance to provide coverage for all of the DHHR's activities and responsibilities." The opinion states further in footnote 14 that "this Court wishes to make clear that the absence of any such coverage may not be used by the DHHR to deprive the appellee of a refund of his overpayment." This sweeping pronouncement by the majority opinion has opened the door for every claim against state agencies to be brought in the circuit courts of this state. That is, the majority opinion stands for the proposition that the Board of Risk and Insurance Management (hereinafter referred to as "BRIM") must provide liability insurance coverage for every activity and responsibility that state entities undertake. Further, to the extent that liability insurance coverage for an activity or responsibility of a state entity is not provided, a party may still litigate the case in circuit court and obtain a judgment. This is a profoundly misguided ruling unsupported by precedent or other authority.
*643 The majority opinion purports to rely upon Eggleston v. West Virginia Dep't of Highways, 189 W.Va. 230, 429 S.E.2d 636 (1993), for the proposition that BRIM must provide liability insurance for all activities and responsibilities of state entities. Specifically, the majority opinion relies on syllabus point 1 of Eggleston:
W. Va.Code, 29-12-5(a) (1986), provides an exception for the State's constitutional immunity found in Section 35 of Article VI of the West Virginia Constitution. It requires the State Board of Risk and Insurance Management to purchase or contract for insurance and requires that such insurance policy "shall provide that the insurer shall be barred and estopped from relying upon the constitutional immunity of the State of West Virginia against claims or suits."
As will be shown, the majority opinion has taken syllabus point 1 of Eggleston out of context and literally pushed the state toward the doorsteps of bankruptcy.
In Eggleston, the plaintiff was involved in tractor-trailer accident on a highway and brought an action against the West Virginia Department of Highways. The plaintiff alleged that his accident was caused by DOH's negligence in designing, constructing, maintaining, and failing to properly warn of the unsafe nature of highway. The circuit court found that the insurance coverage provided to the DOH by BRIM did not cover the type of harm complained of by the plaintiff. Consequently, the circuit court granted summary judgment to DOH and dismissed the action. The plaintiff appealed.
Justice Miller began the opinion in Eggleston by stating that "[b]efore we address the issue of insurance policy coverage, it is useful to explain the underlying legal concept that enables the plaintiff to sue the WVDOH." Eggleston, 189 W.Va. at 232, 429 S.E.2d at 638. The opinion then went on to discuss the state's sovereign immunity and the exception to that immunity when liability insurance coverage is obtained. Regarding insurance coverage, Eggleston made the following general observation, which became syllabus point 1:
W. Va.Code, 29-12-5(a) (1986), provides an exception to the State's constitutional immunity found in Section 35 of Article VI of the West Virginia Constitution. It requires the State Board of Risk and Insurance Management to purchase or contract for insurance and requires that such insurance policy "shall provide that the insurer shall be barred and estopped from relying upon the constitutional immunity of the State of West Virginia against claims or suits."
Eggleston, 189 W.Va. at 232, 429 S.E.2d at 638. The latter quote from Eggleston was never intended to mean, or to be interpreted as holding, that BRIM had a statutory duty to provide liability insurance coverage for all activities and responsibilities of state agencies and that a failure to provide such coverage would not preclude an action in a state court against an agency.
If the majority's interpretation of syllabus point 1 of Eggleston is correct, then Justice Miller would not have concluded his preliminary remarks by observing that:
In other jurisdictions which have a similar type of statutory insurance provision, courts have also reached the result that, insofar as a plaintiff's damage claim is covered by the state's insurance policy barring the assertion of the state's constitutional immunity, the suit may be maintained.
Our focus is, therefore, whether the insurance policy at issue provides coverage for the type of accident that occurred in this case.
Eggleston, 189 W.Va. at 232-233, 429 S.E.2d at 638-639 (Footnotes omitted) (citations omitted) (emphasis added). If Eggleston stood for the proposition that the majority opinion has given it, there would have been no need for Justice Miller to determine whether the policy language covered the claimthe opinion would have concluded that the policy should have covered the claim because BRIM had a statutory duty to provide for all of DOH's activities and responsibilities. Morever, in reversing the circuit court's ruling, Justice Miller made clear that the "complaint and discovery material contains sufficient facts to come within the liability *644 insurance policy coverage purchased by the WVDOH, at least for purposes of a summary judgment motion." Eggleston, 189 W.Va. at 231, 429 S.E.2d at 637. Clearly, Eggleston did not expressly or implicitly hold that BRIM has a statutory duty to provide liability insurance coverage for all activities and responsibilities of state agencies; and that a failure to provide such coverage would not preclude an action in a state court against an agency. See Shrader v. Holland, 186 W.Va. 687, 689, 414 S.E.2d 448, 450 (1992) (emphasis added) ("The Board of Risk and Insurance Management for the State of West Virginia has purchased an insurance policy that covers some claims against the Department of Highways.").[2]
B. BRIM Is Not Required by Statute to Provide Liability Insurance Coverage for Every State Activity and Responsibility
The authority for BRIM to provide insurance for state agencies is set out in W. Va.Code § 29-12-5. Under this statute, BRIM has "general supervision and control over the insurance of all state property, activities and responsibilities, including the acquisition and cancellation thereof; determination of amount and kind of coverage ... and any and all matters, factors and considerations entering into ... coverage of all such state property, activities and responsibilities." W.Va.Code § 29-12-5(a) (emphasis added). Clearly under the language of this statute the legislature has not made it mandatory that BRIM provide liability insurance coverage for every state activity and responsibility. BRIM has the authority to do this, but it is not required to do so. That is, the determination of the type of coverage, if any, that an agency obtains is a discretionary matter for BRIM.
Indeed, the West Virginia Attorney General issued an official opinion in 1963 that recognized BRIM's discretion in determining insurance coverage for state agencies. In that opinion the Attorney General wrote that BRIM has "the authority to determine whether or not a particular State governmental activity was sufficiently grave and its employees were undertaking the discharge of the kind of responsibilities that should be insured against claims of damage." 50 Op. W. Va. Att'y Gen. 230, 234 (Mar. 6, 1963).[3]See also CSR 115-2-7.1 (1990) ("The Board shall determine and establish rates, rate programs, deductibles, and coverages as needed.").
Under the majority opinion, BRIM does not have discretion to determine what type of coverage a state agency should have. The majority opinion has found that BRIM "must" obtained liability insurance coverage for all activities and responsibilities of all state agencies.
C. Under the Majority Opinion No Claim Against a State Agency Need Ever Be Filed in the Court of Claims
Prior to the decision in the instant case, this Court had held that if a state agency did not have liability insurance coverage for an injury or harm allegedly committed by it, an action against the agency could not be maintained in the circuit courts of this state. Cf. Syl. pt. 2, Pittsburgh Elevator v. West Virginia Bd. of Regents, 172 W.Va. 743, 310 S.E.2d 675 (1983) ("Suits which seek no recovery from state funds, but rather allege that recovery is sought under and up to the limits of the State's liability insurance coverage, fall outside the traditional constitutional bar to suits against the State."). However, an injured party could maintain an action in the Court of Claims against the state agency. *645 See Syl. pt. 3, G.M. McCrossin, Inc. v. West Virginia Bd. of Regents, 177 W.Va. 539, 355 S.E.2d 32 (1987) ("Application to the court of claims is the exclusive remedy available to a sophisticated commercial entity, chargeable with knowledge of the rule of sovereign immunity, which chooses, nevertheless, to contract with a state agency.").
This Court recently noted that "[t]he Legislature has established the Court of Claims by law and delegated to it the Legislature's power to investigate certain claims against the State that may not be prosecuted in the courts because of the State's sovereign immunity." State ex rel. McLaughlin v. West Virginia Court of Claims, 209 W.Va. 412, 415, 549 S.E.2d 286, 289 (2001) (per curiam) (footnotes omitted). See also State ex rel. C & D Equip. Co. v. Gainer, 154 W.Va. 83, 92, 174 S.E.2d 729, 734 (1970) ("Any monetary claims against an agency of the state which is immune from suit is within the jurisdiction of the Court of Claims.").[4] The Court of Claims "is authorized to consider and approve claims against the State not otherwise cognizable in the regular courts of the State, and to recommend an award to the Legislature." Pittsburgh Elevator, 172 W.Va. at 754 n. 7, 310 S.E.2d at 686 n. 7.[5]
Under the majority's decision, if a litigant has a claim against any state entity, and there is no liability insurance coverage for the claim, the litigant does not have to file an action in the Court of Claims. The majority opinion has determined that lack of liability insurance coverage is not a bar to litigating an action against a state agency in circuit court, because BRIM has a statutory duty to provide such coverage.
The majority's ruling completely fails to recognize the costs to taxpayers if BRIM has to maintain liability insurance coverage for every activity and responsibility that the state undertakes. Moreover, the majority's ruling completely fails to understand the costs to taxpayers if BRIM does not maintain liability insurance coverage for every activity and responsibility that the state undertakes.
In view of the foregoing, I dissent.
NOTES
[1] Although Ms. Stanley's name appears in the style of this case as Nada D. (Stanley) Shaffer, she explains in her amicus curiae brief that after her divorce from Mr. Stanley, she married a man named Shaffer. However, she subsequently divorced Mr. Shaffer and once again took the name of Stanley.
[2] This support obligation ceased in March 1994 by operation of law.
[3] According to the BCSE, one of Mr. Stanley's children received a social security dependent benefits backpay award of $3078.00 and ongoing monthly payments of $96.00.
[4] The family law master system ceased to operate on January 1, 2002, and was replaced by a system of family court judges. See W.Va.Code § 51-2A-23 (2001). The proceedings in this case occurred under the family law master system.
[5] The family law master found that Mr. Stanley's" unclean hands," the 1980 judgment, the 1981 suggestion, and the income tax intercepts tolled the statute of limitations.
[6] Although Nada Stanley is protected from liability as a result of the bankruptcy discharge, she filed an amicus curiae brief with this Court on behalf of the BCSE.
[7] Rule 69 of the West Virginia Rules of Civil Procedure also addresses the subject of executions. According to Rule 69(a) concerning executions for the payment of money:
Process to enforce a judgment for the payment of money shall be a writ of execution, a writ of suggestee execution and such other writs as are provided by law. The procedure on execution and other such final process, in proceedings supplementary to and in aid of a judgment, and in proceedings on and in aid of execution or such other final process shall be in accordance with the practice and procedure prescribed by the laws of the State existing at the time the remedy is sought, subject to the following qualifications: (1) A writ of execution shall be made returnable not less than 30 days nor more than 90 days after issuance, as directed by the person procuring issuance of the writ; and (2) an answer to a summons issued in a suggestion proceeding shall be served upon the plaintiff within 20 days after service of the summons; and (3) a return on a writ of suggestee execution shall be made forthwith on the expiration of one year after issuance of the writ.
[8] The former version of W.Va.Code § 48-14-201 which would have been available to Nada Stanley and the BCSE to toll the running of the ten-year limitation period after the issuance of the 1981 writ of execution was W.Va.Code § 48A-5-2.
[9] Under W.Va.Code § 38-5-10 (1995), a judgment creditor may commence garnishment proceedings by filing a writ of suggestion against a third party when the judgment creditor alleges that:
a person is indebted or liable to the judgment debtor or has in the person's possession or control personal property belonging to the judgment debtor, which debt or liability could be enforced, when due, or which property could be recovered, when it became returnable, by the judgment debtor in a court of law, and which debt or liability or property is subject to the judgment creditor's writ of fieri facias[.]
In Syllabus Point 1 of Sauls v. Howell, 172 W.Va. 528, 309 S.E.2d 26 (1983), this Court held:
Matured, unpaid installments provided for in a decree of divorce, which decree ordered a husband to pay to his former wife $2,700, "in lieu of alimony" at $150 per month, stand as decretal judgments against the husband, and the wife is entitled to institute suggestion proceedings under W.Va.Code, 38-5-10 [1931], to recover upon those judgments, and she need not institute ancillary proceedings to reduce the amount of those judgments to a sum certain.
[10] According to W.Va.Code § 38-5A-1(2)(1939), "[t]he term `suggestee execution' shall mean an execution differing from an ordinary execution upon a judgment only in that it is directed against money due or to become due to the judgment debtor from the suggestee as therein set out."
[11] The code sections in effect at the time the BCSE began its attempted tax offsets were W.Va. Code § 48A-2-15 (1986), concerning the obtainment of child support from federal tax refunds, and W.Va.Code § 48A-2-16 (1986), concerning the obtainment of support from State income tax refunds.
[12] In the instant case, the circuit court ruled that Nada Stanley was limited to arrearages for ten years prior to Nada Stanley's filing of a contempt petition, not an issuance of an execution. We need not decide at this time whether the filing of a contempt action constitutes an execution for purposes of the limitation period in W.Va.Code § 38-3-18 because Mr. Stanley did not challenge the circuit court's ruling that Nada Stanley could receive arrearages for ten years prior to the date of the contempt action.
[13] Although Mr. Stanley stated in his brief to this Court that it is his understanding that the BCSE is operated by a private corporation, the BCSE responds that only its Kanawha County office is operated by a private company which is under contract to the State.
[14] Due to the fact that the Board of Risk and Insurance Management had a statutory duty under W.Va.Code § 29-12-5(a), as stated in Eggleston, to purchase or contract for insurance for all of the DHHR's responsibilities, this Court wishes to make clear that the absence of any such coverage may not be used by the DHHR to deprive the appellee of a refund of his overpayment.
[15] We emphasize that the issue of constitutional immunity arises only when, as here, the BCSE transfers the withheld funds to the obligee prior to the obligor's successful challenge of the withholding, and the BCSE is then unable to retrieve the improperly transferred funds from the obligee. When the BCSE is still in possession of the improperly withheld funds, it need only return the funds to the obligor. When the BCSE can retrieve the improperly withheld funds from the obligee, it should do so in order to return the funds to the obligor.
[16] See also former W.Va.Code § 48A-5-3 (1995) which was in effect at the time of the income withholding in this case.
[17] "OSCAR" is the highly complex Online Support Collection and Reporting system used by child support staff workers to create cases, locate absent parents, establish paternity and child support obligations, and collect and distribute payments. The system was implemented in May 1994 and federally certified in June 1996. OSCAR enables caseworkers to intercept federal and state tax refunds, workers' compensation, and unemployment benefits; place liens on property; notify credit reporting agencies of delinquencies; and sue to recover assets that are transferred to another person to avoid paying child support. See https:// www.nascio.org/awards/1998awards/Inter/westvirginia.cfm.
[18] In its brief, the BCSE states that counsel for Nada Stanley, by letter, requested guidance from the Family Law Master regarding the failure of counsel for Mr. Stanley to endorse and return the proposed order from a December 8, 1994, hearing. According to the BCSE, the proposed order recommended a judgment of $61,322.94 against Mr. Stanley, but that the order remains outstanding. We note that W.Va.Code § 48A-4-13 (1993), in effect at the time, required the family law master to submit a recommended order to the circuit court within ten days following the close of evidence. In State ex rel. Coats v. Means, 188 W.Va. 233, 423 S.E.2d 636 (1992), this Court found that this duty is mandatory and nondiscretionary so that mandamus is a proper remedy to compel the entry of the recommended order. Therefore, Mr. Stanley did not single-handedly prevent the entry of the family law master's recommended order after the December 8, 1994, hearing on Nada Stanley's contempt petition and Mr. Stanley's petition for determination of arrearage.
[19] The Child Advocate Office now refers to the BCSE. See W.Va.Code § 48-1-208 (2001) ("A reference in this chapter and elsewhere in this code to the `child advocate office' or the child support enforcement division shall be interpreted to refer to the bureau for child support enforcement.").
[20] Another issue raised by the BCSE is that the April 9, 1998, order improperly granted to Mr. Stanley retroactive credit for social security benefits received by his children as far back as February 1994. We are unable to find in the record, however, that the BCSE timely filed exceptions to the April 9, 1998, order. According to W.Va.Code § 48A-4-17 (1993), in effect at the time, "[f]ailure to timely file the petition shall constitute a waiver of exceptions, unless the petitioner, prior to the expiration of the ten-day period, moves for and is granted an extension of time from the circuit court." In Syllabus Point 1 of Czaja v. Czaja, 208 W.Va. 62, 537 S.E.2d 908 (2000), this Court held, in part, that "[f]ailure to comply with the ten-day period for filing exceptions to a recommended order of a family law master, barring a timely filing of and approval of one ten-day extension period, is fatal with regard to preserving those exceptions for appeal." See also Delapp v. Delapp, 213 W.Va. 757, 584 S.E.2d 899 (2003) (per curiam), (finding that Czaja does not prevent relief from failing to file exceptions within the ten-day period upon a showing of excusable neglect under Rule 60(b)(1) of the West Virginia Rules of Civil Procedure.). Because the BCSE failed to except to the granting to Mr. Stanley of retroactive credit for social security benefits received by his children, we decline to address this issue.
[1] To be clear, I understand that the applicable statute and regulation requires DHHR to reimburse an obligor for child support monies that were improperly taken. However, neither the statute nor the rule expressly permit an obligor to file an action in circuit court to obtain a refund. Without such express authority or in the absence of liability insurance coverage, the doctrine of sovereign immunity prevents an obligor from maintaining an action in circuit court against DHHR to recover the money. As I discuss in the body of my dissent, the exclusive remedy for the obligor is to seek a refund in the Court of Claims.
The issue of a refund by DHHR is procedurally different from that of a taxpayer seeking a refund from the Tax Commissioner. The legislature has expressly provided for the issue of a tax refund to be litigated in circuit court, after administrative proceedings. See W. Va.Code § 11-10A-19 (2002) (Repl.Vol.2003). See also Houyoux v. Paige, 206 W.Va. 357, 524 S.E.2d 712 (1999) (claim for refund); Doran & Assoc., Inc. v. Paige, 195 W.Va. 115, 464 S.E.2d 757 (1995) (same). However, no such express statutory or regulatory authority exists for litigating a refund claim against DHHR in circuit court.
[2] Subsequent to the decision in Eggleston this Court specifically remanded several cases for a determination of whether a state agency had liability insurance coverage. See Jeffrey v. West Virginia Dep't of Pub. Safety, 198 W.Va. 609, 615, 482 S.E.2d 226, 232 (1996) ("If the State has not procured insurance indicating such coverage, the public duty doctrine serves as a bar to the Appellant's suit. If the State's insurance does provide coverage, the action may proceed, and liability will be limited only by the limits of insurance coverage."); Parkulo v. West Virginia Bd. of Probation and Parole, 199 W.Va. 161, 180, 483 S.E.2d 507, 526 (1996) ("There remains only the question of whether the actual provisions of such policy ... cover the operation of the Parole Board.... We remand to develop the record on the coverage issue[.]").
[3] The language in W.Va.Code § 29-12-5(a) that was construed by the Attorney General in 1963 is the same language that exists in the statute today.
[4] Pursuant to W. Va.Code § 14-2-13 (1967) (Repl.Vol.2003) the jurisdiction of the Court of Claims extends to:
1. Claims and demands, liquidated and unliquidated, ex contractu and ex delicto, against the State or any of its agencies, which the State as a sovereign commonwealth should in equity and good conscience discharge and pay.
2. Claims and demands, liquidated and unliquidated, ex contractu and ex delicto, which may be asserted in the nature of setoff or counterclaim on the part of the State or any state agency.
3. The legal or equitable status, or both, of any claim referred to the court by the head of a state agency for an advisory determination.
[5] Under W. Va.Code § 14-2-14(5) the Legislature has withheld from the Court of Claims the power to consider "any claim ... [w]ith respect to which a proceeding may be maintained against the State, by or on behalf of the claimant in the courts of the State."
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-4549
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
THEODORUS ANDREAS ROUSSOS,
Defendant - Appellant.
No. 05-4574
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
EUGENE OGLESBY,
Defendant - Appellant.
Appeals from the United States District Court for the District of
South Carolina, at Greenville. Henry F. Floyd, District Judge.
(CR-04-407)
Submitted: June 28, 2006 Decided: July 26, 2006
Before WILKINSON and NIEMEYER, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Affirmed by unpublished per curiam opinion.
Beattie B. Ashmore, PRICE, PASCHAL & ASHMORE, P.A., Greenville,
South Carolina; Cameron G. Boggs, BOGGS LAW FIRM, Greenville, South
Carolina, for Appellants. Reginald I. Lloyd, United States
Attorney, Regan A. Pendleton, Assistant United States Attorney,
Greenville, South Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
- 2 -
PER CURIAM:
Theodorus Roussos (Appeal No. 05-4549) and Eugene Oglesby
(Appeal No. 05-4574) appeal their convictions and sentences for
conspiracy to manufacture, possession with intent to distribute,
and distribution of fifty grams or more of methamphetamine and 500
grams or more of a mixture or substance containing a detectable
amount of methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1),
(b)(1)(A), 846 (2000). Roussos was sentenced to 360 months’
imprisonment; Oglesby was sentenced to 235 months’ imprisonment.
The Appellants first contend the district court abused
its discretion when it admitted photographic evidence of a forensic
analyst, dressed in a hazardous materials suit and holding vials of
liquid seized from the conspirators’ methamphetamine laboratory.
The Appellants claimed the photographs were unduly prejudicial,
communicating the existence of a danger to the community that could
potentially influence the jury. The Government averred the
photographs--the only ones depicting the particular liquid--had
significant probative value, because they were part of the
Government’s foundation for the admissibility of the liquid. The
district court found that, under Fed. R. Evid. 403, the probative
value of the photographs outweighed their prejudicial effect and,
therefore, admitted the photographs.
A district court’s evidentiary rulings are entitled to
substantial deference and will not be reversed absent a clear abuse
- 3 -
of discretion. That discretion is abused only when the district
court acted arbitrarily or irrationally. See United States v.
Moore, 27 F.3d 969, 974 (4th Cir. 1994). After a careful review of
the record, we find the district court did not abuse its discretion
in this instance.
Next, Oglesby* asserts the district court erroneously
admitted testimony concerning a separate methamphetamine conspiracy
and consequently prejudiced his defense. However, the testimony
was not “unrelated to the overall conspiracy charged in the
indictment,” United States v. Squillacote, 221 F.3d 542, 574 (4th
Cir. 2000), and accordingly there was no risk the jury was likely
to transfer evidence from an unrelated conspiracy to the charged
conspiracy. See id. at 574-75. Thus, we find the district court
committed no error.
Finally, the Appellants contend the district court
imposed sentences in violation of United States v. Booker, 543 U.S.
220 (2005), and United States v. Hughes, 401 F.3d 540 (4th Cir.
2005). After Booker, a sentencing court is no longer bound by the
range prescribed by the sentencing guidelines. United States v.
Green, 436 F.3d 449, 455-56 (4th Cir.), cert. denied, 126 S. Ct.
2309 (2006); Hughes, 401 F.3d at 546. In determining the sentence,
however, courts are still required to calculate and consider the
*
While Roussos joined in this argument before the district
court, only Oglesby is identified in the appellate brief as
pursuing this argument on appeal.
- 4 -
guidelines range, as well as the factors set forth in 18 U.S.C.A.
§ 3553(a) (West 2000 & Supp. 2005). Id. In sentencing defendants
after Booker, district courts should apply a preponderance of the
evidence standard, taking into account that the resulting guideline
range is advisory only. United States v. Morris, 429 F.3d 65, 72
(4th Cir. 2005) (internal quotation marks and citation omitted).
We will affirm a post-Booker sentence if it is within the
statutorily prescribed range and is reasonable. Hughes, 401 F.3d
at 546-47.
Here, the district court correctly calculated the
Appellants’ ranges under the now-advisory sentencing guidelines
using a preponderance of the evidence standard. After giving due
consideration to the § 3553(a) factors, the district court then
sentenced the Appellants within the statutorily prescribed range
for their offenses and within the ranges provided for by the
sentencing guidelines. Neither Roussos nor Oglesby has rebutted
the presumption that the district court imposed a reasonable
sentence.
Accordingly, we affirm the judgments of the district
court. We dispense with oral argument because the facts and legal
contentions are adequately presented in the materials before the
court and argument would not aid the decisional process.
AFFIRMED
- 5 -
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860 F.2d 1091
Austinv.BVA Credit Corporation*
NO. 87-8709
United States Court of Appeals,Eleventh Circuit.
SEP 30, 1988
1
Appeal From: S.D.Ga.
2
AFFIRMED.
*
Fed.R.App.P. 34(a); 11th Cir.R. 23
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Order Michigan Supreme Court
Lansing, Michigan
October 28, 2014 Robert P. Young, Jr.,
Chief Justice
148041(102) Michael F. Cavanagh
Stephen J. Markman
Mary Beth Kelly
Brian K. Zahra
Bridget M. McCormack
LINDA THURSFIELD, David F. Viviano,
Plaintiff-Appellant, Justices
v SC: 148041
COA: 302186
Oakland CC: 05-070476-CK
DAVID THURSFIELD,
Defendant-Appellee.
_________________________________________/
On order of the Court, the motion for reconsideration of this Court’s June 18, 2014
order is considered, and it is DENIED, because it does not appear that the order was
entered erroneously.
I, Larry S. Royster, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
October 28, 2014
p1020
Clerk
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525 F.2d 1267
James L. JARVIS and Johanna W. Jarvis, Appellants,v.MONTGOMERY WARD AND COMPANY, INC., Appellee.
No. 75--1558.
United States Court of Appeals,Eighth Circuit.
Submitted Nov. 19, 1975.Decided Dec. 5, 1975.
Larry R. Curtis, Ames, Iowa, for appellants.
L. R. Voigts, Des Moines, Iowa, for appellee.
Before LAY, STEPHENSON and WEBSTER, Circuit Judges.
PER CURIAM.
1
Dr. and Mrs. Jarvis brought this diversity action seeking damages for the willful and intentional infliction of mental distress by the defendant Montgomery Ward and Company, Inc. (hereinafter Ward) arising from the latter's attempts to enforce collection of a charge account.
2
The district court, sitting without a jury, entered judgment for the defendant, holding that the plaintiffs had failed to meet their burden of proving that Ward's acts were willful and malicious. Plaintiffs appealed.
3
The district court found that between 1969 and 1971, plaintiffs had various discussions with Ward's personnel at the Ames, Iowa store concerning disputed charge accounts; that on some of these occasions the Ward's representatives were less than courteous to Dr. and Mrs. Jarvis; and that on one occasion the plaintiffs overheard the store manager, Mr. James Cornwell, refer to them in a derogatory manner. In 1970 and 1971, Ward's representatives telephoned plaintiffs on a regular basis concerning payment of the accounts. On several occasions, plaintiffs were called more than once on the same day. Occasionally, Dr. Jarvis was called while at work and told that unless his accounts were paid, his employer might be contacted. There was no evidence, however, that the employer was contacted.
4
The sole question presented for review is whether the district court erred in ruling that Iowa law requires plaintiffs to prove that defendant's acts were willful and malicious in order to recover for emotional distress. Plaintiffs contend that they need only show that Ward's collection attempts were unreasonable. We find the district court properly interpreted Iowa law and affirm its judgment.
5
Iowa law is well settled that an action for emotional distress lies only where a defendant acts willfully or maliciously. See Amos v. Prom, Inc., 115 F.Supp. 127, 132--33 (N.D.Iowa 1953); Beneficial Finance Co. of Waterloo v. Lamos, 179 N.W.2d 573, 582 (Iowa 1970); Curnett v. Wolf, 244 Iowa 683, 57 N.W.2d 915, 918 (1953); Blakeley v. Shortal's Estate, 236 Iowa 787, 20 N.W.2d 28 (1945); Barnett v. Collection Service Co., 214 Iowa 1303, 242 N.W. 25, 28 (1932). Cf. Northrup v. Miles Homes, Inc. of Iowa, 204 N.W.2d 850 (Iowa 1973); Amsden v. Grinnell Mutual Reinsurance Co., 203 N.W.2d 252 (Iowa 1972).
6
Plaintiffs urge this court to adopt a standard of unreasonableness based on several factors, including the nature of the centralized accounting and billing practices of the defendant. They argue that the Iowa standard requiring a showing of willful or malicious activity does not reflect the sophisticated practices of large commercial concerns. The contention finds no support in Iowa law. The district court properly invoked the rule of law requiring plaintiffs to prove that Ward's acts were willful or malicious. The district court served as a trier of fact and its findings must be sustained unless clearly erroneous. The record supports the judgment of dismissal.
7
The judgment of the district court is affirmed.
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12-1460-cv
Warren v. United States
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER
FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
1 At a stated term of the United States Court of Appeals for the Second Circuit, held at the
2 Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the
3 24th day of April, two thousand thirteen.
4
5 PRESENT:
6 GUIDO CALABRESI,
7 DEBRA ANN LIVINGSTON,
8 GERARD E. LYNCH,
9 Circuit Judges.
10 _____________________________________
11
12 Daniel T. Warren,
13
14 Plaintiff-Appellant,
15
16 v. 12-1460-cv
17
18 United States of America, individually, and as trustee of the goods, credits and chattels of the
19 federally recognized Indian nations and tribes situated in the State of New York, Lynn Scarlett, in
20 her official capacity as Acting Secretary of the United States Department of the Interior, James
21 Cason, in his official capacity as the Acting Assistant Secretary of the Interior for Indian Affairs,
22 United States Department of the Interior, Philip N. Hogen, in his capacity as Chairman of the
23 National Indian Gaming Commission, National Indian Gaming Commission, George E. Pataki, as
24 Governor of the State of New York, Cheryl Ritchko-Buley, as Chairwoman, of the New York State
25 Racing and Wagering Board, Dirk Kempthorne, in his official capacity as Secretary of the United
26 States Department of the Interior,
27
28 Defendants-Appellees.
29 _____________________________________
30
31
1 FOR APPELLANT: Daniel T. Warren, pro se, West Seneca, NY.
2
3 FOR APPELLEES: Ignacia S. Moreno, Assistant Attorney General, Gina L. Allery and
4 Allen M. Brabender, Attorneys, United States Department of Justice,
5 Washington, D.C.; Barbara D. Underwood, Solicitor General, Andrew
6 D. Bing, Deputy Solicitor General, Peter H. Schiff, Senior Counsel,
7 Robert M. Goldfarb, Assistant Solicitor General of Counsel, for Eric
8 T. Schneiderman, Attorney General of the State of New York, Albany,
9 NY.
10
11 FOR AMICUS: Riyaz A. Kanji, Kanji & Katzen, PLLC, Ann Arbor, Michigan, and
12 Carol E. Heckman and David T. Archer, Harter Secrest & Emery LLP,
13 Buffalo, NY for amicus curiae Seneca Nation of Indians in Support of
14 Appellee United States of America.
15
16 Appeal from a judgment of the United States District Court for the Western District of New
17 York (Skretny, C.J.).
18 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
19 DECREED that the judgment of the district court is AFFIRMED.
20 Appellant Daniel T. Warren appeals from the district court’s judgment dismissing his
21 amended complaint for lack of jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(1), and
22 denying him leave to file a second amended complaint. We assume the parties’ familiarity with the
23 underlying facts, the procedural history of the case, and the issues on appeal.
24 This Court reviews de novo a district court decision dismissing a complaint pursuant to Rule
25 12(b)(1) or 12(b)(6). See Jaghory v. N.Y. State Dep’t of Educ., 131 F.3d 326, 329 (2d Cir. 1997).
26 Dismissal of a case for lack of subject matter jurisdiction under Rule 12(b)(1) is proper “when the
27 district court lacks the statutory or constitutional power to adjudicate it.” Makarova v. United States,
28 201 F.3d 110, 113 (2d Cir. 2000). Normally, this Court reviews denials of motions for leave to
29 amend for abuse of discretion, except where, as here, the denial is based on a ruling of law, in which
30 case the Court’s review is de novo. Papelino v. Albany Coll. of Pharmacy of Union Univ., 633 F.3d
31 81, 88 (2d Cir. 2011).
2
1 After an independent review of the record and relevant case law, we conclude that the district
2 court properly dismissed Appellant’s amended complaint for lack of jurisdiction and denied
3 Appellant leave to amend for substantially the same reasons articulated by the district court judge in
4 his well-reasoned decision analyzing the amended complaint and the proposed second amended
5 complaint. Our reasoning, however, differs from the district court’s in one key respect.
6 The district court dismissed Plaintiff’s 10th Amendment claim for lack of standing, reasoning
7 that Warren could not demonstrate an injury-in-fact “because the cited IGRA provisions are not
8 violative of the Tenth Amendment.” Whether the challenged provisions actually contravene the 10th
9 Amendment is not itself relevant to the threshold standing inquiry because, “the question whether a
10 plaintiff states a claim for relief goes to the merits in the typical case, not the justiciability of a
11 dispute, and conflation of the two concepts can cause confusion.” Bond v. United States, 131 S. Ct.
12 2355, 2362 (2011) (internal quotation marks and citation omitted). “The injury in fact required to
13 support constitutional standing is ‘an invasion of a legally protected interest which is (a) concrete and
14 particularized, and (b) actual or imminent, not conjectural or hypothetical.’” Donoghue v. Bulldog
15 Investors Gen. P’ship, 696 F.3d 170, 175 (2d Cir. 2012) (quoting Lujan v. Defenders of Wildlife, 504
16 U.S. 555, 560-61 (1992)). Here, Warren lacks standing because his claim that IGRA “compelled
17 [state officials] to enter into agreements that are prohibited by state law” amounts to little more than
18 an allegation that his Government is violating the law. See Allen v. Wright, 468 U.S. 737, 755 (1984)
19 (noting that individuals have “no standing to complain simply that their Government is violating the
20 law”). Warren has therefore failed to allege a “concrete and particularized” injury. Donoghue, 696
21 F.3d at 175.
22
3
1 We have considered Appellant’s remaining arguments on appeal and find them to be without
2 merit. For the foregoing reasons, the judgment of the district court is hereby AFFIRMED.
3
4 FOR THE COURT:
5 Catherine O’Hagan Wolfe, Clerk
6
4
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17 N.Y.3d 861 (2011)
2011 NY Slip Op 98741U
956 N.E.2d 807
932 N.Y.S.2d 26
PEOPLE
v.
PIERRE.
Not in source.
Court of Appeals of New York.
September 1, 2011.
Application in criminal case for leave to appeal denied. (Jones, J.).
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634 F.2d 637
Youngv.People of State of California
79-4063
UNITED STATES COURT OF APPEALS Ninth Circuit
12/1/80
1
N.D.Cal.
AFFIRMED
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F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
SEP 18 2003
TENTH CIRCUIT
PATRICK FISHER
Clerk
ALI SHERKAT,
Plaintiff-Appellant,
v. No. 03-3143
JAMES F. VANO; SANDY McCURDY, (D.C. No. 02-CV-2570-GTV)
(D. Kansas)
Defendants-Appellees.
ORDER AND JUDGMENT*
Before KELLY, BRISCOE, and LUCERO, Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of this
appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore ordered
submitted without oral argument.
Plaintiff Ali Sherkat, appearing pro se, appeals the district court’s dismissal of his
complaint against defendants James Vano and Sandy McCurdy for lack of subject matter
*
This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. The court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.
jurisdiction. We exercise jurisdiction pursuant to 28 U.S.C. § 1291 and affirm.
According to the record on appeal, Sherkat’s former spouse sought a protective
order in state district court under the Kansas Protection from Abuse Act, Kan. Stat. Ann.
§ 60-3101 et seq. Vano, the presiding magistrate judge, conducted an evidentiary hearing
and found Sherkat “to be a credible threat to the safety of [his former spouse] and/or
minor children.” ROA, Doc. 1, Exh. A. Vano issued a protective order against Sherkat
and ordered Sherkat to participate in a parenting class and anger control counseling.
Sherkat contacted McCurdy, clerk of the state district court, to obtain a transcript of the
evidentiary hearing. McCurdy informed Sherkat that records are not routinely made of
hearings before district magistrate judges, and that an appeal would be “heard de novo by
the district judge assigned upon appeal.” Id. Exh. B.
On November 13, 2002, Sherkat filed this civil action pursuant to 42 U.S.C.
§ 1983 in federal district court, claiming Vano and McCurdy violated his rights by failing
to transcribe the state court evidentiary hearing. The complaint sought relief in the form
of monetary damages, declaratory relief, reversal of the state court rulings, and restoration
of his parental rights. On April 23, 2003, the district court granted defendants’ motion to
dismiss. The district court concluded it was prohibited by the Rooker-Feldman doctrine1
1
The doctrine stems from the decisions in District of Columbia Court of Appeals
v. Feldman, 460 U.S. 462, 476 (1983), and Rooker v. Fidelity Trust Co., 263 U.S. 413,
415-16 (1923).
2
from reviewing Sherkat’s claims. The court also noted that Sherkat’s complaint was
subject to dismissal based on Eleventh Amendment immunity, judicial immunity, the
doctrine of abstention, and potentially the doctrine of res judicata (due to his previous
filing of two similar civil actions in federal court).
We review the dismissal of the complaint de novo. See Ordinance 59 Ass’n v.
United States Dep’t of Interior Sec’y, 163 F.3d 1150, 1152 (10th Cir. 1998). Sherkat’s
complaint “seek[s] what in substance would be appellate review of the” protective order
issued against him by defendant Vano. See Johnson v. Riddle, 305 F.3d 1107, 1116 (10th
Cir. 2002). Further, the constitutional violations allegedly committed by Vano and
McCurdy are inextricably intertwined with the state court protective order entered against
Sherkat. The Rooker-Feldman doctrine clearly prohibits federal court review of those
claims. See Kenmen Eng’g v. City of Union, 314 F.3d 468, 473 (10th Cir. 2002).
AFFIRMED. Sherkat’s Emergency Motion for Preliminary Injunction is
DENIED.
Entered for the Court
Mary Beck Briscoe
Circuit Judge
3
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558 F.Supp. 1147 (1983)
CHICAGO ZOOLOGICAL SOCIETY, a corporation, Plaintiff,
v.
Raymond J. DONOVAN, Secretary of Labor, United States Department of Labor; Thorne G. Auchter, Assistant Secretary of Labor; Occupational Safety and Health Administration of the United States Department of Labor, its Compliance Safety and Health Officer James S. Kontos, its Area Director William E. Funcheon, Jr.; and the Occupational Safety and Health Review Commission, Defendants.
No. 79 C 4770.
United States District Court, N.D. Illinois, E.D.
February 28, 1983.
*1148 *1149 Anne B. Shindell, Krukowski & Associates, Milwaukee, Wis., Frederick J. Fassnacht, Hendricks & Associates, Ltd., Oak Brook, Ill., for plaintiff.
Dan K. Webb, U.S. Atty., T. Timothy Ryan, Jr., Sol. of Labor, U.S. Dept. of Labor, Chicago, Ill., for defendants.
MEMORANDUM OPINION
FLAUM, District Judge:
This matter comes before the court on cross motions for summary judgment. For the reasons set forth below, the motion of defendants Raymond J. Donovan, Secretary of Labor; Thorne G. Auchter, Assistant Secretary of Labor; the Occupational Safety and Health Administration ("OSHA"); James S. Kontos; and William E. Funcheon, (collectively, "defendants") is granted on plaintiff's second and third causes of action. In addition, the motion for partial summary judgment filed by defendant Occupational Safety and Health Review Commission ("Commission") is granted and plaintiff's first, fourth, fifth and sixth causes of action are dismissed.
The allegations of the complaint are detailed in the court's memorandum opinion, dated March 3, 1981, denying defendants' motion to dismiss. Briefly summarized, they are as follows: Plaintiff owns and manages a zoological park known as Brookfield Zoo (the "Zoo"). On March 30, 1979, plaintiff denied admission to the Zoo to James S. Kontos ("Kontos"), a compliance safety and health officer of OSHA, because Kontos did not have a warrant to conduct a safety and health investigation. After Kontos filed an application for an inspection warrant, a United States magistrate issued an ex parte warrant. When Kontos provided the warrant on April 12, 1979, plaintiff objected to the warrant, and Kontos proceeded with the inspection under plaintiff's protest. The inspection resulted in citations and a notification of penalty issued by OSHA, and on May 24, 1979, the Department of Labor filed a complaint with the Commission, asking for an order affirming the citations and notification of penalty. Plaintiff answered the complaint and is contesting the citations and notification of penalty before the Commission. In addition, plaintiff filed a complaint for declarative and injunctive relief with this court, asking the court to declare, inter alia, that the ex parte warrant for inspection is defective because: (1) plaintiff is not an employer subject to the Occupational Health and Safety Act (the "Act") and OSHA thus lacks jurisdiction over plaintiff (first cause of action); (2) OSHA does not have the power to obtain ex parte warrants (second cause of action); (3) the warrant was issued without probable cause (third cause of action); (4) both the warrant application and the warrant are overly broad (third cause of action). Plaintiff also asked the court to declare that the inspection was not conducted properly (fourth cause of action), that the citations issued by OSHA lacked particularity (fifth cause of action), and that the OSHA standards are illegal (sixth cause of action).
*1150 Defendants moved to dismiss plaintiff's action on the grounds that plaintiff had not exhausted its administrative remedies. In their memorandum in support of their motion to dismiss, defendants stated, without explanation, that plaintiff's claim that OSHA lacked jurisdiction must first be argued before an administrative law judge. Defendants went on to urge the court not to follow the Seventh Circuit's decision in Weyerhaeuser Co. v. Marshall, 592 F.2d 373 (7th Cir.1979), which held that exhaustion of administrative remedies is not required when the validity of an administrative search warrant is attacked. This court refused to abandon Weyerhaeuser and denied the motion to dismiss.
Both plaintiff and defendants then filed motions for summary judgment, and the Commission filed a motion for partial summary judgment. Defendants have renewed their argument that plaintiff's claim that OSHA lacks jurisdiction is not properly before the court. Defendants distinguish Weyerhaeuser by pointing out that Weyerhaeuser dealt only with the issue of the validity of a warrant, not with whether the plaintiff fell within the definition of "employer" under the Act. Likewise, the Commission argues in its memorandum in support of its motion for partial summary judgment that plaintiff's first, fifth and sixth causes of action do not concern the validity of the search warrant obtained by OSHA and are not properly before the court. Plaintiff asserts that Weyerhaeuser cannot be so narrowly interpreted as to require exhaustion of administrative remedies on the jurisdiction issue.
After considering the new arguments put forth by defendants and the Commission, the court agrees that Weyerhaeuser held only that exhaustion of administrative remedies is not required when a plaintiff challenges the validity of a search warrant. Weyerhaeuser did not address the situation presented by the present case, in which plaintiff alleges that it is not within the jurisdiction of OSHA, that the citations are not written with sufficient particularity, and that proper inspection procedures were not followed during the OSHA inspection. Since such allegations concern matters that are within the expertise of the Commission, Weyerhaeuser does not exempt plaintiff from the rule of exhaustion of administrative remedies. Weyerhaeuser Co. v. Marshall, 592 F.2d at 376. Furthermore, plaintiff's allegation that OSHA standards are illegal must first be heard by the Commission, because the Commission may decide that the plaintiff does not fall within the jurisdiction of OSHA, thereby mooting the question of OSHA standards and relieving the court of the need to decide it. Id. See also W.E.B. DuBois Clubs of Amer. v. Clark, 389 U.S. 309, 88 S.Ct. 450, 19 L.Ed.2d 546 (1967). Thus, plaintiff's first, fourth, fifth and sixth causes of action are dismissed for failure to exhaust administrative remedies.
As Weyerhaeuser established, however, allegations that a warrant is invalid do not require exhaustion of administrative remedies.[1] In this case, such allegations are made in plaintiff's second and third causes of action. Yet, if the Commission decides that the Zoo is not within the jurisdiction of the Act, any questions regarding the validity of the warrant would be moot. The undesirability of deciding a question that may later be mooted is greatest, *1151 however, when the question concerns the legality or the constitutionality of a statute or administrative procedure. See, e.g., W.E.B. DuBois Clubs of Amer. v. Clark, 389 U.S. 309, 88 S.Ct. 450, 19 L.Ed.2d 546 (1967); Blocksom & Co. v. Marshall, 582 F.2d 1122 (7th Cir.1978). When the question involves the validity of a warrant in a particular instance, the problem of reaching an issue that may be mooted is overridden by considerations of sound judicial administration, which mandate district court review of magistrates' determinations. See Weyerhaeuser Co. v. Marshall, 592 F.2d at 377; see also In re Sauget Industrial Research and Waste Assoc. v. Marshall, 477 F.Supp. 88 (S.D.Ill.1979). Therefore, the court concludes that plaintiff's second and third causes of action are properly before it.
In its second cause of action, plaintiff contends that OSHA does not have the power to obtain ex parte warrants. Defendants move for summary judgment on this issue, arguing that ex parte warrants are not per se defective. Defendants also contend that the 1980 re-promulgation of an amendment to 29 C.F.R. § 1903.4, an amendment that specifically allows OSHA to obtain ex parte warrants of inspection, has rendered moot the question of the propriety of the ex parte warrant in this case. In response to these contentions, plaintiff submits that issues of fact make summary judgment inappropriate in this case. Specifically, plaintiff states that there is a dispute whether the director of the Zoo requested notification of and the opportunity to appear at a hearing regarding a warrant for inspection. Plaintiff further asserts that, at the time that defendants obtained the ex parte warrant to search the Zoo, the amendment allowing ex parte warrants was inoperable because it had been improperly promulgated. Plaintiff relies on Donovan v. Huffhines Steel Co., 645 F.2d 288 (5th Cir.1981), aff'g without opinion, 488 F.Supp. 995 (N.D.Tex.1979), for the proposition that the amendment to 29 C.F.R. 1903.4 was not issued according to rule-making requirements and was therefore invalid.
The Court of Appeals for the Seventh Circuit has squarely rejected both of plaintiff's contentions. In Rockford Drop Forge Co. v. Donovan, 672 F.2d 626, 630 (7th Cir.1981), the court adopted the view that the 1978 amendment of § 1903.4 was exempt from rule-making procedures because it was merely an interpretation of the earlier version of § 1903.4. In addition, Rockford Drop Forge Co. established that an employer has no right to notice and an opportunity to appear at a hearing regarding an inspection warrant. Thus, the properly promulgated amendment to 29 C.F.R. § 1903.4 provided defendants in this case with authority to seek an ex parte warrant of inspection of the Zoo. Further, the unresolved issue of whether the Zoo director requested notification is not material to the issue of the propriety of the ex parte warrant and does not prohibit the granting of summary judgment in favor of defendants. See Fed.R.Civ.P. 56(c).
Plaintiff's third cause of action alleges that the warrant issued in this case is invalid because OSHA failed to demonstrate probable cause in its warrant application. Defendants move for summary judgment, pointing out that, when probable cause is based upon evidence of an existing violation, it is unnecessary to establish probable cause in the criminal sense. Defendants also assert that paragraph two of the warrant application clearly sets forth the basis of OSHA's authority to investigate accidents. Plaintiff responds that the application merely sets forth conclusory statements and that the mere occurrence of an accident or a fatality does not provide probable cause to believe that a violation exists. Plaintiff also argues that the application's boilerplate recital of OSHA's authority to conduct inspections does not identify adequately any legislative or administrative program that OSHA was following when it investigated the Zoo.
It is clear that the requirements of administrative probable cause are less stringent than the requirements of criminal probable cause. See Marshall v. Barlow's Inc., 436 U.S. 307, 320, 98 S.Ct. 1816, 1824, *1152 56 L.Ed.2d 305 (1978); Camara v. Municipal Court, 387 U.S. 523, 534-35, 87 S.Ct. 1727, 1733, 18 L.Ed.2d 930 (1967); Weyerhaeuser Co. v. Marshall, 592 F.2d 373, 377 (7th Cir. 1979). In addition, the Supreme Court has ruled that administrative probable cause can be demonstrated by one of two avenues: 1) if specific evidence of an existing violation is presented, or 2) if a showing is made that reasonable legislative or administrative standards for conducting an investigation are satisfied. Marshall v. Barlow's Inc., 436 U.S. at 320-21, 98 S.Ct. at 1824.
The Seventh Circuit has discussed both methods of demonstrating administrative probable cause. In an opinion issued after the parties filed their motions in the present case, the Seventh Circuit addressed the "existing violation" route to probable cause and clearly held that "the occurrence of an accident, in and of itself, is not proof of an OSHA violation." Donovan v. Federal Clearing Die Casting Co. ("Donovan"), 655 F.2d 793, 797 (7th Cir.1981). In Donovan, OSHA relied solely on newspaper accounts of an accident and made no attempt to question the victim's family or physician about the accident and injury. The Seventh Circuit suggested that information gained from such conversations might present a magistrate with sufficient facts upon which to reach the conclusion that an OSHA violation exists. Absent such information, the court concluded, a warrant that merely describes the occurrence of an accident and concludes, in boilerplate language, that the accident indicates the existence of violations does not establish probable cause.
With respect to the second method of establishing administrative probable cause, the Seventh Circuit has delineated two requirements that must be met: 1) a reasonable legislative or administrative inspection program must exist and 2) the desired inspection must fit within the program. In the Matter of Establishment Inspection of Northwest Airlines, Inc. ("Northwest Airlines"), 587 F.2d 12, 14-15 (7th Cir.1978). The challenged warrant application in Northwest Airlines contained a bare assertion that there was an "inspection and investigation program". OSHA's appellate court briefs, though, identified the program as the section 8(f)(1) program of inspecting pursuant to employee complaints. In holding that the warrant application did not demonstrate probable cause, the Seventh Circuit stated that "the identification of the program must take place in the warrant application itself in order to enable the magistrate to [determine whether a reasonable program exists] ...." 587 F.2d at 15.
Applying these standards, the court holds that the warrant application in the present case fails to satisfy the requirements of administrative probable cause under the "existing violation" route. The application asserts that a laborer employed by the Zoo was found in an unconscious state on the floor of a construction area and later died of internal injuries. The application then states that "the nature and extent of the employee's injuries and the conditions giving rise to the accident indicate the existence of dangerous conditions that may be in violation of the Act and/or the regulations issued pursuant thereto." Thus, this application, as that in Donovan, relies on a description of the scene of the accident to reach the conclusion that violations existed. Moreover, OSHA made no greater attempt in this case than it did in Donovan to question the victim's family or doctor in order to gain information about possible violations.
The "legislative or administrative standards" route to probable cause yields a different result. The warrant application in the present case indicates that "[t]he desired inspection is part of an accident investigation ... as prescribed by Chapter IV, entitled Compliance Programming, of the [OSHA] Field Operations Manual." Since the application identifies the program that formed the basis of the investigation, the magistrate was able to determine that there is a reasonable administrative inspection program as required by Northwest Airlines.[2] In addition, the information contained *1153 in the warrant application regarding the death of a worker allowed the magistrate to fulfill the second element of the Northwest Airlines standard, that an inspection following a death fit within the accident program. Thus, probable cause is established under the "legislative or administrative standard" route and defendants are entitled to judgment on that issue.
In its third cause of action, plaintiff also alleges that the warrant application and the warrant are overly broad because Kontos applied for and received permission to inspect the Zoo's entire premises. Moving for summary judgment on this issue, defendants cite In re Gilbert & Bennett Mfg. Co., 5 OSHC (BNA) 1375 (N.D.Ill.1977), aff'd, 589 F.2d 1335 (7th Cir.), cert. denied, 444 U.S. 884, 100 S.Ct. 174, 62 L.Ed.2d 113 (1979), for the proposition that a limitation on the scope of the warrant would only infringe on the right of workers to have as safe a workplace as possible. Plaintiff responds by asserting that an administrative search must be limited to areas intimately related to the alleged violation.
When probable cause justifying the issuance of an administrative search warrant is based upon an administrative plan, the warrant need not always limit the scope of the inspection. In In re Establishment Inspection of Gilbert & Bennett Mfg. Co., 589 F.2d 1335, 1342 (7th Cir.), cert. denied, 444 U.S. 884, 100 S.Ct. 174, 62 L.Ed.2d 113 (1979), OSHA applied for an inspection warrant pursuant to its "`National-Local plan' designed to reduce the `high incidence' of occupational injuries in the `foundry industry.'" The Seventh Circuit upheld a warrant authorizing a search of the entire workplace, stating that the exact locations of violations could not be known prior to entering the establishment and, thus, no meaningful limitations on the scope of the warrant could be devised. The court noted that a restrictive warrant under such circumstances would defeat the purposes of the Act.[3]
In this case, plaintiff suggests that if the deceased employee sustained his injuries as a result of a job-related accident, *1154 then the accident occurred not far from where the employee was found and the investigation should have been limited to the area in which the employee was working. The court does not agree that warrants authorizing investigations in the aftermath of fatalities should be based upon such assumptions. Neither the court nor a magistrate has the expertise to determine the location of conditions that may cause a death in a workplace. In identifying the scope of an investigation regarding a worker's fatality, which is conducted pursuant to an accident investigation program, the signed application of an OSHA compliance officer will be given great weight. See generally In re Establishment Inspection of Gilbert & Bennett Mfg. Co., 589 F.2d at 1343 (when determining probable cause, magistrate could rely on the known expertise of the Department of Labor in forming opinion that statistics indicated a high incidence of injuries in the foundry industry). It would little further the protective purposes of the Act for the court to inhibit as thorough an investigation as the officer deems necessary. Thus, the court holds that the warrant application and the warrant are not overbroad, and the warrant issued in this case is valid.[4]
Accordingly, summary judgment is granted in defendants' favor on plaintiff's second and third causes of action, and plaintiff's first, fourth, fifth and sixth causes of action are dismissed for failure to exhaust administrative remedies.
NOTES
[1] Several circuits have disagreed with the Seventh Circuit's holding in Weyerhaeuser and have decided that administrative remedies must be exhausted even when the validity of a search warrant is questioned. See Baldwin Metals Co. v. Donovan, 642 F.2d 768 (5th Cir.), cert. denied, 454 U.S. 893, 102 S.Ct. 389, 70 L.Ed.2d 207 (1981); Babcock & Wilcox Co. v. Marshall, 610 F.2d 1128 (3d Cir.1979). See also In re Worksite Inspection of Quality Products, 592 F.2d 611 (when challenges to an OSHA warrant can be adequately considered by the Commission or by the court of appeals, the district court should refrain from deciding a motion to suppress evidence gathered during an OSHA inspection). The Seventh Circuit, however, reaffirmed Weyerhaeuser in Federal Casting Div., Chromalloy Amer. Corp. v. Donovan, 684 F.2d 504, 507-08 (1982). One district court outside the Seventh Circuit has adopted the Weyerhaeuser approach. See Marshall v. Berwick Forge & Fabricating Co., 474 F.Supp. 104 (M.D.Pa.1979).
[2] In Marshall v. Pool Offshore Co., 467 F.Supp. 978 (W.D.La.1979), OSHA representatives had obtained warrants to inspect offshore drilling rigs at which five employees had been killed during the course of their work. The affidavits filed by the OSHA compliance officer at the time of his warrant application failed to state evidence of an existing violation and failed to show that the inspection was required by a reasonable legislature or administrative standard. During a hearing to compel compliance with the warrants, the compliance officer referred to the requirement, set forth in the OSHA Operations Manual, that OSHA compliance officers must investigate and/or inspect whenever a death occurs. Relying upon this oral testimony, the court in Pool Offshore stated that the "legislative or administrative standard" route of demonstrating probable cause "might very well be fulfilled". The court then held that the magistrate's order directing that the warrants be executed was based upon probable cause. 467 F.Supp. at 981.
[3] On the question of the proper scope of an administrative warrant where probable cause is established through an employee's complaint, the Seventh Circuit has not provided clear guidance. In Burkart Randall Division of Textron, Inc. v. Marshall, 625 F.2d 1313 (7th Cir. 1980) three separate views are presented on the proper scope. The Seventh Circuit has yet to resolve the conflict in Burkart, and other courts have reached varying results. Compare Marshall v. North Amer. Car Co., 626 F.2d 320, 324 (3d Cir.1980) ("the scope of the inspection must bear an appropriate relationship to the violations alleged in the complaint"); Donovan v. Burlington Northern, Inc., 521 F.Supp. 99, 102 (D.Mont.1981) (inspection warrant which exceeded the boundaries of alleged violations set forth in employee complaint was overbroad); West Point-Pepperell, Inc. v. Marshall, 496 F.Supp. 1178, 1186-87 (N.D.Ga.1980) (where employee complaints went only to respirator standards, inspection warrant authorizing dust concentration tests in areas of the mill where respirators were not worm was overbroad) with Hern Iron Works, Inc. v. Donovan, 670 F.2d 838, 841 (9th Cir.1982) (employee complaint regarding foundry area was adequate to support inspection of entire establishment); In re Gilbert & Bennett Mfg. Co., 5 OSHC (BNA) 1375, 1375-76 (N.D.Ill.1977) (an inspection limited to the substance of an employee complaint would unreasonably restrict the goals outlined in the Act), aff'd, 589 F.2d 1335 (7th Cir.), cert. denied, 444 U.S. 884, 100 S.Ct. 174, 62 L.Ed.2d 113 (1979).
The controversy need not detain the court because in the present case probable cause justifying the issuance of the warrant is based upon an administrative standard set forth in the OSHA operations manual, not upon specific employee complaints.
[4] In view of this holding, the court need not consider defendants' argument that the exclusionary rule is inapplicable to OSHA proceedings.
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82 F.3d 205
UNITED STATES of America, Appellee,v.Peter Robert BETZ, Appellant.
No. 95-2591.
United States Court of Appeals,Eighth Circuit.
Submitted Jan. 9, 1996.Decided April 24, 1996.Rehearing Denied June 4, 1996.
Appeal from the United States District Court for the Eastern District of Missouri.
Bradley Scott Dede, Clayton, Missouri, argued, for appellant.
Michael A. Price, Cape Girardeau, Missouri, argued (Edward L. Dowd, Jr., on the brief), for appellee.
Before WOLLMAN, Circuit Judge, CAMPBELL,* Senior Circuit Judge, and MURPHY, Circuit Judge.
LEVIN H. CAMPBELL, Senior Circuit Judge.
1
Defendant-appellant Peter Robert Betz was indicted in the United States District Court for the Eastern District of Missouri for knowingly manufacturing, culturing and harvesting marijuana plants on federal property in violation of 21 U.S.C. § 841(a)(1), 841(b)(1)(B)(vii), and 841(b)(5), possession of marijuana with intent to distribute in violation of 21 U.S.C. § 841(a)(1) and 841(b)(1)(D), and use of firearms during the commission of a drug crime in violation of 18 U.S.C. § 924(c)(1). Betz pled guilty to the first two charges and the gun charge was dismissed as part of the plea agreement. An evidentiary hearing was then held on Betz's objections to the calculation of his offense level in the Presentence Report. The district court accepted the offense level as set forth in the Presentence Report and sentenced Betz within the Sentencing Guidelines range for that level. Betz appeals from his sentence.
I.
2
In 1992, the United States Department of Agriculture, Forest Service, received reports from local residents who suspected Betz of growing marijuana in the Mark Twain National Forest, Carter County, Missouri. Forest Service officers began investigating the area of the National Forest surrounding Betz's residence. They observed Betz driving a motorcycle in the National Forest and backtracked the motorcycle tracks to a marijuana patch in a clearing. The officers located several other marijuana patches within a five to seven mile radius of Betz's residence. In most of the patches, there were groups of three to five plants enclosed by a circular chicken wire ring, and the chicken wire enclosure was anchored to the ground with wooden stakes. Forest Service officers continued to monitor marijuana patches with these characteristics during the 1992 growing season and found 34 patches containing 255 marijuana plants in the area of the National Forest around Betz's residence. During 1993, the officers found 57 marijuana patches containing 462 plants. The officers recorded the location of each marijuana patch on a topographical map of the forest.
3
In September 1993, a surveillance camera set on one of the patches showed Betz pruning and harvesting marijuana. Having obtained a search warrant, the officers searched Betz's home, where they found several kilograms of marijuana, some marijuana seeds, a scale, two chicken wire rings, a map of the National Forest, $5,600 in cash, and other drug paraphernalia. Four firearms were also seized at the residence. Betz admitted that he had been growing marijuana for about three years and that the cash found at his residence was drug proceeds.
4
Betz pled guilty to manufacturing marijuana and possessing the drug with the intent to distribute it. In the plea agreement, the parties reserved the right to contest the quantity of marijuana attributed to Betz and his offense level. A Presentence Report was prepared by the United States Probation Office, and Betz objected to the amount of marijuana, 722.45 kilograms, for which he was held accountable in determining his offense level. Betz also objected to the two-level enhancement to his offense level for possession of a dangerous weapon in connection with a drug crime (U.S.S.G. § 2D1.1(b)(1)).
5
After an evidentiary hearing, the district court found that Betz was responsible for 722.45 kilograms of marijuana and that the § 2D1.1(b)(1) two-level increase in his offense level for possession of a dangerous weapon was warranted. Under the Sentencing Guidelines this translated into an offense level of 29 and a sentencing range of 87 to 107 months in prison. The district court sentenced Betz to 87 months in prison on the manufacturing count and 60 months in prison on the possession count, to run concurrently, followed by four years of supervised release.
II.
6
Betz makes two arguments on appeal. First, he contends that the district court erred in overruling his objection to the quantity of marijuana attributed to him for sentencing purposes. He contends that the prosecution failed to produce sufficient evidence to link him to the vast majority of marijuana plants included in his offense level calculation. Second, Betz contends that the district court erred in enhancing his offense level for possession of a firearm in connection with a drug offense pursuant to U.S.S.G. § 2D1.1(b)(1). No evidence exists, he says, of a nexus between his possession of the firearms seized from his residence and his drug activities. We address each of these arguments below.
A. Quantity of Marijuana
7
The district court overruled Betz's objection to the quantity of marijuana, 722.45 kilograms, attributed to him in the Presentence Report. This figure represents the sum of the 2.91 kilograms of marijuana found at Betz's residence during the execution of the search warrant, 2.54 kilograms of marijuana estimated as the quantity one could purchase for the $5,600 in drug proceeds seized from Betz's residence, and 717 kilograms representing some 717 marijuana plants found in the Mark Twain National Forest that were attributed to Betz.1 Betz denied there was evidence sufficient to tie him to most of the latter, even under the "preponderance of the evidence" standard applicable at a sentencing hearing.
8
The district court accepted the government's attribution to Betz of all of the marijuana plants encircled by chicken wire found in the National Forest in 1992 and 1993, as well as all plants without surrounding chicken wire found in 1993 in locations that had had chicken wire in 1992. The court also attributed to Betz some plants surrounded by an old garden fence rather than chicken wire, and some plants found in a ditch without chicken wire. All of these attributed plants were within a radius of seven miles from Betz's residence. Betz does not question the accuracy of the number and location of the described marijuana plants. Rather, he denies that the circumstantial evidence was sufficient to link him to the plants as ones he tended and meant to harvest.
9
In determining drug quantity, "[t]he government bears the burden of proving by a preponderance of the evidence the quantity of drugs involved." United States v. Smiley, 997 F.2d 475, 481 (8th Cir.1993). The district court's factual findings as to the amount of drugs attributable to a defendant will not be overturned unless clearly erroneous, United States v. Hiveley, 61 F.3d 1358, 1362 (8th Cir.1995); see also United States v. Sleet, 893 F.2d 947, 949 (8th Cir.1990), and the district court's findings as to witness credibility are " 'virtually unreviewable on appeal.' " United States v. Adipietro, 983 F.2d 1468, 1472 (8th Cir.1993) (quoting United States v. Candie, 974 F.2d 61, 64 (8th Cir.1992)); see also United States v. Carter, 997 F.2d 459, 461 (8th Cir.1993). Thus, a defendant challenging a district court's determination of quantity faces "a difficult burden" on appeal. United States v. Simmons, 964 F.2d 763, 773 (8th Cir.), cert. denied, 506 U.S. 1011, 113 S.Ct. 632, 121 L.Ed.2d 563 (1992) (internal citation omitted); see also United States v. Sales, 25 F.3d 709, 711 (8th Cir.1994) ("Defendants who challenge the sentencing court's determination of drug quantity face an uphill battle on appeal because we will reverse a determination of drug quantity only if the entire record definitely and firmly convinces us that a mistake has been made.").
10
Betz challenges the government's theory that the use of chicken wire rings to protect the plants constituted a unique "signature" of growing marijuana that enabled the officers to identify marijuana grown by him. Evidence of Betz's "chicken wire signature" was put forth at the sentencing hearing by Officer Clark, who testified that he, along with Special Agent Smallwood and Officer Stevens of the Forest Service, identified a particular method of growing marijuana--groups of three to five marijuana plants encircled by chicken wire rings. This particular method of growing marijuana was attributed to Betz when officers photographed Betz pruning marijuana in a patch of plants encircled with chicken wire rings. Officer Clark testified that other marijuana plants, not attributed to Betz, were found in different locations of the National Forest or were planted in a different way. The district court made specific findings crediting the testimony of Officer Clark as to Betz's "signature" of planting marijuana, stating:
11
I am impressed by Mr. Clark, with his background, knowledge, and information, characterizing marijuana growing and identification as a signature.... The signature that Officer Clark attributed to the defendant was the fact that he had chicken wire around the various plants that were identified by the officers who investigated this problem.
12
Betz argues that the district court was clearly erroneous in attributing to him all the marijuana plants encircled with chicken wire found within a seven mile radius of his residence. Betz contends that using chicken wire to protect plants must be so commonplace that it cannot be a "signature." Apart from the chicken wire surrounding the plants, Betz argues that there was no other characteristic which differentiated any of the plants from any others. Throughout the patches, the number of plants in each chicken wire ring varied from one plant to 30 plants or more. Betz points to Officer Clark's testimony that the type of chicken wire varied between marijuana patches and that the stakes used to anchor the rings to the ground were sometimes wooden and sometimes metal.
13
We believe, in all the circumstances, that the chicken wire was a sufficient "signature" to warrant the attribution to Betz of the marijuana plants encircled by the wire. The officers testified that they identified similarities in the style of marijuana growing that allowed them to attribute plants grown with chicken wire to a single defendant. Betz was photographed in a patch of marijuana planted with chicken wire, was seen driving his motorcycle in the vicinity of other patches of plants with chicken wire, and admitted to growing marijuana in the National Forest over three years. Two rings of chicken wire were stored at his residence, which also contained marijuana leaves drying in a shed, $5,600 in admitted drug proceeds, and other indicia of a substantial marijuana-growing business. Betz admitted to having conducted such an operation in 1991-1993, with 1992 and 1993--the years the agents observed him--being his best years. The systematic use of the wire throughout the area suggested that each enclosure was part of a single program rather than each patch being the haphazard product of a variety of different growers. While it was conceded there were others who grew marijuana in the National Forest, there was no evidence that the others were systematically cultivating marijuana on this scale in this location and manner. We therefore find no clear error in the district court's decision to attribute to Betz all the plants encircled by chicken wire. Cf. United States v. Rose, 8 F.3d 7, 9 (8th Cir.1993) (holding that the district court was not clearly erroneous in attributing to the defendant 172 marijuana plants found in a plot in which the defendant had been photographed tending the plants).
14
Turning to the plants not encircled by wire, we also affirm the district court's determination. Officer Clark testified that approximately 188 plants were attributed to Betz despite the fact that they were not planted within chicken wire enclosures: (1) 84 plants without chicken wire around them in 1993 but planted in patches where the officers determined there had been chicken wire in 1992; (2) 35 plants protected by an old garden fence rather than chicken wire; and (3) 69 unfenced plants found in a ditch. The district court found as to the plants described in (1):
15
[I]t appears, from one of the documents ... that some of the plants were counted that did not have chicken wire around them. As I understood the testimony, that those particular plants were plants that were discovered in 1993 which had chicken wire around them in 1992, but did not have chicken wire around them in 1993. So the conclusion of the officer was that it was still the same modus operandi, the same signature utilized when they had chicken wire around them one year, and perhaps did not have that wire around them the next year. But there was sufficient direct evidence to show that at least at one time, those plants, which when counted did not have the wire, did at one time.
16
We accept the court's reasoning as to these some 84 plants found growing in 1993 in plots which in 1992 had had wire. The indication of the use of wire in the earlier year was, we think, a sufficient signature.
17
We are left to consider the 35 plants protected by an old garden fence and the 69 plants found in a ditch. While the wire signature was lacking, there was evidence that these plants were found near the wire-encircled plants, and the officers who were on the scene concluded that these plants were attributable to the same grower, Betz. We are not persuaded the court was clearly erroneous in attributing these also to Betz.2
18
We affirm the court's attribution to Betz of all plants and household amounts included in the sentence calculation.
B. Section 2D1.1(b)(1) Enhancement
19
Betz contends that the district court erred in adopting the Presentence Report's recommendation of a two-level enhancement in Betz's offense level pursuant to § 2D1.1(b)(1) of the Sentencing Guidelines. This court " 'will not reverse the [d]istrict [c]ourt's conclusion that the weapon was connected to the offense unless it is clearly erroneous.' " United States v. Britton, 68 F.3d 262, 265 (8th Cir.1995) (citing United States v. Baker, 64 F.3d 439, 441 (8th Cir.1995)); see also United States v. Hayes, 15 F.3d 125, 127 (8th Cir.), cert. denied, --- U.S. ----, 114 S.Ct. 2718, 129 L.Ed.2d 843 (1994).
20
Section 2D1.1(b)(1) of the Sentencing Guidelines states: "If a dangerous weapon (including a firearm) was possessed, increase [base offense level] by 2 levels." Application note 3 of the Commentary to § 2D1.1 provides in part:
21
The enhancement for weapon possession reflects the increased danger of violence when drug traffickers possess weapons. The adjustment should be applied if the weapon was present, unless it is clearly improbable that the weapon was connected with the offense. For example, the enhancement would not be applied if the defendant, arrested at his residence, had an unloaded hunting rifle in the closet.
22
U.S.S.G. § 2D1.1 comment (n. 3) (emphasis added). At sentencing, the burden is on the government to show by a preponderance of the evidence that a dangerous weapon was present and that it was not clearly improbable that the weapon had a nexus with the criminal activity. United States v. Richmond, 37 F.3d 418, 419 (8th Cir.1994), cert. denied, --- U.S. ----, 115 S.Ct. 1163, 130 L.Ed.2d 1119 (1995); United States v. McMurray, 34 F.3d 1405, 1416 (8th Cir.1994), cert. denied, --- U.S. ----, 115 S.Ct. 1164, 130 L.Ed.2d 1119 (1995); United States v. Khang, 904 F.2d 1219, 1223 (8th Cir.1990) ("Because of the aggravating nature of U.S.S.G. § 2D1.1(b)(1), because courts strictly construe penal statutes, and because of Congress' intent in developing the Guidelines and the Specific Offense Characteristics, the government must establish a relationship between a defendant's possession of the firearm and the offense which he or she has committed."). A firearm's mere presence is an insufficient predicate for § 2D1.1(b)(1) enhancement. See United States v. Shields, 44 F.3d 673, 674 (8th Cir.1995) ("Although firearms were seized from appellant's residence, there was no evidence presented which would indicate the weapons were present during any illegal activity."); United States v. Turpin, 920 F.2d 1377, 1386 (8th Cir.1990) ("Mere presence of the gun is not sufficient to justify sentence enhancement."), cert. denied, 499 U.S. 953, 111 S.Ct. 1428, 113 L.Ed.2d 480 (1991).
23
It is undisputed that four firearms, along with drugs and proceeds from drug sales, were seized from Betz's residence during the execution of the search warrant: (1) a loaded Springfield 12 gauge pump action shotgun in a Volkswagen van on Betz's property; (2) a loaded Ruger .223 caliber semi-automatic rifle seized from the upstairs main bedroom closet; (3) a loaded Ruger .22 caliber pistol seized from the dining room; and (4) an unloaded Winchester .22 caliber single shot, bolt action rifle seized from the living room. Betz argues that the government failed to present evidence from which to infer, beyond mere presence, that the firearms had a nexus to his drug activities.3 He argues that it is common for people living in rural areas to have firearms on their premises. Moreover, he points out that the firearms were not found in close proximity to large amounts of marijuana--only 2.91 kilograms of marijuana were found at Betz's residence, and none of the weapons was found in the shed where the marijuana was located.
24
Nonetheless, even though the guns were not found in the shed with the marijuana, they were found on premises from which Betz conducted drug-related activities where they were readily accessible to Betz. See Hiveley, 61 F.3d at 1362-63 (upholding enhancement where guns were seized from the defendant's home where he lived with his wife and two minor children, but were not specifically found in the trailer where the marijuana was found). Three of the guns were loaded and one had ammunition nearby, suggesting more than a run-of-the-mill state of readiness for immediate use. As the district court observed, "people who are dealing in drugs frequently use dangerous weapons, or have possession of dangerous weapons, for the purposes of protecting their bounty." This court has said that "firearms are tools of the [drug dealer's] trade." Turpin, 920 F.2d at 1387 (internal citation omitted). We agree with the district court that "[a]nyone who has marijuana in his home, as this defendant did, and who has admitted that he is growing ... and cultivating marijuana in two different sections in the Mark Twain National Forest, and who has over $6,000 [sic] of raw currency on his kitchen table, has something to protect." We find no error, clear or otherwise, in the district court's determination that, in all the circumstances, it was not clearly improbable that the firearms were connected to Betz's drug offense.4
25
We affirm in all respects the sentence imposed on Betz.
*
The Honorable Levin H. Campbell, Senior United States Circuit Judge for the First Circuit, sitting by designation
1
For purposes of calculating Betz's base offense level under the Sentencing Guidelines, one marijuana plant is equivalent to one kilogram of marijuana. The Sentencing Guidelines provide that:
[i]n the case of an offense involving marihuana plants, if the offense involved (A) 50 or more marihuana plants, treat each plant as equivalent to 1 KG of marihuana; (B) fewer than 50 marihuana plants, treat each plant as equivalent to 100 G of marihuana. Provided, however, that if the actual weight of the marihuana is greater, use the actual weight of the marihuana.
U.S.S.G. § 2D1.1 Notes to Drug Quantity Table (1994). Amendment 516 to the Sentencing Guidelines replaced the above paragraph with the following language: "In the case of an offense involving marihuana plants, treat each plant, regardless of sex, as equivalent to 100 G of marihuana." U.S.S.G. § 2D1.1 Notes to Drug Quantity Table (1995). Unfortunately for Betz, the effective date of Amendment 516 was November 1, 1995. Because Betz's case was brought before that date, it is subject to the 1994 language.
2
The author, Judge Campbell, while otherwise in agreement, would hold that there is insufficient evidence to ascribe to Betz the 35 plants surrounded by the old garden fence and the 69 plants lying in the ditch
3
At oral argument, Betz contended that the Supreme Court's decision in Bailey v. United States, --- U.S. ----, 116 S.Ct. 501, 133 L.Ed.2d 472 (1995), impacts the application of § 2D1.1(b)(1) because the Supreme Court construed the term "use" to require "active employment" of a weapon. However, § 2D1.1(b)(1) requires enhancement if a dangerous weapon was "possessed." The Supreme Court in Bailey suggested that § 2D1.1(b)(1) was an enhancement tool for dealing with those who "mix guns and drugs," but whose conduct does not fall within the meaning of § 924(c)(1) which requires that the defendant use or carry the weapon in the commission of the offense. Id. at ----, 116 S.Ct. at 509. Thus, Bailey does not control in the present situation
4
Section 2D1.1(b)(1) enhancements have been upheld under a variety of circumstances. See United States v. Early, 77 F.3d 242, 244 (8th Cir.1996) (upholding enhancement when defendant showed a firearm during a drug sale even though defendant claimed he was trying to sell the firearm in a separate transaction); United States v. Kinshaw, 71 F.3d 268, 271 (8th Cir.1995) (upholding enhancement when defendant had a gun belonging to another person in his apartment--the defendant "need not have used the gun during the crime or have even touched it"); Britton, 68 F.3d at 264-65 (upholding enhancement for weapon seized eight months after narcotics sale when defendant had admitted that he had used pistol "during all of his transactions"); United States v. Cotton, 22 F.3d 182, 185 (8th Cir.1994) (enhancement applied where gun and cocaine were found in room of defendant's daughter); Hayes, 15 F.3d at 127 (upholding dangerous-weapon enhancement when firearms and drug paraphernalia were found in a locker over which defendant had control); United States v. Pou, 953 F.2d 363, 371 (8th Cir.) (firearms seen in apartment from which cocaine was sold establishes sufficient connection between weapons and drug offenses to sustain § 2D1.1(b)(1) enhancement), cert. denied, 504 U.S. 926, 112 S.Ct. 1982, 1983, 118 L.Ed.2d 580, 581 (1992); United States v. Nash, 929 F.2d 356, 359 (8th Cir.1991) (upholding enhancement when weapon was found in the luggage of defendant's girlfriend who was travelling with him); Turpin 920 F.2d at 1386-87 (enhancement applied where gun observed between co-defendants seated in car from which drugs had been sold); United States v. Jones, 875 F.2d 674, 676 (8th Cir.) (upholding enhancement where firearms "were located in close proximity to the drugs"), cert. denied, 493 U.S. 862, 110 S.Ct. 177, 107 L.Ed.2d 133 (1989). Cf. United States v. Bost, 968 F.2d 729, 733 (8th Cir.1992) (reversing § 2D1.1(b)(1) enhancement where weapons were seized two and one-half months after commission of the charged acts and when the search warrant was executed and the weapons were found, no drugs were found)
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99 N.H. 92 (1954)
STATE
v.
GEORGE C. STAFFORD & SONS, INC.
No. 4282.
Supreme Court of New Hampshire.
Argued March 3, 1954.
Decided May 27, 1954.
*96 Louis C. Wyman, Attorney General, George F. Nelson, Assistant Attorney General (Mr. Nelson orally), for the State.
Upton, Sanders & Upton (Mr. Richard F. Upton orally), for the town of Meredith, as an intervening plaintiff.
Tilton & Tilton (Mr. Robert P. Tilton orally), for the defendant.
KENISON, C. J.
It is a basic proposition which has become well *97 settled by usage, statute and judicial decision that lakes and great ponds in New Hampshire belong to the public and are held in trust by the State for public use. R. L., c. 182, ss. 17, 18; Concord Company v. Robertson, 66 N. H. 1; Percy Summer Club v. Welch, 66 N. H. 180; State v. Sunapee Dam Co., 70 N. H. 458; Whitcher v. State, 87 N. H. 405. Meredith Bay in Lake Winnipesaukee, which is one of the boundaries of the lands owned by the parties to this dispute, is a part of one of the public waters of the State. Musgrove v. Cicco, 96 N. H. 141; Rothrock v. Loon Island, 96 N. H. 421. While the title of the State to the bed of the lake extends to the natural high water mark (Taggart v. Jaffrey, 75 N. H. 473), the defendant and other littoral owners have rights which are more extensive than those of the public generally. Willis v. Wilkins, 92 N. H. 400. Such littoral owners have the right to erect wharves and other structures into the lake which are superior to the rights of those who have only the rights of a member of the public. Dolbeer v. Company, 72 N. H. 562. Littoral owners may use the lakes and public waters in front of the property for recreational and other similar purposes in a more extensive manner than those who enjoy the rights to use the lake and public waters only as members of the public. Hoban v. Bucklin, 88 N. H. 73.
Although littoral owners have extensive rights in public waters, they are always subject to the paramount right of the State to control them reasonably in the interests of navigation, water storage and classification, health and other public purposes. Richardson v. Beattie, 98 N. H. 71; State v. Hutchins, 79 N. H. 132. Revised Laws, chapters 181, 182, 266, 267; Laws 1947, chapter 183 as amended. Since the State's rights in land and waters are not always enforced and protected with the same alacrity as private rights (State v. Company, 49 N. H. 240, 252), the Legislature has provided that no person can acquire title to State lands by adverse possession. R. L., c. 411, s. 6. For the same reason it has been decided that the State does not forfeit or lose its rights to public lands and waters by laches, estoppel or waiver. State v. Hutchins, supra; Trustees &c. Academy v. Exeter, 90 N. H. 472, 495; St. Regis Co. v. Board, 92 N. H. 164, 169. Nor is the State estopped to assert public rights if its officers acted without authority. Ham v. Interstate Bridge Authority, 92 N. H. 268; State v. Cote, 95 N. H. 428. "It has been expressly decided that a state is not estopped by the unauthorized acts of its officers." Smith v. Epping, 69 N. H. 558, 560.
*98 There is authority that a littoral or riparian landowner may add "made or filled land" (Watson v. Horne, 64 N. H. 416, 417) to his property assuming, of course, that it is a reasonable use of his property and not injurious to neighboring property or the public rights of the State. See Cheever v. Roberts, 82 N. H. 289. This right has sometimes been referred to as "a reasonable private right of using this public property." Dolbeer v. Company, 72 N. H. 562, 564. Even where the littoral owner limits the made or filled land to the shoreline of his own abutting property, he assumes the risk that his construction of a "wharf . . . or other thing, below the water's edge, being found to be unreasonable, and his structure being an abatable nuisance." Concord Co. v. Robertson, 66 N. H. 1, 20. It follows that the littoral owner has no right to build land or structures out from the lake frontage of his property if the same will unreasonably interfere with the paramount rights of the public to use the lake. To build them along the frontage of adjoining land, whether title to such land is privately or publicly held, would not only be clearly unreasonable but beyond the rights of the littoral owner.
The defendant's claim to title to the filled-in area stands or falls on the authority of the Highway Commissioner to grant it to him. The defendant received no conveyance to the filled-in area and, in any event, the conveyance to be binding required approval of the Governor and Council which was never obtained. R. L., c. 90, pt. 10, s. 11, as inserted by Laws 1945, c. 188. Although the Highway Commissioner had broad powers over highway matters which he exercised on behalf of the State (Id., s .7) the sale, conveyance and lease of property acquired for highway purposes required the approval of the Governor and Council. Id., s. 11. The same rule applies to surplus property which is not immediately needed for the right of way proper. Id., pt. 7, s. 2. While this land transaction was entered into honestly, openly and in good faith, it could not be legally effective to transfer property from the plaintiff to the defendant. State v. Hutchins, 79 N. H. 132. The answer to question one is "no."
Question three is whether on the evidence in this case a littoral owner on a great pond may acquire fee simple title to additional dry land by filling up the bed of the great pond below the natural high water mark. For reasons hereinafter indicated the answer must be "no." An affirmative answer would result in serious and extensive encroachments on the public rights in public waters of the *99 state, would place a premium on trespasses against the public right and encourage one littoral owner to develop his shore frontage at the expense of others. The whole history of the development of lakes and great ponds in this state militates against the allowance of such commercial developments without legislative sanction. Dana v. Craddock, 66 N. H. 593; State v. Welch, 66 N. H. 178; State v. Sunapee Dam Co., 70 N. H. 458; R. L., c. 267, ss. 47-50; Laws 1949, c. 307. It is true that the filled-in area eliminated the building of rip-rap along a portion of the lake shore otherwise necessary to hold the bed of the highway in place. While the fill was thus connected with the highway project and improved the general appearance of the immediate vicinity, it does not follow that the land so created became the private property of the defendant. We know of no decision which allows a littoral owner to acquire fee simple title to fill deposited in a lake and thus accomplish its transfer from the public ownership to private ownership by grading and improving the filled land. 1 Powell, Real Property s. 160, pp. 624-625 (1949). If this was allowed it would be contrary to the statutory provisions punishing trespass on State lands and prohibiting private owners from acquiring title to State lands by adverse possession. R. L., c. 411, ss. 5, 6.
The answer to question two cannot be a categorical "yes" or "no." The exact point at which Cram Mill Brook ended and Lake Winnipesaukee began is difficult to ascertain. The State was not only the owner of public rights in Lake Winnipesaukee but owned certain land on the westerly side of the lake by virtue of the deed from Meredith Linen Mills and as to the defendant was an adjoining owner within the meaning of R. L., c. 269, ss. 27-29. While the defendant could not have compelled the State to determine the boundary line (Rothrock v. Loon Island, 96 N. H. 421), the State through the Governor and Council would have authority to settle a boundary dispute. The effect of this might well be to establish title in fee in the defendant to a minor portion of the filled-in area because of the uncertainty as to the location of the true boundary where the properties adjoin. Cf. Bailey v. Rolfe, 16 N. H. 247, 251, 252. It would not be possible to give the defendant title in fee to the whole of the area since the statute furnishes no authority for such procedure.
While we have answered the questions transferred there remains the further consideration whether there is any equitable solution to this case which will not deprive the defendant of its shoreline. *100 The Court has found that the defendant has expended considerable money improving the property and that this was done openly, honestly and in good faith and that the "equities weigh heavily in its favor." Possible equitable solutions which may be considered by the parties and the Court include (1) legislative action (cf. Laws 1951, c. 280); (2) settlement of the boundary dispute by the Governor and Council and the defendant pursuant to R. L., c. 269, ss. 27-29; or (3) the one that was adopted in the somewhat analogous case of Tiffany v. Oyster Bay, 234 N. Y. 15.
As we understand the exhibits the defendant formerly had approximately one hundred feet of shore frontage while the State had two hundred twenty feet. If the defendant is to receive easement rights in the new shoreline in order to preserve the former proportions it would be entitled to ten thirty-seconds of the new two hundred sixty foot shoreline or eighty-one feet. This would involve establishment of a line from the dividing point on the new shoreline, to the defendant's southwesterly bound where the thread of the brook formerly ended and the lake began. The State would continue to hold in fee simple the area which was formerly the bed of the lake, subject to the special littoral rights of the defendant in so much thereof as lies between the portion of the new shoreline designated for the defendant's use, and the former shoreline of the land owned by it in fee. Tiffany v. Oyster Bay, supra. The rights would include the privilege to cross and recross the area for the purpose of using the frontage along the eighty-one foot section to build a wharf, boathouse or other similar structure and to exercise thereon the common privileges of littoral owners. Whitcher v. State, 87 N. H. 405, 409. This method of dealing fairly with changed conditions on public waters finds some support in Watson v. Horne, 64 N. H. 416, 417.
Remanded.
All concurred.
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72 Cal.Rptr.3d 623 (2008)
177 P.3d 232
MONTGOMERY (Michael) on H.C.
No. S159141.
Supreme Court of California.
February 20, 2008.
Review granted/briefing deferred (8.512(d)(2) criminal case).
The petition for review is granted. Further action in this matter is deferred pending consideration and disposition of related issue in In re Sandra Lawrence on Habeas Corpus, S154018, In re Richard Shaputis on Habeas Corpus, S155872, and In re Arnold Jacobson on Habeas Corpus, S156416 (see Cal. Rules of Court, rule 8.512(d)(2)), or pending further order of the court. Submission of additional briefing, pursuant to California Rules of Court, rule 8.520, is deferred pending further order of the court.
GEORGE, C.J., and KENNARD, BAXTER, WERDEGAR, CHIN, MORENO, and CORRIGAN, JJ., concur.
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NO. 07-01-0256-CV
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL B
APRIL 17, 2002
______________________________
MASON BRISTOL and JBW LAND and MINERALS, INC.,
Appellants
v.
PLACID OIL COMPANY,
Appellee
_________________________________
FROM THE 121st JUDICIAL DISTRICT FOR YOAKUM COUNTY;
NO. 6886; HON. KELLY G. MOORE, PRESIDING
_______________________________
MEMORANDUM OPINION
_______________________________
Before BOYD, C.J., QUINN and JOHNSON, J.J.
Mason Bristol and JBW Land and Minerals, Inc. (Bristol) appeal from a final
judgment entered in favor of Placid Oil Company (Placid). Their three points of error
concern venue. That is, Bristol contends that error occurred when venue was transferred
from Tarrant to Yoakum County, Texas. So too do they assert that any venue dispute was
waived because Placid 1) did not timely secure a hearing on its motion to transfer and 2)
invoked the judicial power of the Tarrant County court before the motion was granted. We
affirm.
Issue One - Propriety of Order Transferring Venue
Initially, Bristol contends that the cause should not have been transferred from
Tarrant County. He believes this is so because the mandatory venue provision described
at §15.011 of the Texas Civil Practice and Remedies Code was inapplicable. (1)
Furthermore, it allegedly was inapplicable because he had only sought, via the suit,
monetary damages as opposed to an interest in land. We disagree.
Standard of Review
"In determining whether venue was or was not proper, the appellate court shall
consider the entire record, including the trial on the merits." Tex. Civ. Prac. & Rem. Code
Ann. §15.064(b). This statutory provision allows us to review the decision on a record
different than that before the district court at the time it ruled upon the issue. Ruiz v.
Conoco, Inc., 868 S.W.2d 752, 757 (Tex. 1993); Bleeker v. Villarreal, 941 S.W.2d 163, 167
(Tex. App.-Corpus Christi 1996, pet. dism'd by agr.). That is, we must independently
review the "entire record to determine whether venue was proper in the ultimate county of
suit." Ruiz v. Conoco, Inc., 868 S.W.2d at 757-58. So, if in reviewing the entire record we
find any probative evidence illustrating that venue was proper in the county wherein
judgment was entered, we must affirm the decision to transfer venue to that county. Id.
Or, as stated by the Corpus Christi Court of Appeals, "our review considers only whether
the venue ruling was ultimately vindicated by the fully developed record." Bleeker v.
Villarreal, 941 S.W.2d at 167.
Application of Standard
First, as mentioned in footnote one, suits to recover realty or an interest in realty
must be filed in the county where all or part of the property is located. Tex. Civ. Prac. &
Rem. Code Ann. §15.011 (Vernon 1986). Second, through his live pleading at the time of
trial, Bristol sought, among other things, the imposition of a constructive trust "on the
revenue received from the [oil] well in question and the lease . . . ." (Emphasis added).
Third, a constructive trust is a relationship with respect to property subjecting one who
holds legal title to property "to convey it to another . . . ." Talley v. Howsley, 176 S.W.2d
158, 160 (Tex. 1943). Fourth, given the foregoing definition of a constructive trust, Bristol
effectively demanded the conveyance of both the mineral leasehold at issue and revenue
produced therefrom to himself. Fifth, it is indisputable that an oil and gas lease constitutes
an interest in land or realty. Jupiter Oil Co. v. Snow, 819 S.W.2d 466, 468 (Tex. 1991).
Sixth, since a mineral lease constitutes an interest in land, logic dictates that Bristol's
demand for a constructive trust upon the lease was tantamount to an attempt to recover
an interest in realty. Seventh, since actions to recover an interest in realty must be filed
in the county wherein the land is located and the land at bar was located in Yoakum
County, then mandatory venue was in Yoakum County, the county where judgment was
rendered. (2)
In short, that the legislature intended to have disputes involving the ownership of
land resolved in the county or counties wherein the land lay is clear. Upon considering the
entire record before us, we conclude that the legislature's intent was fulfilled at bar. The
dispute regarding the interest in realty was resolved by the district court for the county
wherein the land was located. Thus, we cannot say that venue was improper.
Issue Two and Three -Waiver of Right to Transfer
Delay
Bristol contends that Placid waived its venue complaint because it "did not secure"
a timely hearing on its motion to transfer. In support thereof, he cited authority imposing
upon the movant an obligation to request a hearing within a reasonable time, Whitworth
v. Kuhn, 734 S.W.2d 108, 111 (Tex. App.-Austin 1987, no writ), and to pursue such a
hearing. Grozier v. L-B Sprinkler & Plumbing Repair, 744 S.W.2d 306, 311 (Tex. App-Fort
Worth 1988, writ denied). Yet, as proof that the duties were breached, Bristol merely cites
to the amount of time which lapsed between the date on which Placid filed its motion and
the date on which the trial court eventually ruled on it; that period approximated 32 months.
Unmentioned by Bristol is the date on which Placid requested the hearing or the steps, if
any, taken by the company to secure one. Yet, our review of the file disclosed that Placid
prayed that the matter "be set for hearing" in the closing paragraph of its motion and in its
first amended answer filed on October 30, 1997. So, to the extent that a movant "has the
duty to request a setting," Tex. R. Civ. P. 87(1), it appears that Placid sought one at least
twice. Given this circumstance, the record does not support Bristol's assertion in this
respect.
Nor does the record afford us evidence upon which to conclude that Placid
somehow acted less than diligently in pursuing the matter once a hearing was sought. Nor
can one reasonably attribute non-feasance to the company simply because 32 months
lapsed before the trial court ruled on the motion. A myriad of things could have caused
that delay. It is quite possible that Placid did nothing. Equally possible is that Placid
diligently pursued resolution of its motion but that the trial court's docket did not permit
determination of the request. Or, it could be that the trial court awaited Bristol's response
to the motion, which response was not filed until five weeks before the matter was formally
submitted to the court. In any case, the burden lay with Bristol to present us with an
appellate record supporting his contention that Placid was less than diligent, In re Spiegel,
6 S.W.3d 643, 646 (Tex. App.-Amarillo 1999, no pet.), and it did not. Thus, to impute non-feasance to the oil company would be to act upon mere speculation, something we cannot
do.
Furthermore, it may be that delay in obtaining a hearing provides grounds for the
trial court to deny a motion to transfer. Yet, such a delay does not mean that the trial court
must deny it. It remains within its discretion to nevertheless entertain the motion on the
merits if it so chooses. Kerrville State Hosp. v. Clark, 900 S.W.2d 425, 430 n.2 (Tex.
App.-Austin 1995), rev'd on other grounds, 923 S.W.2d 582 (Tex. 1995). Here, the court
chose to entertain it, and, we cannot hold that it abused its discretion in doing so. This is
especially so given that Bristol nowhere asserts that the delay impaired his ability to defeat
the motion.
Invocation of Trial Court's Jurisdiction
Lastly, Bristol asserts that the trial court was obligated to deny the motion because
Placid invoked "the judicial power of the Tarrant County Court in a manner inconsistent
with a continuing intention to transfer venue." The manner in which it allegedly invoked
that power was through filing a motion for summary judgment. Yet, Placid expressly made
its request for summary judgment subject to its motion to transfer venue. Under that
circumstance, seeking relief from the court did not result in waiver of the pending motion
to change venue. General Motors Corp. v. Castaneda, 980 S.W.2d 777, 783 (Tex. App.--San Antonio 1998, pet. denied) (holding that GM did not waive its motion to transfer
because it stated in its later motions that same were subject to its venue motion).
Next, the authorities cited by Bristol as support for his contention are inapposite.
For instance, the court in Kohut v. Mrs. Baird's Bakeries, Inc., 478 S.W.2d 139 (Tex. Civ.
App.--Houston [14th Dist.] 1972, no writ) was faced with a situation where Baird's pursued
summary judgment after its motion to transfer venue had been sustained. That did not
occur here. Nor was the case at bar actually tried on the merits before the venue issue
was heard; that is what distinguishes Gentry v. Tucker, 891 S.W.2d 766 (Tex. App.--Texarkana 1995, no writ) from the dispute before us. Finally, Dossey v. Oehler, 359
S.W.2d 624 (Tex. Civ. App.--Eastland 1962, writ dism'd w.o.j.) is readily distinguishable
since the plea of privilege filed there was made subject to a plea in abatement. That is, the
defendant in Dossey first moved to abate the proceeding and then to transfer venue,
stating that the latter was subject to the former. In doing so, it ignored the concept of due
order of pleadings. Nothing like that happened here.
Accordingly, we overrule the three issues asserted by Bristol and affirm the
judgment entered below.
Brian Quinn
Justice
Publish.
1. The version of §15.011 in existence at the time suit was filed stated that:
[a]ctions for recovery of real property or an estate or interest in real property, for partition
of real property, to remove encumbrances from the title to real property, or to quiet title to
real property shall be brought in the county in which all or a part of the property is located.
Tex. Civ. Prac. & Rem. Code Ann. §15.011 (Vernon 1986).
2. To the extent that Bristol sought a constructive trust via an amended pleading filed after the cause
was transferred from Tarrant to Yoakum County, the amendment would have entitled Placid to again seek
transfer, assuming the Tarrant County district court had initially refused to transfer the proceedings. Gold v.
Insall, 8 S.W.2d 542, 543 (Tex. Civ. App.-Galveston 1928, writ dism'd w.o.j.) (stating that one who has
previously waived an opportunity to transfer venue may regain such opportunity when the plaintiff amends his
pleading to allege a new cause of action implicating a different venue provision). Thus, irrespective of whether
the demand for the trust had been asserted in Bristol's initial pleading and retained throughout the cause or
first mentioned in his last pleading, venue still lay in Yoakum County, i.e. the county wherein the land was
located.
NO. 07-09-00350-CV
IN THE COURT OF APPEALS
FOR THE
SEVENTH DISTRICT OF TEXAS
AT
AMARILLO
PANEL B
JULY
16, 2010
JACOB NEUFELD, APPELLANT
v.
KENNETH HUDNALL, STANLEY BAKER,
JOEL HOVDEN, TEJAS MOTORS AND
LONE STAR AUTO AUCTION, INC., APPELLEES
FROM THE 72ND DISTRICT COURT OF LUBBOCK
COUNTY;
NO. 2007-541,835; HONORABLE RUBEN GONZALES REYES, JUDGE
Before QUINN,
C.J., and CAMPBELL and HANCOCK, JJ.
MEMORANDUM OPINION
Appellant, Jacob Neufeld, appeals a
take-nothing judgment entered by the trial court on Neufelds claim for
personal injuries. We affirm.
Background
On
September 19, 2007, Neufeld attended an automobile auction on the premises of
Lone Star Auto Auction. Prior to the
beginning of the auction, Neufeld walked through the lot to take a closer look
at the cars that were to be auctioned and to determine which vehicles he would
bid on. As Neufeld was inspecting the
autos, the employees of Lone Star began lining up the cars to be
auctioned. Two vehicles were at the head
of the line when Kenneth Hudnall pulled a third to
the end of the line. As Neufeld was walking
between the first and second cars in the line, the car that Hudnall
was driving lurched forward and hit the second car, which was pushed up to the
first car, trapping Neufeld between the two vehicles and crushing his legs.
Neufeld
filed suit against Lone Star; Hudnall; Stanley Baker
and Joel Hovden, the drivers of the other two
vehicles involved in the accident; and Tejas Motors,
a customer of the auction. In their
answers, the defendants generally denied Neufelds claims, alleged that Neufeld
was negligent, and asserted the inferential rebuttal defenses of intervening
cause, act of God, and unavoidable accident.
During the ensuing bench trial, the trial court granted directed verdict
in favor of Baker and Hovden. Toward the end of the trial, Neufeld amended
his petition to omit any claim against Tejas
Motors. Thus, the trial courts
take-nothing judgment related to Neufelds claims against Hudnall
and Lone Star. Findings of fact and
conclusions of law were requested and the trial court entered findings and
conclusions. Neufeld then timely filed
the present appeal.
By
one issue, Neufeld challenges the factual sufficiency of the evidence
supporting the judgment.
Factual Sufficiency
By
his sole issue, Neufeld contends that the trial court committed reversible
error in entering judgment finding that the defendants were not negligent
because such judgment is against the great weight and preponderance of the
evidence. Neufelds issue challenges the
factual sufficiency of the judgment as a whole rather than the sufficiency of
the evidence supporting any particular finding of fact made by the trial court.
Standard of Review
In
a bench trial, findings of fact have the same force and dignity as a jury's
verdict upon jury questions. Dupree
v. Garden City Boxing Club, Inc., 219 S.W.3d 613, 615-16 (Tex.App.--Dallas 2007, no pet.); In re C.R.O., 96
S.W.3d 442, 447 (Tex.App.Amarillo 2002, pet. denied).
However, findings of fact are not
conclusive when we have a complete record.
Leax v. Leax, 305 S.W.3d 22, 28 (Tex.App.Houston [1st Dist.] 2009, pet. denied). When a complete reporters record is filed,
the trial courts factual findings are reviewable for legal and factual sufficiency
under the same standards that are applied in reviewing the sufficiency of the evidence
supporting jury findings. Dupree,
219 S.W.3d at 616; In re C.R.O., 96 S.W.3d at
447.
When an appellant challenges the
factual sufficiency of an adverse finding upon which he had the burden of proof,
he must show that the finding was against the great weight and preponderance of
the evidence. See Dupree, 219 S.W.3d at 616. The
reviewing court must consider and weigh all the evidence and may set aside the
finding only if the evidence is so weak or the finding is so against the great
weight and preponderance of the evidence that it is clearly wrong and
unjust. Id. In conducting this review, we may not
substitute our judgment for that of the finder of fact, even if we would have
reached a different conclusion when reviewing the evidence. Id.
A trial courts conclusions of law
may not be challenged for factual sufficiency,
however, a reviewing court may review the conclusions drawn from the facts to
determine their correctness. See id.
(citing BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002)). If a finding that is supported by the
evidence and necessary to support a conclusion is omitted, we may imply the
finding and that it supports the judgment.
See id.
The appellees
contend that Neufeld failed to preserve any error because his factual
sufficiency challenge does not challenge any specific finding of fact made by
the trial court. Generally, while findings
of fact are reviewable for legal and factual sufficiency, an attack on the sufficiency
of the evidence must be directed at specific findings of fact rather than at
the judgment as a whole. In re an Unborn Child, 153 S.W.3d 559, 560 (Tex.App.--Amarillo 2004, pet. denied). If the trial court's findings of fact are not
challenged by an issue on appeal, they are binding upon the appellate court. See Nw. Park
Homeowners Ass'n, Inc. v. Brundrett,
970 S.W.2d 700, 704 (Tex.App.--Amarillo 1998, pet.
denied). However, a challenge to
an unidentified finding of fact may be sufficient for review if we can fairly
determine from the argument the specific finding of fact which is being
challenged. Shaw v. County of Dallas,
251 S.W.3d 165, 169 (Tex.App.Dallas 2008, pet.
denied).
Analysis
In
the present case, Neufelds issue contends that the judgment as a whole was
against the great weight and preponderance of the evidence. However, a review of Neufelds argument
allows this Court to fairly determine that Neufeld is challenging the factual
sufficiency of the evidence to support the trial courts findings that Hudnall was not negligent on the occasion in question and
did not proximately cause any damage to Neufeld in that Hudnall
experienced an episode which was an intervening cause [which] was unexpected,
unanticipated[,] and unforeseeable; Lone Star was not negligent on the
occasion in question and did not proximately cause any damage to Neufeld;[1]
and No dangerous condition existed on the premises operated by Lone Star, and
Neufeld was not injured as a result of any condition on the premises at the
time the accident in question occurred.[2]
Neufelds
challenge to the trial courts finding that Hudnall
did not proximately cause Neufelds injuries because of an unexpected,
unanticipated, and unforeseen intervening cause is premised on Neufelds
contention that the expert medical opinion evidence offered to prove the
intervening cause was too speculative to constitute probative evidence.
An
independent and intervening cause destroys the causal link between a claimed
act of negligence and the resulting damage.
See Tarry Warehouse & Storage Co. v. Duvall, 131 Tex.
466, 115 S.W.2d 401, 405 (1938) (bright lights that blinded driver were
intervening cause that broke the causal chain); Cook v. Caterpillar, Inc.,
849 S.W.2d 434, 440 (Tex.App.Amarillo 1993, writ
denied) (acts of third-party driver destroyed the causal link between product
defect and injury). When a claim of
intervening cause is premised on a medical episode or condition, medical expert
testimony is required. See Ins.
Co. of N. Am. v. Myers, 411 S.W.2d 710, 713 (Tex.
1966). Expert medical opinion evidence
relating to issues of causation must rest in reasonable probabilities;
otherwise, the inference that such actually did occur can be no more than
speculation and conjecture. Id. The determination of whether expert opinion
evidence is based on reasonable probability depends on consideration of the
substance of the evidence and does not turn on semantics or the use of any
particular term or phrase. Id. Expert opinion evidence regarding causation
that is not based on reasonable probability, but is rather based on speculation
and surmise, is no evidence. See Onwuteaka v. Gill,
908 S.W.2d 276, 283 (Tex.App.Houston [1st
Dist.] 1995, no writ).
In
the present case, the expert medical opinion evidence offered by Lone Star
concluded that Hudnall suffered a pre-syncopal episode which led to confusion and loss of control
of his vehicle. The expert, Kevin Funk,
M.D., chronicled a number of different potential causes of this pre-syncopal episode that are consistent with Hudnalls medical history.
While Dr. Funk does indicate that he will assume that Hudnall suffered a pre-syncopal
episode, the context of this statement indicates that it was intended only to
convey Dr. Funks starting hypothesis.
The remainder of the report then identifies a number of different causes
of pre-syncopal episodes that are present in Hudnalls medical history.
It is only after discussion of Hudnalls
medical history and its correspondence to many potential causes of pre-syncopal episodes that Dr. Funk concludes that, in all
reasonable medical probability, Mr. Hudnall suffered
a pre-syncopal episode. While Dr. Funk does not definitively identify
what caused Hudnall to experience this pre-syncopal episode, he does conclude, within a reasonable
degree of medical probability, that Hudnall
experienced a pre-syncopal episode. Having determined that Dr. Funks expert
opinion was based on a reasonable medical probability and, therefore, probative
evidence that supports the trial courts intervening cause finding, we cannot
say that the trial courts determination that this pre-syncopal
episode was an intervening cause of Neufelds injuries was so against the great
weight and preponderance of the evidence as to be clearly wrong or unjust. As such, we find the evidence supporting the
trial courts finding that Hudnall was not negligent
because Hudnalls pre-syncopal
episode was an intervening cause of Neufelds injuries is factually sufficient.
Review
of Neufelds challenge to the factual sufficiency of the evidence supporting
the trial courts finding that Lone Star was not negligent depends on the type
of claim Neufeld asserted against Lone Star.
A liberal construction of Neufelds petition reveals that Neufeld asserted
a claim that Lone Star was liable for its negligent hiring and retention of its
employee, Hudnall.
According to Neufeld, Lone Star was directly negligent because it hired
and retained Hudnall in a position that required that
he operate motor vehicles near the public with knowledge that Hudnall had a history of low blood pressure and
diabetes.
An
employer who negligently hires an incompetent or unfit individual may be
directly liable to a third party whose injury was proximately caused by the employee's
negligent or intentional act. See Verinakis v. Med.
Profiles, Inc., 987 S.W.2d 90, 97 (Tex.App.--Houston
[14th Dist.] 1998, pet. denied).
A claim of negligent hiring and retention is based on an employer's
direct negligence instead of the employer's vicarious liability for the torts
of its employees. Id. To prevail in a negligence action, the
plaintiff must prove: (1) a legal duty owed to the plaintiff, (2) a breach of
that duty by the defendant, and (3) damages proximately caused by the
breach. Greater
Houston Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex. 1990). Both the duty and proximate cause elements
required to establish a claim of negligent hiring or retention are premised on foreseeability. See Mellon Mortgage Co. v. Holder, 5 S.W.3d 654, 659
(Tex. 1999); CoTemp, Inc. v. Houston West
Corp., 222 S.W.3d 487, 492 (Tex.App.--Houston
[14th Dist.] 2007, no pet.).
Thus, liability under the doctrine of negligent hiring or retention is based
on the employer's negligence in hiring or retaining an incompetent servant whom
the master knows, or by the exercise of reasonable care should have known, was
incompetent or unfit, thereby creating an unreasonable risk of harm to
others. See Houser v. Smith,
968 S.W.2d 542, 546 (Tex.App.--Austin
1998, no pet.).
There
is no dispute that, at the time of the accident, Hudnall
was acting in the course and scope of his employment with Lone Star. The key factual issue in establishing Lone
Stars liability for negligently hiring and retaining Hudnall
is whether the accident was foreseeable.
The record reflects that, when it hired Hudnall,
Hudnall informed Lone Star that he was on medication
for diabetes and low blood pressure.
From this fact, Neufeld contends that Lone Star should have foreseen
that Hudnall could experience dizziness or loss of
consciousness while operating a motor vehicle in the course and scope of his
employment.[3] However, the General Manager of Lone Star
testified that, at the time of Hudnalls hiring, Hudnall indicated that he did not think that his medical
condition would impact his ability to drive nor endanger customers, and, in the
approximate year and a half that Hudnall worked for
Lone Star, Hudnall had not notified Lone Star of any
health problems or any loss of consciousness or blackouts. In addition, Hudnall
testified that the only time he had experienced fainting spells or weakness was
before he was diagnosed with diabetes and started on medication, and that those
issues would have occurred sometime in 2001 or 2002, which would have been five
to six years before the accident in the present case. Thus, considering all the evidence, we do not
find the evidence to be so weak or the finding that Lone Star was not negligent
in hiring and retaining Hudnall to be so against the
great weight and preponderance of the evidence that it is clearly wrong and
unjust. See Dupree, 219 S.W.3d at 616.
Thus, we conclude that the evidence was sufficient to support the trial
courts finding that Lone Star was not negligent and did not proximately cause
Neufelds injuries.
The
other finding that Neufelds argument fairly challenges is the sufficiency of
the evidence supporting the trial courts determination that Lone Star is not
liable under the theory of premises liability.
Neufeld points to evidence that Lone Star posted no warning signs on its
premises, failed to warn patrons of any unsafe areas, and Hudnalls
testimony that the auction lot was controlled chaos as evidence that Lone
Star was aware of a dangerous condition on the premises of which it failed to
warn business invitees.
To
succeed in a premises liability suit, an invitee plaintiff must prove that (1)
the defendant had actual or constructive knowledge of some condition on the
premises, (2) the condition posed an unreasonable risk of harm, (3) the
defendant failed to exercise reasonable care to eliminate or reduce the risk of
that harm, and (4) the defendants failure to use such care proximately caused
the invitees injury. Wal-Mart
Stores, Inc. v. Gonzalez, 968 S.W.2d 934, 936 (Tex. 1998). The mere fact that an injury occurred on the
premises is not of itself evidence of negligence because almost any activity
involves some risk of harm. Thoreson
v. Thompson, 431 S.W.2d 341, 344 (Tex. 1968). Additionally, when a risk is open and obvious
and an invitee knows or is charged with knowledge of the risk, the premises
owner owes the invitee no duty to warn of the risk. Summers v. Fort Crockett
Hotel, Ltd., 902 S.W.2d 20, 28 (Tex.App.Houston
[1st Dist.] 1995, writ denied).
In
the present case, it is clear that Lone Star was aware that vehicles were being
moved to the auction floor; however, there is no evidence that it knew or had
reason to know that Hudnall would pass out or
otherwise operate the vehicle in an unsafe manner. Further, while the act of driving an
automobile poses a risk of harm, the evidence does not establish that the risk
of harm was unreasonable. Even though
the manner in which the auction was conducted was described as controlled
chaos, there is no evidence that the manner that the auction was conducted on
September 19, 2007, was any different than for any other Lone Star auction, and
there was no evidence of prior accidents at Lone Star auctions that would give
rise to an inference that the manner in which Lone Star conducted its auctions
was unreasonably dangerous. Because the
evidence does not establish that there was a condition on Lone Stars premises
that posed an unreasonable risk of harm, Lone Star owed no duty to invitees,
such as Neufeld. Further, the inherent
risk posed by operating a motor vehicle near pedestrians was an open and
obvious risk of which Neufeld should have been aware. Thus, in the absence of evidence that Lone
Star had actual or constructive knowledge that Hudnalls
driving a vehicle posed an unreasonable risk of harm to invitees, it owed no
duty to Neufeld that it could have breached.
As discussed above, the great weight and preponderance of the evidence
does not establish that Lone Star possessed such actual or constructive
knowledge. Consequently, we find the
evidence to be factually sufficient to support the trial courts finding that [n]o
dangerous condition existed on the premises operated by Lone Star, and Neufeld
was not injured as a result of any condition on the premises at the time the
accident in question occurred.
Conclusion
Concluding that the evidence is
factually sufficient to support the trial courts findings of fact that were
fairly challenged by Neufelds appeal, we overrule Neufelds sole issue and
affirm the judgment of the trial court.
Mackey
K. Hancock
Justice
[1] While Neufelds
petition alleged that Hudnall was an employee of Tejas Motors, during trial, Neufeld moved for a trial
amendment of his pleading to allege that Hudnall was
an employee of Lone Star. The defendants
affirmatively stated that they had no objection to the trial amendment and
Neufelds motion was granted by the trial court. Thus, Neufelds claim of negligent hiring or
retention was asserted against Lone Star.
[2] We note that all of these findings are more fairly
characterized as conclusions of law. The
trial courts only factual findings relevant to either of the challenged
findings are the findings that Hudnall experienced
an episode which was an intervening cause [that] was unexpected, unanticipated[,] and unavoidable, and that [n]o dangerous
condition existed on the premises operated by Lone Star . . . . As to any other factual issues that are
necessary to the trial courts judgment, we will imply those finding that are
supported by the evidence and that support the judgment. See Dupree, 219
S.W.3d at 616.
[3] We note the logical
inconsistency of Neufelds arguments.
Neufeld contends that Hudnall did not
experience a pre-syncopal episode that was an
intervening cause of Neufelds injuries, while also contending that Lone Stars
knowledge of Hudnalls medical history was enough
that Lone Star should have known that Hudnall would
experience dizziness and confusion (a pre-syncopal
episode) or pass out (syncope).
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Order entered September 12, 2018
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-18-00310-CR
No. 05-18-00530-CR
No. 05-18-00531-CR
No. 05-18-00532-CR
No. 05-18-00533-CR
No. 05-18-00534-CR
BLAKE ANTHONY ERVIN, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the Criminal District Court No. 5
Dallas County, Texas
Trial Court Cause Nos. F17-71200-L, F17-40081-L,
F17-71199-L, F17-75838-L, F17-75876-L & F17-75942-L
ORDER
Before the Court is appellant’s September 7, 2018 request to review the appellate record
in order to file a pro se response to counsel’s Anders brief. Appellant’s request is GRANTED to
the extent we ORDER counsel Dianne Jones-McVay to send appellant copies of the clerk’s and
reporter’s records and to provide this Court, within FIFTEEN DAYS of the date of this order,
with written verification that the records have been sent to appellant.
Appellant’s pro se response to the Anders brief is due by October 30, 2018. If appellant
does not file a pro se response by October 30, 2018, the appeals will be submitted upon the brief
of counsel.
We DIRECT the Clerk to send a copy of this order, by electronic transmission, to
appellate counsel Dianne Jones-McVay and to counsel for the State.
We further DIRECT the Clerk to send a copy of this order, by first-class mail, to Blake
Anthony Ervin, TDCJ No. 2183892, Coffield Unit, 2661 FM 2054, Tennessee Colony, Texas
75884.
/s/ LANA MYERS
JUSTICE
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Filed 4/2/19; On transfer
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(Sacramento)
----
NATIONAL ASIAN AMERICAN
COALITION et al.,
C079835
Plaintiffs and Appellants,
(Super. Ct. No.
v. 34201480001784CUWMGDS)
GAVIN C. NEWSOM, as Governor, OPINION ON TRANSFER
etc., et al.,
Defendants and Appellants.
APPEAL from a judgment of the Superior Court of Sacramento County,
Timothy M. Frawley, Judge. Reversed in part and remanded with directions.
REMCHO, JOHANSEN & PERCEL, Robin B. Johansen and Margaret R.
Prinzing for Gavin C. Newsom, as Governor, and Keely Bosler, Director of Finance;
Office of the State Controller, Richard J. Chivaro, Ronald V. Placet and
David I. Brownfield for Betty T. Yee, Controller, Defendants and Appellants.
JENNER & BLOCK, Rick Richmond, L. David Russell, Jeffrey A. Atteberry,
Alexander M. Smith, Neil M. Barofsky (admitted pro hac vice), Jessica Ring Amunson
(admitted pro hac vice), Ava U. McAlpin (to apply pro hac vice) and Robert L. Gnaizda
for Plaintiffs and Appellants.
1
This appeal arises out of the subprime mortgage crisis, a nationwide banking
emergency that began in 2007 with the collapse of a housing financing bubble created in
large part by an increase in housing speculation and subprime lending practices. This
crisis led to a deep recession in the United States and around the globe. California was
hit particularly hard. While the recession ended in mid-2009, at least as a definitional
matter, persistent high unemployment continued throughout 2012, along with the
continuing decline in home values, increase in foreclosures and personal bankruptcies,
and the concomitant decrease in state revenue.
In March 2012, the federal government and the attorneys general of 49 states and
the District of Columbia (every state except Oklahoma) brought suit in federal court
against the nation’s five largest mortgage servicers, i.e., Ally (formerly GMAC), Bank of
America, Citigroup, J.P. Morgan Chase, and Wells Fargo (collectively, Bank defendants),
alleging a number of violations of federal law. The case was resolved by settlement
agreement (the National Mortgage Settlement or NMS), the terms of which the federal
court formally entered as consent judgments in April 2012. In addition to setting
comprehensive new mortgage servicing standards and providing more than $20 billion in
financial relief for homeowners damaged by the mortgage crisis, the NMS also provided
for about $2.5 billion to be paid to the states directly, “which sum shall be distributed in
the manner and for the purposes specified in Exhibit B” to the agreement. Exhibit B
states that “[e]ach State Attorney General shall designate the uses of the funds” and
requires, “[t]o the extent practicable, such funds shall be used for purposes intended to
avoid preventable foreclosures, to ameliorate the effects of the foreclosure crisis, to
enhance law enforcement efforts to prevent and prosecute financial fraud, or unfair or
deceptive acts or practices and to compensate the States for costs resulting from the
alleged unlawful conduct of [the Bank defendants].”
2
California’s share of this $2.5 billion direct payment was about $410 million. In
Exhibit B-2 to the NMS, former Attorney General Kamala Harris provided fairly detailed
instructions as to how these funds should be used. We describe these instructions later in
the opinion.
After the consent judgments were entered, the Legislature enacted Government
Code1 section 12531, creating a special deposit fund in the treasury (the National
Mortgage Special Deposit Fund) where 90 percent of the $410 million amount would be
deposited.2 (§ 12531, subds. (b), (d).) The Legislature provided, “all moneys in the
[National Mortgage Special Deposit Fund] are hereby continuously appropriated, and
shall be allocated by the Department of Finance” (id., subd. (b)), and further provided:
“Notwithstanding any other law, the Director of Finance may allocate or otherwise use
the funds in the National Mortgage Special Deposit Fund to offset General Fund
expenditures in the 2011-12, 2012-13, and 2013-14 fiscal years.” (Id., subd. (e).) While
the Legislature did not specify which General Fund expenditures may be offset using the
National Mortgage Special Deposit Fund, subdivision (f) required the Department of
Finance to “submit an expenditure plan to the Joint Legislative Budget Committee
detailing the proposed use of the moneys in the National Mortgage Special Deposit
Fund” at least “30 days prior to allocating moneys pursuant to subdivision (e).” (Id.,
subd. (f).)
1 Undesignated statutory references are to the Government Code.
2 As we explain in greater detail later, in accordance with former Attorney General
Harris’s instructions, 10 percent of the direct payment amount would be “paid as a civil
penalty and deposited in the Unfair Competition Law Fund.” (See § 12531, subd. (c)
[“payments made to the State of California as civil penalties pursuant to the National
Mortgage Settlement shall be deposited in the Unfair Competition Law Fund as required
by the settlement”].)
3
Pursuant to this procedure, the director of finance received approval for various
expenditures from the National Mortgage Special Deposit Fund “to offset General Fund
costs of programs that support public protection, consumer fraud enforcement and
litigation, and housing related programs” during the specified fiscal years. We set forth
the details of these expenditures later in the opinion. For present purposes, we note they
nearly exhausted the National Mortgage Special Deposit Fund.
In March 2014, the National Asian American Coalition, COR Community
Development Corporation, and the National Hispanic Christian Leadership Conference
filed a petition for writ of mandate and complaint for declaratory and injunctive relief
against the Governor, the director of finance, and the controller, seeking the immediate
return of approximately $350 million they alleged was unlawfully diverted from the
National Mortgage Special Deposit Fund to the General Fund in contravention of both
section 12531 and the federal consent judgments.3
The trial court concluded section 12531 was intended to effectuate the terms of the
federal consent judgments, which required compliance with the instructions provided by
former Attorney General Harris in Exhibit B-2 to the National Mortgage Settlement
designating the permissible uses of the $410 million direct payment. Rejecting
defendants’ contention subdivision (e) of that section permitted the director of finance to
use the National Mortgage Special Deposit Fund to offset General Fund expenditures
3 Organizational plaintiffs are California-based charitable organizations that either
provide counseling to homeowners seeking to avoid foreclosure or stand ready to do so
should funding become available through replenishment of the National Mortgage
Special Deposit Fund.
Since both parties appealed from the trial court’s judgment, we refer to National
Asian American Coalition et al. as plaintiffs and Gavin C. Newsom (successor to
Edmund G. Brown, Jr., as Governor) et al. as defendants.
4
regardless of whether such offsets were consistent with these instructions, the trial court
reasoned such a reading of the statute would “raise serious doubts about the legality of
the statute, not only as to whether the Legislature may override a federal judgment, but
also whether the Legislature constitutionally may delegate to an agency the authority to
decide how millions of dollars of state funds shall be spent with virtually no guidance or
direction from the Legislature.” Turning to the question of whether the particular offsets
were consistent with the former Attorney General’s instructions, the trial court concluded
$331,044,084 was unlawfully appropriated from the National Mortgage Special Deposit
Fund for purposes inconsistent with these instructions. Nevertheless, pointing out that it
lacked the constitutional authority to order the Legislature to appropriate funds, the trial
court declared an obligation to restore the unlawfully diverted funds and ordered such
restoration “as soon as there is a sufficient appropriation ‘reasonably’ and ‘generally’
available for such purpose.”
These appeals followed. Defendants contend: (1) plaintiffs lack standing to seek a
writ of mandate directing the National Mortgage Special Deposit Fund to be reimbursed
for the challenged expenditures; (2) section 12531 does not restrict the director of
finance’s ability to use the National Mortgage Special Deposit Fund to offset General
Fund expenditures, aside from requiring Legislative approval of such offsets; (3) the
Legislature possessed absolute authority to approve the challenged expenditures
regardless of whether they were consistent with the federal consent judgments; and (4)
even if section 12531 required consistency with the federal consent judgments, the
challenged expenditures were consistent with both the purposes of the direct payment set
forth in Exhibit B to the National Mortgage Settlement and the former Attorney
General’s instructions set forth in Exhibit B-2. Plaintiffs dispute each of these
contentions and, in their appeal, contend: (1) the amount unlawfully diverted from the
National Mortgage Special Deposit Fund was actually $350 million; and (2) the trial
5
court erred in concluding separation of powers principles prevented it from ordering the
immediate restoration of the unlawfully diverted funds.
On July 10, 2018, we issued an opinion concluding plaintiffs have public interest
standing to seek the requested writ of mandate. We also concluded, as did the trial court,
section 12531 was intended by our Legislature to effectuate the terms of the National
Mortgage Settlement, including the former Attorney General’s instructions regarding the
proper uses of the money, and over $331 million was unlawfully appropriated from the
National Mortgage Special Deposit Fund for purposes inconsistent with the NMS. We
parted ways with the trial court, however, on the issue of remedy. As we explained,
because the unlawfully diverted funds are “in law still in the [National Mortgage Special
Deposit Fund]” (Daugherty v. Riley (1934) 1 Cal.2d 298, 312 (Daugherty), separation of
powers principles do not preclude this court from ordering the immediate return of these
funds. We accordingly reversed the judgment in part and remanded the matter to the trial
court with directions to issue a writ of mandate directing the immediate retransfer from
the General Fund to the National Mortgage Special Deposit Fund the sum of
$331,044,084.
After we issued our original opinion in this case, defendants petitioned our
Supreme Court for review. While that petition was pending, the Legislature passed and
the Governor signed into law Senate Bill No. 861 (2017 – 2018 Reg. Sess.) (Stats. 2018,
ch. 331 (SB 861)), amending section 12531 to add subdivision (h), the text of which we
provide in its entirety later in this opinion. For present purposes, we note SB 861 states
in uncodified section 2: “It is the intent of the Legislature in [adding subdivision (h) to
section 12531] to confirm that allocations and uses of funds made by the director of
finance from the National Mortgage Special Deposit Fund pursuant to [section 12531] in
the 2011-12, 2012-13, and 2013-14 fiscal years were consistent with legislative direction
and intent and to abrogate the holding of the Court of Appeal in [this case]. The
6
Legislature further declares that the allocations made by the director of finance pursuant
to [section 12531] were made for purposes consistent with the National Mortgage
Settlement.” (Stats. 2018, ch. 331, § 2, subd. (a).)
Thereafter, on October 10, 2018, our Supreme Court granted the petition for
review and transferred the matter to this court with directions to vacate our original
opinion and reconsider the matter in light of this new statutory enactment. Having done
so, and giving SB 861 all due consideration, we confirm the conclusions reached in our
original opinion.4
ADDITIONAL BACKGROUND
Having already provided a description of the events giving rise to this appeal in
order to provide context for the parties’ contentions and our resolution thereof, we shall
not repeat ourselves here. Rather, we elaborate on those portions of context deliberately
omitted above. Specifically, we shall provide (1) a fuller description of the terms of the
NMS, including the former Attorney General’s instructions for use of the $410 million
direct payment amount, (2) the complete text of section 12531, as originally enacted,
creating the National Mortgage Special Deposit Fund and authorizing disbursements to
offset General Fund expenditures, (3) the details of the challenged disbursements made
from the National Mortgage Special Deposit Fund, and (4) the Legislature’s amendment
to section 12531 expressing its view that these disbursements were consistent with both
the legislative intent and the National Mortgage Settlement.
The National Mortgage Settlement
The stated purpose of the NMS “is to remediate harms allegedly resulting from the
alleged unlawful conduct of the [Bank defendants].” The portion of the NMS relevant to
4 The request for judicial notice filed by defendants on December 7, 2018 is
granted.
7
these appeals provided for about $2.5 billion to be paid directly to the states. As
mentioned, the agreement provided this amount “shall be distributed in the manner and
for the purposes specified in Exhibit B.”
Paragraph 1 of Exhibit B provides in relevant part:
“b. State Payment Settlement Amounts. In accordance with written instructions
from each State Attorney General, the Escrow Agent shall distribute cash payments in the
total amounts set forth in the attached Exhibit B-1.[5]
“i. Each State Attorney General shall designate the uses of the funds set forth
in the attached Exhibit B-1. To the extent practicable, such funds shall be used for
purposes intended to avoid preventable foreclosures, to ameliorate the effects of the
foreclosure crisis, to enhance law enforcement efforts to prevent and prosecute financial
fraud, or unfair or deceptive acts or practices and to compensate the States for costs
resulting from the alleged unlawful conduct of [the Bank defendants]. Such permissible
purposes for allocation of the funds include, but are not limited to, supplementing the
amounts paid to state homeowners under the Borrower Payment Fund,[6] funding for
housing counselors, state and local foreclosure assistance hotlines, state and local
foreclosure mediation programs, legal assistance, housing remediation and anti-blight
projects, funding for training and staffing of financial fraud or consumer protection
enforcement efforts, and civil penalties. Accordingly, each Attorney General has set
forth general instructions for the funds in the attached Exhibit B-2.
5 Exhibit B-1 lists California’s share of the state payment settlement amount as
$410,576,996.
6 As mentioned, the vast majority of damages paid by the Bank defendants under
the NMS, more than $20 billion, was designated to provide financial relief for individual
borrowers. Exhibit C to the NMS set forth the details regarding administration of the
distribution of cash payments to such borrowers.
8
“ii. No more than ten percent of the aggregate amount paid to the State Parties
under this paragraph 1(b) may be designated as a civil penalty, fine, or similar payment.
The remainder of the payment[] is intended to remediate the harms to the States and their
communities resulting from the alleged unlawful conduct of the [Bank defendants] and to
facilitate the implementation of the Borrower Payment Fund and consumer relief.”
In Exhibit B-2, former Attorney General Harris provided the following general
instructions:
“a) Ten percent of the payment shall be paid as a civil penalty and deposited in
the Unfair Competition Law Fund;
“b) The remainder shall be paid and deposited into a Special Deposit Fund
created for the following purposes: for the administration of the terms of this Consent
Judgment; monitoring compliance with the terms of this Consent Judgment and enforcing
the terms of this Consent Judgment; assisting in the implementation of the relief
programs and servicing standards as described in this Consent Judgment; supporting the
Attorney General’s continuing investigation into misconduct in the origination, servicing,
and securitization of residential mortgage loans; to fund consumer fraud education,
investigations, enforcement operations, litigation, public protection and/or local
consumer aid; to provide borrower relief; to fund grant programs to assist housing
counselors or other legal aid agencies that represent homeowners, former homeowners, or
renters in housing-related matters; to fund other matters, including grant programs, for
the benefit of California homeowners affected by the mortgage/foreclosure crisis; or to
engage and pay for third parties to develop or administer any of the programs or efforts
described above.”
Creation of the National Mortgage Special Deposit Fund
After the federal court approved the National Mortgage Settlement and entered
consent judgments incorporating its terms, the department of finance submitted a letter
9
(Finance letter) to the Senate Budget and Fiscal Review Committee requesting, among
other things, trailer bill language authorizing “the Director of Finance to allocate funds
received pursuant to the [NMS]” and creating a special fund where these settlement funds
would be deposited. The Finance letter states: “For 2011-12 and 2012-13, $94.2 million
of the [direct payment amount] will be used to offset General Fund costs of programs that
support public protection, consumer fraud enforcement and litigation, and housing related
programs. An additional $198 million will be used for debt service payments for
programs funded with Proposition 46 and Proposition 1C housing bonds that assist
homeowners. The remaining $118.4 million will be reserved for similar use in 2013-
14.”7
About six weeks later, the Legislature enacted section 12531 as part of a trailer bill
to the 2012 Budget Act. At the time of its enactment, this section provided in full:
“(a) The Legislature finds and declares that California, represented by the
California Attorney General, entered a national multistate settlement with the country’s
five largest loan servicers. This agreement, the National Mortgage Settlement stemmed
from successful resolution of federal court action (Consent Judgment, United States v.
Bank of America (No. 1:12-cv-00361, Banzr. D.C. Apr. 4, 2012). The National
7 Defendants ask this court to take judicial notice of the State Department of
Housing and Community Development’s record of Proposition 1C bond awards through
December 31, 2013, explaining this government document was before the trial court and
is part of the record on appeal, but the copy therein is “corrupt and illegible.” Plaintiffs
do not oppose this request, which we grant. (Evid. Code, § 452, subds. (c), (h).) We
deny defendants’ further request that we take judicial notice of a motion to vacate
judgment and trial court order denying that motion in another case, Shaw v. Chiang,
Sacramento County Superior Court Case No. 07CS01179. These materials are irrelevant
to our resolution of the issues raised in this appeal. (See Towns v. Davidson (2007) 147
Cal.App.4th 461, 473, fn. 3 [declining to take judicial notice of irrelevant filings in
another appeal].)
10
Mortgage Settlement is broad ranging, with California’s share of this settlement
estimated to be up to eighteen billion dollars ($18,000,000,000). Of this amount,
approximately four hundred ten million dollars ($410,000,000) will come directly to the
state in costs, fees, and penalty payments.
“(b) There is hereby created in the State Treasury the National Mortgage Special
Deposit Fund. Notwithstanding Section 13340, all moneys in the fund are hereby
continuously appropriated, and shall be allocated by the Department of Finance.
“(c) Direct payments made to the State of California as civil penalties pursuant
to the National Mortgage Settlement shall be deposited in the Unfair Competition Law
Fund as required by the settlement.
“(d) Direct payments made to the State of California pursuant to the National
Mortgage Settlement, except for those payments made pursuant to subdivision (c), shall
be deposited in the National Mortgage Special Deposit Fund.
“(e) Notwithstanding any other law, the Director of Finance may allocate or
otherwise use the funds in the National Mortgage Special Deposit Fund to offset General
Fund expenditures in the 2011-12, 2012-13, and 2013-14 fiscal years. The Department of
Finance and the Controller’s office shall recognize this fiscal alignment accordingly for
the purpose of the state budget process and legal basis of accounting.
“(f) Not less than 30 days prior to allocating any moneys pursuant to
subdivision (e), the Department of Finance shall submit an expenditure plan to the Joint
Legislative Budget Committee detailing the proposed use of the moneys in the National
Mortgage Special Deposit Fund.
11
“(g) Notwithstanding any other law, the Controller may use the funds in the
National Mortgage Special Deposit Fund for cashflow loans to the General Fund as
provided in Sections 16310 and 16381.” (§ 12531.)
Disbursements from the National Mortgage Special Deposit Fund
About two months after the National Mortgage Special Deposit Fund was created,
the escrow agent wired the entirety of California’s direct payment into the state’s
Litigation Deposits Fund. Thereafter, pursuant to section 12531, 10 percent of that
amount was redirected into the Unfair Competition Law Fund and 90 percent was
redirected into the National Mortgage Special Deposit Fund.
Before setting forth the details of the challenged disbursements, we briefly note
those that are not challenged. Consistent with section 12531, subdivision (g), the 2012
Budget Act authorized a $100 million loan from the National Mortgage Special Deposit
Fund to the General Fund to be repaid by June 30, 2014. Such a loan was made on
September 24, 2012 and repaid with interest on April 11, 2014. The 2012 Budget Act
also appropriated about $18 million from the National Mortgage Special Deposit Fund to
the State Department of Justice, $8 million of which was appropriated to support the
Office of the California Monitor, who assists the Attorney General in ensuring the Bank
defendants comply with the terms of the NMS, and the remaining $10 million was
appropriated for grants to assist homeowners affected by the foreclosure crisis. These
disbursements are clearly consistent with the former Attorney General’s general
instructions for use of the funds and are not challenged in these appeals.
The challenged disbursements total about $350 million. The expenditure plan
submitted by the Department of Finance pursuant to section 12531, subdivision (f),
proposed the following offsets:
12
“General Fund debt service payments for Propositions 1C and 46 Housing Bonds
will be offset by [$292.4 million, i.e.,] $106 million, $92 million, and $94.4 million in
2011-12, 2012-13, and 2013-14[,] respectively.”
“The Department of Justice’s (DOJ’s) General Fund expenditures will be offset by
[$49.2 million, i.e.,] $14.9 million, $17.8 million, and $16.5 million in 2011-12, 2012-13,
and 2013-14[,] respectively.”
“The Department of Fair Employment and Housing’s General Fund expenditures
will be offset by [$9 million, i.e.,] $3 million in 2011-12, 2012-13, and 2013-14[,]
respectively.”
While the department of finance did not receive a response to this expenditure
plan, that department’s Final Change Book for the 2012-13 Budget indicates the
Legislature accepted the request made in the Finance letter that preceded enactment of
section 12531, i.e., that the direct payment would be used to offset General Fund costs of
programs that support public protection, consumer fraud enforcement and litigation, and
housing related programs. Various executive orders executed the offsets proposed in the
expenditure plan, with minor alterations to the amounts.8
2018 Amendment to Section 12531
After we issued our original opinion concluding the vast majority of these
challenged disbursements (over $331 million) were unlawful, the Legislature enacted
SB 861, effective September 10, 2018, amending section 12531 to add subdivision (h).
This subdivision provides: “The Legislature hereby confirms and ratifies that the
allocations of funds from the National Mortgage Special Deposit Fund in the 2011-12,
8 For example, whereas $94.4 million was proposed for offsetting General Fund
debt service payments for Propositions 1C and 46 housing bonds in the 2013-14 fiscal
year, the amount transferred for these purposes was actually $94.7 million. The precise
total amount of challenged transfers is $350,360,084.
13
2012-13, and 2013-14 fiscal years were consistent with the direction given to the Director
of Finance in subdivision (e) to offset General Fund expenditures in those years. The
Legislature further confirms and ratifies that because those allocations were displayed in
the Governor’s proposed budget for the 2012-13 and 2013-14 fiscal years, and left
unchanged in the budget acts adopted for the 2012-13 and 2013-14 fiscal years, the
Legislature was aware of, and approved, the allocation and expenditure of funds from the
National Mortgage Special Deposit Fund to offset General Fund expenditures in those
fiscal years. This subdivision is declaratory of existing law.” (§ 12531, subd. (h); Stats.
2018, ch. 331, § 3.)
SB 861 states in uncodified section 2: “It is the intent of the Legislature in [adding
subdivision (h) to section 12531] to confirm that allocations and uses of funds made by
the Director of Finance from the National Mortgage Special Deposit Fund pursuant to
[section 12531] in the 2011-12, 2012-13, and 2013-14 fiscal years were consistent with
legislative direction and intent and to abrogate the holding of the Court of Appeal in [this
case]. The Legislature further declares that the allocations made by the Director of
Finance pursuant to [section 12531] were made for purposes consistent with the National
Mortgage Settlement.” (Stats. 2018, ch. 331, § 2, subd. (a).)
We finally note the Legislature declared in uncodified section 1 various ways in
which it has provided funding and encouragement for affordable housing “in the past
several years.” (Stats. 2018, ch. 331, § 1, subd. (a).)9
9 This section provides in full: “The Legislature hereby finds and declares the
following:
“(a) The state has funded and allocated billions of dollars for affordable housing in the
past several years.
“(b) The 2018–19 budget alone includes $5.1 billion in state and federal funds across
multiple programs and departments to address housing and homelessness.
14
“(c) The Governor and Legislature developed a legislative package of 15 bills signed in
September 2017 that collectively shorten the housing development approval process,
provide incentives to streamline development, promote local accountability to adequately
plan for needed housing, and invest in affordable housing production. The housing
package establishes a $75 document recording fee on real estate transactions, excluding
home sales, beginning January 1, 2018, to create a sustainable funding source for state
affordable housing programs.
“(d) The 2017 legislative package also places a $4 billion bond on the November 2018
ballot, with $3 billion in general obligation bonds for affordable housing, and $1 billion
for veterans housing to be supported by participants’ loan repayments.
“(e) To encourage housing development, the Legislature provided local governments
with tools to help fulfill their housing priorities and responsibilities, including:
“(1) Chapter 386, Statutes of 2013 (SB 743), which provides an alternative approach for
CEQA analysis of transportation impacts of transit-oriented development and new
exemptions for certain projects.
“(2) Chapter 785, Statutes of 2014 (SB 628), which allows cities and counties to create an
enhanced infrastructure financing district that utilizes property taxes and other available
funding for various types of projects including low and moderate income housing
projects.
“(3) Chapter 319, Statutes of 2015 (AB 2), which allows specified disadvantaged areas of
California to create a community revitalization and investment authority that utilizes
property taxes and other available funding for various types of projects, including
affordable housing.
“(4) Various statutes that reduce minimum parking requirements and expand size and
other bonuses for developers that meet affordability requirements.
“(5) Chapters 720 and 735, Statutes of 2016 (SB 1069 and AB 2299), which streamline
permits and require local ordinances to facilitate the development of these low-cost
housing options that provide additional living quarters on single-family lots that are
independent of the primary dwelling unit.
“(6) Chapter 453, Statutes of 2016 (AB 2031), allows a local government, with an
existing successor agency to a former redevelopment agency, to bond against the
property tax revenues it receives as a result of redevelopment agency dissolution for the
purposes of affordable housing development.
“(f) In 2016 the Governor signed into law the No Place Like Home Program, which funds
the construction of permanent supportive housing targeted to the chronically homeless
and those at risk of chronic homelessness with mental health services needs. The
15
DISCUSSION
I
Standard of Review
Plaintiffs sought a writ of mandate from the trial court, as well as declaratory
and injunctive relief, compelling defendants to return the $350 million they claim was
unlawfully diverted from the National Mortgage Special Deposit Fund. “A writ of
mandate ‘may be issued by any court . . . to compel the performance of an act which
the law specially enjoins, as a duty resulting from an office, trust, or station . . . .’ (Code
program is funded with a $2 billion bond, secured by Mental Health Services Act
(Proposition 63) revenues, and will be on the November 2018 ballot to accelerate the
issuance of program funds.
“(g) The Veteran’s Housing and Homeless Prevention Bond Act of 2014 (Proposition 41)
repurposed $600 million in bond funds to fund multifamily housing for veterans and their
families.
“(h) The California Tax Credit Allocation Committee, which administers the low-income
housing tax credit program, has made a number of regulatory changes to increase the
utilization of this program. Tax credit financing supports nearly all deed-restricted
affordable housing in California; improvements to this program benefit low-income
families across the state. These efforts resulted in a historic high of 20,847 housing units
financed with ‘4 percent’ federal tax credits in 2016.
“(i) In addition, the California Tax Credit Allocation Committee has worked with the
California Debt Limit Allocation Committee to convene a High Cost Task Force to
address the growing housing development costs that limit the impact of public
investment. As a result, the state has set a high-cost threshold for funded projects,
provided incentives for the construction of larger projects with lower costs per unit, and
removed state funding requirements that prioritize expensive projects.
“(j) The California Housing Financing Agency has increased its multifamily lending
activity each year since the Great Recession, providing $369 million in financing in
2016–17 to support 2,100 affordable housing units. The agency also issued $682 million
in private activity bonds for affordable housing since 2015.
“(k) The state’s first-time homebuyers downpayment assistance program has provided $4
billion to moderate-income families that do not qualify for the low-income programs.”
(Stats. 2018, ch. 331, § 1.)
16
Civ. Proc., § 1085, subd. (a).)” (Kavanaugh v. West Sonoma County Union High
School Dist. (2003) 29 Cal.4th 911, 916.) Plaintiffs were required to show a “ ‘clear,
present, and usually ministerial duty’ ” on the part of defendants to return the allegedly
diverted funds, and that plaintiffs have a “ ‘clear, present and beneficial right . . . to
the performance of that duty.’ ” (Santa Clara County Counsel Attys. Assn. v. Woodside
(1994) 7 Cal.4th 525, 539-540, superseded by statute on another point as stated in
Coachella Valley Mosquito and Vector Control Dist. v. California Public Employment
Relations Bd. (2005) 35 Cal.4th 1072, 1077.) “A ministerial duty is an act that a
public officer is obligated to perform in a prescribed manner required by law when a
given state of facts exists.” (Alliance for a Better Downtown Millbrae v. Wade (2003)
108 Cal.App.4th 123, 129.)
On appeal, we defer to the trial court’s factual determinations if supported by
substantial evidence. However, as always, we review questions of law de novo.
(Kavanaugh v. West Sonoma County Union High School Dist., supra, 29 Cal.4th at p.
916.) Here, whether or not the $350 million in question was unlawfully diverted from the
National Mortgage Special Deposit Fund turns not on disputed facts, but on the proper
interpretation of section 12531 and the National Mortgage Settlement. We therefore
“exercise our independent judgment and review the matter de novo.” (Alliance for a
Better Downtown Millbrae v. Wade, supra, 108 Cal.App.4th at p. 129; see also California
Medical Ass’n v. Brown (2011) 193 Cal.App.4th 1449, 1455-1456.)
II
Standing
Defendants contend plaintiffs “cannot enforce the consent judgments under
federal law, and lack standing to bring their claims under California law.” While we
agree the individual homeowners plaintiffs seek to assist in staying in their homes “
‘are merely incidental beneficiaries of the National Mortgage Settlement,’ ” and therefore
17
have “no standing to enforce the consent judgment[s]” (Graham v. Bank of America, N.A.
(2014) 226 Cal.App.4th 594, 615-616), this does not mean plaintiffs lack standing to
seek a writ of mandate under California law to require defendants to comply with
section 12531.
The law governing standing to seek a writ of mandate is well-settled. “As a
general rule, a party must be ‘beneficially interested’ to seek a writ of mandate. (Code
Civ. Proc., § 1086.) ‘The requirement that a petitioner be “beneficially interested” has
been generally interpreted to mean that one may obtain the writ only if the person has
some special interest to be served or some particular right to be preserved or protected
over and above the interest held in common with the public at large. . . . The beneficial
interest must be direct and substantial. [Citations.]’ ” (Save the Plastic Bag Coalition v.
City of Manhattan Beach (2011) 52 Cal.4th 155, 165.)
However, “ ‘where the question is one of public right and the object of the
mandamus is to procure the enforcement of a public duty, the [petitioner] need not
show that he [or she] has any legal or special interest in the result, since it is sufficient
that [the petitioner] is interested as a citizen in having the laws executed and the duty
in question enforced.’ ” (Board of Social Welfare v. Los Angeles County (1945) 27
Cal.2d 98, 100-101.) “The exception promotes the policy of guaranteeing citizens
the opportunity to ensure that no governmental body impairs or defeats the purpose of
legislation establishing a public right” and “has often been invoked by California courts.”
(Green v. Obledo (1981) 29 Cal.3d 126, 144.) As this court has explained: “When the
duty is sharp and the public need weighty, the courts will grant a mandamus at the behest
of an applicant who shows no greater personal interest than that of a citizen who wants
the law enforced.” (McDonald v. Stockton Met. Transit Dist. (1973) 36 Cal.App.3d 436,
440; see also Urban Habitat Program v. City of Pleasanton (2008) 164 Cal.App.4th
1561, 1581.)
18
Here, the trial court concluded plaintiffs did not have beneficial interest standing,
explaining they “have no direct interest in the legal duty sought to be compelled and will
gain no direct benefit from its performance.” However, the trial court also concluded
plaintiffs fell within the “well-established ‘public interest’ exception to the beneficial
interest requirement.” Because we agree with the latter conclusion, we need not consider
the former.
As we explained in Shaw v. People ex rel. Chiang (2009) 175 Cal.App.4th 577
(Shaw), “[t]he Legislature has plenary lawmaking authority over the state’s budget (Cal.
Const., art. IV, § 12) and we are aware of no constitutional prohibition precluding it from
creating specific funds in the State Treasury for any number of governmental purposes.”
(Id. at p. 602.) Unless the Legislature clearly conveys a contrary intention, “ ‘[i]t is the
policy of the law . . . to have . . . funds authorized for a particular purpose expended for
such purpose.’ [Citations.]” (Stanson v. Mott (1976) 17 Cal.3d 206, 213.) Here, such a
fund was created for purposes we describe below, the money deposited therein was
continuously appropriated, and the department of finance was tasked with expending the
money for those purposes. (§ 12531, subd. (b).) We consider the duty to comply with
restrictions placed by our Legislature on the expenditure of public funds to be “sharp.”
Indeed, as we explain more fully later in this opinion, money misappropriated from a
special deposit fund is considered a loan by operation of law and a writ of mandate may
issue to direct reimbursement. (See Daugherty, supra, 1 Cal.2d at pp. 309, 312.) We
also consider “weighty” the public need to have such restrictions enforced. Petitioners
therefore have standing to challenge the expenditures they claim are inconsistent with
section 12531.
Nevertheless, defendants argue, “the public interest exception should not apply” in
this case because “the alleged interest is ‘outweighed . . . by competing considerations of
a more urgent nature,’ ” and cite this court’s decision in Sacramento County Fire
19
Protection Dist. v. Sacramento County Assessment Appeals Bd. (1999) 75 Cal.App.4th
327 as an example of a situation in which competing considerations prevailed over the
public interest sought to be vindicated by issuance of the writ. There, we held a fire
protection district, as a property tax recipient, had no standing to seek a writ of mandate
challenging an assessment appeals board’s valuation of certain property located within
the district. With respect to the public interest exception to the beneficial interest
requirement, we held the public interest sought to be protected by the district’s challenge
to the valuation was “ ‘outweighed . . . by competing considerations of a more urgent
nature . . . .’ ” (Id. at p. 334.) As we explained, providing standing to the fire protection
district, and inevitably other entities for which the county collects taxes, would create
“chaos” in the taxing process. Moreover, denying standing to the fire protection district
would not render unreviewable the assessment appeals board’s valuation decision
because that decision could be challenged by the State Board of Equalization or by a
county or city. (Ibid.)
Defendants argue, “[s]imilar risks arise here” because providing plaintiffs with
standing in this case allows them to “override” provisions in the National Mortgage
Settlement that “excluded third-parties like [them] from the list of parties who could
bring enforcement proceedings” and “threatens to undermine the State’s ability to enter
into future settlement agreements that seek to bring finality to the State and other
litigants.” Not so. This is not a suit to enforce the NMS. It is an action in mandamus to
compel defendants to return to the National Mortgage Special Deposit Fund money
plaintiffs claim was misappropriated in contravention of section 12531. As we have
explained, there is a sharp duty to comply with restrictions placed on the expenditure of
public funds and a weighty public need for enforcement of such restrictions. Providing
plaintiffs with standing in this case does nothing to undermine California’s ability to
enter into settlement agreements.
20
III
Proper Interpretation of Section 12531
We now turn to defendants’ contention the trial court misconstrued section 12531.
The trial court concluded section 12531 was intended to effectuate the terms of the
federal consent judgments, which required compliance with the instructions provided by
former Attorney General Harris in Exhibit B-2 to the National Mortgage Settlement
designating the permissible uses of the $410 million direct payment. Rejecting
defendants’ contention subdivision (e) of that section permitted the director of finance to
use the National Mortgage Special Deposit Fund to offset General Fund expenditures
regardless of whether such offsets were consistent with these instructions, the trial court
reasoned such a reading of the statute would “raise serious doubts about the legality of
the statute, not only as to whether the Legislature may override a federal judgment, but
also whether the Legislature constitutionally may delegate to an agency the authority to
decide how millions of dollars of state funds shall be spent with virtually no guidance or
direction from the Legislature.”
Defendants assert this interpretation of section 12531 runs “[c]ontrary to the plain
meaning of the statute” and argues the plain meaning of subdivision (e) of that section
“gives the Director of Finance discretion to ‘allocate or otherwise use the funds’ in the
[National Mortgage Special Deposit Fund] ‘to offset General Fund expenditures’ in three
fiscal years, ‘[n]otwithstanding any other law.’ It places no restriction on the type of
General Fund expenditures that the funds can be used to offset, let alone the kinds of
restrictions that the trial court erroneously found in the [former] Attorney General’s
instructions.” We agree with the trial court’s interpretation of the section.
21
A.
Applicable Principles of Statutory Construction
“Pursuant to established principles, our first task in construing a statute is to
ascertain the intent of the Legislature so as to effectuate the purpose of the law. In
determining such intent, a court must look first to the words of the statute themselves,
giving to the language its usual, ordinary import and according significance, if possible,
to every word, phrase and sentence in pursuance of the legislative purpose. A
construction making some words surplusage is to be avoided. The words of the statute
must be construed in context, keeping in mind the statutory purpose, and statutes or
statutory sections relating to the same subject must be harmonized, both internally and
with each other, to the extent possible. [Citations.] Where uncertainty exists
consideration should be given to the consequences that will flow from a particular
interpretation. [Citation.] Both the legislative history of the statute and the wider
historical circumstances of its enactment may be considered in ascertaining the legislative
intent. [Citations.] A statute should be construed whenever possible so as to preserve its
constitutionality. [Citations.]” (Dyna-Med, Inc. v. Fair Employment & Housing Com.
(1987) 43 Cal.3d 1379, 1386-1387.)
While “the interpretation of a statute is an exercise of the judicial power the
Constitution assigns to the courts” (Western Security Bank v. Superior Court (1997)
15 Cal.4th 232, 244 (Western Security)), “if the courts have not yet finally and
conclusively interpreted a statute and are in the process of doing so, a declaration of
a later Legislature as to what an earlier Legislature intended is entitled to consideration.
[Citation.] But even then, ‘a legislative declaration of an existing statute’s meaning’ is
but a factor for a court to consider and ‘is neither binding nor conclusive in construing
the statute.’ [Citations.] This is because the ‘Legislature has no authority to interpret a
statute. That is a judicial task. The Legislature may define the meaning of statutory
22
language by a present legislative enactment which, subject to constitutional restraints,
it may deem retroactive. But it has no legislative authority simply to say what it did
mean.’ [Citations.]” (McClung v. Employment Development Dept. (2004) 34 Cal.4th
467, 473; Carter v. California Dept. of Veterans Affairs (2006) 38 Cal.4th 914, 922
(Carter); see also California Employment Stabilization Com. v. Payne (1947) 31 Cal.2d
210, 213-214 [where a statute is ambiguous, “a subsequent expression of the Legislature,
although not binding on the court, may properly be used in determining the effect of a
prior act”].)
Because our construction of the meaning of section 12531, set forth in our original
opinion, was pending review before our Supreme Court at the time the Legislature
enacted SB 861, it cannot be considered a final and conclusive construction of the law.
We must therefore “give the Legislature’s views ‘due consideration.’ ” (Carter, supra,
38 Cal.4th at p. 922.) How much consideration is “due” depends on the circumstances.
(Compare Carter, supra, 38 Cal.4th 914 and Western Security, supra, 15 Cal.4th 232
with Peralta Community College Dist. v. Fair Employment & Housing Com. (1990) 52
Cal.3d 40, 52 [“declaration of a later Legislature is of little weight in determining the
relevant intent of the Legislature that enacted the law”] and Apple Inc. v. Superior Court
(2013) 56 Cal.4th 128, 145 [same].)
B.
Analysis
Having considered the views of our current Legislature, expressed in SB 861, we
confirm our original conclusion section 12531 was intended to effectuate the terms of the
National Mortgage Settlement. As previously stated, subdivision (a) of this section
provides: “The Legislature finds and declares that California, represented by the
California Attorney General, entered a national multistate settlement with the country’s
five largest loan servicers. This agreement, the National Mortgage Settlement stemmed
23
from successful resolution of federal court action (Consent Judgment, United States v.
Bank of America (No. 1:12-cv-00361, Banzr. D.C. Apr. 4, 2012). The National
Mortgage Settlement is broad ranging, with California’s share of this settlement
estimated to be up to eighteen billion dollars ($18,000,000,000). Of this amount,
approximately four hundred ten million dollars ($410,000,000) will come directly to the
state in costs, fees, and penalty payments.” (§ 12531, subd. (a).) Then subdivision (b)
creates the National Mortgage Special Deposit Fund, continuously appropriates all
moneys in the fund, and directs the department of finance to allocate the money. (Id.,
subd. (b).) Subdivisions (c) and (d) direct where the settlement disbursement shall be
deposited, 90 percent going into the National Mortgage Special Deposit Fund. (Id.,
subds. (c) & (d).) Subdivision (e) then provides: “Notwithstanding any other law, the
Director of Finance may allocate or otherwise use the funds in the [National Mortgage
Special] Deposit Fund to offset General Fund expenditures in the 2011-12, 2012-13, and
2013-14 fiscal years. The Department of Finance and the Controller’s office shall
recognize this fiscal alignment accordingly for the purpose of the state budget process
and legal basis of accounting.” (Id., subd. (e).)
Because subdivision (a) makes reference to the former Attorney General’s
successful negotiation of the National Mortgage Settlement, and subdivisions (b) through
(d) effectuate California’s receipt of the settlement proceeds as set forth in the former
Attorney General’s instructions, i.e., 10 percent to the Unfair Competition Law Fund and
90 percent into a special deposit fund (the National Mortgage Special Deposit Fund), and
because the purpose of creating a special deposit fund is to house money that is
“collected or received for specific purposes” (§ 16372), it is only reasonable to conclude
the Legislature intended the specific purposes set forth in the former Attorney General’s
instructions are also the purposes for which the National Mortgage Special Deposit Fund
money may be spent.
24
Nevertheless, defendants claim the Legislature intended to allow the director of
finance to disregard the former Attorney General’s instructions and use the money in the
National Mortgage Special Deposit Fund to offset any General Fund expenditures.
This supposed intent, they argue, may be found in the phrase “[n]otwithstanding any
other law” in subdivision (e), before that subdivision directs the director of finance to
“offset General Fund expenditures in the 2011-12, 2012-13, and 2013-14 fiscal years.”
(§ 12531, subd. (e).) We are not persuaded that this phrase was intended to untether the
offsets from the purposes for which the money was received. Indeed, defendants’
reading of the statute would effectively defeat the purpose of creating a special deposit
fund to house the money. Moreover, the fact that the Legislature intended the National
Mortgage Special Deposit Fund to be a special deposit fund with restrictions on the use
of the money housed therein is also supported by subdivision (g), which allows for
“cashflow loans to the General Fund as provided in Sections 16310 and 16381.” (Id.,
subd. (g).) Sections 16310 and 16381 allow for such loans from special deposit funds
when the General Fund is or will be exhausted.
Our reading of the statute, and that of the trial court, is also bolstered by the
legislative history. The Legislative Counsel’s Digest for section 12531 states: “This
bill would establish the [National Mortgage Special] Deposit Fund in the State Treasury
as a continuously appropriated fund and would require certain direct payments made
to the state under the National Mortgage Settlement to be deposited in the fund for
allocation by the Director of Finance, as specified. This bill would further authorize
the Director of Finance to allocate moneys from the fund to offset General Fund
expenditures during the 2011-12, 2012-13, and 2013-14 fiscal years for purposes
consistent with the National Mortgage Settlement.” (Legis. Counsel’s Dig., Sen.
Bill No. 1006, (2011-2012 Reg. Sess.) Stats. 2012, ch. 32, § 12, italics added
<http://www.leginfo.ca.gov/pub/11-12/bill/sen/sb_1001-
25
1050/sb_1006_bill_20120625_amended_asm_v98.html> [as of Mar. 26, 2019], archived
at <https://perma.cc/6ZHW-P2GM>.) The former Attorney General’s general
instructions for use of the settlement money is part of the NMS.
We also agree with the trial court’s conclusion that defendants’ reading of the
statute would “raise serious doubts about the legality of the statute, not only as to whether
the Legislature may override a federal judgment, but also whether the Legislature
constitutionally may delegate to an agency the authority to decide how millions of dollars
of state funds shall be spent with virtually no guidance or direction from the Legislature.”
Defendants address the first of these concerns by arguing the Legislature has plenary
power over appropriations that includes the authority to override an Attorney General’s
settlement agreement as long as doing so does not interfere with a party’s vested rights
(primarily relying on Van de Kamp v. Gumbiner (1990) 221 Cal.App.3d 1260 and
Mendly v. County of Los Angeles (1994) 23 Cal.App.4th 1193), and even though the
NMS has been incorporated into a federal judgment, such a judgment may not contravene
an otherwise valid state law unless necessary to vindicate a federal right (primarily
relying on Washington v. Penwell (9th Cir. 1983) 700 F.2d 570 and Cleveland County
Ass’n for Government by the People v. Cleveland County Bd. of Com’rs (D.C. Cir. 1998)
142 F.3d 468). Addressing the nondelegation doctrine, defendants argue there was no
unconstitutional delegation because subdivision (f) requires the department of finance
to “submit an expenditure plan to the Joint Legislative Budget Committee detailing
the proposed use of the moneys in the [National Mortgage Special] Deposit Fund.”
(§ 12531, subd. (f).)
We need not decide these potential constitutional issues because our reading of
section 12531, supported by the language of the statute and its legislative history, avoids
them entirely. “When faced with a statute reasonably susceptible of two or more
interpretations, of which at least one raises constitutional questions, we should construe it
26
in a manner that avoids any doubt about its validity.” (Association for Retarded Citizens
v. Department of Developmental Services (1985) 38 Cal.3d 384, 394.)
Nor does the Legislature’s 2018 amendment to section 12531 alter our conclusion
this provision was intended to effectuate the terms of the National Mortgage Settlement,
including the former Attorney General’s instructions. In their supplemental briefing on
the new enactment, defendants argue, “the intended effect of SB 861 was to clarify that
the allocations of funds made by the Director of Finance were consistent with . . . section
12531” and “such a subsequent expression by the Legislature as to the intent of a prior
statute is persuasive evidence regarding the meaning of that statute.” In making this
argument, defendants rely primarily on Western Security, supra, 15 Cal.4th 232, and
Carter, supra, 38 Cal.4th 914. Such reliance is misplaced.
In Western Security, supra, 15 Cal.4th 232, our Supreme Court gave effect to a
subsequent Legislature’s clarification of existing law and reversed the Court of Appeal’s
contrary conclusion concerning the meaning of that law. That case involved the
interaction of two legal doctrines, one precluding a deficiency judgment for any loan
balance left unpaid after the lender’s nonjudicial foreclosure under a power of sale in a
deed of trust or mortgage on real property (Code Civ. Proc., § 580d, the antideficiency
statute), and the other making a letter of credit issuer’s obligation to pay a draw
conforming to the letter’s terms separate from any underlying contract between the
issuer’s customer and the letter’s beneficiary (the independence principle). (Id. at p.
237.) After a nonjudicial foreclosure left a deficiency, the lender attempted to draw on
standby letters of credit of which it was the beneficiary. The Court of Appeal held this
would indirectly impose on the borrower, who would be required to reimburse the issuer
for the lender’s draw on the letter of credit, “the equivalent of a prohibited deficiency
judgment.” (Id. at pp. 237-238.) The Legislature immediately passed urgency legislation
providing that “an otherwise conforming draw on a letter of credit does not contravene
27
the antideficiency laws.” (Id. at p. 238.) Thereafter, our Supreme Court transferred the
matter back to the Court of Appeal for reconsideration in light of the new legislation.
That court confirmed its prior decision, concluding the new legislation amounted to a
change in the law with only prospective application. (Id. at p. 242.)
Reversing the Court of Appeal’s decision, our Supreme Court first explained the
Legislature’s subsequent enactment did not seek to change the law, but rather sought to
construe and clarify the meaning of existing law. Such an amendment, the court
explained, “ ‘ “must be accepted as the legislative declaration of the meaning of the
original act, where the amendment was adopted soon after the controversy arose as to the
interpretation of the original act . . . .” [Citation.]’ [Citation.]” (Western Security, supra,
15 Cal.4th at pp. 243-244.) However, such a legislative declaration “is neither binding
nor conclusive in construing the statute. Ultimately, the interpretation of a statute is an
exercise of the judicial power the Constitution assigns to the courts.” (Id. at p. 244.)
Thus, the Court of Appeal erred in concluding the amendment had no effect on the case.
(Id. at p. 252.) That subsequent enactment was entitled to “due consideration,” but
ultimately, questions of statutory interpretation are subject to de novo review by the
courts. (Id. at p. 244.) As our Supreme Court noted, “there is little logic and some
incongruity in the notion that one Legislature may speak authoritatively on the intent of
an earlier Legislature’s enactment when a gulf of decades separates the two bodies.”
(Ibid.) Turning to the proper interpretation of the antideficiency statute, the court held:
“A creditor that draws on a letter of credit does no more than call on all the security
pledged for the debt. When it does so, it does not violate the prohibition of deficiency
judgments.” (Id. at p. 252.) Thus, the court gave effect to the statutory amendment, not
because it was bound to do so, but because it concluded the Court of Appeal erred in
interpreting the antideficiency law to begin with. (Id. at pp. 250-252.)
28
Similarly, in Carter, supra, 28 Cal.4th 914, our Supreme Court gave effect to a
subsequent Legislature’s clarification of existing law where that existing law was
ambiguous as to its proper scope and the clarification “was made promptly in response to
[two Court of Appeal opinions], in order to clarify the ambiguities that caused confusion
in the appellate courts and among litigants.” (Id. at p. 930.)
Here, as set forth in detail above, SB 861 added subdivision (h) to section 12531,
confirming and ratifying the director of finance’s allocations of funds from the National
Mortgage Special Deposit Fund as having been “consistent with the direction given to the
Director of Finance in subdivision (e) to offset General Fund expenditures . . . .” (§
12531, subd. (h).) This amendment may well alleviate the potential unconstitutional
delegation problem. (See, e.g., California Chamber of Commerce v. State Air Resources
Bd. (2017) 10 Cal.App.5th 604, 632 [even if the Board lacked authority to adopt the
regulations at issue, the Legislature subsequently ratified them]; see also Professional
Engineers in California Government v. Schwarzenegger (2010) 50 Cal.4th 989, 1000,
1046-1048 [even if the Governor lacked authority to unilaterally institute a furlough
program, the Legislature subsequently ratified the program].) But it does not alter our
interpretation of section 12531. Indeed, in uncodified section 2 of SB 861, the
Legislature “declares that the allocations . . . were made for purposes consistent with the
National Mortgage Settlement.” (Stats. 2018, ch. 331, § 2, subd. (a).) This declaration,
while at odds with the conclusion we reach immediately below, is a tacit admission that
the allocations were required to be consistent with that settlement agreement. Moreover,
as we explain below, the fact that the Legislature believes the director of finance’s
allocations were consistent with section 12531 and the NMS “is not binding on a court.
[Citation.] . . . The interpretation of a statute or a [settlement agreement] ‘ “is an exercise
of the judicial power the Constitution assigns to the courts.” [Citation.]’ [Citations.]”
(California School Boards Assn. v. State (2011) 192 Cal.App.4th 770, 788.)
29
IV
Consistency with the National Mortgage Settlement
We now turn to the question of whether the offsets carried out by the director of
finance are consistent with the National Mortgage Settlement. As mentioned, the trial
court concluded over $331 million was unlawfully diverted from the National Mortgage
Special Deposit Fund for purposes inconsistent with the NMS, specifically the former
Attorney General’s general instructions set forth in Exhibit B-2 thereto. Defendants
argue these expenditures were consistent with both the purposes of the direct payment set
forth in Exhibit B to the NMS and the former Attorney General’s instructions. In their
appeal, plaintiffs contend the amount unlawfully diverted from the National Mortgage
Special Deposit Fund was actually $350 million. We again agree with the trial court’s
assessment.
As a preliminary matter, we reject defendants’ assertion that consistency with the
purposes set forth in Exhibit B would suffice to authorize the expenditures even if those
expenditures were contrary to the former Attorney General’s instructions. The NMS
provided that the direct payment amount “shall be distributed in the manner and for the
purposes specified in Exhibit B.” Paragraph 1 of Exhibit B provides that “[e]ach State
Attorney General shall designate the uses of the funds” and then states: “To the extent
practicable, such funds shall be used for purposes intended to avoid preventable
foreclosures, to ameliorate the effects of the foreclosure crisis, to enhance law
enforcement efforts to prevent and prosecute financial fraud, or unfair or deceptive acts
or practices and to compensate the States for costs resulting from the alleged unlawful
conduct of [the Bank defendants]. Such permissible purposes for allocation of the funds
include, but are not limited to, supplementing the amounts paid to state homeowners
under the Borrower Payment Fund, funding for housing counselors, state and local
foreclosure assistance hotlines, state and local foreclosure mediation programs, legal
30
assistance, housing remediation and anti-blight projects, funding for training and staffing
of financial fraud or consumer protection enforcement efforts, and civil penalties.
Accordingly, each Attorney General has set forth general instructions for the funds in the
attached Exhibit B-2.” (Italics added.) Thus, while Exhibit B provides general
permissible purposes for use of the direct payment, it expressly incorporates the more
specific instructions provided by the former Attorney General in Exhibit B-2. Because,
as we have concluded, section 12531 was intended to effectuate the NMS, the offsets
made by the director of finance must be consistent with the former Attorney General’s
instructions.
These instructions provide: “The remainder [i.e., 90 percent of the direct
payment] shall be paid and deposited into a Special Deposit Fund created for the
following purposes: for the administration of the terms of this Consent Judgment;
monitoring compliance with the terms of this Consent Judgment and enforcing
the terms of this Consent Judgment; assisting in the implementation of the relief
programs and servicing standards as described in this Consent Judgment; supporting
the Attorney General’s continuing investigation into misconduct in the origination,
servicing, and securitization of residential mortgage loans; to fund consumer fraud
education, investigations, enforcement operations, litigation, public protection and/or
local consumer aid; to provide borrower relief; to fund grant programs to assist housing
counselors or other legal aid agencies that represent homeowners, former homeowners,
or renters in housing-related matters; to fund other matters, including grant programs,
for the benefit of California homeowners affected by the mortgage/foreclosure crisis; or
to engage and pay for third parties to develop or administer any of the programs or efforts
described above.”
Relying on our decision in Shaw, supra, 175 Cal.App.4th 577, the trial court
concluded these instructions “do not allow use of the funds to reimburse the General
31
Fund for past expenditures.” We agree. In Shaw, a taxpayer challenged the legality of
the Legislature’s transfer of $622 million of spillover gas tax revenue, that would have
otherwise gone into a public transportation account (PTA) under Proposition 116, into a
newly-created mass transportation fund (MTF), and subsequent appropriation of that
$622 million and another $637 million directly from the PTA for a number of purposes,
including a $200 million payment from the MTF for past debt on mass transportation
bonds and a $409 million transfer from the PTA to the General Fund to offset the cost of
past debt service payments on such bonds. (Id. at pp. 593-594.) The trial court
invalidated the latter transfer because Proposition 116 restricted appropriation of money
in the PTA to “transportation planning or mass transportation purpose[s]” and the trial
court concluded offsetting the General Fund for past debt service payments on mass
transportation bonds did not comport with these purposes. (Id. at p. 594.)
We agreed with this determination, explaining: “There is a clear distinction
between transferring revenue from the PTA to the General Fund to pay current debt
obligations on mass transportation bonds and transferring such revenue to reimburse for
past debt obligations. In the case of the former, the revenue flows from the source to the
present obligation via the General Fund to serve a mass transportation purpose. Although
the money passes through the General Fund, it is still actually being used for the
identified mass transportation purpose. In the Legislature’s discretion, this may include
the payment of current bond debt on mass transportation bonds. In the case of offsets or
reimbursement of past debt service payments, however, there is no mass transportation
debt obligation to be paid with the PTA funds. The debt was paid by the General Fund in
the prior fiscal years. No actual debt remains. Money from the PTA under the label of
offsetting or reimbursing past debt payments is simply transferred to the General Fund
where it can be used for any governmental purpose. Such reimbursement of the General
Fund for its previous payment of its obligation on the specified bonds does not serve a
32
‘mass transportation’ purpose. There is no flow through similar to the payment of current
debt.” (Shaw, supra, 175 Cal.App.4th at p. 610.) We also invalidated the $200 million
transfer from the MTF. Having concluded earlier in the opinion that the transfer of
$622 million of spillover gas tax revenue from the PTA to the MTF was invalid (id. at
p. 602), this $200 million transfer from the MTF was also saddled with the “ ‘mass
transportation’ purpose” requirement and payment of past debt did not satisfy that
requirement. (Id. at pp. 609-610.)
Applying this reasoning, the trial court in this case invalidated all transfers to the
General Fund to offset debt service payments for housing bonds (totaling $292.7 million).
The trial court also invalidated transfers made to the General Fund during the 2012-13
and 2013-14 fiscal years to offset DOJ and DFEH expenditures for the 2011-12 and
2012-13 fiscal years, (totaling $38.4 million), as those expenditures had also already been
paid by the General Fund. We agree with this assessment.
Nevertheless, defendants argue the fact that “the Legislature knew and understood
how the Director of Finance intended to use the money” and did not “object is strong
evidence that the plan complied with the Legislature’s intent in enacting section 12531.”
This argument is bolstered by SB 861, as we have explained above. However, we still
are not persuaded. While this is evidence the Legislature may have believed the director
of finance’s proposed offsets were consistent with section 12531 and the NMS,
confirmed by the current Legislature’s declared belief “that the allocations . . . were made
for purposes consistent with the National Mortgage Settlement” (Stats. 2018, ch. 331, § 2,
subd. (a)), we reiterate that such a “belief is not binding on a court. . . . The interpretation
of a statute or a [settlement agreement] ‘ “is an exercise of the judicial power the
Constitution assigns to the courts.” [Citation.]’ [Citations.]” (California School Boards
Assn. v. State, supra, 192 Cal.App.4th at p. 788.)
33
The remaining $19.5 million was transferred from the National Mortgage Special
Deposit Fund to the General Fund during the 2013-14 fiscal year to pay certain DOJ and
DFEH expenditures incurred that year. The trial court declined to invalidate these
transfers concluding there was no evidence the obligations were already paid at the time
of the transfers. In their appeal, plaintiffs claim these payments should also have been
invalidated, arguing these offsets “rest upon an accounting fiction” and the fact that DOJ
and DFEH “might have something to do with administering programs or enforcing
regulations related to the purposes for which the [National Mortgage Special Deposit]
Fund was created is not sufficient” to comply with the former Attorney General’s
instructions. However, while DOJ and DFEH do more than investigate mortgage fraud
and housing-related matters, respectively, the burden was on plaintiffs to show these
specific expenditures went to other purposes. We agree with the trial court’s conclusion
they failed to carry that burden.
V
Appropriate Remedy
Finally, we address the question of the appropriate remedy. The trial court
concluded principles of separation of powers prevented it from issuing a writ of mandate
directing the Legislature to appropriate funds to restore the $331 million unlawfully
diverted from the National Mortgage Special Deposit Fund. Instead, the trial court
declared an obligation to restore the unlawfully diverted funds and ordered such
restoration “as soon as there is a sufficient appropriation ‘reasonably’ and ‘generally’
available for such purpose.”
Plaintiffs do not dispute that directing an appropriation would violate the
separation of powers. Instead, they argue: “The legal violations at issue in this case lie
not in a failure to appropriate the requisite funds, but in a series of executive orders,
issued by the Defendant Director of Finance to the Defendant Controller, that unlawfully
34
transferred the funds that had already been appropriated. Accordingly, the appropriate
remedial order would simply direct Defendants to rescind those transfers―or,
equivalently, to transfer equal sums back from the General Fund to the [National
Mortgage Special] Deposit Fund.” We agree.
“Article III, section 3 of the California Constitution provides that ‘[t]he powers of
state government are legislative, executive, and judicial. Persons charged with the
exercise of one power may not exercise either of the others except as permitted by this
Constitution.’ Article XVI, section 7 provides that ‘[m]oney may be drawn from the
Treasury only through an appropriation made by law and upon a Controller’s duly drawn
warrant.’ Article IV, sections 10 and 12 set forth the respective powers of the Legislature
and Governor over the enactment of appropriations. It has long been clear that these
separation-of-powers principles limit judicial authority over appropriations. [Citations.]”
(Butt v. State of California (1992) 4 Cal.4th 668, 698 (Butt).)
For example, in Butt, supra, 4 Cal.4th 668, relied upon by the trial court in
declining to issue the writ sought by plaintiffs, after a school district announced it lacked
funds to complete the final six weeks of the school year, the trial court issued a
preliminary injunction directing the State of California (State), the Controller, and the
superintendent of public instruction to ensure the school district’s students would receive
the full school term, approved a plan for the State to take over the school district’s
operations, and further approved an emergency loan of funds from other appropriations.
Affirming the trial court’s determination that “the State has a constitutional duty . . . to
prevent the budgetary problems of a particular school district from depriving its students
of ‘basic’ educational equality,” and that the trial court did not err in concluding
fulfillment of this duty “demanded immediate State intervention,” our Supreme Court
concluded the trial court lacked the authority to approve the “diversion of emergency
35
loan funds from appropriations clearly intended by the Legislature for other purposes.”
(Id. at pp. 673-674.)
In reaching the latter conclusion, the court distinguished Mandel v. Myers (1981)
29 Cal.3d 531 (Mandel), describing that case as “the only decision by this court which
found judicial power to ‘commandeer’ appropriated funds.” (Butt, supra, 4 Cal.4th at
p. 698.) In Mandel, the trial court ordered the Controller to pay attorney fees awarded to
a department of health services (DHS) employee out of funds appropriated for the
operating expenses of DHS, the principal defendant in the underlying action. Our
Supreme Court held the trial court’s order did not violate separation of powers principles
despite the fact that a legislative committee deleted a line-item appropriation for this
particular fee award. The court reasoned that the language of the appropriation for the
operating expenses of DHS was “clearly broad enough to encompass court-awarded
attorney fees” (id. at p. 543) and the Legislature’s attempt to exclude this particular fee
award was an invalid attempt to “disregard the finality of a court judgment and take it
upon itself to readjudicate on a case-by-case basis the merits of such a judgment.” (Id. at
pp. 546-547.) Thus, because the restriction on the use of appropriated funds for payment
of the fee award in question was invalid, the funds remained available for payment of the
award. (Id. at p. 550.)
Returning to Butt, supra, 4 Cal.4th 668, our Supreme Court explained the
Mandel decision does not “permit court-ordered diversion of an appropriation away
from a clear, narrow, and valid purpose specified by the Legislature.” (Butt, supra, at
p. 700.) Thus, the court concluded the trial court erred when it authorized an emergency
loan of money from two appropriations that were “earmarked for purposes entirely
distinct from the subject matter of this lawsuit. They were not reasonably available for
court diversion to finance the remainder of the [school district’s] school term.” (Id. at
pp. 701-702.)
36
The trial court’s reliance on Butt, supra, 4 Cal.4th 668 was misplaced because
plaintiffs herein are not seeking to “commandeer” money the Legislature appropriated for
purposes other than those set forth in the NMS. Rather, the Legislature continuously
appropriated the money in the National Mortgage Special Deposit Fund for those very
purposes and authorized the director of finance to transfer the money to the General Fund
to offset expenditures comporting with those purposes. While, as defendants argue, the
Legislature may have believed the director of finance’s proposed offsets complied with
the purposes for which the National Mortgage Special Deposit Fund was created, it is the
judicial branch that has the constitutional authority to interpret statutes. (California
School Boards Assn. v. State, supra, 192 Cal.App.4th at p. 788.) We have determined, as
did the trial court, the challenged offsets reimbursing the General Fund for past
obligations did not comport with these purposes. Accordingly, this is not a case in which
the trial court would have been required to order money appropriated for one purpose to
be used for another purpose. Instead, it was asked to order money used for a purpose
contrary to the appropriation returned to the special fund from which it was unlawfully
diverted.
For these reasons, our case is more analogous to Daugherty, supra, 1 Cal.2d 298.
There, two appropriations were made from the corporation commission fund, “a special
fund in the nature of a trust fund,” which the Legislature “permanently set apart” from the
General Fund for the use and benefit of the division of corporations to make that
department self-supporting. (Id. at pp. 307-308.) Our Supreme Court concluded the first
appropriation (i.e., a capital expenditure for the enlargement of a state office building to
house the San Francisco offices of the commissioner of corporations with rent to be
collected by the division of corporations for office space in excess of the department’s
requirements) could be deemed to have been for the benefit of the department. (Id. at p.
307.) The second appropriation (i.e., a capital expenditure for the completion of a state
37
office building “without restriction as to office space for housing the corporation
commissioner’s department or the collection of rent[] for the benefit of that department”)
could not be deemed to have been for the benefit of the department and was “chargeable
only against the general fund or some other tax or general revenue fund.” (Id. at pp. 307-
308.) The court did not “deny power upon the part of the Legislature to transfer a special
fund reserve temporarily from one purpose to another . . . [b]ut when these diversions are
made the transfers are . . . deemed a loan from the special fund to be returned to that fund
as soon as funds are available.” (Id. at p. 309.) However, the second appropriation “did
not purport to make the transfer as a loan, but it boldly took from the special fund the
money necessary for the support and maintenance of the corporation commissioner’s
department with no provision for its repayment . . . .” (Id. at p. 310.) The court held,
“provid[ing] fees for regulatory purposes . . . and then devot[ing] the money so received
to capital expenditures for a foreign purpose” violated the special law provision of the
California Constitution. (Ibid.) Important to our discussion of the appropriate remedy,
the court concluded the unlawfully diverted money was “in law still in the corporation
commission fund” and issued a writ of mandate ordering the Controller to “retransfer
from the general funds of the state to the corporation commission fund” the amount that
was unlawfully diverted. (Id. at p. 312.)
Here, too, money was unlawfully diverted from a special fund in contravention
of the purposes for which that special fund was established. Of course, Daugherty,
supra, 1 Cal.2nd 298 involved an unconstitutional diversion by the Legislature, whereas
this case involves an unlawful diversion by the director of finance in contravention of
section 12531 and the National Mortgage Settlement, but this difference makes for a
more compelling case for ordering the money returned, not less. Moreover, in their
supplemental briefing following the Legislature’s enactment of SB 861, defendants
argue the Legislature ratified the director of finance’s expenditures. Without deciding
38
the issue, we simply note this argument places this case squarely in line with Daugherty.
The trial court should have issued a writ of mandate ordering the retransfer of the
wrongfully diverted funds from the General Fund to the National Mortgage Special
Deposit Fund.
DISPOSITION
The portion of the judgment declining to issue the requested writ of mandate is
reversed and the matter is remanded to the trial court with directions to issue a writ of
mandate directing defendants, Gavin C. Newsom, Governor (successor to Edmund G.
Brown, Jr.), Keely Bosler, Finance Director, and Betty Yee, Controller, to retransfer from
the General Fund to the National Mortgage Settlement Deposit Fund the sum of
$331,044,084. Plaintiffs, National Asian American Coalition, COR Community
Development Corporation, and National Hispanic Christian Leadership Conference, are
awarded costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)
/s/
HOCH, J.
We concur:
/s/
RAYE, P. J.
/s/
HULL, J.
39
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67 F.3d 18
Karen SHAW and Forrest Foster, Plaintiffs-Appellees,v.AGRI-MARK, INC., Defendant-Appellant.
No. 1038, Docket 94-7713.
United States Court of Appeals,Second Circuit.
Argued Feb. 8, 1995.Decided Sept. 27, 1995.Questions Certified March 2, 1995.Certified Questions Answered Aug. 2, 1995.
Robert A. Gensburg, St. Johnsbury, Vermont (Peter Welch, Welch, Graham & Manby, White River Junction, Vermont, on the brief), for Plaintiffs-Appellees.
Robert B. Hemley, Burlington, Vermont (Gravel & Shea, Burlington, Vermont, on the brief), for Defendant-Appellant.
Before: LUMBARD, KEARSE, and CARDAMONE, Circuit Judges.
PER CURIAM:
1
Defendant Agri-Mark, Inc. ("Agri-Mark"), a corporation organized for the purpose of processing, handling, and marketing milk and milk products of farmers in the New England states and New York, has appealed a judgment of the United States District Court for the District of Vermont which orders Agri-Mark to allow plaintiffs Karen Shaw and Forrest Foster to inspect certain of Agri-Mark's books and records. Agri-Mark is a stock corporation organized under the laws of the State of Delaware. Plaintiffs are among the members of the Agri-Mark cooperative who supply Agri-Mark's equity capital and directly elect its directors; but they are not stockholders of record. Persons who are not stockholders of a corporation have no right under Delaware statutory law to inspect the corporation's books and records. See, e.g., Rainbow Navigation, Inc. v. Pan Ocean Navigation, Inc., 535 A.2d 1357, 1360 (Del.1987) (interpreting 8 Del.C. Sec. 220). The district court's judgment granting plaintiffs access to the books and records of Agri-Mark was based on the court's interpretation of Delaware common law.
2
The sole issue presented on this appeal is whether nonstockholder members of a Delaware stock corporation have the right under Delaware common law to inspect the corporation's books and records. In Shaw v. Agri-Mark, Inc., 50 F.3d 117 (2d Cir.1995), familiarity with which is assumed, we certified the following questions to the Supreme Court of the State of Delaware pursuant to that Court's Rule 41:
3
(1) Did persons who supplied equity capital to a cooperative stock corporation and directly elected its directors, but who were not stockholders of record, have a right under Delaware common law to inspect the corporation's books and records?
4
(2) If the answer to question (1) is yes, did that right survive the enactment of 8 Del.C. Sec. 220?
5
The Delaware Supreme Court accepted the certification and answered the first question in the negative. See Shaw v. Agri-Mark, Inc., 663 A.2d 464 (Del.Sup.Ct.1995). That Court held "that a member of a Delaware stock corporation must be a 'stockholder of record' to be entitled to inspect the books and records of the corporation under our common law." Id. at 470 (emphasis omitted).
6
In light of this authoritative interpretation of Delaware common law, which is contrary to the conclusion reached by the district court in the present action, the judgment of the district court is reversed, and the matter is remanded for entry of a judgment dismissing the complaint.
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Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
07/12/2019 12:06 AM CDT
- 919 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
STATE v. FUENTES
Cite as 302 Neb. 919
State of Nebraska, appellee, v.
Timothy L. Fuentes, appellant.
___ N.W.2d ___
Filed April 19, 2019. No. S-18-122.
1. Postconviction: Evidence: Appeal and Error. In an evidentiary hear-
ing on a motion for postconviction relief, the trial judge, as the trier
of fact, resolves conflicts in the evidence and questions of fact. An
appellate court upholds the trial court’s factual findings unless they are
clearly erroneous.
2. Effectiveness of Counsel. A claim that defense counsel provided inef-
fective assistance presents a mixed question of law and fact.
3. Effectiveness of Counsel: Appeal and Error. When reviewing a
claim of ineffective assistance of counsel, an appellate court reviews
the factual findings of the lower court for clear error. With regard to
questions of counsel’s performance or prejudice to the defendant as
part of the two-pronged test articulated in Strickland v. Washington, 466
U.S. 668, 104 S. Ct. 2052, 80 L. Ed. 2d 674 (1984), an appellate court
reviews such legal determinations independently of the lower court’s
conclusion.
4. Constitutional Law: Due Process: Trial: Judges. The right to an
impartial judge is guaranteed under the Due Process Clauses of the U.S.
and Nebraska Constitutions, the parameters of which are coextensive.
5. Constitutional Law: Trial: Judges: Proof. In order to show a consti-
tutional violation of the right to an impartial judge, a defendant must
prove actual bias or structural error.
6. Trial: Judges: Words and Phrases. Structural error occurs when the
defendant shows that a judge has such a strong personal or financial
interest in the outcome of the trial that he or she was unable to hold the
proper balance between the State and the accused.
7. Postconviction: Trial: Presumptions: Appeal and Error. Although
structural error requires automatic dismissal if brought on direct appeal,
- 920 -
Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
STATE v. FUENTES
Cite as 302 Neb. 919
not all structural error will result in a presumption of prejudice when
raised in a motion for postconviction relief.
8. Judges: Recusal. Instances in which the judge’s impartiality might
reasonably be questioned specifically include where the judge has a
personal bias or prejudice concerning a party or a party’s lawyer.
9. Judges: Recusal: Presumptions. A defendant seeking to disqualify a
judge on the basis of bias or prejudice bears the heavy burden of over-
coming the presumption of judicial impartiality.
10. Constitutional Law: Identification Procedures: Due Process. An
identification procedure is constitutionally invalid only when it is so
unnecessarily suggestive and conducive to an irreparably mistaken iden-
tification that a defendant is denied due process of law.
11. Identification Procedures. Whether identification procedures were
unduly suggestive and conducive to a substantial likelihood of irrepa-
rable mistaken identification is to be determined by a consideration of
the totality of the circumstances surrounding the procedures.
12. ____. The factors to be considered in determining whether identifica-
tion procedures were unduly suggestive and conducive to a substantial
likelihood of irreparable mistaken identification are the opportunity of
the witness to view the criminal at the time of the crime, the witness’
degree of attention, the accuracy of the witness’ prior description of the
criminal, the level of certainty demonstrated by the witness, and the
length of time between the crime and the identification.
Appeal from the District Court for Scotts Bluff County:
A ndrea D. Miller, Judge. Affirmed.
Leonard G. Tabor for appellant.
Douglas J. Peterson, Attorney General, Erin E. Tangeman,
Derek Bral, Senior Certified Law Student, and, on brief, Sarah
E. Marfisi for appellant.
Heavican, C.J., Cassel, Stacy, Funke, and Papik, JJ.
Heavican, C.J.
INTRODUCTION
Timothy L. Fuentes was convicted of third degree sexual
assault of a child, second offense, and sentenced to 50 to
50 years’ imprisonment. His conviction and sentence were
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Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
STATE v. FUENTES
Cite as 302 Neb. 919
affirmed on direct appeal. Fuentes filed a motion seeking
postconviction relief. Following an evidentiary hearing,
the district court denied Fuentes’ motion. He appeals. We
affirm.
FACTUAL BACKGROUND
The facts leading to Fuentes’ conviction show that on
August 21, 2012, Fuentes visited the upstairs apartment of a
converted house. The victim, Analicia B., was outside of the
house at the time of Fuentes’ visit. Analicia’s family lived in
the basement apartment of the same house. Analicia testified
that Fuentes arrived at the home while her stepfather, Gabriel
T., had been outside. Analicia further testified that Fuentes
went into the upstairs apartment and that Gabriel went into the
basement apartment, leaving Analicia and her sister outside.
Fuentes left the upstairs apartment approximately 5 minutes
later, while Gabriel was still in the basement apartment.
Analicia testified that as he left, Fuentes “slid his finger” of
his right hand up and then sideways on Analicia’s genital area
over her clothing.
Analicia immediately reported the touching to her par-
ents, and law enforcement was contacted. A few days later,
Analicia identified Fuentes out of a photographic array (photo
array) that included photographs of Fuentes and five other
individuals.
Fuentes was charged with third degree sexual assault of a
child. A first jury trial ended in a mistrial because of a dead-
locked jury; Fuentes was convicted following the second trial.
His conviction and sentence were affirmed on direct appeal in
a memorandum opinion filed by the Nebraska Court of Appeals
on February 26, 2014, in case No. A-13-340.
Fuentes subsequently filed a pro se motion seeking post-
conviction relief. Fuentes was represented by an attorney from
the Scotts Bluff County public defender’s office at trial and on
direct appeal, and he is represented by appointed counsel in
this appeal. Fuentes asserts that trial counsel was ineffective
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Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
STATE v. FUENTES
Cite as 302 Neb. 919
at trial and on appeal by failing to (1) argue ineffective assist
ance of counsel on direct appeal; (2) file a motion to suppress
statements; (3) file a motion to recuse the trial judge; (4) file
a motion in limine; (5) file a motion to suppress the photo
array; (6) investigate and depose Analicia, an unknown adult,
and Gabriel; (7) object to jury instructions Nos. 1 and 5; (8)
object to exhibit 5; (9) object to the testimony of DelMaria
B., Analicia’s mother; and (10) file a motion to dismiss at the
conclusion of the State’s evidence.
Because the trial judge had retired, a new district court
judge was appointed. Following an evidentiary hearing, the
district court denied Fuentes’ motion for postconviction relief.
Fuentes appeals.
ASSIGNMENT OF ERROR
Fuentes assigns that the district court erred in denying his
motion for postconviction relief.
STANDARD OF REVIEW
[1] In an evidentiary hearing on a motion for postcon-
viction relief, the trial judge, as the trier of fact, resolves
conflicts in the evidence and questions of fact. An appellate
court upholds the trial court’s factual findings unless they are
clearly erroneous.1
[2,3] A claim that defense counsel provided ineffective
assistance presents a mixed question of law and fact.2 When
reviewing a claim of ineffective assistance of counsel, an
appellate court reviews the factual findings of the lower court
for clear error. With regard to questions of counsel’s perform
ance or prejudice to the defendant as part of the two-pronged
test articulated in Strickland v. Washington,3 an appellate court
1
State v. Huston, 302 Neb. 202, 922 N.W.2d 723 (2019).
2
Id.
3
Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052, 80 L. Ed. 2d 674
(1984).
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Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
STATE v. FUENTES
Cite as 302 Neb. 919
reviews such legal determinations independently of the lower
court’s conclusion.4
ANALYSIS
Fuentes contends on appeal that the district court erred
in denying his motion for postconviction relief and asserts
various grounds in support of his assignment of error. Fuentes
argues that counsel was ineffective in failing to (1) file a
motion to suppress the photo array and out-of-court identi-
fication of Fuentes, (2) investigate and depose a clerk at the
liquor store next door to the victim’s residence at the time
of the alleged sexual assault, (3) investigate and depose an
acquaintance of Fuentes who was at the liquor store the day of
the incident, (4) investigate and depose a coworker of Fuentes,
(5) investigate and depose the unknown male witness at the
time of the sexual assault, (6) raise an intoxication defense, (7)
seek the recusal of the district court judge, (8) have Fuentes
take a polygraph examination, (9) engage in plea negotiations
or communicate plea offers from the State to Fuentes, and
(10) adequately explore inaccuracies in the testimony of sev-
eral witnesses.
Several of these assignments of error can be rejected because
they were not raised in Fuentes’ motion. The motion does not
raise an ineffectiveness claim with respect to three witnesses—
the liquor store clerk, Fuentes’ acquaintance, or his coworker.
Nor does that motion assert ineffectiveness with regard to
the failure to raise the intoxication defense, seek a polygraph
examination, engage in plea negotiations, or communicate
plea deals. As such, we turn to the arguments both raised in
Fuentes’ motion and preserved on appeal.
Failure to Seek Recusal of
District Court Judge.
Fuentes contends that the trial judge should have recused
himself, because the judge assigned to his case had previously
4
Huston, supra note 1.
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302 Nebraska R eports
STATE v. FUENTES
Cite as 302 Neb. 919
represented him on a criminal matter in 1995. Fuentes further
contends that trial counsel was ineffective for not seeking
such recusal.
[4-7] The right to an impartial judge is guaranteed under the
Due Process Clauses of the U.S. and Nebraska Constitutions,
the parameters of which are coextensive.5 In order to show a
constitutional violation of the right to an impartial judge, a
defendant must prove actual bias or structural error.6 Structural
error occurs when the defendant shows that a judge has such
a strong personal or financial interest in the outcome of the
trial that he or she was unable to hold the proper balance
between the State and the accused.7 Although structural error
requires automatic dismissal if brought on direct appeal, not all
structural error will result in a presumption of prejudice when
raised in a motion for postconviction relief.8
[8,9] In addition to the constitutional right to an impartial
judge, the Nebraska Revised Code of Judicial Conduct states
that a judge must recuse himself or herself from a case if the
judge’s impartiality might reasonably be questioned.9 Under
the code, such instances in which the judge’s impartiality
might reasonably be questioned specifically include where
“‘“[t]he judge has a personal bias or prejudice concerning
a party or a party’s lawyer . . . .”’”10 However, a defendant
seeking to disqualify a judge on the basis of bias or prejudice
bears the heavy burden of overcoming the presumption of judi-
cial impartiality.11
5
State v. Thomas, 268 Neb. 570, 685 N.W.2d 69 (2004).
6
Id.
7
Id.
8
See Weaver v. Massachusetts, ___ U.S. ___, 137 S. Ct. 1899, 198 L. Ed.
2d 420 (2017).
9
State v. Buttercase, 296 Neb. 304, 893 N.W.2d 430 (2017).
10
Id. at 314, 893 N.W.2d at 438.
11
Buttercase, supra note 9.
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STATE v. FUENTES
Cite as 302 Neb. 919
Fuentes essentially acknowledges that this case does not
include structural error. Nor does Fuentes argue that his trial
judge was aware of confidential information that was harm-
ful to Fuetnes’ case. Rather, Fuentes now argues that the trial
judge should have recused himself due to the appearance of
impropriety. But, as we noted in State v. Buttercase,12 a defend
ant has a heavy burden to overcome the presumption of judicial
impartiality and show that the judge has a personal bias or
prejudice concerning the defendant.
In Buttercase, the defendant sought to force the removal
of a judge who had presided over prior criminal charges filed
against him. We rejected the claim, noting that “the fact that
the court previously presided over other actions involving the
parties and made rulings against one or another of the par-
ties” was insufficient to show bias.13 We observed that the fact
that a judge knows most of the attorneys practicing in his or
her district is common, and the fact that a judge knows attor-
neys through professional practices and organizations does
not, by itself, create the appearance of impropriety. We fur-
ther observed that judicial rulings alone almost never consti-
tute a valid basis for a bias or partiality motion directed to a
trial judge.
While Buttercase dealt with a judge who had previously
overseen charges against a defendant, we are presented here
with a judge who, 17 years earlier, apparently represented
the defendant in a criminal proceeding. The two cases are,
of course, factually distinct, but both touch on whether prior
knowledge of a defendant creates an appearance of bias.
Fuentes has not offered any evidence whatsoever to show
that the trial judge had access to confidential information or
even recalled representing Fuentes; that the trial judge used
confidential, personal information in presiding over Fuentes’
12
Id.
13
Id. at 316, 893 N.W.2d at 439.
- 926 -
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STATE v. FUENTES
Cite as 302 Neb. 919
trial or in sentencing him; or, indeed, that the trial judge was
biased or prejudiced against Fuentes in any way. We also
observe that while Fuentes suggested in his deposition that an
oral motion seeking the trial judge’s recusal was made, there is
no record of such an oral motion, let alone a written motion.
Fuentes has failed to meet his burden to show that he was prej-
udiced by the failure of the trial court judge to recuse himself.
There is no merit to this argument on appeal.
Failure to File Motion to
Suppress Photo Array
and Out-of-Court
Identification.
Fuentes argues that counsel was ineffective in failing to file
a motion to suppress the photo array and in failing to object to
all testimony regarding out-of-court identification by Analicia.
The basis of his argument appears to be his assertion that
Analicia was not given an advisement in advance of identifying
him from a photo array and that DelMaria’s presence impacted
Analicia’s identification.
[10-12] An identification procedure is constitutionally
invalid only when it is so unnecessarily suggestive and condu-
cive to an irreparably mistaken identification that a defendant
is denied due process of law.14 Whether identification proce-
dures were unduly suggestive and conducive to a substantial
likelihood of irreparable mistaken identification is to be deter-
mined by a consideration of the totality of the circumstances
surrounding the procedures.15 The factors to be considered
are the opportunity of the witness to view the criminal at
the time of the crime, the witness’ degree of attention, the
accuracy of the witness’ prior description of the criminal, the
level of certainty demonstrated by the witness, and the length
14
State v. Smith, 269 Neb. 773, 696 N.W.2d 871 (2005).
15
Id.
- 927 -
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STATE v. FUENTES
Cite as 302 Neb. 919
of time between the crime and the identification.16 We have
noted that “an array of five photographs is sufficient to con-
stitute a fair and adequate array when attempting to identify a
single perpetrator.”17
The record contains very little information about the photo
array. The photo array itself is not in the record. There is
no dispute that a motion to suppress any identification aris-
ing from the photo array was not filed, and counsel did not
otherwise object to evidence offered on the photo array and
Analicia’s identification of Fuentes.
The officer who prepared the photo array and showed it to
Analicia testified during trial that he was also the officer who
first reported to the scene of the alleged assault. He further
testified that at the time he met with Gabriel and DelMaria,
he did not interview Analicia, because it was policy for child
sexual assault victims to be interviewed by individuals trained
in appropriate interview techniques.
The officer further testified that at the time he spoke with
Gabriel and DelMaria, the couple identified Fuentes as the
individual who had been outside their apartment at the time
of the alleged assault, because Gabriel had been outside and
had seen Fuentes arrive. The officer also testified that Fuentes
was not at the scene when he arrived, but that the officer
effected a traffic stop of Fuentes a few days later, on August
24, 2012.
The officer additionally testified that he prepared a photo
array of photographs of six individuals—Fuentes and five oth-
ers—and showed it to Analicia, in the presence of DelMaria,
on August 26, 2012, at the Scottsbluff Police Department.
According to this testimony, DelMaria sat next to Analicia but
did not say anything during the process.
16
Id.
17
State v. Swoopes, 223 Neb. 914, 918, 395 N.W.2d 500, 504 (1986),
overruled on other grounds, State v. Jackson, 225 Neb. 843, 408 N.W.2d
720 (1987).
- 928 -
Nebraska Supreme Court A dvance Sheets
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STATE v. FUENTES
Cite as 302 Neb. 919
Analicia testified that the officer showed her the photo
array and that she circled the picture of the man who touched
her. Analicia also testified at trial that the man who touched
her was in the courtroom at the time she was testifying, iden-
tifying Fuentes as that person.
Fuentes does not make any particular argument about the
makeup of the photo array. Rather, he concentrates his argu-
ment on the fact that Analicia did not receive an advisement
prior to viewing the photo array and on the fact that DelMaria
was present during the showing of the photo array.
There are several problems with Fuentes’ contentions on
appeal. First, there is no evidence regarding whether Analicia
received an advisement prior to looking at the photo array
presented to her. Fuentes’ trial counsel had passed away
prior to the filing of the postconviction motion, but an attor-
ney from the public defender’s office testified by deposition
about Fuentes’ case file. There was no questioning about an
advisement during that deposition. The office’s file was not
offered as an exhibit to the deposition, nor is the police file
part of the record before this court. It is not possible to know
whether an advisement was actually given, because no one
asked that question or offered evidence that might answer
that question. Moreover, Fuentes cites to no authority requir-
ing such an advisement; rather, he cites to a memorandum
opinion of the Court of Appeals where such an advisement
was given.18
In addition, a review of the entire record suggests that
Fuentes was identified largely because Gabriel was aware that
Fuentes had been on the scene at the relevant time and identi-
fied Fuentes by name to the investigating officer. The officer
had contact with Fuentes for the first time 2 days prior to
showing Analicia the photo array. In addition, another offi-
cer testified that he had contact with Fuentes at the police
18
State v. Fletcher, No. A-08-723, 2009 WL 2767720 (Neb. App. Sept. 1,
2009) (selected for posting to court website).
- 929 -
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STATE v. FUENTES
Cite as 302 Neb. 919
department on either August 23 or 24, 2012, because Fuentes
had heard officers were looking for him.
Finally, the issue in this case was not who touched Analicia;
the issue was whether Analicia was touched. Fuentes does not
deny being at the scene at the relevant time. He denied only
that he touched Analicia.
Fuentes has not met his burden to show that he was preju-
diced by any failure of counsel to suppress the photo array
when law enforcement was aware from the time of the alleged
incident that it was looking for Fuentes. There is no merit to
his argument.
Failure to Adequately Explore
Inconsistencies in Witness
Testimonies.
Somewhat related to Fuentes’ allegations regarding the fail-
ure to investigate other witnesses is Fuentes’ contention that
his counsel was ineffective in failing to adequately cross-
examine certain witnesses regarding inconsistencies in their
statements at trial.
In his motion, Fuentes alleges inconsistencies of several wit-
nesses, but argues on appeal only that Analicia’s testimony was
inconsistent. Specifically, Fuentes’ brief argues that Fuentes
testified at his hearing that Analicia’s testimony regarding her
identification of Fuentes was inconsistent.
Fuentes’ argument is without merit. Fuentes does not explain
how he believes Analicia’s testimony was inconsistent and does
not provide any other evidence to suggest actual inconsist
encies in her testimony.
Moreover, our review of Analicia’s testimony reveals no
inconsistencies of note. Analicia testified that Fuentes walked
past her into the residence to visit the people who lived on the
main floor of the apartment building and that about 5 minutes
later, the same man left the building, touching her, as described
above, on his way out. There is no real dispute that Fuentes
was the man who entered and exited the home; the only dispute
- 930 -
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STATE v. FUENTES
Cite as 302 Neb. 919
is whether he touched Analicia as he left—she testified that he
did, while Fuentes testified that he did not.
Fuentes did not meet his burden to show that his counsel was
ineffective in failing to point out inconsistencies in Analicia’s
testimony, because it is not at all clear to what inconsistency
Fuentes was referring and, in any case, a review of Analicia’s
testimony reveals no inconsistency. This assignment of error is
without merit.
CONCLUSION
The decision of the district court dismissing Fuentes’ motion
for postconviction relief is affirmed.
A ffirmed.
Miller-Lerman and Freudenberg, JJ., not participating.
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764 N.W.2d 532 (2009)
STATE
v.
CLAUDIO.
No. 2007AP2124.
Supreme Court of Wisconsin.
January 13, 2009.
Petition for review denied.
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706 P.2d 1321 (1985)
STATE of Hawaii, Plaintiff-Appellee,
v.
Melcom Ray CORREA, Defendant-Appellant.
No. 9873.
Intermediate Court of Appeals of Hawaii.
August 20, 1985.
As Amended September 11, 1985.
*1322 Earle A. Partington, Schweigert & Associates, Honolulu, for defendant-appellant.
Sheila Burger, Deputy Pros. Atty., Honolulu, for plaintiff-appellee.
Before BURNS, C.J., and HEEN and TANAKA, JJ.
BURNS, Chief Judge.
Defendant Melcom Ray Correa appeals the judgment adjudicating him guilty of three counts of robbery in the first degree[1] (counts I, II, III) and four counts of kidnapping (counts IV, V, VI, VII). He was sentenced to concurrent 20-year imprisonment terms for the robbery counts and concurrent 10-year terms for the kidnapping counts. We affirm the sentence and judgment with respect to counts II, III, IV, V, VI, and VII. We vacate the sentence and judgment with respect to count I.
The undisputed evidence adduced at the jury trial shows that at approximately 10:10 a.m., on November 24, 1982, a lone male person entered Capital Jewelers, 803 Kam Highway, Pearl City, City and County of Honolulu.[2] Employees of the store, Danielle Postmus, Beatrice F. Orion, and Rosaline M. Biscocho, were on duty at the time. The male grabbed Orion, brandished a small black handgun, and ordered the three employees into the bathroom. Upon his inquiry, he was informed that Biscocho had the keys to the front door of the store, which was the only entry and exit to the store. He ordered Biscocho to lock the door but before she did, a customer, Rhonda L.H. Bonilla, entered. The male escorted Bonilla into the bathroom, and after Biscocho locked the front door, the male escorted Biscocho back into the bathroom. The male took jewelry and cash from the store and cash from Orion's handbag. He *1323 told Bonilla to open her wallet and give him her money, but she told him she did not have any.
Correa was charged with three counts of robbery in the first degree[3] and four counts of kidnapping. Each of the three robbery counts named the victim of the alleged threat of the imminent use of force but not the victim of the alleged theft.
Correa's defense was alibi. His testimony and evidence suggested that the offenses were committed by Richard "Dickie" Botelho, Correa's girl friend's other boyfriend.
However, Correa was positively identified by two of the four victims. Further, his older sister testified that he told her over the phone on November 24, 1982 that he had robbed a Pearl City jewelry store and asked her to help him get rid of the jewelry.
I.
Correa contends that as to each of the three robbery counts the trial court reversibly erred when it refused to name the alleged victim(s) of the robbery in its instructions to the jury. We agree as to count I. We disagree as to counts II and III because that deficiency in the instructions was cured by the verdict forms relating to those counts.
Under HRS § 708-840 (1976), some robberies may involve only a sole victim, i.e., the same person is a victim of the theft and the use of force or the threat thereof. Other robberies may involve co-victims, i.e., the victim(s) of the theft are not the victim(s) of the use of force or the threat thereof.
No matter what the robbery count or counts allege, see State v. Tuua, 3 Haw. App. 287, 649 P.2d 1180 (1982), the trial court must instruct the jury as to what specific facts it must find in order for it to find the defendant guilty of a particular count. 2 Wright, Federal Practice and Procedure: Criminal 2d § 487 (1982). The jury must be instructed as to each count that to find the defendant guilty, it must find, inter alia, that one or more specifically named persons or legal entities were victims of the theft and the force or the threat of force. Otherwise, the instructions will not accomplish their purpose and will be prejudicially insufficient. State v. Halemanu, 3 Haw. App. 300, 650 P.2d 587 (1982).
Here, notwithstanding Correa's objection, the jury was instructed about the elements of robbery but not about the specifics of each count. It was not told who were the alleged sole or co-victims involved in each count. However, the verdict forms provided by the trial court to the jury and which the court instructed the jury to use read as follows:
*1324 WE, the JURY in the above-entitled cause, find the defendant Guilty of ROBBERY IN THE FIRST DEGREE as to Count I. (as to Rosalina Biscocho)
WE, the JURY in the above-entitled cause, find the defendant Guilty of ROBBERY IN THE FIRST DEGREE as to Count II. (as to Beatrice Orion)
WE, the JURY in the above-entitled cause, find the defendant Guilty of ROBBERY IN THE FIRST DEGREE as to Count III. (as to Rhonda Bonilla)
The verdict forms facially indicate that count I charged a robbery involving Biscocho as the sole victim, count II charged a robbery involving Orion as the sole victim, and count III charged a robbery involving Bonilla as the sole victim. However, after the jury was selected and the prosecution made its opening statement, the prosecution stated in a bench conference that the victim of the theft in count I was the store.[4]
The verdict forms cured the deficiency in the court's instruction with respect to counts II and III. That is not true, however, as to count I. The jury was not informed that count I charged a theft of the store's property rather than of Biscocho's property. It was not instructed that to find Correa guilty of count I it had to find that while he was stealing the store's property, he threatened the imminent use of force against Biscocho. Since the count I verdict form facially finds a robbery involving Biscocho as the sole victim, whereas it should find a robbery involving co-victims Biscocho and Capital Jewelers, it fails to cure the deficiency in the court's instructions as to the particulars of count I. Moreover, it appears that the jury found Correa guilty of a crime for which he was not charged, i.e., a robbery involving Biscocho as the sole victim. Likewise, it appears that the jury did not find Correa guilty of the crime for which count I was intended, i.e., a robbery involving co-victims Biscocho and Capital Jewelers.
Accordingly, we vacate the judgment with respect to count I and affirm the judgment with respect to counts II and III.[5]
II.
Correa contends that the lower court reversibly erred when it denied his pretrial motion to strike kidnapping counts IV, V, and VII. The basis for the motion was that those kidnapping counts "are included or incidental offenses of the Robbery in the First Degree counts." We disagree.
There are four kidnapping counts and only three robbery counts. Count VI (kidnapping of Postmus) does not overlap any robbery count. Count I was intended to charge robbery of the store. Obviously it does not overlap with any kidnapping count. The only counts that possibly overlap are counts II, III, V, and VII charging robbery and kidnapping of Orion and Bonilla.
Correa also contends that the lower court reversibly erred when it refused to instruct the jury that Correa could not be found guilty of both robbing and kidnapping Orion and Bonilla. This contention is also without merit.
In State v. DeCenso, 5 Haw. App. 127, 681 P.2d 573 (1984), we held that it was permissible to charge and convict DeCenso for both kidnapping and sexual abuse because the kidnapping occurred before the sexual abuse although it continued during the sexual abuse. In his opening brief, Correa labels our holding in DeCenso as being "absurd," i.e., ridiculously unreasonable. We disagree and reaffirm DeCenso.
*1325 Unquestionably, a kidnapping that is necessarily and incidentally committed during a robbery cannot be the basis of a charge of kidnapping in addition to a charge of robbery. That is so because crimes involving the same facts are included offenses. See HRS § 701-109(4)(a). Conversely, a kidnapping that was not necessarily and incidentally committed during a robbery may be charged as a separate offense in addition to the robbery charge. Here, there is substantial evidence in the record that with respect to Orion and Bonilla, Correa's acts of kidnapping extended beyond the acts of kidnapping that he necessarily and incidentally committed during the robberies.
III.
Correa contends that notwithstanding his objection the court's jury instructions did not require the jury to find the prosecution timely and the venue proper. We agree, but in this case, the deficiency is harmless error.
As noted in State v. Black, 66 Haw. 530, 668 P.2d 32 (1983), HRS § 701-114 (1976) provides as follows:
Proof beyond a reasonable doubt. (1) Except as otherwise provided in section 701-115, no person may be convicted of an offense unless the following are proved beyond a reasonable doubt:
(a) Each element of the offense;
(b) The state of mind required to establish each element of the offense;
(c) Facts establishing jurisdiction;
(d) Facts establishing venue; and
(e) Facts establishing that the offense was committed within the time period specified in section 701-108.
(2) In the absence of the proof required by subsection (1), the innocence of the defendant is presumed.
Sections 701-108(2)(a) and (b), HRS (1976), provide:
(a) A prosecution for a class A felony must be commenced within six years after it is committed;
(b) A prosecution for any other felony must be commenced within three years after it is committed[.]
Rule 18, Hawaii Rules of Penal Procedure (HRPP) (1981), requires the offense to be prosecuted in a circuit where at least part of the offense was committed. The first judicial circuit covers the Island of Oahu, all other islands belonging to the state (other than Maui, Molokai, Lanai, Kahoolawe, Molokini, Hawaii, Kauai, and Niihau), and the district of Kalawao on the Island of Molokai. HRS § 603-1(1) (1976). The City and County of Honolulu covers the same area as the first judicial circuit except that the City and County of Honolulu does not include the district of Kalawao on the Island of Molokai. Article 1, section 1-102, Revised Charter of the City & County of Honolulu 1973 (1983 edition). Consequently, proof that an event occurred in the City and County of Honolulu or on the Island of Oahu is proof that it occurred within the first judicial circuit.
The prosecution admits that it was required to prove timely prosecution and proper venue. Nevertheless, it contends that the trial court was not required to instruct the jury with respect to those issues. As a general rule, we disagree. Evidence is merely the means of proving a fact. The trier of fact still must find the fact. Where timeliness of the prosecution and venue are issues of fact, the jury must be so instructed. 2 Wright, Federal Practice and Procedure: Criminal 2d § 485 (1982).
Here, however, there is uncontradicted and undisputed evidence in the record that the offenses occurred on November 24, 1982 in Pearl City, Oahu. Correa's defense was that he did not do it. On these facts, we conclude that the lower court's failure to instruct the jury as to timeliness of the prosecution and venue is error that is harmless beyond a reasonable doubt. See Rule 52(a), HRPP (1981).
We distinguish State v. Black, supra. In that case, after the prosecution rested its case-in-chief, Black moved for a judgment *1326 of acquittal on the ground that the record contained no evidence of proper venue. Upon his conviction, Black appealed the denial of his motion. There being no evidence of proper venue in the record, the supreme court held that the trial court reversibly erred in not granting Black's motion.
IV.
We find no merit in Correa's other points and subpoints on appeal.
V.
We vacate the sentence and judgment with respect to count I and affirm the sentence and judgment with respect to counts II, III, IV, V, VI and VII.
NOTES
[1] Section 708-840(1)(b), Hawaii Revised Statutes (HRS) (1976), provides:
Robbery in the first degree. (1) A person commits the offense of robbery in the first degree if, in the course of committing theft:
* * * * * *
(b) He is armed with a dangerous instrument and:
(i) He uses force against the person of the owner or any person present with intent to overcome the owner's physical resistance or physical power of resistance; or
(ii) He threatens the imminent use of force against the person of anyone who is present with intent to compel acquiescence to the taking of or escaping with the property.
[2] Rosalina M. Biscocho testified that Capital Jewelers is owned by Stanley Reiter. We do not know whether Capital Jewelers is a corporation, a partnership, a sole proprietorship, or some other legal entity.
[3] I: On or about the 24th day of November, 1982, in the City and County of Honolulu, State of Hawaii, MELCOM RAY CORREA, while in the course of committing theft, and while armed with a dangerous instrument, to wit, a handgun, did threaten the imminent use of force against Rosalina M. Biscocho, a person who was present, with the intent to compel acquiescence to the taking of or escaping with the property, thereby committing the offense of Robbery in the First Degree in violation of Section 708-840(1)(b)(ii) of the Hawaii Revised Statutes.
COUNT II: On or about the 24th day of November, 1982, in the City and County of Honolulu, State of Hawaii, MELCOM RAY CORREA, while in the course of committing theft, and while armed with a dangerous instrument, to wit, a handgun, did threaten the imminent use of force against Beatrice F. Orion, a person who was present, with the intent to compel acquiescence to the taking of or escaping with the property, thereby committing the offense of Robbery in the First Degree in violation of Section 708-840(1)(b)(ii) of the Hawaii Revised Statutes.
COUNT III: On or about the 24th day of November, 1982, in the City and County of Honolulu, State of Hawaii, MELCOM RAY CORREA, while in the course of committing theft, and while armed with a dangerous instrument, to wit, a handgun, did threaten the imminent use of force against Rhonda L.H. Bonilla, a person who was present, with the intent to compel acquiescence to the taking of or escaping with the property, thereby committing the offense of Robbery in the First Degree in violation of Section 708-840(1)(b)(ii) of the Hawaii Revised Statutes.
[4] In State v. Faatea, 65 Haw. 156, 648 P.2d 197 (1982), the supreme court held that a theft of the property of one business entity from the custody of five of its employees is but one robbery, not five.
[5] Under HRS § 708-842, an act is "in the course of committing theft" as that phrase is used in HRS § 708-840(1), if it occurs in an attempt to commit theft. Under HRS § 705-500, intentional conduct is an attempt if it constitutes a substantial step in a course of conduct intended to culminate in his commission of the crime. Consequently, there is evidence supporting the guilty verdict on count III.
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116 Ill. App.3d 852 (1983)
452 N.E.2d 835
MICHAEL H. MINTON et al., Plaintiffs-Appellants,
v.
THE RICHARDS GROUP OF CHICAGO et al., Defendants (International Decorating, Inc., Defendant-Appellee).
No. 82-2152.
Illinois Appellate Court First District (1st Division).
Opinion filed August 8, 1983.
*853 Uwe Brasch, of Schaumburg, for appellants.
No brief filed for appellee.
Reversed and remanded.
JUSTICE McGLOON delivered the opinion of the court:
The plaintiffs, Michael H. Minton and Mary Minton, appeal from an order of the circuit court of Cook County dismissing their amended complaint with prejudice. They contend that the trial court erred by ruling that they failed to state a cause of action against International Decorating, Inc., one of the defendants herein. This defendant did not file a brief, but we find that this does not prevent resolution of this appeal. First Capitol Mortgage Corp. v. Talandis Construction Corp. (1976), 63 Ill.2d 128, 345 N.E.2d 493.
Plaintiffs filed a complaint alleging that they contracted for the purchase of a new home to be constructed by the Richards Group of Chicago (RGC); that defendants PDS Construction, A & E Plumbing and International Decorating, Inc., worked on the home "under the supervision" of RGC; and that the premises constructed were uninhabitable and violated the implied warranty of habitability. Thereafter, on motion of the plaintiffs, RGC, PDS Construction and A & E Plumbing were dismissed as parties defendant.
The plaintiffs then filed an amended complaint alleging that International Decorating, Inc., a corporation had entered into an agreement with RGC to paint the eaves and windows of plaintiffs' new home, and that within 90 days after plaintiffs took possession of the premises pursuant to their agreement with RGC, the paint on the eaves and windows began to peel; that despite demands that the matter be corrected, no action had been taken to remedy the situation; and that RGC, a Delaware corporation, has since been dissolved. The amended complaint asked for judgment in the sum of $3,000 plus attorney fees and costs.
On motion of the defendant, International Decorating, Inc., the trial court struck the amended complaint and granted the plaintiffs 28 *854 days within which to file a second amended complaint, which plaintiffs failed to do. Thereafter, the trial court dismissed plaintiffs' amended complaint with prejudice.
Plaintiffs contend that the builder-vendor implied warranty of habitability against latent defects in a new house also applies to the subcontractors of the builder-vendor where the builder-vendor is dissolved and shows no assets.
1 The warranty of habitability is a creature of public policy and a judicial innovation that has evolved to protect purchasers of new houses upon discovery of latent defects in their homes. (Petersen v. Hubschman Construction Co. (1979), 76 Ill.2d 31, 389 N.E.2d 1154.) The implied warranty of habitability is a separate covenant between the vendor and vendee which arises because of the unusual dependent relationship. (Herlihy v. Dunbar Builders Corp. (1980), 92 Ill. App.3d 310, 415 N.E.2d 1224.) While this warranty has roots in the execution of the contract for sale, it exists independently and privity of contract is not required. The purpose of the warranty is to protect purchasers' expectations by holding building-vendors accountable. Redarowicz v. Ohlendorf (1982), 92 Ill.2d 171, 441 N.E.2d 324.
In Tassan v. United Development Co. (1980), 88 Ill. App.3d 581, 410 N.E.2d 902, this court extended the warranty of habitability between builder-vendors and purchasers to developer-vendors and condominium purchasers. In Redarowicz v. Ohlendorf, the supreme court extended the warranty of habitability to subsequent purchasers where there is a short intervening ownership by the first purchaser.
In the present case the record discloses that no builder-vendor to vendee relationship existed between plaintiffs and International Decorating. The plaintiffs allege that subsequent to the peeling of the paint on the eaves and windows of their new home, they informed RGC, through its representative, Joseph Mach, of the condition of the paint; that Joseph Mach informed them he would speak to International Decorating to remedy the situation; and that subsequent letters sent by the plaintiffs to International Decorating requesting that the matter be remedied were ignored.
This court is asked to extend the warranty of habitability to the subcontractors of a builder-vendor where the builder-vendor has been dissolved as an entity and is insolvent. Purchasers from a builder-vendor depend upon his ability to construct and sell a home of sound structure and his ability to hire subcontractors capable of building a home of sound structure. The plaintiffs here had no control over the choice of RGC to paint the eaves and windows of their home, and RGC was in the better position to know which subcontractor could *855 perform the work adequately.
2 In this case we agree with the reasoning in Redarowicz that the purpose of the implied warranty is to protect innocent purchasers. For that reason, we hold that in this case where the innocent purchaser has no recourse to the builder-vendor and has sustained loss due to the faulty and latent defect in their new home caused by the subcontractor, the warranty of habitability applies to such subcontractor. We recognize that our opinion is contrary to Waterford Condominium Association v. Dunbar Corp. (1982), 104 Ill. App.3d 371, 432 N.E.2d 1009, but that opinion was rendered prior to Redarowicz v. Ohlendorf.
The judgment of the circuit court of Cook County is therefore reversed, and the cause is remanded for further proceedings.
Judgment reversed; cause remanded.
BUCKLEY, P.J., and GOLDBERG, J., concur.
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NUMBER 13-10-00376-CR
COURT OF APPEALS
THIRTEENTH DISTRICT
OF TEXAS
CORPUS CHRISTI - EDINBURG
JOSE DE LEON PENA,
Appellant,
v.
THE STATE OF TEXAS,
Appellee.
On appeal from the
206th District Court
of Hidalgo County,
Texas.
MEMORANDUM OPINION
Before Justices Benavides,
Vela, and Perkes
Memorandum Opinion by
Justice Perkes
After
a jury trial, Jose De Leon Pena, appellant, was convicted of the offense of
theft of property valued between $1,500 and $20,000, a state-jail felony, and
sentenced to 180 days of confinement in the State Jail Division of the
Texas Department of Criminal Justice. See Tex. Penal Code Ann. § 31.03(e)(3)(a)
(West Supp. 2007). The trial court suspended imposition of sentence, placed
appellant on community supervision for a period of three years, and ordered
appellant to pay $9,000 in restitution, court costs, and supervisory fees. Appellant
challenges the sufficiency of the evidence, and argues that the evidence merely
demonstrates a civil contract dispute, and that it is insufficient to support a
finding of criminal intent to commit theft. On appeal, the State concedes
error and requests this Court to grant appellant the requested relief.[1]
We agree with the parties and reverse the conviction, dismiss the indictment,
and render a judgment of acquittal.
i. Factual Background
After firing their first contractor, Noe
Perez, the complainant, and his wife Maria Perez, approached appellant
regarding the construction of a new law office in the City of Edinburg. Appellant
had owned his construction business, “J. Pena Construction,” for approximately
18 years, and had built hundreds of homes and numerous commercial structures.
On May 14, 2008, the Perezes entered
into a written construction agreement with appellant.[2]
The contract provided that appellant’s company would be paid a lump sum total
of $250,600 for the commercial construction project, and that a $2,000 non-refundable
deposit, would be paid upon execution of the agreement. On May 27, 2008, the Perezes
gave appellant the $2,000 non-refundable retainer fee.[3]
Prior to hiring appellant, the Perezes
had employed another contractor to draft the building plans; however, the plans
were not approved by the city. Appellant testified that it took three to four
weeks to re-draft the original building plans, and that he met with various
city inspectors and the fire marshal during the process. Appellant also
testified he provided the Perezes a copy of the final building plans which the
Perezes initialed. On June 4, 2008, appellant applied for a commercial
building permit and paid a $350 fee. On June 9, 2008, the commercial building
permit was approved, thereby allowing the construction of the project in a
residential area. After the building plans were approved, appellant and the
Perezes attended a preconstruction meeting with the city.
On June 9, 2008, the Perezes delivered a
$10,000 check, payable to J. Pena Construction, and which included the word
“Building” for the description. Appellant testified the Perezes gave him the
check for him to commence construction, despite the fact their construction
loan had not yet been approved. Both Noe and Maria Perez concurred that those
funds were given as an advance. Appellant thereafter hired workers, marked
elevation and property lines, measured and marked the location where the
building was to be constructed, laid ground work by clearing three to four
inches of topsoil, hauled topsoil off the property, and brought in new dirt
which was compacted with a backhoe and tractor. The building-plans examiner
concluded that all the work was completed to the extent possible until the loan
was approved.
Noe Perez applied for a $246,500 bank loan
from the Bank of South Texas. On July 17, 2008, his application was presented
to the loan
committee. On August 18, 2008, the loan was approved, but appellant was not
approved as the builder.[4]
Noe Perez’s options were to either apply for a loan with another bank or use another
builder, who could be approved by the bank. He decided to use another builder,
notwithstanding the fact appellant had a signed contract with the Perezes and
appellant had already commenced work under the contract. The contract did not
address this contingency and did not provide that the Perezes could in effect
fire appellant if the bank did not approve his company as the builder.
Appellant wanted to continue his work under the contract and appellant’s bank
was willing to provide Noe Perez a loan at a half percentage point lower
interest. Noe Perez, however, was not interested.
In late August 2008, Noe Perez sent a
letter to the City of Edinburg Planning Department to notify it of the change
in builders. Noe Perez did not know the date, but he testified that he called
appellant and asked for the money back, and that appellant said he would return
it in two weeks, during which appellant did not answer phone calls from the
Perezes. Appellant testified that he did not answer because Noe Perez was
being aggressive, threatening that he had “friends in high places.”
On November 4, 2008, a demand letter was
sent to appellant from the Law Office of Noe L. Perez seeking reimbursement of
building funds in the amount of $12,000. In the demand letter, Noe Perez
stated that appellant had requested $2,000 for permit fees and $10,000 as an
“advancement.” Noe Perez further asserted in the demand letter that he
received an unreasonable expense form from appellant for acquired expenses.
The demand letter states the following, in relevant part:
This is my final
agreement on the fees.
You sent me an
Expense form which includes a total of $4,915.75 for acquired
expenses. The total is unreasonable. You are charging $2,505.75 for a Draft
(a computer print out), of the building plans. The City of Edinburg never
received a copy of the Blue Prints. They received a Draft of the building
plans when they issued out requested permits. I never received a copy of the
Blue Prints, either. Therefore, the amount of $2,505.75 for a “Draft” of the
building plans is not justifiable. I will pay you $590 for the building Draft,
plus all other expenses you requested. This adds up to a total $3,000
for any and all acquired expenses by you.
(Emphasis in original). In the letter, Noe Perez
concluded that he was therefore entitled to be reimbursed for a total amount of
$9,000, and that if appellant did not reimburse the money within ten days of
appellant’s receipt of the letter, further legal action would be taken.
Noe Perez testified that, prior to filing a
police report, he sent appellant letters, he saw him at the courthouse, and appellant
acknowledged that he owed Noe Perez the money. But Noe Perez also testified
that appellant sent him a letter indicating that Noe Perez owed appellant
$5,000 for blueprints of the building plans. Noe Perez testified that he never
received a draft of the blueprints. Noe Perez admitted, however, that
appellant had to redraw the building plans which had been drafted by the
previous contractor. Noe Perez testified that it was “ridiculous” that appellant
wanted so much money and he concluded that appellant owed him $9,000. Noe Perez
testified further that appellant did not produce receipts or an invoice for the
work he performed on the property. The only check disbursement in evidence from
appellant’s bank account relating to Noe Perez’s property was the check for the
permit fee which was cleared on June 11, 2008.
Appellant testified that he submitted an
expense form to Noe Perez which only included the money he had paid on the
project and did not take into account the amount of time he and his staff
invested. Appellant stated that although there was only one check paid from
his bank account [in evidence] relating to this project, he paid some
subcontractors with cash and he also had two other bank accounts. Appellant
also testified that it was evident that the subcontractors were paid because no
liens were placed on the property.
On December 9, 2008, Noe Perez filed a
police report, accusing appellant of theft of $10,000 and claiming appellant
never performed any work. Investigator Joe Vega of the Edinburg Police
Department was assigned to the case. Vega spoke over the phone with appellant
once or twice and testified that appellant said he would get around to it,
though the money was never returned. Vega also testified that to his
recollection, Noe Perez failed to tell him of the construction agreement, that he
had not seen Noe Perez’s demand letter to appellant, and that he had not had
the benefit of seeing the commercial building permit or the building plans
appellant drafted. Appellant was arrested on the felony charge of theft, and a
$10,000 cash bond was levied.
ii. Standard of Review
When
reviewing the legal sufficiency of the evidence, we examine the evidence in the
light most favorable to the verdict to determine whether any rational trier of
fact could have found the essential elements of the offense beyond a reasonable
doubt. See Jackson v. Virginia, 443 U.S. 307, 318–19 (1979); Brooks
v. State, 323 S.W.3d 893, 894 (Tex. Crim. App. 2010) (plurality op.). We
therefore determine whether any rational trier of fact could have found the
essential elements of theft beyond a reasonable doubt. See Jacobs v. State,
230 S.W.3d 225, 229 (Tex. App.—Houston [14th Dist.] 2006, pet. ref’d).
III. Discussion
We
measure the sufficiency of the evidence by the elements of the offense as
defined by a hypothetically correct jury charge. Villarreal
v. State, 286 S.W.3d 321, 327 (Tex. Crim. App. 2009) (citing Malik
v. State, 953 S.W.2d 234, 240 (Tex. Crim. App. 1997)). Such a charge is
one that accurately sets out the law, is authorized by the indictment, does not
unnecessarily increase the State’s burden of proof or unnecessarily restrict
the State’s theories of liability, and adequately describes the particular
offense for which the defendant was tried. Id.
A person commits theft if he unlawfully
appropriates property with intent to deprive the owner of the property. Tex. Penal Code Ann. § 31.03(a) (West
Supp. 2007). Appropriation of property is unlawful if it “is without the owner’s
effective consent.” Id. §
31.03(b)(1). “Consent” is not effective if it is induced by deception. Id.
§ 31.01(3)(A) (West 2003). As relevant under the indictment in this case,
deception means creating or confirming by words or conduct a false impression
of fact that is likely to affect the judgment of another in the transaction,
and that the actor does not believe to be true. Id. § 31.01(1)(A).
A claim of theft made in connection with a
contract requires proof of more than an intent to deprive the owner of property
and subsequent appropriation of the property. Jacobs, 230 S.W.3d at 229
(citing Baker v. State, 986 S.W.2d 271, 274 (Tex. App.—Texarkana 1998,
pet. ref'd)). If no more than intent and appropriation is shown in a contract
claim, nothing illegal is apparent, because under the terms of a contract, the individuals
typically have the right to “deprive the owner of property,” albeit in return
for consideration. Id. In a contract claim, the State must prove the
defendant did not perform the contract and knew he was not entitled to the
money, not merely that there is a dispute about the amount rightfully owed. Id.
The mere fact that one fails to return funds paid in advance after failing to
perform a contract does not constitute theft. Id. If money was
voluntarily given to the defendant pursuant to a contractual agreement and
there is insufficient evidence in the record to show the money
was obtained by deception, the conviction cannot stand. Id. at 229–30
(citing Phillips v. State, 640 S.W.2d 293, 294 (Tex. Crim. App. 1982)).
For purposes of a theft conviction, the relevant intent to deprive the owner
of his property is the accused’s intent at the time of taking possession of the
property. Wilson v. State, 663 S.W.2d 834, 836–37 (Tex. Crim. App.
1984) (en banc).
In Phillips, the defendant
contracted with the complainants to build an addition to their house, and
accepted $6,930.33 as a down payment. 640 S.W.2d at 294. As in the present
case, the money was paid voluntarily. See id. The defendant took some
measurements and drew plans, but did not fully perform under the contract. Id.
The Court of Criminal Appeals reversed the defendant's conviction, holding
that proof of failure to perform is insufficient to prove theft by deception. Id.
As
in Phillips, the evidence presented shows only a civil contract dispute,
and not the necessary criminal intent to support appellant's conviction. There
is no evidence in the record that appellant did not fully intend to perform
under the contract when he accepted the $10,000, and the evidence showed it was
Noe Perez’s decision to choose another builder while appellant wanted to
continue working under the contract. After the Bank of South Texas disapproved
appellant as the builder, appellant found a bank willing to approve him as
builder and make the loan at a lower interest rate. Under every version of the
facts presented by the trial witnesses, appellant performed at least some of
the contractual work for the $10,000 While Noe Perez testified appellant had
an idea the bank would not approve him as the builder for the loan and his wife,
Maria Perez, testified it was her “impression” the $10,000 was a loan, there is
no evidence appellant did anything to create a false impression to induce the
complainant, Noe Perez, to pay him the $10,000. We conclude the evidence is
legally insufficient to sustain appellant's conviction because there is no
evidence in the record of criminal intent to commit theft. See id.; see
also Peterson v. State, 645 S.W.2d 807, 812 (Tex. Crim. App.1983) (en banc)
(reversing conviction when the evidence failed to show defendant contractor
obtained money by deception); Jacobs, 230 S.W.3d at 232 (reversing
conviction because the evidence did not show criminal intent to commit theft by
deception in a case involving a civil contract dispute between a contractor and
property owner). Accordingly, we sustain appellant’s sole issue on appeal.
IV. Conclusion
Having concluded the evidence is
insufficient to support appellant’s conviction, we must acquit appellant. See
Aldrich v. State, 296 S.W.2d 225, 230 (Tex. App.—Fort Worth 2009, pet.
ref’d); Jacobs, 230 S.W.3d at 232. We therefore reverse the judgment of
conviction, dismiss the indictment, and render a judgment of acquittal.
______________________
GREGORY
T. PERKES
Justice
Do not publish.
Tex.
R. App. P.
47.2(b).
Delivered and filed
the
30th day of August,
2011.
[1] While the State’s
confession of error in a criminal case is an important factor, it is not
conclusive and the appellate court must make an independent examination of the
merits of any issue raised on appeal. Saldano v. State, 70 S.W.3d 873,
884 (Tex. Crim. App. 2004).
[2] The agreement
provides all disputes under the contract shall be resolved by binding
arbitration in accordance with the rules of the American Arbitration
Association. Appellant testified the complainant wanted to “strike . . . out”
the arbitration clause, but that did not happen and the arbitration clause was
agreed upon.
[3]
Although the
Perezes both testified they believed the $2,000 deposit was for permits and
dirt, they later clarified on cross-examination that the $2,000 was actually
the non-refundable retainer.
[4] The record shows
the Bank of South Texas later approved appellant as the builder on a large unrelated
commercial project. According to appellant’s testimony, the bank’s disapproval
of him as to Noe Perez’s building was based on erroneous information given by a
third party.
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627 F.2d 1089
Chisholmv.Denton
79-3276
UNITED STATES COURT OF APPEALS Sixth Circuit
7/14/80
S.D.Ohio
AFFIRMED
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396 F.2d 514
68-1 USTC P 9422
CUSTOM COMPONENT SWITCHES, INC., a California corporation, Appellant,v.UNITED STATES of America, Appellee.
No. 21713.
United States Court of Appeals Ninth Circuit.
June 4, 1968.
Mark Pastor (argued), Walter S. Weiss, Richard W. Craigo of Goodson & Hannam, Los Angeles, Cal., for appellant.
Ronald S. Morrow (argued), Asst. U.S. Atty., William M. Byrne, Jr., U.S. Atty., Los Angeles, Cal., Mitchell Rogovin, Asst. Atty. Gen., Tax Div., Lee A. Jackson, William A. Fiedlander, Howard J. Feldman, Attys., Dept. of Justice, Washington, D.C., for appellee.
Before BARNES, HAMLEY and KOELSCH, Circuit Judges.
HAMLEY, Circuit Judge:
1
In this tax refund suit, taxpayer, Custom Component Switches, Inc. (Company), appeals from a judgment for the United States. The issues presented in the district court and renewed here pertain to the imposition of penalties and interest for the asserted failure of the Company to file a timely federal income tax return for the fiscal year ending April 30, 1962.
2
On January 15, 1962, the Company filed a 'United States Declaration of Estimated Tax for Corporations' for the taxable year ending April 30, 1962. In this declaration the Company estimated its total corporate income tax for that year to be $150,000, and stated its estimated tax due for the taxable year to be $50,000. At the time the declaration was filed, the Company paid $12,500 as its first installment. In due course the Company received a 'Notice of Final Installment of Corporation Estimated Tax Due.' On or about April 15, 1962, the Company paid $37,500 on the second installment of its estimated tax.
3
The Company's income tax return (Form 1120) for the fiscal year was due to be filed on or before July 15, 1962. However, on that date the Company filed Form 7004, 'Application by a Corporation for Automatic Extension of Time to File U.S. Income Tax Return.' In this form the Company stated its tentative tax for 1962 to be $98,000, and the unpaid balance of tax due as $48,000. The instructions set out on the reverse side of this form stated that the application for extension must be filed on or before the fifteenth day of the third month following the close of the taxable year 'together with a remittance of an amount not less than would be required as the first installment should the taxpayer elect to pay the tax in installments as provided by law.'
4
The Company's application for an automatic extension was filed without remittance of money. On or about August 17, 1962, the Internal Revenue Service mailed Form FL-95 to the Company, as it does as a matter of course in all cases where no remittance accompanies the application for automatic extension. The FL-95 letter notified the Company that the extension application would not be granted unless remittance was made of one-half of the balance due, or $24,000.
5
The president of the Company, and a substantial stockholder therein, is William E. Hannam. He is also a certified public accountant and a senior partner in a law firm specializing in tax matters, including those involving the Company. On August 28, 1962, following receipt of the FL-95 notice, Hannam telephoned the Los Angeles office of the Internal Revenue Service. He spoke with an employee in the Returns and Receipts Branch of the District Director of Internal Revenue. On the next day Hannam talked with Nathaniel Baron, who was in charge of the section of that office dealing with applications for extensions of time.
6
During that telephone conversation Baron called Hannam's attention to the provisions of the Internal Revenue Code and Treasury Regulations which, in Baron's opinion, required that a $24,000 remittance accompany the Company's application for automatic extension. Hannam told Baron that he would look up the matter and call Baron back. Baron told Hannam that if there was no answer within five days, the extension application would be denied. Hannam did not call back and the application for extension was denied by the Internal Revenue Service.
7
On October 15, 1962, the Company mailed its income tax return for 1962 and remitted the sum of $47,471.23, the balance of tax due as shown by the tax return. The return was received by the Internal Revenue Service October 16, 1962. On November 9, 1962, the Internal Revenue Service assessed an addition to tax against the Company in the amount of $9,494.25, plus interest of $719.87, or a total of $10,214.12, for the Company's failure to timely file its return for the taxable year. The addition to tax was computed on the basis that the Company's return was delinquent for a period of three months and one day. The Company paid the additional tax plus interest and filed a claim for refund.
8
No action was taken with respect to this claim and the Company therefore commenced this tax refund suit in the district court. The district court, after a trial, entered findings of fact, conclusions of law and a judgment for defendant. This appeal followed.
9
The penalties constituting the bulk of the questioned addition to tax were imposed pursuant to section 6651 of the Internal Revenue Code of 1954 (Code), 26 U.S.C. 6651 (1964). According to that statute, if the Company failed to file its 1962 income tax return on the date prescribed therefor, determined with regard to any extension of time for filing, the penalties prescribed therein must be added 'unless it is shown that such failure is due to reasonable cause and not due to willful neglect * * *.' The Company argues that it made a timely filing of its 1962 return within the meaning of section 6651 and that, if the Company's filing was not timely, such failure was due to reasonable cause and not due to willful neglect. If the Company is correct as to either of these contentions no addition to tax should have been assessed.
10
The Company's tax return for the 1962 fiscal year was ordinarily due on or before July 15, 1962. It was not filed until October 16, 1962. The Company therefore failed to file the return on the date required unless it obtained an extension of time for such filing. Provision for obtaining such an extension is made in section 6081(b) of the Code, 26 U.S.C. 6081(b) (1964) which reads:
11
'(b) Automatic Extension for Corporation Income Tax Returns.-- An extension of 3 months for the filing of the return of income taxes imposed by subtitle A shall be allowed any corporation if, in such manner and at such time as the Secretary or his delegate may be regulations prescribe, there is filed on behalf of such corporation the form prescribed by the Secretary or his delegate, and if such corporation pays, on or before the date prescribed for payment of the tax, the amount properly estimated as its tax or the first installment there of required under section 6152; but this extension may be terminated at any time by the Secretary or his delegate by mailing to the taxpayer notice of such termination at least 10 days prior to the date for termination fixed in such notice.'
12
The form referred to in this statute, and the manner and time of filing it, are provided for in Treasury Regulation (Reg.) 1.6081-3, 26 C.F.R. 1.6081-3. Under this regulation a corporation desiring an automatic extension of time for filing its income tax return shall file an application therefor on Form 7004, 'Application for Automatic Extension of Time to File U.S. Corporation Income Tax Return,' on or before the date prescribed for the filing of the return. As indicated earlier in this opinion, the Company fully complied with this provision of Reg. 1.6081-3, filing its Form 7004 on July 15, 1962.
13
But, as section 6081(b) of the Code further provides, in order to obtain an automatic extension a corporation must, in addition to filing such a form, pay 'on or before the date prescribed for payment of the tax, the amount properly estimated as its tax or the first installment thereof required under section 6152 * * *.'
14
The Company did not, on or before July 15, 1962, pay the amount properly estimated as its tax. The amount properly estimated as its 1962 tax was $98,000, and only $50,000 of that sum had been paid by July 15, 1962. The question remains whether, within the meaning of section 6081(b), the Company, on or before July 15, 1962, paid 'the first installment thereof required under section 6152 * * *.' If it did, then, under section 6081(b), it was entitled to the automatic extension.
15
The Company asserts that it did, reasoning in part as follows: (1) the plain wording of section 6081(b) requires any corporate taxpayer filing for an automatic extension under section 6081(b) to pay only the first installment (one-half) of the 'amount properly estimated as its tax,' payment to be made at any time 'on or before' the due date of its return; (2) this the Company did, since it paid a total of $50,000 (in excess of one-half of its ultimate tax liability) 'on or before' July 15, 1962, the original date of its return; (3) however, such a literal interpretation of section 6081(b) would conflict with a likewise literal interpretation of section 6152 of the Code, 26 U.S.C. 6152 (1964), which provides for the filing of a tax return and the payment of the first installment (one-half) of the 'unpaid amount' of taxes, such payment to occur 'on the date' prescribed for payment of the tax; (4) the conflict between the literal interpretations of the two statutes is such that in some cases, if so interpreted, it would be more advantageous for a taxpayer to file for an automatic extension rather than to file a return with the election to pay in installments.
16
Having thus concluded that, read literally, there is an inconsistency or incongruity between sections 6081(b) and 6152, the Company proposes an interpretation of the two statutes which renders them compatible and under which interpretation it would necessarily be concluded that the Company had complied with the payment provision of section 6081(b).
17
The Company's proposed interpretation is predicated on the following propositions: (1) sections 6081(b) and 6152 should be interpreted in light of the clear congressional policy which provides a different treatment for corporate taxpayers with ultimate tax liabilities over $100,000 than for corporate taxpayers with ultimate tax liabilities under $100,000; (2) section 6016 of the Code, 26 U.S.C. 6016 (1964) contemplates that corporate taxpayers with tax liability over $100,000 must make prepayments on their income tax; (3) therefore, when such taxpayers file for either an automatic extension under section 6081(b) or elect to pay their tax installments under section 6152, both sections should be construed as requiring payment of one-half of the unpaid balance of income taxes on such due date; (4) conversely, section 6016 does not contemplate that corporate taxpayers (such as the Company with ultimate tax liability under $100,000 will be required to make any prepayments on their income tax; (5) therefore, when such taxpayers (including the Company) file for either an automatic extension under section 6081(b) or elect to pay their tax in installments under section 6152, both sections should be construed as requiring, on or before the due date for the filing of the corporate tax return, a payment of an amount equal to one-half of their ultimate tax liability. As before indicated, the Company did this.
18
The key premise in this entire line of argument, whereby sections 6081(b) and 6152 would be given different constructions depending upon whether the corporation has an ultimate tax liability of more or less than $10,000, is the very first premise, namely:
19
'The plain wording of section 6081(b) would require any corporate taxpayer filing for an automatic extension under section 6081(b) to pay only the first installment (1/2) of the 'amount properly estimated as its tax' at any time 'on or before' the due date of its return.'
20
In our opinion this is a faulty premise. The 'plain wording' of section 6081(b) does not require such a taxpayer to pay only the first installment (one-half) of the amount properly estimated as its tax. Instead, it requires such a taxpayer to pay the amount properly estimates as its tax 'or the first installment thereof required under section 6152 * * *.'
21
The Company's 'literal' construction of section 6081(b) ignores the word 'required under section 6152.' If, as section 6081(b) expressly provides, the provisions of section 6152 are to be applied in determining what the 'first installment thereof' is to be, it will be seen that the installment is to be one-half of 'the unpaid amount of such taxes * * *.' On July, 15, 1962, the unpaid amount of the Company's 1962 income tax was $48,000, and one-half thereof was $24,000. The Company made no part of that payment on or about July 15, 1962.
22
The Company has also advanced a number of ancillary arguments in support of its position but we consider them insufficient to warrant disregard of what we consider to be the express requirements of sections 6081(b) and 6152. We therefore conclude that, since the Company failed to pay, on or about July 15, 1962, the $24,000 representing one-half of its then unpaid 1962 taxes, it was not entitled to an automatic extension of time for filing its 1962 tax return. It follows that the Company's 1962 income tax return was not timely filed and that it was subject to penalties under section 6651, unless it was shown, as provided in that statute, 'that such failure is due to reasonable cause and not due to willful neglect * * *.'
23
Having in mind all of the evidence bearing upon the latter question, the salient features of which are summarized at the outset of this opinion, we conclude that the district court finding that the Company failed to show that there was reasonable cause for the failure to make timely filing of the 1962 return, and that such failure was not due to willful neglect, it not clearly erroneous.
24
The assessment of the prescribed penalties for the months of July 15-August 15, August 15-September 15, and September 15-October 15, 1962, was therefore proper. In our opinion, however, since the tax return was actually mailed on October 15, and since the statute, as thereafter amended, provides that the mailing date shall be regarded as the filing date,1 the one-day delay in filing the return on October 16, instead of October 15, 1962, should have been disregarded as de minimis, and therefore a one month's penalty (five percent of the amount of the tax, or $2,373.56) should not have been assessed.
25
The cause is remanded for a recomputation of the judgment to eliminate the penalty and associated interest, if any, attributable to the October 16, instead of October 15, filing. In all other respects the judgment is affirmed.
1
Act of Nov. 2, 1966, Pub.L. No. 89-713, 5(a), 80 Stat. 1110, amending 26 U.S.C. 7502 (1964) (codified at 26 U.S.C. 7502 (Supp. II, 1965-66))
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10 P.3d 686 (2000)
The PEOPLE of the State of Colorado, Plaintiff-Appellee,
v.
Craig Tony SCOTT, Defendant-Appellant.
No. 98CA1958.
Colorado Court of Appeals, Div. I.
March 2, 2000.
Rehearing Denied April 6, 2000.
Certiorari Denied October 10, 2000.
*687 Ken Salazar, Attorney General, Peter J. Cannici, Assistant Attorney General, Denver, Colorado, for Plaintiff-Appellee.
David F. Vela, Colorado State Public Defender, Lisa Dixon, Deputy State Public Defender, Denver, Colorado, for Defendant-Appellant.
Opinion by Judge METZGER.
Defendant, Craig Tony Scott, appeals the judgment of conviction entered upon jury verdicts finding him guilty of two counts of third degree assault. We affirm.
Defendant was charged with having physically assaulted his common law wife twice in the same evening. The first assault took place inside an apartment. The second occurred outside the apartment building and was witnessed by a boy who was waiting in defendant's car. The boy testified he saw defendant punch and kick the victim.
At trial, defendant's theory of defense was that the victim's injuries were caused by a woman who had assaulted her inside the apartment.
I.
Defendant first argues that, because the trial court granted his motion for judgment of acquittal and dismissed one charge of second degree assault, it was without authority to allow the jury to consider third degree assault as a lesser-included offense of the dismissed charge. Under the unique circumstances of this case, we disagree.
Crim. P. 29(a) provides, in pertinent part: "The court on motion of a defendant . . . shall order the entry of a judgment of acquittal of one or more offenses charged in the. . . information . . . after the evidence on either side is closed, if the evidence is insufficient to sustain a conviction of such offense or offenses."
A trial court's ruling granting a defendant's motion for judgment of acquittal at the close of the prosecution's evidence is not a final order unless and until the court terminates the trial by dismissing the jury. Before that time, the trial court retains authority to reconsider its ruling. People v. District Court, 663 P.2d 616 (Colo.1983); People v. Ganatta, 638 P.2d 268 (Colo.1981).
Here, defendant was charged with two counts of second degree assault: (1) unlawfully inflicting serious bodily injury, with intent to commit bodily injury, during the assault within the apartment in violation of § 18-3-203(1)(g), C.R.S.1999; and (2) unlawfully inflicting bodily injury by means of a deadly weapon, a shod foot, during the assault outside of the apartment building in violation of § 18-3-203(1)(b), C.R.S.1999.
At the close of the People's case, defendant moved for judgment of acquittal on the first count of second degree assault. He argued the prosecution had failed to present sufficient evidence to prove that the victim had suffered "serious" bodily injury. Specifically, defendant argued, the prosecution had not proved that the victim's bloodied nose was actually broken.
The prosecutor responded that the evidence and its inferences were sufficient to justify denial of defendant's motion. In the alternative, he argued, if the court were to dismiss that count and its accompanying crime of violence count, the lesser-included third degree assault charge should be substituted.
The court ruled: "The Court dismisses count[s] 1 and 2. Count[s] 3 and 4 remain. Count 1 is reduced actually to third degree assault . . . if [the prosecutor] request[s] it." The prosecutor said he did request it, and the court determined that the evidence was *688 sufficient to support that request. Defense counsel made no comment or objection.
During the jury instructions conference, defense counsel objected to submission of an instruction on the third degree assault charge. She argued that the court lacked authority to submit the lesser-included offense to the jury once it had dismissed the greater offense. The trial court ruled that such an instruction was proper, explaining that its initial dismissal ruling was merely an "inartful" explanation of its intent to merely reduce the charge.
The jury found defendant guilty of that third degree assault charge and also found him guilty of a second count of third degree assault as a lesser-included offense of the remaining second degree assault charge.
A.
Initially, we address and reject defendant's argument that the trial court's dismissal of the second degree assault charge was a final and irreversible order. Because the jury had not yet been dismissed, the trial court had authority to amend its order. People v. District Court, supra; People v. Ganatta, supra.
B.
Defendant next asserts that, even if the trial court had authority to amend its order, its amended order was contrary to the rule set out in People v. Chapman, 174 Colo. 545, 484 P.2d 1234 (1971). In that case, a theft prosecution, the trial court had denied defendant's post-trial motion for judgment of acquittal, modified the jury's verdict, and entered judgment on a lesser-included offense. This ruling was based on its finding that the value of the stolen property was less than the jury had determined it to be. Explaining that the trial court lacked authority to modify a jury's verdict in this manner, the supreme court reversed and remanded the cause with directions to reinstate the verdict and to rule properly on defendant's motion for judgment of acquittal.
In our view, the holding of Chapman is a narrow one preventing post-trial modification of a jury's factual findings. That decision is inapposite to the present question: whether a trial court granting a mid-trial motion for judgment of acquittal may allow the jury to consider a lesser-included offense for which there is sufficient proof.
Far more relevant to our inquiry is People v. Patterson, 187 Colo. 431, 532 P.2d 342 (1975). In Patterson, the trial court had denied the defendant's motion for judgment of acquittal on a charge of selling narcotic drugs with the intent to induce or aid the purchaser to unlawfully use or possess narcotic drugs. On appeal, the supreme court concluded that the trial court's ruling was erroneous and that the charge should not have been submitted to the jury. However, the supreme court held, there was sufficient proof of the lesser-included offense of unlawful sale of narcotic drugs, and it remanded the cause with directions to enter judgment on that charge.
Under Patterson, a trial court's erroneous denial of a motion for judgment of acquittal was corrected by entry of judgment on a lesser-included offense for which there was sufficient proof. By the same reasoning, if a trial court determines that the evidence is insufficient to support a greater offense and grants a defendant's mid-trial motion for judgment of acquittal, it must have authority to submit to the jury a lesser-included offense for which there is sufficient proof. If this were not the case, then the remedy crafted by the supreme court in Patterson would not have been available.
When the prosecution seeks a lesser-included offense instruction over the defendant's objection, the prosecution is entitled to such an instruction if the lesser-included offense is: (1) easily ascertainable from the charging instrument and (2) not so remote in degree from the offense charged that the prosecution's request appears to be an attempt to salvage a conviction from a case which has proved to be weak. People v. Cooke, 186 Colo. 44, 525 P.2d 426 (1974).
Since third degree assault involving knowing or reckless infliction of simple bodily injury is a lesser-included offense of second degree assault committed with intent to cause bodily injury and resulting in serious bodily injury, the lesser-included offense of *689 third degree assault was readily ascertainable from the information. People v. Brown, 677 P.2d 406 (Colo.App.1983); cf. People v. Garcia, 940 P.2d 357 (Colo.1997). Indeed, defendant does not allege that he was surprised or otherwise prejudiced in his ability to defend against the lesser-included offense.
With respect to the second part of the Cooke test, we note that the prosecutor's request for an instruction on the lesser-included offense of third degree assault clearly was an attempt to "salvage" a conviction for the assault inside the apartment. However, the insufficient evidence of serious bodily injury was the only shortcoming in the prosecution's proof, and the lesser-included offense submitted to the jury was not that remote in degree from the charged offense. See § 18-3-203(g)(2)(second degree assault is a class four felony which can be reduced to a class six felony if committed under heat of passion); § 18-3-204 (third degree assault is a class one misdemeanor). Therefore, we perceive no error in the trial court's decision to submit the lesser-included offense of third degree assault to the jury.
II.
Defendant next contends the trial court abused its discretion by denying his motion for mistrial. Again, we disagree.
A mistrial is a drastic remedy that is warranted only when the prejudice to the accused is so substantial that its effect on the jury cannot be remedied by other means. People v. Salazar, 920 P.2d 893 (Colo.App. 1996). Absent an abuse of discretion, a trial court's denial of a motion for mistrial will not be disturbed on appeal. People v. Lee, 914 P.2d 441 (Colo.App.1995).
Here, the boy who witnessed the second assault testified that, after that assault, he and the victim were together in the car when defendant drove them to another location. The prosecutor then asked the boy: "Once [defendant] got out of the car, what happened?" The boy replied: "Well, [the victim] said, `I'm tired of him doing this.'"
Defendant moved for mistrial, arguing that the boy's testimony relating the victim's remark constituted evidence of prior assaults by defendant which violated the trial court's in limine ruling excluding such evidence. Finding that the prosecutor had not deliberately elicited the remark, the trial court denied defendant's motion. Although the trial court offered to admonish the jury to disregard the testimony, defendant declined such an instruction.
Based on our review of the record, we find no abuse of discretion. The statement was ambiguous, did not explicitly refer to any prior assault by defendant, and could well have referred to the alleged assault inside the apartment. Furthermore, the record supports the trial court's finding that the testimony was adduced inadvertently.
The judgment is affirmed.
Judge RULAND and Judge NIETO concur.
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370 N.E.2d 249 (1977)
54 Ill. App.3d 958
12 Ill.Dec. 626
BELVIDERE SOUTH TOWNE CENTER, INC., Plaintiff-Appellee,
v.
ONE STOP PACEMAKER, INC., and Nabors of Illinois, Inc., Defendants-Appellants.
No. 76-320.
Appellate Court of Illinois, Second District.
November 23, 1977.
*250 Williams, McCarthy, Kinley, Rudy & Picha, John C. McCarthy and Curtis W. Nyquist, Rockford, for defendants-appellants.
Strom, Strom, Oakley & Ellis, Belvidere, Maynard, Brassfield & Cowan, Rockford, for plaintiff-appellee.
BOYLE, Justice.
Plaintiff, Belvidere South Towne Center, Inc. (hereinafter "plaintiff"), brought a declaratory judgment action against the defendants, One Stop Pacemaker, Inc. (hereinafter "Pacemaker"), and Nabors of Illinois, Inc. (hereinafter "Nabors"), for the interpretation of a shopping center lease covering realty located in Belvidere, Illinois. Plaintiff is the owner and landlord of the shopping center. Pacemaker is a tenant of plaintiff and operates a supermarket and package liquor store. Nabors is a tenant of plaintiff and the operator of a drugstore which retails a wide variety of merchandise, including food products.
On September 22, 1966, Pacemaker executed a lease with plaintiff and became the first tenant in this shopping center. On October 12, 1972, Pacemaker signed another lease with the plaintiff, similar to the previous lease. This lease provided "that the leased premises shall be used and occupied by Tenant for the operation of Supermarket and Package Liquor Store and that no other similar business shall be allowed in said Shopping Center."
Nabors is immediately adjacent to Pacemaker and entrance to either store is available through a common passageway. On September 28, 1972, Nabors executed a 15-year *251 lease with plaintiff with options to extend the lease another 15 years. Nabors' lease provided at paragraph 10 that the "(t)enant will use and operate the demised building for the purpose of a Drug Store; provided, that Tenant shall be under no obligation to operate a pharmacy. So long as Tenant operates its pharmacy in the demised building, Landlord shall not lease any portion of property owned, directly or indirectly, by it within a five mile radius of the demised building for use as a pharmacy dispensing prescriptions." (Emphasis added.)
Pacemaker filed an answer to plaintiff's complaint and also filed an amended counterclaim-third party complaint against both plaintiff and Nabors, which were later withdrawn. Nabors counterclaimed against the plaintiff, seeking a declaration that it was entitled to sell food items. Following a non-jury hearing, the trial court found that Nabors had violated the restrictive covenant in paragraph 10 of its lease, which, in the trial court's opinion, prohibited Nabors from the sale of those items not included among the merchandise commonly sold in a drugstore. Accordingly, the trial court entered a permanent injunction enjoining Nabors from "selling on or from the premises at Belvidere South Towne Center, Boone County, Illinois, any of the following items: meats of any kind, dairy products, including, but not limited to milk, cheese and ice cream, bread and bakery goods, fresh fruit and vegetables, breakfast foods, canned goods, soft drinks, frozen foods, or any other grocery products except those of a dietary nature, or candy and gum." The trial court also found against Nabors in its counterclaim against plaintiff. The enforcement of the judgment order and writ of permanent injunction has been stayed pending Nabors' appeal from the judgment entered and the order denying its post-trial motion.
It is conceded that Nabors sells various food items and did not commence the sale of these food products until October of 1974. It is also admitted that the various food products that Nabors sells are competitive with the line of goods sold by Pacemaker and, therefore, if the covenant contained in Nabors' lease providing that he shall operate a "drugstore" prohibits the sale of food products, Nabors would be in violation of this covenant.
The definitions and legal interpretation of what encompasses a "drugstore" are numerous and varied. The following is just a sample of the authorities: A drugstore is "a place where drugs are sold." (Black's Law Dictionary (4th Ed. Revised 1968).) Webster's New World Dictionary (2nd College Ed., 1970) defines a drugstore as "a store where medical prescriptions are filled and drugs and medical supplies are sold; most drugstores now also sell a wide variety of merchandise." The term "drugstore" also has been interpreted by the courts as "an emporium devoted to the sale of many other things, besides drugs, such as notions, sodas, and beverages, toys, lunches, cosmetics, etc." (Tynes v. Kelly (1st Cir.Ct. of App. of La., 1959), 116 So.2d 54, 57. See also Crest Drug Store, Inc., v. Levine (1948), 142 N.J.Eq. 652, 61 A.2d 190; Aiello Bros. v. Saybrook Holding Corp. (1930), 106 N.J.Eq. 3, 149 A. 587.) Section 3 of the Pharmacy Practice Act (Ill.Rev.Stat.1975, ch. 91, par. 55.3) defines a drugstore as a place where drugs, medicines or poisons are dispensed, sold or displayed; or a place where prescriptions are filled, dispensed or compounded.
The lease in the instant case did not define the term "Drug Store" and did not include any descriptive language to qualify or limit its application in this lease. Contrast First Trust & Savings Bank v. Economical Drug Co. (1928), 250 Ill.App. 112, 115, where the lease provided that the premises were to be used "for a drug store with the right to sell candy, cigars and soft drinks, and for no other purpose whatsoever." The court stressed the fact that the covenant expressly limited the lessee's operation of anything other than a drugstore and forbade the lessee from selling edibles.
Nabors first contends that by common usage and legal definition a drugstore may sell food items. Nabors relies on Tynes v. *252 Kelly, 116 So.2d at 57, where the court interpreted a restrictive covenant in a lease which provided that the premises were to be used "as a drugstore only", to include the operation of a lunch counter and pinball machines. Nabors also places reliance on Crest Drug Store, Inc., v. Levine, where the court construed a clause in a lease which allowed the sale of "other commodities incidental to the maintenance of a modern drugstore" to permit the tenants to sell newspapers and magazines, noting it was "a matter of common observation that commodities sold in a modern drugstore are as varied and numerous as in a general store, from alarm clocks to liquor, from hairpins to greeting cards." (61 A.2d at 192.) The court further noted that it was "common knowledge as well as disclosed by the record that many drugstores in this State are department stores to a greater or less[er] degree." 61 A.2d at 192.
Here, however, the issue is not what the common usage or legal definition of a drugstore is or what a drugstore may sell, as Nabors contends, but whether the trial court's interpretation of this lease is fair and reasonable based upon a consideration of its provisions and language. (Tatar v. Maxon Construction Co. (1973), 54 Ill.2d 64, 294 N.E.2d 272.) As stated in Chicago Title & Trust Co. v. Northwestern University (1976), 36 Ill.App.3d 165, 168, 344 N.E.2d 52, 55:
"`The cardinal rule in the interpretation of a lease is that the court should ascertain and give effect to the intention of the parties, and that in so doing the court may take into consideration the position of the parties, the surrounding circumstances which existed at the time of the execution of the lease, as well as the purpose or object the parties had in mind in entering into the lease * * *.'" South Parkway Building Corporation v. South Center Department Store (1958), 19 Ill.App.2d 14, 25-26, 153 N.E.2d 291, 296.
In the instant case, the lease provided that Nabors was to use the premises "for the purpose of a Drug Store." Nabors opened for business on April 5, 1973, and began the sale of food products in October of 1974. Pacemaker had been operating a supermarket and package liquor store immediately adjacent to Nabors since 1966. We are well aware, as Nabors contends, that language in a lease use-restriction clause is to be construed most strongly against the landlord and in favor of the tenant. (In re Estate of Corbin v. McKey & Poague, Inc. (1969), 105 Ill.App.2d 120, 245 N.E.2d 117.) However, it is equally well settled that "(a) lease, wherever possible, should be construed reasonably and in such a manner as will be most equitable to the parties and give neither party an unfair advantage over the other." (Getzelman v. Koehler (1958), 14 Ill.2d 396, 404, 152 N.E.2d 833, 837.) We believe it is clear that the clause in the instant case, "(t)enant will use and operate the demised building for the purpose of a Drug Store", was intended by the parties to mean that Nabors would operate a drugstore and would not compete in the sale of food products with Pacemaker, the adjoining tenant. This finding is established with particularity by the evidential facts that indicate Nabors did not begin to sell food items in competition with Pacemaker until it had been in business a year and a half; that 15-18 per cent of Nabors' gross sales are derived from food products; that the majority of Nabors' advertisements in the local newspapers is devoted to food products while a minority of the advertisements is devoted to drug and miscellaneous other merchandise. To interpret this clause in the manner in which Nabors requests would confer an unfair advantage on Nabors over Pacemaker, the first tenant in the shopping center and the only tenant selling food products from 1966 until 1974, when Nabors began selling food products.
We are not persuaded by Nabors' argument that the evolving nature of a drugstore in today's society cannot be encumbered by restrictions prohibiting the nature of items a drugstore may sell for the duration of the lease. While we do recognize the increasing multiplicitude of items being sold by a drugstore in today's society, we think it is clear that the intent of the parties *253 to this lease in 1972 was that Nabors would not sell food product items in the operation of its drugstore.
The issuance of a permanent injunction will not be set aside on appeal unless the trial court has abused its sound discretion, and this is clearly not such a case. (Illinois Power Co. v. Latham (1973), 15 Ill.App.3d 156, 303 N.E.2d 448.) Accordingly, we affirm the order of the trial court permanently enjoining Nabors from selling food products in violation of the restricted covenant in paragraph 10 of its lease. However, as to the wording of the injunction, we are of the opinion that the injunction is not definite, clear and precise in its terms. (Illinois Power Co. v. Latham (1973), 15 Ill.App.3d 156, 303 N.E.2d 448; People ex rel. Traiteur v. Abbott (1975), 27 Ill.App.3d 277, 327 N.E.2d 130.) In particular, the injunction should be clarified as to what specific dietetic and sugar-free dairy and food products Nabors is allowed to sell as part of its operation of a drugstore. Therefore we affirm the trial court's granting of the permanent injunction, but we remand to the trial court for an entry of an order and writ consistent with this opinion.
JUDGMENT AFFIRMED; REMANDED WITH INSTRUCTIONS.
GUILD and WOODWARD, JJ., concur.
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810 F.2d 1517
1988-2 Trade Cases 68,289
John M. DIMIDOWICH, dba Micro Image, Plaintiff-Appellant,v.BELL & HOWELL, Defendant-Appellee.
No. 84-1995.
United States Court of Appeals,Ninth Circuit.
Feb. 25, 1987.
Robert F. Koehler, Jr., Sacramento, Cal., for plaintiff-appellant.
McCutchen, Doyle, Brown & Enersen, John R. Reese, San Francisco, Cal., for defendant-appellee.
Before FLETCHER, BOOCHEVER and NORRIS, Circuit Judges.
ORDER
1
Appellant's petition for rehearing is denied.
2
The opinion, filed November 6, 1986, 803 F.2d 1473 is modified as set forth following.
3
Insert on page 1478 second column line 17 of 803 F.2d before Nonetheless: "It will thus be rare for a court to infer a vertical combination solely from a business's unilateral refusal to deal with distributors or customers who do not comply with certain conditions."
4
Delete on page 1478 second column second line from bottom: "necessary to show a combination between himself and B & H" and replace with "necessary to infer a vertical combination from a unilateral refusal to deal."
5
All petitions to file amicus briefs are denied.
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Filed 10/3/16 Mako Investments v. West Coast Contractors of Nevada CA3
NOT TO BE PUBLISHED
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(Placer)
----
MAKO INVESTMENTS, LLC, C073867
Plaintiff and Appellant, (Super. Ct. No. SCV29252)
v.
WEST COAST CONTRACTORS OF NEVADA,
INC.,
Defendant and Appellant;
FIDELITY AND DEPOSIT COMPANY OF
MARYLAND,
Defendant and Respondent.
WEST COAST CONTRACTORS OF NEVADA,
INC.,
Cross-complainant and Respondent,
v.
ZEPHYR COMPANIES, INC.,
Cross-defendant and Appellant.
1
A $2.6 million erosion control project with a $1.8 million stream restoration
component at Lake Tahoe for Placer County (County) resulted in litigation between the
general contractor and the subcontractor on the project over compensation for work
performed. Defendant and appellant/cross-complainant and respondent West Coast
Contractors of Nevada, Inc. (West Coast), served as general contractor. Defendant and
respondent Fidelity and Deposit Company of Maryland (Fidelity) issued West Coast’s
payment bond. Cross-defendant and appellant Zephyr Companies, Inc. (Zephyr), served
as subcontractor. Zephyr assigned its claims in the litigation to plaintiff and appellant
Mako Investments, LLC (Mako).
Following a flurry of complaints and cross-complaints, a jury returned a verdict in
favor of Mako and Zephyr in the amount of $915,045 in compensatory damages and
$638,422 in punitive damages, for a total of $1,553,467 in damages against West Coast.
On posttrial motions, the trial court reduced compensatory damages by $695,000 and
eliminated all punitive damages, for a damages award of $220,045. In addition, the court
awarded prompt payment interest penalties and 35 percent of the attorney fees and costs
requested. Zephyr and Mako appeal, seeking reversal of the court’s reduction in
damages, restoration of the jury’s award, reversal of the attorney fees and costs award,
and reversal of the prejudgment interest award. West Coast cross-appeals, challenging
the trial court’s statutory interpretation and jury instructions. We shall affirm the
judgment.
FACTUAL AND PROCEDURAL BACKGROUND
The Parties
Zephyr is a contractor specializing in earthwork. Until August 9, 2008, Steven
Cruz owned 50 percent of Cruz Excavating, Inc. (Cruz Excavating), which in 2009
formally changed its name to Zephyr. Scott Freidus was Zephyr’s president.
2
Mako is an investment management company. Zephyr assigned its claims to
Mako, its creditor, since Zephyr did not have the resources to pursue the claims.
West Coast as a general contractor specializes in putting together a team of
subcontractors in order to manage and complete construction projects. Mario and
Andrew (Andy) Ramirez are the owners as well as the president and vice-president,
respectively, of West Coast.1
Fidelity issued West Coast’s payment bond.
The Project
In 2009 the County solicited bids for the Lake Forest Erosion Control Project
(Project). The Project’s goal was to reconstruct a native stream bed. The stream
restoration sought to mitigate erosion and other damage caused by development along the
stream bed.
The project was subject to regulations of the Tahoe Regional Planning Agency
(TRPA), which required work on the Project to stop between October 15 and May 1 each
winter.
Bidding Process
The parties disagree on how the contract for the Project was awarded. West Coast
contends its superintendent, Mark Rosa, found the Project on the Reno Builders
Exchange and the company ultimately submitted a bid. Around this time Andy and
Freidus began discussing the Project. Since Zephyr lacked the qualifications to submit as
general contractor, Freidus offered to team up with West Coast and serve as a
subcontractor. Mario and Freidus met prior to preparing the bid. Payments from
contracting agencies may lag for several months after the performance of labor, so
Freidus stated he would need help funding payroll; Mario knew by then that Zephyr
1 Since Mario and Andy Ramirez share the same last name, we will refer to them by
their first names.
3
could not post payment and performance bonds. Mario was not concerned because the
inability to obtain subcontractor bonding is not necessarily indicative of poor financial
stability. Mario, who had previously advanced payroll for other subcontractors, agreed to
do the same for Zephyr even though it was not required by the subcontract.
Freidus was in the room while West Coast prepared its bid on the Project, a
practice which helped in improving bidding accuracy. West Coast never formed a joint
partnership or joint venture with Freidus or Zephyr. Freidus never requested such a
partnership. A joint partnership or joint venture with a subcontractor would violate the
terms of West Coast’s bond. None of the Project documents refer to Zephyr as a partner
or to the Project as a joint venture.
In contrast, Freidus testified Zephyr usually bids projects as a general contractor.
West Coast lacked the experience and expertise Zephyr possessed. However, due to
financial difficulties, Zephyr could not obtain the necessary bonds and lacked the
working capital necessary to fund the job. Therefore, Zephyr brought the project to West
Coast.
Zephyr informed West Coast that Zephyr’s financial difficulties prevented it from
both obtaining a bond and possessing the working capital to undertake the Project as the
general contractor. The parties agreed to team up together to win the Project, with West
Coast bidding the Project as general contractor. This “teaming” reflected the parties’
fiduciary relationship, a relationship that existed in addition to a joint venture relationship
and partnership relationship. Prior to bidding on the project Zephyr and West Coast
exchanged confidential, proprietary cost data concerning specific items in the bid.
According to both Freidus and Andy, in a typical subcontractor/general contractor
relationship, only final prices on items would be exchanged, not underlying cost data.
Zephyr states it determined how to bid on every single item in the bid, not just
items it was responsible for but also West Coast’s work and that of other subcontractors.
In addition, Zephyr was the only subcontractor present in West Coast’s “war room.”
4
In August 2009 West Coast submitted a bid for $2,595,958.75 to complete the
Project. The County awarded the project to West Coast, with Zephyr as the
earthwork/utilities subcontractor. After the award, West Coast secured Project bonding
and signed a contract with the County. West Coast did not require Zephyr to obtain a
bond; Fidelity posted a bond guarantying West Coast’s obligation to Zephyr.
The Subcontract Agreement
In September 2009, before work on the Project started, West Coast sent Zephyr a
written subcontract agreement. Again, the parties disagree on subsequent events.
West Coast states Zephyr did not object to the agreement on the ground that it was
a partner or joint venturer with West Coast. Instead, Freidus put aside the agreement and
Zephyr began work. Freidus, after work began, mentioned in passing to West Coast’s
project manager’s assistant that there were problems with the subcontract that needed to
be discussed. However, Freidus never discussed his concerns or proposed an alternative
agreement. Zephyr continued work on the project.
At trial, Andy testified West Coast never agreed to provide working capital to
Zephyr or to create a relationship beyond that of contractor/subcontractor. Andy believed
the written subcontract agreement constituted the agreement between Zephyr and West
Coast for the Project.
Zephyr acknowledges that West Coast sent it a subcontractor agreement in
September 2009. However, Zephyr contends the proposed form varied from and
conflicted with the parties’ “teaming agreement.” The proposed form required Zephyr to
post bonds and provided for termination based on financial condition and failure to
provide bond. Therefore, Freidus did not sign the document and notified West Coast
about the problems with it. Neither party signed the document.
Substitution of a Subcontractor
Central to the dispute between the parties is the Subletting and Subcontracting Fair
Practices Act (Act; Pub. Contract Code, § 4100 et seq.), which requires County approval
5
for substitution of a subcontractor on a public works contract.2 The Act provides, in part:
“Prior to approval of the prime contractor’s request for the substitution, the awarding
authority, or its duly authorized officer, shall give notice in writing to the listed
subcontractor of the prime contractor’s request to substitute and of the reasons for the
request. The notice shall be served by certified or registered mail to the last known
address of the subcontractor.” (§ 4107, subd. (a)(9).) It is the final sentence that provides
the bone of contention between the parties.
Work Begins
Zephyr began work on the Project without a bond and without signing West
Coast’s subcontractor agreement. The Project is inside the Lake Tahoe Basin and subject
to TRPA regulations. Under these regulations, the Project was shut down between
October 15, 2009, and May 1, 2010.
Zephyr worked on the Project from September 16, 2009, through October 15,
2009, the winter shut-down date. Dissatisfied with Zephyr’s performance, West Coast
sent Zephyr a “48-Hour Notice to Cure,” requiring the subcontractor to adequately
supervise the Project. Once again, the parties disagree strongly about what followed.
Zephyr’s Version of Events
Zephyr contends West Coast’s complaints were resolved prior to winterization,
and both the County and West Coast approved its work. The Project was on schedule.
The County paid West Coast $249,741.28 and $67,445.95 for the work Zephyr
performed. The total value of Zephyr’s work was $317,187.23.
According to Zephyr, West Coast withheld funds from Zephyr despite being aware
of the potential harm to Zephyr. West Coast never made any payment to Zephyr other
than advances for net payroll. Zephyr repeatedly urged West Coast to release some funds
2 All further statutory references are to the Public Contract Code unless otherwise
designated.
6
or pay some of its obligations. West Coast’s refusal to reimburse Zephyr for work
performed weakened the subcontractor’s already shaky financial condition.
Freidus told Andy, one of West Coast’s owners, that Zephyr would not be able to
remain in business throughout the winter without any money coming in. Andy
acknowledged that West Coast’s withholding of money exacerbated Zephyr’s financial
condition.
After West Coast withheld Zephyr’s progress payment, Zephyr could not pay its
workers’ compensation insurance premiums and the license bond lapsed. Zephyr was
unable to pay for its general liability insurance and was sued by its fuel supplier for
nonpayment. West Coast refused Zephyr’s request that West Coast pay Zephyr’s
insurance premium.
Zephyr also asked West Coast to pay outstanding union contributions, and West
Coast supplied two checks. According to Zephyr, West Coast later voided the checks and
the union was not paid. West Coast failed to inform Zephyr, which incurred penalties
and interest. Subsequently, the union sued Zephyr.
Prior to Christmas, Freidus asked Andy to release $10,000 of Zephyr’s funds so
employees could be paid before the holiday. Andy refused. Freidus laid off Zephyr’s
office staff.
West Coast paid some of Zephyr’s debts. After deducting the amounts advanced
to Zephyr, West Coast retained $194,146.87 of the money the County paid for work done
by Zephyr. In addition, Zephyr spent $10,848 for an approved change order and $15,000
for equipment and materials at the job site from which Zephyr was excluded.
Mario admitted that the decision to withhold Zephyr’s funds was not connected to
the work Zephyr performed on the Project. West Coast did not give Zephyr any reason
for withholding the money from Zephyr.
West Coast calculated the costs of terminating and replacing Zephyr and kept its
calculations secret from the subcontractor. Based on those calculations, West Coast
7
made the decision to terminate Zephyr before December 2009. West Coast did not
inform Zephyr of its decision to terminate the subcontractor.
West Coast led Zephyr to believe that it would allow Zephyr to finish work on the
Project. Mario met with Freidus in February 2010. Mario encouraged Freidus to stop
using union employees because the union rules created inefficiencies. Freidus told Mario
that the only way Zephyr could cease its union involvement would be to file for
bankruptcy and then form a new nonunion company. Zephyr considered bankruptcy only
to satisfy Mario’s desire to break the union contracts. Freidus believed West Coast had
all the money and all the power.
Mario knew that Freidus was in the process of forming the new company. Freidus
subsequently formed DM Excavating in February 2010 and applied for a contractor’s
license. Andy knew about the new company in March 2010.
During these conversations, West Coast never informed Zephyr that it had already
decided to terminate the subcontractor. At the same time, West Coast was accepting bids
from the company with which it eventually replaced Zephyr. Mario ceased
communications with Freidus. The pair never spoke directly and Mario did not return
Freidus’s phone calls. Nor did Andy communicate with Freidus.
On March 4, 2010, West Coast notified Zephyr by letter that Zephyr’s financial
condition had become “unstable or unsatisfactory” and demanded “additional security, in
the form of a bond approved by West Coast’s bonding agent.” Freidus believed the letter
was a precursor to West Coast’s transferring work to a nonunion subcontractor,
DM Excavating. A week later, on March 11, 2010, West Coast sent a letter terminating
the contract.
On March 17, 2010, Freidus sent Mario an e-mail stating “[e]verything is still as
discussed. . . . [¶] . . . [¶] I have many of the same people coming back to do the work -
they have agreed to work outside of the Union. . . [.]” After receiving no response,
Freidus repeatedly telephoned West Coast, left messages, sent e-mails, and visited the
8
West Coast offices a couple of times a week. After receiving an e-mail from West Coast,
Freidus called the West Coast office and was told Zephyr would not be allowed to finish
the Project and someone else had been hired.
Zephyr contends that but for West Coast’s withholding of payment for work
performed, Zephyr’s financial condition had improved from the beginning of the Project
up until termination. According to Zephyr, its financial difficulties had been successfully
addressed by March 2010. Zephyr had a receivable of about $265,000 for work
performed on the Project. At trial, Freidus testified that had West Coast reimbursed
Zephyr for the work performed, it “absolutely would have made it through the winter” as
that amount “of liquid cash would have been probably more money” than Zephyr had had
going into any of seven or eight other winters.
Prior to its termination, Zephyr had access to over $1 million dollars in equipment
and additional financing from alternative capital sources. These sources, which included
Mako, had loaned more than $700,000 over 10 years. Termination by West Coast meant
these sources would not be able to make further loans. West Coast’s refusal to allow
Zephyr to finish the job and the withholding of payment for work performed extinguished
any potential collateral Zephyr could have used to borrow funds.
On March 30, 2010, pursuant to section 4107, West Coast wrote to the County
informing it that Zephyr would no longer be a subcontractor and stating that Zephyr
would be substituted with Marv McQueary Excavating (McQueary). West Coast did not
inform Zephyr of its intentions, nor did it forward a copy of the letter. West Coast cited
”Public Contract Code 4107 . . . subsections 4107 paragraphs 2 and 4” as the reasons for
substituting Zephyr: subcontractor has become insolvent or failed to provide a bond.3
3 West Coast was actually referring to section 4107, subdivision (a)(2) and (4).
9
On April 20, 2010, the County sent a letter to Zephyr giving Zephyr five working
days in which to submit written objections to West Coast’s request to substitute Zephyr,
the submission of which would trigger a hearing. Zephyr never received the notice.
Zephyr had closed its post office box and the notice was returned to the County as
undelivered and undeliverable. West Coast received a copy of the letter and knew that
the notice to Zephyr had been returned undelivered. If Zephyr had known of this notice,
it would have objected and requested a hearing.
West Coast’s Version of Events
As work progressed, West Coast advanced Zephyr’s net payroll, leaving the
subcontractor to pay employer’s taxes, union benefits, and other payroll expenses. This
delayed the County’s initial payment to West Coast until long after the 2009 work had
been completed.
In late 2009 Freidus met with Andy and disclosed some of Zephyr’s financial
problems. Andy worried that Zephyr might not be capable of completing the Project and
might not survive during the scheduled winter shutdown. Documentation provided by
Freidus revealed Zephyr’s debts and overhead far exceeded the amounts due to it for the
work performed in 2009. With each meeting between the two, Zephyr’s financial picture
appeared to worsen.
In December 2009 Freidus stated Zephyr would file for bankruptcy protection,
which Zephyr’s attorney confirmed. On December 7, 2009, Zephyr’s workers’
compensation insurance was canceled for nonpayment of the premium. As a result, the
Contractors State License Board suspended Zephyr’s license in January 2010.
When West Coast received the initial progress payment from the County on
December 7, 2009, it knew the subcontractor was failing and that Zephyr’s failure to pay
its Project-related bills would damage West Coast. West Coast also received notice from
vendors and unions that Zephyr was not paying its bills. Zephyr and West Coast met to
discuss whether the contractor would release payments to the subcontractor.
10
Subsequently, West Coast cut two checks: one for $23,528.04 to the Operating
Engineers Trust Funds and Cruz Excavating, and one for $29,476.44 to the CA 185
Laborers Union and Cruz Excavating. West Coast intended to send the checks to the
respective unions but learned Zephyr was attempting to burden the Project with
obligations arising from other work.
Prior to receiving the first progress payment from the County, West Coast
advanced Zephyr’s net payroll. The increased costs of substituting Zephyr exceeded the
amount Zephyr claimed due for work it had performed.
On December 31, 2009, West Coast received the County’s second progress
payment. Instead of paying Zephyr, West Coast withheld the funds and started paying
claims from Zephyr’s vendors, employees, and unions. Freidus understood the reason for
withholding the funds.
In the first six months of 2010 West Coast paid $34,347.90 in claims from
Zephyr’s vendors and employees, including payroll checks that had been returned for
insufficient funds and union contributions. The County withheld $158,000 from West
Coast’s final payment because Zephyr had failed to pay its unions.
In January 2010 the Internal Revenue Service recorded a $110,094 lien against
Zephyr for failure to pay payroll taxes. The following month, a vendor obtained a
judgment against Zephyr for $24,642 plus attorney fees and costs, and Zephyr lost its
licensing bond. Zephyr’s California license had already been suspended for failure to
maintain workers’ compensation insurance. Various Nevada state agencies also obtained
judgments against Zephyr.
According to Freidus, Zephyr ceased operations on December 7, 2009, and had no
work after that date. Freidus decided to file for bankruptcy, testifying: “I was talking
about a reorganization of our debt to potentially renegotiate with all my creditors. So
going into a Chapter 11 bankruptcy gives a little guy like me some leverage against these
big creditors. Otherwise I don’t have any. . . .”
11
By February 13, 2010, Freidus realized West Coast was going to terminate and
substitute Zephyr. On March 4, 2010, West Coast formally requested evidence from
Zephyr that it had the financial ability to continue work on the Project, that it had a valid
contractor’s license bond, and that it had a valid workers’ compensation certificate.
Zephyr received the letter but never complied with West Coast’s requests.
West Coast terminated the subcontract agreement with Zephyr on March 11, 2010.
West Coast sent the termination letter to Zephyr at P.O. Box 3269, Incline Village,
Nevada. Freidus signed the certified mail receipt for the termination letter and did not
object to the termination. On March 17, 2010, Freidus told West Coast that “Zephyr will
be filing a chapter 7 bankruptcy petition in the next 4-6 weeks.” After West Coast
confirmed Freidus had received its termination letter, it informed the County of the
termination and requested substitution of McQueary as the subcontractor.
On April 20, 2010, the County sent a notice of substitution to Zephyr at the same
P.O. Box 3269 in Incline Village, Nevada, the address used by Zephyr in its original bid
and the post office box listed on its contractor’s license. The letter was not returned
undeliverable for an improper address. It was returned because Zephyr did not sign for or
claim the letter.
Initial Complaint
In January 2011 Zephyr filed suit in Nevada against West Coast, alleging, among
other claims, breach of written contract. Zephyr voluntarily dismissed the suit and
assigned its claims to Mako.
In May 2011 Mako filed suit against West Coast and Fidelity, claiming statutory
violations, breach of oral contract, and various common law claims. West Coast filed a
cross-complaint against Cruz Excavating, alleging breach of subcontract and asserting a
claim for indemnity. West Coast filed a first amended cross-complaint, changing the
cross-defendant from Cruz Excavating to Zephyr.
12
Mako and Zephyr moved for summary adjudication in favor of Mako and
summary judgment or, in the alternative, summary adjudication in favor of Zephyr. The
court denied the motion, finding triable issues of fact as to whether Zephyr had a valid
contractor’s license and as to whether West Coast’s unsigned form governed the parties’
agreement.
Trial
Trial began in November 2012. Mako filed for leave to amend its complaint to
allege that West Coast orally agreed to a partnership or joint venture with Zephyr. The
trial court denied the motion, finding Mako failed to demonstrate why it had failed to
amend sooner and that such an amendment would be highly prejudicial to West Coast.
The court allowed Mako to amend its complaint to allege causes of action for breach of
fiduciary duty, breach of partnership, breach of joint venture, and breach of the covenant
of good faith and fair dealing.
Motion for Nonsuit
At the close of evidence, defendants West Coast and Fidelity moved for nonsuit on
Mako’s claim that West Coast violated the Act by wrongfully terminating and
substituting Zephyr and that West Coast was negligent. The trial court granted the
motion. The trial court denied defendants’ motion for nonsuit with respect to intentional
interference with prospective economic advantage and negligent interference with
prospective economic advantage.
Jury Verdict
The jury found for Mako on its claims that West Coast violated prompt pay
statutes by withholding funds from Zephyr’s progress payment and of breach of oral
contract, breach of implied contract, conversion, common count, breach of fiduciary duty,
breach of joint venture, breach of partnership, and bad faith. The jury awarded Mako
compensatory damages of $915,045. The jury found defendants acted with fraud,
oppression, or malice and awarded $638,422 in punitive damages, for a total award of
13
$1,553,467. In addition, the jury ruled in favor of Zephyr on all causes of action in West
Coast’s cross-complaint, including the breach of contract claim, and found Zephyr’s
license was valid.
The jury deadlocked on Mako’s claims for negligent and intentional interference
with prospective economic relations. The parties submitted these claims to the trial court,
which ruled against Mako. The trial court also ruled against Mako on its causes of action
for unfair competition and unjust enrichment.
Posttrial Motions
West Coast and Fidelity moved for judgment notwithstanding the verdict and for a
new trial. The trial court ruled in favor of defendants, reducing the damages to Mako to
$220,045 and granting a new trial. The court observed: “As a side comment, this court
notes it has never granted a motion for [judgment notwithstanding the verdict] or for new
trial in the scores and scores of jury trials it has heard. This case is the exception. In the
court’s opinion and assessment of the evidence, the jury got it wrong this time. It appears
likely the jury simply did not care for Mr. Ramirez, and it was so reflected in their
verdicts. Nonetheless, the evidence does not in any way, shape or form justify a legally
valid award of damages for lost profits, or for punitive damages . . . .”
Mako moved for prejudgment interest under Civil Code section 3287,
subdivision (a). The trial court awarded prejudgment interest for the work actually
performed by Zephyr but denied interest on the unliquidated lost profits and materials left
on the site.
Mako and Zephyr moved for $904,823.55 in fees and costs. The trial court
awarded $282,915 in attorney fees and $35,859.85 in costs.
The court entered judgment. The parties filed timely notices of appeal.
14
DISCUSSION
MAKO AND ZEPHYR’S APPEAL
Plaintiffs appeal from the trial court’s granting of the judgment notwithstanding
verdict on the basis that the substitution of Zephyr did not violate the Act and the
resulting vacation of future lost profits and punitive damages. Mako and Zephyr argue
Zephyr never received the County’s notice that West Coast had requested to substitute
the subcontractor. In addition, Mako and Zephyr contend a review of Zephyr’s financial
condition reveals it was capable of completing the Project and West Coast promised to
provide financing to this end. Mako and Zephyr challenge the trial court’s rulings on
attorney fees and costs.
Substitution of Zephyr
Standard of Review
Code of Civil Procedure section 629 provides, in part: “The court, before the
expiration of its power to rule on a motion for a new trial, . . . shall render judgment in
favor of the aggrieved party notwithstanding the verdict whenever a motion for a directed
verdict for the aggrieved party should have been granted had a previous motion been
made.”4 In ruling on a motion for a judgment notwithstanding the verdict, the trial court
may not reweigh the evidence or judge the credibility of witnesses but must instead read
the record in the light most favorable to the jury’s determination. (Stubblefield
Construction Co. v. City of San Bernardino (1995) 32 Cal.App.4th 687, 703.)
The trial court’s power to grant a motion for judgment notwithstanding the verdict
is identical to its power to grant a directed verdict. In ruling on the motion, the court
must accept as true the evidence supporting the jury’s verdict, disregarding all conflicting
evidence and drawing every legitimate inference in support of the judgment. The motion
4 Statutes 2014, chapter 93 designated the existing paragraphs of section 629 as
subdivisions (a) through (d). The text quoted here is now in subdivision (a).
15
may be granted only when the verdict lacks support as a matter of law. (Tognazzini v.
San Luis Coastal Unified School Dist. (2001) 86 Cal.App.4th 1053, 1057-1058; see
Gillan v. City of San Marino (2007) 147 Cal.App.4th 1033.) The court may grant a
partial judgment notwithstanding the verdict when a party establishes that some discrete
aspect of the verdict, involving a particular cause of action or claim for damages, is either
unsupported by the evidence or contrary to law. (Beavers v. Allstate Ins. Co. (1990)
225 Cal.App.3d 310, 314, 323.)
The Act
The Act provides that once the general contractor lists a subcontractor in its public
works bid, the general contractor is prohibited from replacing the subcontractor except
under limited circumstances and with prior approval of the public agency. (§ 4107,
subd. (a).) The purpose of the Act is to protect both the public and subcontractors from
the evils of bid shopping and bid peddling subsequent to the award of a contract for a
public project. Under the Act, the grounds for substitution are “keyed to the
unwillingness or inability of the listed subcontractor properly to perform.” (Southern
Cal. Acoustics Co. v. C. V. Holder, Inc. (1969) 71 Cal.2d 719, 726 (Southern Cal.
Acoustics).) If a named subcontractor is wrongfully removed or substituted, the
subcontractor has a private right of action against the prime contractor to recover the
benefits of the wrongfully terminated subcontract. The subcontractor can recover such
damages even if the substitution is approved by the awarding authority as long as the
basis for approval is unauthorized. (Id. at pp. 726-727; Affholder, Inc. v. Mitchell
Engineering, Inc. (2007) 153 Cal.App.4th 510, 517-518 (Affholder).)
A prime contractor may only seek substitution of a listed subcontractor under
certain, specified circumstances, including “[w]hen the listed subcontractor becomes
insolvent or the subject of an order for relief in bankruptcy” and “[w]hen the listed
subcontractor fails or refuses to meet the bond requirements of the prime contractor as set
forth in Section 4108.” (§ 4107, subd. (a)(2), (4).)
16
As previously noted, under section 4107, subdivision (a), prior to approval of the
prime contractor’s request to substitute a subcontractor, the awarding authority must give
notice in writing to the subcontractor about the request to substitute. “The notice shall be
served by certified or registered mail to the last known address of the subcontractor. The
listed subcontractor who has been so notified has five working days within which to
submit written objections to the substitution to the awarding authority. Failure to file
these written objections constitutes the listed subcontractor’s consent to the substitution.”
(§ 4107, subd. (a).)5
Notice to Zephyr
The following facts are undisputed. In March 2010 West Coast notified the
County of its desire to substitute Zephyr under section 4107, subdivision (a)(2) and (4),
cited above. On April 20, 2010, the County served notice by certified or registered mail
to the last known address of the subcontractor. Although both West Coast and the
County complied with the Act, it is also undisputed that Zephyr did not receive the
notice. As a consequence, Zephyr did not file written objections to the County’s notice
or in any way contest the substitution. The County permitted West Coast to substitute
Zephyr with another subcontractor.
Discussion
Mako and Zephyr argue the trial court’s construction of “the Act as allowing a
complete bar to a final adjudication of valuable substantive rights based solely on lack of
response to [a] single mailed notice, known not to be received by the addressee, violates
due process. The trial court’s basis for granting nonsuit was error as a matter of law.”
According to Mako and Zephyr, the Act requires actual notice. In the alternative, they
5 We grant Mako’s request for judicial notice filed on April 28, 2014.
17
contend, even if Zephyr is “deemed” to have notice and consented to the substitution, any
consent was procured by West Coast’s wrongful and fraudulent conduct.
In arguing section 4107 requires actual notice, Mako and Zephyr analogize the
substitution notification to “an initial summons in that it first gives notice of a legal
proceeding that affects a party’s important rights.” Mako and Zephyr conclude: “The
Act should be interpreted for a subcontractor who has not filed written objections as
consenting to substitution only for those subcontractors who have actually received
notice, or at least where there has been reasonable diligence for the party to receive
notice. If the Act is not interpreted in this manner, then it is unconstitutional as depriving
a party of due process.”
We disagree. In Affholder the appellate court rejected a similar challenge to
section 4107, holding: “Here, Mitchell [the defendant prime contractor] requested and
obtained a determination from the district that the change order relieved it of its statutory
obligations to Affholder [the plaintiff subcontractor]. Affholder did not challenge that
administrative determination. It may be, as Affholder suggests, that it did not receive
proper notice of Mitchell’s request or of the district’s determination, but any procedural
requirements that might be applicable (see § 4107, subd. (a)), are the responsibility of the
district, not Mitchell. [Citation.] Affholder made no attempt to challenge the
administrative determination on either procedural or substantive grounds. Assuming that
the determination should be construed as authorizing the ‘substitution’ of Affholder,
Affholder failed to exhaust its administrative remedies and the propriety of the
substitution must be taken as established.” (Affholder, supra, 153 Cal.App.4th at
pp. 521-522, fn. omitted.)
By its express terms, section 4107 only requires that the awarding authority serve
notice by certified or registered mail; it does not require that the County or West Coast
seek out the subcontractor to assure Zephyr knew of its right to object to the substitution.
As the trial court noted: “Nor does the statute mandate that a subcontractor that has
18
closed its post office box be provided different or better notice than a subcontractor who
elects to check its mail or keep its post office box open. As the court noted at the hearing
on the nonsuit motion, that Zephyr did not actually receive the notice from Placer County
was a problem of Zephyr’s own making. Nor is it relevant, in the court’s view, whether
Freidus/Zephyr intentionally refused to pick up his certified mail, whether he
inadvertently failed to do so, or whether West Coast suspected the County’s letter would
not be retrieved by Zephyr. What is relevant is that the legal effect of the County’s
compliance with the Act by mailing notice to Zephyr, and Zephyr’s failure to file
objections to West Coast’s proposed replacement of it as a subcontractor, is clear:
Zephyr’s failure to file written objections ‘constitutes the listed subcontractor’s consent
to the substitution’ [citation; italics added by trial court] and the ‘propriety of the
substitution must be taken as established’ [citation].”
We agree with the trial court’s assessment of the facts. “We must assume that in
creating the procedure in section 4107, the Legislature intended that the results thereof
should be binding on the parties unless found to be erroneous and set aside by a court of
review.” (Interior Systems, Inc. v. Del. E. Webb Corp. (1981) 121 Cal.App.3d 312, 318.)
Here, the procedure set forth in section 4107 was fully complied with. If we were to
follow Zephyr’s reading of the statute, a subcontractor could ignore the administrative
process outlined in the statute and pursue nonstatutory or tort claims against the prime
contractor even when those claims are based on the alleged wrongful substitution of the
subcontractor. Section 4107 provides a binding administrative process that precludes
such claims when complied with.
However, Mako and Zephyr argue, if a subcontractor is wrongfully removed or
substituted for a reason not authorized by statute, the subcontractor has a private right of
action against the prime contractor to recover the benefits of the wrongfully terminated
subcontractor. The subcontractor can bring an action for damages even if the substitution
is approved by the awarding authority as long as the basis for the approval is
19
unauthorized. In support, Mako and Zephyr rely on Southern Cal. Acoustics, supra,
71 Cal.2d 719.
In Southern Cal. Acoustics, a subcontractor submitted a telephone bid to a general
contractor to install ceiling tiles on a public construction job in a school district. The
general contractor listed the plaintiff subcontractor on the bid. The general contractor
then sought permission from the school district to substitute on the ground that the
plaintiff had been inadvertently listed as the subcontractor in place of the intended
subcontractor. The school district allowed the substitution. (Southern Cal. Acoustics,
supra, 71 Cal.2d at pp. 721-722.) The Supreme Court held that the plaintiff
subcontractor had a cause of action against the general contractor for violating the Act if
the general contractor sought substitution for an invalid reason. The Southern Cal.
Acoustics court stated: “we hold that [the Act] confers the right on the listed
subcontractor to perform the subcontract unless statutory grounds for a valid substitution
exist.” (Id. at p. 727.) The court in Affholder distinguished Southern Cal. Acoustics,
noting that in Southern Cal. Acoustics the substitution was made on a ground clearly
unauthorized by section 4107 and not within the awarding authority’s discretion. In
Affholder, the district had the authority to define and modify the scope of the contract bid
items. There was no evidence the district acted in bad faith. (Affholder, supra,
153 Cal.App.4th at p. 520.)
Subsequent to Southern Cal. Acoustics, section 4107 was amended to state:
“Failure to file these written objections constitutes the listed subcontractor’s consent to
the substitution.” (§ 4107, subd. (a.).) Affholder also discussed Southern Cal. Acoustics
in relation to the amendment of the Act: “Subsequent to the decision in [Southern Cal.
Acoustics], section 4107, subdivision (a) was amended to provide for a hearing before the
awarding authority if a listed subcontractor objects to a substitution. [Citation.] As the
statute now reads, ‘Failure to file these written objections constitutes the listed
subcontractor’s consent to the substitution.’ (§ 4107, subd. (a).) In Interior Systems,
20
Inc. v. Del E. Webb Corp. [(1981)] 121 Cal.App.3d [312,] 317-319, the court explained
that the awarding authority ‘had the initial jurisdiction and authority to decide whether
the facts warranted granting respondent permission to substitute. There was no challenge
or effort to review that permission. As a result, the trial court was entitled to presume
that [the awarding authority] obeyed the law and performed its legal duty. The
unavoidable conclusion is that . . . [the originally listed subcontractor] may not maintain
an action against the prime contractor.’ [Citation.] ‘We must assume that in creating the
procedure in section 4107, the Legislature intended that the results thereof should be
binding on the parties unless found to be erroneous and set aside by a court of review.
Here appellant never sought such review or to otherwise properly set aside [the awarding
authority’s] administrative finding and determination allowing respondent to substitute.
The [A]ct has created a quasi-judicial remedy in the form of a hearing before the
awarding authority to determine whether proper grounds exist under the act for
substitution. Thus, we have at bench a case where: “The administrative tribunal is
created by law to adjudicate the issue sought to be presented to the court. The claim or
‘cause of action’ is within the special jurisdiction of the administrative tribunal, and the
courts may act only to review the final administrative determination.” ’ [Citation.]”
(Affholder, supra, 153 Cal.App.4th at p. 521.)6
Mako and Zephyr also claim that West Coast terminated Zephyr as a subcontractor
on March 11, 2010, six weeks prior to the mailing of the substitution notice. According
to Mako and Zephyr, West Coast’s “liability for wrongful termination was fixed as of
March 11, 2010, and the later substitution cannot whitewash [West Coast’s] liability for
tort and contract claims.” In support, Mako and Zephyr rely on Titan Electric Corp. v.
Los Angeles Unified School Dist. (2008) 160 Cal.App.4th 188 (Titan).
6 Except for bracketed citations, all bracketed text added by Affholder.
21
In Titan, a general contractor petitioned under section 4107 to substitute a
subcontractor. However, the general contractor replaced the subcontractor before the
district had consented to the substitution. The subcontractor argued that under
section 4107, subdivision (b) the district lacked the authority to consent to the
substitution after another subcontractor had completed the work. (Titan, supra,
160 Cal.App.4th at p. 203.) The appellate court disagreed, finding: “Although
section 4107 contemplates that the awarding authority’s consent to substitution and
approval of a replacement subcontractor will occur before the replacement performs the
subcontract, a deviation from this procedure is valid so long as the procedure used
actually complies in substance with the reasonable objectives of the statute. Here, such
substantial compliance occurred.” (Titan, at p. 203.)
In Titan, the subcontractor received the notices of the substitution and requested
hearings. The hearings were postponed to accommodate settlement talks. Subsequently,
following administrative hearings, the district granted the substitution requests. During
this process, the general contractor replaced the subcontractor and the work proceeded.
(Titan, supra, 160 Cal.App.4th at pp. 197-200.) The appellate court reviewed the record,
found the district complied in substance with the procedural requirements of the statute,
and further found no evidence of bid shopping or any other evil the statute sought to
avoid. (Id. at pp. 204-208.) Here, the procedural requirements of section 4107 were met
and Zephyr has presented no evidence of bid shopping or other irregularities at odds with
the reasonable objectives of the statute. Zephyr failed to respond to the notice of
substitution, which precluded any further hearings.
The trial court concluded that “[i]n this case, the procedure mandated by statute
that allows for substitution of subcontractor Zephyr was engaged and followed. The
results of this compliance with statute include that West Coast was permitted to substitute
Zephyr based on statutorily-recognized grounds and that Zephyr’s failure to object
constitutes its consent to its substitution. These results are binding on the parties.
22
Allowing plaintiff to seek damages that follow the substitution to which it is deemed to
have consented, despite having failed to exhaust administrative or mandamus remedies,
would circumvent the purposes of the statute.” The failure to pursue administrative
remedies results in the administrative finding’s having a binding, preclusive effect on
claims involving the issue of Zephyr’s substitution and replacement on the Project. The
trial court’s determination is supported by both the facts and the relevant legal authority.
Punitive Damages
The jury awarded Mako punitive damages in the amount of $638,422.00. The trial
court granted a judgment notwithstanding the verdict with respect to punitive damages.
Mako and Zephyr contend the court erred in vacating the punitive damages award.
Regarding punitive damages, the court found: “In this case, the court does not
intend to simply reduce or lower an amount of punitive damages awardable to plaintiff,
but finds that there is no legal entitlement to an award of punitive damages at all.
First . . . the central component of plaintiff’s claims is that it was wrongfully substituted
on the Lake Forest Project and replaced by another subcontractor. This cannot serve as a
basis for a finding that, in effectuating the substitution, West Coast acted with malice,
oppression or fraud. This is so because the substitution of the plaintiff subcontractor by
West Coast was lawful and because, by operation of statute, Zephyr consented to the
substitution. What is left of the jury’s verdict is its finding that West Coast breached an
implied or oral contract and/or failed to make payments under the prompt payment
statutes. However, as to the breach of contract findings, punitive damages may not be
awarded. It is well settled that punitive damages are not available for breach of contract.
[Citations.] In this case, an arguable independent tort is conversion of the ‘materials left
at the job site.’ However, of the claims not eliminated by this motion, the jury found
West Coast liable for materials left at the job site, in the amount of $15,000, under the
alternative theories that the materials were provided pursuant to an implied or oral
contract or because of conversion. The same is true with respect to the jury’s finding that
23
the checks that had been endorsed jointly by West Coast and plaintiff were not signed
over to plaintiff. The jury found West Coast liable for the checks under alternative
theories of breach of contract or conversion. In the court’s view, it would not be
appropriate to allow a punitive damages award on top of the jury’s award of $205,045 for
‘work performed on the Lake Forest Job but not paid for by West Coast’ or on top of the
$15,000 the jury found owing ‘for loss of equipment and materials left on the Lake Forest
Job.’ West Coast is not liable for those amounts because of conduct that has been found
by the jury to be only [tortious], as opposed to contract-related.”
Mako and Zephyr begin by challenging the trial court’s ability to strike the
punitive damage award without a noticed motion, briefing, or argument. Mako and
Zephyr point out that defendants did not challenge the punitive damages award in the
combined motion for judgment notwithstanding the verdict and for a new trial. However,
Mako and Zephyr acknowledge that in a posttrial motion, defendants requested judgment
be entered against Mako on punitive damages. As the trial court found in its ruling on
posttrial motions, “the court is compelled to note that all of the issues raised by the
motions were raised in some form before trial, during trial and, now, after trial. Neither
side should claim it is surprised to see the arguments made by the other.”
Mako and Zephyr argue that, as a matter of law, a finding that Zephyr was not
unlawfully substituted under the Act does not bar punitive damages under other theories.
According to Mako and Zephyr, the jury found West Coast liable on other claims that
support punitive damages: breach of fiduciary duty, breach of joint venture, and breach
of partnership. These torts, Mako and Zephyr aver, independently support an award of
punitive damages. The acts supporting an award of punitive damages include West
Coast’s wrongfully withholding Zephyr’s share of Placer County’s payment for work
performed, West Coast’s secret plan to terminate Zephyr and put it out of business, and
not forwarding union checks.
24
Civil Code section 3294 provides, in 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.” (Civ. Code, § 3294, subd. (a).) Punitive damages may not be
awarded if a defendant’s oppressive, fraudulent, or malicious conduct is related to or
arises from the contract. (Doyle v. Chief Oil Co. (1944) 64 Cal.App.2d 284, 295.)
As the parties agree, a breach of contract gives rise to punitive damages only if the
conduct breaches an independent tort duty. (Cates Construction, Inc. v. Talbot Partners
(1999) 21 Cal.4th 28, 61.) “ ‘Tort damages have been permitted in contract cases where
a breach of duty directly causes physical injury [citation]; for breach of the covenant of
good faith and fair dealing in insurance contracts [citation]; for wrongful discharge in
violation of fundamental public policy [citation]; or where the contract was fraudulently
induced. [Citation.]’ [Citation.]” (Robinson Helicopter Co., Inc. v. Dana Corp. (2004)
34 Cal.4th 979, 989-990.)
We agree with the trial court’s assessment that the jury’s punitive damages award
was based on conduct that was contract related. Mako and Zephyr argue the jury found
West Coast liable for breach of fiduciary duty, breach of joint venture, and breach of
partnership and that “[e]ach of these breaches is a breach of an independent tort, any one
of which alone would support the jury’s award of punitive damages.” However, Mako
and Zephyr fail to explain why these torts are independent from the underlying contract
between the parties.
Mako and Zephyr contend the prompt payment statutory penalty does not bar
additional punitive damages. According to Mako and Zephyr, the trial court’s finding to
the contrary is error as a matter of law. The court determined “punitive damages are not
appropriate for a violation of the prompt payment statutes because the statutes already
contain a specific punitive feature - plaintiff will be entitled to recover statutory penalties
25
for West Coast’s failure to timely make payments for work and materials provided by
Zephyr.”
The prompt payment statute includes a 2 percent per month penalty to be assessed
by the court after the verdict. (Bus. & Prof. Code, §§ 7107, 7108.5; Pub. Contract Code,
§ 10262.5.) Mako and Zephyr characterize the statutory penalty as remedial, not
punitive, quoting dicta from Washington Internat. Ins. Co. v. Superior Court (1998)
62 Cal.App.4th 981. (“Although we need not reach this issue, we note that the ‘interest
penalty’ appears to be more in the nature of reimbursement . . . .” (Id. at p. 991, fn. 5.)
However, the rule is clear and straightforward: “a plaintiff cannot recover both
punitive damages and statutory penalties, as this would constitute a prohibited double
penalty for the same act.” (De Anza Santa Cruz Mobile Estates Homeowners Assn. v.
De Anza Santa Cruz Mobile Estates (2001) 94 Cal.App.4th 890, 912.) Awarding Mako
punitive damages in addition to the damages under the prompt payment statute would
punish West Coast twice.
Trial Court’s Grant of a New Trial
Mako and Zephyr argue the trial court erred in granting, in the alternative, a new
trial. In making this claim, Mako and Zephyr incorporate their arguments against the
judgment notwithstanding the verdict: that “the trial court erroneously construed the Act
when it held a subcontractor who does not contest the substitution is deemed to ‘consent’
to the substitution and that consent bars any other common law tort or contract claims
against the prime contractor.” We have considered Mako and Zephyr’s claim and found
it wanting.
Prejudgment Interest on Damages for Lost Profits
In a related claim, Mako and Zephyr contend the trial court erred in denying
prejudgment interest on damages for lost profits on the Project. Mako and Zephyr
challenge the trial court’s conclusion that Zephyr’s lost profits on the Project were not
liquidated.
26
“Every person who is entitled to recover damages certain, or capable of being
made certain by calculation, and the right to recover which is vested in him upon a
particular day, is entitled also to recover interest thereon from that day . . . .” (Civ. Code,
§ 3287, former subd. (a).) “The primary purpose of an award of prejudgment interest is
to compensate the plaintiff for the loss of use of money during the period before the entry
of judgment, in order to make the plaintiff whole.” (Uzyel v. Kadisha (2010)
188 Cal.App.4th 866, 919.) We review the denial of section 3287 prejudgment interest
de novo. (Tenzera, Inc. v. Osterman (2012) 205 Cal.App.4th 16, 21.)
The trial court, in denying prejudgment interest, found: “The court determined in
its ruling on defendants’ motion for [judgment notwithstanding the verdict] that plaintiff
is not entitled to recover for lost profits claimed on the Lake Forest Project and, therefore,
prejudgment interest cannot be awarded as to this claim. Even so, the damages claimed
for lost profits on the project were not liquidated. The court notes that the original
complaint alleged lost profits of $548,123.10 while the First Amended Complaint alleged
lost profits of $484,992. The amount of this claim could not be readily ascertained, and it
took a trial and the presentation of evidence to determine the amount to which plaintiff
might have been entitled, had the court not determined subsequently, as a matter of law,
that plaintiff is not entitled to recover for loss of profits.”
We find the trial court appropriately refused to award Mako lost profits for the
Project. Therefore, the court also correctly concluded Mako was not entitled to
prejudgment interest on lost profits. We need not address the question of liquidated
damages.
Mako and Zephyr also claim the court erred in not awarding prejudgment interest
on damages for loss of equipment and materials left on the job site. The jury awarded
Mako $15,000 for damages for loss of equipment and materials; Mako and Zephyr
contend Mako is entitled to prejudgment interest calculated on the principal amount of
27
$15,000 at an interest rate of 10 percent per annum from March 11, 2010, until entry of
judgment.
The trial court found: “Plaintiff’s request for an award of prejudgment interest on
the $15,000 awarded by the jury for equipment and materials left at the Lake Forest job
site is denied. Plaintiff has not shown that the materials and equipment left on the project
site can be characterized as liquidated damages. Although the jury determined a value,
the evidence at trial concerning the value of materials and equipment left at the job site
was sketchy. These damages could not be readily ascertained. The materials consisted of
miscellaneous piping, fencing materials, pine needles, rock and other items.”
Mako and Zephyr argue the materials at issue included “eighteen (18) pieces of K-
rail, miscellaneous pipe, miscellaneous filter fence, fencing materials, a fuel trailer, six-
foot panels, approximately 100 yards of pine needles, steel plates, BMP supplies, and a
variety of rock,” materials capable of ascertainment by calculation. However, as the trial
court noted, the value of these various components could not be readily valued and
therefore were unliquidated.
Attorney Fees
Mako and Zephyr take issue with the trial court’s award of attorney fees.
According to Mako and Zephyr, the court erred in reducing their attorney fees to
35 percent of those requested.
The trial court determined Mako was the prevailing party. Mako filed a motion
seeking recovery of $839,158.23 in attorney fees and $65,665.32 in costs, for a total of
$904,823.55. The trial court awarded attorney fees of $282,915 and costs of $35,859.85,
for a total of $318,774.85.
The trial court is the best judge of the value of professional services rendered by
counsel in court. We do not disturb the trial court’s decision absent an abuse of
discretion. (In re Vitamin Cases (2003) 110 Cal.App.4th 1041, 1052.) The party
requesting attorney fees must show the fees were allowable, reasonably necessary to the
28
litigation, and reasonable. “Reasonable compensation does not include compensation for
‘ “padding” in the form of inefficient or duplicative efforts . . . .’ [Citations.] ‘A reduced
award might be fully justified by a general observation that an attorney overlitigated a
case or submitted a padded bill . . . .’ [Citation.]” (Donahue v. Donahue (2010)
182 Cal.App.4th 259, 271.) Any attorney fees inquiry begins with the “lodestar,” or the
number of hours reasonably extended multiplied by the reasonable hourly rate. This
figure may then be adjusted, based on factors specific to the case, in order to fix the fee at
the fair market value for the provided legal services. (PLCM Group, Inc. v. Drexler
(2000) 22 Cal.4th 1084, 1095.)
In determining the appropriate attorney fees, the court considered several factors.
First, Mako did not prevail on the vast bulk of its claims, although Mako was free to
pursue the remedies it believed applicable. However, Mako’s “election to pursue a
multitude of tort claims transformed a relatively straight-forward case into an expensive,
time-consuming litigation, ultimately requiring determination of sixteen causes of action.
By far, the vast bulk of time spent on this case is attributable to litigation of Mako’s
unsuccessful tort claims. Simply put, from the court’s perspective, the case was over-
litigated. The mole hill here was West Coast’s untimely payment under the prompt
payment statutes - from which Mako attempted to make a mountain consisting of a
multitude of tort claims. In this case, the court finds that the time necessary to prove non-
payment by West Coast amounts to a small fraction of the total time devoted by Mako to
litigating an array of claims not related to contract or statutory remedies. However,
because of the manner in which plaintiff’s counsel has billed, as described in defendants’
oppositions, it is not possible for the court to precisely apportion fees attributable to the
specific causes of action that were litigated.”
Second, the court reviewed all of Mako’s and Zephyr’s invoices for attorney
services and found the amount of time claimed not reasonable and, in many cases,
excessive and duplicative: “For example, the court does not believe it reasonable to
29
charge for over 70 hours for preparation of the complaint, or another 100 or more hours
drafting amendments. As a further example, the court finds expenditure of over sixty
hours for preparation of a motion for attorneys’ fees to be unreasonable. Many other
specific examples of unreasonable charges are cited by defendants in their respective
oppositions to the motion and will not be reiterated here, but have been considered by the
court. Additionally, many of the charges simply appear too general or vague to be
adjudged reasonable. Finally, while it is acceptable to have multiple attorneys assigned
to work on plaintiff’s case, it is not reasonable to unnecessarily duplicate services, which
appears to be the case here in many instances.” The court determined one-third of the
hours claimed by Mako and Zephyr were reasonable and awarded fees based on that
calculation.
Mako and Zephyr challenge the trial court’s reduction of attorney fees, arguing the
court erred in attempting to apportion between successful and unsuccessful claims.
According to Mako and Zephyr, all its claims “are inextricably intertwined and based
upon a common core of facts and related legal theories.”
The court found Mako did not prevail on the majority of its claims and
“transformed a relatively straight-forward case into an expensive, time-consuming
litigation, ultimately requiring determination of sixteen causes of action.” In determining
a prevailing plaintiff’s attorney fees, the extent of a plaintiff’s success is a crucial factor
for the court to consider. If the plaintiff prevailed on some claims but not others, the
court does not award fees for time spent litigating claims unrelated to the successful
claims. The court awards only that amount of fees that is reasonable in relation to the
results obtained. (Chavez v. City of Los Angeles (2010) 47 Cal.4th 970, 989.)
In addition, “[A] partially prevailing party is not necessarily entitled to all incurred
fees even where the work on the successful and unsuccessful claims was overlapping.
[Citations.] Instead, the court must consider the significance of the overall relief obtained
by the prevailing party in relation to the hours reasonably expended on the litigation and
30
whether the expenditure of counsel’s time was reasonable in relation to the success
achieved.” (Mann v. Quality Old Time Service, Inc. (2006) 139 Cal.App.4th 328, 344.)
However, the court need not apportion attorney fees when the claims for relief are so
intertwined that it would be impracticable or impossible to separate counsel’s billable
hours into compensable and noncompensable hours. (Bell v. Vista Unified School Dist.
(2000) 82 Cal.App.4th 672, 687.)
Here, the trial court found Mako prevailed on its claim of West Coast’s
withholding payment in violation of the prompt payment statute but was unsuccessful on
its numerous tort claims. However, Mako and Zephyr contend West Coast’s reason for
not paying Zephyr for work performed was its secret decision to terminate Zephyr and
use the money owed to offset expenses it anticipated to incur from the termination.
Therefore, the same evidence applied to all claims and the court erred in apportioning
fees.
We agree with the trial court’s assessment of the facts. West Coast’s failure to pay
Zephyr for work it performed was a small portion of the total litigation Zephyr pursued.
The subcontract in question only provides recovery of attorney fees relating to the
construction or interpretation of the subcontract itself. In such a case, the court may
delete time spent on unnecessary and unsuccessful claims; when a plaintiff achieves only
limited success, a reduced attorney fee award is appropriate. (Rey v. Madera Unified
School Dist. (2012) 203 Cal.App.4th 1223, 1238-1239.)
Mako and Zephyr also accuse the trial court of “arbitrarily slashing” the number of
attorney hours by two-thirds. A court abuses its discretion, they argue, when there is no
reasonable connection between the lodestar figure and the fee ultimately ordered.
Mako and Zephyr contend the court applied an “unsubstantiated” percentage of
35 percent based solely on an erroneous description of Mako and Zephyr’s degree of
success. Again, we disagree. The court considered the entire case and determined what
percentage of the attorney fees was attributable to litigating the claim for failure to pay.
31
Finally, Mako and Zephyr allege the court abused its discretion by reducing
uncontested attorney hourly rates. According to Mako and Zephyr, they submitted
detailed declarations of the experience and expertise of the attorneys, their usual hourly
rates, and a survey substantiating rates from their area.
“The objective starting point in the attorney fee analysis is the lodestar figure.
[Citation.] The lodestar figure is calculated using the reasonable rate for comparable
legal services in the local community for noncontingent litigation of the same type,
multiplied by the reasonable number of hours spent on the case.” (Nichols v. City of Taft
(2007) 155 Cal.App.4th 1233, 1242-1243.) The trial took place in Placer County. Mako
and Zephyr offered evidence of rates at large law firms in cities across the United States,
not rates applicable in the local community. We cannot find the trial court abused its
discretion in determining the reasonable rates for attorney services in Placer County.
Costs
Mako and Zephyr claim the trial court abused its discretion in reducing the amount
of costs awarded. The trial court has broad discretion to allow or deny costs, and we
reverse only if there is a clear abuse of discretion and a miscarriage of justice.
(Chaaban v. Wet Seal, Inc. (2012) 203 Cal.App.4th 49, 52.)
In essence, Mako and Zephyr echo their earlier arguments that the trial court erred
in finding Zephyr “did not prevail on the bulk of its claims and that it spent the bulk of
this case litigating unsuccessful tort claims.” As noted, we find this argument
unpersuasive and accordingly cannot find an abuse of discretion in the trial court’s
reduction of costs.
WEST COAST’S CROSS-APPEAL
In its cross-appeal, West Coast presents a single contention: the trial court erred in
instructing on the consequences of Zephyr’s failure to maintain a qualified individual.
According to West Coast, Steven Cruz, designated as responsible managing officer of
Cruz Excavating, disassociated himself in August 2008, which resulted in Cruz
32
Excavating’s license being automatically suspended in November 2008, long before the
Project began. However, West Coast asserts the trial court’s instruction to the jury made
no mention of license suspension but stated the effective date of disassociation is when
written notice is received at the licensing board’s headquarters. West Coast asserts this
was error and requests that we reverse the judgment and award West Coast its attorney
fees and costs on appeal: “Reversal based on the licensing issue renders moot all of the
issues in the appeal.”
Background
Corporations can operate as licensed contractors only through the association of a
qualified individual. (Bus. & Prof. Code, §§ 7065, subd. (c)(3), 7068, subd. (b)(3).) In
2008 Steven Cruz was the qualified individual or responsible managing officer (RMO)
for Cruz Excavating. On August 9, 2008, Steven Cruz sold his interest in Cruz
Excavating. In December 2008 Cruz Excavating filed its annual list of officers, directors,
and registered agent with the Nevada Secretary of State. The list added Vince Scott in
place of Steven Cruz.
Jury Instruction
The court instructed the jury on the disassociation statute: “The California
Contractor’s License Law requires that if a Responsible Managing Officer (‘RMO’) is no
longer associated with a license, the RMO and the Licensee each have an independent
duty to give written notice of the disassociation to the Contractor [sic] State License
Board (the ‘Board’) as the agency that oversees contractor licensing.
“If the written notice is not made to the Board with in [sic] 90 days of the date of
disassociation, then the effective date of disassociation is when written notice is received
at the Board’s headquarters.
“The RMO is responsible for the construction operations of the licensee until the
date of disassociation or the date the Board receives the written notification of
disassociation, whichever is later.”
33
West Coast challenges the instruction, arguing: “During the course of trial, the
Court concluded that the failure to give the registrar notice of disassociation, within
90 days of disassociation, does not result in the automatic suspension of the license. The
Trial Court’s instruction to the Jury made no reference to license suspension, and
incorrectly stated that the ‘effective date of disassociation is when written notice is
received at the Board’s headquarters.’ [West Coast’s judgment notwithstanding the
verdict] motion requested judgment based on a correct interpretation of the statute, but
that request was denied.”
The Statutory Scheme
Business and Professions Code section 7031, subdivision (a) states, in part: “[N]o
person engaged in the business or acting in the capacity of a contractor, may bring or
maintain any action, or recover in law or equity in any action, in any court of this state for
the collection of compensation for the performance of any act or contract where a license
is required by this chapter without alleging that he or she was a duly licensed contractor
at all times during the performance of that act or contract, regardless of the merits of the
cause of action brought by the person . . . .”
Business and Professions Code section 7068.2 states, in pertinent part:
“(a) If the responsible managing officer, responsible managing employee,
responsible managing member, or responsible managing manager disassociates from the
licensed entity, the licensee or the qualifier shall notify the registrar in writing within
90 days after the date of disassociation. The licensee shall have 90 days after the date of
disassociation in which to replace the qualifier. Upon failure to replace the qualifier
within 90 days after the date of disassociation, the license shall be automatically
suspended or the classification removed at the end of the 90 days. [¶] . . . [¶]
“(c) Upon failure of the licensee or the qualifier to notify the registrar of the
disassociation of the qualifier within 90 days after the date of disassociation, the license
shall be automatically suspended or the classification removed and the qualifier removed
34
from the license effective the date the notification is received at the board’s headquarters
office.
“(d) The person qualifying on behalf of a licensee under [Business and
Professions Code] Section 7068 shall be responsible for the licensee’s construction
operations until the date of disassociation or the date the board receives the written
notification of disassociation, whichever is later.
“(e)(1) Upon a showing of good cause by the licensee, the registrar may review
and accept a petition for one 90-day extension to replace the qualifier immediately
following the initial 90-day period described in subdivision (a) only under one or more of
the following circumstances: [¶] . . . [¶]
“(f) Failure of the licensee or the qualifier to notify the registrar of the qualifier’s
disassociation within 90 days after the date of disassociation shall constitute grounds for
disciplinary action.”
Discussion
A party is entitled, upon request, to correct, nonargumentative jury instructions on
every theory advanced by the party that is supported by substantial evidence. However,
the trial court is not required to give instructions that are not correct statements of the law
or that are incomplete or misleading. (Norman v. Life Care Centers of America, Inc.
(2003) 107 Cal.App.4th 1233, 1242.)
Whether an instruction correctly states the law is a question of law we review de
novo. (Gunnell v. Metrocolor Laboratories, Inc. (2001) 92 Cal.App.4th 710, 718-719.)
However, we reverse only if it is reasonably probable a result more favorable to the
appealing party would have been reached in the absence of the error. (Huffman v.
Interstate Brands Corp. (2004) 121 Cal.App.4th 679, 691-692.)
West Coast insists that under Business and Professions Code section 7068.2
license suspension is automatic 90 days after disassociation of a qualified individual,
even if the licensee fails to report the disassociation. Therefore, the trial court erred in
35
not so instructing. West Coast comes to this conclusion after a rather tortured reading of
section 7068.2, subdivisions (a) and (c); we are not persuaded.
Business and Professions Code section 7068.2, subdivision (a) applies when notice
of disassociation by a qualifier or licensee notifies the registrar within 90 days of
disassociation. At that point the licensee has 90 days to replace the qualifier. If
replacement does not take place within 90 days, “the license shall be automatically
suspended.”
In contrast, subdivision (c) of Business and Professions Code section 7068.2
applies when, as in the present case, the licensee or qualifier fails to notify the registrar of
the disassociation within 90 days. In this situation “the license shall be automatically
suspended or the classification removed and the qualifier removed from the license
effective the date the notification is received at the board’s headquarters office.” (Ibid.,
italics added.) In addition, subdivision (f) of section 7068.2 states that failure of the
licensee or qualifier to notify the registrar within 90 days of disassociation “shall
constitute grounds for disciplinary action.”
West Coast contends the automatic 90-day suspension described in subdivision (a)
of Business and Professions Code section 7068.2 also applies in subdivision (c) of that
section. The wording of what is now subdivision (c) supported this interpretation: “If the
licensee or his responsible managing officer or responsible managing employee
qualifying for the license or classification fails to notify the registrar in writing or replace
the qualifier within 90 days, the license shall be automatically suspended or the
classification removed retroactively to 90 days from the date of disassociation.”
(Stats. 1984, ch. 1174, § 3, p. 4017, italics added.) However, in 1987 the Legislature
deleted “retroactively to 90 days from the date of disassociation” and added the current
language. (Stats. 1987, ch. 930, § 5, p. 3139; § 7068.2, subd. (c).) The same
1987 amendment added the language now found in subdivision (f).
36
West Coast also attempts to distinguish the provisions of Business and Professions
Code former section 7083. Former section 7083 states: “All licensees shall notify the
registrar, on a form prescribed by the registrar, in writing within 90 days of any change to
information recorded under this chapter. This notification requirement shall include, but
not be limited to, changes in business address, personnel, business name, qualifying
individual bond exemption pursuant to [Business and Professions Code] Section 7071.9,
or exemption to qualify multiple licenses pursuant to [Business and Professions Code]
Section 7068.1.
“Failure of the licensee to notify the registrar of any change to information within
90 days shall cause the change to be effective the date the written notification is received
at the board’s headquarters office.
“Failure to notify the registrar of the changes within the 90 days is grounds for
disciplinary action.” (Italics added.) The court instructed the jury with a variation of
former section 7083; West Coast does not object to this instruction.
West Coast argues Business and Professions Code former section 7083 is
irrelevant: “Whether Zephyr violated its Section 7083 obligation to provide the CSLB
[Contractors State License Board] with notice so the CSLB could update its own records
is irrelevant. Whether the CSLB could have instituted disciplinary proceedings against
Zephyr for its violation of Section 7083 is irrelevant.” However, the very information
former section 7083 covers, a change in personnel—in this case Cruz—and a change in
qualifying for multiple licenses under Business and Professions Code section 7068.1—in
this case the change in qualifying for multiple licenses from Cruz’s sale of his stock—are
at issue here. The trial court did not err in instructing the jury pursuant to Business and
Professions Code section 7083.
37
DISPOSITION
The judgment is affirmed. The parties shall bear their own costs on appeal. (Cal.
Rules of Court, rule 8.278(a)(5).)
RAYE , P. J.
We concur:
NICHOLSON , J.
HOCH , J.
38
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73 F.Supp.2d 116 (1999)
Eladio Seda SOTO, Plaintiff,
v.
CORPORATION OF THE PRESIDING BISHOP OF THE CHURCH OF JESUS CHRIST OF LATTER-DAY SAINTS, Defendant.
No. CIV. 95-2299(RLA).
United States District Court, D. Puerto Rico.
September 23, 1999.
*117 *118 Eric Rivera Cruz, Hato Rey, PR, for Plaintiff.
Jorge L. Capo-Matos, O'Neill & Borges, Hato Rey, PR, for Defendant.
ORDER DISMISSING COMPLAINT
ACOSTA, District Judge.
Pending before the Court is defendant Corporation of the Presiding Bishop of the Church of Jesus Christ of Latter-Day Saints' (CPB), motion for summary judgment (docket No. 29), to which plaintiff, Eladio Seda Soto (Seda) has filed an opposition (docket No. 30).[1] For the reasons set forth below, defendant's Motion for Summary Judgment is hereby GRANTED in its entirety.
I. BACKGROUND
This is an action originally filed by Seda before the Commonwealth of Puerto Rico, Court of First Instance, San Juan Part, against CPB, for alleged age discrimination and wrongful discharge. Plaintiff requests in excess of $200,000 in damages, back pay, front pay, costs and attorney's fees.
The complaint alleges that in May, 1995, defendant discharged Seda because of his age, in violation of the Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C. § 621 et seq., and the Commonwealth of Puerto Rico Law No. 100 of June 30, 1959, as amended, ("Law No. 100"), 29 L.P.R.A. § 146, et seq. Plaintiff also alleges the dismissal was without just cause, in violation of the Commonwealth of Puerto Rico's wrongful discharge statute, Law No. 80 of May 30, 1976, as amended ("Law No. 80"), 29 L.P.R.A. § 185a, et seq.
The case was timely removed by CPB to this Court pursuant to the provisions of Section 1441 of Title 28, United States Code. Jurisdiction is predicated on a federal question, pursuant to 28 U.S.C. § 1331. Supplemental jurisdiction over the state claims arises under 28 U.S.C. § 1446(d).
Defendant's motion for summary judgment contains a Statement of Uncontested Material Facts ("Statement"), supported by the appropriate references to the specific evidence on file, pursuant to Local Rule 311.12.
Based on the facts asserted in the Statement, defendant's motion for summary judgment requests dismissal of the complaint for the following reasons: (1) plaintiff failed to file a charge with the Equal Employment Opportunity Commission *119 ("EEOC")as required by the ADEA as a prerequisite for a judicial claim; (2) plaintiff has failed to present a prima facie case under the ADEA, since he did not meet CPB's legitimate job performance expectations, and after his dismissal was not replaced by a new employee; (3) defendant dismissed Seda for just cause and legitimate, non discriminatory business reasons, specifically the elimination of his position as mission accountant; (4) CPB provided plaintiff with a voluntary termination payment in excess of any amount which could be due if the dismissal was without just cause, as required by Law No. 80, thereby barring any subsequent Law No. 80 claim.
Plaintiff, on the other hand, did not file a separate statement of material facts as to which he contends exists a genuine issue to be tried, properly supported by specific reference to the record, as mandated by Local Rule 311.12.
Plaintiff's opposition and surreply simply argue that material factual disputes exist because: (1) plaintiff's prior demotion from distribution center manager to mission accountant in April 1994, was unjustified and he was used as a "scapegoat" to cover-up defendant's inefficient operations and/or Seda's supervisor's negligent performance; (2) the April 1994 demotion was part of a scheme to induce him to resign and/or subsequently dismiss him upon the elimination of the mission accountant position; (3) the real reason defendant wanted to terminate plaintiff's employment was to save approximately $30,000 per year (Seda's salary); and (4) the fact that defendant provided Seda with a "voluntary" termination payment which exceeds Law No. 80, is irrelevant to plaintiff's entitlement to a Law No. 80 indemnity payment, if the dismissal was without just cause.
Plaintiff also requests that, pursuant to Fed.R.Civ.P. 56(f), if the Court is "inclined" to grant summary judgment, that he be permitted to conduct additional discovery to unveil the evidence which will support his factual contentions. We begin by addressing this request, which we find has no merit.
II. FED.R.CIV.P. 56(f)
First, we must assume that at the time plaintiff filed his complaint he had a reasonable factual basis on which to support his claim. Further, plaintiff was forewarned as to defendant's affirmative defenses and theories as soon as he received CPB's answer to the complaint. In the Joint Initial Scheduling Memorandum, plaintiff represented that he would notify defendant with interrogatories and a request for production of documents, which he never did. At the Initial Scheduling Conference held eleven (11) months after the complaint was filed, further discovery was stayed pending defendant's filing of its announced motion for summary judgment. See Minutes of Initial Scheduling Conference, docket No. 16.
It was only when defendant's summary judgment motion was notified pursuant to the undersigned's Standing order that plaintiff belatedly pleaded that he was under a disadvantage because of his lack of access to company records. See Opposition at p.3.
Rule 56(f) of the Federal Rules of Civil Procedure states the following:
"(f) When Affidavits are Unavailable. Should it appear from the affidavits of a party opposing the motion that the party cannot for reasons stated present by affidavit facts essential to justify the party's opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make such other order as is just."
"Fed.R.Civ.P. 56(f) provides a method of tolling time for a party who, when confronted by a summary judgment motion, can demonstrate an authentic need for, and an entitlement to, an additional interval in which to marshal facts essential to mount an opposition." Resolution Trust v. North Bridge Assoc., 22 F.3d 1198, 1203 *120 (1st Cir.1994). This does not mean, however, that Rule 56(f) has no effect or that it is available to rescue a litigant who acts lackadaisically. Use of the rule requires meeting several benchmarks, as well as due diligence in pursuing discovery.
Ordinarily, a party who wishes to conduct discovery before the court acts on a summary judgment motion should present timely affidavits under Rule 56(f); something plaintiff failed to do in this case. See Humphreys v. Roche Biomedical Laboratories, Inc., 990 F.2d 1078, 1081 (8th Cir. 1993) (plaintiff was not entitled to discovery before court ruled on motion for summary judgment where plaintiff failed to file any affidavit specifying what facts further discovery might unveil, its relevance to issues pleaded, or how discovery might unveil its relevance to issues pleaded, or how it might overcome facially time barred complaint); Resolution Trust, 22 F.3d at 1204 (while an attorney may provide the affidavit, he must provide first hand knowledge of the facts asserted); Committee for First Amendment v. Campbell, 962 F.2d 1517, 1522 (10th Cir.1992)(unverified assertion by counsel which simply constitutes advocacy, does not suffice for evidence or facts required to grant continuance).
Furthermore, to satisfy Rule 56(f), a party must meet two additional requirements: (1) articulate a plausible basis for the belief that discoverable materials exist which would raise a trial-worthy issue and (2) demonstrate good cause for failure to have conducted discovery earlier. Mass. School of Law at Andover v. American Bar, 142 F.3d 26, 43-45 (1st Cir.1998); Fennell v. First Step Designs, Ltd., 83 F.3d 526, 531 (1st Cir.1996) (movant must articulate plausible basis for belief that discoverable materials exist which would raise a trial-worthy issue.); R.W. Intern. Corp. v. Welch Food, Inc., 13 F.3d 478 (1st Cir.1994), appeal after remand, 88 F.3d 49 (1st Cir.1996) (the party seeking additional time for discovery must show that the facts sought will, if obtained, suffice to engender an issue both genuine and material); Bird v. Centennial Ins. Co., 11 F.3d 228, 235 (1st Cir.1993); Price v. General Motors Corp., 931 F.2d 162, 164 (1st Cir. 1991).
In this case, Seda failed to identify any facts he would expect to discover. Further, he did not specify what information he had reasonable grounds to expect would be disclosed which would generate genuine and material disputes of fact.
Plaintiff has not provided minimal supporting factual allegations, and has not supplemented that deficiency. Thus, he has not made the slightest showing that his opposition is meritorious. See Néstor Colón Medina & Sucesores, Inc. v. Custodio, 964 F.2d 32, 39 (1st Cir.1992) ("Mere conclusory allegations, standing alone, are not enough; and it is only after stating a valid claim that a plaintiff can insist upon a right to discovery. If this were not so, a party entirely lacking in a cause of action could sue first and then `fish' to see if he could discover a cause of action") Id. at 39 (internal citations omitted).
Finally, plaintiff has not shown cause for his failure to advance his quest for discovery. Undoubtedly, plaintiff had ample opportunity for adequate discovery but failed to engage in same. We are not inclined to reward such lack of diligence. C.B. Trucking, Inc. v. Waste Management, Inc., 137 F.3d 41, 44-45 (1st Cir.1998). Therefore, we deny plaintiff's request to conduct further discovery.
III. SUMMARY JUDGMENT STANDARD
Pursuant to Fed.R.Civ.P. 56, summary judgment must be granted where the record shows no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. As repeatedly stated, the function of summary judgment is "to pierce the boilerplate of the pleadings and examine the parties' proof to determine whether a trial is actually necessary." Vega-Rodríguez v. Puerto Rico *121 Tel. Co., 110 F.3d 174, 178 (1st Cir.1997) (citing Wynne v. Tufts Univ. Sch. of Med., 976 F.2d 791, 794 (1st Cir.1992)). It allows courts and litigants to avoid full-blown trials in unwinnable cases, thus conserving the parties' time and money and permitting courts to husband scarce judicial resources. McCarthy v. Northwest Airlines, Inc., 56 F.3d 313, 315 (1st Cir.1995).
Summary judgment may be 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 as to any material fact..." Fed.R.Civ.P. 56(c). "To defeat a motion for summary judgment, the non-moving party must demonstrate the existence of a trial-worthy issue as to some material fact." Cortes Irizarry v. Corporation Insular, 111 F.3d 184, 187 (1st Cir.1997). "In applying this formulation, a fact is `material' if it potentially affects the outcome of the case," Vega-Rodriguez, 110 F.3d at 178, and "`genuine' if a reasonable factfinder, examining the evidence and drawing all reasonable inferences helpful to the party resisting summary judgment, could resolve the dispute in that party's favor." Cortes-Irizarry, 111 F.3d at 187. "Speculation and surmise, even when coupled with effervescent optimism that something definite will materialize further down the line, are impuissant in the face of a properly documented summary judgment motion." Ayala-Gerena v. Bristol Myers-Squibb Co., 95 F.3d 86, 95 (1st Cir.1996).
Here, the emphasis of plaintiff's arguments has been primarily to cast doubt as to the reasonableness of Seda's demotion in April 1994, which occurred more than a year before his dismissal. He attempts to do so by questioning the amount of complaints received pertaining to the distribution center's operations under Seda's supervisor and imputing responsibility to his own supervisor for poorly supervising him. From this, plaintiff urges the court to find there are material factual controversies as to the legitimate non-discriminatory reasons for Seda's discharge. To plaintiff's misfortune, the record does not support any reasonable inference of age discrimination in connection with CPB's actions.
In a wrongful discharge case such as this one, Seda bears the ultimate burden of proving that he would not have been terminated but for his age. St. Mary's Honor Ctr. v. Hicks, 509 U.S. 502, 113 S.Ct. 2742, 125 L.Ed.2d 407 (1993); Jiménez v. Bancomercio de Puerto Rico, 174 F.3d 36 (1st Cir.1999); Alvarez-Fonseca v. Pepsi Cola of Puerto Rico, 152 F.3d 17 (1st Cir.1998).
"On issues where the nonmovant bears the ultimate burden of proof at trial, he may not defeat a motion for summary judgment by relying on evidence that is `merely colorable' or `not significantly probative.'" Pagano v. Frank, 983 F.2d 343, 347 (1st Cir.1993) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 91 L.Ed.2d 202, (1986)). The nonmovant must "present definite, competent evidence to rebut the motion." Mesnick v. General Electric Co., 950 F.2d 816, 822 (1st Cir.1991), cert. denied, 504 U.S. 985, 112 S.Ct. 2965, 119 L.Ed.2d 586 (1992). Thus, "[s]ummary judgment may be appropriate if the nonmoving party rests merely upon conclusory allegations, improbable inferences, and unsupported speculation." Medina-Muñoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir.1990).
Even in cases where elusive concepts such as motive or intent are at issue, summary judgment is appropriate if the non-moving party rests merely upon unsupported allegations. Ayala-Gerena, 95 F.3d at 95. In such cases, courts in this circuit found summary judgment an appropriate mechanism to dispose of age discrimination cases on the merits. See, Shorette v. Rite Aid of Maine, Inc., 155 F.3d 8 (1st Cir.1998); American Airlines, Inc. v. Cardoza-Rodriguez, 133 F.3d 111 (1st Cir. 1998); Ruiz v. Posadas de San Juan Assocs., 124 F.3d 243 (1st Cir.1997); Hidalgo v. Overseas Condado Ins. Agencies, Inc., 120 F.3d 328 (1st Cir.1997); Pages-Cahue *122 v. Iberia Líneas Aéreas de España, 82 F.3d 533 (1st Cir.1996); Medina-Muñoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 810 (1st Cir.1990); Vega v. Kodak Caribbean, Ltd., 807 F.Supp. 872 (D.P.R.1992), aff'd. 3 F.3d 476, 480-481 (1st Cir.1993); Domínguez v. Eli Lilly & Co., 958 F.Supp. 721 (D.P.R.1997) aff'd 141 F.3d 1149 (1st Cir.1998); De Arteaga v. Pall Ultrafine Filtration Corp., 673 F.Supp. 650 (D.P.R. 1987), aff'd 862 F.2d 940 (1st Cir.1988); Menzel v. Western Auto Supply, 662 F.Supp. 731, 745 (D.P.R.1987) aff'd. 848 F.2d 327 (1st Cir.1988).
IV. LOCAL RULE 311.12
A. Standard
In this district, Local Rule 311.12 was promulgated to assist the Court in dealing with summary judgment mechanics. It requires the moving party to file a separate statement, with specific references to the record, of material facts that it alleges are not at issue. The nonmoving party must also file a separate statement stating the material facts that are allegedly at issue. On repeated occasions this Court has stated that compliance with Rule 311.12 is critical, since the Court will only consider the facts alleged in the above-mentioned statements when entertaining the movant's arguments. Rivera de Torres v. Telefónica de Puerto Rico, 913 F.Supp. 81 (D.P.R.1995).
This Court has frequently required compliance with Local Rule 311.12, even when failure to comply has resulted in the dismissal of plaintiff's employment discrimination complaint. Ortiz Rodríguez v. Banco Popular de Puerto Rico, 27 F.Supp.2d 309 (D.P.R.1998).
Without such a rule, the Court would have to search through the record, with or without the assistance of counsel, for lurking evidence of a genuine issue of material fact. Local Rule 311.12 prevents the recurrent problem of ferreting through the record and the specter of district judges being unfairly sandbagged by the unadvertised factual issues.
Dominguez v. Eli Lilly & Co., 958 F.Supp. 721, 727 (D.P.R.1997) (quoting Stepanischen v. Merchants Despatch Transp. Corp., 722 F.2d 922, 930-31 (1st Cir.1983))(internal citations omitted); Rivera Rosario v. Granada Mills, Inc., 142 F.R.D. 50 (D.P.R.1992). Insistence on compliance with the rule and enforcement of the consequences for noncompliance has consistently been endorsed by our Circuit. Ayala-Gerena v. Bristol Myers-Squibb Co., 95 F.3d 86 (1st Cir.1996); Rivas v. Federación de Asociaciones Pecuarias, 929 F.2d 814, 816 n. 2 (1st Cir.1991); Laracuente v. Chase Manhattan Bank, 891 F.2d 17, 19 (1st Cir.1989); Alvarado-Morales v. Digital Equip. Corp., 843 F.2d 613, 615 (1st Cir.1988).
Moreover, "[w]ithout specific references to the Record, the list of uncontested and contested facts does not serve its purpose. The court would have to continue to ferret through the record, read all the answers to the interrogatories, study all the attached documents, and carefully scrutinize all the depositions for lurking genuine issues of material fact." Id.
Accordingly, failure to comply with the "anti-ferret rule" has severe consequences. Indeed, as Stepanischen warns, "the failure to make specific references to the Record would, where appropriate, be grounds for judgment against the party." Dominguez, 958 F.Supp. at 727 (quoting Stepanischen, 722 F.2d at 931).
B. Noncompliance by Plaintiff
We have searched through plaintiffs opposition to defendant's motion for summary judgment, as well as his surreply, and nowhere is there any indication of plaintiff's effort to comply with Local Rule 311.12. Rather, plaintiff simply attempts to address defendant's legal arguments and cast doubt, through a series of allegations, as to the veracity of the reasons proffered to explain Seda's initial demotion *123 and his subsequent dismissal, approximately a year later.
Accordingly, the Court hereby admits the properly supported statements of uncontested facts presented by defendant. Such facts as are pertinent to the disposition of the case follow.
V. FACTS
CPB is a corporation organized to perform activities on behalf of The Church of Jesus Christ of Latter-Day Saints. CPB has a local office in Puerto Rico. All of the administrative matters related to the Church's activities in the Caribbean Area are coordinated from the central office in Puerto Rico.
Seda was hired to work as an accountant for CPB on August 23, 1982, when he was 35 years of age. During the period of his employment with CPB, Seda held several positions. In November of 1989, Seda was transferred to the position of distribution center manager responsible for the operation and organization of the inventory in the warehouse and the distribution and shipment of CPB's materials throughout the Caribbean.
In March and April of 1994, Seda's supervisor, Angel M. Negrón ("Negrón"), received several complaints from various church affiliates from the Caribbean islands, related to the inefficient operation of the distribution center managed by Seda. The complaints were particularly related to the tardiness of the shipments of materials and problems with back orders.
Also in April, 1994, Mr. Kris Christensen, manager of the Salt Lake distribution center came to Puerto Rico to evaluate the local distribution center's problems and identify actions to be taken to improve its operations. His visit resulted in a report, which identified various problems associated with the malfunctioning of the distribution center managed by Seda. According to the report, the principal problems with the center were the following: slow and late shipments; failure to follow-up on complaints from other offices; accounting problems caused by the billing of back orders with the rest of the original order; delay in the processing of orders; paying for a two-day freight service which CPB was not getting; problems with the ordering process from the Dominican Republic to Puerto Rico as outlined by a prior audit; delay in the input of orders into the computer system; the frustration of employees in their efforts to try to work with Seda and in Seda's lack of effort in trying to resolve their issues and concerns. The report was submitted to Donald L. Clark ("Clark"), the Director of Temporal Affairs for CPB in Puerto Rico and the Caribbean.
Thereafter, since Seda could not comply with the requirements of the distribution center manager position and had failed to properly manage the inventory in the warehouse, Seda was demoted to the position of mission accountant in accordance with Clark's and Negrón's recommendations.[2] Rubén Pomales, the finance manager, became Seda's immediate supervisor as mission accountant. Even though Seda was demoted, his salary of $3,568 per month was not reduced.
A mission accountant was in charge of the mission accounting transactions and was also responsible for the mission finances. During the time Seda was mission accountant, there were eight missions in the Caribbean area: Puerto Rico (1); *124 Dominican Republic (3); Jamaica (1); Haiti (1); Trinidad-Tobago (1); and West Indies (1).
There was also a project accountant position in CPB. The project accountant was responsible for keeping accounting records of all construction and real property projects in the Caribbean according to CPB's policies and procedures. There were approximately twelve (12) to fourteen (14) projects in the Dominican Republic and two (2) to three (3) in the rest of the Caribbean.
Rafael Pedrosa had been the project accountant in Puerto Rico since June of 1988. As project accountant, Pedrosa was in charge of all the projects in the Caribbean and in Puerto Rico. He also was subject to supervision by the finance manager, Pomales.
In September of 1994, CPB's comptroller, Miguel A. Tenorio, began to consider the alternative of transferring all of the accounting responsibilities of the missions and projects located in the Dominican Republic to the finance department of the Dominican Republic service center, since they were being handled from the office in Puerto Rico.
In the week of September 26-30, 1994, H. Larry Hutchinson, the International Comptroller for CPB, visited the Dominican Republic and Puerto Rico administration offices and prepared a "Caribbean Area Trip Report." After reviewing, considering, and adopting the recommendations of this report, Clark and Tenorio concluded that the mission and project accounting responsibilities would be transferred to the Dominican Republic service center and that only one full-time employee would be needed in Puerto Rico to carry out the remaining accounting responsibilities for both the missions and projects for Puerto Rico and the rest of the Caribbean, excluding the Dominican Republic.
As a result of this reorganization, the new job position in Puerto Rico was designated as "senior accountant". The newly created position consolidated the mission and the project accountant positions. The senior accountant would be responsible for the management of the finances of the missions and projects in Puerto Rico and the rest of the Caribbean, excluding the Dominican Republic.
As part of the reorganization, a determination was made with respect to the person who was to occupy the senior accountant position. Tenorio and Pomales decided that Pedrosa was the most qualified person to occupy the position because (1) Pedrosa had vast knowledge of the project accounting responsibilities; (2) on numerous occasions, Pedrosa had also worked with the financing responsibilities of the missions while Seda, in contrast, had held the mission accountant position for only one year and was not familiar with project accounting functions; and (3) Pedrosa had received substantially better performance evaluations than Seda.[3]
On May 8, 1995, Pomales and Tenorio met with Seda and informed him of CPB's decision to reorganize and consolidate operations, create the senior accountant position, and terminate his employment. During that meeting, Pomales and Tenorio also informed Seda that he could continue working for CPB during a transitional period until he could find another job. However, the day after the meeting, that is, on May 9, 1995, Seda informed Pomales of his decision to leave immediately.
Notwithstanding Seda's decision to leave immediately, Clark decided to grant him a voluntary termination payment. Accordingly, on May 9, 1995, Seda received a *125 payment of $17,560.12. At the time of Seda's termination, there were at least four other CPB employees with salaries higher than Seda's. At the time of his termination, Seda and Pedrosa were 48 and 46 years of age, respectively. Finally, the record contains uncontroverted sworn statements by Clark, Pomales and Tenorio, the persons involved in the decision to choose Pedrosa over Seda for the senior accountant position, affirming they did not take into consideration the age of either of the employees in the decision-making process.
Seda never filed an age discrimination charge with the EEOC nor with the Anti-discrimination Unit of Puerto Rico Department of Labor and Human Resources. Yet it is uncontroverted, that at least since September of 1993, EEOC notices had been posted in the employees' lounge, informing employees of the illegality of age discrimination and advising them to contact the EEOC if they thought they were victims of discrimination. Notwithstanding this notice of the ADEA rights, Seda's first and only effort to challenge the dismissal was the filing of the present complaint on September 18, 1995.
VI. DISCUSSION
A. ADEA CLAIM
1. Filing Requirements
In deferral states (states which have enacted employment discrimination laws), such as Puerto Rico, employees must file a charge of unlawful age discrimination in employment with the EEOC within 300 days "after the alleged unlawful practice occurred." 29 U.S.C. § 626(d); American Airlines, Inc., 133 F.3d at 122. That is, as a prerequisite to the commencement of a civil action under the ADEA, an aggrieved employee must file an administrative charge with the EEOC and with the parallel state agency designated by law in deferral states. 29 U.S.C. §§ 626(d) and 633(b); Powers v. Grinnell Corp., 915 F.2d 34, 37 (1st Cir.1990).
It is undisputed that Seda never filed a claim with the Antidiscrimination Unit of the Department of Labor nor with the EEOC. Plaintiff argues that CPB waived its right to challenge plaintiff's failure to comply with the filing requirements of a charge at the EEOC by removing the case from local court to a federal district court. The exercise of defendant's right to remove the case to the federal district court, however, is no basis to hold that defendant waived its right to raise this appropriate defense under federal law.
We also reject as inapplicable to the case the doctrines of equitable estoppel and equitable tolling.
Equitable estoppel may be invoked when an employee is aware of his ADEA rights, but does not make a timely filing of a charge due to his reasonable reliance on his employer's deceptive conduct. American Airlines, 133 F.3d at 124, Mercado-García v. Ponce Federal Bank, 979 F.2d 890, 895 (1st Cir.1992); Kale v. Combined Ins. Co. of America, 861 F.2d 746, 752 (1st Cir.1988). Plaintiff has failed to allege such conduct here. Moreover, in this case, plaintiff has failed to file at any moment a charge with the EEOC and/or with the Antidiscrimination Unit of the Department of Labor and Human Resources.
Equitable tolling is appropriate when the plaintiff demonstrates "excusable ignorance" of his statutory rights. American Airlines, Inc., 133 F.3d at 124; Mercado-García, 979 F.2d at 896, Kale, 861 F.2d at 752. In this case, plaintiff at least had constructive knowledge of a statute outlawing age discrimination. Defendant posted EEOC notices at Seda's place of employment. The posting informed employees of the illegality of age discrimination and provided plaintiff constructive knowledge of his ADEA rights. Therefore, equitable tolling cannot excuse plaintiff's failure to file a charge with the EEOC. Kale, 861 F.2d at 752.
*126 Since plaintiff did not comply with the statutory requirements for initiating a civil action under ADEA, defendant's motion for summary judgment dismissing plaintiff's ADEA claim is hereby GRANTED. Castro v. United States, 775 F.2d 399, 403 (1st Cir.1985).
Having dismissed plaintiff's ADEA claim for his failure to file a charge, we nonetheless address his claim on the merits.
2. Merits of the Claim
In relevant part, the ADEA prohibits an employer from discharging an employee because of his age. As previously stated, in a case such as this one, Seda bears the ultimate burden of proving that he would not have been terminated but for his age. Cardona Jiménez v. Bancomercio Puerto Rico, 174 F.3d 36 (1st Cir.1999); Alvarez-Fonseca v. Pepsi Cola of Puerto Rico, 152 F.3d 17, 24 (1st Cir.1998), Serrano-Cruz v. DFI Puerto Rico, Inc., 109 F.3d 23, 25 (1st Cir.1997). When the plaintiff has direct evidence of discriminatory animus, the case must be put to the jury without further ado. Cardona Jiménez, 174 F.3d at 40; Alvarez-Fonseca, 152 F.3d at 24.
Absent direct evidence of discriminatory intent, the familiar McDonnell Douglas burden-shifting framework governs. Cardona Jiménez, 174 F.3d at 40-41; Shorette, 155 F.3d at 12; Alvarez-Fonseca, 152 F.3d at 24; Ruiz, 124 F.3d at 247; Serrano-Cruz, 109 F.3d at 25; Pages-Cahue, 82 F.3d at 536; Woodman v. Haemonetics Corp., 51 F.3d 1087, 1091 (1st Cir. 1995); see also McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-805, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973).
Under McDonnell Douglas, Seda must present a prima facie case of discrimination, that is, that he (1) was at least forty years of age; (2) met the employer's legitimate job expectations; (3) was fired; and (4) was replaced by a person with roughly equivalent job qualifications. Cardona Jiménez, 174 F.3d at 41; Shorette, 155 F.3d at 12; Alvarez-Fonseca, 152 F.3d at 24; Ruiz, 124 F.3d at 247-248; Hidalgo, 120 F.3d at 332; Pages-Cahue, 82 F.3d at 536; Vega v. Kodak Caribbean, Ltd., 3 F.3d 476 (1st Cir.1993).
Once plaintiff meets this burden, a presumption of discrimination attaches, and CPB must articulate a legitimate nondiscriminatory reason for his termination. Cardona Jiménez, 174 F.3d at 41; Shorette, 155 F.3d at 12, Alvarez-Fonseca, 152 F.3d at 24; Ruiz, 124 F.3d at 248; Hidalgo, 120 F.3d at 334; Pages-Cahue, 82 F.3d at 536.
Once defendant articulates a legitimate non-discriminatory reason, the presumption of discrimination vanishes and Seda must show by a preponderance of evidence both that CPB's reason was a pretext and that the real reason was age-based animus. Cardona Jiménez, 174 F.3d at 41; Shorette, 155 F.3d at 13, Alvarez-Fonseca, 152 F.3d at 24; Ruiz, 124 F.3d at 248; Hidalgo, 120 F.3d at 335; Medina-Muñoz, 896 F.2d at 8. In this summary judgment context, Seda, as the nonmovant, must show evidence sufficient for a fact finder to reasonably conclude that CPB's decision to terminate him was driven by a discriminatory animus. Le Blanc v. Great American Ins. Co., 6 F.3d 836, 843 (1st Cir.1993).
a. Direct Evidence of Discriminatory Animus.
Seda failed to present any facts which would amount to direct evidence of CPB's age-based animus. In fact, Seda failed to present any affidavits and other probative and admissible evidence setting forth a genuine issue as to any material fact. The responses to the motion for summary judgment filed by plaintiff are conclusory allegations, improbable inferences, speculations and conjectures that are not duly and properly supported by admissible evidence. The nonmovant bears the burden of setting forth "specific facts showing that there is a genuine issue for trial." Fed. R.Civ.P. 56(e).
*127 The record in this case lacks any direct evidence demonstrating that Seda was a victim of age discrimination. Seda has failed to submit even a sworn affidavit presenting facts attesting to age discrimination. Rather, he appears to rely wholly on the general conclusory allegations contained in his complaint and in the responses to defendant's motion for summary judgment. Such evidence cannot withstand a motion for summary judgment. See Fed.R.Civ.P. 56(c); see also Mesnick, 950 F.2d at 822; LeBlanc, supra, 6 F.3d at 842.
b. Indirect Evidence of Discriminatory Animus.
Absent direct evidence of discriminatory animus, our analysis is governed by the familiar framework enunciated in McDonnell Douglas.
(i) Prima Facie case
This court finds that Seda failed to make out a prima facie case of age discrimination since he did not meet the second and fourth elements. The evidence presented by defendant demonstrates that Seda's performance as a mission accountant was poor. Moreover, in his previous job position, as a distribution center manager, Seda's performance created problems with the operation and management of the distribution center. As a result, on April 1994, he was demoted from distribution center manager to the mission accountant position.
Since Seda performed his job duties as a mission accountant in a poor manner, undoubtedly he was not going to be able to perform the senior accountant duties in a satisfactory way since the new position consolidated the mission accountant and the project accountant positions. The evidence on record shows that the project accountant, Rafael Pedrosa, had a better evaluation and had knowledge of the mission accounting responsibilities. Seda was not qualified for the position he held, much less for the senior accountant position. Seda failed to provide any evidence that his job performance was up to CPB's legitimate job expectations.
The fourth requirement is not met in the present case since Seda was not replaced by another person. Instead, Seda's job position was eliminated as well as the project accountant position.
No person was hired or reassigned to perform plaintiff's duties. Instead, Pedrosa was assigned to perform Seda's duties in addition to his own duties. CPB had no duty to transfer or relocate Seda to another position within the organization. Pages-Cahue, 82 F.3d at 538-539; LeBlanc, 6 F.3d at 846; Holt v. Gamewell Corp., 797 F.2d 36, 38 (1st Cir.1986). Moreover, the record in this case is devoid of evidence that demonstrates that Seda met defendant's legitimate job performance expectation for the position of senior accountant, that defendant had a continuing need for the same services and that they subsequently were performed by a person with the same or similar qualifications as plaintiff. See Brennan v. GTE Government Systems Corp., 150 F.3d 21, 26 (1st Cir.1998).
The mere fact that some of Seda's duties were assumed by Pedrosa in addition to Pedrosa's other duties is insufficient to demonstrate that Seda was replaced after his termination. Accordingly, plaintiff has failed to meet the fourth element of the McDonnell Douglas framework. Le Blanc v. Great American Insurance Co., 6 F.3d 836, 844 (1st Cir.1993); Fabregas v. I.T.T. Intermedia, Inc., 13 F.Supp.2d. 225 (D.P.R.1998).
Thus, plaintiff has failed to establish a prima facie case of age discrimination.
This court grants defendant's summary judgment dismissing Plaintiff's ADEA claim for his failure to establish a prima facie case. However, this court also grants defendant's motion for summary judgment dismissing plaintiff's ADEA claim because plaintiff has failed to present *128 sufficient evidence from which a rational fact finder could have inferred both that defendant's legitimate business reason for Seda's termination was a pretext, and that the real reason for his termination was an age-based animus.
(ii). Pretext
In this case, CPB articulated a legitimate nondiscriminatory reason for terminating Seda: the elimination of the mission accountant position which plaintiff held.
The evidence shows that CPB reorganized the management and operation of the missions and projects located in Puerto Rico and the Caribbean. A senior accountant position was created in the Dominican Republic service center responsible for the finances of the missions and projects located there. Similarly, a senior accountant position was created in Puerto Rico to manage the finances of the missions and projects in Puerto Rico and the rest of the Caribbean, excluding the Dominican Republic.
As a result of its reorganization and the creation of a new senior accountant position, the mission accountant and the project accountant positions were both eliminated. Undoubtedly, the creation of the new senior accountant position was related to CPB's normal operations.
We find that CPB was able to articulate a legitimate nondiscriminatory reason for Seda's discharge. See, Ruiz, 124 F.3d at 248; Hidalgo, 120 F.3d at 334-335. We therefore turn to the final step of the McDonnell Douglas framework.
In pursuing this inquiry, Seda must have done more than cast doubt on the rationale proffered by CPB. Instead, the evidence must be of such strength and quality as to permit a reasonable finding that the employer's decision to terminate the employee was motivated by age. Goldman v. First Nat'l Bank of Boston, 985 F.2d 1113, 1117 (1st Cir.1993); Connell v. Bank of Boston, 924 F.2d 1169, 1172 n. 3 (1st Cir.1991); Le Blanc, supra, 6 F.3d at 843. We find that Seda failed to produce evidence sufficient to meet his ultimate burden of persuasion of demonstrating pretext, let alone discriminatory intent. While we find that Seda has failed to meet his ultimate evidentiary burden, we present his evidence in detail in our responsibility to consider the facts in the light most favorable to him.
Plaintiff alleges that discriminatory intent existed since April 1994, when Seda was demoted. He also contends that the demotion was motivated by a desire to use him as a "scapegoat" and to cover up the inefficient operation of the distribution center, and his supervisor's (Negrón) negligent supervision. Plaintiff further alleges that his dismissal, twelve (12) months after his demotion, was motivated by a desire to save money due to his alleged high salary.
Apart from the speculative nature of these allegations, none can reasonably justify an inference of age discrimination. An employer's signaling an employee as responsible for the operational deficiencies of others is not by itself evidence of discrimination based on age. Cardona Jiménez, 174 F.3d 41-42. See also Phipps v. Gary Drilling Co., Inc., 722 F.Supp. 615 (E.D.Cal.1989); Murre v. A.B. Dick Co., 625 F.Supp. 158 (N.D.Ill.1985) (Age discrimination claimant cannot raise triable issue of discrimination by arguing about fairness of employer's evaluation of work performance, even with testimony of co-workers or other employees of the defendant's employer); Schultz v. General Elec. Capital Corp., 37 F.3d 329 (7th Cir. 1994)(In age discrimination action, employee failed to show that employer's proffered nondiscriminatory reason for his termination, i.e., poor performance, was pretextual; employee's self-serving statements were insufficient to show that manager lied about his belief that employee was poor performer, manager's treatment of other poor performers did not indicate age discrimination or that proffered reason for *129 termination was a lie.) See also, Rodríguez-Cuevas v. Wal-Mart Stores, Inc., 181 F.3d 15 (1st Cir.1999)(The questioning of the accuracy of the evaluations or the timing of same is insufficient to show that the legitimate proffered reason for demoting an employee was actually a pretext for unlawful discrimination. The courts may not sit as super personnel departments assessing the merits or even the rationality of employers' non discriminatory business decisions).
Further, the mere allegation that an employer terminated an employee for economic reasons, i.e. to save money on salary, is an insufficient basis to infer discrimination on the basis of age. See Hazen Paper Co. v. Biggins, 507 U.S. 604, 113 S.Ct. 1701, 123 L.Ed.2d 338 (1993) (Age and years of service are analytically distinct, so that employer could take account of one while ignoring the other, and decision based on years of service is thus not necessarily age-based; firing employee in order to prevent pension benefits from vesting does not, without more, violate ADEA); Armendariz v. Pinkerton Tobacco Co., 58 F.3d 144 (5th Cir.1995) (Fact that employee's high salary or fast-approaching eligibility for retirement benefits motivated termination decision would not be sufficient alone to support finding of age discrimination, as ADEA prohibits discrimination on basis of age, not on the basis of salary or seniority); Woroski v. Nashua Corp., 31 F.3d 105 (2nd Cir. 1994)(ADEA does not prohibit employer from acting out of concern for excessive costs, even if they arise from age-related facts, such as fact that employees with long seniority command higher salary and benefits than new hire); Anderson v. Baxter Healthcare Corp., 13 F.3d 1120 (7th Cir.1994) (Firing employee solely to reduce salary costs is not age discrimination; compensation is typically correlated with age, but relation is not perfect).
Thus, Seda's argument is speculative in its nature and consequently meritless. The oldest employee of an employer does not necessarily earn the highest salary in the company. It is axiomatic that more is required than mere conclusory allegations and unsupported conjecture. See LeBlanc, 6 F.3d at 841; Goldman, 985 F.2d at 1116. Moreover, CPB presented uncontroverted evidence that at least four other employees had higher salaries than Seda. According to plaintiff's own testimony, this fact is the only evidence he has to support his age discrimination claim. However, that fact in itself is insufficient to support a finding or inference of age discrimination. Moreover, such evidence does not suggest that there was an age-related reason for plaintiff's termination.
Accordingly, plaintiff has failed to present probative evidence to show that defendant's articulated reason for his termination, i.e. the elimination of his job position, was a pretext to cover up the real reason of age discrimination. In fact, the admissible evidence presented by defendant demonstrates that the mission accountant and the project accountant positions were both eliminated, that the new senior accountant positions were created in Puerto Rico and in the Dominican Republic respectively; and that based on the performance evaluations, Pedrosa was a better qualified person to occupy the senior accountant position.
Finally, the Court finds the fact that at the time of Seda's termination, Pedrosa, who became the senior accountant, was forty six (46) years old, while Seda was forty eight (48) years old, is of insufficient probative value to justify an inference by a reasonable factfinder of pretext for discriminatory age animus. O'Connor v. Consolidated Coin Caterers, 517 U.S. 308, 116 S.Ct. 1307, 134 L.Ed.2d 433 (1996)(age discrimination inference cannot be drawn from replacement of one worker with another worker insignificantly younger).
The evidence adduced by plaintiff could not convince a trier of fact that defendant unlawfully discriminated on the basis of age. The circumstances of this case, based on the evidence of record, are not *130 reasonably susceptible to an inference that defendant discharged Seda because of unlawful age discriminatory animus.
Therefore, this Court GRANTS defendant's motion for summary judgment and hereby DISMISSES plaintiff's ADEA claim.
B. Puerto Rico Law No. 100
The Court, in the exercise of its discretion, has retained supplemental jurisdiction over the pendent state law claims.
Law No. 100 is the Puerto Rico equivalent of the federal ADEA.[4] It provides a cause of action in favor of those persons who suffer discrimination in their employment, among others, because of their age. Similar in several respect, the two statutes differ somewhat with regard to the burden of proof that they impose upon the parties.
With regard to Law No. 100 claims and the accompanying burden-shifting standard thereunder, this Court is guided by the Supreme Court of Puerto Rico cases such as Narvaez v. Chase Manhattan Bank, 120 P.R.Dec. 731 (1988); Báez Garcia v. Cooper Lab., 120 P.R.Dec. 145, 1987 WL 448243 (1987); Ibánez Benitez v. Molinos de Puerto Rico, Inc., 114 P.R.Dec. 42, 1983 WL 204221 (1983), and the interpretations thereof by the federal courts, such as Alvarez-Fonseca v. Pepsi Cola of P.R. Bottling Co., 152 F.3d 17, 27-9 (1st Cir. 1998); Menzel v. Western Auto Supply Co., 848 F.2d 327, 330-31 (1st Cir.1988); Dominguez v. Eli Lilly and Co., 958 F.Supp. 721, 741-45 (D.P.R.1997); Maldonado-Maldonado v. Pantasia Mfg. Corp., 983 F.Supp. 58, 65-66 (D.P.R.1997).
Much like a Title VII action, under Law No. 100 the employee bears the initial burden of presenting sufficient, probative evidence that he was discharged without just cause, this entails showing (a) that he was actively or constructively discharged and (b) the discharge was without "just cause". Landrau Romero v. Caribbean Restaurants, Inc., 14 F.Supp.2d 185, 193 (D.P.R.1998)(citing Dominguez v. Eli Lilly and Co., 958 F.Supp. 721, 743 (D.P.R.1997); Borrero-Rentero v. Western Auto Supply Co., 2 F.Supp.2d 197 (D.P.R. 1998); Arthur Young & Co. v. Virgilio Vega III, 94 J.T.S. 75 at 11962, 11972 (1994)). Provided the plaintiff proffers sufficient evidence to sustain a prima facie case, a rebuttable presumption of discrimination is established;[5]see also, Alvarez-Fonseca v. Pepsi Cola of P.R. Bottling Co., 152 F.3d at 27.
The most important difference between Law No. 100 and the ADEA is that when the Law No. 100 presumption has been triggered, it shifts not only the burden of production, but also the burden of persuasion, from the employee to the employer. See Ibáñez Benítez v. Molinos de Puerto Rico, Inc., 114 P.R. Dec. 42, 52, 1983 WL 204221 (1983). Thus, in order to rebut the Law No. 100 presumption, the employer must prove, by a preponderance of the evidence, that the challenged action was not motivated by discriminatory age animus. Id. at 53, 1983 WL 204221.
*131 As noted above, the Law No. 100 presumption of discrimination is triggered only when the employee shows that the employer lacked "just cause" to discharge or take other adverse action with regard to the employee. In Báez García v. Cooper Lab, Inc., 120 P.R. Dec. 145, 155, 1987 WL 448243 (1987), the Supreme Court of the Commonwealth of Puerto Rico has determined that, because Law No. 100 did not define the term "just cause," the term's definition would be sought in an analogous statute Law No. 80. Law No. 80 defines a dismissal without just cause as "[a] discharge made by mere whim or fancy of the employer or without cause related to the proper and normal operation of the establishment." 29 L.P.R.A. § 185b.
Law No. 80 further provides an illustrative list of reasons that are deemed to constitute "just cause" for a dismissal. With regard to acts or omissions imputable to the employee, the reasons include the employee's improper or disorderly conduct; negligent attitude towards his work or poor performance; violations of the employer's rules and regulations, 29 L.P.R.A. § 185b(a),(b) and (c).
With regard to circumstances not directly attributable to the employee, Law No. 80 considers as just cause for discharge the full, temporary or partial closing of the operations of the establishment; technological or reorganization changes as well as changes of style, design or the nature of the product made or handled by the establishment; and reductions in employment made necessary by a reduction in the anticipated or prevailing volume of production, sales or profits at the time of the discharge. 29 L.P.R.A. § 185b(d),(e) and (f). Law No. 80 further provides that in cases of discharges or lay-offs under subsections (d)(e) and (f), the employer should follow seniority (meaning seniority with the employer) within the occupational classification subject to the lay-off. However, if there is a clear and conclusive difference in favor of the efficiency or capacity of the workers compared, these efficiency or capacity factors shall prevail in the decision. 29 L.P.R.A. § 185c.
Applying the preceding rules, once the plaintiff has proven that he was discharged for unjust reasons, the burden of proof would shift to the employer to show that the discharge was based on nondiscriminatory reasons.
Conversely, if the employer proves that the discharge was justified, then the Law No. 100 presumption is not activated. Consequently, the burden of proof on the ultimate issue of discrimination remains with the plaintiff, as in any other civil case. The plaintiff must prove that, even if the dismissal was justified the defendant nevertheless violated Law No. 100, because the dismissal was motivated by discriminatory animus instead of or in addition to the legitimate reasons for dismissal. The Law No. 100 plaintiff is then in same situation as an ADEA plaintiff after the defendant has articulated a legitimate, nondiscriminatory reason for its actions. Cardona Jiménez, 174 F.3d at 42-43; Alvarez-Fonseca, 152 F.3d at 27-28.
As we have discussed above with regard to the ADEA claim, CPB was able to meet it's burden under Law No. 80 by proving that Seda's discharge was justified. The evidence is clear. The reorganization of the finance departments in the Puerto Rico and the Dominican Republic offices, the consequent elimination of the mission and project accountant positions, the creation of the senior accountant position, and Seda's poor performance as a mission accountant, were all reasons for Seda's termination. Undoubtedly, any one of these reasons constitutes just cause under Law No. 80.
Moreover, the elimination of the mission accountant position due to the creation of a new senior accountant position was a legitimate business decision related to the proper and efficient operation of defendant's activities. This is also related to the normal functioning of defendant's operations.
*132 Given this evidence, no reasonable jury could find that CPB did not have just cause to dismiss Seda, regardless of the allocation of the burden of persuasion. Also, as we have discussed above with regard to his ADEA claim, no reasonable jury could find that Seda carried his burden of proof on the ultimate issue of discrimination.
Seda's own admissions demonstrate that the only basis for his allegation of age discrimination is the fact that he was the oldest employee working for CPB and therefore was earning the highest salary. The uncontroverted facts demonstrate that Seda's allegation is unfounded. However, even if the allegation is correct, it is insufficient to support an inference of age discrimination.
Therefore, defendant's motion for summary judgment dismissing plaintiff's Law No. 100 claim is hereby GRANTED.
C. Law No. 80
As discussed above with respect to plaintiff's Law No. 80 claim, defendant proved that plaintiff's discharge was with just cause. Plaintiff was dismissed as a result of the elimination of his position as mission accountant. This would appear to constitute just cause under Law No. 80. Even if we assume that the occupational classification in question should be read more broadly and include all "accountants," Pedrosa's uncontroverted superior performance justified his retention over Seda. 29 L.P.R.A. § 185c.
An additional basis exists to dismiss Seda's Law No. 80 claim.
Law No. 80 provides an employee who has been terminated without just cause with the exclusive remedy of a discharge indemnity payment, calculated on the basis of the employee's salary and years of service. At the time of Seda's discharge, Law No. 80 provided that the indemnity payment for a wrongful discharge would be equivalent to one month's pay, plus an additional progressive indemnity equivalent to one week's pay for each complete year of service. In Seda's case, the Law No. 80 payment would have amounted to $13,445.81.[6]
The uncontroverted evidence presented by defendant shows that plaintiff accepted a voluntary termination payment of $17,560.12, an amount in excess of what he would have been entitled to under Law No. 80. This Court has previously held that a wrongful discharge claim under Law No. 80 must be dismissed when an employer pays an employee a termination pay equal or greater than the Law No. 80 indemnity. See Hopgood v. Merrill Lynch, Pierce, Fenner & Smith, 839 F.Supp. 98, 110 (D.P.R.1993).[7]
Accordingly, defendant's motion for summary judgment dismissing plaintiff's Law No. 80 claim is GRANTED.
IV. CONCLUSION
In view of the above, defendant's motion for summary judgment (docket No. 29) is hereby GRANTED as to all of plaintiff's claims.
*133 Judgment shall be entered accordingly.
IT IS SO ORDERED.
NOTES
[1] See also defendant's reply to plaintiff's opposition (docket No. 31) and plaintiff's surreply thereto (docket No. 32).
[2] Contrary to the allegations made in plaintiff's opposition to the defendant's motion for summary judgment and his surreply, plaintiff specifically stated in his deposition that he did not consider that this demotion was motivated by his age. See Statement, lines 20-24 at page 71 of Seda's deposition. Moreover, Section II-A of plaintiff's legal theories in the Joint Initial Scheduling Memorandum (docket No. 14) lacks any assertion that the demotion was based on age discrimination animus. These admissions are fatal to plaintiff's attorney's advocacy in opposing the summary judgment motion. At any rate, any claim that the April, 1994 demotion was based on age discrimination reasons would be clearly time-barred.
[3] In fact, Seda had received a very poor performance evaluation as mission accountant. On a scale of 1 through 4, 4 being the lowest score and indicating a very poor performance, Seda had obtained an overall performance rating of 3.5, while Pedrosa's overall appraisal was 2.5. Indeed, as mission accountant, Seda never received a merit salary increase.
[4] Law No. 100, in pertinent part, provides:
"Any employer who discharges, lays off or discriminates against an employee regarding his salary, wage, pay or remuneration, terms, rank, conditions or privileges of his work, or who fails or refuses to hire or rehire a person, or who limits or classifies his employment opportunities, or to affect his status as employee, on the basis of ... age ... shall incur civil liability... and [] he shall also be guilty of a misdemeanor."
29 L.P.R.A. § 146.
[5] Law No. 100 provides that "[A]ny of the acts mentioned in the preceding sections shall be presumed to have been committed in violation of sections 146-151 of this title, whenever the same shall have been performed without good cause. This presumption shall be of a controvertible character." 29 L.P.R.A. § 148. The acts referred to include dismissals, lay-offs and other disparate treatment regarding terms, rank or conditions of employment.
[6] This is determined as follows:
$ 3,568.00 × 12 months = $42,816.00
$42,816.00 ÷ 52 weeks = $ 823.38 weekly pay
__________
$ 823.38 × 4.33 = $ 3,565.25 ("mesada"-one month pay under Law No. 80)
$ 823.38 × 12 weeks = $ 9,880.56 ("progressive" indemnity under Law No. 80)
$ 3,565.25
+ 9,880.56
__________
$13,445.81 Law No. 80 payment
[7] See also, Selgas v. American Airlines, Inc., 858 F.Supp. 316, 326 (D.P.R.1994) and Loubrido v. Hull Dobbs Co. of Puerto Rico, Inc., 526 F.Supp. 1055, 1061 (D.P.R.1981), which held that Law No. 80 payment is not due when a remedy granted in damages or back-pay is greater than the Law No. 80 indemnity.
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541 U.S. 1017
ALVAREZ-GUTIERREZv.UNITED STATES.
No. 03-9533.
Supreme Court of United States.
April 26, 2004.
1
C. A. 5th Cir. Certiorari denied. Reported below: 85 Fed. Appx. 356.
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451 S.W.2d 275 (1970)
Joseph R. DARNALL et ux., Appellants,
v.
CITY OF AUSTIN et al., Appellees.
No. 11729.
Court of Civil Appeals of Texas, Austin.
February 18, 1970.
Rehearing Denied March 11, 1970.
*276 Joseph R. Darnall, Jr., Austin, for appellants.
H. Glenn Cortez, City Atty., C. Charles Dippel, Asst. City Atty., Austin; Sneed, Vine, Wilkerson & Selman, John B. Selman, Austin, for appellees.
PHILLIPS, Chief Justice.
This is a suit attacking an amendment to a zoning ordinance which reclassified approximately one half of a city block of land from "A" Residential, First Height and Area, to "B" Residential, First Height and Area. The latter classification allows apartment houses. The property is within four or five blocks from the campus of the University of Texas.
The trial court denied the plaintiffs below, and the appellants here, any relief, hence this appeal.
We affirm.
Appellants' property and all property adjacent thereto on both sides of the street is zoned A. Small apartment houses under BB zoning (Between A residential and B) existed to the west of the property in question. Immediately to the south of this property the zoning is B, but the actual use of the area has been predominantly single family residential.
The zoning change was sought by the owner of the property to construct apartments for university students.
Appellants are before this Court on two points of error, briefed together, which complain that there is not sufficient evidence upon which to base the judgment, and, that "there is no absence or lack of evidence which, by absence, would support the judgment."
We overrule these points.
The City presented evidence which disclosed that the property in question lies within an area of the City of Austin designated for "apartment-type" land use. That the area was carefully studied by planning experts and the Planning Commission of the City of Austin in 1966 to lay future guidelines for "apartment-type reclassifications," consistent with the City's Master Plan.
The evidence further disclosed that the property was consistent with the Master Plan, was recommended by the City's Staff and Planning Commission, and that a definite public need did exist for such "apartment-type" zoning in the area. Further, that the rezoning to apartments would not be undesirable because of added traffic congestion.
It is common knowledge that the enrollment of the University of Texas achieved an excess of 34,000 students this year. The testimony discloses that additional housing facilities are needed in the area because of the growth of the University and because of the loss of some existing housing due to urban renewal and other public facilities that either preempted or will preempt present housing near the University.
Appellants attempted to show through cross-examination of the city's own technical witnesses that the apartment would cause traffic congestion, would tend to reduce air circulation and light, would burden sewerage facilities and that there would not be adequate parking facilities.
As stated by this Court in Burford v. City of Austin, 379 S.W.2d 671 (Tex.Civ. App., Austin, 1964, writ ref'd n. r. e.):
"[5] The authority of the courts in interfering with a municipal zoning ordinance is very limited. The proper test *277 to be applied is whether reasonable minds may differ.
`If reasonable minds may differ as to whether or not a particular zoning restriction has a substantial relationship to the public health, safety, morals or general welfare, no clear abuse of discretion is shown and the restriction must stand as a valid exercise of the city's police power. City of Corpus Christi v. Jones, Tex.Civ.App., 144 S. W.2d 388, error dism., correct judgt. Otherwise expressed by the court in the case just cited, if the issue of validity is fairly debatable courts will not interfere.'" City of Waxahachie v. Watkins, 154 Tex. 206, 275 S.W.2d 477.
We hold that under the standard set out above there was ample evidence to sustain the amended ordinance.
The judgment of the trial court is affirmed.
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194 S.E.2d 638 (1973)
17 N.C. App. 445
Steve W. KISER
v.
H. F. SNYDER et al.
No. 7321SC162.
Court of Appeals of North Carolina.
February 28, 1973.
Certiorari Denied April 2, 1973.
*640 White & Crumpler by James G. White, Michael J. Lewis and G. Edgar Parker, Winston-Salem, for plaintiff appellant.
Womble, Carlyle, Sandridge & Rice by Allan R. Gitter, Winston-Salem, for defendants appellees.
Certiorari Denied by Supreme Court April 2, 1973.
MALLARD, Chief Judge.
Rendition of summary judgment is, by the rule itself, conditioned upon a showing by the movant (1) that there is no genuine issue as to any material fact and (2) that the moving party is entitled to a *641 judgment as a matter of law. Page v. Sloan, 281 N.C. 697, 190 S.E.2d 189 (1972). "An issue is material if the facts alleged would constitute a legal defense or would affect the result of the action, or if its resolution would prevent the party against whom it is resolved from prevailing in the action." Koontz v. City of Winston-Salem, 280 N.C. 513, 186 S.E.2d 897 (1972). "`The party moving for summary judgment has the burden of clearly establishing the lack of any triable issue of fact. . . . His papers are carefully scrutinized; and those of the opposing party are on the whole indulgently regarded.'" Singleton v. Stewart, 280 N.C. 460, 186 S.E.2d 400 (1972).
In Page v. Sloan, supra, it is said:
"While our Rule 56, like its federal counterpart, is available in all types of litigation to both plaintiff and defendant, `we start with the general proposition that issues of negligence . . . are ordinarily not susceptible of summary adjudication either for or against the claimant, but should be resolved by trial in the ordinary manner.' 6 Moore's Federal Practice (2d ed. 1971) § 56.17 [42] at 2583; 3 Barron and Holtzoff, Federal Practice and Procedure (Wright ed. 1958) § 1232.1, at 106. It is only in exceptional negligence cases that summary judgment is appropriate. Rogers v. Peabody Coal Co., 342 F.2d 749 (C.A.6th 1965); Stace v. Watson, 316 F.2d 715 (C.A.5th 1963). This is so because the rule of the prudent man (or other applicable standard of care) must be applied, and ordinarily the jury should apply it under appropriate instructions from the court. Gordon, The New Summary Judgment Rule in North Carolina, 5 Wake Forest Intra.L.Rev. 87 (1969).
Moreover, the movant is held by most courts to a strict standard in all cases; and `all inferences of fact from the proofs proffered at the hearing must be drawn against the movant and in favor of the party opposing the motion.' 6 Moore's Federal Practice (2d ed. 1971) § 56.15 [3], at 2337; United States v. Diebold, Inc., 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962)."
Nonetheless, summary judgment is proper in negligence actions where it appears that there can be no recovery even if the facts as claimed by plaintiff are true. McNair v. Boyette, 282 N.C. 230, 192 S.E. 2d 457 (1972); Pridgen v. Hughes, 9 N.C. App. 635, 177 S.E.2d 425 (1970). When the facts are admitted or established, negligence is a question of law and the court must say whether it does or does not exist. McNair v. Boyette, supra; Hudson v. Transit Co., 250 N.C. 435, 108 S.E.2d 900 (1959).
The facts in this case are not admitted and neither are they agreed. Portions of the deposition of the plaintiff offered by the defendants in support of their motion are in conflict with other portions of the deposition, as well as portions of plaintiff's affidavit offered by the plaintiff in opposition to the motion. These conflicts, although they appear in plaintiff's statements, when carefully scrutinized and "indulgently regarded" in favor of the plaintiff, raise material issues of fact as to whether plaintiff was properly instructed as to the use of the metal shearing machine before being directed to use it.
Thus, when all the evidence is properly considered and all inferences of fact from the proofs proffered at the hearing are drawn against the movant (defendant) and in favor of the party opposing the motion (plaintiff), genuine issues of fact as to negligence, contributory negligence and damages were raised, and the defendants failed to carry the burden of showing that there was a lack of any triable issue of fact and that they were therefore entitled to judgment as a matter of law.
The entry of summary judgment was error.
Reversed.
MORRIS and HEDRICK, JJ., concur.
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475 So.2d 947 (1985)
OBS COMPANY, INC. and Mission Insurance Company, Appellants,
v.
Donald FREENEY, Appellee.
No. BD-331.
District Court of Appeal of Florida, First District.
September 5, 1985.
Rehearing Denied October 11, 1985.
John S. Smith of Marlow, Shofi, Smith, Hennen, Smith & Slother, Tampa, for appellants.
Barry M. Salzman of Chambers & Salzman, St. Petersburg, for appellee.
BOOTH, Chief Judge.
This cause is before us on appeal from a workers' compensation order awarding claimant temporary partial disability benefits and wage-loss benefits. The issues presented are: (1) whether the deputy commissioner erred in awarding wage-loss benefits when claimant had no permanent impairment under the AMA Guides to the Evaluation of Permanent Impairment (Guides); and (2) whether the deputy commissioner erred in awarding temporary partial disability benefits when claimant had been released to perform employment with no limitations or restrictions other than avoiding wet plaster or wet cement.
On February 29, 1984, claimant, a 37-year-old high school graduate, developed contact dermatitis as a result of exposure to wet cement while working for the employer, OBS Company, Inc. (OBS). Claimant's treating physician, Dr. Harold Seder, determined that claimant's dermatitis was an allergic reaction rather than an irritational reaction, which means that each time claimant comes in contact with wet cement, he can expect to have the dermatitis. Claimant had worked as a journeyman plasterer for three or four years prior to the onset of the dermatitis. At the time he was disabled by dermatitis, he was earning ten dollars per hour, with an average weekly wage of $400. The parties stipulated that claimant reached maximum medical improvement on July 30, 1984.
*948 Dr. Seder was of the opinion that, based upon the Guides, claimant had sustained no ratable permanent impairment. However, Dr. Seder testified that, if he were not required to follow the criteria in the Guides, he was of the opinion that claimant has a permanent physical impairment to the extent that he must avoid contact with wet cement and therefore cannot work as a plasterer. When asked whether he could give a rating of claimant's permanent impairment if claimant remained in his occupation as a plasterer, Dr. Seder responded that he could not but that, if claimant continued in such occupation, claimant would be totally incapacitated and unable to work at all.
Claimant had worked approximately three to four years before becoming disabled by the contact dermatitis on February 29, 1984. He has had some training in horticulture and block masonry. His work history includes janitorial work, working in a lumberyard, block masonry, and lawn maintenance. After his release to work on June 4, 1984, claimant unsuccessfully searched for a job. Most of the employers claimant contacted or with whom he filed an application were not hiring. Claimant admitted that he tried to obtain work which paid more than the minimum wage.
The deputy commissioner found that claimant was temporarily partially disabled from April 16, 1984, to May 15, 1984, and from June 4, 1984, to July 30, 1984, during which times he conducted a good-faith job search. He further found that claimant had performed an adequate job search after he had reached maxiumum medical improvement on July 30, 1984, that claimant's wage loss was causally related to his occupational disease, and that claimant had a permanent physical impairment as a result of his occupational disease.
The order of the deputy commissioner awarding temporary partial disability benefits and wage-loss benefits is, in pertinent part, as follows:
The main issue of this claim is whether the claimant has a permanent physical impairment that makes him eligible to receive wage loss benefits. Some historical background on the compensability of the claimant's condition may be helpful. Contact dermatitis due to cement has long been recognized as an occupational disease in Florida. Accord: Phelps v. Gunite Construction and Rentals, Inc., 279 So.2d 829 (Fla. 1973). Likewise, under pre-Wage Loss law, when an employee suffered "disability" as a result of an occupational disease, "disability' [sic] being defined then, as now, by Chapter 440 as the "incapacity because of the injury to earn in the same or any other employment the wages which the employee was receiving at the time of the injury", an injured worker was entitled to receive permanent indemnification benefits, either partial or total. It is obvious to the undersigned, based upon findings more specifically set out in this order, that were this claim governed by the law in effect prior to institution of the wage loss concept, the claimant herein would have a permanent impairment of his wage earning capacity and would be entitled to permanent partial disability benefits. See, Martinez v. Robert Weber Construction Company, 181 So.2d 645 (Fla. 1966), and Plantation Construction Company v. Ayers, 385 So.2d 1138 (Fla. 1st D.C.A. 1980).
However, under the Wage Loss law that was in effect at the time of the accident herein, in order to be eligible for wage loss benefits, an injured worker must incur a permanent impairment pursuant to the A.M.A. Guides unless such permanent impairment cannot be determined by the Guides, in which case such permanent impairment may be established under other generally accepted medical criteria for determining impairment. Accord: Trindade v. Abbey Road Beef 'n Booze, 443 So.2d 1007 (Fla. 1st D.C.A. 1983). In the instant case, the claimant's doctor opined that under the examples and criteria set forth in Chapter 12, "The Skin", of the A.M.A. Guides, the claimant would have a zero percent impairment even though the claimant would not be able to return to his former *949 employment. The doctor also opined that if the claimant continued to work in wet cement he would have a permanent impairment.
Chapter 12 of the Guides, dealing with the skin, states in the introductory paragraph that:
"This `Guide' provides criteria for evaluating the effect that permanent impairment of the skin and its appendages has on an individual's ability to perform the activities of daily living".
American Medical Association Committee on Rating of Mental and Physical Impairment, Guides to the Evaluation of Permanent Impairment, Chapter XII, "The Skin", P. 143 (1971).
Additionally, the phrase, "activities of daily living" is specifically defined in the Guides as:
"Evaluation of permanent impairment is an appraisal of the nature and extent of the patient's illness or injury as it affects his personal efficiency in one or more of the activities of daily living. These activities are self-care, communication, normal living postures, ambulation, elevation, traveling, and non-specialized hand activities."
American Medical Association Committee on Rating of Mental and Physical Impairment, Guides to the Evaluation of Permanent Impairment, "Preface", P. iii, (1971).
Of note, is the conspicuous absence of reference to how a particular condition affects one's efficiency in personal physical activities peculiar to one's employment.
Essentially, the main issue in the instant case can be stated as follows: whether the so-called exclusivity of the Guides must be recognized with respect to injuries or conditions which, although "covered" in the Guides, do so only to the extent of providing a permanent impairment rating where the condition has resulted in some limitation in performance of some of the activities of daily living, where the existence of permanent impairment other than some limitation in the performance of daily living activities, i.e., physical limitation of certain employment activities, has been made to appear by evidence meeting generally accepted medical standards for determining impairment? It is the opinion of the undersigned that the Trindade decision, supra, dealing with an analogous situation (instability of joint but no loss of range of motion) compels the answer, that under those circumstances, the A.M.A. Guides do not exclusively control in this specific factual circumstance.
A review of Chapter 12 of the Guides on "The Skin" and the examples set forth leads the undersigned to conclude that the existence and degree of permanent impairment under the particular facts of this case cannot be determined by the Guides. As pointed out above, the Guides in this particular chapter deal with the effect that the permanent impairment of the skin has on an individual's ability to perform the activities of daily living without taking into consideration the effect that a skin impairment has on one's employment activities. This is reinforced by the examples given in the Guides. Under "Class one, 0 to 5%, Example two", Page 144, an employee with a dermatitis condition that clears up if he avoids certain agents, receives a zero percent impairment even if that person cannot return to the type of employment that he was performing at the time of his exposure and outbreak (this is the example that applies to the claimant herein). However, under "Class two, 10% to 20%, Example one", Page 145, a housewife that develops a chronic dermatitis that requires some intermittent treatment receives a ten percent impairment. Thus, it is obvious that the effect that the skin condition has upon one's economic loss, which is the heart of the wage loss concept, is not a factor in making a determination of impairment to the skin under the Guides. Collaterally, but not a factor in the undersigned's findings, is the pronouncement in Trindade, supra, that since the indispensable requisite of the wage loss concept is economic *950 loss, a classification which distinguishes between eligible and ineligible claimants on a basis which bears no reasonable relationship to their respective economic loss is violative of certain Federal and State Constitutional guarantees.
The claimant's physician has opined that the claimant would have a permanent impairment as a result of his condition if he continued to work with wet cement. However, the claimant would encounter increasing physical problems from the dermatitis that would eventually totally incapacitate him from working in that employment. Additionally, the employer/carrier could assert the affirmative defense of a voluntarily inflicted injury against claims for indemnity benefits under those circumstances. Accord: Ernest Waters Construction Company v. Mills, 51 So.2d 180 (Fla. 1951). On the other hand, if one accepts the premise that the Guides are exclusive in this particular situation, and the claimant accepts other less remunerative employment, he would not be entitled to wage loss benefits because the Guides do not provide an impairment rating.
I find, however, that under the facts of this particular case, the Guides do not deal with the effect that the dermatitis has upon the claimant's ability to return to and perform the various physical activities of the employment in which he developed the occupational disease as opposed to the claimant's ability to carry out daily living activities as defined by the Guides.
The claimant's treating physician, Harold Seder, M.D., a Board Certified Dermatologist, has opined that the claimant would have a permanent impairment if the claimant continued to work with wet cement and that he would eventually become totally disabled from working in that employment as a result of the dermatitis. Dr. Seder also observed the outbreak of the dermatitis upon the claimant's skin. It was Dr. Seder's opinion that the claimant should not return to employment involving contact with wet cement. The undersigned accepts the testimony of Dr. Seder and finds that this expert opinion is competent and substantial evidence that establishes the existence of a permanent impairment of an unknown degree under the facts of this particular case and that this evidence meets generally acceptable medical standards for determining impairment, especially in light of the fact that the doctor was not aware of any guides other than the A.M.A. Guides for determining dermatological impairment.
Claimant clearly suffers from permanent impairment which has resulted in his "incapacity because of the injury to earn in the same or any other employment the wages which the employee was receiving at the time of the injury." (emphasis added). Section 440.02(9), Florida Statutes. Due to his skin condition, claimant cannot work in his chosen occupation, where he earned a relatively high salary, and, in all likelihood, is unable to earn an equal wage in other employment without further training. Although not presented as an issue, we note that neither the employer nor its servicing agent has provided claimant any rehabilitation services as required by Section 440.49(1)(a), Florida Statutes.[1] In the *951 situation before us, claimant's condition is directly related to his occupation. Under the terms of the Guides, there is no impairment if the injury does not affect the employee's daily living. In the case sub judice, claimant's skin condition does not affect his daily living as long as he does not work in his job. Essentially, as long as claimant does nothing, there is no impairment.
In Trindade v. Abbey Road Beef 'n Booze, 443 So.2d 1007, 1011 (Fla. 1st DCA 1983), this court held:
We have the obligation of interpreting a statute in a manner consistent with the legislative intent, to the extent it is ascertainable and can lawfully be implemented. We have the further obligation of applying an interpretation upholding the constitutionality of a statute, if such an interpretation is permissible. Department of Insurance, State of Florida v. Southeast Volusia Hospital District, 438 So.2d 815 (Fla. 1983).
Accordingly, although the Guides do not award the permanent impairment to claimant's skin condition, we affirm and agree with the deputy that, under the particular factual circumstances at bar, the Guides are not exclusively controlling because the Guides do not address claimant's evident economic loss, which is the basis of the wage-loss concept. Trindade at 1012.
As to the award of temporary partial disability benefits, the deputy's finding that claimant conducted a valid, good-faith job search after his release by his doctor to return to some other type of employment is supported by competent, substantial evidence. We therefore affirm that award.
We certify to the Supreme Court of Florida the following question as one of great public importance:
DO THE AMA GUIDES TO THE EVALUATION OF PERMANENT IMPAIRMENT APPLY AND PRECLUDE A PERMANENT IMPAIRMENT RATING WHERE CLAIMANT SUFFERS A DISABILITY DUE TO OCCUPATIONAL DISEASE WHICH PERMANENTLY IMPAIRS CLAIMANT'S ABILITY TO WORK, RESULTING IN ECONOMIC LOSS, BUT DOES NOT AFFECT "THE ACTIVITIES OF DAILY LIVING?"
WIGGINTON and BARFIELD, JJ., Concur.
NOTES
[1] Section 440.49(1)(a), Florida Statutes, provides, in pertinent part, as follows:
(1) REHABILITATION OF INJURED EMPLOYEES.
(a) When an employee has suffered an injury covered by this chapter and it appears that the injury will preclude the employee from earning wages equal to wages earned prior to the injury, the employee shall be entitled to prompt rehabilitation services. The employer or carrier, at its own expense, shall provide such injured employee with appropriate training and education for suitable gainful employment and may cooperate with federal and state agencies for vocational education and with any public or private agency cooperating with such federal and state agencies in the vocational rehabilitation of such injured employees. For purposes of this section only, "suitable gainful employment" means employment or self-employment which is reasonably attainable in light of the individual's age, education, previous occupation, and injury and which offers an opportunity to restore the individual as soon as practicable and as nearly as possible to his average weekly earnings at the time of injury... .
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405 F.Supp. 385 (1975)
SWANK FEDERAL CREDIT UNION
v.
C. H. WAGNER & CO., INC., et al.
SOMERVILLE SCHOOL EMPLOYEES FEDERAL CREDIT UNION
v.
C. H. WAGNER & CO., INC., et al.
Civ. A. Nos. 71-2038-T, 71-2618-T.
United States District Court, D. Massachusetts.
December 17, 1975.
*386 Paul J. Lambert, Thomas H. Walsh, Jr., William G. Young, Bingham, Dana & Gould, Boston, Mass., for plaintiffs.
Milton P. Reiser, pro se.
Murray P. Reiser, Boston, Mass., for defendants.
TAURO, District Judge.
These actions are brought by two federally-chartered employees' credit unions seeking to enforce the civil liabilities of Section 12(1) of the Securities Act of 1933, 15 U.S.C. § 77l(1), in connection with the sale to them of certificates of deposit [CD] which were not accompanied by a registration statement approved by the Securities and Exchange Commission.
The original defendants in each case were C. H. Wagner & Co. [Wagner Co.], the Boston brokerage firm through which the CDs were bought, Clarence Wagner, the President of Wagner Co. at the time of the transactions in question and Robert Treyz, a salesman in Wagner Co.'s Providence, Rhode Island office. In addition, Milton Reiser, General Manager of Wagner Co.'s Providence office was originally named as a defendant in the Swank case, although not in the Somerville case.
Pursuant to the Securities Investor Protection Act (S.I.P.A.), 15 U.S.C. §§ 78aaa et seq., all actions against Wagner Co. were stayed by another judge on March 1, 1972 and a trustee was appointed to liquidate the firm's assets. See S.E.C. v. C. H. Wagner & Co., Inc., 373 F.Supp. 1214 (D.Mass.1974). The plaintiff has indicated to the court that Mr. Treyz is deceased. The action against Mr. Reiser has been settled.
I.
The parties to both actions have filed agreed statements of facts which may be briefly summarized.
A.
The Swank Case.
During 1970 and 1971, Reiser, on behalf of C. H. Wagner, suggested to the Swank Employees' Federal Credit Union [Swank] that it purchase a CD issued by the Sharpstown State Bank [Sharpstown] in Texas. Prior to this solicitation Swank had not been aware of the availability of Sharpstown CDs. To induce the purchase, Reiser described to a Swank representative the financial condition of Sharpstown and sent a letter confirming that Sharpstown was in sound financial condition and provided other information indicating that the investment was legal.
On January 8, 1971, Swank purchased a Sharpstown CD with a face value of *387 $100,000 and a term of one year. Sharpstown was to pay interest of 7.5% per annum. In addition, Wagner Co. itself agreed to pay Swank a further .5% bonus at the end of the CD's term. This bonus was offered as an inducement to Swank to purchase the CD and it operated as such. The CD was never registered as a security pursuant to Section 5 of the Securities Act of 1933. 15 U.S.C. § 77e(a).
At about the time of the CD purchase by Swank, there existed certain persons who desired to obtain loans from Sharpstown. Sharpstown was willing to make loans to these persons only if the deposits were first made to the Bank which would act as a compensating balance.
The potential borrowers entered into arrangements with certain "money brokers" to obtain these deposits. They agreed to pay the money brokers a commission if the brokers obtained the deposits. The money brokers, in turn, entered into arrangements with Wagner Co. and/or its subsidiary Wagner Funding Corp., pursuant to which Wagner Co. would receive a commission from the brokers if it found the necessary deposits.
Wagner Co. solicited Swank pursuant to its arrangement with the money brokers. The .5% discount paid by Wagner Co. to Swank was a portion of the commission Wagner Co. received from the money brokers. The remainder of Wagner Co.'s commission was to be its profit.
Swank was unaware of these arrangements at the time it purchased the CDs. Swank remained unaware of them until sometime after January 25, 1971, the date Sharpstown was closed by order of the Texas Banking Commissioner and the Federal Deposit Insurance Corporation was appointed receiver. Swank has received to date $68,172.61 from FDIC insurance and dividends paid from the liquidation of bank assets. It claims a loss of $32,115.06.
The mails, telephone and other instrumentalities of interstate commerce were used in the course of the transaction.
B.
The Somerville Case.
The facts of the Somerville case are essentially the same. The Somerville School Employees' Federal Credit Union [Somerville] purchased a $100,000 unregistered Sharpstown CD on December 8, 1970. Sharpstown was to pay 7.5% and Wagner Co. .5%. As a result of FDIC insurance and liquidation dividends, Somerville has received $68,542.46 and claims a remaining loss of $32,361.65.
II.
Section 5 of the 1933 Act, 15 U.S.C. § 77e(a), prohibits inter alia, the use of the mails or other instruments of interstate commerce to sell a security for which a registration statement is not in effect. Section 12(1) of the 1933 Act, 15 U.S.C. § 77l(1), provides for absolute civil liability for violations of Section 5. The parties do not dispute the fact that controlling persons of brokerage firms which act as the agents for the issuers of securities are liable under section 12. 15 U.S.C. § 77d; 77o; S.E.C. Rule 405, 17 C.F.R. § 230.405(f) (1975); Hill York Corp. v. American International Franchises, Inc., 448 F.2d 680, 692-95 (5th Cir. 1971); Katz v. Amos Treat Co., 411 F.2d 1046, 1052-55 (2d Cir. 1969) (Friendly, J.); Cady v. Murphy, 113 F.2d 988, 990-91 (1st Cir.), cert. denied, 311 U.S. 705, 61 S.Ct. 175, 85 L. Ed. 458 (1940).
In order to establish a prima facie case for a violation of Section 5, the plaintiff must prove three elements. Hill York v. American International Franchises, Inc., 448 F.2d 680 (5th Cir. 1971).
1. No registration statement was in effect at the times in question;
2. The defendant offered or sold securities; and
*388 3. Interstate transportation and/or communication were used in connection with the transaction.[1]
The parties have stipulated to facts which would prove elements one and three. The sole question in this lawsuit then is whether the CDs with their bonus provision were securities which should have been registered prior to sale.
Section 2(1) of the 1933 Act, 15 U.S.C. § 77b(1) defines security to include any "investment contract." The plaintiff contends that the certificates of deposit sold to it, together with the added discount or bonus, constituted an investment contract package which should have been registered.
The leading case interpreting the phrase "investment contract" is S.E.C. v. Howey Co., 328 U.S. 293, 66 S.Ct. 1100, 90 L.Ed. 1244 (1946). There investors were encouraged to purchase mini-parcels of a citrus grove together with a service contract for cultivating the crops. The S.E.C. argued that the entire transaction should be accompanied by a registration statement. The Court agreed, noting:
. . . [A]n investment contract for purposes of the Securities Act means a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party, it being immaterial whether the shares in the enterprise are evidenced by formal certificates or by nominal interests in the physical assets employed in the enterprise. . . . [The definition] embodies a flexible rather than a static principle, one that is capable of adaptation to meet the countless and variable schemes devised by those who seek the use of the money of others on the promise of profits. Id. at 298-99, 66 S.Ct. at 1103 (emphasis added).
See also S.E.C. v. Glenn W. Turner Enterprises, 474 F.2d 476 (9th Cir. 1973).
The application of Howey was well illustrated by Safeway Portland Employees Federal Credit Union v. C. H. Wagner & Co., 501 F.2d 1120 (9th Cir. 1974), aff'g in part, 335 F.Supp. 110 (D. Or.1971), where the Ninth Circuit dealt with an essentially identical transaction involving Sharpstown CDs sold to an employee's credit union by Wagner Co. This court finds the reasoning of the Ninth Circuit persuasive and adopts it here.
The transactions at issue in this case are not ordinary purchases and sales of a bank CD. Rather, they represent the culmination of an integrated plan by which outside investors unknowingly provide loan capital to marginal borrowers and thereby shift at least a portion of the risk of those loans away from a bank already in difficult financial circumstances. The venture is inescapably tied to the efforts, and continued solvency, of the bank, the brokerage firm and the borrowers. The investor's role is limited to providing the funds and accepting a risk commensurate with his hopes of a higher return.
The defendant would view the transaction in two parts: the sale of a CD by a bank at 7.5% interest, and the addition of a .5% bonus by Wagner Co. Under this view, the defendant would seek to apply the bank securities exemption of the 1933 Act, 15 U.S.C. § 77c(a)(2), and limit the defendant's liability to that portion of the loss attributable to payment of the bonus. While perhaps technically accurate, this theory ignores the substance of the transaction. The plaintiffs were sold integrated investment packages, which depended upon the efforts of all those involved for their success. The additional bonus to be provided *389 by Wagner Co. was one aspect of the transaction and it provided not only the critical economic inducement for the plaintiffs but also represented the value of the increased risk inherent in the entire venture. When so viewed, the elements of the Wagner package are inseparable, and as such, constitute an investment contract under the Act. See also Continental Marketing v. S.E.C., 387 F. 2d 466 (10th Cir. 1967).
The defendant also argues that as a matter of policy no liability should be imposed here. He maintains that the real abuse in this situation is that it encourages marginal banks to make unsafe loans, a matter which is essentially a banking or economic problem and should therefore be left in the hands of the Comptroller of the Currency. This view, of course, differs from the view expressed by both the Comptroller and the Federal Deposit Insurance Corporation in their amicus briefs before the Ninth Circuit. Moreover, it fails to take into account the fundamental difference between this transaction and the routine sale of a bank CD. Here, plaintiffs' hopes for a successful investment were primarily dependent upon the success and continued survival of parties other than Sharpstown, a risk which is fundamentally different from that involved in a normal transaction of this kind. Indeed, the plaintiffs made the investment without being fully informed of the risks they were undertaking, the precise ill which the registration requirement of Section 5 was designed to cure. Under these circumstances, and in light of the purpose of the registration requirement to provide "the investing public a full measure of protection," the defendant's policy argument must be also rejected. S.E.C. v. Howey Co., supra, 328 U.S. at 298, 66 S.Ct. at 1102.
Accordingly, it is ordered that judgment be entered in favor of the plaintiff in 71-2038-T in the amount of $32,115.06 and that judgment be entered in favor of the plaintiff in 71-2168-T in the amount of $32,361.65.
NOTES
[1] The defendant's state of mind is not relevant to liability under Section 12(1) for violations on Section 5. Lewis v. Walston & Co., 487 F.2d 617, 621 (5th Cir. 1973); III Loss, Securities Regulation 1693 (2d ed. 1961).
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Opinion filed January 18,2013
In The
€lebentf) Court of Appeals
No. 11-12-00150-CR
BRAD LINDSEY, Appellant
V.
STATE OF TEXAS, Appellee
On Appeal from the 104th District Court
Taylor County, Texas
Trial Court Cause No. 15888B
MEMORANDUM OPINION
Brad Lindsey has filed in this court a motion to withdraw his notice of appeal and dismiss
his appeal. Pursuant to Tex. R. App. P. 42.2, the motion is signed by both appellant and his
counsel.
The motion is granted. Appellant's notice of appeal is withdrawn, and the appeal is
dismissed.
January 18,2013 PER CURIAM
Do not publish. See Tex. R. App. P. 47.2(b).
Panel consists of: Wright, C.J.,
McCall, J., and Willson, J.
1 1th Court of Appeals
Eastland, Texas
Judgment
Brad Lindsey, * From the 104th District
Court of Taylor County,
Trial Court No. 15888B.
Vs. No. 11-12-00150-CR * January 18, 2013
State of Texas, * Per Curiam Memorandum Opinion
(Panel consists of: Wright, C.J.,
McCall, J., and Willson, J.)
This court has considered Brad Lindsey's motion to withdraw his notice of appeal and
dismiss his appeal and concludes that the motion should be granted. Therefore, in accordance
with this court's opinion, the notice of appeal is withdrawn, and the appeal is dismissed.
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991 F.2d 789
NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.GANOT CORPORATION, Plaintiff-Appellant,v.HOSPITAL CORPORATION OF AMERICA; HCA Health Services ofVirginia; Roanoke Valley Psychiatric Center,Defendants-Appellees.
No. 92-1010.
United States Court of Appeals,Fourth Circuit.
Argued: February 3, 1993Decided: April 26, 1993
Appeal from the United States District Court for the Western District of Virginia, at Roanoke. James C. Turk, Chief District Judge. (CA-87-115-R)
John Saul Edwards, MARTIN, HOPKINS, LEMON & EDWARDS, P.C., Roanoke, Virginia, for Appellant.
Daniel Simpson Brown, WOODS, ROGERS & HAZLEGROVE, Roanoke, Virginia, for Appellees.
Frank K. Friedman, WOODS, ROGERS & HAZLEGROVE, Roanoke, Virginia, for Appellees.
W.D.Va.
AFFIRMED.
Before HALL, MURNAGHAN, and NIEMEYER, Circuit Judges.
PER CURIAM:
OPINION
1
Ganot Corporation appeals an order of the district court granting summary judgment for appellees Hospital Corporation of America (HCA), et al., in a dispute over the amount of rent owed by HCA to Ganot under a sublease. Our review of the briefs and consideration of the arguments of the parties have revealed that this appeal is without merit. Accordingly, we affirm the judgment of the district court for the reasons stated by that court in its memorandum opinion. Ganot Corporation v. Hospital Corporation of America, No. 87-0115-R (W.D. Va. Dec. 9, 1991).
AFFIRMED
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241 F.2d 521
57-1 USTC P 9446
Alvin KAPLAN, Appellant,v.UNITED STATES of America, Appellee.
No. 16129.
United States Court of Appeals Fifth Circuit.
March 1, 1957.Rehearing Denied April 22, 1957.
Jacob J. Amato, Gretna, La., for appellant.
M. Hepburn Many, New Orleans, La., Charles K. Rice, Asst. Atty. Gen., Fred G. Folsom, Atty. Dept. of Justice, Washington, D.C., for appellee.
Before HUTCHESON, Chief Judge, and CAMERON and JONES, Circuit Judges.
PER CURIAM.
1
Convicted by a jury on the three counts of an indictment charging him with aiding and assisting in the preparation and presentation of false and fraudulent income tax returns, in violation of Sec. 7206(2) Title 26 U.S.C.A., and sentenced to imprisonment for one year on each count, the sentences to run concurrently, defendant has appealed, presenting five questions.1
2
The first, second, and fourth together make up the question most urged and argued, that the defendant, though insisting upon conducting his own trial,2 and conducting it through some 600 pages of testimony, did not have the capacity to understand the nature and seriousness of the charges against him and to properly conduct the trial, and that he should, therefore, have had counsel to assist him.
3
The other two claims, (1) of the denial of his request for a continuance of twenty days to prepare a defense and (2) of the failure of the court to hear defendant's motions, urging the unconstitutionality of the statute under which he was convicted, may be disposed of by saying that the record does not support them. The continuance sought was not for the purpose of preparing a defense. It was, as shown in the record, to consider a motion to be filed for hearing exceptions to criminal jurisdiction and to the indictment, and the record does not show any motion urging the unconstitutionality of the statute under which he was charged or that the court failed or refused to consider and determine all of the matters presented to him. Besides, neither the record nor appellant's brief, points out any prejudicial error in any action of the court, including his refusal to grant any of the defendant's motions. As the government's brief points out, the validity, scope, application, and effect of the statute have been determined adversely to appellant's contentions in cases cited by it, United States v. Borgis, 7 Cir., 182 F.2d 274 and United States v. Kelley, 2 Cir., 105 F.2d 912, and no cases holding to the contrary are cited by appellant.
4
We come then to his counsel's primary contention, that appellant was incompetent to waive the assistance of counsel and conduct his own case, to find that the question of mental competency of the defendant was decided in favor of his contention that he was competent, by the district judge on competent professional evidence offered by the defendant;3 that the record is replete with evidence that defendant had had considerable acquaintance with and experience in regard to legal matters that throughout the long record he exhibited an understanding of the proceedings, a thoroughness in examination, and a pertinacity which belies the claim his counsel is now making that he was ignorant, inexperienced, and gullible, a lamb among wolves; and that the court therefore erred in permitting him at his request, to conduct his own case.4
5
Throughout the trial, in the sentence imposed, and in the proceedings subsequent thereto, including his advising the defendant to appeal his case and authorizing his appeal in forma pauperis, the district judge evidenced patience and forbearance and a recognition of the defendant's age and frailties, together with solicitude of a rare order, to assure to the defendant every rightful protection. On this record, it is impossible for us to view the case, as defendant's counsel asks us to do, as one in which defendant had been denied due process or subjected in any way to a deprivation of his rights or suppose other than that the court will, under Rule 35 Federal Rules of Criminal Procedure, 18 U.S.C.A. 'Correction or Reduction of Sentence', give careful consideration to a reduction of the sentence, including placing the defendant on probation.
6
No prejudicial error having been made to appear,5 the judgment is affirmed.
1
(1) The question of the mental capacity of the appellant to fully comprehend and understand the nature of the proceedings against him
(2) The lack of knowledge on the part of the appellant as to the seriousness of the charge against him and the possible consequences or sentence that could be imposed if found guilty.
(3) The denial of the appellant's request for a continuance prior to trial in order to prepare a defense.
(4) The admission into evidence of certain inadmissible or objectionable evidence without any objection being made on the part of the appellant.
(5) The failure of the court to hear the motions filed by the appellant urging the unconstitutionality of the statute under which he was charged.
2
'The Court: Is the defendant ready?
'Mr. Kaplan: The defendant is ready, your Honor.
'The Court: And the court is advised that counsel appointed by the court is not representing the defendant, is that correct?
'Mr. Kaplan: I would like to have a trial by jury, and I represent myself. I would like to represent myself, and I have represented myself the last four years in this open court.' (TR p. 17)
3
Prior to trial, on motion of the United States Attorney, a hearing was conducted before his Honor, the trial judge, to determine the mental competency of the appellant. Dr. Edmund Connely, a psychiatrist testified that he had examined the appellant in 1955 and that at that time he considered the appellant to be suffering from manic depression insanity, and that he further believed that the appellant was still in that state and could not stand trial
Upon motion of the appellant, through his attorney, Carl Shumacker, the hearing was continued in order that the appellant could be examined by a psychiatrist of his choosing. Thereafter, the hearing was resumed, this psychiatrist testified categorically to defendant's mental competency and, the hearing ended, the trial judge ruled that the appellant was mentally able to stand trial.
4
Adams v. U.S. ex rel. McCann, 317 U.S. 269, 63 S.Ct. 236, 87 L.Ed. 268; Johnson v. Zerbst, 304 U.S. 458, 58 S.Ct. 1019, 82 L.Ed. 1461
5
United States v. Herskovitz, 2 Cir., 209 F.2d 881; United States v. Brewster, 2 Cir., 231 F.2d 213
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136 Ga. App. 301 (1975)
220 S.E.2d 786
FOOTE
v.
THE STATE.
51204.
Court of Appeals of Georgia.
Submitted September 29, 1975.
Decided October 23, 1975.
William D. Smith, for appellant.
Clete D. Johnson, District Attorney, for appellee.
DEEN, Presiding Judge.
1. The defendant was indicted in the Superior Court of Madison County on February 18, 1974, for the offense of aggravated assault. He did not live in the county and was arrested in Atlanta, Georgia, on Monday, February 24, and brought to Danielsville that afternoon. According to his counsel, "He was brought here and was able to contact his family on Tuesday. They contacted me late Tuesday afternoon, and I was here last night [Wednesday], my first opportunity to talk with him. I have not had an opportunity to talk with any witnesses in this case, to investigate the case or to prepare a proper defense on his behalf." The motion was made Thursday morning, February 27, upon the call of the case for trial. Counsel also specified a possible witness whose name appeared on police reports and whom he had not had time to interview. The court denied the motion, stating that he had on Monday appointed the public defender to represent the defendant. Whether this attorney was present and whether he had made any investigation or trial preparation does not appear. We assume from suggestions in the skimpy record before us that the defendant was not admitted to bail and that the employment of counsel was effectuated by members of the family on Tuesday, the afternoon of the same day they were notified of the arrest.
Where it affirmatively appears that the possible time for investigation and preparation of the defense is short, and the defendant has not been dilatory in obtaining counsel, the discretion of the court on motions for postponement should be liberally exercised in favor of a fair trial. Cartee v. State, 85 Ga. App. 532 (69 SE2d 827). Due process requirements guarantee to a defendant unable to employ counsel the right to have counsel appointed by the court, but no less do they entitle an accused who is able to employ counsel a reasonable opportunity to obtain representation of his choice, and he is not compelled to accept court appointed defenders instead of an attorney in whom he reposes greater confidence merely to speed his trial by a day or two. "Where a defendant charged with crime is detained in *302 custody, and is in effect ... deprived of opportunity to procure counsel of his own choice, and is forced to trial with counsel appointed by the court, and his motion to postpone the trial so as to permit him to communicate with his family in order to procure counsel is overruled, the provisions of the constitution and of the Code, § 27-403, are violated." Walker v. State, 194 Ga. 727 (22 SE2d 462). The mere obtention of counsel, without giving him time to acquaint himself with the case and subpoena witnesses, is an empty right. "The constitutional guaranty of benefit of counsel to one charged with an offense against the laws of this State means something more than the mere appointment. Such counsel is entitled to a reasonable length of time to prepare properly his defense." Smith v. State, 215 Ga. 362 (1) (110 SE2d 635). Here, the defendant was in jail. His family obtained counsel within twenty-four hours. The attorney employed had no opportunity to talk with him until the following evening. He announced not ready for trial the next morning. It was error not to grant a postponement under these circumstances.
2. The remaining enumerations of error are not passed upon since they are unlikely to recur.
Judgment reversed. Evans and Stolz, JJ., concur.
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Case: 17-20329 Document: 00514566395 Page: 1 Date Filed: 07/23/2018
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 17-20329 FILED
Summary Calendar July 23, 2018
Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee
v.
JOSE CARMEN SOLIS PONCE, also known as Jose Carmen Solis-Ponce, also
known as Igancio Solis, also known as Jose Ponce Solis, also known as Jose
Carmen Ponce Solis, also known as Jose Carmen Solis, also known as Jose S.
Carmen, also known as Jose C. Solis, also known as Jose C. Ponce,
Defendant-Appellant
Appeal from the United States District Court
for the Southern District of Texas
Before KING, ELROD, and HIGGINSON, Circuit Judges.
STEPHEN A. HIGGINSON, Circuit Judge:
Jose Carmen Solis Ponce appeals his guilty-plea conviction and sentence
for illegal reentry after deportation following an aggravated felony conviction,
in violation of 8 U.S.C. § 1326(a) and (b)(2). He argues that the district court
erred in applying U.S.S.G. § 2L1.2(b) to enhance his sentence based on his prior
1996 and 1998 felony convictions.
To the extent that Solis Ponce is challenging the reliability of the
presentence report’s determination that he admittedly reentered the United
States illegally on November 23, 2010, he has forfeited that argument by
Case: 17-20329 Document: 00514566395 Page: 2 Date Filed: 07/23/2018
No. 17-20329
raising it for the first time in his reply brief. See Yohey v. Collins, 985 F.2d
222, 225 (5th Cir. 1993). Even if he had not forfeited this argument, we would
find no error in the district court’s reliance on Solis Ponce’s admitted date of
entry.
There is likewise no merit to Solis Ponce’s contention that his prior
convictions should not have been used to enhance his sentence under § 2L1.2(b)
because they were too remote from the date on which he was found illegally in
the United States and, thus, should not have received criminal history points
under U.S.S.G. § 4A1.2(e)(1). We review this issue de novo. See United States
v. Hawkins, 866 F.3d 344, 346-47 (5th Cir. 2017).
“A § 1326 offense begins at the time the defendant illegally re-enters the
country and does not become complete unless or until the defendant is found
by [immigration authorities] in the United States.” United States v. Compian-
Torres, 712 F.3d 203, 207 (5th Cir. 2013) (internal quotation marks and
citation omitted); see also United States v. Santana-Castellano, 74 F.3d 593,
597-98 (5th Cir. 1996) (rejecting a challenge to the application of U.S.S.G.
§ 4A1.1(d), which adds criminal history points if the defendant was under a
criminal justice sentence at the time of his illegal reentry). The commentary
to § 4A1.2 states that “the term ‘commencement of the instant offense’ includes
any relevant conduct.” § 4A1.2, comment. (n.8). Accordingly, when
determining whether a prior conviction meets the time-period requirement for
assessing criminal history points under § 4A1.2(e), the triggering date is that
of the defendant’s illegal reentry, not the date on which the defendant was
found by immigration authorities in the United States. Because Solis Ponce’s
prior convictions were within the requisite time period from his illegal reentry
date in order to receive criminal history points under § 4A1.2(e)(1), the district
2
Case: 17-20329 Document: 00514566395 Page: 3 Date Filed: 07/23/2018
No. 17-20329
court did not err in enhancing his offense level under § 2L1.2(b) based on those
convictions. See § 2L1.2, comment. (n.3); Hawkins, 866 F.3d at 346-47.
Finally, Solis Ponce has failed to show that the extent of the district
court’s downward departure based on the age of his 1996 conviction constituted
an abuse of discretion. See United States v. Desselle, 450 F.3d 179, 182 (5th
Cir. 2006). The judgment of the district court is AFFIRMED.
3
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
August 20, 2008
No. 07-60639
Summary Calendar Charles R. Fulbruge III
Clerk
JOSE MANUEL CHAVARRIA
Petitioner
v.
MICHAEL B MUKASEY, U S ATTORNEY GENERAL
Respondent
Petition for Review of an Order of the
Board of Immigration Appeals
BIA No. A29 693 130
Before KING, DENNIS, and OWEN, Circuit Judges.
PER CURIAM:*
Jose Manuel Chavarria, a native and citizen of El Salvador, has filed a
petition for review of the Board of Immigration Appeals’ (BIA) order denying his
application for asylum and withholding of removal. Chavarria argues that he
suffered past persecution and has a well-founded fear of future persecution on
account of his membership in a particular social group: family members of
military officers in El Salvador. Chavarria contends that the BIA’s decision is
not supported by substantial evidence.
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion
should not be published and is not precedent except under the limited
circumstances set forth in 5TH CIR. R. 47.5.4.
No. 07-60639
This court reviews the order of the BIA and will consider the underlying
decision of the IJ only if it had some impact upon the BIA’s decision.
Ontunez-Tursios v. Ashcroft, 303 F.3d 341, 348 (5th Cir. 2002). The BIA’s factual
findings are reviewed for substantial evidence. Ozdemir v. INS, 46 F.3d 6, 7 (5th
Cir. 1994). Under the substantial evidence standard, this court will affirm the
BIA’s decision unless the evidence compels a contrary conclusion. Id. at 8.
The record does not compel a conclusion contrary to the determination that
Chavarria was harassed and attacked by former guerillas whose motivation was
extorting money and other support from Chavarria, as opposed to Chavarria’s
membership in a particular social group. Furthermore, the BIA’s finding that
the Salvadoran government is able and willing to control Chavarria’s attackers
is supported by substantial evidence. See Adebisi v. INS, 952 F.2d 910, 913-14
(5th Cir. 1992). Chavarria cannot meet the more demanding standard for
withholding of removal given that he cannot satisfy the standard for asylum.
See Ozdemir, 46 F.3d at 8.
The petition for review is DENIED.
2
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337 N.W.2d 521 (1983)
OSKALOOSA FOOD PRODUCTS CORPORATION, Appellant,
v.
The AETNA CASUALTY AND SURETY COMPANY, Appellee.
No. 68911.
Supreme Court of Iowa.
August 17, 1983.
Charles F. Helsten of Spayde, White & Helsten, Oskaloosa, for appellant.
J.D. Hilmes of Duncan, Jones, Riley & Finley, Des Moines, for appellee.
Considered by REYNOLDSON, C.J., and UHLENHOPP, McGIVERIN, LARSON and WOLLE, JJ.
McGIVERIN, Justice.
Defendant The Aetna Casualty and Surety Company (Aetna) seeks further review of the court of appeals decision which reversed the district court order that statutory interest on the judgment for plaintiff Oskaloosa Food Products Corporation, Iowa Code § 535.3 (1981), accrued only from the date of judgment. Aetna contends that the district court ruled correctly because plaintiff did not request pre-judgment interest in its petition. We affirm the decision of the court of appeals that section 535.3 requires interest to be awarded from the date of the commencement of the action even though plaintiff did not request interest.
This action was commenced by plaintiff filing its petition on June 22, 1979. Oskaloosa Food Products won a jury verdict of $56,767.24 against defendant insurance company based on its refusal to pay for a loss under a contract of insurance coverage. The clerk of district court entered a judgment on the verdict on June 14, 1982, providing for interest at ten percent per year *522 on the judgment from the date the petition had been filed, all pursuant to section 535.3. That section provides as follows:
Interest shall be allowed on all money due on judgments and decrees of courts at the rate of ten percent per year, unless a different rate is fixed by the contract on which the judgment or decree is rendered, in which case the judgment or decree shall draw interest at the rate expressed in the contract, not exceeding the maximum applicable rate permitted by the provisions of section 535.2, which rate must be expressed in the judgment or decree. The interest shall accrue from the date of the commencement of the action.
Iowa Code § 535.3 (1981) (emphasis added).
Aetna, relying on the fact that plaintiff had not requested interest in its petition at any time in the proceedings, applied for a nunc pro tunc order requesting that the judgment be amended to eliminate interest before the date of the judgment. The district court granted defendant's application and entered a nunc pro tunc order eliminating interest prior to judgment.
Oskaloosa Food Products then filed an application for a nunc pro tunc order reinstating the interest award from the date of filing of the petition. It also requested interest from the date of the loss giving rise to the controverted insurance claim.
The district court rejected plaintiff's claim regarding interest and overruled plaintiff's application for an order nunc pro tunc. Plaintiff appealed from this and other orders not now relevant. We transferred the appeal to the court of appeals.
The court of appeals reversed the district court on the issue of pre-judgment interest, holding that "plaintiff, by operation of law, is entitled to interest from the `date of the commencement of the action.'" Defendant seeks further review of this issue.
Prior to amendment, effective on January 1, 1981, 1980 Iowa Acts ch. 1170, § 1, section 535.3 provided for interest on judgments as follows:
Interest shall be allowed on all money due on judgments and decrees of courts at the rate of seven cents on the hundred by the year, unless a different rate is fixed by the contract on which the judgment or decree is rendered, in which case the judgment or decree shall draw interest at the rate expressed in the contract, not exceeding the maximum applicable rate permitted by the provisions of section 535.2, which rate must be expressed in the judgment or decree.
Iowa Code § 535.3 (1979).
Under the pre-1981 version of section 535.3, we held that an award of pre-judgment interest under section 535.3 was waived by a party's failure to request it. Kuper v. Chicago and North Western Transportation Company, 290 N.W.2d 903, 910 (Iowa 1980); Bosch v. Garcia, 286 N.W.2d 26, 27 (Iowa 1979); Laverty v. Hawkeye Insurance Company, 258 Iowa 717, 727, 140 N.W.2d 83, 89 (1966). Defendant contends that the amendment to section 535.3 did not obviate the requirement of requesting pre-judgment interest, and cites Iowa State Commerce Commission v. IGF Insurance Co., 309 N.W.2d 445, 449 (Iowa 1981), a case decided under the amended section 535.3.
In IGF, the Commerce Commission on appeal asked us to enter judgment on the supersedeas bond for interest "from the date of the district court's judgment ... until procedendo is issued." Id. Nothing that the "Commission's motion did not ask us to rule on any other claim to interest on the judgment," id., we limited our ruling to the issue presented by the parties.
The parties to this case, however, have not asked us to rule on a specific request for interest under section 535.3; they have asked us to construe the application of section 535.3 when no request for interest has been made. In so doing, we note, as did the court of appeals, that the amended section 535.3 is to be applied retrospectively to the date the petition was filed, even though that date was prior to the effective date of the revised section 535.3. Janda v. Iowa *523 Industrial Hydraulics, Inc., 326 N.W.2d 339, 344 (Iowa 1982).
In Sheer Construction, Inc. v. W. Hodgman and Sons, Inc., 326 N.W.2d 328, 334 (Iowa 1982), we concluded that use of the word "shall" in section 535.3 ("[i]nterest shall be allowed ...." and "interest shall accrue from the date of the commencement of the action") was evidence that the statute was obligatory. Consequently, we held that the district court lacked discretion to withhold interest on the judgment as a sanction for failure to make a good faith effort to settle.
Thus, we conclude that even when no request for interest is made, section 535.3, as amended, requires that "interest shall accrue from the date of the commencement of the action." In the present case, the district court erred in excluding pre-judgment interest on plaintiff's judgment. Oskaloosa Food Products should have been awarded interest at ten percent per year from the date of commencement of this action. The district court is reversed and the case is remanded. The district court is directed to reinstate the original judgment, stating interest in conformity with this opinion.
DECISION OF COURT OF APPEALS AFFIRMED; DISTRICT COURT JUDGMENT REVERSED AND REMANDED WITH DIRECTIONS.
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694 P.2d 1256 (1985)
The PEOPLE of the State of Colorado, Plaintiff-Appellee,
v.
Ramon ROMERO, Defendant-Appellant.
No. 82SA566.
Supreme Court of Colorado, En Banc.
January 21, 1985.
*1259 Duane Woodard, Atty. Gen., Charles B. Howe, Deputy Atty. Gen., Joel W. Cantrick, Sol. Gen., Marie Volk Bahr, Asst. Atty. Gen., Denver, for plaintiff-appellee.
David F. Vela, Colorado State Public Defender, Linda Hotes, Deputy State Public Defender, Denver, for defendant-appellant.
QUINN, Justice.
The defendant, Ramon Romero, appeals his conviction and sentence for second degree burglary of a building.[1] He claims that the district court erred in permitting him to represent himself at trial, in failing to appoint advisory counsel to assist him at trial, in failing to provide him the same opportunities to be heard as would have been provided to an attorney, in permitting him to be tried in jail clothes, in submitting certain instructions to the jury and in failing to submit other instructions on the court's own motion, and in imposing a sentence greater than the presumptive two-to-four year sentence for second degree burglary.[2]*1260 We affirm the judgment and sentence.
I.
A detailed statement of the proceedings leading up to the judgment and sentence is necessary to a complete understanding of the issues before us. A complaint-information was filed in the Denver County Court alleging that "Raymond Romero also known as Daniel Jiminez" did knowingly break into the building of Denver Dry Goods, Inc., located at 1529 California Street, Denver, Colorado, on January 11, 1981, with the intent to commit therein the crime of theft. The public defender's office was appointed to represent the defendant at a preliminary hearing, and upon a finding of probable cause the case was bound over to the district court. The defendant was not able to post bail and remained in the county jail while awaiting trial.
On February 13, 1981, the defendant appeared with a deputy public defender, Maureen Cain, for arraignment in the district court and informed the court that he preferred to hire private counsel. Ms. Cain simultaneously requested and was given permission to withdraw from the case due to an alleged conflict of interest. One week later, on February 20, 1981, the defendant reported to the court that he had not yet been able to retain private counsel. Upon being advised by Cain that the source of the conflict was the defendant's refusal to discuss the case with her and thinking that the defendant might possibly be having problems communicating in English, the court requested Manuel Martinez, a deputy public defender fluent in the Spanish language, to speak to the defendant at the county jail. The court continued the case to February 26, 1981, for arraignment.
On February 26 the defendant appeared in court and stated that Mr. Martinez had not been to see him at the county jail. Deputy Public Defender Cain explained to the court that her superior believed that as long as the public defender's office was to remain on the case she should be the attorney who represented the defendant. The court, indicating that it was considering the appointment of private counsel, continued the case to March 3, 1981, for arraignment. On that occasion the court expressly noted on the record that the public defender's original motion for withdrawal was based solely on the defendant's personal dislike for Ms. Cain. Ruling that this was an insufficient ground for withdrawal, the court ordered the public defender's office to continue its representation of the defendant. The defendant again stated that he wished to hire private counsel, and the court continued the case three more weeks for arraignment.
On March 24, 1981, the defendant reported that he could not retain private counsel, whereupon the court again reaffirmed the appointment of the public defender's office and continued the case to the following day. On March 25 the defendant again appeared in court with Ms. Cain, who advised the court that she had discussed the case with the defendant on three occasions and that the defendant had told her that he did not want the public defender's office to represent him. The court addressed the defendant and informed him that if he desired court-appointed counsel the public defender's office would represent him throughout the trial. The defendant, however, stated to the court that he desired to represent himself and to enter a not guilty plea. At this point the court explained to the defendant that he had a right to represent himself, but that it was in his best interest that a lawyer represent him, especially since he was charged with a class 4 felony carrying a presumptive sentence of two-to-four years and a possible maximum sentence of eight years in the event aggravating circumstances were present. The court also informed the defendant of his right to require the prosecution to prove *1261 his guilt beyond a reasonable doubt at trial and various other procedural rights, such as the right to a trial by jury, the right to cross-examine the prosecution's witnesses, the right to subpoena and to present witnesses in defense of the charge, the right to testify in his own defense, and the right to discover the prosecution's evidence in advance of trial. The court ordered the prosecutor to provide the defendant with a transcript of the preliminary hearing and other appropriate discovery materials. The prosecutor, for the purpose of showing the defendant's familiarity with the criminal justice system, requested that his prior criminal history be made part of the record of the proceedings on that day.[3] The court acquiesced in the prosecutor's request, and the defendant entered a not guilty plea and requested a jury trial. The case was set for trial on May 11, 1981. Finally, the court appointed an investigator to assist the defendant in preparation for trial.
On April 16, 1981, the court held a hearing to determine the progress of the defendant's trial preparation. The investigator appointed by the court had previously filed a written report with the court on March 30 in which he described his visits to the county jail on two occasions and the defendant's refusal to talk to him about the case. The court determined that the defendant did not want the assistance of the investigator in preparation for trial. The deputy district attorney on this occasion furnished the defendant with a copy of all materials in the prosecution's file.
On the scheduled trial date of May 11, 1981, the defendant advised the court that he had not yet received a copy of the preliminary hearing transcript. The court ordered the transcript to be provided the defendant that afternoon and continued the case to the following day for jury selection and trial. Before commencing jury selection on May 12, the court explained to the defendant the procedures involved in questioning prospective jurors, informed him that he could challenge up to eleven members of the jury panel for no reason at all, and also provided him with a written list of the grounds for challenges for cause. The court also explained to the defendant the procedures that would be followed in the trial of the case, namely, opening statements outlining the evidence, the opportunity of each party to present evidence and to cross-examine witnesses called by the opposing party, the preparation of jury instructions at the conclusion of the evidence, and closing arguments.
After the jury was selected and sworn, the prosecutor made an opening statement in which he informed the jury that the People's evidence would show that on January 11, 1981, the defendant broke a window into the Denver Dry Goods downtown store at 1529 California Street in Denver, then made his way to the jewelry department where he was confronted and taken into custody by a security guard, later attempted to escape but was subdued by the security guard, and was ultimately arrested by the Denver police. The defendant in his opening statement stated that he was "pretty well intoxicated" at the time of the offense, that he might have fallen asleep on a pallet near the store, and that when he awoke in city jail he was "pretty well beaten up."
The prosecution's evidence established the following events. At about 1:20 a.m. on January 11, 1981, the alarm system in the Denver Dry Goods downtown store alerted the security guard, Samuel Quintana, to the fact that an intruder was present in the store. Quintana traced the alarm to *1262 the jewelry department where he saw a man rummaging through the drawers located behind the counter. During the trial Quintana identified the defendant as the intruder and described him for the record as follows: "he is sitting right over there... wearing a green shirt and a red t-shirt, pair of jeans, and tennis shoes."
When Quintana confronted the defendant inside the store, he pressed his belt buckle into the defendant's back as if he had a pistol and ordered him not to move or he would shoot. He then led the defendant to the guard station where he placed him in a chair and took a night stick from under the counter. Someone from the central alarm system telephoned and told Quintana that the police had been called. A short time later the phone rang again. As Quintana answered, the defendant grabbed the night stick and raised his arm to strike. Quintana subdued the defendant by hitting him in the stomach and, after retrieving the night stick, by striking him about the head and shoulders.
As Quintana was fighting with the defendant, Denver Police Officer James Negri arrived and handcuffed the defendant to a railing in the store. Quintana and Negri made a search of the store and discovered a broken window on the alley side of the building, beneath which a pallet had been propped up, and an empty canvas bag, normally kept in the dock area, in the jewelry department. The drawers in the jewelry department had been opened and the area was in a state of disarray.
The defendant briefly cross-examined the prosecution's witnesses. He elicited testimony that Quintana, the security guard, had found a bottle of white pills in the search of the store, but that he threw them away because he did not know that they belonged to the defendant. The defendant, however, made no attempt to elicit any testimony from the prosecution's witnesses about his alleged state of intoxication at the time of the offense.
At the conclusion of the prosecution's case, the court explained to the defendant that he could testify in his own defense or could elect to remain silent but that if he testified the prosecutor could question him about prior felony convictions for impeachment purposes. The court arranged for the defendant to secure the presence of two police officers to testify in his case and a third witness who was presently confined in the county jail. The court also directed the sheriff, pursuant to the defendant's request, to permit the defendant to bring to court the clothes that he was wearing on the morning of his arrest.
The defendant called three witnesses in his defense. Not having previously availed himself of the court appointed investigator, he called two police officers who had only incidentally participated in the investigation and elicited no significant testimony from them. The third witness called by the defendant was a county jail inmate who had been confined in the city jail on January 11, 1981, the morning of the defendant's arrest. This witness testified that he saw the defendant at the city jail on January 11 sometime between 5:00 a.m. and 7:00 a.m., at which time the defendant was bleeding from a gash on his head and appeared in a confused state. The defendant offered into evidence and showed to the jury the shirt, pants, and shoes that he had been wearing on the morning of his arrest. The court then announced a recess in order to provide the defendant with an opportunity to consider whether he wanted to testify. The defendant decided to forego testifying and so informed the court at the end of the recess.
After both sides rested the defendant unsuccessfully moved for a judgment of acquittal. In meeting with the prosecutor and the defendant to settle instructions, the court advised the defendant that it would abide by his decision on whether the jury should be instructed on his election not to testify. It was the defendant's decision, so far as we can determine from the record, that no such instruction should be given to the jury. The jury, accordingly, was not instructed on the defendant's election not to testify. The defendant made no objection to the jury instructions given by the *1263 court, nor did he tender any instructions for the court's consideration.
The prosecutor delivered a summation to the jury, and the defendant did likewise. The defendant's summation, which was extremely brief, consisted basically of calling the jury's attention to the fact that no fingerprints had been lifted from the scene and then acknowledging that "I ain't saying I didn't do the crime or anything like that, but basically, I passed out ... on drugs."
After the jury returned a guilty verdict, the defendant filed a motion for new trial and also requested the appointment of counsel to assist him in perfecting an appeal. The court appointed the public defender's office to assist the defendant and granted several continuances so that a deputy public defender could review the trial transcript and supplement the grounds listed in the defendant's motion for new trial. On October 28, 1981, the court denied the motion for new trial.
Finding that extraordinary aggravating circumstances were present which justified a sentence beyond the presumptive range of two to four years, the court sentenced the defendant to a term of seven years plus one year of parole, with credit for presentence confinement from the date of the defendant's arrest on January 11, 1981, to October 28, 1981, the date of the sentence. The extraordinary aggravating circumstances, as reflected in the court's written findings, consisted of the defendant's having been on parole when the burglary was committed and the defendant's prior criminal record of at least three felony convictions.[4] This appeal followed.
II.
We first address the defendant's claims relating to his self-representation. He argues that he is entitled to a new trial for three reasons: (1) the trial court erred in allowing him to proceed pro se because he did not effectively waive his right to counsel; (2) his efforts at self-representation were so inept that the trial court's failure to appoint advisory counsel denied him a fair trial; and (3) the trial court erred in failing to provide him the same opportunities to be heard as would have been accorded an attorney. We are unpersuaded by the defendant's arguments.
A.
A criminally accused enjoys the constitutional right of self-representation. This right has its source both in the historical antecedents to and in the structure of the Sixth Amendment, which provides that "[i]n all criminal prosecutions the accused shall ... have the assistance of counsel for his defense." U.S. Const. amend. VI. Historically, as the Supreme Court noted in Faretta v. California, 422 U.S. 806, 821, 95 S.Ct. 2525, 2534, 45 L.Ed.2d 562 (1975), only one tribunal in the long history of English jurisprudence ever adopted a practice of forcing counsel upon an unwilling defendant in a criminal proceedingthe infamous Star Chamber. The American colonies were even more fervent in maintaining the right of self-representation. Although colonial courts permitted an accused to be represented by counsel, the general practice still continued to be that of self-representation. Faretta, 422 U.S. at 828, 95 S.Ct. at 2537. Article II, section 16 of the Colorado Constitution leaves no doubt on the matter of an accused's right of self-representation. It expressly provides that "[i]n criminal prosecutions the accused shall have the right to appear and defend in person and by counsel." (Emphasis added).
As the Supreme Court also noted in Faretta, the structure of the Sixth Amendment is such that the express guarantee of the right to counsel implicitly embodies a correlative *1264 right to dispense with a lawyer's help:
The Sixth Amendment does not provide merely that a defense shall be made for the accused; it grants to the accused personally the right to make his defense. It is the accused, not counsel, who must be "informed of the nature and cause of the accusation," who must be "confronted with the witnesses against him," and who must be accorded "compulsory process for obtaining witnesses in his favor." Although not stated in the Amendment in so many words, the right to self-representationto make one's own defense personallyis thus necessarily implied by the structure of the Amendment. The right to defend is given directly to the accused; for it is he who suffers the consequences if the defense fails.
Faretta, 422 U.S. at 819-20, 95 S.Ct. at 2533 (footnote omitted).
The right of self-representation, therefore, is personal to the defendant and may not be abridged by compelling a defendant to accept a lawyer when he desires to represent himself. To force a lawyer on a defendant under these circumstances "can only lead him to believe that the law contrives against him." Faretta, 422 U.S. at 834, 95 S.Ct. at 2540. Because the right of self-representation furthers the basic value of personal autonomy, it is the defendant who must decide whether it is to his advantage to have counsel in his particular case. Although a pro se defendant "may conduct his own defense ultimately to his own detriment, his choice must be honored out of `that respect for the individual which is the lifeblood of the law.'" Faretta v. California, 422 U.S. at 834, 95 S.Ct. at 2541, quoting Illinois v. Allen, 397 U.S. 337, 350-51, 90 S.Ct. 1057, 1064, 25 L.Ed.2d 353 (1970) (Brennan, J., concurring).
Since the exercise of the right of self-representation results in a relinquishment of the right to counsel, it is the responsibility of the trial court to ascertain whether the accused has been made aware of the dangers and disadvantages of self-representation, at least to the point where the record shows that "`he knows what he is doing and his choice is made with eyes open.'" Faretta, 422 U.S. at 835, 95 S.Ct. at 2541, quoting Adams v. United States ex rel. McCann, 317 U.S. 269, 279, 63 S.Ct. 236, 242, 87 L.Ed. 268 (1942). Only in this way can the trial court be satisfied that the accused has knowingly and intelligently decided to forego the traditional benefits associated with the right to counsel. See Faretta, 422 U.S. at 835-36, 95 S.Ct. at 2541; People v. Lucero, 200 Colo. 335, 340, 615 P.2d 660, 663 (1980); Reliford v. People, 195 Colo. 549, 552-53, 579 P.2d 1145, 1147 (1978), cert. denied 439 U.S. 1076, 99 S.Ct. 851, 59 L.Ed.2d 43 (1979). Although an accused's legal knowledge is not relevant to an assessment of whether his exercise of the right to defend himself is knowingly made, Faretta, 422 U.S. at 836, 95 S.Ct. at 2541, there must nevertheless be an affirmative showing of record that the accused understands the charge he is facing and the range of possible penalties, that he knows of his right to the assistance of counsel and is aware of the hazards in proceeding pro se, and that his decision to represent himself is the product of his informed free will.
The record in this case affirmatively shows that the defendant's decision to represent himself was knowingly and intelligently made and was the product of his voluntary choice. The defendant had been through a preliminary hearing with a deputy public defender and was fully aware of the charge facing him. At the hearing on March 25, 1981, the trial court explained the possible penalties applicable to the charge and the basic procedural rights of an accused at a criminal trial. The court also informed him that, although he had the constitutional right to represent himself, it was clearly in his own best interest to avail himself of the services of his court-appointed attorney in defending against such a serious charge. The defendant nonetheless persisted in rejecting the services *1265 of a court-appointed lawyer and voiced his decision to represent himself. We cannot say under these circumstances that the court erred in permitting the defendant to proceed pro se.
B.
We also reject the defendant's claim that the quality of his self-representation was so inept as to require the trial court to appoint advisory counsel to assist him during the trial. While a defendant has the constitutional right to represent himself, he has no right to the appointment of advisory counsel in connection with the exercise of his right of self-representation. Locks v. Sumner, 703 F.2d 403 (9th Cir. 1983), cert. denied, ___ U.S. ___, 104 S.Ct. 338, 78 L.Ed.2d 307 (1983); United States v. Gigax, 605 F.2d 507 (10th Cir.1979); Reliford, 195 Colo. 549, 579 P.2d 1145; see also McKaskle v. Wiggins, ___ U.S. ___, 104 S.Ct. 944, 953-54, 79 L.Ed.2d 122 (1984) (court notes in dictum that a pro se defendant has no constitutional right to "hybrid" representation). Nor may a pro se defendant complain that "the quality of his own defense amounted to a denial of `effective assistance of counsel'." Faretta, 422 U.S. at 835 n. 46, 95 S.Ct. at 2541 n. 46. We do acknowledge, however, that there may be circumstances where a pro se defendant's performance reaches such a level of ineptitude as to demonstrate a fundamental inability to provide any meaningful representation in his defense. For this reason a trial court should closely monitor the proceedings in order to ensure that they do not become so fundamentally unfair as to result in a denial of due process of law.[5]
The appointment of advisory counsel is one method of ensuring that the defendant has available a resource person from whom he can seek direction on matters pertinent to his defense and, if necessary, who can take over the case in the event the defendant is unable to continue. Although a salutary practice to be strongly encouraged even over the objection of an accused, the appointment of advisory counsel remains essentially a matter of trial court discretion. E.g., Faretta, 422 U.S. at 835 n. 46, 95 S.Ct. at 2541 n. 46; Reliford, 195 Colo. at 554, 579 P.2d at 1148-49. Factors which should inform the exercise of discretion include the factual and legal complexity of the issues, the defendant's familiarity with the criminal trial process, and his formal education and ability to effectively communicate with the court and jury.[6]See Reliford, 195 Colo. at 554, 579 P.2d at 1148-49.
Although it would have been preferable for the trial court to have appointed advisory counsel for the defendant, we cannot say that the failure to do so constituted reversible error. The factual and legal issues in the case were simple and clear-cut. After the defendant elected to proceed pro se, the trial judge at various stages of the case explained to him pertinent legal procedures. The defendant did not hesitate to ask questions of the court at various times and, so far as the record shows, understood and was satisfied with the court's responses. The record further shows that the defendant, notwithstanding a minimal education[7]*1266 and some difficulty in expressing himself, participated in all phases of the trial. He made an opening statement, briefly cross-examined the prosecution witnesses, called defense witnesses, and argued the case to the jury in summation. While it is true that the defendant did not present any evidence to support his claim of voluntary intoxication, there is nothing of record suggesting that any of the trial witnesses could have offered such evidence even if specifically questioned about the matter. The defendant might have provided such evidence through his own testimony, but undoubtedly made the tactical decision not to testify in order to avoid exposing his prior felony record to the jury. In short, although the defendant might well have fared better if he had the benefit of advisory counsel and actually availed himself of counsel's advice, we are unable to conclude that the defendant's performance was so inept as to render the court's failure to appoint advisory counsel a violation of the defendant's due process right to a fair trial.
C.
The defendant also asserts that the trial court's failure to accord him the same opportunities to be heard as would have been given to an attorney deprived him of a fair trial. The record, however, belies his contention. The trial judge explained pertinent procedures to the defendant at various stages of the trial, assisted him in securing the presence of his witnesses and arranged for the sheriff to make available to him the clothing that he was wearing at the time of his arrest, and afforded the defendant full opportunity to be heard on any matter that he desired to raise.
To the extent that the defendant's argument implies that a pro se defendant is entitled to opportunities over and above those normally accorded an attorney, we reject such implication as unfounded in law. By electing to represent himself the defendant subjected himself to the same rules, procedures, and substantive law applicable to a licensed attorney. A pro se defendant cannot legitimately expect the court to deviate from its role of impartial arbiter and accord preferential treatment to a litigant simply because of the exercise of the constitutional right of self-representation.
III.
The defendant next asserts that the court erred in permitting him to stand trial in prison clothes without informing him of his right to wear civilian clothes. We find no merit in this claim.
In Estelle v. Williams, 425 U.S. 501, 96 S.Ct. 1691, 48 L.Ed.2d 126 (1976), reh'g denied 426 U.S. 954, 96 S.Ct. 3182, 49 L.Ed.2d 1194 (1976), the United States Supreme Court considered whether an accused who is tried by a jury in identifiable prison clothing is denied due process or equal protection of the laws. Although recognizing that an accused's prison clothing is likely to have a continuing influence on the jury and that persons who secure their release on bail are not subjected to such a condition, the Court nonetheless held that the critical factor was the governmental compulsion to stand trial in prison clothing after the accused or his counsel has first objected to such procedure.[8]*1267 Thus, although a state cannot compel an accused to stand trial while dressed in identifiable prison clothes, "the failure to make an objection to the court as to being tried in such clothes, for whatever reason, is sufficient to negate the presence of compulsion necessary to establish a constitutional violation." Williams, 425 U.S. at 512-13, 96 S.Ct. at 1697.
In this case the defendant was not tried in identifiable prison clothing. The only reference in the record to the clothes worn by the defendant during the trial is the testimony of Samuel Quintana, the security guard. Quintana identified the defendant as the person who had entered the Denver Dry Goods store in the early morning hours on January 11, 1981, and who was sitting in the courtroom dressed in "a green shirt and a red t-shirt, a pair of jeans, and tennis shoes." Nothing in the record indicates that the clothing worn by the defendant had identifiable letters, stripes, or marks that are normally associated with prison garb. Moreover, the defendant failed to make an objection to being tried in the clothes he was wearing at the trial, and in the absence of such an objection we will not presume that he was somehow compelled to wear this clothing against his will.
IV.
The defendant raises four arguments relating to jury instructions given by the court and those not given by the court. He argues that the court erred in referring to him in the jury instructions as "Raymond Romero also known as Daniel Jiminez" and in advising the jury of the circumstances under which a private person may use physical force against another to effect an arrest. He also contends that the court erred in failing to instruct the jury on the affirmative defense of intoxication and in failing to submit for the jury's consideration the lesser offenses of second and third degree criminal trespass. We find no reversible error occurred in this case.
A.
We first address the defendant's challenge to the alias in the jury instructions. An examination of the record discloses that the caption of the instructions and Instruction No. 2, which summarized the charge, referred to the defendant as "Raymond Romero also known as Daniel Jiminez," as did the verdict forms submitted to the jury. In People v. DeHerrera, 680 P.2d 848 (Colo.1984), we recently reversed a conviction for aggravated robbery under circumstances where the trial court first denied the defendant's motion to strike an alias from the information, then admitted into evidence over the defendant's objection two driver's licenses in different names seized from the defendant after his arrest, and finally instructed the jury, again over the defendant's objection, that the use of an alias after a crime has been committed is a circumstance which the jury may consider in determining guilt. Although noting that evidence of an alias may be relevant when a defendant uses the alias to avoid detection or when an issue of identification is raised, we emphasized there was no connection between DeHerrera's aliases and any material issue concerning the avoidance of detection or identification. When the improper admission of alias evidence was considered in light of the jury instruction on the circumstantial value of such evidence, we concluded that the evidentiary error could not be considered harmless:
The instruction directing the jury to consider the use of aliases as a circumstance establishing guilt made the prejudice resulting from the admission of the aliases substantial. The admission of irrelevant and prejudicial evidence is not harmless when it is coupled with an instruction to *1268 the jury to consider that evidence as a circumstance establishing guilt.
680 P.2d at 850.
In the instant case, the defendant made no objection to the instructions and verdict forms, and his claim therefore must be evaluated under the plain error standard of review. Crim.P. 52. The proper inquiry in determining whether a claimed error amounts to "plain error" or instead may be considered harmless is whether the error substantially influenced the verdict or affected the fairness of the trial proceedings. Callis v. People, 692 P.2d 1045, 1053 (Colo.1984); People v. Quintana, 665 P.2d 605 (Colo.1983); see also Ramirez v. People, 682 P.2d 1181 (Colo.1984); People v. Taylor, 197 Colo. 161, 591 P.2d 1017 (1979); People v. Barker, 180 Colo. 28, 501 P.2d 1041 (1972). We are satisfied in this case that, although the trial court should have deleted any reference to the defendant's alias from the jury instructions and verdict forms, the failure to do so was harmless error. This case was tried prior to our decision in DeHerrera, and, in contrast to that case, involved neither the admission of evidence showing the defendant's use of an alias nor any instruction permitting the jury to consider the alias as circumstantial proof of guilt. The prosecution did not comment on the alias at any time during the trial, and the jury's attention was not specially directed to the alias in any of the instructions given by the court. Furthermore, in light of the defendant's arrest inside the store while searching through the drawers of the jewelry department, the evidence of guilt can be aptly characterized as overwhelming.
B.
We turn to the defendant's challenge to Instruction No. 14, which stated in pertinent part that a private citizen "is justified in using reasonable and appropriate physical force upon another person when and to the extent that he reasonably believes it necessary to effect an arrest [or] to prevent the escape from custody of an arrested person who has committed an offense in his presence." The defendant basically contends that the instruction was irrelevant to any issue in the case and therefore was likely to confuse the jury in its resolution of the issues. Again, because the defendant made no objection to Instruction No. 14, the trial court's action must be upheld in the absence of plain error. Crim.P. 52.
We find that the challenged instruction, far from amounting to plain error, was explanatory of a legal issue raised by the defendant during the trialnamely, the validity of the security guard's action in subduing him in the store. The defendant contended in his opening statement that he had been beaten up allegedly without reason, and presented evidence showing that he sustained injuries in the course of his encounter with the security guard inside the store. Instruction No. 14, when considered in this light, was nothing more than a statement of the legal standard applicable to this issue and was properly given to avoid confusion and uncertainty on the part of the jury with respect to this aspect of the case. See, e.g., People v. Roark, 643 P.2d 756 (Colo.1982); People v. Thomson, 197 Colo. 232, 591 P.2d 1031 (1979).
C.
We next consider the defendant's claim regarding the trial court's failure to submit on its own motion an instruction on the affirmative defense of intoxication. We acknowledge that section 18-1-804(1), 8 C.R.S. (1978), authorizes the admissibility of evidence of self-induced intoxication to negate the existence of a specific intent crime, such as second degree burglary. See, e.g., McPhee v. People, 105 Colo. 539, 100 P.2d 148 (1940). In contrast to the case of Martinez v. People, 172 Colo. 82, 470 P.2d 26 (1970), however, where this court reversed a pro se defendant's conviction for assault with intent to commit robbery due to the trial court's failure sua sponte to instruct on voluntary intoxication, the defendant in the instant case, although referring to his alleged intoxication *1269 in his opening statement and summation, presented no evidence during the trial that he was indeed intoxicated when he entered the Denver Dry Goods downtown store in the early morning hours of January 11, 1981.
The only evidence presented by the defendant regarding his mental condition was testimony from a witness who was confined in the Denver city jail several hours after the defendant's arrest and who testified that the defendant appeared to be in a generally confused state at that time and was bleeding from a gash on his head. This witness' testimony, however, falls far short of evidence of the defendant's intoxication when the crime was committed. Where, as here, the defendant does not present any evidence raising self-induced intoxication as an affirmative defense to the crime charged, the failure of the court to submit on its own motion a jury instruction on this defense cannot be considered reversible error. See, e.g., People v. Dillon, 655 P.2d 841 (Colo.1983); Kurtz v. People, 177 Colo. 306, 494 P.2d 97 (1972).
D.
The defendant's last contention concerning jury instructions is that the trial court erred in failing to instruct the jury on second and third degree criminal trespass as lesser offenses of second degree burglary of a building. An offense is lesser included when: it is established "by proof of the same or less than all the facts required to establish the commission of the offense charged;" it "consists of an attempt or solicitation to commit the offense charged or a lesser included offense;" or it "differs from the offense charged only in respect that a less serious injury or risk of injury to the same person, property, or public interest or a lesser kind of culpability suffices to establish its commission." § 18-1-408(5), 8 C.R.S. (1978). The crime of second degree burglary consists of knowingly breaking into or entering or remaining unlawfully in a building with the intent to commit therein a crime against a person or property. § 18-4-203(1), 8 C.R.S. (1978). Although second and third degree criminal trespass, both of which involve the unlawful entry or remaining in or upon the premises of another, §§ 18-4-503 and -504, 8 C.R.S. (1984 Supp.), can be considered lesser included offenses of second degree burglary of a building because "premises" includes buildings, § 18-4-504.5, 8 C.R.S. (1978), a court is not obligated to instruct on a lesser offense unless either the prosecution or the defense requests such instruction. Crim.P. 30; see People v. Paris, 182 Colo. 148, 511 P.2d 893 (1973). In this case the defendant made no request for an instruction on any lesser included offense. In the absence of a request by the defendant, it may reasonably be assumed that he elected to take his chance on an outright acquittal or conviction of the principal charge rather than to provide the jury with an opportunity to convict on a lesser offense.
Moreover, section 18-1-408(6), 8 C.R.S. (1978), makes clear that a trial court is not obliged to instruct a jury on an included offense unless there is a rational basis for a verdict acquitting the defendant of the offense charged and convicting him of the included offense. The evidence quite clearly showed that the defendant gained entry into the Denver Dry Goods store by breaking a window shortly after 1:00 a.m., made his way to the jewelry department, and was caught in the act of rummaging through drawers in the jewelry department. There was no evidence in the record showing that the defendant merely trespassed onto the property for some purpose other than theft. Under these circumstances, there is no rational basis on which a jury could have acquitted the defendant of the greater offense of second degree burglary of a building while finding him guilty of the lesser offense of trespass. The trial court did not err, therefore, in declining to instruct the jury on the lesser offenses of second and third degree criminal trespass. See, e.g., People v. Aragon, 653 P.2d 715 (Colo.1982); Bowers v. People, 617 P.2d 560 (Colo.1980); People v. Saars, 196 Colo. 294, 584 P.2d 622 (1978).
*1270 V.
The defendant's final contention relates to the sentence of seven years imposed by the trial court. He argues, first, that section 18-1-105(6), 8 C.R.S. (1984 Supp.), which permits the court to impose a sentence beyond the presumptive range when extraordinary aggravating circumstances are present, violates due process of law because the statute fails to define extraordinary aggravating circumstances. The second prong of his argument is that, even if section 18-1-105(6) passes constitutional muster, the record in this case does not support the seven year sentence imposed by the court. We reject the defendant's claim.
In People v. Phillips, 652 P.2d 575 (Colo. 1982), this court rejected a vagueness challenge identical to that raised here. We noted in Phillips that sentencing is a discretionary decision requiring the weighing of several factors and that the mere inability to objectively quantify the difference between the statutory terms "aggravating or mitigating circumstances" and "extraordinary mitigating or aggravating circumstances" does not render the presumptive sentencing scheme impermissibly vague. On the contrary, the presumptive sentencing scheme applicable to this case served to guide the exercise of sentencing discretion by requiring the court to make specific findings on the record "detailing the specific extraordinary circumstances which constitute the reasons for varying from the presumptive sentence." § 18-1-105(7), 8 C.R.S. (1984 Supp.).
In this case the sentencing court specifically found, as extraordinary aggravating circumstances, that the defendant was on parole when he committed the burglary in question and that he had sustained at least three prior felony convictions. A person's past criminal record and his present parole status are certainly circumstances appropriate for a court to consider in fashioning an appropriate sentence. We cannot say that the trial court erred in finding that the number of the defendant's prior felony convictions and his having been on parole at the time of the burglary constituted extraordinary aggravating circumstances within the intendment of section 18-1-105(6).[9]See People v. Cantwell, 636 P.2d 1313 (Colo.App.1981).
The judgment and sentence are accordingly affirmed.
DUBOFSKY, J., concurs in part and dissents in part, and LOHR and NEIGHBORS, JJ., join in the concurrence and the dissent.
DUBOFSKY, Justice, concurring in part and dissenting in part:
I agree with the majority that the totality of circumstances in this case demonstrates that the defendant's waiver of the right to counsel was constitutionally valid; however, I write separately on this issue to express my belief that the district court's waiver procedure was deficient in many respects. I dissent from the majority opinion because, in my view, the failure to appoint advisory counsel under the circumstances of this case was an abuse of discretion, deprived the defendant of a fair trial, and requires reversal of the judgment below.
I.
The majority's finding of a valid waiver of counsel rests upon two grounds: the district court's explanation of procedural rights and possible penalties, and the defendant's *1271 presence at preliminary hearing. Maj. op. at 1264. I agree that these factors, together with the defendant's criminal history and his conduct prior to and at trial, compel the conclusion that his waiver of counsel was voluntary, knowing and intelligent. However, I write separately on this issue primarily to emphasize my view that the district court's colloquy with the defendant concerning waiver of counsel was deficient in many respects, and that our holding on this issue should not be taken as an endorsement of the waiver procedures followed by the district court.
Waiver of a defendant's right to counsel may not be accepted unless the waiver is determined to be both voluntary and intelligent. Johnson v. Zerbst, 304 U.S. 458, 465, 58 S.Ct. 1019, 1023, 82 L.Ed. 1461 (1938); People v. Moody, 630 P.2d 74, 77 (Colo. 1981). In making this determination, the trial court must consider "the background, experience, and conduct of the accused." Johnson, 304 U.S. at 464, 58 S.Ct. at 1023. An intelligent waiver of the right to counsel is also dependent upon the defendant's "apprehension of the nature of the charges, the statutory offenses included within them, the range of allowable punishments thereunder, possible defenses to the charges and circumstances in mitigation thereof, and all other facts essential to a broad understanding of the whole matter." Von Moltke v. Gillies, 332 U.S. 708, 724, 68 S.Ct. 316, 323, 92 L.Ed. 309 (1948). In the context of self-representation, the defendant must in addition "be made aware of the dangers and disadvantages of self-representation, so that the record will establish that `he knows what he is doing and his choice is made with eyes open.' [Citation omitted.]" Faretta v. California, 422 U.S. 806, 835, 95 S.Ct. 2525, 2541, 45 L.Ed.2d 562 (1975).
Because of the strong presumption against waiver of the right to counsel, Von Moltke, 332 U.S. at 723, 68 S.Ct. at 323, the most appropriate method for establishing the constitutional validity of a defendant's waiver is an on-the-record inquiry by the court into the defendant's awareness of the "dangers and disadvantages" of proceeding pro se, as well as an explanation of the elements set forth in Von Moltke. United States v. Harris, 683 F.2d 322, 324 (9th Cir.1982); United States v. Bailey, 675 F.2d 1292, 1300 (D.C.Cir.), cert. denied, 459 U.S. 853, 103 S.Ct. 119, 74 L.Ed.2d 104 (1982); People v. Lopez, 71 Cal.App.3d 568, 571-72, 138 Cal.Rptr. 36, 38 (1977); People v. Lucero, 200 Colo. 335, 340 n. 3, 615 P.2d 660, 663 n. 3 (1980); Cohen v. State, 97 Nev. 166, 625 P.2d 1170, 1171 (1981); Geeslin v. State, 600 S.W.2d 309, 313 (Tex.Crim. App.1980). We have held that the waiver of constitutional rights inherent in a guilty plea cannot be considered understanding unless the court has explained to the defendant the critical elements of the crime charged. Watkins v. People, 655 P.2d 834, 837 (Colo.1982). The court owes no less to a defendant waiving his right to counsel.
In addition, it is preferable that the court inquire on the record into other factors affecting the defendant's understanding of his situation, such as the defendant's educational background, prior criminal history and other experience. Lopez, 71 Cal. App.3d at 573, 138 Cal.Rptr. at 39; Hsu v. United States, 392 A.2d 972, 984 (D.C.App. 1978); Geeslin, 600 S.W.2d at 313. An on-the-record colloquy not only ensures the validity of the defendant's waiver, but also provides a complete record on appeal that will forestall frivolous claims of denial of the right to counsel and prevent reversals of otherwise valid convictions. Bailey, 675 F.2d at 1300; Lopez, 71 Cal.App.3d at 571-72, 138 Cal.Rptr. at 38; Hsu, 392 A.2d at 983; cf. Boykin v. Alabama, 395 U.S. 238, 244, 89 S.Ct. 1709, 1712, 23 L.Ed.2d 274 (1969) (on-the-record inquiry before accepting guilty plea ensures adequate record for review).
Measured against these standards, the district court's inquiry into the defendant's waiver here was deficient in many respects. The court did not explain the elements of and defenses to the charge, nor did it make the defendant "aware of the dangers and disadvantages of self-representation" by impressing upon him the difficulties he might encounter in adhering to the applicable *1272 rules of evidence and other technical rules of procedure. See Maynard v. Meachum, 545 F.2d 273, 279 (1st Cir.1976) (court must ascertain that defendant is aware of duty to adhere to "technical rules governing the conduct of a trial"); Lopez, 71 Cal.App.3d at 572, 138 Cal.Rptr. at 39. In addition, the court failed to ascertain the defendant's educational background[1] and did not inquire into the defendant's criminal history beyond admitting the defendant's criminal record into evidence.[2]
Moreover, I believe that under the circumstances of this case the district court should have re-inquired into the defendant's decision to proceed pro se during the weeks that followed the defendant's initial waiver. See People v. Wilks, 21 Cal.3d 460, 578 P.2d 1369, 1374 n. 5, 146 Cal.Rptr. 364, 369 n. 5 (1979) (such re-inquiry necessary in certain cases); Reliford v. People, 195 Colo. 549, 523-24, 579 P.2d 1145, 1148 (1978), cert. denied 439 U.S. 1079, 99 S.Ct. 851, 59 L.Ed.2d 43 (1979) (validity of waiver bolstered by re-inquiry). The defendant's initial waiver was equivocal. He stated that he wanted to represent himself "because I'm under a lot of pressure right now.... I mean, there's a lot of conflict going on right now. And, you know, I ain't going to be pushed into something I don't want to." He also told the court that he wanted to "enter my plea and get these procedures going ... you know, have a speedy trial right away." Because of the strong presumption against a waiver of counsel, the defendant's expression of waiver must be clear and unequivocal. Brown v. Wainwright, 665 F.2d 607, 610 (5th Cir.1982). Given the equivocality of the waiver here, and the fact that six weeks passed between waiver and trial, the district court was remiss in failing to ascertain that the defendant's desire to waive counsel was unabated on the eve of trial. This failure became particularly acute as the trial progressed and the defendant's inability to articulate his thoughts became manifest. (See discussion in Part II, infra.)
The defective waiver procedure followed here makes the validity of the defendant's waiver of counsel a much closer question than the majority intimates. Nonetheless, I agree with the majority that the defendant's waiver was valid. While an on-the-record colloquy and re-inquiry into waiver was strongly advisable here, other circumstances attending the casesuch as the defendant's previous courtroom experience, his conduct before the court, and his prior opportunity to consult with an attorney about his casemay demonstrate that the defendant voluntarily relinquished his right to counsel with an understanding of the consequences. Harris, 683 F.2d at 324; Maynard, 545 F.2d at 277-78; United States v. Rosenthal, 470 F.2d 837, 844-45 (2nd Cir.1972); Lucero, 200 Colo. at 340 n. 3, 615 P.2d at 663 n. 3; Hsu, 392 A.2d at 983; Commonwealth v. Hawkins, 17 Mass. App. 1041, 461 N.E.2d 1242, 1243 (1984); but see, Bailey, 675 F.2d at 1300 (on-the-record colloquy mandatory); Cohen, 625 P.2d at 1171 (same); Geeslin, 600 S.W.2d at 313 (same). Here, the circumstances demonstrate that, despite the defendant's equivocal initial waiver, he voluntarily surrendered his right to counsel. The defendant refused without good cause to accept the services of the attorney assigned to his *1273 case,[3] while failing to procure substitute counsel within the ample time he was given to do so. The refusal to accept the services of counsel here amounted to an implied voluntary waiver of counsel. People v. Litsey, 192 Colo. 19, 23, 555 P.2d 974, 977 (1976).
The circumstances also demonstrate that the defendant's desire to waive counsel was predicated on an understanding of the consequences. The defendant had an opportunity to discuss his case with two public defenders over a period of six weeks prior to his waiver. In addition, his extensive prior record, although unclear as to whether his previous convictions arose from trials or guilty pleas, makes it likely that the defendant at some point underwent trial and possessed some awareness of trial procedure. Moreover, as the majority notes, the defendant's presence at his preliminary hearing indicates probable awareness of the nature of the charges against him. Finally, although the court did not inquire into the defendant's educational background, the defendant showed no difficulty in understanding and complying with the court's advice and explanations throughout trial, and thus apparently possessed the capacity to apprehend the import of his previous experience. Under the totality of these circumstances, I would hold the defendant's waiver valid. I repeat, however, that a thorough colloquy on the record in this case would have relieved this court of the speculative task of assessing the meaning of these circumstances.
Therefore, I join the majority in holding the defendant's waiver valid with the understanding that such holding does not approve the waiver procedure followed in this case nor recommend such a deficient inquiry for use in the future.
II.
Although the district court properly determined that the defendant's waiver of the right to counsel was valid, its duty did not end with this determination. The court before which a defendant appears without counsel has a duty "to take all steps necessary to insure the fullest protection" of the constitutional right to a fair trial "at every stage of the proceedings." See Von Moltke, 332 U.S. at 722, 68 S.Ct. at 322. This protective duty extends both to the right to counsel and to all "essential rights of the accused." Glasser v. United States, 315 U.S. 60, 71, 62 S.Ct. 457, 465, 86 L.Ed. 680 (1942). Moreover, the state as well as the accused has an interest in the integrity and fairness of the trial process. Mayberry v. Pennsylvania, 400 U.S. 455, 468, 91 S.Ct. 499, 506, 27 L.Ed.2d 532 (1971) (Burger, C.J., concurring); Brady v. Maryland, 373 U.S. 83, 87, 83 S.Ct. 1194, 1196, 10 L.Ed.2d 215 (1963). To protect both the state and the defendant, therefore, it is incumbent upon the trial court to raise on its own motion "matters which may significantly promote a just determination of the trial." ABA Standards for Criminal Justice, Special Functions of the Trial Judge, Std. 6-1.1; see also Pinkey, 548 F.2d at 308.
Where a trial court has accepted a valid waiver of counsel, the court must continue to monitor the proceedings in order to ensure that they do not become so fundamentally unfair as to result in a denial of due process. In Martinez v. People, 172 Colo. 82, 470 P.2d 26 (1970), for example, a defendant charged with assault elected to represent himself. Although the evidence warranted an instruction on voluntary intoxication, the defendant failed to request, and the trial court failed to give, the instruction. We held that the court had a duty to protect the rights of a pro se defendant by giving the instruction sua sponte, and that the failure to protect the defendant from his incompetence was reversible error:
To sum up, a reading of the transcript indicates that the defendant was so inept that he did not and could not conduct a *1274 proper defense for himself. Therefore, the absence of defense counsel in this case and the total ineptness of the defendant to conduct a defense for himself actually resulted in a lack of due process.
172 Colo. at 87, 470 P.2d at 29.
Here, too, the defendant was unable to present a meaningful defense. Although he attempted to raise an intoxication defense, he did so only in argument, apparently unaware of the necessity to present evidence of intoxication before he would be entitled to a jury instruction on the issue. Instead, the defendant's evidence focused irrelevantly on the injuries he sustained while being arrested. The defendant's failure to present a legally significant defense was complicated by a host of other failures. Throughout the trial, the defendant exhibited difficulty in organizing and expressing his thoughts, and presented his arguments in a rambling and incoherent fashion. His fluency in English was suspect; at the close of the prosecutor's case-in-chief the defendant asked for an interpreter because "I don't know how to use right words to express myself to the, to you people."[4]
Under these circumstances, it was incumbent upon the district court to protect the defendant's due process right to a fair trial. One court has observed that
even after the request to proceed pro se has been granted and the defendant has begun his defense, the trial court has a continuing responsibility to watch over the defendant and insure that his incompetence is not allowed to substitute for the obligation of the state to prove its case.
Pickens v. State, 96 Wis.2d 549, 292 N.W.2d 601, 611 (1981). Because direct judicial aid in fashioning a defense is inappropriate, both because the trial court must remain neutral, Pinkey, 548 F.2d at 309, and because the court is under no obligation to treat the pro se defendant any differently than it treats defendants with counsel, Faretta, 422 U.S. at 834-35 n. 46, 95 S.Ct. at 2541 n. 46, the best method of protecting the defendant's due process rights is the appointment of advisory counsel to aid the defendant during trial and to take over the defense should the defendant choose to reassert his right to counsel. Advisory counsel preserves the proper role of the trial court and permits the defendant to pursue his option of self-representation, while simultaneously ensuring that the defendant has been afforded every opportunity to present the defenses available to him. Many courts, including this one, strongly encourage the appointment of advisory counsel as a means of achieving these goals. United States v. Moore, 706 F.2d 538, 540 (5th Cir.), cert. denied, ___ U.S. ___, 104 S.Ct. 183, 78 L.Ed.2d 163 (1983); United States v. Pilla, 550 F.2d 1085, 1093 (8th Cir.), cert. denied 432 U.S. 907, 97 S.Ct. 2954, 53 L.Ed.2d 1080 (1977); United States v. Spencer, 439 F.2d 1047, 1051 (2d Cir.1971); Cano v. Municipality of Anchorage, 627 P.2d 660 (Ala.App.1981); Reliford, 195 Colo. at 554, 579 P.2d at 1148-49; Hicks v. State, 434 A.2d 377, 380 (Del. 1981); Johnson v. State, 556 P.2d 1285, 1297 (Okl.Crim.App.1976); Commonwealth v. Africa, 466 Pa. 603, 353 A.2d 855, 864 (1976). The role played by advisory counsel is so crucial that he may be appointed and assist the defendant even over the latter's objection. McKaskle v. Wiggins, ___ U.S. ___, 104 S.Ct. 944, 79 L.Ed.2d 122 (1984); Faretta, 422 U.S. at 834-35 n. 46, 95 S.Ct. at 2541 n. 46. In addition, the presence of advisory counsel has been an important factor in saving the validity of constitutionally questionable waivers of counsel. Goode v. Wainwright, 704 F.2d 593, 599 (11th Cir.1983); Bailey, 675 F.2d at 1302; United States v. McFadden, 630 F.2d 963, 972 (3d Cir.1980), cert. denied 450 U.S. 1043, 101 S.Ct. 1763, 68 L.Ed.2d 241 (1981); Rosenthal, 470 F.2d at 845; Kelly v. State, 663 P.2d 967, 969-70 (Ala.App. 1983); Hsu, 392 A.2d at 983; State v. Harvey, 184 Mont. 423, 603 P.2d 661, 665 (1979); State v. Chavis, 31 Wash.App. 784, 644 P.2d 1202, 1207 (1982).
The appointment of advisory counsel is not a matter of constitutional right, but *1275 rather rests within the discretion of the trial court. Locks v. Sumner, 703 F.2d 403, 408 (9th Cir.), cert. denied, ___ U.S. ___, 104 S.Ct. 338, 78 L.Ed.2d 307 (1983); United States v. Gigax, 605 F.2d 507, 517 (10th Cir.1979); Reliford, 195 Colo. at 554, 579 P.2d at 1148. The limits of this discretion were set forth in Reliford:
[T]he appointment of advisory counsel is an intermediate measure designed to ensure a fair trial when the trial court determines that the defendant, because of mental or physical problems, is incapable of representing himself, or when it becomes apparent during trial that the defendant is simply unable to handle the task he has undertaken.
195 Colo. at 554, 579 P.2d at 1148. We found no abuse of discretion in Reliford, where the trial court did not appoint advisory counsel, because the defendant "articulately presented a well-organized case." Id. In contrast, the present situation falls squarely within that class of cases identified in Reliford as requiring the appointment of advisory counsel. Cf. Pickens, 292 N.W.2d at 611 (where defendant's incompetence deprives him of opportunity to present defense "that is at least prima facie valid," court must rescind permission to proceed pro se and assign counsel). Therefore, I would hold that the district court abused its discretion in failing to appoint advisory counsel.
Because this abuse of discretion deprived the defendant of due process, we could affirm this conviction only if we were satisfied "beyond a reasonable doubt that the error did not contribute to the defendant's conviction." People v. Campbell, 187 Colo. 354, 358, 531 P.2d 381, 383 (1975). The failure in this case to appoint advisory counsel deprived the defendant of an opportunity to present an intoxication defense that would negate the mental element of the crime charged; therefore, the error is not harmless beyond a reasonable doubt. See Martinez, 172 Colo. at 86, 470 P.2d at 28. Moreover, the majority's discussion and resolution of the issues relating to the clothing worn by the defendant during the trial, the use of an alias in the instructions and the trial court's failure to instruct the jury on lesser included offenses clearly demonstrates that advisory counsel was necessary to protect the record by eliciting necessary facts or making timely and proper objections. I would reverse the judgment on this ground, and, accordingly, I dissent.
I am authorized to say that Justice LOHR and Justice NEIGHBORS join in this concurrence and dissent.
NOTES
[1] § 18-4-203, 8 C.R.S. (1978 & 1984 Supp.).
[2] Because the defendant challenged the constitutionality of the presumptive sentencing statute, § 18-1-105(6), 8 C.R.S. (1984 Supp.), the case was transferred to this court. §§ 13-4-102(1)(b) and 13-4-110(1)(a), 6 C.R.S. (1973).
[3] The defendant's criminal record shows a prior conviction and sentence for burglary in 1957, sentences in 1959 and 1960 for either separate burglary convictions or parole revocations stemming from the 1957 burglary conviction and sentence, prior convictions and sentences for possession of narcotic drugs in 1963 and 1969, a conviction and sentence for escape in 1972, and a felony theft conviction and sentence in 1976. Most of these prior convictions were entered in the name of Daniel Jiminez. It was apparently on the basis of this prior record that the prosecution, in anticipation of using the prior convictions for impeachment purposes in the event the defendant testified at trial, charged him under the name of "Raymond Romero, also known as Daniel Jiminez."
[4] In imposing sentence the court orally referred to the defendant's seven prior felony convictions as the basis for the enhanced seven year sentence. Later, pursuant to a remand from the court of appeals, the court entered written findings as to extraordinary aggravating circumstances and specifically found that the defendant was on parole for a prior felony conviction at the time of the burglary and that he had sustained at least three prior felony convictions.
[5] The mere fact that an accused validly waives counsel and elects to proceed pro se does not prohibit the court from reminding the accused at appropriate stages of the proceedings of his continuing right to reclaim the assistance of counsel. See People v. Wilks, 21 Cal.3d 460, 469 n. 5, 578 P.2d 1369, 1374 n. 5, 146 Cal.Rptr. 364, 369 n. 5 (1978) (reinquiry into the decision to proceed pro se necessary in certain cases); Reliford v. People, 195 Colo. 549, 553-54, 579 P.2d 1145, 1148 (1978) (validity of waiver bolstered by repeated inquiry into decision to proceed pro se). But see State v. Carpenter, 390 So.2d 1296, 1299 (La.1980) (reinquiry not necessary because waiver carries forward through all stages of proceedings).
[6] Although the defendant's level of literacy and education, as well as his technical legal knowledge, are not relevant considerations in determining whether the exercise of his right to defend himself is knowingly made, Faretta v. California, 422 U.S. 806, 835-36, 95 S.Ct. 2525, 2541, 45 L.Ed.2d 562 (1975), these factors may appropriately be considered by the court in deciding whether to appoint advisory counsel for the defendant.
[7] Although the record shows very little concerning the defendant's educational background, a statement made by the defendant at the sentencing hearing indicates that his formal education was indeed minimal. The reason for the sparsity of information on the defendant's background is due primarily to his refusal to provide such information to the court. Prior to the sentencing hearing a probation officer had met with the defendant on three separate occasions in an effort to prepare a presentence report for the court, but the defendant refused to discuss any aspect of his background with the officer and later told the court that he did not desire a presentence report. The court, with the concurrence of the defendant and the prosecuting attorney, finally dispensed with a presentence report pursuant to section 16-11-102(4), 8 C.R.S. (1984 Supp.).
[8] The court in Williams, 425 U.S. at 508-09, 96 S.Ct. at 1695, elaborated on the compulsion requirement as follows:
The reason for this judicial focus upon compulsion is simple; instances frequently arise where a defendant prefers to stand trial before his peers in prison garments. The cases show, for example, that it is not an uncommon defense tactic to produce the defendant in jail clothes in the hope of eliciting sympathy from the jury. Anderson v. Watt, 475 F.2d 881, 882 (CA10 1973); Watt v. Page [452 F.2d 1174, at 1176 (CA10 1972)]. Cf. Garcia v. Beto, 452 F.2d 655, 656 (CA5 1971).
[9] Subsequent to January 11, 1981, the date of the offense in this case, the legislature amended section 18-1-105 by adding a new subsection which provides that the presence of one or more of five listed factors will constitute extraordinary aggravating circumstances, thereby requiring the court to sentence the defendant to a term greater than the maximum in the presumptive range. Ch. 211, sec. 1, § 18-1-105(9)(a), 1981 Colo.Sess.Laws 970-71. Included in the list of extraordinary aggravating circumstances is the fact that the defendant was on parole or probation for a felony at the time of the commission of the felony in question. § 18-1-105(9)(a)(II) & (III), 8 C.R.S. (1984 Supp.). The amendment also provides that the existence of one or more of the statutory extraordinary aggravating circumstances dispenses with the need for the sentencing court to make specific findings detailing the specific extraordinary circumstances that justify the enhanced sentence. § 18-1-105(9)(b), 8 C.R.S. (1984 Supp.).
[1] The majority blames the lack of record information concerning defendant's educational background on the defendant's refusal to provide such information for a presentence report. Maj. op. at 1266 n. 7. The defendant's failure to cooperate at that late stage of the proceedings bears no relation to the trial court's duty to inquire into the defendant's background prior to accepting a waiver of counsel.
[2] The obscurity of the information provided by the written criminal record made further inquiry into the defendant's criminal history desirable. As the majority notes, it is difficult to tell from the record whether certain of the defendant's previous sentences resulted from conviction or from parole revocation. Maj. op. at 1263 n. 4. In addition, the record does not show whether such convictions were the result of trials or guilty pleas; this distinction is important because previous trial experience indicates the defendant's acquaintance with rules of procedure while previous guilty pleas do not.
[3] Absent conflict of interest, an indigent defendant has no right to a particular attorney. People v. Shook, 186 Colo. 339, 527 P.2d 815 (1974).
[4] The court's only response was an offer to explain any unfamiliar words.
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In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 02-2130
MICHAEL B. SMITH,
Plaintiff-Appellant,
v.
DOUGLAS LAMZ and the VILLAGE OF ALGONQUIN,
a municipal corporation,
Defendants-Appellees.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Western Division.
No. 00-C-50074—Philip G. Reinhard, Judge.
____________
ARGUED DECEMBER 9, 2002—DECIDED MARCH 5, 2003
____________
Before BAUER, RIPPLE, and KANNE, Circuit Judges.
KANNE, Circuit Judge. When Michael B. Smith arrived
at the offices of the Algonquin Dental Associates to col-
lect donations for police unions and other organizations,
he was arrested for the crime of impersonating a po-
lice officer, a felony under Illinois law. The charges
were subsequently dropped, and Smith sued the Village
of Algonquin and the arresting officer, Douglas Lamz,
under 42 U.S.C. § 1983 and applicable state law alleging
malicious prosecution. Lamz and the Village moved for
summary judgment and the district court granted the
defendant’s motion. Smith appeals. Because the uncon-
2 No. 02-2130
tested facts establish that Smith’s arrest was supported
by probable cause, we affirm.
Before we relate the operative facts, we resolve
Smith’s procedural challenge. He argues that the district
court abused its discretion in deeming admitted for pur-
poses of summary judgment all the facts set forth in the
defendants’ statement of material facts. We have consid-
ered Smith’s numerous attacks on this decision, and find
them all unavailing.
Under Local Rule 56.1, the defendants, as movants
for summary judgment, were required to submit in sup-
port of their summary-judgment motion a statement of
material facts, comprised of short numbered paragraphs
with citations to admissible evidence,1 which they did.
In his response materials, Smith was required to re-
spond particularly to each numbered paragraph and, in
the case of disagreement, provide citations to supporting
evidentiary material. Moreover, should there have been
any additional facts, not set forth in the movant’s pa-
pers, which required denial of the defendant’s motion,
1
Local Rule 56.1(a) provides
Moving Party. With each motion for summary judgment . . .
the moving party shall serve and file—
...
(3) a statement of material facts as to which the moving
party contends there is no genuine issue and that entitle
the moving party to judgment as a matter of law . . . .
The statement referred to in (3) shall consist of short num-
bered paragraphs, including within each paragraph spe-
cific references to the affidavits, parts of the record, and
other supporting materials relied upon to support the facts
set forth in that paragraph. Failure to submit such a state-
ment constitutes grounds for denial of the motion.
N.D. ILL. L.R. 56.1(a).
No. 02-2130 3
Smith was required to submit his own concise state-
ment, supported by citations to the record.2 Smith admit-
tedly did not follow this mandatory procedure. He chose
instead—for the court’s convenience—to discuss in his
brief only the “two or three dispositive issues” of the
case, ignoring the remainder of the defendants’ state-
ment (see Smith App. Br. at 19-20). In doing so, he failed
in his obligation to respond with particularity to the
statement of material facts submitted by the defen-
dants. Additionally, Smith sought to support his factual
disagreements by affixing to his brief assorted material,
totaling over one hundred pages. But with his concern for
2
Local Rule 56.1(b) provides
Opposing Party. Each party opposing a motion [for summary
judgment] shall serve and file—
...
(3) a concise response to the movant’s statement that
shall contain:
(A) a response to each numbered paragraph in the
moving party’s statement, including, in the case
of any disagreement, specific references to the
affidavits, parts of the record, and other support-
ing materials relied upon, and
(B) a statement, consisting of short numbered
paragraphs, of any additional facts that require
the denial of summary judgment, including refer-
ences to the affidavits, parts of the record, and
other supporting materials relied upon. All material
facts set forth in the statement required of the
moving party will be deemed to be admitted unless
controverted by the statement of the opposing party.
N.D. ILL. L.R. 56.1(b); see also Brasic v. Heinemann’s Bakeries,
Inc., 121 F.3d 281, 286 (7th Cir. 1997) (finding the nonmoving
party’s response must contain “appropriate specific references
to the record”).
4 No. 02-2130
the court’s convenience apparently waning, Smith did
not provide the court with appropriate citations to any
of it (nor did he ensure that he attached only admis-
sible evidence). Here, he has failed in his obligation to
support controverted or additional facts with citations to
admissible evidence.
Local Rule 56.1’s enforcement provision provides that
when a responding party’s statement fails to controvert
the facts as set forth in the moving party’s statement in
the manner dictated by the rule, those facts shall be
deemed admitted for purposes of the motion. N.D. ILL.
L.R. 56.1(b). We have consistently held that a failure
to respond by the nonmovant as mandated by the
local rules results in an admission. See, e.g., Michas v.
Health Cost Controls of Ill., Inc., 209 F.3d 687, 689 (7th Cir.
2000).
A district court is not required to “wade through
improper denials and legal argument in search of a genu-
inely disputed fact.” Bordelon v. Chicago Sch. Reform Bd.
of Trustees, 233 F.3d 524, 529 (7th Cir. 2000). And a
mere disagreement with the movant’s asserted facts is
inadequate if made without reference to specific support-
ing material. Edward E. Gillen Co. v. City of Lake Forest,
3 F.3d 192, 196 (7th Cir. 1993). In short, “[j]udges are
not like pigs, hunting for truffles buried in briefs.”
United States v. Dunkel, 927 F.2d 955, 956 (7th Cir.
1991). Smith’s summary-judgment materials were woe-
fully deficient in either responding adequately to the
defendants’ statement or in setting forth additional facts
with appropriate citations to the record. As such, Smith’s
purportedly good intentions aside, the district court did
not abuse its discretion in deeming admitted and only
considering the defendants’ statement of material facts.
Turning now to those facts, we learn the following: On the
morning of January 23, 1998, Detective Lamz of the
No. 02-2130 5
Algonquin Police Department received a telephone call
from Karen S. Jurasek, an employee of the Algonquin
Dental Associates, informing Lamz that she had just
received a telephone call from a man identifying him-
self as being “from the Algonquin Police Department,”
who was interested in selling her advertising space in a
soon-to-be-published magazine. Jurasek said she agreed
to make a $150 donation, and the caller was to come to
the office later that day to collect. She told Lamz, how-
ever, that her employer had decided not to contrib-
ute after all and that she needed to cancel the office’s
donation.
In response to Jurasek’s comments, Lamz told her
that Algonquin police officers do not solicit money from
residents or businesses and that no Algonquin police
officers should be collecting money in the name of the
police department. Lamz directed Jurasek to stall the
man should he come to collect the check and to contact
the police immediately upon the caller’s arrival.
The caller was, of course, Smith, who showed up at
the dental office later that day to collect. Jurasek did as
she was told, stalling Smith until the police could arrive.
Lamz came himself and questioned Smith, Jurasek, and
another dental employee, Victoria Carlson. Both Jurasek
and Carlson told Lamz that Smith had declared on the
phone and at the front window of the dentist’s office
that he was “from the Algonquin Police Department.”
As it turns out, Smith was actually employed by a
company called Triad Promotions, Inc., which had been
retained by the Metropolitan Alliance of Police Unions to
solicit donations on its behalf. Smith explained this to
Lamz, insisted that Jurasek and Carlson must have
misunderstood him, and denied identifying himself as
an Algonquin police officer.
Jurasek and Carlson, however, reiterated they were
“absolutely certain” that Smith had told them he was
6 No. 02-2130
“from the Algonquin Police Department,” and they both
wrote and signed contemporaneous statements to that
effect. In a conversation with Lamz, McHenry County
Assistant State’s Attorney Mary Lennon approved charg-
ing Smith with false impersonation of a police officer
and theft by deception. As a result, Lamz arrested Smith.
Of Smith’s remaining challenges, which attack the dis-
trict court’s decision on the merits, the only one warrant-
ing discussion is whether the district court erred in
finding that Lamz had probable cause to arrest Smith
and was therefore entitled to qualified immunity. We
begin by noting that Smith may not maintain an action
under § 1983 for malicious prosecution. Newsome v.
McCabe, 256 F.3d 747, 750-51 (7th Cir. 2001) (interpreting
the effective holding of Albright v. Oliver, 510 U.S. 266
(1994), in accordance with its narrowest ground of deci-
sion, to be that the opportunity for state-law remedies
for wrongful-prosecution claims precludes any constitu-
tional theory of the tort). Rather, the district court
was correct in treating Smith’s claim as one for unlaw-
ful arrest in violation of his Fourth Amendment rights.
Id. Under the doctrine of qualified immunity, probable
cause to arrest will defeat an unlawful-arrest claim. See
Jenkins v. Keating, 147 F.3d 577, 585 (7th Cir. 1998)
(officer has probable cause, and is therefore entitled to
qualified immunity, for arresting alleged culprit so long
as reasonably credible witness or victim informs the po-
lice that the suspect has committed a crime, even if
the arrestee is later found to be innocent).
The determination of probable cause is normally a
mixed question of law and fact, Ornelas v. United States,
517 U.S. 690, 696 (1996), but when “what happened”
questions are not at issue, the ultimate resolution of
whether probable cause existed is a question of law, which
we review de novo. Cervantes v. Jones, 188 F.3d 805,
811 (7th Cir. 1999). In order to determine whether prob-
No. 02-2130 7
able cause existed for an arrest, we ask whether, at the
time of the arrest, the facts and circumstances within
the officer’s knowledge were sufficient for the officer to
form a reasonable belief to suspect criminal activity. Qian
v. Kautz, 168 F.3d 949, 953 (7th Cir. 1999). The officer
need only demonstrate “a probability or substantial
chance of criminal activity, not an actual showing of
such activity.” United States v. Gilbert, 45 F.3d 1163, 1166
(7th Cir. 1995) (quotations omitted). And when a po-
lice officer receives information sufficient to raise a sub-
stantial chance of criminal activity from a person
whose truthfulness he has no reason to doubt, that infor-
mation is sufficient to establish probable cause. Jenkins,
147 F.3d at 585.
Unquestionably, the facts as known to Lamz at the
time of the arrest establish that he had probable cause
to suspect Smith of criminal activity. Under Illinois
law, false personation of a peace officer occurs when “a
person . . . knowingly and falsely represents himself to
be a peace officer of any jurisdiction.” 720 ILL. COMP.
STAT. 5/32-5.1 (2003). Jurasek and Carlson informed
Lamz, both orally and in writing, that the plaintiff told
them he was “from the Algonquin Police Department.”
Arguing semantics, Smith asserts that since Lamz knew
he did not utter the words, “I am an Algonquin police
officer,” he did not commit the offense. But the arrest-
ing officer Lamz is not charged with the duty of judge
and jury at the moment of arrest, deciding whether
the statement “I am from the Algonquin Police Depart-
ment,” is ultimately sufficient to establish guilt of the
crime of impersonating an officer. See Gilbert, 45 F.3d
at 1166. Instead, the appropriate question is whether
an officer in Lamz’s position would reasonably believe
on the basis of that statement that there was “a probabil-
ity or substantial chance of criminal activity.” Id. (quota-
tions omitted). On the facts before us, that Lamz could
8 No. 02-2130
have reasonably so believed is supported not only by
Smith’s chosen words themselves, but also by the fact
that those words conveyed the impression upon the lis-
tener that he was an Algonquin police officer. Jurasek
had thought as much when speaking with Smith on the
phone: afterwards, she called the Algonquin Police De-
partment to cancel the donation. We thus conclude that
Lamz possessed probable cause on the basis of these
statements to arrest Smith for the crime of impersonat-
ing a police officer.
Smith had argued to the district court that Lamz’s
testimony regarding what Jurasek and Carlson told him
was not credible. In other words, Smith argues that
Jurasek and Carlson never told Lamz that Smith had
represented to them that he was “from the Algonquin
Police Department.” Because Smith did not controvert
this fact appropriately in his summary-judgment sub-
missions, Smith has provided no evidence to support
his allegation. But even if we could look past this pro-
cedural bar and examine the “evidence” he attempts to
introduce on this point, we would find that it would
not raise an issue of fact regarding whether Lamz had
probable cause to arrest. Smith only argues that
Jurasek and Carlson later recanted their original state-
ments in an unsworn interview with Smith’s private
investigator. Such evidence, even if properly asserted
within Smith’s brief, would still be inadmissible hear-
say.3 But more importantly, both Jurasek and Carlson
3
Conversely, Jurasek’s and Carlson’s original oral and written
statements are not hearsay. They were not introduced to prove
the truth of the matter asserted—that is, that Smith in fact
told Jurasek and Carlson he was “from the Algonquin Police
Department”—but rather to show the effect on the hearer of
Jurasek’s and Carlson’s statements, Lamz—that is, that upon
(continued...)
No. 02-2130 9
wrote and signed their own statements implicating
Smith at the time of his arrest. Armed with this contempo-
raneous documentation written by the witnesses them-
selves, the importance of Lamz’s credibility is dimin-
ished. On the basis of both Jurasek’s and Carlson’s con-
temporaneous written statements, we find that Lamz
had probable cause to suspect that Smith had committed
the offense of impersonating an officer. The district
court correctly found that he was entitled to qualified
immunity on this charge.
For the foregoing reasons, the decision of the dis-
trict court is AFFIRMED.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
3
(...continued)
hearing Jurasek’s and Carlson’s statements, Lamz believed
that Smith had told them he was “from the Algonquin Police
Department.” See FED. R. EVID. 801(c). Smith’s statement to
Jurasek and Carlson falls within the party-admission exemp-
tion to the rule. FED. R. EVID. 801(d)(2)(A).
USCA-02-C-0072—3-5-03
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546 F.Supp. 391 (1982)
Saul MAURIBER, Plaintiff,
v.
SHEARSON/AMERICAN EXPRESS, INC., and Judith LeWinter a/k/a Judith Cohen, Defendants.
No. 82 Civ. 1802 (KTD).
United States District Court, S. D. New York.
August 27, 1982.
*392 Dan Brecher, New York City, for plaintiff.
Peter T. Kujawski, Harry D. Frisch, Leslie A. Klein, Theodore A. Krebsbach, New York City, for defendant Shearson/American Exp., Inc.
MEMORANDUM & ORDER
KEVIN THOMAS DUFFY, District Judge:
From January, 1980 to October, 1981, Saul Mauriber placed a substantial portion of his life savings in a discretionary customer account at Shearson/American Express, Inc. ("Shearson"), a New York corporation engaged in the investment brokerage business. Allegedly, Shearson proceeded to lose up to $250,000 of Mauriber's money principally by selling off his portfolio of "blue chip securities" and purchasing "speculative" stock. This lawsuit ensued. It exemplifies a growing number of cases which improperly invoke the federal securities laws and, additionally, exploit the vague language of the civil provisions of the federal anti-racketeering statute in an attempt to recoup investment losses.
Shearson now moves to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted in that (1) the complaint fails to plead fraud with the particularity required by Fed.R.Civ.P. 9(b); (2) the complaint improperly assumes the existence of an implied cause of action under the Rules of the New York Stock Exchange ("NYSE"), the American Stock Exchange ("AMEX") and the National Association of Securities Dealers ("NASD"); and (3) the complaint fails to state sufficient facts to sustain a claim under the Racketeer Influenced and Corrupt Organization Statute ("RICO"), 18 U.S.C. §§ 1961-68 (1976 and Supp. II 1978). Shearson also moves pursuant to Fed.R.Civ.P. 12(f) to strike plaintiff's claim for punitive damages.
The complaint alleges two causes of action, one under Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and another under Section 1962(c) of RICO, 18 U.S.C. § 1962(c). The same set of facts purport to support both causes of action. For purposes of this motion the facts alleged in the complaint are assumed to be true and all inferences are construed in plaintiff's favor. Prior to January, 1980, the plaintiff, who is at an "advanced age" and retired, owned an unspecified amount of "blue chip" securities which he had acquired over the past thirty years. The dividend and interest income from these securities provided plaintiff with a "substantial portion of his income." Sometime in January 1980, plaintiff opened a customer account at the Shearson brokerage firm and transferred his portfolio of securities there. The account executive at Shearson responsible for Mauriber's account was defendant Judith LeWinter. Mauriber contends that the defendants Shearson and LeWinter "made and caused to be made misstatements and omissions of material facts and engaged in fraudulent and deceptive conduct and courses of business," complaint ¶ 17, including the following:
1. "in an atmosphere of high pressure tactics, defendants induced plaintiff to sign a Limited Discretionary Authorization which granted defendants discretionary power to buy and sell securities in plaintiff's *393 account, without offering plaintiff the opportunity to read, reflect or ask meaningful questions with respect to said document, and by telling plaintiff that said document was merely necessary to transfer plaintiff's existing portfolio of securities over to his account with defendant Shearson." Complaint ¶ 17(b).
2. "defendants filled out, completed, reviewed and maintained possession of a Discretionary Account Information Statement on plaintiff's behalf, without consulting plaintiff or obtaining the relevant information from plaintiff. Said document contained several material misstatements of facts concerning plaintiff and his financial condition and investment objectives." Id., ¶ 17(c).
3. "defendants failed to inform plaintiff that said Limited Discretionary Authorization granted defendants several powers, including, but not limited to, the power to act as plaintiff's agent ... for purpose of buying and selling securities in plaintiff's account, ... without first consulting plaintiff ...." Id., ¶ 17(d).
4. Between January, 1980 and October, 1981, "defendants sold plaintiff's blue chip securities and caused plaintiff to make several cash payments into his account. With the proceeds of said sales and said cash payments, defendants purchased and sold, for plaintiff's account, various non-income producing securities which were of a high risk and speculative nature. Said purchases and sales involved in excess of 160 transactions over a short period of time, constituting excessive trading, and were designed to, and, in fact, did earn defendants substantial commissions, but caused plaintiff losses, expenses, costs and damages." Id., ¶ 17(c).
5. "defendants knew that the high risk securities were unsuitable for plaintiff's financial needs and investment objectives." Id., ¶ 17(f). "Despite this knowledge, defendants represented to plaintiff that it would be consistent with his needs and objectives to sell the securities." Id., ¶ 17(g).
6. "defendants sold plaintiff's Anchor Growth Funds, and defendants told plaintiff that the sale price of said securities was approximately $11,000, when, in fact, the sale price was approximately $34,000." Id., ¶ 17(i). Furthermore, "defendants failed to inform plaintiff that approximately $23,000 from the sale of plaintiff's Anchor Growth Funds was deposited into plaintiff's account by defendants and utilized to purchase unsuitable securities." Id., ¶ 17(j).
7. Defendants failed to inform plaintiff that numerous purchases of securities for plaintiff's account were made on margin. Id. ¶ 17(k).
Plaintiff asserts that these actions constitute a Section 10(b) violation in that they involved misrepresentations and omissions, and furthermore, they constitute violations of NASD and NYSE "know your customer" and "suitability" of investments rules. Also, plaintiff alleges that these actions constitute violations of Section 1962(c) of RICO which proscribes inter alia any fraud in the sale of a security committed at least twice within a ten year period.
1. The Section 10(b) Claim
On its motion to dismiss, defendants' first objection to the complaint is that it fails to plead fraud with the particularity required by Fed.R.Civ.P. 9(b). Rule 9(b) states in part: "in all averments of fraud ... the circumstances constituting fraud ... shall be stated with particularity."
"To pass muster in this Circuit a complaint `must allege with some specificity the acts constituting the fraud;' conclusory allegations that defendant's conduct was fraudulent or deceptive are not enough." Decker v. Massey-Ferguson, Ltd., [current], 681 F.2d 111 (2d Cir. 1982), quoting Rodman v. Grant Foundation, 608 F.2d 64, 73 (2d Cir. 1979). In defendants' view, nearly every paragraph of the complaint fails to meet this standard.
After reviewing the complaint, I find that plaintiff's fraud allegations fail to meet the requirements of Rule 9(b). The Section 10(b) portion of the complaint can be divided into three categories: (1) misrepresentations by defendants to Mauriber; (2) churning; and (3) violations of the "know *394 your customer" and "suitability" rules of the NYSE and NASD. These categories will be scrutinized seriatim under the Rule 9(b) requirements.
The first category of fraud allegations takes several forms. Plaintiff asserts that he was induced through "high pressure tactics" to grant defendants discretionary power over his account. Defendants purportedly told the plaintiff that the document which he signed was merely necessary to set up the account at Shearson. The complaint fails to state, however, who made these "pressure" statements to the plaintiff and exactly when and where they were made.
The complaint further states that the defendants filled out and maintained a Discretionary Account Information Statement on plaintiff's behalf which contained misstatements of fact. But the complaint does not reveal these misrepresentations nor how plaintiff relied upon them to his detriment.
Next, the complaint alleges that defendants erroneously represented to the plaintiff that selling off his blue chip securities was consistent with his financial needs. Again, it is not clear who made these statements, when they were made and how they were made. Gross v. Diversified Mortgage Investors, 431 F.Supp. 1080 (S.D.N.Y.1977), aff'd without op., 636 F.2d 1201 (2d Cir. 1980). A similar deficiency exists in the allegation that defendants told plaintiff that the sale price of his shares in Anchor Growth Funds was $11,000 instead of $34,000. Plaintiff is under a Rule 9(b) obligation when dealing with more than one defendant to specify which defendant told which lie and under what circumstances. Plaintiff is also obligated to name the defendant or defendants who allegedly failed to inform the plaintiff that securities were purchased on margin in plaintiff's account. For the foregoing reasons, paragraphs 16 and 17(a), (b), (c), (g), (i) are stricken from the complaint. These vague allegations of fraud fail to appraise the defendants of information which would be necessary to raise an intelligent defense.
The second category of fraud in the complaint is churning. Complaint ¶ 17(e), (k). Churning occurs when a broker disregards the client's investment objectives and engages in excessive trading for the purpose of generating commissions. To prevail on a claim of churning under Section 10b, an investor must prove: (1) excessive trading in light of his known investment objectives, (2) by a broker with discretion over his account, (3) who acts with the intent to defraud. See Miley v. Oppenheimer & Co., Inc., 637 F.2d 318 (5th Cir. 1981). The complaint falls short of alleging enough facts to sustain a churning claim. The complaint does not describe the plaintiff's investment objectives nor why the trades made in his account between January, 1980 and October, 1981 were excessive. Furthermore, plaintiff does not state whether all or only part of the trades in this time period were unnecessary. Plaintiff should be able to describe more precisely its churning claim without further investigation.
The third category of fraud in the complaint alleges that the "defendants failed to inform plaintiff" that they had violated the "know your customer" and "suitability" rules of NASD, NYSE and AMEX, complaint ¶ 17(n). The invocation of these rules poses a separate problem. To the extent that this portion of the complaint purports to state independently a claim for Section 10(b) violation it must be dismissed. The law is clear that the mere violation of a rule of an exchange cannot, without more, constitute a violation of Section 10(b) or Rule 10b-5, see Clark v. John Lamula Inv., Inc., 583 F.2d 594 (2d Cir. 1978); Rolf v. Blyth Eastman Dillon, 424 F.Supp. 1021 (S.D.N.Y.1977), aff'd, 570 F.2d 38 (2d Cir.), cert. denied, 439 U.S. 1039, 99 S.Ct. 642, 58 L.Ed.2d 698 (1978), and it cannot support an implied cause of action under Section 6 of the Securities Exchange Act of 1934. See Jablon v. Dean Witter & Co., 614 F.2d 677 (9th Cir. 1980); Picard v. Wall St. Discount Corp., 526 F.Supp. 1248 (S.D.N.Y.1981); Klitzman v. Bache Halsey Stuart Shields, Inc., 499 F.Supp. 255 (S.D.N. *395 Y.1980).[1] To the extent the complaint mentions these rules as part of a course of conduct which amount to fraud, the rules, however, may form part of the complaint.
As part of plaintiff's broader allegation of fraud, the references to these rules contribute to the complaint's failure to comply with Rule 9(b). How the defendants specifically violated the Rules is not outlined nor is it explained how these violations amounted to a fraud upon plaintiff. For example, it is not enough to say, as paragraph 17(n) apparently does, that defendants failed to inform plaintiff that they had not learned the essential facts about a customer or a particular order. This is not necessarily fraud. Plaintiff must allege a specific intention by defendants to defraud and facts to support such an allegation. A complaint cannot merely state that a broker defendant failed to learn certain facts. Paragraph 17(n) does not even go this far and accordingly it must be stricken from the complaint for failure to comply with Rule 9(b). Although plaintiff will be granted leave to replead the Section 10(b) claim he may not depend upon a mere recitation of alleged violations of the exchange rules to establish his claim.
2. The RICO Claim
RICO makes it unlawful (1) for any person to use or invest any income derived from "a pattern of racketeering activity ... in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in ... interstate or foreign commerce," 18 U.S.C. § 1962(a); (2) "for any person to acquire or maintain through a pattern of racketeering any interest in or control of any enterprise engaged in interstate or foreign commerce", id. § 1962(b); (3) "for any person employed by or associated with any enterprise engaged in ... interstate ... commerce, to conduct or participate ... in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt," id. § 1962(c); and (4) "for any person to conspire to violate any of the above provisions." Id. § 1962(d).
In this case involving a broker's alleged fraud of a customer, only the third prohibition of Section 1962 appears applicable. It is plaintiff's contention that defendants' commission of "fraud in the sale of securities," 18 U.S.C. § 1961(1)(D), constitute a pattern of racketeering activities within the meaning of RICO. For such a pattern to exist, at least two acts of fraud must be committed within a ten year period. Id. § 1961(5).
This federal action was instituted in part under the civil provisions of RICO which permits a suit by "[a]ny person injured in his business or property by reason of a violation of section 1962." 18 U.S.C. § 1964(c). What is perhaps most significant about plaintiff's invocation of this statute is that if successful he can recover treble damages, costs and attorneys' fees. Id. The potency of this civil remedy serves to emphasize the legislature's determination to provide a comprehensive arsenal of weapons against the proliferation of organized crime. See United States v. Turkette, 452 U.S. 576, 588-90, 101 S.Ct. 2524, 2531-2532, 69 L.Ed.2d 246 (1981).
The potential for an award of treble damages to a RICO plaintiff has caused considerable consternation over the apparent breadth of the statute. In particular, it is not entirely clear whether Congress envisioned a civil RICO remedy for someone defrauded in the purchase or sale of a security where an apparent remedy already exists under the federal securities laws or whether the securities laws are intended to provide the victim's exclusive remedies. Several district courts have concluded that *396 RICO applies only to situations where the defendants are involved in organized crime, especially where the civil plaintiffs have recourse through other federal laws. See, e.g., Adair v. Hunt International Resources Corp., 526 F.Supp. 736 (N.D.Ill.1981) (plaintiffs were able to state claims under the federal securities law and the Interstate Land Sales Acts); Landmark Savings & Loan v. Rhoades, 527 F.Supp. 206 (E.D. Mich.1981) (securities fraud claim did not allege "racketeering enterprise injury"); Waterman S.S. Corp. v. Avondale Shipyards, Inc., 527 F.Supp. 256, 260 (E.D.La. 1981) (plaintiff asserted viable antitrust claims and the court reasoned that the "civil ... provisions of RICO were not designed to convert every fraud or misrepresentation action ... into treble damages RICO actions"); Noonan v. Granville-Smith, 537 F.Supp. 23 (S.D.N.Y.1981) (federal securities fraud action RICO claim dismissed because there was no allegation that organized crime sought control over a business enterprise); Barr v. WUI/TAS, Inc., 66 F.R.D. 109 (S.D.N.Y.1975) (plaintiff alleged unlawful price increases and price fixing and court dismissed RICO claim because defendant could not be characterized as "society of criminals"). Defendants urge that this line of cases renders RICO inapplicable to the situation at bar. This is a simple securities fraud case, according to defendants, involving a reputable broker and one disappointed customer hardly the situation requiring a sanction created by Congress to eradicate the infiltration of organized crime into legitimate businesses.
I disagree with this simplistic approach. RICO does not require an allegation that organized crime is operating an enterprise through a pattern of racketeering activity. Such a requirement might, in fact, defeat the very purpose of the statute. RICO's definition of racketeering activity is broad and without explicit reference to "organized crime." Several reasons might explain why Congress chose not to include this in the statute. For one, "organized crime" is incapable of precise definition or identification. Moreover, in the words of one congressman, "to require a general showing that organized crime is involved as a predicate for use of investigative techniques would be to cripple these techniques." 116 Cong.Rec. 35344 (October 7, 1970). The Act's purpose is to eliminate the penetration of organized crime and racketeering into legitimate business. S. Rep. No. 91-617 (1969). The civil remedies provide a useful tool in helping to rid society of organized crime by divesting "the association of the fruits of its ill-gotten gains." United States v. Turkette, 452 U.S. at 585, 101 S.Ct. at 2530. This does not mean, however, that plaintiffs have to await a criminal prosecution to bring a civil action in order to be sure the defendant is a criminal. See Farmers Bank of Delaware v. Bell Mortgage Corp., 452 F.Supp. 1278 (D.Del. 1978). Organized crime presumably takes many clandestine forms. A plaintiff should not be forced to prove that a defendant is a part of a "society of criminals" before he can seek relief. Such a rule might emasculate the civil remedies' effectiveness as a deterrent to racketeering activity. Therefore, until Congress promulgates more precise language for the invocation of RICO's civil provisions, I am constrained to find that if the racketeering activity explicitly proscribed by the statute is proven, RICO damages may be awarded to the appropriate plaintiff without proof that the defendant is connected to organized crime. Cenco, Inc. v. Seidman & Seidman [Current] Fed. Sec.L.Rep. (CCH), ¶ 98,615 at p. 93,057, 686 F.2d 449 (7th Cir. 1982); Maryville Academy v. Loeb Rhoades & Co., Inc., 530 F.Supp. 1061, 1069 (N.D.Ill.1981); Engl v. Berg, 511 F.Supp. 1146, 1155 (E.D.Pa.1981).
Further, I do not subscribe to defendants' argument that a securities fraud violation under Section 10(b) is never actionable under RICO. Racketeering activity under RICO specifically includes "fraud in the sale of securities." This leads to the inescapable conclusion that Congress intended there to be some overlap, and under the appropriate circumstances a violation of the securities laws may result in RICO liability. See Spencer Companies, Inc. v. Agency Rent-A-Car, *397 Inc., [1981] Fed.Sec.L.Rep. (CCH), ¶ 98,361 (D.Mass. November 17, 1981); Maryville Academy v. Loeb Rhoades, Inc., supra; Parnes v. Heinold Commodities, Inc., 487 F.Supp. 645 (N.D.Ill.1980).
In this case the RICO claim must fail for reasons not advanced by defendants. In Count II, the complaint alleges a violation of RICO by vaguely referring back to all of the preceding paragraphs that constitute the Section 10(b) violation. As earlier stated, the securities fraud allegations fail in numerous respects to comply with the specificity requirements of Fed.R. Civ.P. 9(b). Until such time as plaintiff adequately pleads fraud it will not be known whether a RICO violation is properly alleged. As a result, Count II of the complaint is dismissed with leave to replead within 20 days of the date hereof.
In sum, the entire complaint is dismissed and plaintiff is granted 20 days from the date hereof to replead.
SO ORDERED.
NOTES
[1] Cases which hold that no private right of action exists for a violation of the exchange rules are not altered by the Supreme Court's recent decision in Merrill-Lynch v. Curran, ___ U.S. ___, 102 S.Ct. 1825, 72 L.Ed.2d 182 (1982). In fact, the standards utilized in that case by the Court to find a private right of action under the Commodity Exchange Act were similar to the standards used in those cases cited which found no private right of action under the exchange rules. See, e.g., Picard v. Wall St. Discount Corp., 526 F.Supp. 1248 (S.D.N.Y.1981).
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FILED
NOT FOR PUBLICATION JAN 12 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
LEVI F. SCHULTZ, No. 08-36047
Plaintiff - Appellant, D.C. No. 3:07-cv-06144-MO
v.
MEMORANDUM *
MICHAEL J. ASTRUE, Commissioner of
Social Security Administration,
Defendant - Appellee.
Appeal from the United States District Court
for the District of Oregon
Michael W. Mosman, District Judge, Presiding
Argued and Submitted December 11, 2009
Portland, Oregon
Before: FARRIS, D.W. NELSON and BERZON, Circuit Judges.
Plaintiff-Appellant Levi Schultz appeals the district court’s grant of
summary judgment to the Commissioner in a challenge to the Commissioner’s
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
1
finding that Schultz is not disabled pursuant to Title XVI of the Social Security
Act. We affirm in part, reverse in part, and remand.1
1. We affirm the Administrative Law Judge’s (“ALJ”) adverse credibility
finding with respect to Schultz because it is supported by a “clear and convincing
reason[].” Carmickle v. Comm’r of Soc. Sec. Admin., 533 F.3d 1155, 1160 (9th
Cir. 2008). The ALJ was entitled to discredit Schultz’s testimony based on its
inconsistency with Schultz’s reported daily activities, such as his ability soon after
back surgery to hike two to three miles. See Tommasetti v. Astrue, 533 F.3d 1035,
1039 (9th Cir. 2008); Batson v. Comm’r of Soc. Sec. Admin., 359 F.3d 1190, 1196
(9th Cir. 2004).2
2. We affirm the ALJ’s decision to give little weight to Dr. Norelle’s opinion
that Schultz would be disabled for one year. The ALJ provided “clear and
convincing reasons supported by substantial evidence in the record” for
1
We do not consider Schultz’s challenge to the ALJ’s conclusion at Step 5
that Schultz could perform other work in the national economy. Schultz waived
this challenge by not setting forth an argument to support it in his opening brief.
See Greenwood v. F.A.A., 28 F.3d 971, 977 (9th Cir. 1994).
2
The ALJ also discredited Schultz’s testimony because of Schultz’s history
of lying about his physical condition. The validity of that reason may depend on
the outcome of a psychological evaluation on remand, discussed infra. However,
as the ALJ’s remaining reason is supported by substantial evidence, the ALJ’s
credibility assessment is legally valid, even if reliance on Schultz’s history of lying
was in error. See Carmickle, 533 F.3d at 1162.
2
discounting Dr. Norelle’s opinion about disability. Holohan v. Massanari, 246
F.3d 1195, 1202–03 (9th Cir. 2001) (internal quotation marks omitted). The ALJ
determined that Dr. Norelle’s opinion was conclusory and unsupported by clinical
findings, a determination supported by the record. See Batson, 359 F.3d at 1195.
The ALJ also properly concluded that Dr. Norelle’s opinion was inconsistent with
the medical evidence available at the time period during which the opinion was
recorded, and was also contradicted by Schultz’s later medical developments. In
the months before Norelle wrote the letter but after Schultz’s back surgery, Schultz
reported to Norelle that he was “doing quite well,” “walking daily,” and had “no
low back pain or lower extremity pain/numbness.” Dr. Norelle noted that
Schultz’s gait was normal. Moreover, the same month that Dr. Norelle wrote her
letter, Schultz reported that he had taken a ten-mile hike and could hike two miles
resulting only in soreness.
3. We affirm the ALJ’s decision to reject Dr. Micek’s opinion that Schultz
would miss two days of work per month, as the ALJ provided clear and convincing
reasons for so doing. Dr. Micek offered no medical findings or rationale to support
her conclusion, see Tonapetyan v. Halter, 242 F.3d 1144, 1149 (9th Cir. 2001), so
the ALJ properly inferred that Dr. Micek’s opinion was based on Schultz’s own
reports. Where an applicant’s credibility has been permissibly discounted, an ALJ
3
may disregard a physician’s opinion based on the applicant’s “subjective
complaints and on testing within [the claimant’s] control.” Id.
4. We hold, however, that the ALJ failed to develop the record with respect to
Schultz’s mental impairments, a duty “triggered . . . when there is ambiguous
evidence or when the record is inadequate to allow for proper evaluation of the
evidence.” Mayes v. Massanari, 276 F.3d 453, 459–60 (9th Cir. 2001). As a
result, the ALJ’s residual functional capacity (“RFC”) analysis did not account for
any limitations posed by Schultz’s recognized mental impairments of possible
conversion reaction, history of delusional state, or depression.
The state psychologists’ review, on which the ALJ relied for his RFC
analysis, preceded Schultz’s delusional episode and identified only a learning
disorder as the mental impairment under evaluation. Moreover, despite the “broad
latitude” granted the Commissioner concerning whether to order consultative
examinations, Reed v. Massanari, 270 F.3d 838, 842 (9th Cir. 2001) (internal
quotation marks omitted), the ALJ’s rationale for not ordering an
examination—that a “one-shot [psychological] evaluation” would not help the
disability assessment because Schultz “exaggerated his problems to the point of
fabrication”—cannot suffice. The rationale is pure speculation; after the
psychological evaluation is conducted, not before, the ALJ will be in a position to
4
ascertain whether or not it is reliable and helpful. Moreover, that rationale does not
explain why a person whose psychological problems seem to include delusions
could not be evaluated to determine whether he has delusions and whether they
affect his functionality. We therefore reverse the district court’s grant of summary
judgment to the Commissioner and remand for development of the record as to
Schultz’s mental impairments.
CONCLUSION
We AFFIRM the district court’s conclusion that the ALJ properly
discredited Schultz’s testimony and gave little weight to the opinions of Drs.
Norelle and Micek. We REVERSE the district court’s affirmance of the ALJ’s
refusal to order a psychological consultation. We REMAND to the district court
with instructions to remand to the Commissioner for additional administrative
proceedings consistent with this disposition.
AFFIRMED in part, REVERSED in part, and REMANDED.
5
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57 So.3d 860 (2011)
C.I.
v.
STATE.
No. 3D10-2544.
District Court of Appeal of Florida, Third District.
March 23, 2011.
DECISION WITHOUT PUBLISHED OPINION
Affirmed.
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IN THE COURT OF WORKERS' COMPENSATION CLAIMS
AT KNOXVILLE
JOHN TIDMORE ) Docket No.: 2015-03-0265
Employee, )
)
v. ) State File Number: 24517-2015
)
TENNESSEESTEELCENTER )
Employer, ) Judge Lisa A. Knott
And )
)
MITSUI SUMITOMO INSURANCE )
COMPANY )
Insurance Carrier. )
EXPEDITED HEARING ORDER GRANTING MEDICAL BENEFITS
This matter came before the undersigned workers' compensation judge on the
Request for Expedited Hearing filed by the Employee, John Tidmore, pursuant to
Tennessee Code Annotated section 50-6-239 (2014). The present focus of this case is
Mr. Tidmore's right shoulder condition. The central legal issues are whether Mr.
Tidmore gave proper notice of his claim and whether his injury arose primarily in the
course and scope of his employment. For the reasons set forth below, the Court finds that
Mr. Tidmore provided proper notice of his gradually occurring injury to his Employer,
Tennessee Steel (TN Steel). The Court further finds that based on the evidence presented
at this time, Mr. Tidmore is likely to succeed at a hearing on the merits of establishing
that his right shoulder condition arose primarily in the course and scope of his
1
employment.
History of Claim
Mr. Tidmore is a 60-year-old resident of Knox County, Tennessee.
1
A complete listing of the technical record and exhibits admitted at the Expedited Hearing is attached to this Order
as an appendix.
TN Steel employed Mr. Tidmore to operate a six-hundred-ton press. Mr. Tidmore
alleged he received a right shoulder rotator cuff tear from repetitive movements of
pulling or pushing a two-foot wrench to loosen and tighten large bolts.
Mr. Tidmore underwent his yearly physical with Dr. Christopher Cox on June 17,
2014. He complained about pain, for about a year, in both shoulders, right greater than
left. At his September 17, 2014 visit, Mr. Tidmore informed Dr. Cox he was still
experiencing shoulder pain and referenced that he is physically active at work. On March
17,2015, an MRI of Mr. Tidmore's right shoulder demonstrated a partial thickness tear
of two tendons in the shoulder and a labral tear. Dr. Cox referred Mr. Tidmore for an
orthopedic evaluation. (Ex. 3.)
The First Report of Injury reflects that Mr. Tidmore provided notice of his injury
to TN Steel on March 17, 2015. (Ex. 15.) TN Steel provided Mr. Tidmore a panel of
physicians, from which he selected Dr. Paul Brady. (Ex. 5.) Dr. Brady's May 18, 2015
note contains the following:
He reports the [right] shoulder has been giving him problems for years. It
hurts on and off. He denies any specific incident or event on his shoulder.
He has seen another physician who ordered an MRI. That MRI
demonstrated a high-grade partial to small full-thickness rotator cuff tear.
The patient then felt like this was likely attributable to some of his work
activities, which require significant force to push and pull hard bolts when
tightening and loosening those bolts.
I told him that without an event or an accident, I cannot within a reasonable
degree of medical certainty attribute his rotator cuff tear back to a work-
related event and therefore I did not think this is something, which qualifies
under current Workmen's Compensation laws as being a work comp injury.
I told him I am happy to take care of his shoulder outside of the work comp
system if he so desires. Follow up with me as needed. No restrictions from
my standpoint.
In addition, Dr. Brady handwrote on the May 18, 2015 WORKlink sheet, "Can not [sic]
attribute problem to a work injury."
Mr. Tidmore returned to Dr. Brady on July 27, 2015, and brought a video of a co-
worker changing bolts for him to watch. Dr. Brady noted:
I told him that after reviewing this video I do believe doing this repetitively
over a long period of time is likely to have contributed/Colles[ sic] his
rotator cuff tearing. I believe this within a reasonable degree of medical
certainty [to be] the case. I told him to work with his mediator in regards to
------------------------------------------------------------------------
this causation and whether this should be filed as a Workmen's
Compensation injury or under private insurance. (Emphasis added.)
Dr. Brady also made the following addendum to his note: "I believe that Mr.
Tidmore's right shoulder rotator cuff tear shows a preponderance of the evidence that his
employment contributed more than 50% in causing the injury considering all causes."
(Emphasis added). (Ex. 2.)
Mr. Tidmore filed a Petition for Benefit Determination seeking medical benefits.
The parties did not resolve the disputed issues through mediation, and the Mediating
Specialist filed a Dispute Certification Notice. Mr. Tidmore filed a Request for
Expedited Hearing, and this Court heard the matter on October 6, 2015.
At the Expedited Hearing, Mr. Tidmore asserted he provided proper notice of his
injury because he reported it after realizing his shoulder pain was due to a tear rather than
general work aches and pains. He further asserted that Dr. Brady's July 27, 2015 opinion
established his injury arose primarily out of and in the course and scope of his
employment. TN Steel countered that Mr. Tidmore did not give proper notice of his
injury because he knew when he saw Dr. Cox in June 2014, that he thought his shoulder
pain was work-related, yet he did not provide notice of his injury to TN Steel until March
17, 2015. TN Steel further countered that Dr. Brady's conflicting causation opinions
cancel each other out and should not be given weight because Mr. Tidmore did not
provide an accurate history of the time he spent removing the bolts and did not tell Dr.
Brady about his gardening activities.
Findings of Fact and Conclusions of Law
The Workers' Compensation Law shall not be remedially or liberally construed in
favor of either party but shall be construed fairly, impartially and in accordance with
basic principles of statutory construction favoring neither the employee nor
employer. Tenn. Code Ann. § 50-6-116 (2014). The employee in a workers'
compensation claim has the burden of proof on all essential elements of a claim. Tindall
v. Waring Park Ass 'n, 725 S.W.2d 935, 937 (Tenn. 1987); 2 Scott v. Integrity Staffing
Solutions, No. 2015-01-0055, 2015 TN Wrk. Comp. App. Bd. LEXIS 24, at *6 (Tenn.
Workers' Comp. App. Bd. Aug. 18, 2015). An employee need not prove every element
of his or her claim by a preponderance of the evidence in order to obtain relief at an
expedited hearing. McCord v. Advantage Human Resourcing, No. 2014-06-0063, 2015
2
The Tennessee Workers' Compensation Appeals Board allows reliance on precedent from the Tennessee Supreme
Court "unless it is evident that the Supreme Court's decision or rationale relied on a remedial interpretation of pre-
July I, 2014 statutes, that it relied on specific statutory language no longer contained in the Workers' Compensation
Law, and/or that it relied on an analysis that has since been addressed by the general assembly through statutory
amendments." McCord v. Advantage Human Resourcing, No . 2014-06-0063, 2015 TN Wrk. Comp. App. Bd.
LEXIS 6, *13 n.4 (Tenn. Workers' Comp. App. Bd. Mar. 27, 2015).
TN Wrk. Comp. App. Bd. LEXIS 6, at *7-8, 9 (Tenn. Workers' Comp. App. Bd. Mar. 27,
20 15). At an expedited hearing, an employee has the burden to come forward with
sufficient evidence from which the trial court can determine that the employee is likely to
prevail at a hearing on the merits. !d.
Notice
Tennessee Code Annotated section 56-6-201(b) (2014) provides the following:
In those cases where the injuries occur as the result of gradual or
cumulative events or trauma, then the injured employee ... shall provide
notice of the injury to the employer within thirty days after the employee:
( 1) Knows or reasonably should know that the employee has suffered a
work-related injury that has resulted in permanent physical impairment;
or
(2) Is rendered unable to continue to perform the employee's normal work
activities as the result of the work-related injury and the employee
knows or reasonably should know that the injury was caused by work-
related activities.
Mr. Tidmore testified he always had general aches and pains from performing his
physically demanding job. He initially had pain in both shoulders, but ultimately the left
shoulder pain resolved. He stated he thought that the right shoulder pain would resolve
as well. The Court finds that Mr. Tidmore did not know his work activities resulted in
permanent physical impairment until the MRI revealed a tear, and he was referred to an
orth pedic physician. Human Resources Manager Vickie Mooney testified that Mr.
Tidmor · contacted her around March l t 11 or 18th to advise he was having problems with
his right shoulder that he related to a prior 2013 work-related elbow injury. She further
noted Mr. Tidmore sent her a text message on March 28, 2015, stating that the date of
injury should be the MRI date. (Ex. 13.) Ms. Mooney also testified that Dr. Cox
assigned Mr. Tidmore restrictions on March 31, 2015. The Court finds Mr. Tidmore
underwent the MRI on March 17, 2015, and provided notice of a work-related injury to
TN Steel on either March 17, 2015, or, at the latest, March 28, 2015. (Exs. 13, 15.)
Therefore, Mr. Tidmore provided notice within thirty days of knowing his work-related
injury resulted in permanent impairment and of being assigned restrictions that prevented
him from performing his normal work activities.
Causation
An injury causes death, disablement or the need for medical treatment only if it
has been shown by a reasonable degree of medical certainty that it contributed more than
fifty percent (50%) in causing the death, disablement or the need for medical treatment,
considering all causes." Tenn. Code Ann. § 50-6-102(13)(C) (2014). Tennessee Code
Annotated section 50-6-102(13)(D) (2014) provides, "'shown to a reasonable degree of
medical certainty' means that, in the opinion of the physician, it is more likely than not
considering all causes, as opposed to speculation or possibility." "The opinion of the
treating physician, selected by the employee from the employer's designated panel ...
shall be presumed correct on the issue of causation but this presumption shall be
rebuttable by a preponderance of the evidence." Tenn. Code Ann. § 50-6-102(13)(E)
(2014).
During the Expedited Hearing, Mr. Tidmore stated any time he had to remove the
bolts, it took about one to two minutes to remove all ten of them. He also testified he did
not change the bolts all day long. He said some days he does not change the bolts at all,
and he may go two to three days without changing the bolts. Plant Manager Ronnie King
provided monthly reports that reflect the frequency the bolts were changed. The Court
admitted those reports into evidence as Collective Exhibit 9, and they reflect the
following:
In September 2014, the bolts were changed 11 up to 16 times. 3
In October 2014, the bolts were changed 13 up to 21 times.
In November 2014, the bolts were changed 9 up to 11 times.
In December 2014, the bolts were changed 7 up to 10 times.
In January 2015, the bolts were changed 9 up to 13 times.
In February 2015, the bolts were changed 7 up to 9 times.
The nurse case manager, Sue Millhouse, testified that, on one occasion, Mr.
Tidmore related to her that he associated his shoulder problems being related to his
gardening and life activities. Mr. Tidmore admitted during cross-examination that he has
two gardens at home, one four feet by ten feet, and the other twelve feet by twelve feet.
He stated he tilled the gardens with a shovel and acknowledged he did not tell Dr. Brady
about his gardening activities.
The Court finds Dr. Brady initially opined, in his May 18, 2015 office note and
WORKlink sheet, that Mr. Tidmore's shoulder injury was not work-related. Then after
watching the video of changing bolts, he said, "doing this repetitively over a long period
of time is likely to have contributed/Colles[sic] his rotator cuff tearing." Dr. Brady's
second opinion does not meet Mr. Tidmore' s burden of establishing that his shoulder
injury arose primarily out of and in the course and scope of his employment. Finally, Dr.
Brady's third opinion, provided in the addendum, was "I believe that Mr. Tidmore's right
shoulder rotator cuff tear shows a preponderance of the evidence that his employment
contributed more than 50% in causing the injury considering all causes." Dr. Brady's
third causation opinion meets Mr. Tidmore's burden, and is presumed correct since he is
the authorized treating physician selected from a panel.
3
The potential additional number is due to a shift change. In this example, the bolts were changed at least eleven
times and could have been changed an additional five times due to the shift change.
The premises for Dr. Brady's opinion are that Mr. Tidmore performed the activity
depicted on the video "repetitively" and he considered all potential causes of Mr.
Tidmore's right shoulder injury. As TN Steel argued, Dr. Brady's notes do not provide
his definition of "repetitive" and do not indicate he ever discussed or questioned Mr.
Tidmore about any other potential causes for his shoulder injury. It does not appear that
Mr. Tidmore provided Dr. Brady with specific information about how many times per
month he changed the bolts. Furthermore, the evidence provided at the Expedited
Hearing and contained in Exhibit 9 could potentially affect Dr. Brady's opinion about
whether Mr. Tidmore performed the bolt-removing activity on a repetitive basis. In
addition, Dr. Brady was not provided information about Mr. Tidmore's gardening
activities. However, TN Steel did not provide any of this information to Dr. Brady.
Therefore, this Court would be engaging in speculation if it were to presume Dr. Brady's
opinion would change upon being presented with said information.
Therefore, as a matter of law, Mr. Tidmore has come forward with sufficient
evidence from which this Court concludes that he is likely to prevail at a hearing on the
merits. His request for medical benefits is granted at this time.
IT IS, THEREFORE, ORDERED as follows:
1. Medical care for Mr. Tidmore's injuries shall be paid and Tennessee Steel Center
or its workers' compensation carrier shall provide Mr. Tidmore with medical
treatment from Dr. Brady for his right shoulder injury as required by Tennessee
Code Annotated section 50-6-204 (2014).
2. This matter is set for an Initial (Scheduling) Hearing on January 5, 2016, at 9a.m.
Eastern.
3. Unless interlocutory appeal of the Expedited Hearing Order is filed, compliance
with this Order must occur no later than seven business days from the date of entry
of this Order as required by Tennessee Code Annotated section 50-6-239(d)(3)
(2014). The Insurer or Self-Insured Employer must submit confirmation of
compliance with this Order to the Bureau by email to
W ompliance.Program@tn .gov no later than the seventh business day after
entry of this Order. Failure to submit the necessary confirmation within the period
of compliance may result in a penalty assessment for non-compliance.
4. For questions regarding compliance, please contact the Workers' Compensation
Compliance Unit via email WC ompliance.Pr [email protected] or by calling (615)
253-1471 or (615) 532-1309.
------
ENTERED this the 5th day of~b~ 2~
Judge Lisa A. Knott
Court of Workers' Compensation Claims
lnitial (ScbeduJin g) Hearing:
An Initial (Scheduling) Hearing has been set with Judge Lisa A. Knott, Court of
Workers' Compensation Claims. You must call 865-594-0109 or toll-free at 855-
383-0003 to participate in the Initial Hearing.
Please Note: You must call in on the scheduled date/time to
participate. Failure to call in may result in a determination of the issues without
your further participation.
Right to Appeal:
Tennessee Law allows any party who disagrees with this Expedited Hearing Order
to appeal the decision to the Workers' Compensation Appeals Board. To file a Notice of
Appeal, you must:
1. Complete the enclosed form entitled: "Expedited Hearing Notice of Appeal."
2. File the completed form with the Court Clerk within seven business days of the
date the Workers' Compensation Judge entered the Expedited Hearing Order.
3. Serve a copy of the Expedited Hearing Notice of Appeal upon the opposing party.
4. The appealing party is responsible for payment of a filing fee in the amount of
$75.00. Within ten calendar days after the filing of a notice of appeal, payment
must be received by check, money order, or credit card payment. Payments can be
made in person at any Bureau office or by United States mail, hand-delivery, or
other delivery service. In the alternative, the appealing party may file an Affidavit
of Indigency, on a form prescribed by the Bureau, seeking a waiver of the filing
fee. The Affidavit of Indigency may be filed contemporaneously with the Notice
of Appeal or must be filed within ten calendar days thereafter. The Appeals Board
will consider the Affidavit of Indigency and issue an Order granting or denying
the request for a waiver of the filing fee as soon thereafter as is
practicable. Failure to timely pay the filing fee or file the Affidavit of
lndigency in accordance with this section shall result in dismissal of the
appeal.
5. The parties, having the responsibility of ensuring a complete record on appeal,
may request, from the Court Clerk, the audio recording of the hearing for the
purpose of having a transcript prepared by a licensed court reporter and filing it
with the Court Clerk within ten calendar days of the filing of the Expedited
Hearing Notice of Appeal. Alternatively, the parties may file a joint statement of
the evidence within ten calendar days of the filing of the Expedited Hearing
Notice of Appeal. The statement of the evidence must convey a complete and
accurate account of what transpired in the Court of Workers' Compensation
Claims and must be approved by the workers' compensation judge before the
record is submitted to the Clerk of the Appeals Board.
6. If the appellant elects to file a position statement in support of the interlocutory
appeal, the appellant shall file such position statement with the Court Clerk within
three business days of the expiration of the time to file a transcript or statement of
the evidence, specifying the issues presented for review and including any
argument in support thereof. A party opposing the appeal shall file a response, if
any, with the Court Clerk within three business days of the filing ofthe appellant's
position statement. All position statements pertaining to an appeal of an
interlocutory order should include: (1) a statement summarizing the facts of the
case from the evidence admitted during the expedited hearing; (2) a statement
summarizing the disposition of the case as a result of the expedited hearing; (3) a
statement of the issue(s) presented for review; and (4) an argument, citing
appropriate statutes, case law, or other authority.
APPENDIX
Exhibits:
• EXHIBIT 1: Affidavit of John Tidmore;
• EXHIBIT 2: Medical Records of Dr. Paul C. Brady, Tennessee Orthopedic Clinic;
• EXHIBIT 3: Medical Records of Fountain City Family Practice;
• EXHIBIT 4: Notice of Denial of Claim for Compensation, Form C-23;
• EXHIBIT 5: Agreement Between Employer/Employee Choice of Physicians, form
C-42;
• EXHIBIT 6: MSIG Acknowledgement and Assignment;
• EXHIBIT 7: Photographs and Drawings of tools and workstation;
• EXHIBIT 8: Claimant's handwritten Timeline of Events
Technical record: 4
1. Petition for Benefit Determination
2. Dispute Certification Notice
3. Request for Expedited Hearing
4. Notice of Appearance of Attorney McLaughlin
5. Notice ofFiling of Wage Statement
6. Amended Request for Expedited Hearing
7. Notice of Discovery Filing
4
The Court did not consider attachments to Technical Record filings unless admitted into evidence during the
Expedited Hearing. The Court considered factual statements in these filings or any attachments to them as
allegations unless established by the evidence.
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the Expedited Hearing Order was
sent to the following recipients by the following methods of service on this the 4th day of
November, 2015.
Name Certified Via Via Service sent to:
Mail Fax Email
TimothyM. X [email protected]
McLaughlin,
Employee's Counsel
Jeffrey C. Taylor, X [email protected]
Employer's Counsel
Penny Shrum, Clerk of Court
Court of Workers' Compensation Claims
W C. Cou rtClerk@tn .gov
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537 U.S. 1075
SMITHv.SOLOMON, WARDEN, ET AL.
No. 02-6890.
Supreme Court of United States.
December 9, 2002.
1
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT.
2
C. A. 11th Cir. Certiorari denied.
| {
"pile_set_name": "FreeLaw"
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(2008)
Sandra TINKER, Plaintiff,
v.
VERSATA, INC. GROUP DISABILITY INCOME INSURANCE PLAN, and Continental Casualty Company, Defendants.
No. Civ. 2:06-CV-02906 JAM KJM.
United States District Court, E.D. California.
July 15, 2008.
ORDER GRANTING PLAINTIFF'S MOTION FOR JUDGMENT
JOHN A. MENDEZ, District Judge.
Plaintiff Sandra Tinker ("Tinker") brought this action against Versata, Inc. Group Disability Income Insurance Plan ("Versata") and Continental Casualty Company ("Continental") (collectively "Defendants") pursuant to the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001, et seq. ("ERISA") seeking judicial review of Continental's denial of longterm disability benefits under her employer's ERISA-based plan. The parties filed cross-motions for judgment pursuant to Rule 52 of the Federal Rules of Civil Procedure. For the reasons set forth below, Tinker's motion is GRANTED and Defendants' motion is DENIED.
I. FACTUAL BACKGROUND
On February 6, 1996, Tinker began working for Versata as a lead technical writer. Administrative Record ("AR") 228. As an employee of Versata, Tinker was a member of a long-term disability ("Plan") insured by Continental. AR 206, 228. The Plan defines "Disability" as satisfying the "Occupational Qualifier." Steven M. Chabre ("Chabre") Deck, Exh. C at 5.[1] The Occupational Qualifier provides in relevant part:
"Disability" means that during the Elimination Period and the following 24 months, Injury or Sickness causes physical or mental impairment to such a degree of severity that You are:
1. continuously unable to perform the Material and Substantial Duties of Your Regular Occupation; and
2. not working for wages in any occupation for which You are or become qualified by education, training or experience.
Chabre Deck, Exh. C at 5 (italics in original). The Plan further provides that benefits may be terminated if a beneficiary, among other things, fails to provide objective medical findings supporting her disability. Chabre Deck, Exh. C at 12. Finally, the Plan provides that a beneficiary may appeal any denial of a claim for benefits by filing a written request for a full and fair review to the insurance company within 180 days after receipt of the written notice of denial of the claim. Chabre Deck, Exh. C at 17-18.
On June 26, 2001, Tinker stopped working for Versata. AR 228. On July 27, Tinker was diagnosed with depression and Meniere's disease, a disorder of the inner ear, which in Tinker's case caused, among other things, severe vertigo attacks. AR 133, 149, 176, 185. On or around August 3, 2001, Tinker submitted a claim for disability benefits. AR 228. On September 27, 2001 Tinker's claim for short-term disability benefits was approved, effective July 4, 2001 to August 28, 2001. AR 206. On October 9, 2001, Tinker's claim for long-term benefits was approved, effective August 28, 2001. AR 201. On April 21, 2003, Tinker's attending physician, Dr. Jennifer Derebery ("Derebery"), wrote a letter to Continental, based on a February 12, 2003 appointment, stating that Tinker's vertigo attacks had decreased in frequency from daily attacks to one attack every three weeks. AR 116. Dr. Derebery also noted that the severity of the attacks had decreased, and that Tinker described the attacks as being less severe than in the past. AR 116. Dr. Derebery's February 12, 2003 chart notes, however, indicate that Tinker was suffering from severe attacks once every 3^1 weeks and moderate attacks 1-2 times per week related to stress or cheating on diet. AR 94.
On June 5, 2003, Continental informed Tinker that her disability benefits were terminated as of May 31, 2003 and that no further benefits would be issued beyond June 30, 2003. AR 106-107. The termination of benefits letter referenced the definition of "Disability" as set forth in the Plan and explained that Tinker was no longer entitled to benefits because she no longer met the Plan's definition of "Disability" since Dr. Derebery reported that she was capable of returning to work, full duty without restrictions. AR 106. This determination was based on Dr. Derebery's affirmative response to the following Functional Assessment Tool: "Do you feel your patient is currently capable of performing work at this time which would afford her the opportunity to sit or stand as needed, the ability to operate a computer, telephone, fax machine, and the ability to practice analytic thinking skills?" AR 106, 115. The termination letter advised Tinker that she had the right to appeal this decision under the regulations specified by ERISA, and that if Tinker had any additional medical evidence not mentioned in the letter, or wished for Continental to reconsider its decision, she should submit a formal request for reconsideration in writing to Continental within 60 days from the date of the letter, June 5, 2003. AR 106. The termination letter further advised Tinker that Continental would reconsider its decision upon the receipt of additional evidence, and that if this evidence did not change its decision, Tinker would be informed of this and her claim would be submitted for a formal appeal review. AR 1D6. Finally, the termination letter advised Tinker that "Appeals received later than 60-days may not be considered." AR 106.
On June 9, 2003, Tinker wrote a letter to Dr. Derebery, copied to Continental, explaining that her condition was much worse than Dr. Derebery had reported to Continental. AR 90-92. The letter stated that since her appointment with Dr. Derebery on February 12, 2003, "major" vertigo attacks were increasing, moderate attacks were occurring daily, and "instant" attacks were occurring approximately twelve times a day. AR 90-92. On June 9, 2003, Tinker also wrote a letter to Continental explaining that there had been a misunderstanding as to the gravity of her current medical condition and that Dr. Derebery would send a corrected letter regarding her condition. AR 98. On June 18, 2003, during an appointment with Tinker, Dr. Derebery noted in Tinker's chart that her condition had worsened, with vertigo attacks occurring almost daily, lasting one minute to two hours. AR 95. On July 17, 2003, Continental received Tinker's appeal seeking reinstatement of her benefits on the basis that she was disabled under the Plan insofar as she was still experiencing vertigo attacks on a daily basis, which prevent her from performing her job. AR 85-97. In support of her appeal, Tinker relied on her June 2003 letters and Dr. Derebery's June 18, 2003 chart notes. AR 85-86.
On August 27, 2003, Continental faxed a letter to Tinker upholding the decision to deny benefits on the ground that the medical evidence no longer supported a physical or mental impairment preventing her from returning to work. AR 79. Continental noted that it considered Dr. Derebery's chart notes of June 18, 2003 as well as Tinker's June 2003 letters outlining her symptoms, but found this information to be insufficient to demonstrate that Tinker could not return to her job as previously determined by Dr. Derebery. AR 79. Continental stated that it had no information indicating that Tinker was incapable of functioning in her occupation. AR 79
On December 2, 2003, Dr. Derebery wrote Continental a letter requesting that Tinker's disability benefits be reinstated because she continues to suffer from severe problems and disability from Meniere's disease. AR 58. The letter acknowledged that while Tinker did indicate that she experienced some improvement in her symptoms in February 2003, she nonetheless continues to suffer from violent vertigo which has not been adequately controlled with medication. AR 58. According to Dr. Derebery, Tinker's symptoms "are quite significant" and have not "appreciably changed from the status she reported to [Dr. Derebery] on September 3, 2002." AR 58. On January 13, 2004, Tinker wrote to Continental requesting reconsideration of its decision to deny benefits in light of Dr. Derebery's December 2, 2003 letter. AR 55. On March 19, 2004, Continental responded by advising Tinker that she had exhausted her administrative remedies and that her only option was to file a civil action. AR CC003-CC004. In October 2006, Tinker's counsel wrote to Hartford Financial Services Group, Inc. ("Hartford") (Continental's successor) requesting that it reopen Tinker's claim given Continental's failure to follow ERISA claims procedure requirements. Chabre Decl., Exh. B. In support of this request, Tinker's counsel enclosed medical records purportedly demonstrating that Tinker has been disabled under the Plan since June 2003. Chabre Deck, Exh. B. On December 4, 2006, Hartford advised Tinker that she had exhausted her administrative remedies and therefore was entitled to file a civil action. AR 12. On December 23, 2006, Tinker filed the instant action. Docket at 1. On April 30, 2008, Tinker filed a motion for judgment under Rule 52. Docket at 41. On May 21, 2008, Defendants filed an opposition and cross-motion for judgment under Rule 52. Docket at 46.
II. OPINION
A. Standard of Review
Pursuant to Rule 52 of the Federal Rules of Civil Procedure, each of the parties moves for judgment in its favor on Tinker's ERISA claims. Under Rule 52, the court conducts what is essentially a bench trial on the record, evaluating the persuasiveness of conflicting testimony and deciding which is more likely true. Kearney v. Standard Ins. Co., 175 F.3d 1084, 1094-95 (9th Cir.1999).
ERISA provides for judicial review of a decision to deny benefits to an ERISA plan beneficiary. See 29 U.S.C. § 1132(a)(1)(B). It also creates federal court jurisdiction to hear such a claim. See 29 U.S.C. § 1132(e). Review of a decision to deny benefits is de novo review unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits; if the plan does grant such discretionary authority, the decision is reviewed for abuse of discretion. Saffon v. Wells Fargo & Co. Long Term Disability Plan, 522 F.3d 863, 866 (9th Cir.2008). Here, the relevant language of the Plan provides: "With respect to making benefit decisions, the Plan Administrator has delegated sole discretionary authority to Continental Casualty Company to determine Your eligibility for and entitlement to benefits under the Plan and to interpret the terms and provisions of any insurance issued in connection with the Plan." Chabre Deck, Exh. C at 16. Because the Plan unambiguously confers discretionary authority upon Continental to administer the Plan, by granting Continental the power to interpret the terms and provisions of the Plan and to make final benefit determinations, the proper standard of review in this case would normally be abuse of discretion. See Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 963-64 (9th Cir.2006) (review of the denial of benefits is abuse of discretion if a plan grants the power to construe and interpret the policy and to make final benefit determinations).[2] However, as explained below, the Court finds that a de novo review is appropriate as a matter of law in the instant case because Continental violated the claims handling procedures of ERISA and the express terms of the Plan.
In Abatie, the court clarified the standard of review district courts should apply when administrators fail to follow the procedural requirements of ERISA. Abatie, 458 F.3d at 971. There, the court stated that a decision by an administrator to deny benefits under a plan will be reviewed de novo when "an administrator engages in wholesale and flagrant violations of the procedural requirements of ERISA, and thus acts in utter disregard of the underlying purpose of the plan." Id. De novo review is appropriate where the procedural violations are so flagrant as to alter the substantive relationship between the employer and employee, thereby causing the beneficiary substantive harm. Id. For instance, de novo review was appropriate where an administrator kept the policy details secret from the employees, offered them no claims procedure, and did not provide them in writing the relevant plan information. Id. An adverse benefit determination will be reviewed de novo when the decision does not fall within an administrator's discretionary authority, such as when a decision is taken in wholesale violation of ERISA procedures. Id. at 971-72. In the present case, the Court finds that de novo review is the appropriate standard of review because Continental failed to adhere to the procedural requirements of ERISA and the express terms of the Plan, which prevented full development of the record. A review of the record reveals that Continental did not provide Tinker a reasonable claims procedure insofar as it failed to comply with ERISA claims procedure requirements, namely the notice and review procedure requirements. See 29 C.F.R. 2560.503-1(b) (Every plan shall establish and maintain reasonable claims procedures. A plan's claims procedure will be deemed reasonable only if it complies with, among other things, the requirements of paragraph (f), content of notice requirements, and paragraph (g), review procedure requirements).[3]
First, Continental failed to comply with the notice requirements established by ERISA. ERISA and its implementing regulations require a plan administrator, once it has decided to deny a claim for benefits, to provide the claimant with "adequate notice in writing ... setting forth the specific reasons for such denial." 29 U.S.C. § 1133(1). Specifically, under ERISA regulations, a plan "shall provide to every claimant who is denied a claim for benefits written notice setting forth in a manner calculated to be understood by the claimant: (1) The specific reason or reasons for the denial; (2) Specific reference to pertinent plan provisions on which the denial is based; (3) A description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and (4) Appropriate information as to the steps to be taken if the participant or beneficiary wishes to submit his or her claim for review." 29 C.F.R. 2560.503-1(f). Put simply, "what this regulation calls for is a meaningful dialogue between ERISA plan administrators and their beneficiaries. If benefits are denied in whole or in part, the reason for the denial must be stated in reasonably clear language, with specific reference to the plan provisions that form the basis for the denial." Booton v. Lockheed Medical Ben. Plan, 110 F.3d 1461, 1463 (9th Cir.1997). "The purpose of ERISA's notice requirement is to provide. the claimant `with information necessary for him or her to know what he or she must do to obtain the benefit,' and to `enable the [claimant] effectively to protest' if a plan persists in its denial of benefits." Boyd v. Aetna Life Ins. Co., 438 F.Supp.2d 1134, 1156 (C.D.Cal.2006) (citing Juliano v. Health Maint. Org. of New Jersey, Inc., 221 F.3d 279, 287 (2nd Cir. 2000)). Here, while Continental's termination letter referenced the relevant Plan provision on which the denial was based and set forth the reason for the denial of benefits, namely that Tinker no longer met the Plan's definition of disability, the letter did not provide a description of any additional material or information that might be required to perfect Tinker's claim or explain why such material or information was necessary. Rather, the termination letter merely stated that if Tinker had "additional medical information" not mentioned in the letter or wished Continental to reconsider its decision then she should submit a formal request for reconsideration in writing within 60 days. Continental's clear and flagrant failure to provide a description of any additional material or information necessary for Tinker to perfect her claim or an explanation of why such material was necessary compels this Court to find that Continental did not comply with ERISA's notice requirements. See Cheng v. Unum Life Ins. Co., 291 F.Supp.2d 717, 720-21 (N.D.Ill.2003) (finding that a plan administrator's termination letter failed to set forth "[a] description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material is necessary" because it simply indicated that if the beneficiary had "new, additional information to support [his] request for disability benefits," he should send it to the plan administrator). Additionally, the Court finds that Continental failed to comply with ERISA's notice requirements insofar as it incorrectly advised Tinker that she had 60 rather than 180 days to appeal the denial of her claim as required by the Plan and that "Appeals received later than 60-days may not be considered." AR 106-107. As such, Continental did not provide Tinker the appropriate information as to the steps to be taken to submit her claim for review. Accordingly, because the termination letter did not provide the information necessary for Tinker to know what she must do to obtain benefits or enable her to effectively protest the denial of benefits, the Court concludes that Continental failed to engage in a "meaningful dialogue" with Tinker in violation of ERISA's notice requirements.
Second, the Court finds that Continental failed to comply with the claim review procedures established by ERISA. Under ERISA regulations, "[e]very plan shall establish and maintain a procedure by which a claimant ... has a reasonable opportunity to appeal a denied claim to an appropriate named fiduciary ... and under which a full and fair review of the claim and its denial may be obtained." 29 C.F.R. 2560.503-1(g). A plan may establish a limited period within which a claimant must file any request for review of a denied claim.
Such time limits must be reasonable and may not expire less than 60 days after receipt by claimant of written notification of denial of a claim. 29 C.F.R. 2560.503-1(g)(3).[4] Under the express terms of the Plan, Continental was mandated to notify Tinker that she had 180 days to appeal the denial of her claim for benefits. Thus, because the termination letter stated that Tinker had 60 days to appeal the denial of her claim for benefits, Continental did not satisfy ERISA's "full and fair review" requirement. Indeed, the Court finds Tinker's argument that had Continental's termination letter notified her of the 180-day appeal deadline, she likely would not have appealed the denial of her claim until she submitted Dr. Derebery's amended letter to be persuasive.
The Court finds the foregoing procedural irregularities to be so substantial as to alter the standard of review from abuse of discretion review to de novo review. Continental's actions fall outside the strictures of ERISA, and therefore it cannot be said that Continental exercised its discretionary authority granted by the Plan. As such, Continental's decision to deny benefits is not entitled to deference.
District courts may take additional evidence where, as here, "[procedural] irregularities have prevented full development of the administrative record," Abatie, 458 F.3d at 973. The Court finds that Dr. Dereberry's amended letter dated December 2, 2003, which was not considered by Continental, is significant new evidence that nullifies Continental's basis for terminating Tinker's claim. This letter will be admitted into evidence as part of the administrative record in this case and no deference will be given to Continental's decision to deny benefits to Tinker. Id.; see also Saffon, 522 F.3d at 874 (If new significant evidence will be presented in the district court, it may be impossible for the court to grant any deference to the decision of the claims administrator, as that decision will perforce have been made without taking into account the new evidence. As a practical matter, therefore, it may be unnecessary for the district court to determine the degree of deference to the decision of the claims administrator, as the admission of significant new evidence will require a de novo reconsideration of the decision in any event.).
Accordingly, the Court finds that Continental's decision to deny benefits requires de novo review, including a determination of whether Tinker is disabled. See Saffon, 522 F.3d at 874 n. 6 (where procedural irregularities have prevented full development of the administrative record, the district court may hear additional evidence and decide the issue of whether a claimant is disabled).
For these reasons, the Court will apply a de novo standard of review to Continental's decision to deny benefits.
B. Denial of Disability Benefits
Applying the de novo standard of review, the issue before the Court is whether Continental improperly terminated Tinker's benefits. Abatie, 458 F.3d at 963. In this regard, the Court finds that Continental improperly terminated Tinker's benefits, and that Tinker is entitled to a retroactive reinstatement of benefits as a result of Meniere's disease.
A review of the record in this case reveals that Tinker was disabled when Continental terminated her benefits. Although Dr. Derebery advised Continental in April 2003 that Tinker's vertigo attacks had decreased in severity and frequency since September 2001, and that, as of May 30, 2003, Tinker was capable of performing the duties described in the Functional Assessment Tool, such as sitting with the option of standing as needed, the ability to operate a computer, telephone, fax machine, or practice analytic thinking skills, there is no evidence in the record indicating that Tinker could continuously perform the material and substantial duties of her job as required by the Plan. Even assuming that Tinker could perform the duties described in the Functional Assessment Tool, this finding is not equivalent to a finding that Tinker could continuously perform the material and substantial duties of her job. In fact, contrary to Continental's assertion, Continental had information indicating that Tinker was not capable of continuously performing the material and substantial duties of her job at the time it terminated her benefits. Specifically, the record indicates that as of February 12, 2003, Tinker was suffering from severe vertigo attacks once every 3-4 weeks and moderate attacks 1-2 times per week. The record further indicates that as of June 18, 2003, Tinker's condition had worsened, with vertigo attacks occurring almost daily, lasting one minute to two hours. Finally, the record indicates that, according to Tinker, she was unable to return to work as of June 30, 2003 because she was suffering from frequent vertigo attacks.[5] Based on this evidence, the Court concludes that Continental improperly terminated Tinker's benefits on May 31, 2003 because Tinker was unable to continuously perform the material and substantial duties of her job as required by the Plan. This conclusion is fully supported by Dr. Derebery's letter dated December 2, 2003, requesting Continental to reinstate Tinker's benefits because Tinker continues to suffer from severe problems and disability from Meniere's disease. Dr. Derebery's letter unequivocally stated that Tinker suffers from violent vertigo which has not been adequately controlled with medication. Thus, viewed in its entirety, the evidence supports no other conclusion except that Tinker was ineapable of returning to work and continuously performing the material and substantial duties of her job and Continental improperly terminated Tinker's benefits on May 31, 2003.
Because the Court finds that the undisputed facts conclusively establish that Tinker was disabled under the Plan when her benefits were terminated, retroactive reinstatement of benefits is appropriate. See Grosz-Salomon v. Paul Revere Life Ins. Co., 237 F.3d 1154, 1163 (9th Cir.2001) (a retroactive reinstatement of benefits is appropriate in ERISA cases where but for the insurer's arbitrary and capricious conduct, the insured would have continued to receive the benefits or where there was no evidence in the record to support a termination or denial of benefits). Here, but for Continental's arbitrary and capricious conduct, Tinker would have continued to receive benefits under the Plan. A review of the record reveals that the denial of benefits was erroneous. Tinker's claim for benefits was supported by a preponderance of the evidence and therefore Continental's decision was unreasonable. As such, retroactive reinstatement of benefits is appropriate. See id. ("A remand of an ERISA action seeking benefits is inappropriate where the difficulty is not that the administrative record was incomplete but that a denial of benefits based on the record was unreasonable.").
In reaching this conclusion, the Court is mindful that it could remand the case to the plan administrator for a renewed evaluation of Tinker's case. Cook v. Liberty Life Assurance Co. of Boston, 320 F.3d 11, 24 (1st Cir.2003) ("Once a court finds that an administrator has acted arbitrarily and capriciously in denying a claim for benefits, the court can either remand the case to the administrator for a renewed evaluation of the claimant's case, or it can award a retroactive reinstatement of benefits."). This is particularly so given that but for Continental's improper termination of benefits, Tinker would have received benefits under the Plan through August 28, 2003 pursuant to the Plan's 24-month limitation for a physical or mental impairment that prevents a claimant for continuously performing the material and substantial duties of their job. At that time, Tinker would have to satisfy a more stringent definition of disability in order to continue receiving benefits. In particular, Tinker would have to show that she had a physical or mental impairment that prevented her from engaging in any occupation for which she became qualified by education, training or experience.[6] Under similar circumstances, remand for further proceedings has been found proper where the record lacked sufficient evidence to determine whether the claimant was disabled under the more stringent definition of disability. See Volynskaya v. Epicentric, Inc., 2008 WL 495708, *1-2 (N.D.Cal.2008).
The record in this case contains sufficient evidence to support the Court's conclusion that Tinker was disabled under the more stringent definition of disability and therefore no remand is necessary or required. This evidence includes Tinker's June 9, 2003 letter, AR 90-92; Dr. Derebery's notes in Tinker's medical chart from the June 18, 2003 appointment, AR 95; Tinker's July 17, 2003 appeal, AR 85-97; and, most significantly, Dr. Derebery's December 2, 2003 letter requesting reinstatement of Tinker's disability benefits, AR 58. Accordingly, remand is not the appropriate remedy in this case because Continental's termination of benefits was clearly contrary to the facts. Grosz-Salomon, 237 F.3d at 1163 ("[A] plan administrator will not get a second bite at the apple when its first decision was simply contrary to the facts.").
The Court finds that remand would result in further delay and add to the injustice already suffered by Tinker. Tinker should not be required to endure additional hardship and difficulties in obtaining proof of disability for a period beginning more than five years distant because Continental acted unreasonably. The Court declines to allow Continental to profit from its wrongdoing.
For these reasons, the Court concludes that retroactive reinstatement, not remand, is appropriate. Continental is directed to reinstate Tinker to the Plan and treat her as if she has been disabled due to Meniere's disease under the Plan from June 30, 2003 to the present date.
III. ORDER
For the reasons set forth above, Tinker's motion is GRANTED and Continental's motion is DENIED. Continental is directed to immediately reinstate Tinker's monthly disability benefits retroactive to June 30, 2003, with interest. Tinker may also be entitled to an award of reasonable attorney's fees and costs. See 29 U.S.C. § 1132(g). The Court will entertain a separate motion for attorney's fees and costs.
IT IS SO ORDERED.
NOTES
[1] In deciding this motion, the Court will refer to the language in the "Amendment Rider #1" ("rider") to the Plan since it contains the relevant language in effect at the time Tinker's benefits were denied. Chabre Decl., Exh. C. While the parties do not dispute this fact, neither has offered an explanation as to why the rider is not in the administrative record.
[2] The Court notes that where, as here, a plan administrator both administers a plan and funds it, an inherent or structural conflict of interest exists, and the Court must weigh the conflict as a factor in determining how much or how little to credit the plan administrator's reason for denying insurance coverage. See Abatie, 458 F.3d at 965-69; see also Saffon, 522 F.3d at 868 (observing that a plan administrator labors under a conflict of interest when it both decides who gets benefits and pays for them since it has a direct financial incentive to deny claims). However, because the Court finds that Tinker, is entitled to de novo review, which gives no deference at all to Continental's decision, the Court need not reach the question of whether Continental's decision would be entitled to less deferential review were Tinker entitled to abuse of discretion review.
[3] The Court refers to the Code of Federal Regulations as of 2001, the year Tinker's claim was filed. The pertinent regulation, 29 C.F.R. § 2560, first promulgated in 1977, was amended in 2000. See Pension and Welfare Benefits Administration, 65 Fed.Reg. 70,246 (Nov. 21, 2000). The alterations apply to claims filed on or after January 1, 2002. 29 C.F.R. § 2560.503-1(o) (2002).
[4] The new regulation provides that the claims procedures of a group health plan will not be deemed to provide a claimant with a reasonable opportunity for a full and fair review of a claim and adverse benefit determination unless it provides a claimant at least 180 days following receipt of a notification of an adverse benefit determination within which to appeal the determination. 29 C.F.R. § 2560.503-1(h)(3)(i) (2002).
[5] Continental's choice to stick its head in the sand and ignore this evidence strongly implies that its claim procedure was unfair and self serving. Even though ERISA claim regulations requiring consultation with a healthcare professional by the claim fiduciary did not technically apply to Tinker's case, Continental should have further investigated Tinker's condition upon receiving information inconsistent with Dr. Derebery's answer to the Functional Assessment Tool, such as Dr. Derebery's June 18, 2003 chart notes indicating that Tinker's condition had worsened with vertigo attacks occurring on almost a daily basis and Tinker's June 2003 letters stating that she was suffering from frequent vertigo attacks.
[6] The Plan provides in relevant part:
After the Monthly Benefit has been payable for 24 months, "Disability" means that Injury or Sickness causes physical or mental impairment to such a degree of severity that You are:
1. continuously unable to engage in any occupation for which You are or become qualified by education, training or experience; and
2. not working for wages in any occupation for which You are or become qualified by education, training or experience.
Chabre Decl., Exh. C at 5 (italics in original).
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588 F.2d 822
Olanoffv.Commerce and Industry Insurance Co.
No. 78-1837
United States Court of Appeals, Third Circuit
12/14/78
1
E.D.Pa.
AFFIRMED
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3 Mich. App. 290 (1966)
142 N.W.2d 28
CATALDO
v.
WINSHALL, INC.
Docket No. 302.
Michigan Court of Appeals.
Decided May 11, 1966.
Rehearing denied June 20, 1966.
Leave to appeal denied September 7, 1966.
Sugar & Schwartz (A. Albert Schwartz, of counsel), for plaintiff.
Starkey & Gentz (William A. Gentz, of counsel), for defendants.
Leave to appeal denied by Supreme Court September 7, 1966. See 378 Mich 731.
QUINN, J.
Defendants appeal from a judgment entered against them in Macomb county circuit court. Plaintiff cross-appeals from the trial court's refusal to include interest as an item of his damages.
Counsel for both sides agree that the questions presented by this appeal are as follows:
"1. Did the court abuse its discretion in denying the motion filed by both defendants for leave to *292 amend their answer to conform to the proofs and in denying the defendants' motion to correct the lower court's findings of fact and law?"
"2. Was the trial court's finding against defendant, Winshall, Inc., on plaintiff's exhibit 2 in the amount of $9,355, against the clear weight of the evidence and not in accordance with law?"
Plaintiff states the question involved on his cross-appeal as follows:
"Is the computation of interest a matter of right when the sum sued upon is a liquidated amount or an amount capable of ascertainment from fixed standards?"
Defendants counterstate this question as:
"Was the refusal of the trial court to grant the cross-appellant an allowance of interest as part of its findings of damages a reversible error in view of the multitude of separate transactions and controversies that had existed between the various parties prior to trial?"
This is the second of three companion cases appealed to this Court. No. 369, Cataldo v. Winshall, has been decided, see 2 Mich App 442. No. 307, Peter Cataldo v. Winjack Corporation, a Michigan corporation, and David Sefansky, has not been submitted for decision. Like case No. 369, the case now before us was filed in 1959 and involves transactions going back to 1953. Plaintiff sued to recover claimed real estate and other commissions and advances made by plaintiff at the request of defendant Winshall for the latter's benefit. In essence, defendants' answer denied any indebtedness and in addition, alleged if defendants did owe plaintiff anything, it was offset by credits due from plaintiff to defendants. In addition, *293 defendants pleaded two affirmative defenses, but they did not plead as affirmative defenses payment and satisfaction, nor did they plead as a separate division of their answer the claimed set-offs as required by Court Rule No 23 (1945), §§ 3 and 5. By leave granted February 28, 1963, plaintiff filed an amended complaint; defendants answered and again pleaded affirmative defenses, but they failed to meet the requirements of GCR 1963, 111.1 and 111.7 with respect to the affirmative defenses of payment and satisfaction and the manner of pleading the alleged set-off (now counterclaim).
On the basis of a written instrument,[1] the trial judge sitting without a jury found that defendant Winshall owed plaintiff $5,600. On the basis of another written instrument,[2] the trial judge found Winshall, Inc., owed plaintiff $9,355. On defendant Winshall's admission, the trial judge found Winshall owed plaintiff $2,000. All other claims of plaintiff including interest were denied as were defendants' claims of payment, satisfaction, and set-off. As in case No. 369, the trial court and this Court are asked to solve the various controversies between these parties which arose years ago and are now practically inscrutable because of inadequate records. This situation moved the trial court to observe,
"The court recognizes there is grave danger of injustice to one or other of these parties, but the danger is one created by the parties themselves and their deliberate method of conducting business." *294 This is a fair statement of the problem faced by the trial court as well as an explanation of why it relied on written instruments and an admission in reaching decision.
Following decision by the trial court, defendants moved for a rehearing of their motion for leave to amend answer to conform to proofs made during trial and to reopen proofs. They also moved to correct findings of fact and conclusions of law made by the trial court. Defendants contend here that the trial court abused its discretion in denying these motions. This contention is based on the assumption that certain items of evidence[3] prove what defendants say they prove. The trial court did not make this assumption nor can we for the reason that the record does not contain sufficient corroborating evidence for us to say the items of evidence relied on by plaintiff prove what defendants say they prove. This is true because of defendants' lack of records, and because it is true, this Court is unable to say the trial court abused its discretion as defendants contend.
Defendants' next claim of error relates to the trial court's finding that Winshall, Inc., owed plaintiff $9,355. This was the balance of commission the trial court found was due plaintiff on the sale of certain land to Milgrom Building Company for $188,000. The rate of commission was 10% and plaintiff admitted receipt of $9,445 on the total commission of $18,800. At trial, defendants claimed the agreed commission rate on this transaction was 5% and introduced exhibit Q, a check from Winshall, Inc., to plaintiff under date of November 22, 1954, in the *295 amount of $9,440 which bore the following legend on the back, above plaintiff's indorsement:
"Commission in full for Winshall, Inc., to Milgrom Building Company. Sale of land purchased from Geo. Orley."
Plaintiff's exhibit 2, the agreement of sale on which he predicated this claim, shows the commission rate to be 10%; it is dated in May, 1953. Defendants do not now urge that the agreed commission was 5% and exhibit Q paid it; instead they say the acceptance of exhibit Q by plaintiff and his indorsement of it below the above stated legend constitute an accord and satisfaction. This was not pleaded as an affirmative defense in the original answer as required by Court Rule No 23 (1945), § 3, nor was it so pleaded in the amended answer as required by GCR 1963, 111.7. In addition, the record does not persuade us that exhibit Q concerns the transaction evidenced by exhibit 2. We cannot say the finding of the trial judge that Winshall, Inc., owed plaintiff $9,355 on this transaction is clearly erroneous. This we must do before the finding may be disturbed. GCR 1963, 517.1.
To support his claim of cross-appeal on the right to interest, plaintiff relies on CL 1948, § 438.7 (Stat Ann 1964 Rev § 19.4). The pertinent portion thereof reads as follows:
"In all actions founded on contracts express or implied, whenever in the execution thereof any amount of money shall be liquidated or ascertained in favor of either party * * * it shall be lawful * * * to allow and receive interest upon such amount."
This language merely makes it lawful to allow interest in those cases covered by the statute; it does *296 not state interest must be allowed. This leaves the allowance or disallowance of interest a matter of discretion, and we do not find the trial judge abused his discretion in disallowing interest in this case.
Affirmed in all respects. Neither party having prevailed in full, no costs are allowed.
LESINSKI, C.J., and T.G. KAVANAGH, J., concurred.
NOTES
[1] Listing agreement dated October 15, 1953, covering 65 scattered lots in the Beverly Gardens Subdivision, city of St. Clair Shores, in evidence as exhibit 1.
[2] Plaintiff's contract for sale of real estate between Winshall, Inc., as sellers, and Milgrom Building Company, as purchasers, dated May 22, 1953, and covering acreage and lots in city of St. Clair Shores as described in the land contract, in evidence as exhibit 2.
[3] 5 checks designated exhibits R, W, X, Y, and Z; a declaration in another case designated B-1; a land contract between Winshall, Inc., and Milgrom designated exhibit S, and a closing statement on a purchase by Milgrom from Winshall, Inc., designated exhibit V.
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In the
United States Court of Appeals
For the Seventh Circuit
No. 11-3589
A NGELA M. F ARRELL,
Plaintiff-Appellant,
v.
M ICHAEL J. A STRUE, Commissioner of Social Security,
Defendant-Appellee.
Appeal from the United States District Court
for the Northern District of Indiana, Hammond Division.
No. 2:10-cv-00226-APR—Andrew P. Rodovich, Magistrate Judge.
A RGUED M AY 25, 2012—D ECIDED A UGUST 28, 2012
Before P OSNER, F LAUM, and W OOD , Circuit Judges.
W OOD , Circuit Judge. Angela Farrell suffers from
anxiety, depression, suicidal tendencies, insomnia,
vertigo, migraine headaches, fibromyalgia, carpal tunnel
syndrome, and plantar fasciitis. Citing this array of im-
pairments, she applied for disability insurance benefits;
as of the date of her application, she was almost 34 years
old. Her initial application was denied, but the Social
Security Administration Appeals Council remanded
2 No. 11-3589
her case for reconsideration. On remand, the Administra-
tive Law Judge (ALJ) once again ruled against her, in
part because of her failure to establish definitively that
she suffered from fibromyalgia. The Appeals Council
summarily affirmed this decision, despite new evidence
before it that confirmed the fibromyalgia. The district
court in turn affirmed that ruling, and Farrell now ap-
peals. We reverse. The Social Security Administration’s
own regulations require the Appeals Council to
consider “new and material evidence,” but it did not do
so in this case. In addition, several other aspects of the
ALJ’s decision independently require correction. Because
these warrant reversal in and of themselves (that is,
without regard to the error committed by the Appeals
Council), we follow the procedure that normally
applies when the Appeals Council denies review and
remand to the ALJ.
I
Farrell is married and has two children. She is 4’11” tall
and, at the time of the hearing, she weighed 211 pounds;
this represents a body mass index of 42.6, well into the
range of obesity (which is 30 or greater). See NIH,
National Heart Lung and Blood Institute, http://www.
nhlbisupport.com/bmi/bminojs.htm. She completed be-
tween two and three years of college and has worked in
a variety of jobs, including as a tax analyst, an accounting
clerk, and a waitress.
Her primary physician is Dr. Sara Beyer, who has
been treating her since at least 2002. According to
No. 11-3589 3
Dr. Beyer’s reports, Farrell has suffered from progres-
sively worsening physical and mental conditions. In
2003, Dr. Beyer treated her for panic attacks. Dr. Beyer
reported that Farrell’s medications were ineffective in
quelling these attacks, and she noted that Farrell was
suffering from severe pain throughout her body,
increased anxiety, and suicidal thoughts. Following
surgery in April 2003, Farrell returned to work, but she
quickly became fatigued and anxious. In response,
Dr. Beyer specifically instructed her to avoid stressful
situations—advice that in Farrell’s case covered a lot of
ground. Practically, in order to comply she would
have needed to avoid any contact with the outside
world, given her photo- and phonophobias. In July
of that year, Farrell underwent a psychiatric assess-
ment in which she received a Global Assessment of
Functioning (GAF) score of 51—a score that is right on
the border between “severe” and “moderate” symptoms.
(A GAF score of 41-50 indicates serious symptoms; a
score of 51-60 indicates moderate symptoms; and a score
in the range of 61-70 indicates mild symptoms. Am.
Psychiatric Ass’n, D IAGNOSIS AND S TATISTICAL M ANUAL
OF M ENTAL D ISORDERS 32-34 (4th ed. 2000).) As the
year progressed, so did Farrell’s symptoms. Her joint and
back pain became worse, and her mental symptoms
began to include paranoia, occasional hallucinations,
nightmares, and more serious thoughts of suicide (in-
cluding a specific plan to overdose on drugs).
In June 2004, Farrell’s GAF score plummeted to 30,
well below the “serious” point. With new treatment for
her migraines and carpal tunnel syndrome, as well as
4 No. 11-3589
stronger medication for her depression and anxiety, her
GAF score improved to 50 by September of that year, but
her symptoms were still significant. She reported
suffering from extreme stress in social situations, an
inability to concentrate, and continuing back and joint
pain.
In April 2005, Farrell complained of a constant sense
of worriment and problems concentrating, as well as
several new physical ailments, including an irregular
heartbeat. After an examination, Dr. Beyer recorded that
Farrell suffered from anxiety, insomnia, depression,
joint pain, and anemia. She also alluded to the possibility
of fibromyalgia—a diagnosis that both Dr. Beyer and
other treating specialists had considered in the past.
Shortly thereafter, in May 2005, Farrell applied for
disability insurance benefits from the Social Security
Administration, alleging an onset date in Novem-
ber 2003. Her application noted her history of “de-
pression, anxiety, phobias, migraines, su[icid]al tendencies,
vertigo, fibromyalgia, carpal tunnel [syndrome],
insomnia, [and] plantar fasciitis,”and claimed that she
is unable to work as a result of these ailments.
As part of the process of evaluating her application,
Farrell’s file was reviewed by several physicians
engaged by the state. In general, they had a more optimis-
tic assessment of her capabilities than her treating physi-
cians had reached. Dr. Perkins, for example, suggested
that Farrell suffered from only “moderate difficulties”
and suggested that she could hold jobs requiring
simple and routine tasks. After reviewing Farrell’s
No. 11-3589 5
medical records, Dr. Pyle determined that she was able
to lift and carry between 25 and 50 pounds, and work for
6 hours in an 8 hour workday. Dr. Mann thought
that Farrell had only “mild restrictions in daily activi-
ties” and found her capable of jobs involving only
simple tasks. Dr. Boyce, who testified before the ALJ,
stated that there was no evidence in Farrell’s records
of inflammation that would give rise to arthritic pain.
He further testified that there was no evidence of a con-
firmed diagnosis of fibromyalgia.
After weighing Dr. Beyer’s conclusions against the
opinions offered by the state’s reviewing physicians, the
ALJ ruled against Farrell. He found the testimony of the
reviewing physicians to be more consistent with the
medical record, and he credited Dr. Boyce’s view
regarding fibromyalgia (i.e., that she suffered from only
“minimal functional limitations resulting from [her] . . .
fibromyalgia-type illness”) while chiding Dr. Beyer for
lacking a clinical basis for her evaluation of Farrell’s
functional capacity. Farrell sought review at the Appeals
Council. She included new evidence with her sub-
mission, but the Appeals Council nevertheless sum-
marily denied her petition. The district court affirmed,
and this appeal now follows.
II
On appeal, Farrell presents a variety of challenges to
the Social Security Administration’s decision to deny her
application for disability benefits. We review the ALJ’s
decision “to deny benefits to determine whether it was
6 No. 11-3589
supported by substantial evidence or is the result of an
error of law.” Rice v. Barnhart, 384 F.3d 363, 369 (7th Cir.
2004).
A
Farrell’s first argument is that the district court and the
Appeals Council erred by refusing to consider her new
evidence confirming a diagnosis of fibromyalgia. As
we noted above, the ALJ found “no evidence that this
diagnosis ha[d] been confirmed” and accordingly ruled
that Farrell’s claimed impairments were “nonsevere.”
In response to this adverse ruling, Farrell received con-
firmation of the diagnosis that had been suggested
several times in her medical reports: tests conducted by
Dr. Ryan Loyd showed that all 18 fibromyalgia points
were tender, and although only 11 positive results are
required for a confirmed diagnosis, Farrell tested posi-
tive in 16, including several on her neck, shoulders,
knees, elbows, and chest. (The NIH’s website explains
that “[t]o be diagnosed with fibromyalgia, you must
have had at least 3 months of widespread pain, and
pain and tenderness in at least 11 of 18 areas,” including
arms (elbows), buttocks, chest, knees, lower back, neck,
rib cage, shoulders, and thighs. See http://www.ncbi.nlm.
nih.gov/pubmedhealth/PMH0001463/.)
In light of Dr. Loyd’s firm diagnosis, Farrell sought
review of the ALJ’s decision at the Appeals Council and
included this new evidence with her application. The
Appeals Council summarily denied the application. In
affirming that ruling, the district court specifically
No. 11-3589 7
refused to consider Farrell’s new evidence, citing Rice
v. Barnhart, 384 F.3d at 366 n.2, in which we ruled that
it was “not appropriate for us to consider evidence
which was not before the ALJ, but which [plaintiff]
later submitted to the Appeals Council” because “the
Appeals Council eventually refused [plaintiff’s] request
to review the ALJ’s unfavorable decision.” The district
court was correct in its ruling. This is because 42 U.S.C.
§ 405(g) provides that a reviewing court may consider
additional evidence “only upon a showing that there is
new evidence which is material.” The evidence Farrell
wanted the court to consider was not “new” to the
district court because it had been already been sub-
mitted to, and rejected by, the Appeals Council. Evidence
that has been rejected by the Appeals Council cannot
be considered to reevaluate the ALJ’s factual findings.
Nevertheless, whether the ALJ’s decision is supported
by substantial evidence is not the same question as
whether the Appeals Council properly rejected Farrell’s
appeal. The Social Security Administration regula-
tions require that body to evaluate “new and material
evidence” in determining whether a case qualifies for
review. 20 C.F.R. §§ 404.970(b), 416.1470. In Perkins v.
Chater, 107 F.3d 1290 (7th Cir. 1997), we held that “[o]ur
review of the question whether the [Appeals]
Council made an error of law in applying this regulation
is de novo. . . . In the absence of any such error,
however, the Council’s decision whether to review is
discretionary and unreviewable.” Id. at 1294. Here, the
Appeals Council’s decision says that it “considered . . . the
additional evidence . . . [and] found that this information
8 No. 11-3589
does not provide a basis for changing the Administra-
tive Law Judge’s decision.”
We note that this text, which often appears in orders
of the Appeals Council rejecting plenary review, is not
as clear as it might be. On the one hand, it might
indicate that the Appeals Council found the proffered
new evidence to be immaterial, but on the other hand
it might indicate that the Council accepted the evidence
as material but found it insufficient to require a different
result. This ambiguity is reflected in several decisions
from reviewing courts. See, e.g., Brewes v. Commissioner
of Soc. Sec. Admin., 682 F.3d 1157, 1162-63 (9th Cir. 2012)
(avoiding the question by holding, in tension with this
court’s Rice decision, that the new evidence becomes
part of the administrative record for purposes of “re-
viewing the Commissioner’s final decision for substantial
evidence”); Meyer v. Astrue, 662 F.3d 700, 705-06 (4th Cir.
2011) (same); Krauser v. Astrue, 638 F.3d 1324, 1328 (10th
Cir. 2011) (discussing ambiguity and holding that where
the Appeals Council rejects new evidence as non-qualify-
ing and claimant challenges that ruling on judicial review,
that the “general rule of de novo review permits [the
court] to resolve the matter and remand if the Appeals
Council erroneously rejected the evidence.”). Krauser is
most consistent with our ruling in Rice. See also
Bergmann v. Apfel, 207 F.3d 1065, 1069-70 (8th Cir. 2000);
Aulston v. Astrue, 277 F. App’x 663, 664 (8th Cir. 2008).
We thus interpret the Appeals Council decision as
stating that it has rejected Farrell’s new evidence as non-
qualifying under the regulation and proceed along
the lines we indicated in Perkins to review that limited
question.
No. 11-3589 9
We find the Appeals Council’s determination that
Farrell’s evidence was not “new and material” to be
erroneous. It is undisputed that Dr. Loyd’s diagnosis
was “new” to the administrative record at the time of
Farrell’s application to the Appeals Council. Its materiality
is also, in our view, beyond question: the ALJ’s decision
unequivocally rests in part on the determination
that “there is no evidence that [a fibromyalgia] diagnosis
has been confirmed.” Farrell’s new evidence fills in that
evidentiary gap by providing exactly that confirmation.
And this diagnosis, confirmed in December 2008,
“relates to the period on or before the date of the admin-
istrative law judge hearing decision” (November 2008)
as required by 20 C.F.R. § 404.970(b). It builds on the
allusions to possible fibromyalgia in Dr. Beyer’s
reports from 2005 and 2006. Dr. Loyd’s diagnosis was
“new and material” evidence that the Appeals Council
improperly failed to consider.
The Commissioner contends that “[b]ecause the
Appeals Council did not make any finding with regard
to the materiality of the evidence Farrell submitted . . .
there is nothing in the Appeals Council’s denial of review
upon which Farrell can properly pin an assertion of legal
error.” This position is inconsistent with our decision
in Perkins and the other decisions we discussed above;
it would make the right recognized in the regulations
to submit new evidence to the Appeals Council mean-
ingless. We conclude that the Appeals Council com-
mitted legal error by ignoring Dr. Loyd’s opinion in its
decision to reject Farrell’s appeal. See Scivally v. Sullivan,
966 F.2d 1070, 1075 (7th Cir. 1992).
10 No. 11-3589
This error was not harmless. The Commissioner
suggests now that the ALJ’s determination about the
severity of Farrell’s fibromyalgia is irrelevant, because
once an ALJ finds any severe impairment, her determina-
tion regarding the severity of the other impairments
is immaterial. This is true only insofar as the severity
finding relates to meeting the required threshold in
step two of the ALJ’s five-step analysis. 20 C.F.R.
§ 404.1520(a)(4)(ii) (requiring a “severe” impairment
to move on to step three); Castile v. Astrue, 617 F.3d 923,
926-27 (7th Cir. 2010) (“[T]he step two determination
of severity is merely a threshold requirement.” (quota-
tion marks omitted)). This is not the only place, however,
in which the severity of an applicant’s conditions is
properly part of the ALJ’s analysis. It also affects the
ALJ’s determination of residual functional capacity, for
example, and thus, no matter what happens at step two,
a correct assessment remains important. See Castile,
617 F.3d at 926-27; Arnett v. Astrue, 676 F.3d 586, 592
(7th Cir. 2012).
B
Farrell also challenges a number of the ALJ’s factual
determinations. Many of them, such as the ALJ’s assess-
ment of Farrell’s credibility, are supported by sub-
stantial evidence. Nevertheless, as we explain in more
detail below, the ALJ failed to grapple properly with
the competing medical opinions.
Farrell contends that the ALJ’s Residual Func-
tional Capacity (RFC) determination, see 20 C.F.R.
No. 11-3589 11
§ 404.1520(a)(4)(v), improperly discounted the medical
opinions of her treating physician, Dr. Beyer. See 20 C.F.R.
§ 404.1527(c)(1)-(c)(2) (“Generally, we give more weight
to opinions from your treating sources . . . .”). In
response, the Commissioner argues that it is required to
defer only if the treating physician’s opinion is “sup-
ported by objective clinical findings.” Henderson v. Apfel,
179 F.3d 507, 514 (7th Cir. 1999). Citing to only a handful
of pages in the record (and only one page from
Dr. Beyer’s notes), the Commissioner suggests that no
such clinical evidence exists. Dr. Beyer’s notes, however,
span many years and consume many pages. We do not
know what the ALJ thought about most of this material,
because he never seriously discussed it.
Dr. Beyer suggested that Farrell was capable at most
of only occasionally lifting over 20 pounds and that
she could not sit or stand for more than 30 minutes at
a time. The lifting restriction is supported by the
June 2004 report, which indicates that Farrell has
“severe r[igh]t index pain—hard to bend finger.” The
August 2004 report similarly describes Farrell’s carpal
tunnel syndrome, which requires her to “wear her wrist
splints at all times.” Dr. Beyer also reported that
Farrell was limited by her chronic fatigue, and that her
inability to concentrate would affect her capacity to
listen. The ALJ faulted Dr. Beyer for “not referenc[ing]
clinical evidence to support [these] proposed restric-
tions.” But a careful examination of the record that
Dr. Beyer furnished shows exactly the kind of sup-
porting evidence the ALJ apparently wanted. As early
as May 2002, Dr. Beyer noted that Farrell suffered
12 No. 11-3589
from “severe fatigue” and that it was “hard [for Farrell]
to get out of bed.” In September 2002, Farrell complained
of “being tired all the time” (emphasis in original).
In 2003, Dr. Beyer noted that Farrell bruises easily
(incidently, a point not dependent on Farrell’s self-re-
porting), and later that year diagnosed her with restless
leg syndrome (a neurological condition that is similarly
not dependent on subjective reports). Beginning in
2004, Dr. Beyer’s notes make increasing references to
joint pain and lower back pain.
Notably, just before Farrell’s alleged onset of disability—
in October 2003—Dr. Beyer suggested that the “real
cause” for Farrell’s “severe fatigue” was her “stress [and]
depression.” Similarly, in September 2004, Dr. Beyer
suggested that Farrell’s “concentration problems” might
stem from her “depression [and] anxiety.” The ALJ’s
decision makes almost no mention of these mental
ailments—diseases which are best evaluated by those
physicians who have a long history of treating the ap-
plicant—despite the fact that Dr. Beyer’s medical
reports repeatedly suggest that these mental conditions
may be the root cause of some of her physical limitations.
As we already have pointed out, Dr. Beyer’s reports
indicate that Farrell was suffering from anxiety and
depression as early as 2003. For example, her notes
from July 2003 state that Farrell was suffering from
“increased anxiety . . . l[eading] her to increased panic
attacks,” and the report from December flags increasing
anxiety. These ailments persisted. Dr. Beyer’s reports
from 2005 and 2006 continue to refer to Farrell’s anxiety,
No. 11-3589 13
stress, depression, along with new bouts of panic attacks
in June 2005. Farrell was hospitalized on more than one
occasion because of her suicidal tendencies, and she
admitted to cutting her wrist with a plastic knife to relieve
stress. Dr. Beyer noted that Farrell found it difficult to let
go of situations that were beyond her control. It was
only the thought of her own children that deterred her
from committing suicide. It is true that some reports,
such as those from August 2004, indicated improve-
ments in Farrell’s condition, but these successes were
only temporary. Farrell’s GAF score similarly vacillated,
but it only sporadically moved outside of the “severe”
zone. Farrell’s RFC should not have been measured
exclusively by her best days; when a patient like Farrell
is only unpredictably able to function in a normal
work environment, the resulting intermittent attendance
normally precludes the possibility of holding down a
steady job. Cf. EEOC v. Yellow Freight Sys., 253 F.3d 943,
949-52 (7th Cir. 2001) (en banc). Matters would be
different if the ALJ had confronted Dr. Beyer’s opinions
and had explained why he was rejecting them. But he
did not. Instead, he ignored the extensive medical
history in the record and emphasized contradictions with
the opinions of the government’s doctors. This was
error. See Gudgel v. Barnhart, 345 F.3d 467, 470 (7th
Cir. 2003).
Farrell also challenges the hypothetical questions that
the ALJ posed to the testifying vocational experts,
alleging that they did not fully incorporate his findings
regarding her RFC. Because we have determined that
the ALJ’s RFC determination is based on an incomplete
14 No. 11-3589
assessment of the record and does not account for
Dr. Loyd’s diagnosis, we need not decide whether the
ALJ’s examination was appropriate. On remand, the
ALJ may need to re-examine these or other experts in
order to assess Farrell’s ability to work in light of the
fresh look at the case.
The decision of the district court is R EVERSED, and the
case is R EMANDED to the agency for further proceedings
consistent with this opinion.
8-28-12
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420 F.2d 251
137 U.S.App.D.C. 1
UNITED STATES of Americav.Jack WOODEN, Jr., Appellant.
No. 22773.
United States Court of Appeals District of Columbia Circuit.
Argued Oct. 20, 1969.Decided Nov. 28, 1969.
Mr. Murray S. Simpson, Jr., Washington, D.C. (appointed by this court), for appellant.
Mr. William S. Block, Asst. U.S. Atty., for appellee. Messrs. Thomas A. Flannery, U.S. Atty., Roger E. Zuckerman, Daniel J. Givelber, Asst. U.S. Attys., and Robert P. Watkins, Asst. U.S. Atty., at the time the brief was filed, were on the brief for appellee. Messrs. David G. Bress, U.S. Atty., at the time the record was filed, and John A. Terry, Asst. U.S. Atty., also entered appearances for appellee.
Before FAHY, Senior Circuit Judge, and WRIGHT and ROBB, Circuit judges.
ROBB, Circuit Judge:
1
The appellant and Charles Reid were indicted for burglary in the second degree (22 D.C.Code 1801(b)) (Supp. II, 1969) and grand larceny (22 D.C.Code 2201). A jury found them guilty of burglary in the second degree and petty larceny. Reid has not appealed.
2
From the evidence at trial it appeared that the Rio Restaurant on 14th Street, N.W., in Washington, was entered by burglars between the hours of 4:30 A.M. and 9:30 A.M. on Sunday, May 26, 1968. Entrance was gained by cutting a hole in the roof. When the proprietor unlocked the front door and entered the restaurant at about 9:30 on Sunday morning, he found the appellant and Reid standing inside. He testified that Reid had a box of assorted meats in his hands and the appellant was holding two cases of beer. Beside the appellant was a ladder which apparently had been brought to the restaurant by the thieves and used to descend from the hole in the roof. Reid and the appellant offered no resistance but sat down and waited while the proprietor called the police who came and arrested them.
3
Inspection of the restaurant disclosed that the burglars had stolen 69 cases of beer, 7 cases of port and whiskey, an amplifier, 5 sets of musical instruments, the proceeds of the cigarette machine and juke box, and assorted meats and canned goods. None of this property, having an aggregate value of some $3,235, was recovered. It appeared that the thieves had departed through the back door which they left open. An iron gate which protected the door had been forced.
4
The arresting officer testified that shortly after arriving at the precinct the appellant and Reid said they had been walking through the alley in the rear of the restaurant and observing the rear door open had gone in to look around. The appellant testified that he had been at his apartment near the restaurant on Saturday night and until shortly after 9:00 o'clock on Sunday morning, when he and Reid set out in search of some beer. He said that while walking through the alley behind the restaurant they noticed that the rear door of the establishment was wide open and they went in to see if they could purchase beer. Almost immediately they were confronted by the proprietor and arrested. The appellant denied that he had stolen any of the missing property and denied that he had anything in his hands when the proprietor entered. Reid did not testify.
5
The appellant called a witness, James Bundy, who corroborated the appellant's testimony with respect to his activities on Saturday night and Sunday morning prior to the appellant's departure from his apartment. The appellant's assigned counsel1 then undertook to question Bundy concerning the appellant's reputation, and the following took place:
6
'Q. (By appellant's counsel) Mr. Bundy, do you know others in your community who know Mr. Jack Wooden? 'A. Yes, practically everybody in the building. I am the janitor of 24 units and practically everybody in the units knows him because he do favors for them occasionally. 'Q. Have you heard others in your community discuss--
7
'(The Assistant United States Attorney): Your Honor, may we approach the bench?
8
(AT THE BENCH:)
9
'(The Assistant United States Attorney): Fair warning, Mr. (Counsel). He has got 20 drunk convictions and once you put his character in evidence I can ask this man about each and every one of them. ' (Counsel): Whose character, the defendant or the witness? '(The Assistant United States Attorney): You are starting to put the defendant's character in evidence, aren't you? ' (Counsel): What does Your Honor have to comment on that? 'THE COURT: I am afraid it is correct. ' (Counsel): Well, I will withdraw the question. I am letting it go at that. 'THE COURT: All right.
10
* * * *'the
11
We must disagree with the position taken by the prosecutor and the district judge. It is of course true that a witness who testifies to the good reputation of a defendant may be asked on cross examination if he has heard of certain arrests or convictions of the defendant, the reasoning being that such questions go to the reliability of the witness. But the scope of such cross examination is not unlimited. The impeaching questions must be tested 'by comparison with the reputation asserted', Michelson v. United States, 335 U.S. 469, 483, 484, 69 S.Ct. 213, 222, 93 L.Ed. 168 (1948), and care must be taken to exclude questions which merely tend to traduce and besmirch the defendant, while having no substantial impact on the credibility of the witness. Shimon v. United States, 122 U.S.App.D.C. 152, 352 F.2d 449 (1965); Awkard v. United States, 122 U.S.App.D.C. 165, 352 F.2d 641 (1965).
12
Judged by these principles and in the context of this case we think that the proposed questions concerning the appellant's twenty convictions for being drunk were impermissible. Had counsel proceeded with his examination of the witness Bundy the testimony given would obviously have related to the reputation of the defendant for honesty and integrity and for peace and good order. We do not believe that convictions for drunkenness are relevant to a reputation for honesty and integrity. Neither can we say that such convictions have any bearing on a reputation for peace and good order, in the context of a prosecution for burglary and larceny. We need not decide what the result might be in a prosecution for being drunk and disorderly. We hold only that cross examination of Bundy concerning the appellant's convictions for drunkenness would have been immaterial and irrelevant to the reputation which the appellant proposed to assert as a defense to the charges against him. In short, the target of such questions would have been the appellant, not the credibility or reliability of his witness. See Aaron v. United States, 397 F.2d 584 (5th Cir. 1968); Travis v. United States, 247 F.2d 130 (10th Cir. 1957); Smith v. Commonwealth, 206 Ky. 728, 268 S.W. 328 (1925); Albertson v. Commonwealth, 312 Ky. 68, 226 S.W.2d 523 (1950).
13
The government suggests that no prejudice resulted from the ruling of the District Court. We cannot agree. It is plain that the decisive issue before the jury was one of credibility; if the jury had believed the appellant's explanation of his presence in the restaurant he would have been acquitted. The appellant's story was not incredible; indeed, the jury seems to have accepted it, at least in part, by finding him guilty of petty larceny instead of grand larceny and thus indicating a belief that he was not a party to the wholesale looting of the restaurant, but was a late arrival on the scene. In this situation evidence of his good reputation might well have tipped the scales in his favor; for evidence of good reputation standing alone may create a reasonable doubt. See Edgington v. United States, 164 U.S. 361, 17 S.Ct. 72, 41 L.Ed. 467 (1896). The ruling of the district judge, however, effectively foreclosed the introduction of any evidence of the appellant's good reputation, and this we think was clearly prejudicial.
14
We have considered the appellant's other claims of error and concluded that they are without merit.
15
Reversed and remanded for a new trial.
1
Not counsel on this appeal
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-4312
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
BALMORE PORTILLO-MERINO,
Defendant - Appellant.
Appeal from the United States District Court for the Western
District of North Carolina, at Statesville. Richard L.
Voorhees, District Judge. (5:09-cr-00018-RLV-DSC-1)
Submitted: November 12, 2013 Decided: November 21, 2013
Before WILKINSON, GREGORY, and KEENAN, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Lawrence W. Hewitt, GUTHRIE, DAVIS, HENDERSON & STATON, PLLC,
Charlotte, North Carolina, for Appellant. Amy Elizabeth Ray,
Assistant United States Attorney, Asheville, North Carolina, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Balmore Portillo-Merino appeals the fifty-seven-month
sentence imposed by the district court following his guilty
plea, pursuant to a written plea agreement, to reentry of a
deported alien, in violation of 8 U.S.C. § 1326(a), (b)(2)
(2012). On appeal, Portillo-Merino’s counsel filed a brief
pursuant to Anders v. California, 386 U.S. 738 (1967), asserting
that there are no meritorious grounds for appeal but questioning
whether the sentence imposed by the district court was
substantively reasonable. Portillo-Merino was advised of his
right to file a pro se supplemental brief but did not file one.
Finding no error, we affirm.
The sole issue raised in the Anders brief is whether
Portillo-Merino’s sentence on remand was substantively
reasonable. In reviewing the substantive reasonableness of a
sentence, we must “take into account the totality of the
circumstances.” Id. The sentence imposed “must be sufficient,
but not greater than necessary,” to satisfy the purposes of
sentencing. 18 U.S.C. § 3553(a) (2012). If the sentence
imposed is within the appropriate Guidelines range, we consider
it presumptively reasonable. United States v. Abu Ali, 528 F.3d
210, 261 (4th Cir. 2008). The presumption may be rebutted by a
showing “that the sentence is unreasonable when measured against
the § 3553(a) factors.” United States v. Montes-Pineda, 445
2
F.3d 375, 379 (4th Cir. 2006) (internal quotation marks
omitted). Upon review, we conclude that the district court
committed no substantive error in imposing the fifty-seven-month
sentence. United States v. Lynn, 592 F.3d 572, 577 (4th Cir.
2010) (providing standard of review).
In accordance with Anders, we have reviewed the entire
record and have found no meritorious issues for appeal. We
therefore affirm the district court’s judgment. This court
requires that counsel inform Portillo-Merino, in writing, of his
right to petition the Supreme Court of the United States for
further review. If Portillo-Merino requests that a petition be
filed, but counsel believes that such a petition would be
frivolous, counsel may move in this court for leave to withdraw
from representation. Counsel’s motion must state that a copy
thereof was served on Portillo-Merino. We dispense with oral
argument because the facts and legal contentions are adequately
presented in the materials before this court and argument would
not aid the decisional process.
AFFIRMED
3
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307 F.Supp. 11 (1969)
Sally LADSON, as Administratrix of the goods, chattels and credits of Marvin Langston, deceased, and Sally Ladson, Plaintiffs,
v.
Jane D. KIBBLE and Kenneth Kibble, Defendants.
No. 68 Civ. 4018.
United States District Court S. D. New York.
December 9, 1969.
*12 Coleman & Carlo, by Louis G. Carlo, New York City, for plaintiffs.
McLaughlin, Fiscella & Biancheri, by John J. Biancheri, New York City, for defendants.
CANNELLA, District Judge.
The defendants have moved for an order pursuant to 28 U.S.C. § 1404(a) transferring this case from this district to the Northern District of Indiana. Plaintiffs moved for an order pursuant to 28 U.S.C. § 1447(c) remanding this case to the Supreme Court of New York, Westchester County. Defendants' motion for a transfer is granted, and plaintiffs' motion for remand is denied.
This case presents a unique factual situation stemming from the fact that New York law allows attachment of a liability insurance policy. Seider v. Roth, 17 N.Y.2d 111, 269 N.Y.S.2d 99, 216 N.E.2d 312 (1966). Plaintiff Ladson was granted limited Letters of Administration for the estate of Marvin C. Langston, her son, on March 1, 1967 in Westchester County. On September 12, 1968, the Supreme Court of New York, Westchester County issued an order of attachment pursuant to CPLR § 6201 to attach the defendants' insurance policy and its contractual obligation to defend and indemnify the defendants. This policy was issued to defendants by Traveler's Indemnity Company. The sheriff levied upon this property on September 19, 1968, and a summons and complaint was served on September 20, 1968, all in accordance with New York law. Thereafter, defendants filed a petition on October 11, 1968 for removal to this court pursuant to 28 U.S.C. § 1441. They invoked this court's jurisdiction on the grounds of diversity of citizenship under 28 U.S.C. § 1332. Defendants also filed a bond at that time pursuant to 28 U.S.C. § 1446(d). Defendants *13 filed their answer to the complaint on November 14, 1968.
Plaintiffs allege in their complaint that the decedent, Marvin Langston, was injured and subsequently died as the result of an automobile accident in Valparaiso, Indiana, occurring on February 2, 1967 and caused by the negligence of the defendants. At that time, the decedent was a student at Midwestern College in Iowa and was en route to attend or participate in a basketball game in Allendale, Michigan. The decedent was riding as a passenger in a car driven by one Robert Schneck, a resident of New Jersey and also a student at Midwestern. The car had apparently been leased en route from an Illinois firm, Coffman Brothers Rental and Leasing Corp., and had Illinois license plates. The defendants are Indiana residents, and their car is registered and insured there by "Traveler's". Defendants contend that there was a third car involved in either the same accident or another one occurring immediately thereafter. That car is owned by an Indiana taxi company, American Taxi Service, and was driven by an Indiana resident, one Alfred Bowman, who, defendants contend, will be a material witness as to the accident(s).
The parents of the decedent are apparently divorced or separated. While the action of the mother was pending, the father also instituted a suit against the defendants. The father, a resident of New Jersey, through his Indiana attorneys had one Duane W. Hartman appointed administrator for the purposes of a wrongful death action only. Letters of Administration were issued to this effect by the Clerk of the Circuit Court, Porter County, Indiana, on May 26, 1967.[1] Subsequently, a complaint was filed against the defendants in the United States District Court, Northern District of Indiana, Civil No. 69 H 5.
A further complication is that plaintiff Ladson has commenced another action by way of a Seider attachment against Coffman Brothers Rental and Leasing Corp. and Robert B. Schneck in the Supreme Court of New York, Westchester County, Index No. 408/1969. This was done through an order signed on January 14, 1969 authorizing the attachment of an insurance policy issued by Royal-Globe Insurance Co.[2]
Since the plaintiffs have moved to remand, they have put in issue the removal of this action from the Supreme Court of New York to this court. It is thus necessary for this court to ascertain whether a proper removal was made pursuant to 28 U.S.C. § 1441 before it addresses itself to the defendants' motion for transfer.
Section 1441(a) of Title 28 United States Code states in part:
[A]ny civil action brought in State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.
Initially, plaintiffs contend that this action is one in rem against the insurance policy and its contractual obligations and is therefore not removable, since only in personam actions are removable under Section 1441. This argument is without merit. The statute does not state that only in personam actions are removable; rather it speaks in terms of "any civil action." This language, especially if construed in conjunction with Section 1450 which, in effect, transfers a state court attachment to the federal court to which the action is *14 removed, makes it clear that an in rem or quasi in rem proceeding may be removed to the federal district court providing a federal jurisdictional base is present. The Second Circuit has specifically held that Seider-based actions are by definition removable to the federal courts. Minichiello v. Rosenburg, 410 F.2d 106, 119 (2d Cir. 1969). See also Jarvik v. Magic Mountain Corp., 290 F.Supp. 998 (S.D.N.Y.1968); Siegel, Seider v. Roth: U. S. Courts Faced with Special Problems, 161 N.Y.Law J., March 10, 1969, at p. 1, col. 4 [hereinafter "Siegel"].
Plaintiffs next contend that there is no diversity of citizenship here since plaintiffs are New York residents[3] and the property attached, the res, is situated in New York. This argument also has no merit. Although plaintiffs have attached the insurance policy and its contractual obligations here in New York, this was done solely to acquire quasi in rem jurisdiction over the defendants. In truth, the plaintiffs are suing the defendants, residents of Indiana, and the Seider attachment is merely a conduit for jurisdictional purposes. In stating this, this court is not unmindful of the fact that the ostensible outcome or purpose of the Seider line of cases may be to provide, in effect, a direct action against the insurance companies. See Simpson v. Loehmann, 21 N.Y.2d 305, 287 N.Y.S.2d 633, 234 N.E. 2d 669 (1967); Minichiello v. Rosenburg, supra. Therefore, this court finds that diversity of citizenship exists. See also 28 U.S.C. § 1332(c).
Plaintiffs next attack the removal on the grounds that since any judgment awarded would be necessarily limited to the face amount of the policy,[4] which plaintiffs contend is $10,000, there is not the requisite amount in controversy for federal jurisdiction under 28 U.S.C. § 1332.[5] The defendants have made no concession regarding the policy limits,[6] and the limit of the policy is not known to the court. However, the plaintiffs' complaint contains an ad damnum clause for $75,000. Although recovery may be limited to the face amount of the policy, an unknown in this case, the actual amount in controversy here is $75,000, and thus the jurisdictional requirements of 28 U.S.C. § 1332 have been met. This construction where the amount claimed and not the face amount of the policy is the amount in controversy for purposes of Section 1332, in a removal situationis sanctioned by the Second Circuit in its opinion en banc in Minichiello.[7] 410 F.2d at 119 n. 4. See Saint Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 58 S.Ct. 586, 82 L.Ed. 845 (1938).
Therefore, the action herein was properly removed from the Supreme Court of New York, Westchester County to this court, providing that defendants complied with the procedure for removal set out in 28 U.S.C. § 1446. Defendants have complied with that section's provisions. They have removed the action *15 timely, and they have posted a bond as required by the section.
Plaintiffs' final argument is that a remand should be granted, even if the case were properly removed, because they have another action pending in state court against the operator of the car in which plaintiff was a passenger and the rental agency. This action is also based upon a Seider attachment. Plaintiffs contend that both of these actions should be tried together and that if a remand is granted, they will move to consolidate the cases. The court notes the fact that this second action was commenced more than three months after the action herein was removed; that defendants' motion for transfer was originally returnable on December 17, 1968, but that it was continually adjourned by the parties so that it did not come on to be heard by this court until March 4, 1969; that plaintiffs did not seek an order of attachment in the second action until January 14, 1969; and that plaintiffs did not make their motion for a remand until January 23, 1969, which motion was also adjourned to March 4, 1969. Nevertheless, plaintiffs contend that it would be in the interests of justice for this court to remand this case. This argument is unpersuasive. If plaintiffs' intent was to have the two cases tried together, they could have applied to this court for a writ of attachment. See Farrell v. Piedmont Aviation, Inc., 295 F.Supp. 228 (S.D.N.Y.1968). Such an application could have been made under Rules 4(e) and 64 of the Federal Rules of Civil Procedure, and the New York attachment laws and procedure flowing from Seider would have been applied. Instead, plaintiffs chose to commence the second action in state court. Since at the time of commencement of the second action, this action had already been removed to this court, they cannot now be heard to complain about the course they have followed. This court will not allow the plaintiffs to commence a second action and then plead it in an attempt to oust this court from jurisdiction.
Accordingly, the plaintiffs' motion to remand is denied.
Since this action was properly removed to this court, it becomes necessary to consider the defendants' motion for a change of venue to the Northern District of Indiana. Defendants move for such a change in venue on the basis that it would be in the interests of justice and for the convenience of witnesses.
Section 1404(a) of Title 28 United States Code states:
(a) For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.
A transfer of a Seider action can be made under this section, and such a transfer lies within the sound discretion of the District Judge. See Minichiello v. Rosenburg, 410 F.2d at 119; Farrell v. Piedmont Aviation, Inc., supra; Jarvik v. Magic Mountain Corp., supra. However, a transfer can only be made to a district "where [the action] might have been brought [in the first instance]." As examined previously, this action is between citizens of New York[8] and citizens of Indiana, and thus there is diversity of citizenship. It also involves an amount in controversy exceeding $10,000. Jurisdictional grounds therefore exist. 28 U.S.C. § 1332. The venue of this diversity action could have been originally laid in the Northern District of Indiana. All the defendants reside there, and, additionally, the automobile accident or claim arose there. 28 U.S.C. § 1391(a). Furthermore, the defendants would have been amenable to service there under the Federal Rules of Civil Procedure which control in this motion for change of venue. See Van Dusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964); Farrell v. Wyatt, 408 F.2d 662 (2d Cir. 1969).
*16 In establishing that it is in the interests of justice and the convenience of the witnesses that the action be transferred to Indiana, the defendants, by their attorney's affidavit in support of the motion, point out several highly material considerations. First, the accident occurred in Indiana, and defendants are residents there. Plaintiff is only the administrator here in New York and undoubtedly can shed little light upon the facts surrounding the accident. Second, the defendants point out that a number of material witnesses are located in Indiana who will testify, and defendants have outlined to this court the nature of their testimony. These witnesses are: 1) Alfred Bowman, the driver of the third car involved in the accident; 2) David S. Kinne, the driver of another car present at the accident scene, but not involved, who took photographs of the scene of the accident; 3) the State Trooper, Carl Freeman, who investigated the accident and also took some photographs; and 4) Leonard Wetmore, the coroner of Valparaiso, Indiana, who pronounced the death of the decedent, who was present at the scene of the accident and apparently held an inquest into the cause of death. Third, Robert B. Schneck, the driver of the car in which decedent was a passenger, although a resident of New Jersey, still attends college at Midwestern in Iowa. Fourth, Indiana concededly has a prime interest in what occurs on its highways.[9] And fifth, there is another action pending in the Northern District of Indiana, brought by the deceased's father, also seeking damages for wrongful death and loss of services.[10]
Plaintiffs in their opposition to the transfer motion do not refute the defendants' points regarding the place of the accident or the list of witnesses. Rather, they only contend that they have not completed their investigations and thus do not know if there are additional witnesses or not. However, even if they are able to ascertain the identity of more witnesses, it is hard to imagine that they would not be located in Indiana. Plaintiffs contend that all of these witnesses' testimony could be taken by deposition and submitted to the court here in that form. This argument overlooks the fact that it is usually advantageous to the trier of fact to observe the demeanor of the witnesses. This can only be done effectively if the witnesses are present in the courtroom since it is exceedingly difficult to determine reliability of a witness from the cold sheets of paper of a deposition.
Plaintiffs also contend that this court can only order a change in venue of an in personam action and not one in rem or quasi in rem. This argument, as applied to this action, is without merit. Although this court may not order the transfer of a strictly in rem action, Hughes v. S. S. Santa Irene, 209 F.Supp. 440 (S.D.N.Y.1962), because it would not be one that "might have been brought" in the transferee district, it can order a transfer if such an in rem action is joined by an in personam one, Continental Grain Co. v. Federal Barge FBL-585, 364 U.S. 19, 80 S.Ct. 1470, 4 L.Ed.2d 1540 (1960). This court may also transfer a quasi in rem action, like the one here, based upon Seider v. Roth. See Minichiello v. Rosenburg, supra; Farrell v. Wyatt, supra; Jarvik v. Magic Mountain Corp., supra.
The fact that there is another action against the defendants pending in the Northern District of Indiana, in combination with the other factors listed, suggests even more compellingly that the action should be transferred to that District. It is needless duplication to have two district judges concerned with the same case. See Farrell v. Piedmont Aviation, Inc., supra. Furthermore, since recovery under a wrongful death statute is sought here by two distinct parties, it *17 would be advantageous for one judge to determine who is the proper party to seek such redress.
The parties have argued at length in their memoranda and affidavits the various choices of law which may be made in this case. Those questions are for the trial judge to determine and need not enter into this court's opinion.[11]
It is therefore clear to this court that, in the interests of justice and for the convenience of the witnesses and parties, this action should be transferred under 28 U.S.C. § 1404(a) to the Northern District of Indiana.
The motion of the defendants is granted. This action is transferred to the United States District Court for the Northern District of Indiana. The Clerk of the Court is directed to forward all papers to the Clerk of the Court at Hammond, Indiana.
The motion of the plaintiffs for a remand to the state court is denied.
So ordered.
NOTES
[1] This is prior to the commencement of the action herein, but two months after the issuance of plaintiff Ladson's Letters in Westchester.
[2] This action is not strictly germane to the present case at bar, although plaintiff contends that if a remand is granted, she will consolidate the two. It is merely mentioned by the court to show the complexity of the litigation to date.
[3] Plaintiffs' complaint alleges the domicile of Sally Ladson as being New York. However, it does not set forth the domicile of the deceased. In view of the separation or divorce of the parents, it is not clear to this court which parent had custody. This is especially true in view of the fact that they have both brought actions. Thus, in the alternative the deceased is a domiciliary of New York, the mother's domicile, or New Jersey, the father's domicile. In either case, diversity of citizenship exists.
[4] See Simpson v. Loehmann, 21 N.Y.2d 990, 290 N.Y.S.2d 914, 238 N.E.2d 319 (1968).
[5] See plaintiffs' Affidavit in Support of their Motion, pp. 9-10.
[6] See defendants' Affidavit in Opposition, pp. 3-4.
[7] See Siegel, 161 N.Y.Law J., March 11, 1969, at p. 1, col. 4 for another theory involving the addition of the costs to defend to the obligation to indemnify for the face amount of the policy in order to obtain the requisite amount in controversy when a common 10-20-5 policy is involved.
[8] See n. 3, supra.
[9] Relative to this argument, see Watson v. Employers Liability Assurance Corp., 348 U.S. 66, 75 S.Ct. 166, 99 L.Ed. 74 (1954).
[10] A copy of the complaint was annexed as an Exhibit in defendants' attorney's Affidavit in Opposition to plaintiffs' motion for remand.
[11] See Van Dusen v. Barrack, 376 U.S. 612, 639, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964); Farrell v. Wyatt, 408 F.2d 662, 666 (2d Cir. 1969).
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373 S.C. 303 (2007)
644 S.E.2d 784
Cally R. FORREST, Jr., Respondent,
v.
A.S. PRICE MECHANICAL and O'Steen Adjusting Services, Appellants.
No. 4227.
Court of Appeals of South Carolina.
Heard March 6, 2007.
Filed April 2, 2007.
Rehearing Denied May 17, 2007.
*304 Duke K. McCall, Jr., Rebecca H. Zabel and Zandra Johnson, all of Greenville, for Appellants.
Belinda Ellison, of Lexington and James B. Richardson, of Columbia, for Respondent.
KITTREDGE, J.:
In this workers' compensation case, Cally R. Forrest, Jr. sustained injuries from a work-related accident while employed by Appellant A.S. Price Mechanical.[1] Appellant concedes that Forrest is entitled to lifetime medical and workers' compensation benefits. Appellant assigns error to the Workers' *305 Compensation Commission's computation of Forrest's compensation, the finding that Forrest has reached maximum medical improvement (MMI), and the admission of Forrest's vocational expert's report. We affirm.
I.
With the exception of four semesters spent at Clemson University, Forrest was employed full-time since graduating from high school in 1995, usually working multiple jobs.[2] As a high school student, Forrest worked regularly, including seasonal, full-time work with Monetta Peach Packers. He continued seasonal employment with Monetta Peach Packers until his injury on May 26, 2001. During the remaining months of the year, Forrest worked for several employers, including Appellant A.S. Price Mechanical, Price's Metal Shop, Gibson Construction Company, and J.E. Oswalt & Sons ("Oswalt").
After leaving Clemson in December of 1998, Forrest began working full-time for Larry Price at Price's Metal Shop.[3] Forrest also worked for Appellant on the weekends. In the fall of 1999, Forrest's job with Appellant changed from part-time to full-time, and he began working for Larry Price only part-time. When work with Appellant was slow, Forrest would work for Gibson Construction Company. Eventually, his job with Gibson Construction Company became full-time, and he worked for Appellant only part-time. By the start of the 2000 peach season, the specific construction Forrest was working on was completed with Gibson Construction Company, and Forrest once again began his seasonal work with Monetta Peach Packers.
At the end of the peach season in 2000, Forrest began working full-time for Oswalt and part-time with Appellant. When the peach season began in 2001, he left his job at Oswalt and went back to Monetta Peach Packers. Forrest testified he intended to go back to work for Oswalt at the end of the 2001 peach season. He further noted that the owner of *306 Oswalt and one of the owners of Monetta Peach Packers were friends and knew of his intentions.
Forrest was injured during the 2001 peach season when he fell from a roof while working part-time for Appellant. Forrest was twenty-four years old at the time of the accident. The injuries rendered him a paraplegic.
Appellant agreed to pay Forrest workers' compensation at a rate of $490.00. This amount reflected Forrest's combined wages from Appellant and Monetta Peach Packers.
The single commissioner subsequently adjusted the compensation rate to $532.72. This compensation rate represented Forrest's average weekly wage from January 1, 2001 to May 26, 2001, while working for Appellant, Monetta Peach Packers, and Oswalt. The Commission adopted the order of the single commissioner. The circuit court held the Commission's findings were supported by substantial evidence and affirmed.
II.
The Administrative Procedures Act establishes the standard of review for decisions by the South Carolina Workers' Compensation Commission. Lark v. Bi-Lo, Inc., 276 S.C. 130, 134-35, 276 S.E.2d 304, 306 (1981). "In workers' compensation cases, the Full Commission is the ultimate fact finder." Shealy v. Aiken County, 341 S.C. 448, 455, 535 S.E.2d 438, 442 (2000). This court reviews facts based on the substantial evidence standard. Thompson v. S.C. Steel Erectors, 369 S.C. 606, 612, 632 S.E.2d 874, 877 (Ct.App.2006). Under the substantial evidence standard, the appellate court may not substitute its judgment for that of the Commission as to the weight of the evidence on questions of fact. S.C.Code Ann. 1-23-380(A)(5) (Supp.2006). The appellate court may reverse or modify the Commission's decision only if the claimant's substantial rights have been prejudiced because the decision is affected by an error of law or is clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record. Id. "Substantial evidence is not a mere scintilla of evidence nor evidence viewed from one side, but such evidence, when the whole record is considered, as would allow reasonable minds to reach the conclusion the Full Commission reached." Shealy, 341 S.C. at 455, 535 S.E.2d at 442.
*307 III.
Appellant argues the circuit court erred in affirming the Commission's computation of Forrest's average weekly wage of $532.72. First, Appellant asserts that the doctrines of estoppel and laches preclude Forrest from asserting a different wage than the parties agreed upon. Next, Appellant objects to the inclusion of Oswalt as an employer in the rate computation, and maintains that Forrest was not employed with Oswalt at the time of his injury. Appellant contends any wages earned as a result of his previous employment with Oswalt are irrelevant per section 42-1-40 of the South Carolina Code (Supp.2006). Finally, Appellant argues there are no exceptional circumstances justifying an adjustment or computation of Forrest's average weekly wage in a method other than that employed originally.
At the outset we hold that the doctrines of estoppel and laches do not preclude the Commission from adjusting the average weekly wage prior to the administrative body's final determination. Appellant's argument stems from the fact that Forrest's initial compensation rate was $300 per week until he requested that this rate be increased to include wages earned from Monetta Peach Packers. Appellant states it agreed to the new calculation ($490 per week) and filed a new Form 15 with the Commission in exchange for Forrest agreeing to withdraw his request for a hearing. Forrest filed a new Form 19 with the Commission confirming his acceptance of the rate, and Appellant maintains it relied to its detriment on Forrest's promise of acceptance.
The circuit court correctly held that neither a Form 15 nor a Form 19 is a final judgment. Section 42-17-10 of the South Carolina Code (1985) allows the Commission to adjust a claimant's compensation rate after the filing of the claim, even when the parties agree to the preliminary compensation rate. Section 42-17-10 provides: "All such agreements [between the claimant and employer as to rate of compensation] shall be subject to adjustment and correction as to the compensable rate if subsequent to filing with the Commission it is determined that such rate does not reflect the correct average weekly wage of the claimant." Moreover, Appellant has failed to establish any detrimental reliance.
*308 On the merits, we disagree with Appellant's contention that the Commission erred in including Oswalt as an employer in Forrest's average weekly wage computation. Section 42-1-40 of the South Carolina Code (Supp.2006) defines "average weekly wage" for the purposes of computing compensation and sets forth four different methods of calculation.[4] The methods for calculating average weekly wage explained in section 42-1-40 have been interpreted by our courts to implement the "usual" job situation with one employer. See Foreman v. Jackson Minit Markets, Inc. 265 S.C. 164, 167, 217 S.E.2d 214, 215 (1975) (summarizing the four different methods of calculating average weekly wage in the predecessor to section 42-1-40). However, section 42-1-40 further provides that when exceptional reasons make one of the standard approaches unfair to either the employer or employee, "such other method of computing average weekly wages may be resorted to as will most nearly approximate the amount which the injured employee would be earning were it not for the injury." We note that exceptional circumstances have been found where an employee has multiple employers at the same time. See, e.g. Brunson v. Wal-Mart Stores, Inc., 344 S.C. 107, 111, 542 S.E.2d 732, 734 (Ct.App.2001) (listing several *309 cases where multiple employment has been sufficient to justify exceptional circumstances).
Appellant argues section 42-1-40 requires that the wage being earned at the time of the injury be the wage that controls the compensation rate. On the date of the injury, Appellant correctly points out that Forrest only worked for Appellant and Monetta Peach Packers.
The Commission found that the following "exceptional circumstances" justified deviation from the usual statutory method of average weekly wage computation: (1) Forrest's young age of twenty-four years at the time of injury;[5] (2) Forrest's demonstration of the interest, aptitude, ability, work ethic, and work history to be both a welder or maintenance worker and an employee who had worked year-round with multiple employers; (3) the fact that Forrest worked for Monetta Peach Packers during the peach season for several months each year since he was fifteen and had worked for two or three additional employers to complete his annual earnings and year-round employment; (4) the severity of Forrest's injury; and (5) the fact that Appellant knew that Forrest regularly worked full-time and part-time for multiple employers.
The circuit court did not err in affirming the Commission.[6] The Commission acted within its broad discretion in determining that exceptional circumstances existed. In finding exceptional circumstances in other cases, this court has reasoned that "[section 42-1-40] provides an elasticity or flexibility with a view toward always achieving the ultimate objective of reflecting fairly a claimant's probable future earning loss." Sellers v. Pinedale Residential Ctr., 350 S.C. 183, 191, 564 S.E.2d 694, 698 (Ct.App.2002). "Moreover, it is well established that the objective of wage calculation is to arrive *310 at a fair approximation of the claimant's probable future earning capacity." Elliott v. S.C. Dep't of Transp., 362 S.C. 234, 238, 607 S.E.2d 90, 92 (Ct.App.2004). "Disability reaches into the future, not the past; loss as a result of the injury must be thought of in terms of its impact on probable future earnings." Id. (citing Bennett v. Gary Smith Builders, 271 S.C. 94, 98-99, 245 S.E.2d 129,131 (1978)).
Forrest's work history demonstrates a laudable, strong work ethic. There is no reason to second-guess the Commission's finding that, were it not for his injury and subsequent paraplegia, Forrest would be working full-time and part-time, year-round for several different employers because of his commitment to seasonal employment with Monetta Peach Packers. To arrive at a fair average weekly wage in this case, it was reasonable for the Commission to examine Forrest's actual work history. The Commission looked to the period from January 1, 2001 until the date of Forrest's injury on May 26, 2001a twenty-one-week period. This time period reflected Forrest's true earnings and thus a fair estimation of his future earning capacity. The rate of compensation determined by the Commission is consonant with the statutory scheme, as well as a fair rate to both Forrest and Appellant.
Appellant attempts to distinguish this case from Sellers v. Pinedale Residential Ctr., 350 S.C. 183, 564 S.E.2d 694 (Ct. App.2002), a case relied upon by the Commission. This case is not distinguishable in any meaningful way that Appellant urges. In Sellers, a case where exceptional circumstances were found to exist, a sixteen-year-old became a paraplegic as a result of a job injury. 350 S.C. at 186, 564 S.E.2d at 696. The Commission noted the similarity between the two claimants (Sellers and Forrest) in that they were both of a young age and regularly worked three jobs. Appellant contends in Sellers the claimant demonstrated that he planned to become a master electrician, which warranted the Commission increasing his compensation rate to that of an electrician. Unlike the claimant in Sellers, Appellant argues Forrest has made no such showing. Appellant contends Forrest "has voluntarily assumed a pattern of work that is somewhat unconventional[.]" By conceding Forrest's "pattern of work," Appellant in effect lends support to the Commission's reliance on Forrest's true work history. This reliance on Forrest's demonstrated *311 work history supports the Commission's finding of exceptional circumstances. If anything, Forrest presents a stronger case for a finding of exceptional circumstances than Sellers did.
As for the argument that Forrest's testimony about intending to return to work for Oswalt is too speculative to determine future earnings, we find substantial evidence supports the Commission's findings. Forrest's future work plans, interrupted by his injury, may be reasonably gauged by his work history.
Perhaps Forrest's strong work ethic is "unconventional," but that is no reason to discount his actual work history and earnings. The law mandates the Commission evaluate each case (including a claimant's average weekly wage) in accordance with its particular facts. The quest here is one for truth in light of the particular case, not by resort to an employer's idea of what is "conventional" that can be advanced when an employer is up against a claimant with a solid work ethic and a demonstrable pattern of consistent work and earnings. Substantial evidence supports the Commission's determination of Forrest's average weekly wage.
IV.
As for Appellant's remaining assignments of error, we affirm pursuant to Rule 220(b)(2), SCACR, and the following authorities: Gadson v. Mikasa Corp., 368 S.C. 214, 224, 628 S.E.2d 262, 268 (Ct.App.2006) (noting that MMI is a factual determination left to the discretion of the Commission); Dodge v. Bruccoli, Clark, Layman, Inc., 334 S.C. 574, 580-81, 514 S.E.2d 593, 596 (Ct.App.1999) (finding MMI "indicate[s] that a person has reached such a plateau that in the physician's opinion there is no further medical care or treatment which will lessen the degree of impairment[,]" while disability is the "incapacity because of an injury to earn the wages which the employee was receiving at the time of injury in the same or any other employment"); Fields v. Reg'l Med. Ctr. Orangeburg, 363 S.C. 19, 25, 609 S.E.2d 506, 509 (2005) (noting the qualification of an expert witness and the admissibility of the expert's testimony are matters within the trial court's sound discretion); Peterson v. Nat'l R.R. Passenger Corp., 365 S.C. 391, 399, 618 S.E.2d 903, 907 (2005) ("Defects in an expert *312 witness' education and experience go to the weight, not the admissibility, of the expert's testimony."); Gadson, 368 S.C. at 229, 628 S.E.2d at 270 (finding that the Commission acted within its discretion in allowing a certified rehabilitation counselor with a master's degree to render an opinion on employability).
V.
For the reasons stated above, the order of the circuit court is
AFFIRMED.
ANDERSON and SHORT, JJ., concur.
NOTES
[1] The employer's carrier, O'Steen Adjusting Services, is also an appellant.
[2] Forrest testified that although he received a scholarship to attend Clemson, he left after two years because he wanted to work full-time and get married.
[3] Larry Price is Forrest's father-in-law and Allen Price's uncle. Allen Price is the owner of Appellant A.S. Price Mechanical.
[4] Section 42-1-40 provides as follows:
"Average weekly wages" means the earnings of the injured employee in the employment in which he was working at the time of the injury during the period of fifty-two weeks immediately preceding the date of the injury.... "Average weekly wage" must be calculated by taking the total wages paid for the last four quarters immediately preceding the quarter in which the injury occurred ... divided by fifty-two or by the actual number of weeks for which wages were paid, whichever is less. When the employment, prior to the injury, extended over a period of less than fifty-two weeks, the method of dividing the earnings during that period by the number of weeks and parts thereof during which the employee earned wages shall be followed, as long as results fair and just to both parties will be obtained. Where, by reason of a shortness of time during which the employee has been in the employment of his employer or the casual nature or terms of his employment, it is impracticable to compute the average weekly wages as defined in this section, regard is to be had to the average weekly amount which during the fifty-two weeks previous to the injury was being earned by a person of the same grade and character employed in the same class of employment in the same locality or community.
(Emphasis added.)
[5] The Commission's order states Forrest was twenty-three at the time of injury. Forrest's testimony and birth date (May 22, 1977) show, however, that Forrest turned twenty-four four days prior to his accident.
[6] We recognize the difficulty with the factor concerning the severity of a claimant's injury and the implication of a sliding scale relationship between injury and determination of average weekly wage. But see Sellers v. Pinedale Residential Ctr., 350 S.C. 183, 191, 564 S.E.2d 694, 699 (Ct.App.2002) (finding the extent of Sellers' injury was a factor warranting a ruling of exceptional circumstances).
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82 Cal.App.3d 106 (1978)
146 Cal. Rptr. 828
In re RICKY B., a Person Coming Under the Juvenile Court Law.
THE PEOPLE, Plaintiff and Respondent,
v.
RICKY B., Defendant and Appellant.
Docket No. 3335.
Court of Appeals of California, Fifth District.
June 23, 1978.
*109 COUNSEL
Paul N. Halvonik and Quin Denvir, State Public Defenders, under appointment by the Court of Appeal, Gary S. Goodpaster, Chief Assistant State Public Defender, Laurance S. Smith and Charles M. Bonneau, Deputy State Public Defenders, for Defendant and Appellant.
Evelle J. Younger, Attorney General, Jack R. Winkler, Chief Assistant Attorney General, Arnold O. Overoye, Assistant Attorney General, Paul V. Bishop and Joel Carey, Deputy Attorneys General, for Plaintiff and Respondent.
OPINION
FRANSON, J.
A supplemental petition was filed in the Kern County Juvenile Court alleging that appellant came within the provisions of Welfare and Institutions Code section 602 in that on December 19, 1976, he unlawfully took a 1968 Dodge van belonging to S.J. Mobley in violation of Vehicle Code section 10851. At the jurisdictional hearing the allegations of the petition were found to be true. Appellant, who was already subject to a Youth Authority hold relating to an earlier offense, was ordered committed to the Youth Authority, the commitment to be served concurrently with the prior one.
*110 STATEMENT OF THE FACTS
Chuck H., appellant, and his brother Delbert, all minors, were living in Taft, California. Earlier that month Chuck H. had taken the keys from inside a 1968 Dodge van while it was parked on the used car lot of S.J. Mobley and had subsequently given the keys to Delbert. On the evening of December 19, 1976, Chuck was at the local recreation center when appellant arrived. They walked around town and came across Delbert near the Nickolodian. When Delbert heard that appellant and Chuck were planning to hitchhike the following morning, he suggested that they take the Mobley van instead. At that time appellant left to go to his girl friend's, Chuck returned to the recreation center, and Delbert stayed at the Nickolodian.
Later that night, shortly after the recreation center closed at 11 p.m., Delbert arrived and found Chuck; the two then walked around town for a couple of hours, during which time they thought and talked about taking the van. They went by Mobley's used car lot and actually got inside the unlocked van. However, Taft Police Officer Dan Robison spotted them and took them home to Delbert's residence. The boys walked downtown again. They then went to Delbert's grandmother's and to Delbert's, where they found appellant. At Delbert's suggestion they all decided to walk downtown again and take the van. Delbert entered the lot and took the van and then picked up Chuck and appellant, who had been waiting behind a building about 50 feet away. The three of them drove back to Delbert's to pick up some clothes. They also picked up a motorcycle lying in a bush. They left for Santa Cruz, where Chuck's mother lived. On the way there they stopped near Coalinga, where Chuck sold the motorcycle to a service station attendant. After arriving and driving around in Santa Cruz for a while, Chuck was taken to his mother's house and appellant and Delbert started back toward Taft. The van broke down on the return trip. Delbert and appellant were given a ride back to Taft by Lonnie Robison, appellant's cousin.
On December 20, 1976, Dan O'Dell, a salesman for S.J. Mobley, received a call from the police at about 10 a.m., informing him that a van had been located near Black Well's Corner. O'Dell and another employee went there and discovered that the van was not operable.
Appellant's defense was that he had been at his girl friend's from about 6 p.m. on December 19 until he was awakened by Chuck and Delbert at about 4 a.m. on the morning of the 20th. They asked him if he wanted to *111 go to Santa Cruz in the van, which they said belonged to Chuck's uncle. Appellant agreed. He denied having been downtown with them earlier that evening, denied having participated in the taking or driving of the van, and denied even knowing that the van was stolen until they stopped to sell the motorcycle, at which time they told him that they had stolen both the motorcycle and the van.
DISCUSSION
(1a) Appellant's primary contention that the accomplice testimony of Chuck H. was insufficiently corroborated is without merit. Assuming that the accomplice-corroboration rule is applicable to juvenile proceedings,[1] there was sufficient corroborative testimony to uphold the judgment. (2) The standard for measuring the sufficiency of corroboration is easily met: "`The evidence required for corroboration of an accomplice "need not corroborate the accomplice as to every fact to which he testifies but is sufficient if it does not require interpretation and direction from the testimony of the accomplice yet tends to connect the defendant with the commission of the offense in such a way as reasonably may satisfy a jury that the accomplice is telling the truth; it must tend to implicate the defendant and therefore must relate to some act or fact which is an element of the crime but it is not necessary that the corroborative evidence be sufficient in itself to establish every element of the offense charged." [Citations.] Moreover, evidence of corroboration is sufficient if it connects defendant with the crime, although such evidence "is slight and entitled, when standing by itself, to but little consideration." [Citations.]'" (People v. Hathcock (1973) 8 Cal.3d 599, 617 [105 Cal. Rptr. 540, 504 P.2d 476].)
However, it is insufficient corroboration merely to connect a defendant with the accomplice or other persons participating in the crime. "`It is not with the thief that the connection must be had but with the commission of the crime itself.'" (People v. Robinson (1964) 61 Cal.2d 373, 400 [38 Cal. Rptr. 890, 392 P.2d 970].) (1b) Thus, in the present case the corroboration must indicate in some way that appellant had *112 knowledge that the van was stolen when he drove in it to Santa Cruz. (See Veh. Code, § 10851.)
Chuck testified as follows: He had obtained the ignition key to the van about three weeks before the theft. On the night of the theft, he, Delbert, and appellant discussed taking the van at the Nickolodian. Appellant then went to his girl friend's house, Chuck went to the recreation center, and Delbert stayed at the Nickolodian. Sometime later Delbert picked up Chuck at the recreation center. At about 11 or 12 o'clock they went to the Mobley lot and were sitting inside the van when Officer Robison spotted them. He took them to Delbert's house. Sometime thereafter they got appellant and went to get the van. Delbert drove it from the lot while appellant and Chuck waited behind a nearby building. They drove to Delbert's house to get some clothes and then picked up a motorcycle and departed for Santa Cruz. They sold the motorcycle at a service station near Coalinga on the way. In Santa Cruz Chuck showed them around town. Delbert and appellant then left him at his mother's house and left Santa Cruz to return to Taft.
Officer Kleadas testified that appellant told him that he had knowledge that Chuck had a key to the van two to three weeks before the theft. This admission, together with appellant's own testimony placing him in the van traveling to Santa Cruz late at night and corroborating several other details of Chuck's version of the journey, "`"tends to connect the defendant with the commission of the offense in such a way as reasonably may satisfy a jury that the accomplice is telling the truth."'" (People v. Hathcock, supra, 8 Cal.3d 599, 617.)
(3) Appellant next contends that the trial court erred in admitting Lonnie Robison's out of court statement. At trial Lonnie Robison testified about the conversation he overheard between appellant and Delbert after Robison picked them up in Black Well's Corner. He denied that appellant and Delbert mentioned having stolen the van. The prosecutor asked Officer Kleadas about a statement Robison had given him. Kleadas testified that Robison told him that he had overheard appellant and Delbert talking about how they had taken the van. The prosecutor stated that this evidence was only being introduced to impeach Robison.
Robison's statement to Kleadas was inconsistent with his testimony at trial and therefore within the prior inconsistent statement exception to the hearsay rule (Evid. Code, § 1235). Appellant argues that the statement contained inadmissible multiple hearsay and it was never established *113 whether he or Delbert made the remark. However, the testimony was that appellant and Delbert had a conversation about taking the van. From this we infer that appellant made either an admission or an adoptive admission. (Evid. Code, §§ 1220, 1221.) The testimony of Kleadas concerning Lonnie Robison's out of court statement was properly admitted.
(4) Appellant next contends that the prosecution did not show that the vehicle was taken without the owner's consent as required by Vehicle Code section 10851. The following circumstantial evidence refutes this argument: Chuck admitted that he stole the key to the van a few weeks before the van was taken. Delbert persuaded appellant and Chuck to take the van to go to Santa Cruz, meaning that they should steal it. Chuck testified that Delbert got the van from the lot while he and appellant waited behind a nearby building. Mobley's salesman testified that he received a call from the police about a missing van, went to the lot and confirmed this, and then went to the police department. The van was found the next morning near Black Well's Corner, a considerable distance from Taft. These circumstances clearly establish that the van was taken without the owner's consent.
(5a) Appellant's final contention is that the trial court abused its discretion in denying him the discovery of Chuck's rap sheet. Appellant had requested discovery of the rap sheet of each witness. The trial judge approved the request but precluded the release of any criminal records of juvenile witnesses. Appellant argues that this denial violated his right to a fair trial by impeding his ability to thoroughly cross-examine Chuck H.
Appellant cites Davis v. Alaska (1974) 415 U.S. 308 [39 L.Ed.2d 347, 94 S.Ct. 1105], which stands for the proposition that the Sixth Amendment's right to confrontation requires that defense counsel be permitted to cross-examine a crucial prosecution witness about his probation status following an adjudication of juvenile delinquency. The defendant in that case had sought to use the evidence to show that the witness had implicated the defendant out of fear of possible jeopardy to the witness' probation. The court concluded that Alaska's interest in protecting the confidentiality of juvenile adjudications was outweighed by the defendant's right to inquire into the possible motives of the prosecution witness.
(6) In California criminal defendants have a judicially created right of discovery, which is based on the fundamental proposition that they are *114 entitled to a fair trial and intelligent defense in light of all relevant and accessible information. (Pitchess v. Superior Court (1974) 11 Cal.3d 531, 535 [113 Cal. Rptr. 897, 522 P.2d 305]; Hill v. Superior Court (1974) 10 Cal.3d 812, 816 [112 Cal. Rptr. 257, 518 P.2d 1353].) The scope of such discovery is quite extensive. "`Absent some governmental requirement that information be kept confidential for the purposes of effective law enforcement, the state has no interest in denying the accused access to all evidence that can throw light on the issues in the case, and in particular it has no interest in convicting on the testimony of witnesses who have not been as rigorously cross-examined and as thoroughly impeached as the evidence permits.'" (Hill v. Superior Court, supra, at p. 816, quoting People v. Riser (1956) 47 Cal.2d 566, 586 [305 P.2d 1]. Hill's italics.) This right has been held to encompass rap sheets. (Hill v. Superior Court, supra.) Moreover, it is not necessary that the evidence to be discovered be admissible at trial.[2] (People v. Cooper (1960) 53 Cal.2d 755, 770 [3 Cal. Rptr. 148, 349 P.2d 964].)
(5b) In light of these considerations and the trend in the last 15 years to expand criminal discovery in California (see Louisell, Modern Cal. Discovery (2d ed. 1963) § 14.01, p. 847), we conclude that the trial court erred in denying appellant the right to discover Chuck's rap sheet. The crucial question then becomes whether it is reasonably probable that a different verdict would have been reached if the rap sheet had been discovered. (People v. Riser, supra, 47 Cal.2d 566, 588; People v. Watson (1956) 46 Cal.2d 818, 836 [299 P.2d 243].) We must examine the entire record, including the evidence, to make this determination. (People v. Watson, supra, People v. Pipes (1960) 179 Cal. App.2d 547, 555-556 [3 Cal. Rptr. 814].)
The record is devoid of any indication that Chuck H. even had a rap sheet at all. If he did, only felony convictions could have been used to impeach him. (See fn. 2.) While any minor 16 years of age or older may be transferred to a criminal court upon a showing that he is not a fit and proper subject for the juvenile court (Welf. & Inst. Code, §§ 707, 707.1), it is extremely unlikely that Chuck had been transferred and convicted of a felony since he was 17 years old at the time he testified at trial and not in custody at the time of the theft.
*115 It is also unlikely that Chuck's rap sheet would have contained information showing a possible motive for his testimony. In Davis v. Alaska, supra, 415 U.S. 308, the defendant argued this point specifically. In this case appellant has not made such a claim either at trial or before this court. Moreover, it is hard to imagine such a motive existing because Chuck's testimony was extremely self-incriminatory.
We conclude that the error in denying appellant's discovery motion was not prejudicial.
The judgment is affirmed.
Brown (G.A.), P.J., and Hopper, J., concurred.
A petition for a rehearing was denied July 21, 1978, and appellant's petition for a hearing by the Supreme Court was denied August 16, 1978.
NOTES
[1] Three appellate cases have held that the Penal Code section 1111 corroboration requirement does not apply to juvenile cases. (In re Eugene M. (1976) 55 Cal. App.3d 650, 657 [127 Cal. Rptr. 851]; In re D.L. (1975) 46 Cal. App.3d 65, 73 [120 Cal. Rptr. 276]; In re R.C. (1974) 39 Cal. App.3d 887 [114 Cal. Rptr. 735].) However, in In re Mitchell P. (Cal. App.) Civil No. 19002, the court held that it violates equal protection to apply Penal Code section 1111 to adult proceedings but not juvenile. The Supreme Court granted a hearing in this case on December 22, 1977; therefore, the state of the law is unclear on this issue.
[2] In California only felony convictions can be used to impeach a witness. (Evid. Code, § 788.) A juvenile court adjudication is not considered a conviction and cannot be used to impeach. (Welf. & Inst. Code, § 203; Witkin, Cal. Evidence (2d ed. 1966) § 1244, subd. (1), p. 1147.)
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396 F.Supp. 986 (1975)
STEVENS INSTITUTE OF TECHNOLOGY, Plaintiff,
v.
UNITED STATES of America, Defendant.
No. 69 Civ. 4329.
United States District Court, S. D. New York.
April 30, 1975.
Supplemental Opinion May 27, 1975.
*987 Bigham, Englar, Jones & Houston, New York City, for plaintiff; Sheldon A. Vogel, John H. Parker, New York City, of counsel.
Paul J. Curran, U. S. Atty., U. S. Dept. of Justice, Admiralty & Shipping Section, New York City, for defendant; Gilbert S. Fleischer, New York City, Atty. in Charge, Gilbert S. Fleischer, Janis G. Schulmeisters, New York City, of counsel.
LASKER, District Judge.
Stevens Institute of Technology (Stevens) sues for damages to a vessel it purchased from the United States in 1967. The government admits that the damages resulted from the negligence of one of its officers. The issues are the effect of certain exculpatory clauses *988 contained in the contract of purchase and the amount of damages, if any, due Stevens.
The United States Maritime Administration had kept the SS Exochorda, a passenger vessel, "held up" since 1959 as a "navy retention ship." In 1967, Stevens submitted an Invitation to Bid (Exhibit E) to MARAD for the purchase of a passenger vessel which it hoped to use as a dormitory. The bid was conditioned on the promise that:
"The Buyer shall not at any time use or operate the ships, nor cause or permit same to be used or operated, as a means of transportation of passengers or cargo for hire, or as a means of transportation of proprietary cargo." (Condition I)
The bid contained further provisions that:
"IX. Terms of Sale. (A) Warranties. Each ship is offered for sale as is, where is, * * *, without warranty, guaranty, or representation as to seaworthiness, condition, description, tonnage, or otherwise. However, the bill of sale conveying title to the Buyer will fully warrant title and freedom from all liens.
(B) Responsibility for Ships. The Buyer of each ship shall assume all risks of ownership thereof from the time the Buyer receives notice of acceptance of its bid, and the Administration shall not thereafter be liable for any loss thereof or damage thereto either in whole or in part, nor will the Buyer be excused from performance or the purchase price be reduced by reason thereof.
* * * * * *
(D) Delivery of Ships. (1) The Administration will, without cost or expense to the Buyer, but at the risk of the Buyer, break each ship out from its present location and make the ship available fleetside for delivery to the Buyer within five (5) days after receipt of written request therefor from the Buyer, provided, however, that the Administration shall not be liable for delay in breaking any ship out due to conditions beyond its control or conditions which by the exercise of reasonable diligence it was unable to prevent."
MARAD accepted Stevens' bid and the Government arranged for the vessel to be "broken out" from the fleet by MARAD's tugboats and personnel, in accordance with Paragraph IX(D)(1) of the Invitation to Bid. Stevens hired two tugboats to tow the ship to its next destination and offered their assistance, on the date of the breaking out, to Captain Syre, the MARAD officer in charge. Syre refused the offer, used only MARAD tugs and, in the process of removing the ship from the fleet, misjudged the force of the tidal current, causing damage to the ship's bulwarks at various locations, port and starboard. (Exhibit H) (Pre-trial Order Paragraphs (3) (xii)-(xix)). Although the estimated cost of repairs totalled $36,070., Stevens actually repaired the damage only partially, to the tune of $5,296.
A. Effect of Exculpatory Clauses
The government contends that Paragraphs IX(B) and (D) of the Invitation to Bid provide a complete shield against liability, even that occasioned by its own negligence. Stevens attacks this extreme stance, claiming that the clauses do not bar recovery because they do not explicitly exculpate negligent acts of the government; or that, if interpreted to cover the incident here, the provisions contravene public policy and are unenforceable.
1. It is settled that a contract and, in particular, exculpatory clauses, should be strictly construed against the drafter (here, the United States). As the Supreme Court has noted:
"A number of courts take the view, frequently in a context in which the indemnitee was solely or principally responsible for the damages, that there can be indemnification for the indemnitee's negligence only if this *989 intention is explicitly stated in the contract." United States v. Seckinger, 397 U.S. 203, 211 n. 15, 90 S.Ct. 880, 885, 25 L.Ed.2d 224 (1970) (citations omitted).
The exculpatory terms of the contract here are at first blush pretty all-encompassing:
"(B) The Buyer . . . shall assume all risks of ownership . . . and the Administration shall not . . . be liable for any loss . . . or damage . . .; and
(D) (1) The Administration will, . . . at the risk of the Buyer, break each ship out."
Similarly expansive language, however, has been held by at least one court not to create an agreement to indemnify the United States against its own negligence. United States Steel v. Warner, 378 F.2d 995, 999 (10th Cir. 1967) ("safety of all persons . . . shall be the sole responsibility of the Contractor"); see Sterner Aero AB v. Page Airmotive, Inc., 499 F.2d 709 (10th Cir. 1974); Kansas City Power & L. Co. v. United Telephone Co. of Kansas, Inc., 458 F.2d 177, 179 (10th Cir. 1972); Becker Pretzel Bakeries, Inc. v. Universal Oven Company, 279 F.Supp. 893 (D.C.Md.1968). The view that escape from liability must be specified with particularity reflects a judicial reluctance to absolve a negligent party of responsibility and to impose it on faultless victims; and "is particularly applicable to a situation in which there is a vast disparity in bargaining power and economic resources between the parties, such as exists between the United States and particular government contractors." United States v. Seckinger, supra, 397 U.S. at 211-212, 90 S.Ct. at 885; accord, Ozark Dam Constructors v. United States, 127 F.Supp. 187, 190-191, 130 Ct.Cl. 354 (1955).
The Seckinger rule and the narrow construction given exculpatory clauses by lower courts fit the situation here. Accordingly, although the contract provision here referring to delivery of ships may literally saddle the Buyer with the risks of "breaking out," (Paragraph IX (D) (1)) it does not follow that the provision encompasses risks actually created by the government's own negligence, as distinct, for example, from risks created by natural calamity or without government fault.
2. In any event, the government cannot escape liability, for we believe that on the basis of the facts here, a contract which exculpates the United States from responsibility for its own negligence is unenforceable on public policy grounds.
Two distinct lines of cases exist in this area. One is based on Sun Oil v. Dalzell Towing Co., 287 U.S. 291, 53 S.Ct. 135, 77 L.Ed. 311 (1932) which upheld the validity of "pilotage clauses" which exculpate tug owners from the negligence of a pilot furnished by the tug to another ship. The rule rests on the application of the master-servant rationale, that
"When one puts his employee at the disposal and under the direction of another for the performance of service for the latter, such employee while so engaged acts directly for and is to be deemed the employee of the latter and not of the former." Sun Oil v. Dalzell Towing, Id. at 294-295, 53 S. Ct. at 136.
See, A/S Atlantica v. Moran Towing & Transportation Co. Inc., 498 F.2d 158 (2d Cir. 1974); Petition of Marina Mercante Nicaraguense, S.A., 364 F.2d 118 (2d Cir. 1966). The second, based on Bisso v. Inland Waterways, 349 U.S. 85, 75 S.Ct. 629, 99 L.Ed. 911 (1955) and Dixilyn Corp. v. Crescent Co., 372 U.S. 697, 83 S.Ct. 967, 10 L.Ed.2d 78 (1963), holds that towage contracts which release towboats from all liability for negligent towage are invalid as a matter of public policy. The policy considerations specified in Bisso are:
(1) to discourage negligence by making wrongdoers pay damages, and
(2) to protect those in need of goods or services from being overreached by others who have power to drive *990 hard bargains. Bisso v. Inland Waterways, supra, 349 U.S. at 91, 75 S.Ct. at 632.
Not surprisingly, the government argues that the pilotage clause cases apply here while Stevens urges reliance on Bisso and Dixilyn. We agree with Stevens. Except for the fact that Captain Syre, a pilot, participated in causing the damage, the contract and facts here bear little resemblance to pilotage clause contracts or the cases construing them. In explaining the distinction between pilotage clauses and towage exculpation provisions, the Supreme Court has noted:
(1) A pilotage clause exempts for the negligence of pilots only; a towage clause exempts from all negligence of all towage employees;
(2) Pilots are regulated extensively by Federal and State authorities in regard to fees and other matters;
(3) As a rule pilots are free to act on their own best judgment.
Bisso v. Inland Waterways Corp., supra, 394 U.S. at 93-94, 75 S.Ct. 629. Moreover, towage contracts involve services in which a tug is in sole control because the tow is without power or crew; pilotage contracts involve vessels capable of moving under their own power. Bisso, Id. at 96, 75 S.Ct. 629. (Douglas, J., concurring); compare Sun Oil Co. v. Dalzell Towing Co., supra. Unlike pilotage contracts, the agreement here released the government from all risks, not just that of the pilot's negligence. Furthermore, the Exochorda was without power and Captain Syre was in command of both tugs used in the breaking out operation. Indeed, the damage resulted from the Exochorda's collision with a vessel moored on its port side, and stemmed from the inability of MARAD's tugs to hold the ship directly into the tidal current (Pre-Trial Order, Paragraph (3) (xvii)). Finally, Captain Syre, in contrast to tug pilots working on another's ship pursuant to pilotage contracts, can hardly be deemed to have been in Stevens' employ rather than the government's. His exclusive control of tugboat maneuvers of a "dead" ship falls within the pattern of work done under towage contracts, not under pilotage clauses.
The government contends that the decision in S. W. Sugar Co. v. River Terminals, 360 U.S. 411, 79 S.Ct. 1210, 3 L. Ed.2d 1334 (1959) indicates that the Supreme Court is retreating from the Bisso doctrine. The argument is unpersuasive. It is true that the Sugar court refused to extend Bisso to a towage exculpatory clause embodied in a tariff filed with the Interstate Commerce Commission (ICC). However, its ruling was premised on the rationale that
"so long as the towboat's rates are at all times subject to regulatory control . . . the possibility of an overreaching whereby the towboat is at once able to exact high rates and deny the liabilities . . . can be aborted by the action of the I.C.C." S. W. Sugar Co. v. River Terminals, 360 U.S. at 418, 79 S.Ct. at 1215.
No such "pervasive regulatory scheme" (360 U.S. at 420, 79 S.Ct. 1210) exists here and there is no evidence of record that the Exochorda's purchase price reflected a reduction related to the exculpatory clause. (Defendant's Post-Trial Memorandum p. 13)
The government further argues Bisso cannot control here because (1) the sale of the Exochorda was instigated by Stevens' request that a ship be sold pursuant to a special "scrap" sale (Exhibit A); (2) a few dents on an unseaworthy vessel do not diminish the vessel's scrap value; and (3) unlike typical towage cases, the contract here involved the sale of a valuable first class passenger vessel for her scrap value in order to benefit an educational institution. We recognize that the vessel is worth more now than what Stevens paid for it and that the damage did not substantially affect the ship's intended use as a dormitory. On the other hand, the government's bargaining clout dictated the inclusion of the exculpatory clauses in the sale *991 agreement. And, as written, the contract left Stevens without a vestige of control over the breaking-out operation but responsibility nevertheless for any mishap which the government might cause. Such a contract cannot be enforced as a matter of public policy.
The government's remaining arguments as to liability fall by the wayside. It is argued that Stevens assumed the risk of "breaking-out," in consideration for the government's gratuitous services. However, as Stevens points out, it had two tugboats ready and willing to handle the operation but was required to permit MARAD to conduct the breaking-out. Similarly, the government's reliance on certain Uniform Commercial Code sections and federal statutes which authorize limitation of liability have no application to this case.
B. Damages
As noted above, the estimated cost fully to repair the dents to Exochorda's hull was $36,070., but Stevens actually spent only $5,296 to undo damage. The $36,070 figure included the proposed charge for three days drydocking estimated at $6,269 (Exhibit G and Pre-Trial Order Paragraph (3)(xx)). The government argues that Stevens is entitled only to the cost of repairs actually performed; Stevens seeks recovery of the full amount.
To begin with we agree that Stevens should not recover the proposed drydocking expenses. After the breaking-out incident, the ship was dry-docked and converted to a dormitory. During the conversion, only the damage to the bulwarks and rails above the waterline was repaired. Drydocking was unnecessary for those repairs, although it was required for the conversion work. (Pre-Trial Order Paragraph (3) (xx)) The parties agree that repair of the entire damage could have been performed at that time. Under the circumstances, Stevens is not entitled to reimbursement for drydocking cost because this expense is not attributable to the repairs actually made, and represents funds that Stevens would have spent for conversion of Exochorda in any event. Skibs A/S Dalfonn v. S/T Alabama, 373 F.2d 101, 104 (2d Cir. 1967)
On the question whether the government can be charged for the remainder of the estimated full repair costs or only what Stevens actually expended, the applicable rule is that:
". . . where repairs are practicable . . . the damages assessed against the respondent shall be sufficient to restore the injured vessel to the condition in which she was at the time the collision occurred . ." Baltimore, 75 U.S. 377, 385, 8 Wall. 377, 385, 19 L.Ed. 463 (1869) (emphasis added).
A reading of the relevant cases suggests that the word "practicable" refers to the possibility of restoring the damaged vessel to a seaworthy condition. See, e. g., The Ames & Carroll No. 20, 66 F.2d 413 (2d Cir. 1933); Pennsylvania Railroad Co. v. Downes Towing Corp., 11 F.2d 466 (2d Cir. 1926). In the case at hand, Exochorda not only was incapable of travel; the contract of sale actually prohibited its use for transportation purposes. The only necessary repair here, then, was cosmetic, (i. e. visible) and in fact, only such repairs made. As Judge Augustus Hand stated in Zeller Marine Corp. v. Nessa Corp., 166 F.2d 32, 33-34 (2d Cir. 1948):
"`. . . where an injury can be perfectly repaired for all practical uses at slight expense, but, as in this case, cannot be placed in exactly the same condition as new, except by . . [work] at a very considerable expense, the court must hesitate in allowing damages on the basis of the latter mode of repair, especially where, as in this case, though a long time has elapsed, no such repair has been made.' . . . In other words, he is only entitled to an award that would give him a boat as seaworthy and practically serviceable as before and *992 not to an award, often much larger, sufficient to restore her to the identical condition she was in before the injury."
The cases relied upon by Stevens do not persuade us to the contrary. The ship was repaired for practical use as a dormitory. Stevens submitted no proof to establish that further repairs were necessary for any purpose to which the ship might be put. (See Plaintiff's Post-Trial Brief at pp. 30-37 and Defendant's Post-Trial Brief at pp. 6-8) Stevens is, therefore, entitled to damages in the amount of $5,296.
Submit judgment.
MEMORANDUM
Supplemental Opinion
The parties disagree as to whether pre-judgment interest is payable on the judgment in this case. They are in accord that the issue is governed by a determination whether the provisions of the Public Vessels Act, 46 U.S.C. § 781 et seq. (PVA) or the provisions of the Suits in Admiralty Act, 46 U.S.C. § 741 et seq. (SAA) control. The confusion engendered by the overlapping provisions of these Acts is well analyzed in Judge Gurfein's opinion in Richmond Marine Panama, S. A. v. United States, 350 F. Supp. 1210 (S.D.N.Y.1972). While the question is murky we find that the fact pattern at hand strongly suggests the applicability of the PVA. The damage caused here was clearly caused by the tugs which were public vessels, that is United States owned vessels, which were not merchant ships. The plaintiffs themselves have recognized the possible applicability of the statute by having brought suit under both the SAA and the PVA.
In the circumstances we apply the rule of the PVA that no interest is allowable on any claim up to the rendition of judgment. Post-judgment interest appears to be payable in accordance with the provisions of the SAA at the rate of 4% by virtue of the SAA's partial incorporation by reference in the PVA at 46 U.S. C. § 782. Even if this were not so, we see no reason why a higher rate should be paid than the standard established in the SAA.
Plaintiff's application for payment of costs and disbursements is denied. No special circumstances exist in this case which warrant such an award.
Judgment is being entered concurrently herewith in accordance with this memorandum.
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135 F.3d 116
United States of America, Plaintiff-Appellee/Cross-Appellantv.Jack William Tocco, Defendant-Appellant/Cross-Appellee.
Nos. 98-2312/2426; 99-1003
UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
Argued: June 11, 1999
Decided and Filed: January 5, 2000
Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
No. 96-80201--John Corbett O'Meara, District Judge.
United States of America, Plaintiff-Appellee/Cross-Appellant (99-1003),v.Jack William Tocco, Defendant-Appellant (98-2312/2426)/ Cross-Appellee.
Nos. 98-2312/2426; 99-1003
UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
Argued: June 11, 1999
Decided and Filed: January 5, 2000
Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
No. 96-80201--John Corbett O'Meara, District Judge.
COUNSEL: ARGUED: Frank D. Eaman, BELLANCE, BEATTIE & DeLISLE, Harper Woods, Michigan, for Appellant.
Kathleen Moro Nesi, OFFICE OF THE U.S. ATTORNEY, Detroit, Michigan, for Appellee.
ON BRIEF: Frank D. Eaman, BELLANCE, BEATTIE & DeLISLE, Harper Woods, Michigan, for Appellant.
Kathleen Moro Nesi, OFFICE OF THE U.S. ATTORNEY, Detroit, Michigan, for Appellee.
Before: WELLFORD, NELSON, and GILMAN, Circuit Judges.
OPINION
HARRY W. WELLFORD, Circuit Judge.
1
This criminal prosecution pertains to one of six defendants who were tried on charges of conspiracy to conduct and participate in a Detroit-based racketeer influenced and corrupt organization.1 Appellant Jack W. Tocco ("Tocco") was convicted on two counts of conspiracy in violation of the Racketeer Influenced and Corrupt Organization Act, 18 U.S.C. § 1962(d) ("RICO") -- one for engaging in a pattern of racketeering activity and one for collection of an unlawful debt (Counts One and Two) -- and one count of conspiracy to interfere with commerce by extortion in violation of 18 U.S.C. § 1951 ("Hobbs Act") (Count Six). Both Tocco and the government now appeal -- Tocco from the jury convictions, the government from the sentence imposed by the trial judge.
A. Background2
2
On March 14, 1996, Tocco was charged in a twenty-five (25)-count indictment along with sixteen (16) co-defendants on charges relating to the activities of a group called "Cosa Nostra," also known as "the Outfit" or, as is known to the general public in the United States, "the Mafia." Cosa Nostra allegedly is made up of "families" in various cities, including Detroit, and allegedly is involved in illegal activities such as extortion, illegal lotteries ("numbers"), bookmaking, loansharking, and acquiring undisclosed and illegal investments in gambling casinos. The indictment herein alleged that Tocco had been involved in the Detroit branch of the national Mafia organization, and that he had been the "Boss of the Detroit Cosa Nostra Family" since about 1979. The district court severed the trial of Tocco and his five co-defendants from the trials of the others named in the indictment.
3
On January 27, 1998, trial commenced against Tocco and his co-defendants. Approximately three months later, on April 29, 1998, the jury convicted Tocco on the two RICO conspiracies and the Hobbs Act conspiracy mentioned above. It acquitted him on ten counts of extortion or attempted extortion. On October 23, 1998, the district court denied the government's request for a forfeiture judgment against all the defendants.
4
On November 13, 1998, the district court sentenced Tocco to twelve months and one day in prison, departing downward ten levels from the applicable guideline range, and recommended that Tocco's sentence be served in a community correction center. Tocco filed a timely appeal from the district court's judgment of conviction, and the government timely appealed Tocco's sentence.
B. Voir Dire
5
Tocco first challenges the adequacy of the jury voir dire. A district court's manner of conducting voir dire is not reversible unless the court abused its discretion. See United States v. Phibbs, 999 F.3d 1053, 1071-72 (6th Cir. 1993). It is well-settled that the district court enjoys broad discretion in establishing its voir dire procedures. See United States v. Lanier, 33 F.3d 639, 657-59 (6th Cir. 1994) (citing Mu'Min v. Virginia, 500 U.S. 415, 427 (1991)), vacated on other grounds, 114 F.3d 84 (6th Cir. 1997); see also Deel v. Jago, 967 F.2d 1079, 1087 (6th Cir. 1992) (same).
6
Tocco claims that he was denied his right to a fair trial because the district court declined to permit specific questions during voir dire on the subject of Mafia prejudice. Tocco's counsel filed a motion requesting that the prospective jurors be asked whether they possessed any strong opinions about the Mafia, or whether they believed that Italian-Americans were more likely to be members of organized crime. The motion was accompanied by Detroit newspaper articles referring to "Detroit's Mob" and the Detroit Mafia. Tocco claims that the district court's denial of that motion constituted reversible error because of the very high-profile nature of the case and the substantial unsympathetic publicity in the media.
7
The government argues that the district court was not compelled to allow questions on the specific issue of Mafia prejudice, and that the questions posed to the prospective jurors were adequate to ensure Tocco a fair and impartial jury. The district court asked the prospective jurors to answer the following in the juror questionnaire:
8
41. You are being asked to participate in jury selection process that will select a jury to try a criminal case in which the government prosecutors charge several defendants with involvement in a racketeering conspiracy. The government alleges that the defendants are participating in a conspiracy call [sic] "Cosa Nostra" or the "Mafia." To the best of your knowledge, have you heard anything about this case? ___ yes ___ no.
9
The district court informed counsel that it would question individual jurors more specifically about the matter if the juror's answer to that question was affirmative. Otherwise, the court refused to ask the jury pool more specific questions pertaining to the Mafia.
10
While we are aware that the district court has broad discretion in such matters, we are mindful that this case attracted much media attention. This court has indicated that the district court is in the best position to determine the appropriate areas of inquiry in such cases.
11
[W]ide discretion [is] granted to the trial court in conducting voir dire in the area of pretrial publicity and in other areas of inquiry that might tend to show juror bias. Particularly with respect to pretrial publicity, we think this primary reliance on the judgment of the trial court makes good sense. The judge of that court sits in the locale where the publicity is said to have had its effect, and brings to his evaluation of any such claim his own perception of the depth and extent of news stories that might influence a juror.
12
Lanier, 33 F.3d at 657 (citing Mu'Min v. Virginia, 500 U.S. 415, 427 (1991)). The Supreme Court and this circuit have set out the principles involved in determining whether the failure to ask specific questions amounts to "an unconstitutional abuse of discretion":
13
There is no constitutional presumption of juror bias for or against members of any particular racial or ethnic groups. . . . [T]here is no per se constitutional rule in such circumstances requiring inquiry as to racial prejudice. . . . Only when there are more substantial indications of the likelihood of racial or ethnic prejudice affecting the jurors in a particular case does the trial court's denial of a defendant's request to examine the jurors' ability to deal impartially with this subject amount to an unconstitutional abuse of discretion.
14
Rosales-Lopez v. United States, 451 U.S. 182, 190 (1981) (citations omitted).
15
It is not required, however, that the jurors be totally ignorant of the facts and issues involved. In these days of swift, widespread and diverse methods of communication, an important case can be expected to arouse the interest of the public in the vicinity, and scarcely any of those best qualified to serve as jurors will not have formed some impression or opinion as to the merits of the case.
16
United States v. Blanton, 719 F.2d 815, 830 (6th Cir. 1983). It suffices "if the juror can lay aside his impression or opinion and render a verdict based on the evidence presented in court." Murphy v. Florida, 421 U.S. 794, 800 (1975) (quoting Irvin v. Dowd, 366 U.S. 717, 723 (1961)). See also Hill v. Brigano, No. 98-3714, 1999 WL 1222642, at *8-*9 (6th Cir. Dec. 22, 1999).
17
Having said all that, we still believe the district court would have been well-advised to allow more detailed questioning to reveal an individual prospective juror's prejudice, if any, against Cosa Nostra and the obvious Italian heritage of the defendants and the Sicilian or Italian connection with the Mafia. We decided similar issues concerning voir dire method and jury selection in a highly publicized case, United States v. Blanton, 719 F.2d 815 (6th Cir. 1983) (en banc). The court majority, in considering challenges to the sufficiency of voir dire in the criminal trial of a recent Tennessee governor, concluded that no reversible error occurred, although the trial judge probably did not employ the best voir dire procedures and we would not recommend the manner of such voir dire. See id. at 819, 822. We have the same reservations, as did the court majority in Blanton (and the writer was one of those judges), about voir dire and jury selection in this case.
18
Nevertheless, the district court sought to ensure the fairness of the jury selection through more general, progressive questioning. After obtaining the prospective jurors' answers to the "Mafia" question in the questionnaire, the court followed up with each juror individually and asked more specific questions about their knowledge of the case. Of the twelve jurors that ultimately were chosen to sit at trial, seven had heard nothing about the case, and the other five had only had minimal knowledge. The five that had minimal knowledge of the case individually assured the district court that they could, despite that knowledge, render a fair and impartial verdict. Furthermore, the jurors all informed the court of their ability to assume that an accused is innocent until proven guilty beyond a reasonable doubt, and to accept that a defendant does not forfeit his presumption of innocence if he chooses not to testify. In our view, Tocco was not constitutionally entitled, under the circumstances, to any more specific race-based questioning during voir dire. "The Constitution, after all, does not dictate a catechism for voir dire, but only that the defendant be afforded an impartial jury." Morgan v. Illinois, 504 U.S. 719, 729 (1992).3
19
This issue regarding voir dire is of serious concern to this court. We believe that the district court's failure to ask more specific questions regarding Mafia or Italian-American prejudice was a mistake, but not an error compelling reversal under the circumstances. The district court's voir dire sufficiently explored the prospective jurors' knowledge about the Mafia-related case and their individual ability to be fair and impartial. As the Supreme Court has stated, "[t]here is no constitutional presumption of juror bias for or against members of any particular racial or ethnic groups." Rosales-Lopez, 451 U.S. at 190. Based on the foregoing, we believe the procedures for jury selection, viewed in their entirety, afforded Tocco a fair and impartial jury. Accordingly, we find that any error committed in failing to allow more specific voir dire questions on Mafia prejudice does not require a reversal of Tocco's conviction.4
C. Severance
20
Tocco also argues that the district court erred in failing to sever his trial from that of co-defendants Nove Tocco ("Nove") and Paul Corrado ("Corrado"). A district court's decision to deny severance of defendants is reviewed for a "clear abuse of discretion." United States v. Critton, 43 F.3d 1089, 1098 (6th Cir. 1995). The defendant "has a heavy burden of showing specific and compelling prejudice" from having a joint trial. United States v. Harris, 9 F.3d 493, 500 (6th Cir. 1993).
21
Tocco claims that his trial should have been severed from that of Nove and Corrado because there was no evidence that he was a co-conspirator of those two defendants. He argues that certain tape recorded statements of Nove and Corrado were entered into evidence, and that such evidence never linked him with those defendants. Thus, he claims that the evidence unfairly prejudiced his case, and he should have been given a separate trial.
22
We find that Tocco's position is an extension of his argument that the evidence was insufficient to find that a conspiracy existed between him and the other defendants. For reasons discussed below, we find that the evidence was sufficient to support a finding that such a conspiracy existed. Joint trials are favored in this circuit, and "it is well-settled that defendants are not entitled to severance merely because they may have a better chance of acquittal in separate trials." Zafiro v. United States, 506 U.S. 534, 540 (1993). We must presume that juries are "capable of sorting out the evidence and considering the case of each defendant separately." Harris, 9 F.3d at 501. The fact that the jurors in this case found Tocco not guilty on ten counts and acquitted co-defendants on other counts is some indication that the jury was able to sort out the issues and follow the court's instructions with respect to each defendant separately.5 Accordingly, we find that the district court did not abuse its discretion in failing to sever Tocco's trial from that of Nove and Corrado.
D. Admissibility of Evidence
23
Tocco raises seven alleged errors regarding the district court's admission of evidence. Generally, a district court's decision to admit testimony and other evidence is reviewable under an abuse of discretion standard. United States v. Bonds, 12 F.3d 540, 554 (6th Cir. 1993). Even if the district court abuses its discretion in this regard, we will not reverse a conviction on that basis unless the "substantial rights" of a party are affected. Id. We will note below the issues to which a different standard of review applies.
24
(1) Testimony of Anthony Polizzi
25
An important part of the government's case against Tocco was the testimony of Angelo Polizzi ("Angelo"). Angelo testified about statements made to him by his father, Michael Polizzi ("Polizzi"), who died shortly before trial in this case, which the district court held to be admissible as declarations against penal interest. See Fed R. Evid. 804(b)(3).6 Tocco now argues that the district court erred in allowing Angelo to testify about his father's statements. We review de novo the issue of whether the district court properly held those statements to be admissible. See United States v. Fountain, 2 F.3d 656, 668 (6th Cir. 1993).
26
The statements challenged by Tocco are in one of two categories: (1) statements that others were involved in the conspiracies and (2) statements about Polizzi's own involvement in the Frontier Hotel and Casino, which were made after Polizzi had been convicted and sentenced based on that involvement.
27
Without directing the court's attention to specific statements, Tocco claims that "[w]hile a statement of [Angelo] Polizzi's father that he, himself, was involved in organized crime may have been a declaration against his father's penal interest, the statements that others were involved in illegal crime were not declarations against his father's penal interest." In support, Tocco relies on Williamson v. United States, 512 U.S. 594 (1994), in which the Supreme Court held that the declarations of a criminal that implicate another person are admissible only to the extent that they are self-inculpatory. Williamson, 512 U.S. at 599. In determining whether Polizzi's statements qualify as declarations against penal interest, we must consider (1) whether the declarant is unavailable; (2) whether, from the perspective of the average, reasonable person, the statements were truly adverse to the declarant's penal interest, and (3) whether corroborating circumstances truly establish the trustworthiness of the statement. United States v. Maliszewski, 161 F.3d 992, 1009 (6th Cir. 1998), cert. denied, 119 S. Ct. 1126 (1999).
28
Among other things, Polizzi told Angelo about Tocco's role in the Cosa Nostra organization, and about the identity of other organization leaders. Polizzi stated that Tocco had been the leader since 1979, and that defendant Zerilli was the leader before him. All were related by blood or marriage. Polizzi had identified Paul Corrado and Nove Tocco as underlings in the enterprise. Angelo at the time himself assumed a role in the conspiracy by making deliveries and collections for his father.
29
Tocco argues that Polizzi's statements implicating others were inadmissible because they were about others and were not adverse to Polizzi's own penal interest. We agree that our decision should be guided by Williamson. In that case, the Supreme Court recognized that "[t]he question under Rule 804(b)(3) is always whether the statement was sufficiently against the declarant's penal interest 'that a reasonable person in the declarant's position would not have made the statement unless believing it to be true,' and this question can only be answered in light of the surrounding circumstances." Williamson, 512 U.S. at 603-04. The court also noted that statements must be viewed in context. For example:
30
"Sam and I went to Joe's house" might be against the declarant's interest if a reasonable person in the declarant's shoes would realize that being linked to Joe and Sam would implicate the declarant in Joe and Sam's conspiracy. And other statements that give the police significant details about the crime may also, depending on the situation, be against the declarant's interest.
31
Id. at 603; see also United States v. Price, 134 F.3d 340, 347 (6th Cir.), cert. denied, 119 S. Ct. 114 (1998).
32
We believe that Tocco's argument ignores the context in which Polizzi's statements were made to his son. The statements described Polizzi's own participation in the RICO enterprise, and inculpated himself and others as participants in the conspiracy. Those statements are not rendered inadmissible simply because they implicate others. Justice Scalia explained a similar situation in his concurring opinion in Williamson:
33
For example, if a lieutenant in an organized crime operation described the inner workings of an extortion and protection racket, naming some of the other actors and thereby inculpating himself on racketeering and/or conspiracy charges, I have no doubt that some of those remarks could be admitted as statements against penal interest.
34
Id. at 606-07 (Scalia, J., concurring). Here, Polizzi's statements about the conspiracy linked himself to the others in the conspiracy, and were therefore against his own penal interest. Thus, we decline to hold that those statements were rendered inadmissible by virtue of the fact that others were implicated.7 See United States v. Barone, 114 F.3d 1284, 1295 (1st Cir. 1997) (finding admissible statements that "demonstrate 'an insider's knowledge' of a criminal enterprise and its criminal activities").
35
Tocco also claims that any statements about Polizzi's involvement in the Frontier Hotel and Casino case were not against his penal interest because he had been convicted and sentenced for that conduct at the time he made the statements. In other words, Polizzi was already in prison, so no penal interest was at stake. We disagree, because Polizzi's involvement in the Frontier Hotel and Casino was a predicate act of the RICO conspiracy charged in this case, a conspiracy of which Polizzi was a member and for which he was never tried and convicted.
36
Tocco did not raise an argument that the admission of Polizzi's statements violated his Sixth Amendment right to confront witnesses testifying against him. See Lilly v. Virginia, 119 S.Ct. 1887, 1899 (1999). Even if we had, the argument would have been unavailing. In Lilly, the Supreme Court concluded that an accomplice's out-of-court statements that inculpate a defendant cannot be admitted against that defendant unless they bear "particularized guarantees of trustworthiness." Id. at 1899-1900. Those guarantees must be inherent in the circumstances of the testimony itself; the fact that other evidence corroborates the testimony in question does not suffice. Id. at 1900. We find that the circumstances surrounding Polizzi's statements in this case indicate that the statements were trustworthy, particularly in light of the fact that Polizzi's statements were made to his son in confidence, rather than to the police or to any other authority for the purpose of shifting the blame to Tocco. See Burton v. Phillips, 64 F.Supp.2d 669, 680 (E.D. Mich. 1999) (reasoning that statements made to a perceived ally rather than to police officers during an interrogation are trustworthy, citing Latine v. Mann, 25 F.3d 1162, 1166-67 (2d Cir. 1994)). Therefore, the admission of Polizzi's statements would withstand a Sixth Amendment challenge.
37
Accordingly, we reject Tocco's argument that the district court erred in allowing into evidence Polizzi's out-of-court statements.
38
(2) Documentary evidence relating to Polizzi
39
We review the admission of exhibits under an abuse of discretion standard. Bonds, 12 F.3d at 554. The government argues that it sought to introduce Angelo Polizzi's plea agreement and other exhibits relating to this witness "to blunt any cross-examination impeaching of Polizzi's credibility" with respect to cooperating with the prosecution. The plea agreement provided, among other things, that Angelo Polizzi would "provide truthful and complete information." Tocco maintains that introduction of this evidence impermissibly constituted a vouching for Polizzi's credibility, particularly since he was a key witness for the prosecution. We have considered this question previously and have concluded that "[i]ntroduction of the entire plea agreement permits the jury to consider fully the possible conflicting motivations underlying the witness' testimony." United States v. Townsend, 796 F.2d 158, 163 (6th Cir. 1986). We noted further:
40
While the existence of a plea agreement may support the witness' credibility by showing his or her interest in testifying truthfully, the plea agreement may also impeach the witness' credibility by showing his or her interest in testifying as the government wishes regardless of the truth.
41
Id.; accord, United States v. Mealy, 851 F.2d 890, 898-99 (7th Cir. 1988) (holding that prosecutor may elicit testimony regarding plea agreement and may enter agreement into evidence).
42
Tocco counters with reliance upon United States v. Carroll, 26 F.3d 1380 (6th Cir. 1994), which held that the prosecutor's improper reliance in closing argument on such an agreement amounted to personal vouching for the truthfulness of the witness' testimony under the circumstances. The prosecutor argued and emphasized in Carroll that the witness who had entered into a similar plea agreement "would be in jeopardy" if he were not testifying truthfully. Id. at 1389. Circumstances were not the same in this case; the prosecutor made no similar closing argument and did not personally vouch for the truthfulness of Polizzi's testimony. We do not agree with Tocco that Carroll supports reversal by reason of the introduction of the plea agreement as an exhibit. Indeed, the prosecutor may refer to such agreement in appropriate circumstances to deflect defendant's use of a plea agreement to attack the witness' credibility. See Mealy, 851 F.2d at 898-99. Thus, we find no error in the admission of these exhibits, and this assignment of error, therefore, does not support a reversal of Tocco's conviction.
43
(3) Vitello's testimony about labor racketeering
44
The district court permitted Vitello to testify about Vito Giacolone's taking care of labor problems in Toledo. Tocco claims that allowing the "labor racketeering" testimony impermissibly "enlarged the scope of the indictment" and strayed away "from the elements of the charges." We are hard pressed to see any unfair prejudice inherent in this brief testimony. We agree with the district court that the evidence related to the charged conspiracy. Tocco requested no limiting instruction, and we cannot conclude that the district court's decision constituted reversible error.
45
(4)Investigative reports by the Nevada Gaming Commission
46
Through Clifton Copher, chief of the enforcement division of the Nevada State Gaming Control Board, the government introduced records of the Board, also called "investigative summaries," into evidence.8 The government claims that these documents pertained to the application for a gaming license for the Edgewater Casino and corroborated and placed into context the conversations of co-conspirators that had been intercepted. Also, the records were relevant to the defendants obtaining a hidden interest in the Nevada gambling industry.
47
Tocco objected to the admission of the documents on the basis that they contained opinions and were speculative. The district court overruled that objection, finding that the documents were admissible as business records. After the witness was dismissed, the district court granted Tocco's request to redact certain portions of the reports. Six weeks later, the parties placed into the record an agreed-upon redaction of only one of the reports.
48
In this appeal, Tocco claims that the district court erred in admitting the Board's records into evidence. Upon examination, we agree with the government that much of the documentary evidence was not hearsay because it was based on facts that the Board had received from information supplied by the applicants. The objectionable portions which might arguably be hearsay were redacted by agreement of the parties. Furthermore, the exhibits were admissible for a non-hearsay purpose--they showed the predicate act of the defendants obtaining a hidden interest in the Edgewater, and they assisted in showing why the Gaming Board granted the applicants only a temporary gaming license. Thus, we are not persuaded that the district court should have excluded these documents as inadmissible hearsay, and in view of the court's action in allowing redactions to particular objectionable portions, no error in this regard has been established.
49
(5) Judgments of conviction
50
At trial, the district court allowed the government to admit into evidence the certified convictions against certain of Tocco's co-defendants. Tocco generally objected to the admission of that evidence, but at no time did he specifically complain that this was an improper use of offensive collateral estoppel. Because we find that the admission of those convictions was permissible, we will assume for purposes of our analysis that the issue was properly preserved for review.
51
Tocco argues that the government is not permitted to rely on the judgments of conviction to prove the predicate acts of a RICO charge. Such use of those convictions, he claims, constitutes improper offensive collateral estoppel, relying on the reasoning in United States v. Pelullo, 14 F.3d 881 (3d Cir. 1994). In Pellulo, however, the district court held that the previous conviction of the defendant established the existence of a predicate act under RICO, and the court instructed the jury to recognize the predicate act as a matter of law. See Pellulo, 14 F.3d at 889-90. The instant case is different, because the district court here entered into evidence the convictions of Tocco's co-defendants, who had the opportunity to show the jury that he was not involved in their crimes. Furthermore, the court did not give a "collateral estoppel" instruction as the court did in Pellulo. The government explained that "[w]hether or not Mr. Tocco was connected to that is a jury-question for the jury to determine." Also, there was other evidence that corroborated the information about the convictions in question. Thus, because no collateral estoppel effect was given to the challenged evidence, Tocco's argument is unfounded.
52
(6) FBI Agent Ruffino as an expert witness
53
The district court allowed one of the case agents, Samuel J. Ruffino, to testify as an expert on organized crime. Tocco claims that allowing that testimony constituted error because he received insufficient pretrial notice that Ruffino would be testifying in that capacity, and because Ruffino should not have been permitted to testify both as a fact witness and an expert witness. We review the district court's admission of expert testimony under an abuse of discretion standard. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 119 S. Ct. 1167, 1174-75 (1999).
54
After the jury had been selected but before the trial began, the government moved to have Alfonso D'Arco qualified as an expert to testify about the nature, organization, rules, and structure of the national Cosa Nostra enterprise. Though the district court initially agreed to allow that testimony, it reversed itself two days later with the agreement that it would consider a renewed motion later in the trial. On March 2, 1998, the government renewed its motion to qualify D'Arco, and it also informed the court of its intent to call Ruffino if D'Arco was not allowed to testify. About ten days later, more than a month before he testified, the government formally notified the court and all the defendants that it intended to call Ruffino as its expert on "the structure, the organization, the rules, the interpretation of phrases, and jargon that's been used in [the] trial, on the tapes, the hierarchy and the roles of individuals." Thus, Tocco knew before trial that some form of "organized crime" expert would testify, and he knew one month before the actual testimony that Ruffino would be the expert. Tocco did not request a continuance, nor did he claim that he did not have sufficient time to examine the witness prior to his testimony. We conclude that, under these circumstances, this notice concerning Ruffino was adequate and sufficient.
55
Tocco also claims that the district court erred in admitting Ruffino's testimony as an expert witness because of the undue prejudice involved in Ruffino testifying as both a fact witness and an expert witness. We rejected a similar argument in United States v. Thomas, 74 F.3d 676 (6th Cir. 1996), where the defendant argued that a police officer should not be able to testify in a single case as both a fact witness and an expert witness. We noted that although "there is a significant risk that the jury will be confused by the officer's dual role," we are not willing to adopt a per se prohibition of the practice of allowing an officer to testify in two capacities. Thomas, 74 F.3d at 682-83. If the district court and the prosecutor take care to assure that the jury is informed of the dual roles of a law enforcement officer as a fact witness and an expert witness, then the officer's "expert" testimony may be proper. See id. at 683.
56
In this case, Ruffino's dual roles were emphasized to the jury by the fact that he testified at two different times - once early in the trial as a fact witness, and again at the conclusion of trial as an expert witness. Furthermore, the district court instructed the jury, both before he gave his opinion and again in the jury charge, that it should consider Ruffino's dual roles in determining what weight, if any, to give Ruffino's expert testimony. Under these circumstances, the district court did not abuse its discretion in allowing Ruffino to testify in both capacities.
57
Ruffino's testimony was certainly relevant and reliable under the principles of Daubert v. Merrill Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). This type of evidence regarding the inner-workings of organized crime has been held to be a proper subject of expert opinion because such matters are "generally beyond the understanding of the average layman." Thomas, 74 F.3d at 682; see also United States v. Amuso, 21 F.3d 1251, 1264 (2d Cir. 1994); United States v. Locascio, 6 F.3d 924, 936-37 (2d Cir. 1993); United States v. Pungitore, 910 F.2d 1084, 1148-49 (3d Cir. 1990). Further, to the extent that Tocco challenges Ruffino's qualifications on the subject about which he testified, we reject any such contention in light of the undisputed facts. Ruffino has extensive experience in the investigation of organized crime in the Detroit area, including 22 years with the FBI, 17 of which were spent in organized crime investigations, and his role since 1990 as the Cosa Nostra coordinator for the Detroit division, and as liason with other FBI offices and FBI headquarters. Thus, he was amply qualified to opine about the machinations of organized crime.
58
In summary, we conclude that the district court did not abuse its discretion in allowing agent Ruffino to testify as an expert and that his testimony met the standards of relevance and reliability. Furthermore, the dual role played by Ruffino as both a fact witness and an expert did not, under the circumstances, preclude his testimony because the transition from one role to another was separated by time and was explained to the jury.
59
(7) Co-conspirator statements
60
Tocco contends that the district court erroneously admitted tapes (wire intercepts) of conversations between Nove Tocco and Paul Corrado because they were not "in furtherance of the conspiracy" charged. Rather, Tocco claims, those tapes contained nothing more than idle, malicious gossip and inflammatory statements which unduly prejudiced his case.
61
If the conversations admitted were "nothing more than idle chatter or casual conversation about past events," they were not properly admissible. United States v. Shores, 33 F.3d 438, 444 (4th Cir. 1994); see also United States v. Doerr, 886 F.2d 944, 951-52 (7th Cir. 1989). The court in Doerr acknowledged that "statements 'in furtherance' of a conspiracy can take many forms," such as keeping co-conspirators advised, or concealing aspects of the scheme. Id. at 951. The statement may also be "susceptible of alternative interpretations." Id. at 952; see also Shores, 33 F.3d at 444. Shores goes further to indicate that a statement may be admissible as "in furtherance of a conspiracy" even if "not 'exclusively, or even primarily, made to further the conspiracy.'" Id. (quoting United States v. Shoffner, 826 F.2d 619, 628 (7th Cir. 1987)); see also United States v. Hitow, 889 F.2d 1573, 1581 (6th Cir. 1989); United States v. Hamilton, 689 F.2d 1262, 1270 (6th Cir. 1982).
62
We are satisfied, after examining the record, that the great bulk of the admitted evidence tended to demonstrate (1) that the conspiracy in question existed; (2) that those whose statements were overheard were members of the conspiracy that included Tocco; and (3) that the statements were, in fact, made "during the course and in furtherance of the conspiracy at issue" according to Fed. R. Evid. 801(d)(2)(E). The provision applies when "a court is satisfied that the statement actually falls within the definition of the rule." Bourjaily v. United States, 483 U.S. 171, 175 (1987). "[T]he existence of the conspiracy and [defendant's] involvement in it are preliminary questions of fact that under [Fed. R. Evid.] 104, must be resolved by the court." Id.
63
Bourjaily held also in considering this issue "that there is little doubt that a co-conspirator's statements could themselves be probative of the existence of a conspiracy." Id. at 180. Here, Nove Tocco's and Paul Corrado's conversations are probative of the existence of a conspiracy in which defendant Tocco was involved, and other evidence was probative on this matter as well. It was not error to consider that the controverted statements were made in the course and scope of the conspiracy.
64
We are concerned, however, with certain remarks of a racial nature that were made in the conversations that should have been excised from the tapes. For example, one of the comments on the tapes was that "I think you might win up here [in Detroit] with a nigger trial, nigger jury." Also, a statement was made that "they seem to have success over there [in New York City] because there's so many Italians and American people, the Wasps or whatever, are so used to being around other Italians, they're accepted."
65
Although we agree that those particular denigrating comments were unfairly prejudicial, they were only a very minor portion of the total discussion on the tapes. Accordingly, the district court did not commit reversible error in refusing to strike the tapes in total as urged by defendant Tocco, though it would have been advisable to strike the parts that we have mentioned. We note that a case relied upon by Tocco, United States v. Johnson, 927 F.2d 999 (7th Cir. 1991), found that certain co-conspirator statements were improperly admitted against defendant, but that the error did not affect the "substantial rights" of the defendant and was therefore not reversible. Johnson, 927 F.2d at 1003. Here, as in Johnson, the prosecution presented substantial other evidence "from which the jury might have concluded" defendant's guilt, and his conviction will not be reversed based on the admission of the co-conspirator's statements. Id.
66
In sum, none of the evidentiary issues raised by Tocco require this court to reverse his conviction.
E. Prosecutorial Misconduct
67
Tocco moved for a mistrial based upon several aspects of alleged prosecutorial misconduct, and the district court denied that motion. We review the district court's decision for an abuse of discretion. United States v. Carroll, 26 F.3d 1380, 1383 (6th Cir. 1994). "An abuse of discretion exists when the reviewing court is firmly convinced that a mistake has been made." Id.
68
When reviewing claims of prosecutorial misconduct, we determine first whether the statements were improper. See United States v. Krebs, 788 F.2d 1166, 1177 (6th Cir.1986). If they appear improper, we then look to see if they were flagrant and warrant reversal. See United States v. Carroll, 26 F.3d 1380, 1388 (6th Cir. 1994). To determine flagrancy, the standard set by this Court is: 1) whether the statements tended to mislead the jury or prejudice the defendant; 2) whether the statements were isolated or among a series of improper statements; 3) whether the statements were deliberately or accidentally before the jury; and 4) the total strength of the evidence against the accused. United States v. Monus, 128 F.3d 376, 394 (6th Cir.1997) (citing United States v. Cobleigh, 75 F.3d 242, 247 (6th Cir. 1996)); Carroll, 26 F.3d at 1385 (citing United States v. Leon, 534 F.2d 667, 679 (6th Cir.1976)). To reverse a conviction because of an improper non-flagrant statement, a reviewing court must determine that: 1) the proof of the defendant's guilt is not overwhelming; 2) the defense counsel objected; and 3) the trial court failed to cure the impropriety by failing to admonish the jury. Monus, 128 F.3d at 394; Carroll, 26 F.3d at 1385-86 (citing United States v. Bess, 593 F.2d 749, 757 (6th Cir.1979)).
69
United States v. Francis, 170 F.3d 546, 549-50 (6th Cir. 1999); see also Pritchett v. Pitcher, 117 F.3d 959, 964 (6th Cir. 1997) (quoting Serra v. Michigan Dept. of Corrections, 4 F.3d 1348, 1355-56 (6th Cir. 1993)). We will not overturn a verdict unless the prosecutorial misconduct is "so pronounced and persistent that it permeate[d] the entire atmosphere of the trial, . . . or so gross as probably to prejudice the defendant." Pritchett, 117 F.3d at 964 (citations omitted).
70
Tocco raises seven categories of government misconduct that, taken together, allegedly require reversal. For the following reasons, we are not "firmly convinced that a mistake has been made," nor are we persuaded that there has been a denial of a fair trial by the actions of the prosecutor. See Carroll, 26 F.3d at 1383.
71
We turn to the specifics of the alleged misconduct.
72
(1) Blurt-outs
73
Tocco claims that the prosecution improperly orchestrated questions and answers that intentionally brought before the jury opinions of experienced FBI agents that Tocco and others were "known members of the Cosa Nostra family." Tocco promptly objected to such "blurt-outs" at trial, and the district court forcefully sustained those objections and admonished counsel in that respect.
74
At the end of the first day of trial, the court expressed its preference that the terms "La Cosa Nostra" or "Mafia" not be used unless the defendants' participation in that group was first established. The court further stated that "it's not going to be any kind of a terminal problem if [the improper terminology] slips out." Later in the trial, when government agent Stejskal was asked why he was engaged in a surveillance of Tocco, he said because "Jack Tocco was considered to be a member of the Detroit family of La Cosa Nostra." Tocco did not object at that time, but he objected when Stejskal subsequently stated that Raffaele Qusarano was a member of the Detroit family. The district court sustained the objection, then later warned that there should be no "more conclusory testimony about we knew that these men were such and such." When Tocco moved for a mistrial on the basis of the improper comments, the district court denied the motion and explained that it had effectively sustained any objections in that regard and that a new trial was not warranted. Tocco did not request any curative instruction on the issue.
75
We agree, as the district court recognized, that any testimony that Tocco was a "known" member or "boss" of La Cosa Nostra was improper. The impropriety, however, was not flagrant, nor was it so pervasive as to "permeate the entire atmosphere of the trial." Rather, when Tocco objected to the improper remarks, the district court promptly sustained any objections and the government complied with the court's admonishments. Furthermore, the government was charged with proving its allegation that Tocco was a member of La Cosa Nostra, so every reference to the group can not be deemed to have been improper. The improper witness comments constituted a very small part of the total evidence against Tocco. The district court did not decline any precautionary instructions suggested by Tocco.
76
In conclusion, we deem Tocco's concerns to be legitimate, but, on balance, we find that the district court did not abuse its discretion in failing to grant a new trial based on the improper episodes. See United States v. Forrest, 17 F.3d 916, 920-21 (6th Cir. 1994) (holding that the challenge was legitimate, but finding that the episodes did not warrant a mistrial).
77
(2) "Vouching" for the credibility of Angelo Polizzi
78
Tocco claims that the government improperly "vouched" for the credibility of Angelo Polizzi by entering into evidence Polizzi's plea agreement and related documents which stated that he had to testify truthfully in order to obtain lenity. Whether improper vouching amounts to prosecutorial misconduct and whether it renders the trial fundamentally unfair are mixed questions of law and fact reviewable de novo. Francis, 170 F.3d at 549.
79
Tocco argues that this situation is like that described in Carroll, supra, where this court held that the government may not "vouch" for the credibility of its witnesses by disclosing to the jury the witness's obligation under his plea agreement or by prosecutor comments suggesting that a witness will be punished by not testifying truthfully. Such a practice, we found, "improperly place[s] the prestige of the government, and even of the court, behind the credibility of the [witnesses] by stating that, if the government or the judge did not believe that the witnesses were being truthful, the witnesses would be in jeopardy. . . . This constitutes improper vouching. . . . We cannot overstate the extent to which we disapprove of this sort of improper vouching by prosecutors." Carroll, 26 F.3d at 1389.
80
In this case, the government introduced into evidence documents related to the benefits that Angelo received for his cooperation with the government. Those documents were redacted to exclude the phrase that Angelo "provided truthful and very valuable testimony." In his examination of Angelo, the prosecutor never referred to the parts of the documents that explained the benefits that were conferred in exchange for Angelo's testimony. Tocco fails to point out any comments made by the prosecutor to the effect that the government and the court would prosecute Polizzi for perjury and revoke his plea agreement if he did not testify truthfully. Nor did the prosecutor indicate that he had any other independent means of discerning Polizzi's truthfulness. Thus, the only basis for Tocco's claim is the unredacted portions of Polizzi's plea agreement and related documents, the admissibility of which we have discussed and affirmed above. There being no improper prosecutorial statements, we must reject Tocco's contention of improper vouching. See Francis, 170 F.3d at 549-50 (reasoning that court must first determine whether the prosecutor's statements are improper).
81
(3)Impermissible comments on the exercise of Tocco's right to seek counsel
82
Tocco claims that prosecutorial misconduct occurred when the prosecution elicited testimony during trial from various witnesses indicating that Tocco had requested to see an attorney, that he had consulted an attorney, and that he consulted an attorney in the company of co-conspirators. This, Tocco argues, constituted "an impermissible comment on the defendant's exercise of his constitutional right."
83
We find this argument to be without merit. First, it seems that Tocco did not object to most of this evidence at the time it was admitted. Rather, counsel for Anthony Tocco objected to the possible prejudice of surveillance evidence that Tocco went to Peter Bellanca's law offices. He feared that such evidence would prejudice his client, Anthony Tocco. The district court rejected that argument because the evidence tended to show Tocco's association with an illegal casino matter. It was not offered for any improper purpose. Assuming that Anthony's objection preserves the issue for Tocco in this appeal, we find that the evidence of Tocco's visit to Bellanca's law office -- or evidence that Tocco sought out or consulted the advice of an attorney generally -- simply does not invade the attorney-client relationship, nor does such evidence impinge on the exercise of Tocco's constitutional right to consult with an attorney. The mere act of hiring an attorney is simply not probative of Tocco's guilt or innocence under these circumstances.
84
(4) Admitting evidence of an unrelated murder
85
Tocco argues that prosecutorial misconduct occurred when the government introduced evidence that the cousin of the bookmaker Yatooma was murdered. The government claims that it had offered that evidence to explain when and why Yatooma's bookmaking business suddenly increased sharply. Yatooma testified that his cousin's bookmaking customers started dealing with him after his cousin died. Tocco did not object to that evidence. When asked in cross-examination whether the defendants were involved in the murder, Yatooma responded, "Oh, no, sir, no." Though the court gave an instruction for the jury to disregard such testimony, Tocco now claims that the prejudice from that evidence was too prejudicial for a curative instruction to mitigate.
86
We disagree. The prosecution did not imply that the murder was related to defendant Tocco, and the evidence did not by its own nature imply such a conclusion. The witness specifically denied that Tocco or any other defendant was involved, and the district court issued a curative instruction on the matter. Under these circumstances, we find no basis for concluding that there was prosecutorial misconduct.
87
(5) Arguing facts not in evidence
88
Tocco argues that the prosecution twice argued facts that were not in evidence during closing argument, in that the prosecuting attorney embellished the testimony of Silverio Vitello. The prosecutor first argued that after Vitello saw Tocco, Vitello's union problem was taken care of, and second that "Tocco worked that union problem out for [Vitello]." When Tocco objected to the second comment (he did not object to the first), the prosecutor explained that he was arguing his recollection of Vitello's testimony. Vitello actually testified that when he had problems Tocco referred him to Tony Lapiana, who had previously helped him handle
89
union grievances.
90
We have examined this contention in light of the record and, again, find no justifiable basis for concluding that this episode amounted to prosecutorial misconduct. At most, as the district court apparently concluded, the prosecutor argued a mistaken recollection of the facts and the jury was reminded that it was the determiner of the true facts from the evidence. Under the circumstances, Tocco is not entitled a new trial based on this assignment of error.
91
(6) Shuffling of documents in Exhibit 116
92
Tocco argues that the prosecutor added pages to Exhibit 116, a Nevada Gaming Commission record, after the exhibit had been entered into evidence. Tocco alleges that an egregious error was committed when the prosecutor was allowed to refer to the pages that had been added during his closing argument. He claimed that the prosecutor impermissibly "shuffled" the exhibit to include the investigative summaries that were not a part of the exhibit when it was admitted.
93
From our review of the record, it is apparent that the reference to the pertinent pages of Exhibit 116 did not constitute prosecutorial misconduct. Tocco has failed to show that the portions to which the prosecutor referred were not included in the exhibit during trial, and that reference to those portions prejudiced him in any way. The district court was in the best position to assay the merits of the parties' arguments and to determine exactly what was included in Exhibit 116 according to the redaction agreement of the parties. From this record, we are not persuaded that the prosecutor engaged in misconduct with respect to its reference to Exhibit 116.
94
(7)FBI escort of cooperating witness to witness stand/testifying about witness's fears
95
At trial, FBI agents escorted the first government witness, Angelo Polizzi, into the courtroom and all the way to the witness chair, which Tocco claims indicated to the jury that government witnesses were in danger from the defendants. Tocco objected, and the district court directed that there be no more escorting of witnesses to the stand. Tocco argues that the district court committed reversible error in failing to grant him a mistrial because of the FBI escort of Polizzi.
96
The agents that escorted Polizzi were in plain clothes and without weapons. There were no prosecutorial comments relating to the escort and the need for witness protection. Though witness endangerment could have possibly been inferred, the district court resolved the issue by disallowing such escorts for the other witnesses. We find no error, much less any "egregious" error, in the action taken by the district court and denial of the motion for mistrial based upon this alleged misconduct.
97
In sum, we find that none of the alleged instances of prosecutorial misconduct, alone or collectively, justify a new trial in this case.
F. Insufficiency of the Evidence
98
We review a challenge to the sufficiency of the evidence de novo, considering "whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." Jackson v. Virginia, 443 U.S. 307, 319 (1979); see also United States v. Jones, 102 F.3d 804, 807-08 (6th Cir. 1996). A defendant making such a challenge bears a very heavy burden. United States v. Spearman, 186 F.3d 743, 746 (6th Cir. 1999), petition for cert. filed (U.S. Oct. 29, 1999) (No. 99-6812). "Circumstantial evidence alone is sufficient to sustain a conviction and such evidence need not remove every reasonable hypothesis except that of guilt." Id. (citation omitted). The jury may draw any reasonable inferences from direct, as well as circumstantial, proof. See United States v. Locascio, 6 F.3d 924, 944 (2d Cir. 1993). Once a conspiracy has been proven, only slight evidence is necessary to implicate a defendant as a participant in that conspiracy if the evidence shows the connection beyond a reasonable doubt. See United States v. Braggs, 23 F.3d 1047, 1051 (6th Cir. 1994).
99
At the conclusion of the government's proof, Tocco moved for acquittal "relying on the brief filed by co-defendant [Anthony Tocco]." We have not been furnished in the substantial joint appendix a copy of that motion, so we look to Tocco's appellate brief for his position with respect to this "heavy burden" of persuasion. In an opinion filed July 30, 1998, the district court simply concluded as to this defendant that "[a]dequate evidence was adduced at trial to support the jury's verdict on all charges," and, therefore, denied Tocco's motion for acquittal and for a new trial. Here, Tocco again argues that the evidence was insufficient to convict him on all three counts of which he was found guilty.
100
Proof of a charge under § 1962(d) requires proof that the association or enterprise existed and that the named defendants were associated with and agreed to participate in the conduct of its affairs, which affect interstate commerce, through a pattern of racketeering activity (Count One) or through the collection of an unlawful debt (Count Two). See United States v. Turkette, 452 U.S. 576, 583 (1981); United States v. Qaoud, 777 F.2d 1105, 1116 (6th Cir. 1985). These elements are separate and distinct. Turkette, 452 U.S. at 583. Evidence used to show the existence of the enterprise may also support the participation element. Id. The RICO statute defines an enterprise as "includ[ing] any individual, partnership, corporation, association or other legal entity, and any union or group of individuals associated in fact although not a legal entity." 18 U.S.C. § 1961(4).
101
(1) Counts One and Two -- Proof of the Enterprise
102
Tocco first challenges the sufficiency of the evidence of an enterprise. The existence of an enterprise is shown "by evidence of an ongoing organization, formal or informal, and by evidence that the various associations function as a continuing unit." Turkette, 452 U.S. at 583. "Continuity of structure exists where there is an organizational pattern or system of authority that provides a mechanism for directing the group's affairs on a continuing, rather than ad hoc, basis." United States v. Kragness, 830 F.2d 842, 856 (6th Cir. 1987).
103
The government claims that it presented sufficient evidence to show the existence of an enterprise, which was the Detroit organized crime family called La Cosa Nostra. The majority of this proof, the government notes, came through the testimony of Angelo Polizzi and Ruffino, and through the recorded conversations admitted at trial. The testimony showed a highly structured organization with Tocco as the boss. According to the testimony, there were ten to twelve partners, all associated by blood or by marriage, including Michael Polizzi and Anthony Corrado, and several lower-level members, including Paul Corrado and Nove Tocco.
104
Tocco argues that the evidence fails to show an ascertainable structure distinct from any structure inherent in the conduct of a pattern of racketeering activity. Tocco's position, however, ignores the testimony of Angelo Polizzi, who testified as to statements made by his father regarding his involvement in La Cosa Nostra and the expert testimony of Ruffino, who testified about the general structure of La Cosa Nostra and other details involved in organized crime. As the Eighth Circuit has recognized, "the command system of a Mafia family is an example of th[e] type of structure" that is distinct from the pattern of racketeering activity. See United States v. Flynn, 852 F.2d 1045, 1052 (8th Cir. 1988) (quoting United States v. Bledsoe, 674 F.2d 647, 665 (8th Cir. 1982)). Thus, the government submitted sufficient evidence to show that an enterprise existed.9
105
(2) Count One -- Pattern of Racketeering
106
Tocco claims that the evidence did not show a pattern of racketeering. To show a pattern of racketeering activity conspiracy, a defendant need not personally agree to commit two predicate acts; rather, he need only "kn[ow] about and agree[ ] to facilitate the scheme." Salinas v. United States, 522 U.S. 52, 66 (1997). Further, a defendant need not know about every member and component of the enterprise; he need only know "the general nature of the enterprise and that the enterprise extends beyond his role." United States v. Eufrasio, 935 F.3d 553, 577 n.29 (3d Cir. 1991).
107
Tocco argues that the government failed in its burden of showing a pattern of racketeering with respect to himself because the evidence showed no more than a series of unrelated acts by people not acting in concert with each other, although many knew each other. Tocco argues that he had no knowledge of many of the acts committed by the others in the purported conspiracy.
108
The testimony at trial belies Tocco's assertions. Angelo Polizzi, if believed, provided evidence to show the criminal enterprise in operation, with Tocco as a "boss" thereof. The tapes of Corrado and Nove Tocco, if believed, supported allegations of family connections and relationships, and a pattern of criminal activity. In Salinas, supra, the Supreme Court stated that "[t]here is no requirement of some overt act or specific act in the [RICO] statute before us. . . . [Section 1962] is even more comprehensive than the general conspiracy offense in §371." Id. at 63. "[S]o long as the purpose of the agreement is to facilitate commission of a crime, the actor need not agree 'to commit' the crime." Id. at 65 (quoting the American Law Institute, Model Penal Code, Tent. Draft No. 10, p. 117 (1960)).
109
We believe that there was sufficient evidence for a rational jury to find that defendant Tocco agreed to "facilitate . . . some of the acts leading to the substantive offense[s]" charged. Id. Indeed, Angelo Polizzi testified that Tocco was the boss of the organization. Even if the proof did not show that all the substantive offenses related to the RICO conspiracy actually occurred, "[i]t is elementary that a conspiracy may exist and be punished whether or not the substantive crime ensues, for the conspiracy is a distinct evil, dangerous to the public, and so punishable in itself." Id. The testimony confirmed the general nature of the enterprise, and that Tocco knew that the enterprise extended beyond his role therein.
110
(3) Count Two -- Collection of an Unlawful Debt
111
Tocco argues that Count Two is duplicitous of Count One, because Count Two charges another RICO conspiracy which has as its object the collection of an unlawful debt. It is true that Count Two relies on the same enterprise as is involved in Count One, but the crime charged in Count Two is not part of the predicate acts in Count One. These counts are not duplicitous, but they are related. In a collection of an unlawful debt conspiracy, the government need only show an agreement as to one act of collection, whereas a pattern of racketeering activity RICO conspiracy requires an agreement to commit at least two predicate acts. See United States v. Oreto, 37 F.3d 739, 751 (1st Cir. 1994); Eufrasio, 935 F.2d at 576. The predicate acts in count one involved Tocco's part in an illegal gambling business (sports betting and numbers) by bankrolling the operation. The overt acts charged in Count Two were periodic distributions of funds realized from this operation to the charged partners or co-conspirators. Therefore, the separate counts were justified in this case.
112
The unlawful collection involved in Count Two was shown through the testimony of Angelo Polizzi, who explained that the proceeds of his father's illegal gambling business were pooled by the enterprise and then filtered to the partners in the form of weekly draws and year-end bonuses. The unlawful debt is the gambling proceeds. The government notes that only the partners who received these payments, including Tocco, were charged in Count Two. Under these circumstances, the testimony of Angelo is sufficient for a reasonable jury to find that the elements of Count Two have been supported by the evidence.
113
(4) Count Six -- Hobbs Act Conspiracy
114
Tocco claims that the evidence was insufficient to show that Tocco knew of the purpose of the conspiracy to commit extortion by Nove Tocco and Paul Corrado, which is the basis for the Hobbs Act charge in Count Six. The jury acquitted Tocco of the underlying extortions or attempted extortions that were charged against him in the indictment, but convicted him only of the conspiracy to commit those crimes. Tocco suggests that such verdicts are inconsistent and represent a compromise by some jurors who may not have thought that Tocco was actually involved in Nove Tocco's and Paul Corrado's affairs.
115
We agree with the government that the tape recorded conversations of Nove and Corrado, coupled with the Finnigan and Ruffino evidence, were sufficient to support Tocco's conviction on this count. Specifically, the tape recorded conversations of Nove and Corrado candidly showed a conspiracy to commit extortion by the collection of a "street tax," and also tended to show that Tocco had the authority to influence from whom they would extort money and how the collection of the "street taxes" would be enforced. The evidence also showed that agents Finnigan and Ruffino had met with Tocco to inform him that he would be held responsible personally for violent acts that two of his unnamed associates were planning. At the time, Tocco claimed ignorance and denied that any such association existed. Less than forty-eight (48) hours later, however, Nove and Corrado received the message that the FBI had visited Tocco and had given him that warning.
116
That evidence, when viewing all inferences in a light most favorable to the government, supports a finding that Tocco was involved in the conspiracy to commit extortion. Though the jury may have found it justifiable to acquit Tocco on the substantive extortion counts, it could very well have found contemporaneously that Tocco was involved to some degree in a conspiracy to commit those crimes.
117
In sum, from our review of the voluminous record in this case, we conclude that the evidence against Tocco on the three counts for which he was convicted was not only sufficient, but it was substantial. The portions of testimony and evidence mentioned above constitute only a portion of the evidence admitted into evidence during the course of the lengthy trial. Thus, we are firmly convinced that the district court did not err in failing to grant Tocco a judgment of acquittal on any of the three counts of conviction.
G. Sentencing of Tocco
118
The district court sentenced Tocco according to the recommendation in the presentence report, finding those calculations to be "accurate and correct." The report assigned Tocco a base offense level of 19, which is the minimum level for RICO convictions pursuant to U.S.S.G. § 2E1.1(a)(1). Three points were added pursuant to U.S.S.G. § 3D1.4, which sets out the enhancements due to the grouping of the various counts, making the adjusted offense level 22. The court agreed with the report's conclusion that no other enhancements were applicable, so the total offense level remained at 22. The district court then determined that this case was an extraordinary case, outside the "heartland" category of cases, and departed downward 10 levels from the guideline range based on Tocco's overwhelming community service (4 levels), Tocco's age and debilitating health (4 levels), and Tocco's wife's poor health (2 levels). Consequently, the final total offense level was 12, and with a criminal history category of I, the court noted that the applicable guideline range was 10 to 16 months. The court sentenced Tocco to 12 months and one day for each of the three counts of conviction, to be served concurrently, followed by two years of supervised release, and recommended a community corrections center as the place of confinement. In addition, the court ordered Tocco to complete 705 hours of community service and imposed a fine of $75,000 plus and amount equal to the cost of incarceration and supervision (approximately $20,000). The district court denied the government's request for a forfeiture judgment.10
119
The government now appeals, claiming that the district court erred in applying the § 2E1.1(a)(1) minimum base offense level of 19 rather than the offense level applicable to the underlying racketeering activity of extortion pursuant to § 2E1.1(a)(2). The government also claims that the district court should have enhanced Tocco's sentence for his role in the conspiracy, and for specific characteristics of the extortion crime including the use of threats, the discharging of a firearm, and because the total loss was in excess of $10,000. According to the government, Tocco's offense level should have been 36, calculated pursuant to § 2B3.2, for a guideline range of 188-235 months. Furthermore, the government contends that the district court erred in departing downward ten levels. We will discuss each argument below.
120
At the outset, we note that we can recall no presentence report comparable to the one pertaining to Tocco in the instant case, containing what might well be construed as "arguments" that Tocco was not involved in most of the criminal activity of which he was convicted. The report takes pains to discredit the testimony of Angelo Polizzi, a key witness for the government, referring to his criminal offenses, the loss of his license to practice law, and his receiving a sentence of probation in connection with his testimony.
121
It also makes reference to the affidavit of Tocco's deceased former attorney and to the statements of other "defense attorneys" who maintain that Tocco "has been under constant FBI surveillance," and that certain past events "justify any feelings of harassment that he may hold against the government." The probation officer concluded that "surveillance never produced a single instance where JACK WILLIAM TOCCO was observed committing a crime or overheard discussing a crime," and then added that "[n]o evidence was introduced that JACK WILLIAM TOCCO has ever been in the company of all of the six men who are alleged by the Indictment to be 'capos' of the alleged Detroit organized crime group." Also along those lines, the report criticizes the government for its longstanding pursuit of Tocco, stating that Tocco has been under investigation for thirty years "and for some reason, the government waited until 1996, or until the defendant was aged and infirm, to indict him."
122
Overall, the probation office appears to have been preoccupied with expressing its concern that Tocco was unjustly pursued by the government or that his conviction was based on evidence that was not credible. We have addressed the concerns regarding the sufficiency of the evidence, and we will not reconsider those concerns at this juncture. Rather, we must focus on whether Tocco was lawfully and appropriately sentenced pursuant to the United States Sentencing Guidelines with reference to the record in this case, keeping in mind the three counts on which Tocco was convicted.
123
We now turn to the government's assignments of error.
124
(1) The proper base offense level
125
First, the government contends that the district court erred in determining the base offense level for Tocco's RICO conviction. Because the proper application of the guidelines is a question of law, we will review this issue de novo. United States v. Bazel, 80 F.3d 1140, 1141 (6th Cir. 1996); see also United States v. Morgano, 39 F.3d 1358, 1378 (7th Cir. 1994).
126
The appropriate offense level should be determined by reference to U.S.S.G. § 2E1.1, which provides that the base offense level for unlawful conduct related to racketeer influenced and corrupt organizations is either 19 or "the offense level applicable to the underlying racketeering activity," whichever is greater. Here, the district court concluded, consistently with the recommendation in the presentence report, that 19 was the appropriate base offense level in this case. The report reviewed all of the overt acts of Tocco and determined that the guideline for the underlying offense was § 2E3.1, relating to gambling offenses, which requires a base offense level of 12. Because the RICO minimum is 19 was higher, the court used that number as the base offense level for sentencing purposes.
127
The government argues that the extortion of Ramzi Yaldoo produced the highest base offense level as that level would have been calculated under U.S.S.G. § 2B3.2, which pertains to extortion by force or threats. According to the government's calculations, that extortion would dictate a base offense level of 18 and would be increased by 10 levels because that crime involved an express or implied threat of death, bodily injury, or kidnapping (increase of 2 levels, § 2B3.2(b)(1)), a loss in excess of $10,000 (increase of 1 level, § 2B3.2(b)(2)), and the discharge of a weapon (increase of 7 levels, § 2B3.2(b)(3)(A)(i)).11 In addition, as we will discuss below, the government advocates an increase of 3 levels for Tocco's supervisory role pursuant to U.S.S.G. § 3B1.1(b). Finally, the government argues that a 5-level enhancement for grouping the offenses is appropriate under U.S.S.G. § 3D1.3. Thus, if the enhancements included by the government were applicable, Tocco's offense level applicable to the conduct related to the underlying racketeering activity would be 36 [18 + 2 + 1 + 7 + 3 + 5 = 36]. According to the government, the minimum base offense level of 19 under subsection (a)(1) would produce an offense level of 22, adding only the 3-level enhancement for a supervisory role to the base offense level of 19 [19 + 3 = 22]. Thus, because using the offense level applicable to the racketeering activity produces a higher adjusted level, the government argues that the court must use that number.12
128
We must determine, then, whether the district court erred in applying the base offense level of 19 pursuant to § 2E1.1(a)(1) or whether, according to § 2E1.1(a)(2), the court should have used "the offense level applicable to the underlying racketeering activity." The question becomes, then, what conduct must be considered in determining what constitutes "the underlying racketeering activity."
129
In this case, Tocco was convicted based on more than one underlying offense. The government claims that those offenses include, but are not limited to, (1) the extortion conspiracy (Count Six), (2) the illegal gambling operation, (3) & (4) the involvement in the Edgewater and the Frontier Hotels, (5) obstruction of justice, and (6) the Harry Bowman murder conspiracy. Application Note 1 to § 2E1.1 states that "[w]here there is more than one underlying offense, [the court should] treat each underlying offense as if contained in a separate count of conviction for purposes of subsection (a)(2)." Id. In addition, that Application Note 1 directs the sentencing court to apply the adjustments contained in Chapter 3 of the guidelines to determine if the underlying offense would produce an offense level greater than 19.
130
Tocco claims that the government's argument must fail because there was no evidence adduced at trial to show that Tocco, himself, "committed, aided, abetted, counseled, commanded, induced, procured, or willfully caused" the criminal activity that the government seeks to use against him, or that the acts of his co-conspirators were "reasonably foreseeable" in furtherance of a "jointly undertaken criminal activity." See U.S.S.G. § 1B1.3(a)(1). Tocco argues that the government impermissibly relies on the charges in the indictment, rather than what conduct was proven at trial, in determining the relevant conduct for sentencing. Tocco relies on the application notes of § 1B1.3(a)(1):
131
In the case of a jointly undertaken criminal activity, subsection (a)(1)(B) provides that a defendant is accountable for the conduct (acts or omissions) of others that was both:
132
(i) in furtherance of the jointly undertaken activity; and
133
(ii) reasonably foreseeable in connection with that criminal activity.
134
Because a count may be worded broadly and include the conduct of many participants over a period of time, the scope of the criminal activity jointly undertaken by the defendant (the "jointly undertaken criminal activity") is not necessarily the same as the scope of the entire conspiracy, and hence relevant conduct is not necessarily the same for every participant. In order to determine the defendant's accountability for the conduct of others under subsection (a)(1)(B), the court must first determine the scope of the criminal activity the particular defendant agreed to jointly undertake (i.e., the scope of the specific conduct and objectives embraced by the defendant's agreement). The conduct of others that was both in furtherance of, and reasonably foreseeable in connection with, the criminal activity jointly undertaken by the defendant is relevant conduct under this provision. The conduct of others that was not in furtherance of the criminal activity jointly undertaken by the defendant, or was not reasonably foreseeable in connection with that criminal activity, is not relevant conduct under this provision.
135
In determining the scope of the criminal activity that the particular defendant agreed to jointly undertake (i.e., the scope of the specific conduct and objectives embraced by the defendant's agreement), the court may consider any explicit agreement or implicit agreement fairly inferred from the conduct of the defendant and others.
136
U.S.S.G. § 1B1.3, note 2.
137
We agree with the government that the offense level applicable to the conduct involved in the underlying racketeering activity may exceed the offense level produced by the § 2E1.1(a)(1) minimum level of 19, depending on what conduct is considered. The difficulty in this case is that the district court failed to make any specific findings on what conduct may be considered, and it failed to make any comparisons of the resulting offense levels from the underlying racketeering offenses. As we have stated, this case involves more than one underlying offense, and the district court must "treat each underlying offense as if contained in a separate count of conviction of the purposes of (a)(2)." U.S.S.G. § 2E1.1, note 1.
138
We agree with Tocco that he can only be held responsible for actions of his co-conspirators that were in furtherance of the jointly undertaken activity and that were reasonably foreseeable in connection with that activity. See U.S.S.G. § 1B1.3. He is, however, "potentially liable for the foreseeable criminal acts of others in furtherance of th[e criminal] enterprise even though he did not personally participate in them." United States v. Carrozza, 4 F.3d 70, 75 (1st Cir. 1993). The district court made no findings whatsoever as to what criminal activities were in furtherance of the conspiracy and what activities were reasonably foreseeable by Tocco. We remand these issues to the district court, and we instruct the district court to determine which underlying offenses may properly be attributable to Tocco for purposes of sentencing him under § 2E1.1. The court should then determine the offense levels applicable to those offenses and "make the appropriate adjustments under Parts A through D of Chapter Three of the guidelines, using the [alternative] base offense levels in turn, and compare the results." United States v. Sarault, 975 F.2d 17, 18 (1st Cir. 1992) (determining that the district court properly followed the "protocol" of comparing the offense levels to determine whether it should use the minimum level of 19 or the offense level attributable to the underlying racketeering activity in sentencing the defendant); see also United States v. Damico, 99 F.3d 1431, 1436-37 (7th Cir. 1996) (noting that parties agreed on four "groups" of underlying racketeering activity).
139
The district court should note that any enhancement for grouping pursuant to § 3D1.3 would be added to the offense level calculation in § 2E1.1(a)(2), but not to the minimum offense level calculation in § 2E1.1(a)(1) for purposes of determining which equation produces the greater result. See Damico, 99 F.3d at 1435 (finding that 4-level adjustment under § 3D1.4 caused the subsection (a)(2) calculation to exceed the calculation using the minimum level in subsection (a)(1)); United States v. Boggi, 74 F.3d 470, 473 (3d Cir. 1996) (reasoning that the (a)(2) calculation is greater because "only the subsection (a)(2) offense level will receive a four-level adjustment under section 3D1.4"). When the court arrives at the alternative adjusted offense levels, it must apply the highest adjusted offense level in sentencing Tocco.
140
(2) Enhancements
141
As we have indicated, the district court rejected the government's contentions that Tocco's offense level should have been increased because of the threat of death, bodily injury, or kidnapping (2 levels, § 2B3.2(b)(1)); because the loss exceeded $10,000 (1 level, § 2B3.2(b)(2)); for the discharge of a weapon (7 levels, § 2B3.2(b)(3)(A)(i)); and for his supervisory role in the offense (3 levels, § 3B1.1(b)). The court also rejected the government's contention that a 5-level enhancement was appropriate under the grouping provisions of § 3D1.3. Whether Tocco's offense level should be enhanced by the first three items, which are specific offense characteristics of extortion, will depend on whether the district court ultimately sentences Tocco pursuant to § 2B3.2 or some other guideline. The court did not address those issues below because it used the minimum of 19 as the base offense level and did not refer to the specific offense characteristics in § 2B3.2(b), nor did it enhance the offense level for Tocco's supervisory role. On remand, depending upon the district court's review of the application of the extortion guideline, the court must reconsider whether any enhancements under that guideline would apply under the circumstances.
142
At sentencing, after the district court announced that none of the government's requested enhancements were applicable to Tocco's offense level, the prosecutor asked whether the court adopted the presentence report's conclusion that "none of the threats or acts of violence were reasonably foreseeable" as part of the conduct involved. The district judge made no response or explanation to this pertinent question. We find that the foreseeability of the threats and acts of violence may be critical to the district court's analysis on remand, and we direct the district court to make specific findings with respect to that issue.
143
The government argues that the evidence supported a finding that Tocco was the "boss" of the enterprise and that he had a supervisory role over five or more persons, and that consequently a 3-level enhancement was warranted pursuant to U.S.S.G. § 3B1.1(b).13 The government points out that in the sentencing of Nove Tocco and Paul Corrado the court followed the recommendations of different probation officers in holding the two accountable for a two-level increase for each one's role in the offense as an organizer, leader, manager, or supervisor. See U.S.S.G. § 3B1.1(c). Nove and Corrado managed John Sciaratta, John Jarjosa, and others who collected the "street taxes" for them. The government argues that adding the four other defendants in this case easily supports the claim that Tocco supervised five or more participants.
144
We find from a review of the record that the district court committed clear error in concluding that Tocco did not have a supervisory role in this case. As the government points out, the district court ignored the fact that the jury found Tocco guilty on Count Six, the Hobbs Act violation. The government's theory of the case was that Nove and Corrado could not engage in their extortionate activities without the permission of Tocco. The wiretapped conversations between Nove and Corrado showed that Tocco was the "boss" and that he had control over the extortionate activities of his underlings. The jury found Tocco guilty of conspiring to commit those extortionate activities in Count Six, indicating that they found Tocco to be the "boss" or "manager" or "supervisor." Under these circumstances, we instruct the district court on remand to apply the three-level enhancement for Tocco's supervisory role in the offense pursuant to U.S.S.G. §3B1.1(b).
145
(3) Downward departure
146
As we stated above, the district court departed downward 10 levels based upon Tocco's overwhelming community service and support (4 levels), Tocco's age and debilitating health (4 levels), and Tocco's wife's poor health (2 levels). A district court's decision to depart downward from the applicable guideline level is reviewed for an abuse of discretion. Koon v. United States, 518 U.S. 81, 91 (1996). Whether a stated ground for departure is a permissible basis is a question of law reviewable de novo. See id. at 98. Before a departure is authorized, the circumstances of the case must be sufficiently unusual and "outside the heartland of cases" to warrant such a departure. See United States v. Crouse, 145 F.3d 786, 788-89 (6th Cir. 1998). If we determine that the departure was not based on impermissible factors, we must still determine whether the departure was reasonable in terms of the amount and the extent of the departure in light of the reasons for the departure. See id. at 789. In other words, we must find that the reasons justify the magnitude of the departure. See id.
147
Based on our conclusion that the district court must revisit the sentence imposed under the guidelines, we further instruct the court to reconsider its decision to depart from the guideline range once that range has been redetermined. We discuss below our views regarding the downward departure in this case to guide the district court's decision on remand.
148
In Koon, supra, the Supreme Court discussed what factors may or may not be considered by a district court in determining whether a departure from the guidelines is warranted. The Court discussed some "encouraged factors," which "are those 'the Commission has not been able to take into account fully in formulating the guidelines.'" Koon, 518 U.S. at 94 (citing U.S.S.G.§ 5K2.0). The court also discussed "discouraged factors," which "are those 'not ordinarily relevant to the determination of whether a sentence should be outside the applicable guideline range.'" Id. at 95 (quoting 1995 U.S.S.G. ch. 5, pt. H, intro. comment.). Examples of those "discouraged factors" include a defendant's civic contributions and his family ties and responsibilities. Though those factors are "not necessarily inappropriate," the Court noted, they should only be relied on as a basis for departure "in exceptional cases." Id.
149
The guidelines list certain factors that may never for the basis for departure. See U.S.S.G. § 5H1.10 (race, sex, national origin, creed, religion, socio-economic status); § 5H1.4 (drug or alcohol dependence). With the exception of those factors, the guidelines do not "limit the kinds of factors, whether or not mentioned anywhere else in the guidelines, that could constitute grounds for departure in an unusual case." U.S.S.G. ch. 1, pt. A, intro. comment.
150
The district court in this case applied discouraged factors in departing downward, emphasizing insistently its view that this was an "extraordinary" case. The court stated that this case was outside of the heartland of cases, presenting "an extraordinary set of facts and is highly infrequent and rare. . . . It can be no rarer. The Court's [sic] never [departed in this manner] before and the Court does not contemplate doing it again soon." Then the court noted that the case has spanned over three decades and related to criminal activity that occurred over that entire period of time. The court also made the determination that Tocco did not have the type of "absolute power" that would justify him being held responsible for any and all criminal acts that the members or associates of his criminal enterprise may have committed or conspired to commit. Thus, the court was generally of the view that a downward departure was necessary.
151
With that as a preface, the court turned to the three specific factors on which it relied in making the 10-level downward departure in Tocco's sentence. We now discuss those three factors.
152
(a) Community service and community support
153
First, the court found that Tocco's extraordinary community involvement and community support warranted a 4-level departure. The court noted that Tocco had participated in no less than twelve charitable and civic organizations. A flood of letters poured into the court that strongly supported Tocco and urged leniency in his sentencing. The letters stated, among other things, that Tocco is a dedicated family man and a dependable philanthropist in the community. These circumstances, the court found, helped to show that this case is outside of the heartland of cases.
154
We addressed the propriety of a departure in similar circumstances in United States v. Crouse, 145 F.3d 786 (6th Cir. 1998). Crouse involved the sentencing of a successful businessman much in the same category as Tocco. Though the applicable guideline range for his sentence was 15, the district court departed downward 9 levels based on the defendant's charitable works in order to bring his offense level down to 6 so that the defendant would qualify for home confinement. The court noted that the community contributions consisted primarily of the defendant's time commitments and not monetary contributions. Crouse, 145 F.3d at 792. On appeal, we determined that considering the defendant's charitable works, though a discouraged factor, was a permissible ground for the district court to consider departing downward. See id. at 791. We found, however, that the defendant's community works, while significant, were not unusual for a prominent business man. The works included, but were not limited to, involvement in church activities, service on the boards of various organizations, and involvement in the Rotary Club. We concluded that, while some departure may have been warranted, the 9-level departure was unreasonable because the district court made no reference to the guidelines determining the departure amount. Rather, the district court sought to reach a certain result--no jail time--and it departed the necessary number of levels to reach the desired result. Consequently, we held that the departure was unreasonable under the circumstances. See id. at 792.
155
In assessing the effect of Tocco's community involvement in this case, we believe that much of Tocco's contributions may have consisted of contributions of money, not time and energy. If that is so, then the factor could really be considered one involving Tocco's socio-economic status, i.e., his wealth and his ability to donate to various civic and charitable causes. Consideration of that factor is prohibited by the guidelines. See U.S.S.G. § 5H1.10. This, perhaps, is an expression of the ancient concept of justice that a man of wealth, position, power, and prestige should not be given special consideration in the law. In any event, a defendant's community involvement is at best a discouraged factor in determining the appropriate departure from the guidelines.
156
On remand, the district court must determine whether the "community involvement" of Tocco is substantially financial, which would prevent the court from considering that factor in departing from the guidelines on that basis. If, however, the court finds as a matter of fact that the community involvement actually involves significant contributions of Tocco's time and personal skill and involvement, the court may consider the factor in determining the appropriate and reasonable degree of departure if the court concludes that the case presents truly extraordinary circumstances. The district court should be mindful that any departure must be reasonable and must be "guided by the structure of the Guidelines." Crouse,145 F.3d at 792; see also United States v. Morken, 133 F.3d 628, 630 (8th Cir. 1998); United States v. McHan, 920 F.2d 244, 247 (4th Cir. 1990).
157
(b) Tocco's age and debilitating health
158
The guidelines note that both age and physical condition may be valid grounds for a downward departure. U.S.S.G. § 5H1.1 provides in relevant part that although not "ordinarily relevant ... [a]ge may be a reason to go below the guidelines when the offender is elderly and infirm and where a form of punishment (e.g., home confinement) might be equally efficient as and less costly than incarceration." With respect to physical infirmity, the guidelines provide that a defendant's "[p]hysical condition or appearance, including physique, is not ordinarily relevant in determining whether a sentence should be outside the applicable guideline range. However, an extraordinary physical impairment may be a reason to impose a sentence below the applicable guideline range; e.g., in the case of a seriously infirm defendant, home detention may be as efficient as, and less costly than, imprisonment." U.S.S.G. § 5H1.4.
159
The district court below determined that Tocco's age, 72 years, and debilitating health, "which ordinarily would not be the basis for downward departure," was a basis for departure in this case. The court referred to the presentence report which described all of Tocco's illnesses, including arteriosclerotic disease, coronary artery disease, hypertension, renal insufficiency, labrynthitis, and diverticulosis. The report also mentioned that Tocco's continuing health problems required "periodic monitoring."
160
We conclude that Tocco's age alone should not be considered as a basis for a substantial downward departure. Tocco was portrayed as remaining active in civic and charitable affairs and in carrying on (with family help and support) a number of business interests. The district court did not discuss any basis for consideration of Tocco's age as a basis of downward departure per se, as set out in the judgment. We observe in passing in this regard that eight judges of this court, still in service, are seventy years old or older. Many persons in business continue to serve in important capacities beyond seventy years of age.
161
With respect to the propriety of a downward departure based upon Tocco's physical condition, we note that it is possible "that an aged defendant with a multitude of health problems may qualify for a downward departure under § 5H1.4 . . ., [but] such downward departures are rare." United States v. Johnson, 71 F.3d 539, 545 (6th Cir. 1995). In Johnson, the district court had departed downward from the applicable guideline range based on the defendant's medical condition. The defendant in that case had a profile similar to that of Tocco, being a 65-year-old man who suffered from diabetes, hypertension, hypothyroidism, ulcers, potassium loss, and reactive depression. Id. at 544-45.
162
The Johnson court stated that "[i]n view of the fact that the defendant will be resentenced, the District Court should make more specific findings as to whether defendant has 'an extraordinary physical impairment,' or combination of impairments, worthy of departure." Id. at 545. We find that this approach is proper in the instant case. To this end, the district court might obtain independent and competent medical evidence to determine the extent of Tocco's infirmities and the prison system's ability or inability to accommodate them. Id.
163
We are concerned about the discrepancy between the district court's actions in Tocco's case and in the case of Anthony Corrado. The district court declined to depart downward due to the medical condition of Corrado, who had undergone seven bypass operations, had circulation problems, and had diabetes. We shall expect the district court to consider the decision in Corrado's case when it determines whether or to what extent to depart in Tocco's case.
164
(c) Tocco's wife's health
165
Pursuant to the guidelines, "[f]amily ties and responsibilities . . . are not ordinarily relevant in determining whether a sentence should be outside the guidelines." U.S.S.G. § 5H1.6. However, "[e]xtraordinary family circumstances, i.e., outside of the 'heartland' of cases the Guidelines were intended to cover, can be the basis for a downward departure." United States v. Haversat, 22 F.3d 790, 797 (8th Cir. 1994) (quoting United States v. Harrison, 970 F.2d 444, 447 (8th Cir. 1992)). The district court determined that Tocco qualified for a 2-level downward departure because of his "family ties," specifically his need to be with his ill wife, who had cancer and emphysema.14 The presentence report included an extensive and extremely sympathetic family history of Tocco, including information that his wife had recently undergone an operation, and that their eight children were successful and supportive.
166
Extraordinary and special family circumstances may justify a downward departure in exceptional cases. Usually, this factor is taken into account when a defendant personally is required to take care of a seriously ill spouse or family member. A good discussion of the type of circumstances necessary for such a departure can be found in United States v. Haversat, 22 F.3d 790, 793 (8th Cir. 1994). In that case, the district court had approved of a 5-level downward departure from the guidelines based on the defendant's wife's "severe psychiatric problems" which had "potentially life threatening" effects and thus constituted a "truly exceptional case." Haversat, 22 F.3d at 797. Though the court found that the defendant's family ties constituted a permissible basis for a downward departure, it concluded that the particular circumstances did not justify the magnitude of the departure. Id. at 798 (citing Williams v. United States, 503 U.S. 193 (1992)).
167
On remand, we instruct the district court to revisit this issue and to make specific findings regarding Tocco's personal involvement in the care of his wife or other family members. The court should consider whether Maria Tocco has alternate sources of support other than her husband. On that subject we note that Tocco has eight children, seven of whom live in the area and one of whom is a doctor.
168
We specifically do not adopt the rationale in this regard, and in respect to other factors claimed by Tocco, applied in the case of United States v. Rioux, 97 F.3d 648,652 (2d Cir. 1996), which approved a 10 point downward departure based on "physical condition, charitable fund-raising efforts, and civic accomplishments."
169
Thus, we conclude that the sentence imposed upon defendant Tocco was "imposed in violation of law" and that it was imposed as a result of an incorrect application of the guidelines for the reasons stated. We must, therefore, REMAND for re-sentencing in a manner not inconsistent with this opinion. In addition, we order the district court to furnish the government copies of any written recommendations from the probation office that have been and will be used in resentencing. Any confidential reports may be submitted under seal.
170
During the interim before re-sentencing, we direct the district court to consider promptly the government's motions for immediate revocation of Tocco's bond. Furthermore, in connection with resentencing, the district court should reconsider whether a term of supervised release is appropriate, and also consider the place of incarceration and its potential for monitoring Tocco's medical problems.
H. Conclusion
171
We recognize that one of the most difficult and thankless responsibilities of a district judge is to pass sentence upon a defendant. The district court in this case was faced with a complex and lengthy trial, and we give the district court its due deference in effectuating a sentence upon Tocco, guided by all pertinent legal considerations. The district court must ordinarily rely in considerable measure upon a presentence report, but it is the district court that must make the hard decisions in cases such as this with a wide range of sentencing issues and legal determinations to be made. The district court has broad discretion in dealing with requests for departure, whether upward or downward, but the Sentencing Commission and the courts expect that they will not often occur, and only where there are particular "aggravating or mitigating circumstances of a kind or degree not adequately taken into consideration by the [Sentencing] Commission." Koon, 518 U.S. at 94.
172
Accordingly, we AFFIRM Tocco's convictions for the reasons explained above, but VACATE his sentence and REMAND for resentencing in a manner not inconsistent with this opinion.
Notes:
1
The six co-defendants were Jack W. Tocco (appellant), Anthony J. Tocco, Anthony J. Corrado, Anthony J. Zerilli, Nove Tocco, and Paul Corrado. Before testimony was taken, Zerilli's case was severed due to health reasons.
2
The factual background of this case spans three decades and will be discussed only insofar as the facts relate to the issues on appeal.
3
The fact that the jurors found defendant Tocco not guilty on ten counts, and that they acquitted other defendants in part or entirely, is some indication of the jury's ability to act with impartiality.
4
Much of Tocco's pretrial argument focused on the stigma attached to the words "Cosa Nostra" and "Mafia" as those terms were used in the indictment charges. The charges in this case, however, would not differ materially from a charge that a particular defendant was allegedly in a particular group or gang, such as "Hell's Angels," or "White Citizen Council," or a subversive group such as an international terrorist organization. We would not deem such an indictment charge to constitute prejudicial error so long as the prosecution was prepared to come forward with proof to establish the existence of such a group, and that the particular defendant was associated with the alleged criminal enterprise or conspiracy.
5
Tocco cites United States v. Casamento, 887 F.2d 1141, 1152 (2d Cir. 1989), in arguing that "megatrials" should not be permitted and that there should be a presumption against a joint trial in cases that are estimated to last more than four months. This circuit, however, has not adopted such a policy, and we decline to do so in this case. We adhere to the "strong policy in favor of joint trials when charges will be proved by the same series of acts." United States v. Horton, 847 F.2d 313, 317 (6th Cir. 1988); see also United States v. Mays, 69 F.3d 116, 120 (6th Cir. 1995) (recognizing the "strong policy in favoring joint trials" and "the presumption of the validity of curative instructions").
6
Federal Rule of Evidence 804(b)(3) provides in pertinent part:(b) Hearsay exceptions. The following are not excluded by the hearsay rule if the declarant is unavailable as a witness:
. . .(3) Statement against interest. A statement which at the time of its making so far contrary to the declarant's pecuniary or proprietary interest, or so far tended to subject the declarant to civil or criminal liability . . . that a reasonable person in the declarant's position would not have made the statement unless believing it to be true.
7
When Polizzi made the statements about involvement in organized crime in Detroit and about Cosa Nostra, the statements were not made with the hope of implicating others to gain favor with the police. Under the circumstances, we believe that other corroborating factors also support admissibility of the Polizzi testimony. See Price, 134 F.3d at 348 (discussing what types of corroborating evidence demonstrate trustworthiness).
8
See Kraft v. Jacka, 872 F.2d 862, 867-68 (9th Cir. 1989), which sets out the Nevada regulatory procedures and controls involved.
9
Tocco briefly argues that the RICO conspiracy charges are barred by the five-year statute of limitations. However, "a RICO conspiracy offense is complete, thus commencing the running of the five-year statute of limitations, only when the purposes of the conspiracy have either been accomplished or abandoned." United States v. Salerno, 868 F.2d 524, 534 (2d Cir. 1989) (citing United States v. Persico, 832 F.2d 705, 713 (2d Cir. 1987)). Tocco has not persuaded us that the purposes of the conspiracy had been accomplished more than five years before his continuing involvement was shown, nor has it been demonstrated that he abandoned the ongoing enterprise. Certainly, Tocco has not shown any affirmative withdrawal. See United States v. Rogers, 118 F.3d 466 (6th Cir. 1997).
10
We do not address the propriety of the district court's decision to deny the government's request for a forfeiture because the government did not raise that as an issue in its appeal.
11
The government claims that the Harry Bowman murder conspiracy would also require the same offense level.
12
The government also argues that the court should have added 3 levels for Tocco's supervisory or managerial role, and 5 levels according to the grouping rules in U.S.S.G. § 3D1.4. We will address the basis for those increases separately. Here we are concerned with the appropriate base offense level, or starting point, for Tocco's sentence.
13
That guideline provides that "[i]If the defendant was a manager or supervisor . . . and the criminal activity involved five or more participants or was otherwise extensive, increase by 3 levels." U.S.S.G. § 3B1.1(b).
14
Tocco's mother and sister are also ill, but the district court did not rely on Tocco's responsibilities toward those family members in departing downward.
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Affirmed in Part and Reversed and Remanded in Part and Memorandum
Opinion filed September 23, 2003
Affirmed in
Part and Reversed and Remanded in Part and Memorandum Opinion filed September 23, 2003.
In The
Fourteenth Court of Appeals
_______________
NO. 14-02-01256-CV
_______________
JOHN H.
TRUEHEART, JR., Appellant
V.
DENISE L. TRUEHEART, Appellee
_______________________________________________________
On Appeal from
the 306th District Court
Galveston County, Texas
Trial Court Cause
No. 01FD2003
_______________________________________________________
M E M O R A N D U M O P I N I O
N
In this divorce case, John Trueheart appeals a judgment in favor of appellee, Denise Trueheart.
Specifically, he contends the trial court erred in (1) awarding
appellate attorney’s fees; (2) ordering spousal maintenance; and (3) failing to
order Denise to pay child support. We
affirm in part and reverse and remand in part.
FACTS
A trial
court granted a divorce to Denise based on cruel treatment. It granted primary custody of their
sixteen-year-old son to John.[1] Denise was granted standard visitation and
was not ordered to pay child support.
Additionally, the trial court awarded Denise spousal maintenance of
$2,500 per month for three years.
Lastly, John was ordered to pay Denise $14,000 in attorney’s fees for
trial, $10,000 in the event of appeal to the Court of Appeals, and $5,000 in
the event of appeal to the Supreme Court.
Appellate Attorney’s Fees
In appellant’s first point of error,
he contends the trial court erred in awarding appellate attorney’s fees when no
evidence of such fees was presented.[2] The trial court, in its Conclusions of Law, stated
that “[t]he Court awards attorney’s fees to Petitioner’s attorney, and the
Court took into consideration the awarding of attorney’s fees to Petitioner in
making the Court’s division of the property; so that there would be a fair and
equitable division of the community estate, considering the conditions and
needs of the parties and all the surrounding circumstances.”
Generally, a court may award
attorney’s fees in a proceeding to enforce a divorce decree. Cook v.
Cameron, 733 S.W.2d 137, 141 (Tex. 1987); see McPherren v. McPherren, 967 S.W.2d 485, 492 (Tex. App.—El Paso 1998,
no pet.). However, evidence must be
presented as to the amount of time an appeal would take or a reasonable hourly
rate. See Smith v. Smith, 757 S.W.2d 422, 425–26
(Tex. App.—Dallas 1988, writ denied); see
also Eikenhorst v. Eikenhorst,
746 S.W.2d 882, 890 (Tex. App.—Houston [1st Dist.] 1988, no writ). Here, counsel for appellee did not present
evidence regarding the usual and customary fees for services to be rendered on
appeal. Instead, appellee argues on
appeal that the court took judicial notice of appellate attorney’s fees. However, it has been previously held that
“[a] court may not adjudicate the reasonableness of attorney’s fees on judicial
knowledge without the benefit of evidence.”
Cantu v. Moore, 90 S.W.3d 821,
826 (Tex. App.—San Antonio 2002, pet. denied) (citing Woollett v. Matyastik, 23 S.W.3d 48, 52 (Tex.
App.—Austin 2000, pet. denied)). Because
there is no evidence of appellate attorney’s fees, the trial court erred in
awarding $10,000 for an appeal to the court of appeals and $5,000 for an appeal
to the Texas Supreme Court.
Although there is no evidence of a
reasonable and necessary amount for appellate attorney’s fees, it is clear from
the trial court’s conclusion of law that it considered appellate attorney’s
fees of $15,000 in dividing the community estate fairly and equitably. Where error affects the trial court’s “just
and right” property division, we must reverse and remand the community estate
for a new property division. Jacobs v. Jacobs, 687 S.W.2d 731, 732–33
(Tex. 1985) (“Once reversible error affecting the ‘just and right’ division of
the community estate is found, the court of appeals must remand the entire
community estate for a new division;” it cannot strike the specific amount
because division of the property is within trial court’s discretion); Jensen v. Jensen, 665 S.W.2d 107, 109
(Tex. 1985); Henry v. Henry, 48 S.W.3d 468, 475
(Tex. App.—Houston [14th Dist.] 2001, no pet.); see Sandone v. Miller-Sandone,
No. 08-02-00433-CV, 2003 WL 21757506, at *3 (Tex. App.—El Paso July 31, 2003,
n. pet. h.) (remanding where there was no evidence of attorney’s fees and no
evidence of community estate’s value); cf.
Zieba v. Martin, 928 S.W.2d 782, 791–92 (Tex.
App.—Houston [14th Dist.] 1996, no writ) (remanding for new division where
judgment awarded $10,000 less in attorney’s fees than the court specifically
found was part of the fair and equitable division of the community estate). Accordingly, we reverse and remand for a new
division of the property.
Spousal Maintenance
In John’s second and third issues,[3] he
contends the trial court erred in ordering him to pay spousal maintenance
because Denise failed to establish her “minimum reasonable needs” or that they
could not be met with the amount awarded as her share of the community
estate. Thus, John focuses his argument
on the more narrow issue of minimum reasonable needs, not the broader issues of
amount and duration of support.
We review the granting of
post-divorce spousal maintenance for an abuse of discretion. Lopez
v. Lopez, 55 S.W.3d 194, 198 (Tex.
App.—Corpus Christi 2001, no pet.); Alexander
v. Alexander, 982 S.W.2d 116, 118 (Tex. App.—Houston [1st Dist.] 1998, no
pet.). We view the evidence in the light
most favorable to the trial court’s actions and indulge every legal presumption
to favor of the judgment. In re Marriage of Hale, 975 S.W.2d 694,
697 (Tex. App.—Texarkana 1998, no pet.).
There is no abuse of discretion if some evidence of a substantive and
probative nature supports the decision. Dennis v. Smith, 962 S.W.2d 67, 68 (Tex.
App.—Houston [1st Dist.] 1997, pet. denied).
The trial court may award spousal
maintenance in limited circumstances. See Tex.
Fam. Code Ann. § 8.051 (Vernon Supp. 2003); Pickens v. Pickens, 62 S.W.3d 212,
214-15 (Tex. App.—Dallas 2001, pet. denied).
In marriages lasting ten years or more, a spouse is eligible to seek
spousal maintenance if the spouse lacks sufficient property to meet minimum
reasonable needs and cannot support himself or herself due to (1) an
incapacitating physical or mental disability, (2) a child in the home with a
disability requiring substantial care and supervision, or (3) the lack of
adequate earning ability. Tex. Fam. Code Ann.
§ 8.051(2) (Vernon Supp.
2003).
A. Evidence of Minimum Reasonable Needs
The term “minimum reasonable needs”
is not defined in the Family Code, nor are there cases defining the term. Hale,
975 S.W.2d at 698. “Deciding what the
minimum reasonable needs are for a particular individual is a fact-specific
determination that should be made by the trial court on a case-by-case
basis.” Amos v. Amos, 79 S.W.3d 747, 749 (Tex.
App.—Corpus Christi 2002, no pet.). John
suggests that minimum reasonable needs must be proved by an itemized dollar
amount of monthly expenses, citing Morris
v. Morris, No. 07-99-0518-CV, 2001 WL 257809 (Tex. App.—Amarillo Mar. 15,
2001, no pet.) (not designated for publication). While a list of expenses is helpful, see Limbaugh v. Limbaugh, 71 S.W.3d 1,
14 (Tex. App.—Waco 2002, no pet.), there is no authority that only such a list
suffices as evidence of minimum reasonable needs. See
Amos, 79 S.W.3d at 750 (evidence of minimal reasonable needs included
wife’s abilities, education, mortgage concerns, and business opportunities).
Here, we have no itemization of
Denise’s monthly expenses in evidence.
However, the evidence reveals that Denise is a 48-year-old housewife
with a high school diploma and no job skills.
She has not been employed outside the home in the last 21 years. She has no typing or computer skills, and
assessments at a local college reveal that she needs remedial math. She enrolled in remedial math courses at the
college. She is trying to hone her
typing skills by using a computer program at home. Apparently, the local college seldom offers
lower skill level computer classes due to lack of demand. Further, Denise’s educational training is
impeded by the strict and late hours she works in her entry-level position for
Southwest Airlines. See Alexander v. Alexander, 982 S.W.2d 116, 118 (Tex. App.—Houston
[1st Dist.] 1998, no pet.) (working full time interfered with wife’s ability to
attend college). Denise testified that
it will take her at least three years to complete education requirements
necessary to obtain and retain employment with salary potential higher than her
current remuneration.
The evidence further reveals that
Denise previously failed the training program at Southwest Airlines for lack of
job skills. At the time of trial, she
was working on a six-month probationary period with Southwest, but had received
“unsatisfactory” reviews. She was making
$8.50 an hour, which, if she manages to keep her job and work full time, might
accrue in an annual salary of $17,680.
However, such a minimal salary does not support a conclusion that her
minimum reasonable needs have been met. Cf. Hale, 975 S.W.2d at 698 (rejecting
proposition that minimum wage is adequate to meet minimum reasonable needs in
every case). Nor does a spouse’s mere
employment preclude an award of spousal maintenance. Id.
Moreover, Denise testified that the
rent for her one-bedroom apartment is expensive in relation to her earning
capacity. She contends that she will
never again own a home because she could not afford the property taxes. Although she and John owned a dog when
married, she cannot afford a pet deposit at her apartment. Additionally, Denise testified that she
cannot afford the monthly payments if it becomes necessary to replace her 1998
pick-up truck. She shops for her clothes
at resale shops and cuts her own hair.
Further, the court found that Denise
needs continued professional mental health counseling. The trial court concluded that Denise “was
traumatized by [John’s] mental cruelty.”
The evidence reveals that when Denise left her marriage, she feared for
her safety. She was “beaten down” and
“scared to death” by John’s sexual requirements of her, alcohol abuse, and
controlling behavior that left her socially reclusive. This evidence supports the conclusion that
she could not afford necessary treatment without spousal maintenance. Additionally, as in Hale, the evidence of Denise’s needs does “not include other
essential needs that everyone has, such as her portion of health premiums,
uncovered medical expenses, drugs and medicines, and the like.” 975 S.W.2d at 698.
Finally, the case-specific nature of
the criteria for determination of “minimum reasonable needs” would allow a
trial court to determine needs with reference to the spouse’s activities during
marriage. For instance, during Denise’s
marriage, one of her main activities was woodworking. She made several pieces of furniture, including
a kitchen hutch, bedside tables, and bunk beds, for their homes. However, the minimal space in Denise’s
current apartment is not sufficient for her to keep most of her tools or
perform such woodworking projects.
For all the reasons stated above, we
find there is some evidence sufficient for the trial court to determine Denise’s
minimum reasonable needs.
B. Consideration of Community Assets
Next, John argues that the trial
court did not consider whether the $290,000 of community property awarded to
Denise meets her minimal reasonable needs.
John, however, fails to mention that almost half the community assets
awarded to Denise are not easily liquidated, such as life insurance policies
held on their sons, or cannot be liquidated without significant penalty, such
as individual retirement accounts. The
purpose of spousal maintenance is to provide temporary and rehabilitative support for a spouse whose ability for
self-support has deteriorated over time while engaged in homemaking activities
and whose capital assets are insufficient to provide support. O’Carolan v. Hopper,
71 S.W.3d 529, 533 (Tex. App.—Austin, 2002 no
pet.). In considering assets awarded in
the divorce, the law does not require a spouse to spend down long-term assets,
liquidate all available assets, or incur new debt simply to obtain job skills
and meet needs in the short term. See Limbaugh, 71 S.W.3d at 15 (no new
debt to meet monthly needs); Alaghehband v. Abolbaghaei, No. 03-02-00445-CV, 2003 WL 1986777 at *5
(Tex. App.—Austin May 1, 2003, no pet.) (many assets were
not liquid or short-term); see also Amos,
79 S.W.3d at 749–50 (tax-deferred community assets awarded to wife were
unavailable to meet her needs); see, e.g.,
Langenbeck v. Langenbeck,
No. 05-99-00801-CV, 2001 WL 51075 , at *5–6 (Tex. App.—Dallas 2001, no pet.)
(not designated for publication) (award of costly home, which was bulk of
community estate, to wife did not preclude spousal maintenance of $1,800 a
month). Further, the evidence shows that
the income generating potential of Denise’s community assets is minimal.
We hold the trial court did not
abuse its discretion in finding that Denise lacked sufficient assets, including
property and sums awarded in the decree, to meet her minimal reasonable
needs. Accordingly, we overrule issues
two and three.
Child Support
In John’s last issue, he contends
the trial court erred in failing to order Denise to pay child support. He relies on the presumption under the Family
Code that child support must be ordered according to standard guidelines. We review a trial court’s ruling on child
support for a clear abuse of discretion.
Worford v. Stamper, 801 S.W.2d 108, 109 (Tex.
1990). The test for abuse of discretion
is whether the act was arbitrary or unreasonable. Id.
A court may order an amount of
support above or below the standard guidelines if the evidence rebuts the
presumption that application of the guidelines is in the child’s best interest
and the evidence justifies a variance. Tex. Fam. Code Ann.
§ 154.123(a) (Vernon Supp.
2003). In determining whether
application of the guidelines would be unjust or inappropriate, the court
considers many factors, including:
• the ages and needs of the children;
• the ability of the parents to contribute to the support of the
children;
• any financial resources available for the support of the children;
• the amount of time of possession of and access to the children;
• the amount of the obligee’s net resources,
including earning potential;
• whether either party has the managing conservatorship
or actual physical custody of another child;
• the amount of alimony or spousal maintenance actually and currently
being paid or received by a party;
• special or extraordinary educational, health care, or other expenses
of the parties or of the children;
• any other reason
consistent with the best interest of the children, taking into consideration
the circumstances of the parents.
Tex. Fam. Code Ann. §
154.123(b) (Vernon Supp.
2003).
In the instant case, John has
primary custody of their sixteen-year-old son.
There is evidence that John manipulated their son and engaged in conduct
that alienated him from his mother. The
child is extremely upset by the divorce and, by his own wishes, does not want
to see Denise anymore. Denise is fearful
of her son and has only seen him a few times since separating from John. Denise makes only $8.50 per hour and is
currently on probationary status at her job.
Although she has no steady income, she provides health insurance for the
child. Denise has special educational
and health needs: she needs job skill training and mental heath counseling to
take better care of herself. In fact,
she was awarded spousal maintenance for the same reasons. Consequently, we find that there was some
probative and substantive evidence to support the court’s variance from the
child support guidelines. See Dennis v. Smith, 962 S.W.2d 67, 72
(Tex. App.—Houston [1st Dist.] 1997, pet. denied); Sanchez v. Sanchez, 915 S.W.2d 99, 102–03 (Tex. App.—San Antonio
1996, no writ). Therefore, we overrule
John’s final point of error.
The judgment of the trial court is
affirmed in part and reversed and remanded in part for proceedings consistent
with this opinion.
/s/ Charles W. Seymore
Justice
Judgment
rendered and Memorandum Opinion filed September 23, 2003.
Panel
consists of Justices Anderson, Seymore, and Guzman.
[1] The two other children of the marriage are over age
eighteen.
[2] Appellant also argues that the unconditional award of
appellate attorney’s fees is improper; however, we need not address this issue
based on our disposition of the first sub-issue.
[3] In his third issue, John seeks repayment of spousal
maintenance should we sustain issue two.
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 07-13130 March 27, 2008
Non-Argument Calendar THOMAS K. KAHN
CLERK
________________________
D. C. Docket No. 06-20648-CR-CMA
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
RENIER HERRERA,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(March 27, 2008)
Before DUBINA, CARNES and BARKETT, Circuit Judges.
PER CURIAM:
Appellant Renier Herrera appeals his convictions and sentences for
possession of cocaine base, in violation of 21 U.S.C. § 844, possession of
marijuana, in violation of 21 U.S.C. § 844, and possession of a firearm by a
convicted felon, in violation of 18 U.S.C. § 922(g)(1). The facts of Herrera’s arrest
are simple and straightforward. Detective Jonathon Streetzel (“Detective
Streetzel”) of the Miami-Dade police department observed as Herrera parked a
sports utility vehicle (“SUV”) a few feet from the detective’s unmarked car in a
shopping center parking lot. Within minutes, another man parked alongside
Herrera, approached the driver’s side of Herrera’s SUV, and handed Herrera what
appeared to be a bag of crack cocaine in exchange for money. Detective Streetzel
followed Herrera as he left the parking lot and stopped the SUV soon thereafter.
Detective Streetzel smelled burning marijuana as he approached the SUV, and
officers uncovered marijuana in the ashtray, marijuana and crack cocaine in
Herrera’s pocket, and a loaded handgun jutting out from underneath the driver’s
seat.
On appeal, Herrera argues that the district court erred in (1) denying his
motion to suppress evidence that was seized pursuant to the stop of his vehicle,
(2) enhancing his sentence under the Armed Career Criminal Act (“ACCA”), and
(3) enhancing his offense level under the sentencing guidelines for possession of a
2
firearm in connection with another felony offense.1 For the reasons that follow, we
find it necessary to address his first two issues only, and we affirm.
I. Motion to Suppress
Herrera argues first that Detective Streetzel's observations provided an
insufficient basis for the subsequent stop of Herrera's vehicle. He contends that the
officer observed nothing more than the everyday actions of presumably innocent
patrons of a shopping center, and the subsequent discovery of contraband does not
justify an initially unlawful detention.
We review the denial of a motion to suppress under “a mixed standard of
review, reviewing the court’s findings of fact for clear error and its application of
the law to those facts de novo.” United States v. Dunn, 345 F.3d 1285, 1288 (11th
Cir. 2003) (quotations and citations omitted). On review of the denial of a motion
to suppress, we construe all facts in the light most favorable to the prevailing party
below. United States v. Perez, 443 F.3d 772, 774 (11th Cir. 2006).
The stop of a motor vehicle may be justified by a reasonable suspicion of
criminal activity. See United States v. Lindsey, 482 F.3d 1285, 1290-91 (11th
1
Herrera also argues that the court erred in enhancing his sentence under ACCA based
on his prior convictions that were neither charged in the indictment nor proven to the jury
beyond a reasonable doubt. However, he acknowledges that the law of the Supreme Court
allows for such use of his prior convictions. See Apprendi v. New Jersey, 530 U.S. 466, 489, 120
S. Ct. 2348, 2362-63 (2000) (“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.”).
3
Cir.), cert. denied, 128 S. Ct. 438 (2007). “To have reasonable suspicion, an
officer conducting a stop must have a reasonable, articulable suspicion based on
objective facts that the person has engaged in, or is about to engage in, criminal
activity.” Id. at 1290 (quotations and citations omitted). “We examine ‘the totality
of the circumstances’ to determine whether the police had ‘a particularized and
objective basis for suspecting legal wrongdoing.’” Id. (quoting United States v.
Arvizu, 534 U.S. 266, 273, 122 S. Ct. 744, 750 (2002)). Further, “[a] reasonable
suspicion of criminal activity may be formed by observing exclusively legal
activity.” United States v. Gordon, 231 F.3d 750, 754 (11th Cir. 2000). “In
examining the totality of the circumstances, a reviewing court must give due
weight to the officer's experience.” United States v. Briggman, 931 F.2d 705, 709
(11th Cir. 1991).
Under the totality of the circumstances, including Detective Streetzel’s
experience observing similar drug transactions in the same location, we conclude
that the district court did not err in finding that the detective had reasonable
suspicion to stop Herrera’s SUV. Accordingly, we affirm his convictions.
II. Armed Career Criminal Enhancement
Next, Herrera argues that the district court erred in finding that his prior
4
conviction in Florida for high-speed chase constituted a violent felony for purposes
of enhancing his sentence as an armed career criminal, per 18 U.S.C. § 924(e). He
contends that the statutory elements of this offense, along with the charging
document, demonstrate that it is not a violent felony, as it neither requires damage
to persons or property nor has as an element conduct that presents a serious risk of
harm.
We review de novo whether a prior conviction constitutes a violent felony
for purposes of the § 924(e) armed career criminal enhancement. United States v.
Day, 465 F.3d 1262, 1264 (11th Cir. 2006). The ACCA requires a minimum
sentence of 15 years imprisonment for a defendant who violates 18 U.S.C. § 922(g)
and has 3 previous convictions for “a violent felony or serious drug offense.” 18
U.S.C. § 924(e)(1). To that end, the ACCA defines a “violent felony” as:
[A]ny crime punishable by imprisonment for a term exceeding one
year, or any act of juvenile delinquency involving the use or carrying
of a firearm, knife, or destructive device that would be punishable by
imprisonment for such term if committed by an adult, that--
(i) has as an element the use, attempted use, or threatened use of
physical force against the person of another; or
(ii) is burglary, arson, or extortion, involves use of explosives, or
otherwise involves conduct that presents a serious potential risk of
physical injury to another[.]
18 U.S.C. § 924(e)(2)(B). At the time of Herrera’s conviction, Florida law
5
provided that:
Any person who, in the course of unlawfully fleeing or attempting to
elude a law enforcement officer in an authorized law enforcement
patrol vehicle . . . having knowledge of an order to stop by a duly
authorized law enforcement officer, causes the law enforcement
officer to engage in a high-speed vehicle pursuit commits a felony of
the third degree . . . .
Fla. Stat. § 316.1935(2) (1996).
“In determining whether a particular offense falls within [§ 924(e)(2)(B)],
the Supreme Court has directed trial courts to pursue a categorical approach,
‘looking only to the statutory definitions of the prior offenses, and not to the
particular facts underlying those convictions.’” United States v. Wilkerson, 286
F.3d 1324, 1325 (11th Cir. 2002) (quoting Taylor v. United States, 495 U.S. 575,
600, 110 S. Ct. 2143, 2159 (1990)). Further, we have held that “our cases
interpreting ‘crime of violence’ under [U.S.S.G.] § 4B1.2 provide important
guidance in determining what is a ‘violent felony’ under the ACCA[,] because the
definitions for both terms are virtually identical.” United States v. Taylor, 489
F.3d 1112, 1113 (11th Cir.) (quotations and citations omitted), petition for cert.
filed, (U.S. Nov. 16, 2007) (No. 07-668). In this regard, we have held that felony
fleeing and eluding in Florida constitutes a “crime of violence” within
§ 4B1.2(a)(2), as “[t]he dangerous circumstances surrounding a person's attempt to
flee from law enforcement coupled with the person's operation of a motor vehicle
6
most assuredly presents a ‘potential risk of physical injury’ to others.” United
States v. Orisnord, 483 F.3d 1169, 1182-83 (11th Cir.), cert. denied, 128 S. Ct. 673
(2007) (quoting U.S.S.G. § 4B1.2(a)(2) and interpreting Fla. Stat. § 316.1935(3)
(2004)).
Here, although Orisnord involved a separate provision of Florida’s fleeing
and eluding statute, our reasoning is equally applicable to the statute under which
Herrera was convicted, as both offenses similarly proscribe conduct involving
motorists who flee from or attempt to elude law enforcement officers. Compare
Fla. Stat. § 316.1935(2) (1996) (“Any person who, in the course of unlawfully
fleeing or attempting to elude a law enforcement officer . . . causes the law
enforcement officer to engage in a high-speed vehicle pursuit commits a felony in
the third degree.”), with Fla. Stat. § 316.1935(3)(a) (2004) (“Any person who
willfully flees or attempts to elude a law enforcement officer . . . and during the
course of the fleeing or attempted eluding . . . [d]rives at high speed, or in any
manner which demonstrates a wanton disregard for the safety of persons or
property, commits a felony of the second degree.”). Accordingly, the fleeing
motorist who causes a high-speed chase in violation of former § 316.1935(2)
creates the very same serious risk of potential injury to pedestrians, other drivers,
and police officers. Further, as with U.S.S.G. § 4B1.2(a)(2)’s residual definition of
7
a crime of violence, the plain language of 18 U.S.C. § 924(e)(2)(B)(ii) “makes
clear that the potential risk of injury, rather than actual violence or actual injury, is
the touchstone of a [violent felony].” Orisnord, 483 F.3d at 1182; see 18 U.S.C.
§ 924(e)(2)(B)(ii). Therefore, we hold that the district court did not err in finding
that Herrera’s prior conviction for high-speed chase constituted a violent felony
and, in turn, enhancing his sentence under the ACCA.
Moreover, as a result of our holding, we do not address Herrera’s third issue
regarding the enhancement of his guidelines offense level for possession of a
firearm in connection with another felony offense, per U.S.S.G. § 2K2.1(b)(6).
Herrera’s offense level with the § 2K2.1(b)(6) enhancement was 28. However,
after finding that Herrera qualified as an armed career criminal, the court was
required to apply an offense level of 33. See U.S.S.G. § 4B1.4(b)(3)(B). For the
above-stated reasons, we affirm Herrera’s convictions and sentences.
AFFIRMED.
8
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United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 04-3079
___________
United States of America, *
*
Appellee, *
*
v. *
*
Ramiro R. Urbina, *
*
Appellant. *
__________ Appeal from the United States
District Court for the
No. 04-3142 Western District of Missouri.
__________
United States of America, *
*
Appellant, *
*
v. *
*
Ramiro R. Urbina, *
*
Appellee. *
___________
Submitted: June 23, 2005
Filed: December 9, 2005
___________
Before ARNOLD, McMILLIAN, and COLLOTON, Circuit Judges.
___________
COLLOTON, Circuit Judge.
Following a jury trial, Ramiro Urbina was convicted of one count of possession
with intent to distribute cocaine in violation of 21 U.S.C. § 841. The jury also found
that the government proved two counts of criminal forfeiture, pursuant to 21 U.S.C.
§ 853. The district court sentenced Urbina to 300 months’ imprisonment. He appeals
his conviction and sentence, and the government cross-appeals the sentence. We
affirm the conviction and remand the case for resentencing in light of United States
v. Booker, 125 S.Ct. 738 (2005).
I.
Urbina’s first point on appeal challenges the district court’s denial of his motion
to suppress evidence. We relate the facts as found by the district court, adopting the
report and recommendation of a magistrate judge. On April 1, 2003, at approximately
10 a.m., Missouri State Highway Patrolman Corporal Thomas Hall observed a gold
pickup truck pulling a horse trailer on I-44 in Lawrence County, Missouri. Hall
stopped the truck after observing the vehicle cross the center line of traffic on at least
four occasions. Corporal Gary Braden, also of the Highway Patrol, arrived
immediately after the stop. Hall asked Urbina, the driver, if the wind was blowing his
vehicle over the line, and Urbina replied, “It may be, but I’m tired too.” Urbina told
the officer that he was en route to Dayton, Ohio, to pick up a horse for a friend.
Hall noticed an auxiliary gas tank in the back of the truck. He asked Urbina the
purpose of the tank, and Urbina responded that he used it as an extra tank and hooked
it up to the battery. Hall saw no wiring connecting the tank to the battery.
Urbina was unable to produce a driver’s license, but did offer Hall an Oregon
identification card. Hall asked Urbina to accompany him back to the patrol car, where
he determined that the Oregon driver’s license was suspended. While in the patrol
-2-
car, Urbina said that the truck belonged to his brother-in-law, but that he, Urbina,
owned the trailer and had purchased it specifically for this trip. Urbina acknowledged
that he did not own any horses, and then said, contradicting his earlier explanation,
that he was going to Ohio to purchase an automobile. Hall asked Urbina if there was
anything illegal in the truck, and Urbina said no. Hall then asked for consent to search
the truck, and Urbina agreed. A drug dog was in the back seat of the patrol car during
the stop, but it was never used to investigate the vehicle, because Urbina consented
to the search.
After examining the horse trailer and the cab of the truck without finding
contraband, Hall and Braden examined the bed of the truck. Around the auxiliary
tank, they observed scratch marks that appeared fresh. Hall also testified that the tank
was not fastened to the bed of the truck. The officers tipped the tank and heard not
the sloshing sound one might expect from gasoline, but rather a dull thud, as if
nonmetallic objects were moving around inside. Hall noticed that on the bottom of
the tank, there was fresh paint and putty surrounding a portion of the tank that had
been cut out and then reattached. Hall stated that in his experience, there normally is
no opening on the bottom of an auxiliary gas tank.
Both troopers had been involved in stops in which narcotics had been hidden
in auxiliary gas tanks, and their suspicions were raised by what they had seen of the
tank on Urbina’s vehicle. Braden then kicked in the access panel on the tank with his
boot and observed six bundles in the tank. He pried open the tank further with a
screwdriver and discovered that the bundles contained cocaine.
-3-
II.
A.
Urbina first argues that he did not voluntarily consent to a search. The district
court recognized that Urbina had raised this issue in his motion to suppress, and
addressed the issue, noting that it was undisputed that Urbina answered “yes” when
asked for consent and finding no evidence of any coercion by the troopers or the
presence of the drug dog. We thus reject the government’s contention that the issue
is not preserved, and we review the district court’s determination that consent was
voluntary for clear error. United States v. Poulack, 236 F.3d 932, 936 (8th Cir. 2001).
To determine if consent is freely and voluntarily given, we consider the totality
of the circumstances. Schneckloth v. Bustamante, 412 U.S. 218, 227 (1973).
Characteristics of a defendant relevant to the voluntariness of his consent include (1)
his age, (2) his general intelligence and education, (3) whether he was intoxicated or
under the influence of drugs when he consented, (4) whether he consented after being
informed of his right to withhold consent or of his Miranda rights, and (5) whether,
because he had been previously arrested, he was aware of the protections afforded to
suspected criminals by the legal system. United States v. Chaidez, 906 F.2d 377, 381
(8th Cir. 1990). Urbina also points to the factors we have cited for use in examining
the environment in which consent was given: whether the defendant (1) was detained
and questioned for a long or short time, (2) was threatened, physically intimidated, or
punished by police, (3) relied upon promises or misrepresentations made by the
police, (4) was in custody or under arrest when the consent was given, (5) was in a
public or secluded place, or (6) either objected to the search or stood by silently while
the search occurred. Id.
Urbina argues that the circumstances surrounding his consent undermine its
voluntariness. He claims that Hall did not advise him of his right not to consent, that
-4-
he was taken to a relatively secluded place (the patrol car) for no reason, that a
German Shepherd was in the back seat of the patrol car, that Hall told Urbina neither
that he suspected he was a drug courier nor why he wanted to search the vehicle, that
Urbina was not requested to aid the search, that Urbina did not assist the search, that
Urbina was not told that he could revoke his consent at any time, and that there was
no visible evidence of contraband.
We conclude that adequate evidence supports the district court’s conclusion that
Urbina’s consent was voluntarily given, and we see no convincing evidence to the
contrary. The interior of a police patrol car on the shoulder of a public highway
during the day is not a secluded location. Chaidez, 906 F.2d at 382; see also United
States v. Mancias, 350 F.3d 800, 806 (8th Cir. 2003). The district court specifically
found that there was no evidence of any coercion by the presence of the dog, and we
do not believe that the mere presence of a dog in the back seat of the patrol car
requires a finding that Urbina was coerced into giving consent. See United States v.
Malone, 886 F.2d 1162, 1165-66 (9th Cir. 1989). The lack of visible evidence of
contraband and Hall’s failure to inform Urbina of his suspicions are not relevant to
determining whether the totality of the circumstances indicates that consent was
voluntary.
Even if Urbina was unaware of his right to withhold or revoke consent, this is
another case in which “other considerations set out in Chaidez overwhelmingly favor
the district court’s finding” that Urbina’s consent was voluntary. United States v.
Thompson, 408 F.3d 994, 996 (8th Cir. 2005). Urbina is an adult with a lengthy
criminal record. The traffic stop had lasted only a few minutes before Hall asked
Urbina for consent to search. There is no evidence that the officer treated Urbina in
anything other than a professional manner. The district court’s finding that Urbina’s
consent was voluntary was not clearly erroneous.
-5-
Urbina also argues that the evidence should have been suppressed because the
patrolmen exceeded the scope of his consent when they used force to open his
auxiliary gas tank. We measure the scope of consent under the Fourth Amendment
using a standard of objective reasonableness, considering what an objectively
reasonable person would have understood the consent to include. United States v.
Fleck, 413 F.3d 883, 892 (8th Cir. 2005). We believe a reasonable person would have
understood Urbina’s consent to search the vehicle to include consent to examine and
open unlocked containers within the vehicle, see Florida v. Jimeno, 500 U.S. 248,
251-52 (1991), but Urbina suggests that the officers’ efforts to access the interior of
the gas tank went beyond opening a container to the point of destroying it, and that the
latter is outside the scope of an objectively reasonable interpretation of his consent.
See United States v. Alverez, 235 F.3d 1086, 1088-89 (8th Cir. 2000). We need not
resolve this question, because by the time the officers removed the panel, they had
probable cause to search the tank. The sound of objects moving in the tank gave the
officers probable cause to believe that the gas tank contained contraband, and probable
cause is sufficient to justify the warrantless search of an automobile or a container
therein, including the destruction, if necessary, of the container. Id. at 1089.
B.
Urbina next argues that the district court erred by not granting a mistrial when
the government, in its opening statement, made dramatic reference to Urbina’s flight
from police in a stolen car following his arrest. We recognize the trial court’s broad
discretion in controlling the direction of opening statements and closing arguments,
and we will not reverse that court’s decision absent a showing of abuse of discretion.
United States v. Conrad, 320 F.3d 851, 855 (8th Cir. 2003). In this context, the
district court abuses its discretion if a prosecutor’s improper comments “prejudicially
affected the defendant’s substantial rights so as to deprive the defendant of a fair
trial.” United States v. Hernandez, 779 F.2d 456, 458 (8th Cir. 1985).
-6-
The record indicates that the district court, in response to Urbina’s motion in
limine, had told the parties off the record at a conference in chambers that it would not
allow the government to discuss certain details of Urbina’s flight. The government
apparently misunderstood the court’s decision and described some details of the flight,
such as the speed of the chase, at the start of its opening statement. Urbina objected.
After a discussion with counsel, the court indicated that it may not have been as
specific about the ruling as it should have been. Urbina moved both for a mistrial and
for a curative instruction to the jury. The district court declined to grant a mistrial but
instructed the jury to disregard the statements. The court also clarified that the
government would be permitted to discuss Urbina’s acquisition of the car and his
flight, but could not talk about the speeds at which Urbina drove during his flight or
mention that he was convicted of fleeing by vehicle and reckless driving in Indiana
state court.
Assuming, arguendo, that the prosecutor’s comments were improper, Urbina
still must establish that the comments prejudicially affected his substantial rights so
as to deprive him of a fair trial. To determine the effect of alleged prosecutorial
misconduct, we consider the cumulative effect of the misconduct, the strength of the
evidence against the defendant, and the curative actions taken by the district court.
United States v. Flores-Mireles, 112 F.3d 337, 341 (8th Cir. 1997). In this case, the
cumulative effect of the misconduct was minimal. While the prosecutor mentioned
specific details the district court believed he ought not have described, the general
subject of his comments – Urbina’s flight – was deemed admissible by the district
court, and evidence of the flight was introduced in the course of the trial. The
evidence against Urbina was strong: he had six bricks of cocaine concealed in a
container in his truck, he had provided inconsistent stories as to the purpose of his trip
to police, and he agreed to cooperate and arrange a controlled delivery of the cocaine
– cooperation that ended when he fled from the agents escorting him to his
destination. Finally, the district court offered an immediate curative instruction at
Urbina’s request, which “further served to obviate the claimed error.” United States
-7-
v. Guerra, 113 F.3d 809, 816 (8th Cir. 1997). We do not believe the comments, even
assuming they were improper, reasonably could be viewed as having affected the
jury’s verdict. The district court therefore did not abuse its discretion in denying
Urbina’s motion for mistrial.
C.
Urbina also argues that the district court erred in admitting the government’s
expert testimony regarding his “unknowing courier” defense and repeated testimony
about his flight. We review the district court’s evidentiary rulings for abuse of
discretion. Fleck, 413 F.3d at 890.
The government presented Agent Mark Hooten of the Drug Enforcement
Administration to testify, inter alia, that in his experience he had never seen a drug
dealer entrust as large a quantity of drugs as were found in Urbina’s auxiliary gas tank
to a courier who was not aware of what he was transporting. Urbina argues that this
evidence was inadmissible under Federal Rule of Evidence 704(b), which prohibits
experts from stating an opinion as to whether the defendant had the requisite mental
state for the crime charged, and that the government improperly sought through this
evidence to establish Urbina’s guilt by showing that his characteristics matched the
profile of a knowing drug courier. See United States v. Vasquez, 213 F.3d 425, 427
(8th Cir. 2000). We recently rejected a similar claim in United States v. Martinez.
358 F.3d 1005, 1010 (8th Cir. 2004), and although the claim in Martinez was
reviewed for plain error rather than for abuse of discretion, we believe the reasoning
dictates the same conclusion here.
Expert testimony “to the effect that drug traffickers do not typically use couriers
who are unaware they are transporting drugs” is permissible where one theory of the
defense is that the defendant was unaware of the presence of the drugs. Id. (internal
quotation omitted). In this case, one of Urbina’s defenses was that he did not know
-8-
that the cocaine was present in the gas tank. We have also held generally that “[a]
district court has discretion to allow law enforcement officials to testify as experts
concerning the modus operandi of drug dealers in areas concerning activities which
are not something with which most jurors are familiar.” United States v. Brown, 110
F.3d 605, 610 (8th Cir. 1997) (internal quotation omitted). And “a court can allow
opinion testimony if the expert’s specialized knowledge is helpful to the jury to
understand the evidence or determine a fact in issue, even if the opinion embraces an
ultimate issue to be decided by the jury.” Id. In this case, the district court explicitly
warned that it would sustain Urbina’s objection if the prosecution attempted to elicit
the expert’s opinion on the ultimate issue of Urbina’s knowledge, and the agent did
not offer a view on that issue. We note as well that Urbina had an opportunity to
subject Agent Hooten to a thorough cross-examination. The district court thus did not
abuse its discretion in admitting the agent’s testimony.
Urbina also objects to the admission of testimony about his flight from law
enforcement agents in the course of an attempted controlled delivery following his
arrest. According to Urbina, the district court allowed unnecessarily cumulative
evidence on the issue, such that the chase was unduly emphasized to the jury.
Evidence of flight is generally admissible, because it is probative of a defendant’s
consciousness of guilt. United States v. Hankins, 931 F.2d 1256, 1261 (8th Cir.
1991). While three witnesses did testify regarding some aspect of Urbina’s flight,
each testified about a different portion of the flight. We do not believe that the district
court abused its discretion in admitting the evidence.
III.
Urbina argues that the district court erred by rejecting his argument that Blakely
v. Washington, 542 U.S. 296 (2004), rendered the United States Sentencing
Guidelines unconstitutional. The government cross-appeals, arguing that the district
court erred by holding that it was not permitted to adjust Urbina’s base offense level
-9-
for obstruction of justice under USSG § 3C1.1 and reckless endangerment during
flight under USSG § 3C1.2. Both parties request a remand for resentencing.
The district court denied Urbina’s Blakely objection regarding his criminal
history score, but declined to include the adjustments for obstruction of justice and
reckless endangerment during flight when calculating the offense level. The court
explained:
[T]his is a very difficult decision for me to make because I heard the
evidence and I have absolutely no doubt in my mind what Mr. Urbina
did. He took the car, he drove the wrong way on the interstate, drove at
a high speed. All of that came in as evidence at trial. There was
absolutely no evidence in opposition to that. It was basically undisputed.
And it’s clear to me what happened. And I have no doubt that had we
submitted that to the jury, they would have found the same thing. But
we didn’t. And Blakely, by my interpretation, puts me in a position
where if I’m following Blakely and the guidelines, at that point I have to
deny the enhancements.
(S. Tr. at 15). The presentence investigation report included the enhancements in its
calculation and recommended a sentencing range of 324 to 405 months. In light of
its interpretation of Blakely, however, the district court calculated a total offense level
of 32 (without the adjustments), and a criminal history of VI, resulting in a sentencing
range of 210 to 262 months. Based on this court’s decision in United States v.
Mooney, No. 02-3388, slip op. (8th Cir. July 23, 2004), vacated, No. 02-3388, 2004
WL 1636960 (8th Cir. Aug. 6, 2004), the court then treated the guideline range as
advisory, and imposed a sentence of 300 months’ imprisonment. In the alternative,
considering the guidelines as mandatory, the court imposed a sentence of 262 months’
imprisonment.
We agree with the parties that resentencing is warranted. Since Urbina was
sentenced, the Supreme Court decided Booker, which declared the guidelines
-10-
“effectively advisory,” but which permits judicial fact-finding and application of
guideline adjustments, so long as the sentencing range is not binding on the sentencing
court. United States v. Killingsworth, 413 F.3d 760, 764 (8th Cir. 2005). Given the
uncertainty in the law at the time of sentencing, although the district court fashioned
a sentence treating the guidelines as “advisory,” the court did not calculate and take
into account a correct guideline range for Urbina under the scheme announced in
Booker. An objection to the sentencing procedure was preserved, and we conclude
that the case should be remanded for resentencing.
* * *
For the foregoing reasons, we affirm Urbina’s conviction, but vacate the
sentence and remand for resentencing in light of Booker.
______________________________
-11-
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IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-93-530-CV
RAY W. MEYER,
APPELLANT
vs.
TEXAS HOUSING AGENCY AND RICHARD H. GARZA, IN HIS FORMER
OFFICIAL CAPACITY AND IN HIS OFFICIAL CAPACITY,
APPELLEES
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 200TH JUDICIAL DISTRICT
NO. 91-11800, HONORABLE F. SCOTT McCOWN, JUDGE PRESIDING
PER CURIAM
Appellant has filed a motion to dismiss this appeal. The motion is granted. Tex.
R. App. P. 59(a).
The appeal is dismissed.
Before Chief Justice Carroll, Justices Aboussie and B. A. Smith
Dismissed on Appellant's Motion
Filed: November 24, 1993
Do Not Publish
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COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-14-00448-CR
Cedric Tyrone Scott Jr. a/k/a Cedric § From Criminal District Court No. 2
Tyrone Scott
§ of Tarrant County (1324883D)
§ March 26, 2015
v.
§ Per Curiam
§ (nfp)
The State of Texas
JUDGMENT
This court has considered the record on appeal in this case and holds that
there was error in the trial court’s judgment. The judgment is modified to delete
the $500 fine. It is ordered that the judgment of the trial court is affirmed as
modified.
SECOND DISTRICT COURT OF APPEALS
PER CURIAM
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463 So.2d 856 (1985)
Alvin J. ARLEDGE as Administrator of the Succession of Joseph Alton Arledge, Plaintiff-Appellee,
v.
Arlen C. BELL, Defendant-Appellant.
No. 16706-CA.
Court of Appeal of Louisiana, Second Circuit.
January 23, 1985.
*857 Dimos, Brown, Erskine, Burkett & Smith by Wade R. Baggette, Monroe, for defendant-appellant.
Howell H. Heard, West Monroe, for plaintiff-appellee.
Before HALL, MARVIN and SEXTON, JJ.
SEXTON, Judge.
Arlen C. Bell appeals a declaratory judgment finding that he is indebted to the succession of Joseph Alton Arledge in the amount of $9,000, representing the unpaid balance of a loan from decedent to defendant. We reverse and remand for a new trial.
Decedent, Joseph Alton Arledge, was a single man with no children who died intestate on November 17, 1982. One sister, Willie Travis Arledge Bell, predeceased Joseph. He was survived by one brother, Alvin Julius Arledge, the duly qualified administrator of this succession. Defendant herein is one of the three children born to Willie Bell and is therefore a nephew to the decedent.
The administrator of the succession brought suit for declaratory judgment separately against defendant, and his sister Charlotte Bell, seeking declarations of the amounts of their respective indebtedness to the succession. Arlen Bell's answer alleged that the transaction was a gift and, in the alternative, that if the initial transaction was characterized as a loan, the debt was extinguished by remission in a long distance telephone call between Arlen C. Bell and the decedent. In interrogatories which were admitted into evidence, appellant conceded that the money was originally advanced from his uncle as a loan. The cases were consolidated for trial. Judgment was rendered in favor of the succession and against both defendants. Only Arlen C. Bell has appealed.
At trial Arlen Bell testified that in 1980 he borrowed $10,000 from his uncle in order to place a down payment on a home for his family. He subsequently paid ten installments of $100 each on the loan, reducing the unpaid balance to $9,000.
*858 On appeal, defendant urges the applicability of LSA-C.C. Art. 1888, et seq.,[*] claiming that the debt had been remitted by his uncle.
All that is required under the remission articles is a determination that the creditor intended to remit his claim or that he has estopped himself to claim the contrary. Cowley Corporation v. Shreveport Packing Co., 440 So.2d 1345 (La.App. 2d Cir.1983), writ denied, 444 So.2d 122 (La. 1984). While the remission of a debt cannot be revoked by a creditor, remission is never presumed unless it clearly appears that the creditor intended it. The burden of proving remission, express or tacit, rests with those claiming the benefit. Cowley, supra; Succession of Martin, 335 So.2d 494 (La.App. 2d Cir. 1976), writ denied, 337 So.2d 516 (La.1976). No particular form for remission is necessary and the remission may either occur by oral declaration or in writing. Gulf States Finance Corporation v. Moses, 56 So.2d 221 (La.App. 2d Cir.1951).
At trial, defendant's attorney attempted to elicit testimony concerning the substance of the long distance telephone conversation. Counsel for the succession objected on hearsay and relevancy grounds. The objection was sustained, and the evidence was admitted by proffer. Appellant contends that the trial court erred in refusing to admit and consider this evidence.
In regard to his relevancy argument, appellee contends that LSA-C.C. Art. 1536 precludes the admission of this evidence. Appellee claims that the alleged conversation relative to forgiveness of Arlen Bell's debt constituted a gift of a credit, an incorporeal thing. Thus, he asserts that LSA-C.C. Art. 1536, which stipulates formal requirements for the donation of incorporeal movables, is controlling, thus rendering appellant's evidence irrelevant.
Our initial inquiry, then, must be directed to the character of the transaction here involved to determine whether the formal requirements of Article 1536 are pertinent. It is clear from the testimony and answers to interrogatories of the defendant Arlen C. Bell that this transaction was originally intended to be a loan and not a donation. Therefore, if the deceased acted as the defendant asserts, that action forgave an existing obligation.
While the forgiveness of a debt may in some respects appear to be a donation because of the gratuitous intent manifested by the act of forgiveness, in specific terms it is the remission of a previous obligation. It therefore must be considered within the context of our law on remission.
As Professor Levasseur explains:
When remitting a debt, the creditor is usually motivated by a gratuitous intent (animus donandi). Such a gratuitous juridical act is tantamount to a donation and should, therefore, be subjected to the conditions of substance applicable to liberalities (collation, reduction, revocation...). However, the conditions of form pertaining to donations are not applicable (LCC 1536 et seq).
A. Levasseur, Precis in Conventional Obligations: A Civil Code Analysis, at 84 (1980). Accord, S. Litvinoff, 6 Louisiana Civil Law Treatise: Obligations, § 371 (1969). See also Hicks v. Hicks, 145 La. 465, 82 So. 415 (1919).
The redactors comment (b) to the new Article 1888 is succinctly in accord with Professor Levasseur:
(b) Although remission is an act gratuitous in principle, it is considered a sort of indirect liberality not subject to the requirements of form prescribed for donations. See 4 Aubry et Rau, Cours de droit civil francaisObligations 223 (Louisiana State Law Institute trans. *859 1965); 2 Colin et Capitant, Cours elementaire de droit civil francais 403 (10th ed. 1953); 7 Planiol et Ripert, Traite pratique de droit civil francais 716 (2nd ed. 1954); 1 Litvinoff, Obligations 627-628 (1969). See also Hicks v. Hicks, 145 La. 465, 82 So. 415 (1919); Reinecke v. Pelham, 199 So. 521 (La.App.Orl.1941). [Emphasis ours]
Therefore, while a remission may involve a donative intent on the part of the creditor, the authentic form requirements of LSA-C.C. Art. 1536 do not apply. A remission may be perfected by an oral agreement and appellant's evidence which sought to establish an oral remission was relevant.
We now turn to a consideration of the hearsay portion of the objection. Appellant argues that the conversation constituted a declaration against the decedent's interest and therefore fell within an established exception to the hearsay rule.
Appellant's assertion is correct. The general rule is that declarations of a party deceased are inadmissible if the same would be excluded as hearsay were he alive. Micheli v. Toye Bros. Yellow Cab Co., 174 So.2d 168 (La.App. 4th Cir.1965). However, such statements may be admitted into evidence under an exception to the hearsay rule if they constitute a declaration against the deceased's interest. Abunza v. Olivier, 230 La. 445, 88 So.2d 815 (1956); Wall v. Murrell, 280 So.2d 865 (La.App. 3rd Cir.1973). The court explained in Abunza that although a declaration against interest by a deceased is the weakest kind of testimony, it is admissible and does have some probative value. It must be scrutinized with great care, however, since it can be so easily fabricated, a fact which concerns the weight of the proof rather than its competency.
In summary, it is apparent that appellant's evidence was both relevant to his plea of remission, and fell within an established exception to the hearsay rule. Consequently, the trial court erred in refusing to admit this evidence.
In his final specification, appellant contends that the trial court erred in excluding testimony of the decedent's close familial ties with his nieces and nephews, and testimony concerning other transactions, both gifts and loans, from decedent to other nieces and nephews. Counsel for the succession urges the correctness of the trial court's ruling and argues that the evidence was irrelevant. This evidence, like the testimony concerning the telephone conversation, was admitted by proffer, and not heard or considered by the trial court.
For evidence to be relevant, it must have some probative value and be reasonably connected to the transaction in question. State in the Interest of Miles, 441 So.2d 61 (La.App. 3rd Cir.1983); Associates Financial Services Company, Inc. v. Ryan, 382 So.2d 215 (La.App. 3rd Cir. 1980); Vignes-Bombet Co., Inc. v. Rowe, 288 So.2d 889 (La.App. 1st Cir.1973). The trial court is, however, granted a great deal of discretion in assessing the probative value of evidence. City of Baton Rouge v. Tullier, 401 So.2d 422 (La.App. 1st Cir. 1981), writ denied, 406 So.2d 605 (La.1981).
In this case, the proffered testimony concerning decedent's close relationship with his nephew, and his custom of giving money or loaning money to his family members is generally relevant to show decedent's course of liberality and financial dealings with his family members, i.e., whether the deceased expected repayment of the loan or intended a remission of the debt. The objection tendered, therefore, is more appropriately considered as an argument against the weight to be afforded the evidence in question.
We therefore determine that the trial court erred in refusing to admit evidence of the telephone conversation between appellant and decedent and the evidence concerning decedent's relationship with this family members including his acts of generosity toward them. We therefore remand this matter to the district court for a new trial in order that appellant's proffered evidence be considered in determining whether a remission of this debt occurred. We adopt this course rather than deciding *860 the cause as we usually do when all of the evidence is before us for the following reasons.
While the law instructs an appellate court to sparingly remand when all of the facts are presented to it as here, the law also indicates that a remand is appropriate where a view of the witness is essential to judge his credibility. Ragas v. Argonaut Southwest Insurance Co., 388 So.2d 707 (La.1980); Ketcher v. Illinois Central Gulf Railroad Co., 440 So.2d 805 (La.App. 1st Cir.1983), writ denied, 444 So.2d 1220 (La.1984). Obviously, the linchpin of the defendant's case is the defendant's testimony that the deceased remitted the debt. Thus, the credibility of the defendant is all important to a resolution of the issues in the case, just as it was in the similar cause of Wall v. Murrell, supra. Because the trial court is obviously in a better position to determine this credibility than this court, we believe the ends of justice are best served by a remand for new trial. LSA-C. C.P. Art. 2164.
The judgment of the district court is reversed and the case is remanded for a new trial in accordance with the views expressed in this opinion. Costs of this appeal are taxed against appellee.
REVERSED AND REMANDED.
NOTES
[*] Prior to the revision of the "Obligations" articles of the Civil Code by Act No. 331 of 1984, the remission articles were contained in Article 2199, et seq. As the redactors comment to the new Article 1888 indicates, that Article does not change the law. While some changes were made in the remission articles, these changes primarily deal with the effects of remission on sureties and have no effect on the instant litigation. See generally, Section 4, Chapter 6 of the Expose Des Motif of the Project of Titles III and IV of Book III of the Civil Code of Louisiana.
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In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 03-2076
JERMAINE GILDON,
Petitioner-Appellant,
v.
EDWIN R. BOWEN, Warden,
Respondent-Appellee.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 03 C 1613—Milton I. Shadur, Judge.
____________
ARGUED MAY 26, 2004—DECIDED SEPTEMBER 30, 2004
____________
Before BAUER, POSNER, and COFFEY, Circuit Judges.
BAUER, Circuit Judge. Petitioner-Appellant, Jermaine
Gildon, brought this habeas corpus claim under 28 U.S.C.
§ 2254 challenging his Illinois state conviction for first-
degree murder. The district court dismissed the petition as
being untimely under the one-year period of limitations
pursuant to 28 U.S.C. § 2244(d). Gildon appeals.
2 No. 03-2076
I. Background
Gildon was tried by a jury in the Circuit Court of Will
County, Illinois. He was convicted of first-degree murder
and sentenced to thirty years of imprisonment. His direct
appeal resulted in the state court affirming his conviction
and it became final on July 5, 2000. Gildon then filed a
post-conviction petition which was denied on December 14,
2000. A Petition for Leave to Appeal was denied on April 3,
2002. The Illinois Supreme Court’s mandate issued on May 1,
2002. Gildon did not file a petition for writ of certiorari with
the Supreme Court.
Gildon next filed an undated, pro se federal habeas corpus
petition under 28 U.S.C. § 2254, which was file-stamped by
the Clerk of the Northern District of Illinois on March 5,
2003. On March 11, 2003, the district court sua sponte dis-
missed the habeas petition as untimely, relying on 28 U.S.C.
§ 2244(d)(1)(A), 28 U.S.C. § 2244(d)(2), and Gutierrez v.
Schomig, 233 F.3d 490 (7th Cir. 2000). On March 24, 2003,
Gildon’s motion to Alter and Amend Judgment was filed and
denied. This court granted a certificate of appealability on
July 21, 2003, allowing appeal on the following issues:
(1) whether the district court erroneously dismissed the
Petitioner’s petition for habeas corpus on timeliness grounds,
(2) whether Petitioner was denied an impartial jury when
a juror failed to disclose on voir dire that she had a familial
relationship with the victim and a hostile relationship to
the Petitioner’s family, (3) whether Petitioner was denied a
fair trial when the only witness to identify him recanted his
testimony, (4) whether Petitioner received ineffective
assistance of counsel based on counsel’s failure to object to
certain damaging testimony, and (5) whether Petitioner is
innocent and is entitled to relief under 28 U.S.C. § 2254.
Additional facts will be discussed within the discussion
portion of this opinion as necessary.
No. 03-2076 3
II. Discussion
A. Does the Supreme Court’s decision in Clay v. United States
overrule this court’s decision in Gutierrez v. Schomig?
Gildon’s first argument claims that his petition was timely
because his state post-conviction petition was pending dur-
ing the time that he could have, but did not file a petition
for writ of certiorari to the Supreme Court from the denial
of his Petition for Leave to Appeal to the Illinois Supreme
Court. In making this argument, Petitioner asks that we
reverse our earlier holding that the period of limitations
under 28 U.S.C. § 2244(d) “is not tolled during the time a
state post-conviction petitioner could have filed, but did not
file, a petition for certiorari review in the United States
Supreme Court.” Gutierrez, 233 F.3d at 490. Gildon claims
that Clay v. United States, 537 U.S. 522 (2003), demon-
strates that Gutierrez was wrongly decided.
Clay dealt with the one-year period of limitations pro-
vision under 28 U.S.C. § 2255. The relevant portions of that
provision read “[a] 1-year period of limitation shall apply to
a motion under this section. The limitation period shall run
from the latest of . . . (1) the date on which the judgment
becomes final.” 28 U.S.C. § 2255. The Court held that a
direct appeal is “final” when the Supreme Court “affirms a
conviction on the merits on direct review or denies a
petition for a writ of certiorari, or when the time for filling
a certiorari petition expires.” Clay, 537 U.S. at 527.
28 U.S.C. § 2244(d)(2) reads, “[t]he time during which a
properly filed application for State post-conviction or other
collateral review with respect to the pertinent judgment or
claim is pending shall not be counted toward any period of
limitation under this subsection.” Gildon claims that Clay
requires the period of limitation to be tolled during the time
when a petitioner could have, but did not file a petition for
writ of certiorari from the denial of their State post-con-
viction relief. But Clay says nothing about a “properly filed”
or “pending” petition. Instead, that case discussed “final.”
4 No. 03-2076
Clay, 537 U.S. at 524. However, Gildon claims that Griffith
v. Kentucky, 479 U.S. 314, 321 (1987), which was cited with
approval in Clay, used the terms “pending” and “final”
interchangeably. Therefore, the argument continues, “under
the reasoning in Clay, the term ‘pending’ in 28 U.S.C. §
2244(d)(2) should also include the time for filing a petition for
certiorari to the United States Supreme Court.”
We are not persuaded that Clay overruled Gutierrez. The
cases have almost nothing in common, nor do the statutes
at issue; Clay dealt with a federal prisoner’s habeas petition,
Gildon is a State prisoner; the term construed in Clay was
“final”, where here, the term is “pending”; the issue in Clay
dealt with finality of a direct appeal, while here, we ask
whether a properly filed post-conviction petition was pend-
ing. Clay, 537 U.S. at 524. Such distinctions are not minor,
especially in light of the Supreme Court’s statement that
“[f]inality is variously defined; like many legal terms, its
precise meaning depends on context.” Id. at 527. Nevertheless,
any doubts which we might have habored about the applica-
bility of Clay to § 2244(d)(2) are resolved by the legislature’s
use of the words “properly filed.”
Even if Clay’s interpretation of “final” in 28 U.S.C. § 2255
can be transferred to interpret the meaning of “pending” in
18 U.S.C. § 2244(d)(2), our decision would remain the same.
As Gutierrez points out, “[b]ecause [petitioner] never filed
a petition for certiorari review in the Supreme Court, his
potential certiorari petition was never ‘properly filed.’ When
Congress intended to exclude from the limitations period
time during which a pleading could have been filed, it did so
explicitly. See, e.g., [28 U.S.C.] § 2244(d)(1)(A).”1 Gutierrez,
233 F.3d at 492. Such a reading comports with the “plain
1
28 U.S.C. § 2244(d)(1)(A) reads, “[t]he limitation period shall run
from the latest of . . . the date on which the judgment became final
by the conclusion of direct review or the expiration of the time for
seeking such review.”
No. 03-2076 5
language” rule of statutory construction. Estate of Cowser
v. Comm’r of Internal Revenue, 736 F.2d 1168, 1171 (7th Cir.
1984) (“It is a common rule of statutory construction that
when the plain language of a statute is clear, courts need
look no farther than those words in interpreting the stat-
ute”). Further, though we need go no further, it is notewor-
thy that when Congress includes language in one section of
a statute, but omits such language in another section, it is
presumed that Congress acted intentionally in authoring
disparate statutes. Duncan v. Walker, 533 U.S. 167, 173
(2001).
Gildon next claims that “consistency and fairness argue
strongly for tolling the 1–year limitations period during the 90
day period that petition for writ of certiorari is available to
the Petitioner.” However laudable the goals, we are pri-
marily concerned with what the legislature intended when
it enacted the statute. Any inconsistencies in the period of
limitation under 28 U.S.C. § 2244(d) are therefore, an issue
for Congress, not the courts.
B. Equitable Tolling
Before considering the equitable tolling claim, we address a
related issue; whether the district court erred when it dis-
missed sua sponte Gildon’s petition as being untimely. Since
the period of limitations is an affirmative defense, the state
has the burden of showing that the petition is untimely.
Acosta v. Artuz, 221 F.3d 117, 121-22 (2nd Cir. 2000). In our
adversary system, it is the usual rule that a court rule on
an affirmative defense after the input of the parties. Id.,
citing United States v. Burke, 504 U.S. 229, 246 (1992)
(Scalia, J. concurring) (“The rule that points not argued will
not be considered is more than just a prudential rule of
convenience; it’s observance, at least in the vast majority of
cases, distinguishes our adversary system of justice from an
inquisitorial one.”). Nevertheless, the district court may
6 No. 03-2076
dismiss a petition sua sponte if it appears on its face to be
without merit. Acosta, 221 F.3d at 122. Although the
petition appeared to be untimely, it is difficult to conceive
of a situation where a claim of equitable tolling would be
clear on the face of the petition. So, we will address Gildon’s
claim in this respect.
Petitioner argues that he should be allowed to proceed
with his habeas claim under the principles of equitable toll-
ing. Equitable tolling is proper when extraordinary cir-
cumstances outside of the petitioner’s control prevent timely
filing of the habeas petition. United States v. Marcello, 212
F.3d 1005, 1010 (7th Cir. 2000). Gildon explains that he is
entitled to benefit from this doctrine because his application
would have been timely if the corrections officers had
delivered his mail on time. That story follows.
Gildon’s attorney assisted in preparing the habeas appli-
cation, and on February 11, 2003, the attorney sent the appli-
cation, via Federal Express, to Gildon.2 Gildon however,
never received the application and his brief states that the
correctional center employees never delivered the package.
Gildon then says, “[i]f Centralia Correctional Center had
delivered the application, petitioner would have clearly had
the application on file prior to February 14, 2003.” He
claims that February 14, 2003 was the day the clock ran out
under 28 U.S.C. § 2244(d). He is mistaken.
Gildon arrives at February 14, 2003 as the deadline for fil-
ing his habeas claim by claiming that the Illinois Appellate
Court’s ruling on his post-conviction proceedings was pending
until the court issued its mandate. The government, on the
other hand, argues that the decision became final on the
day the judgment was entered. The issue is important be-
2
Gildon’s brief says that the application was sent to him on
February 11, 2002, not 2003. We assume that this is a mistake.
Nevertheless, neither date will affect the opinion.
No. 03-2076 7
cause Gildon cannot meet the equitable tolling require-
ments if the period of limitations expired prior to February
12, 2003, the day that Gildon should have received the
habeas application.
State law controls the issue of when a state action if pend-
ing and when it is final. Wilson v. Battles, 302 F.3d 745, 747
(7th Cir. 2002). This court has noted in the past that the
judgment of an Illinois Court of Appeals is final on the day
it is entered. Wilson, 302 F.3d at 747 (citing PSL Realty Co.
v. Granite Inv. Co., 427 N.E.2d 563, 569-70 (Ill. 1981)). There-
fore, Gildon’s State post-conviction proceedings became final
when the judgment was entered. This means that the
period of limitations ran out well before February 14, 2003
which, in turn, means that equitable tolling is unavailable.
C. Actual Innocence
Gildon finally attempts to circumvent the constraints of
28 U.S.C. § 2244 by arguing “actual innocence.” However,
neither the Supreme Court nor this court has ever applied
the actual innocence exception to overcome the failure to
timely file under § 2244. We find the Eight Circuit’s anal-
ysis of this issue in Flanders v. Graves, to be persuasive.
We do not hold that actual innocence can never be rele-
vant to a claim that the habeas statute of limitations
should be equitably tolled. For such a claim to be viable,
though, a petitioner would have to show some action or
inaction on the part of the respondent that prevented
him from discovering the relevant facts in a timely
fashion, or, at the very least, that a reasonably diligent
petitioner could not have discovered these facts in time
to file a petition within the period of limitations.
Flanders v. Graves, 299 F.3d 974, 978 (8th Cir. 2002).
Like Flanders, Gildon has not made such a showing and
therefore, the district court did not err in dismissing his
petition as untimely.
8 No. 03-2076
III. Conclusion
Because we find that the district court did not err in dis-
missing Gildon’s habeas petition as untimely under 28 U.S.C.
§ 2244(d), we do not address the merits of his claim. The
decision of the district court is AFFIRMED.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—9-30-04
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423 F.Supp.2d 691 (2006)
TRANSAMERICA ASSURANCE CORPORATION, Plaintiff,
v.
UNITED STATES of America, Settlement Capital Corporation and Gary Steele, Defendants.
Civ.A. No. 3:05CV-126-H.
United States District Court, W.D. Kentucky, at Louisville.
March 22, 2006.
*692 Richard M. Rubenstein, Peoples Benefit Life Insurance Company, Stephen Richie Price, Wyatt, Tarrant & Combs, Louisville, KY, for Plaintiff.
Benjamin Seth Schecter, U.S. Attorneys Office, Louisville, KY, Frank P. Doheny, Jr., Dinsmore & Shohl, Matthew T. Bracy, Robert B. Weathersby, Suzanne B. Campbell, Andrews Kurth LLP, Dallas, TX, for Defendants.
MEMORANDUM OPINION
HEYBURN, Chief Judge.
This is an interpleader action filed by TransAmerica Assurance Corporation ("TAC") the issuer of an annuity contract, the payment of which is in dispute. Discovery is now complete and the parties have filed motions for summary judgment. *693 The interesting issue presented here is whether the doctrine of sovereign immunity precludes a state court from exercising jurisdiction over a case involving a settlement agreement entered into by the United States.
The Court has thoroughly discussed the issues with counsel at a conference. The Court concludes that the doctrine of sovereign immunity voids the state court order that required the United States to take a specific action transferring rights to annuity payments to a third party, Settlement Capital Corporation ("SCC"). To accomplish its objectives, SCC must file an independent action in federal court.
I.
In 1989, Gary Steele ("Steele") was injured in an auto accident with a Virginia National Guard tractor. Steele filed a tort claim against the United States pursuant to the Federal Tort Claims Act, 28 U.S.C. §§ 2671-2680. ("FTCA"). In 1991, the United States and Steele entered into a settlement agreement ("Settlement Agreement").
As part of the terms of the Settlement Agreement, the United States agreed to purchase an annuity (the "Annuity") for Steele's benefit, the Annuity being "owned solely and exclusively by the UNITED STATES. . . ." By the terms of the Settlement Agreement, all settlement funds were to be "free from anticipation, assignment, pledge, or obligations of the claimants' heirs, executors, administrators, successors or assigns, and shall not be subject to attachment, execution or other legal process."
Pursuant to the Settlement Agreement's terms, the United States entered into a contract with TAC to purchase an annuity for Steele's benefit. In the annuity contract, the United States is the owner of the Annuity, TAC is its issuer, and Steele is the measuring life and the designated payee. Pursuant to the annuity, the United States "has the right at any time to designate to whom annuity payments will be made." Accordingly, the United States made provision for Steele to receive periodic payments over the course of his life.
SCC is a finance company that purchases rights to structured settlement payments throughout the country. In 2003, Steele, agreed to assign his right to future annuity payments to SCC. In exchange, SCC was to pay Steele $18,250.00 in a lump-sum payment.[1]
The State of Florida requires judicial approval of such a procedure. On January 6, 2004, SCC filed a petition in a state court in the Eleventh Judicial Circuit Court of Miami-Dade County, Florida pursuant to the Florida Structured Settlement Transfer Act. In that state action, SCC sought judicial approval to transfer the rights of Steele's payments under the Annuity.
As required under the Florida statute, SCC sent notice to the United States and TCA, both of whom were "interested parties" within the meaning of the Florida Structured Settlement Transfer Act. See Fla. Stat. Ann. § 626.99296(2)(i). The Florida state court approved the transfer at a hearing on February 3, 2004. Neither TCA nor the United States appeared at the hearing nor voiced any objections at that time. In its order, the Florida court stated that the transfer of structured settlement payment rights from Steele to SCC "is in the best interests of [Mr. Steele] and satisfies the Internal Revenue Code Section 5891 and does not contravene any Federal or State statute. . . ." The court further noted that it "makes no finding regarding the enforceability of any *694 non-assignment provisions contained in the original Settlement Agreement or related documents." Nevertheless, the court approved the transfer and ordered that "pursuant to the approval of the Transfer, Structured Settlement Obligor [the United States] is hereby ordered to direct Annuity Issuer [TAC] to make and pay the assigned monthly payments . . . to [SCC]."
On February 5, 2004, the United States sent a letter to the Florida court indicating that the payments were not assignable and that the Florida court lacked jurisdiction to affect a federal contract right of the United States. The United States also stated in the letter that it was not a party to the Florida court proceeding, would not make an appearance in the Florida court proceeding, and would not subject itself to the jurisdiction of the Florida court.
After the Florida court approved the transfer, SCC sought payment from TAC under the Annuity. The United States ordered TAC to continue paying Steele unless otherwise directed by the United States. TAC filed this interpleader action asking the Court to direct and declare to whom the periodic payments at issue should be paid.
II.
The sole question raised here is whether TAC must comply with the Florida state court order. The answer depends in turn on whether the state court properly asserted subject matter jurisdiction over the matter. See Twin City Fire. Insurance Co. v. Adkins, 400 F.3d 293, 299 (6th Cir.2005) ("Where a federal court finds that a state-court decision was rendered in the absence of subject matter jurisdiction or tainted by due process violations, it may declare the state court's judgment void ab initio and refuse to give the decision effect in the federal proceeding.") (citations omitted). The United States argues that the Florida state court lacked subject matter jurisdiction because its proceedings were barred by the doctrine of sovereign immunity.
Sovereign immunity is jurisdictional in nature. United States v. Mitchell, 463 U.S. 206, 212, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983). "`Absent a waiver, sovereign immunity shields the Federal Government and its agencies from suit.'" Department of the Army v. Blue Fox, Inc., 525 U.S. 255, 259, 119 S.Ct. 687, 142 L.Ed.2d 718 (1999) (quoting FDIC v. Meyer, 510 U.S. 471, 475, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994)). A suit is against the sovereign if " the judgment sought would expend itself on the public treasury or domain, or interfere with the public administration,' or if the effect of the judgment would be `to restrain the Government from acting, or to compel it to act.'" Dugan v. Rank, 372 U.S. 609, 620, 83 S.Ct. 999, 10 L.Ed.2d 15 (1963) (internal citations omitted) (quoting Land v. Dollar, 330 U.S. 731, 738, 67 S.Ct. 1009, 91 L.Ed. 1209 (1947) and Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 704, 69 S.Ct. 1457, 93 L.Ed. 1628 (1949)). The policy behind this rule is that the government should not be hampered in its performance of activities essential to the governing of the nation, unless it has given its consent. See Larson, 337 U.S. at 704, 69 S.Ct. 1457; see also Commissioners of the State Ins. Fund v. United States, 72 F.Supp. 549, 552 (D.C.N.Y.1947) (sovereign immunity grounded on the doctrine that "The King can do no wrong.").
In this case, by the time the state court judgment was entered, the United States had already paid the entire purchase price for the Annuity. Therefore, the state court judgment did not "expend itself on the public treasury or domain." However, the Florida state court order does implicate other aspects of the doctrine of sovereign immunity. Allowing the Florida *695 court to assert jurisdiction over the Settlement Agreement interferes with the government's administration of its settlement agreement. Although the Florida court did not profess to interpret the terms of the Settlement Agreement, its judgment effectively modified the United States government's rights and obligations under both the Settlement Agreement and the Annuity. This affected rights of the United States in a real way.
The United States is the sole and exclusive owner of the Annuity. The language of the Annuity clearly states that no assignment of the contract may be made other than by the United States as owner and that the only person entitled to payment is Steele. This payment structure is consistent with an express congressional policy that generally prohibits assignments of contracts with the United States. See 31 U.S.C. § 3727.[2] Moreover, in cases like this one, the United States has a unique interest in prohibiting the transfer of longterm FTCA settlement payments. By providing a stable stream of income to persons injured by government negligence, the United States may reduce the likelihood that an injured party will recover twice for the same injury: once in the form of an FTCA settlement; and again in the form of a government-benefits program, such as Social Security or Medicaid. By ordering the assignment, and effectively nullifying contractual language prohibiting assignment, the Florida court interfered with the public administration of a contract executed and owned by the United States.[3]
More importantly, the operative language of the Florida state court judgment compelled the United States government to act. The Florida court order proclaimed that the "Structured Settlement Obligor [the United States] is hereby ordered to direct Annuity Issuer [TAC] to make monthly payments . . . to [SCC]." Consequently, the order did require direct and affirmative action on the part of the United States.
The Court finds this case distinguishable from Gao v. Jenifer, 185 F.3d 548 (6th Cir.1999), in which the Sixth Circuit found that the compulsory effect of a state court judgment was too indirect to qualify as a suit against the United States. In Gao, a minor entered the country illegally, and was placed in the custody of a social services *696 agency. The agency successfully petitioned the local probate court to find that Gao was "dependent" and that it would not be in his best interests to return to his native country. Based on that determination, he then requested that the INS classify him in "Special Immigrant Juvenile" (SIJ) status. The INS denied the petition on the basis that the state court did not have the power to declare Gao dependent and, absent that determination, he did not qualify for SIJ status. It argued that the United States' sovereign immunity barred the state court from asserting jurisdiction over the petition because the judgment prevented the government from deporting him. The Sixth Circuit disagreed. It held that the state court's action in granting the status at issue did not, under the terms of the Statute, determine what would happen to Gao; it merely gave him the right to seek the benefits at issue. Id. at 554. Thus, the court held that the state court proceeding was not a suit against the United States. Id. at 554-55. Here, however, the state court judgment automatically imposes obligations on the United States. The United States has no choice but to file a written notice with TAC seeking to designate SCC as the Annuity's payee.
Notwithstanding the above analysis, SCC argues that the doctrine of sovereign immunity is inapposite because the state court proceedings in this case were akin to in rem proceedings. The Supreme Court has held that certain in rem proceedings do not qualify as suits against the government and therefore do not trigger sovereign immunity protection. See, e.g., Tennessee Student Assistance Corp. v. Hood, 541 U.S. 440, 453, 124 S.Ct. 1905, 158 L.Ed.2d 764 (2004) ("Our [Eleventh Amendment] precedent has drawn a distinction between in rem and in personam jurisdiction, even when the underlying proceedings are, for the most part, identical."). But as far as this Court is aware, there is no general "in rem" exception to the doctrine of sovereign immunity. Rather, the Supreme Court has excepted only two very specific types of in rem proceedings from sovereign immunity analysis: bankruptcy proceedings, see, id. at 453-54; and admiralty cases, see, e.g., California v. Deep Sea Research, Inc., 523 U.S. 491, 494-95, 118 S.Ct. 1464, 140 L.Ed.2d 626 (1998) (stating that sovereign immunity does not prevent federal courts from hearing admiralty case brought in rem where res is not within the state's possession). Therefore, despite the fact that the Florida state court action arguably resembled an in rem action, absent further guidance, this Court holds that the litigation qualifies as a suit against the United States.
Because the state court proceeding qualifies as a suit against the United States, the state court's jurisdiction depends on whether the United States has waived its immunity with respect to the particular proceeding. See Blue Fox, Inc., 525 U.S. at 259, 119 S.Ct. 687. Only an unequivocal and express act of Congress can act to waive sovereign immunity. See Lane v. Pena, 518 U.S. 187, 192, 116 S.Ct. 2092, 135 L.Ed.2d 486 (1996). Here, no congressional act expressly authorizes a state court to exercise jurisdiction over a petition to transfer payment rights under a structured settlement agreement executed and owned by the United States. Congressional enactment of favorable tax treatment for structured settlement transferees, see 26 U.S.C. § 5891, does not constitute its waiver of sovereign immunity in this context; and therefore, the Florida state court lacked jurisdiction to transfer Steele's interests. In these circumstances, even though the United States received notice of the lawsuit, it had no obligation to appear and object to SCC's request. This is so because the absence of subject matter jurisdiction voids the entire proceeding and all orders arising from it. The judgment *697 transferring Steele's payment rights is null and void. See Twin City Fire Insurance Co., 400 F.3d at 299.
One might suggest that the logical extension of this analysis is that Steele can never gain approval for the transfer of structured settlement payments under Florida law. The Court does not believe that this is so. The federal government is not categorically immune from petitions to transfer structured FTCA settlements. The United States has waived sovereign immunity over federal contract claims and tort actions against it; however, those waivers expressly dictate that only a court established pursuant to Article III of the United States Constitution may exercise jurisdiction over those matters. See 28 § 1346(a)(2) (conferring exclusive jurisdiction on federal courts of "any civil action or claim against the United States founded upon any express or implied contract with the United States"); see also 28 U.S.C. § 1346(b) (the federal district courts "shall have exclusive jurisdiction of civil actions against the United States, for money damages . . . for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment"). Accordingly, the proper forum for SCC's current petition is a federal courtnot the Eleventh Judicial Circuit Court of Miami-Dade County, Florida. Also, it would appear that it is appropriate to file a petition pursuant to the Florida Structured Settlement Transfer Act in federal court. The federal court can certainly interpret and follow Florida law. Moreover, the Florida statute permits any court of "competent jurisdiction" to authorize the transfer "based on the written express findings" that the statute requires. Fla. Stat. Am. § 626.99296(3)(a).
Therefore, TAC must pay the interpleaded funds and future payments under the Annuity to the person entitled to receive them before that judgment was entered: Steele.
The Court will enter an order consistent with this Memorandum Opinion.
NOTES
[1] The payments outstanding under the Annuity totaled $37,453.32.
[2] Section 3727, the Anti-Assignment Act, restricts the voluntary assignment of claims against the government, including the right to future payments in a settlement agreement. The Act is intended to prevent traffic in government claims, which would breed corruption and influence-peddling, and to avoid the proliferation of claims and claimants, which would increase the government's risks and burdens in the handling and payment of claims, Saint John Marine Co. v. United States, 92 F.3d 39, 48 (2d Cir.1996), as well as to make unnecessary the investigation of assignments, and preserve the government defenses which the government might have by way of set-off and counterclaim and which might not be available against an assignee. Stearns Co., Ltd. v. United States, 34 Fed. Cl. 264 (1995). The Act, however, does not affect the rights of parties to an assignment. Arthur Pew Constr. Co. v. Lipscomb, 965 F.2d 1559, 1576 (11th Cir.1992). "Whether or not an assignment is valid as against the United States, it is effective and binding on the parties." Id.
[3] As the parties point out, there is a split of authority as to the assignability of structured settlement agreements between private parties with language similar to that employed in this case. Compare Allstate Ins. Co. v. American Bankers Ins. Co., 882 F.2d 856, 859-60 (4th Cir.1989) (assignment of annuitant's right to receive monthly payments unenforceable) with Settlement Funding, LLC v. Jamestown Life Ins. Co., 78 F.Supp.2d 1349, 1356 (N.D.Ga.1999) (assignment of structured settlement payments, funded by an annuity, enforceable). However, no reported case has held that a structured settlement agreement can be assigned pursuant to a state court order when the settlement was executed by the United States government.
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100 Ill. App.3d 973 (1981)
427 N.E.2d 399
JEROME M. ORBACH, Petitioner-Appellant,
v.
RALPH H. AXELROD et al., Respondents-Appellees.
No. 80-2363.
Illinois Appellate Court First District (1st Division).
Opinion filed October 5, 1981.
*974 Michael Kreloff and Franklin S. Schwerin, both of Chicago, for appellant.
Michael L. Levinson, Andrew M. Raucci, and Michael P. McClelland, all of Chicago, for appellees.
Reversed and remanded.
Mr. PRESIDING JUSTICE CAMPBELL delivered the opinion of the court:
Jerome M. Orbach (petitioner) filed an election contest after the Board of Election Commissioners declared Ralph H. Axelrod (respondent) elected Democratic Ward Committeeman for Chicago's 46th Ward. The trial court found for respondent. In his appeal, petitioner raises a variety of issues relating to the validity of the trial court's rulings in regard to whether certain ballots were properly counted. For the following reasons we reverse and remand this cause to the circuit court of Cook County with directions to dismiss the petition.
The parties were candidates for Democratic Ward Committeeman for Chicago's 46th Ward in the March 18, 1980, primary election. The 46th Ward contains 53 precincts and comprises the Uptown and Edgewater neighborhoods of Chicago's north lakefront. It utilizes automatic voting machines, punch card ballots and paper ballots for absentee voting. On March 28, 1980, the Board of Election Commissioners, which administers elections within the city of Chicago, proclaimed the respondent elected by a margin of two votes. Both parties filed for a discovery recount pursuant to statute. (Ill. Rev. Stat. 1979, ch. 46, par. 22-9.1.) Furthermore, petitioner filed his petition for election contest on April 25, 1980. The amended verified petition alleged that petitioner was a resident, elector and legal voter of the 46th Ward as well as a candidate. It alleged irregularities as to the voting procedure in a number of precincts. It specifically alleged that certain ballots were invalidated because the respective voters involved were not duly registered qualified voters, that certain absentee ballots should not have been counted because they had been handled by non-election judges, that the failure of election judges to properly initial certain absentee ballots invalidated these ballots and that several absentee and punch card ballots had not been tallied for various unstated reasons. According to the amended verified petition, had the *975 foregoing votes been handled and tallied properly, petitioner would have been proclaimed ward committeeman.
Respondent filed responsive pleadings including an amended counterclaim alleging certain irregularities in the counting of various ballots and a motion to dismiss the petition. The motion alleged that the petition had not been filed within the statutory time limit for filing such petitions (Ill. Rev. Stat. 1979, ch. 46, par. 7-63) and challenged the jurisdiction of the trial court to hear the contest. After a hearing, the trial court denied the motion. The trial court also denied respondent's motion for certification of the question to this court pursuant to Supreme Court Rule 308 (Ill. Rev. Stat. 1979, ch. 110A, par. 308).
After hearing testimony and examining the ballots at issue the trial court concluded that both candidates' votes should be increased due to changes required by his rulings as to various votes. He further declared that respondent was elected to the position of ward committeeman, however, only by a margin of 1.84 votes rather than the earlier determined 2-vote margin. It is from this judgment that petitioner appeals. Because we believe that the trial court improperly denied respondent's motion to dismiss, we find it unnecessary to extensively detail the testimony concerning either the preservation of the ballots or the voting irregularities raised by both parties. In the view that we take of this case the only question we must address is the construction of several provisions of article 7 and article 23 of the Election Code (Ill. Rev. Stat. 1979, ch. 46, par. 1-1 et seq.).
The Election Code codifies the election and primary laws of this State and provides for the time for holding elections, voter qualifications and registration, nomination of candidates, procedural aspects of the elections and post-election procedures. Article 7 of the Election Code (Ill. Rev. Stat. 1979, ch. 46, par. 7-1 et seq.) encompasses virtually unchanged the primary election act of July 6, 1927, which regulated the nomination and election of primary candidates. In a primary election, candidates vie for nomination as their party's candidate for State, congressional, judicial, city, county, village, town, municipal district and township offices. Additionally, precinct, township, ward and State central committeemen and delegates and alternate delegates to national nominating conventions are elected at primary elections. It should be emphasized that neither the Election Code nor the earlier primary election laws granted authority to political parties to nominate and elect candidates but rather "recognizes such power existing in them, and prescribes the manner in which it shall be exercised." (People v. Kramer (1928), 328 Ill. 512, 160 N.E. 60.) Article 23 of the Election Code (Ill. Rev. Stat. 1979, ch. 46, pars. 23-1 et seq.) generally provides for contesting elections. It specifically regulates who *976 may bring an election contest and grants jurisdiction to the circuit courts over various types of election contest.
Respondent's motion to dismiss contended that the petition for election contest had not been timely filed. It alleged that section 7-63 of the Election Code (Ill. Rev. Stat. 1979, ch. 46, par. 7-63) required the filing of the election contest within 10 days of the March 28, 1980, proclamation of the official election canvass. The petition for election contest was filed April 25, 1980, and accordingly was filed approximately 28 days after the official proclamation. Petitioner's contention in the trial court and in this court is that, because the instant election contest pertained to an election rather than a nomination, it was not covered by the provisions of article 7, which pertained to primaries and nominations, but rather was covered by article 23, which provides for the contests of elections. Petitioner specifically relies upon section 23-20 (Ill. Rev. Stat. 1979, ch. 46, par. 23-20), whereby an elector may file a petition for election contest within 30 days of the official proclamation and points out that his petition was filed on April 25, 1980, within 30 days of the March 23, 1980, proclamation of the official election canvass.
The only decision of this court which has addressed the construction of articles 7 and 23 is Whitsell v. Rutherford (1969), 118 Ill. App.2d 401, 255 N.E.2d 34 which involved an election contest by a candidate for precinct committeeman in Madison County. The trial court there granted a motion to dismiss on the basis that the petition for election contest was not timely filed and, moreover, did not state a cause of action. On review, the court held that section 7-63 (Ill. Rev. Stat. 1979, ch. 46, par. 7-63), which provides for primary election contests, failed to provide a procedure for contesting a precinct committeeman's election. Therefore, the court determined that the legislature did not intend article 7 to be the exclusive means of contesting an election for precinct committeeman. The court then turned to a consideration of the provisions of article 23. The court noted that section 23-5 (Ill. Rev. Stat. 1979, ch. 46, par. 23-5) provides for the grant of jurisdiction to the circuit court to hear election contests of "all other county, township and precinct officers, and all other officers for the contesting of whose election no provision is made" and that the term "precinct officers" used therein could only refer to the position of precinct committeeman. Thus, the court concluded that an election contest for a precinct committeeman could be brought properly under section 23-20 (Ill. Rev. Stat. 1979, ch. 46, par. 23-20), which provides for the filing of a petition for election contest within 30 days from the date a candidate is declared elected.
Petitioner contends that the Whitsell court's construction of article 23-5, as applicable to the contest of a precinct committeeman, should be extended to include ward committeeman. Petitioner urges this argument *977 is supported by Illinois decisions which have construed the "all other officer" language of section 23-5 to refer to other officers of the same or like grade or class. (Baker v. Shinkle (1911), 249 Ill. 154, 94 N.E. 58; Misch v. Russell (1891), 136 Ill. 22, 26 N.E. 528; Brush v. Lemma (1875), 77 Ill. 496.) In Misch, the court held that the phrase "all other officers" cannot be limited to officers specifically named in this provision as this would violate the rule of statutory construction known as ejusdem generis as well as the rule that no word in a statute shall be construed to be superfluous. Moreover, in holding that the court had jurisdiction over the election contest of a school district board of education president, the supreme court noted that the officers specifically named in this provision are officers of quasi-municipal corporations. From this the court reasoned that the phrase "all other officers" should be construed as including all like officers of quasi-municipal corporations. It would appear using this analysis that a ward would constitute a quasi-municipal corporation similar to a precinct and a ward committeeman would constitute the only possible ward officer whose election would be contested under this provision. See Whitsell v. Rutherford.
We find a strong differentiation between Whitsell and the case at bar. The pertinent section 5 of article 23 (Ill. Rev. Stat. 1979, ch. 46, par. 23-5) relied on by petitioner authorizes the circuit court to hear election contests "of all other county, township and precinct officers, and all other officers for the contesting of whose election no provision is made."
1 A "precinct officer" in Madison County may conceivably be covered by that language. However, a ward committeeman is not and cannot be classified as a county officer. He is, rather, a party officer. The pertinent statute provides for and describes the duties of various county officers who are governing officials. (See Ill. Rev. Stat. 1979, ch. 34.) On the contrary, a ward committeeman is not a governing official but is strictly and only a political functionary.
2 The rules of statutory construction require this court to determine and follow the intent of the legislature's acts. (Carey v. Elrod (1971), 49 Ill.2d 464, 275 N.E.2d 367.) As the court explained in Huckaba v. Cox (1958), 14 Ill.2d 126, 131, 150 N.E.2d 832,
"It is a cardinal rule of statutory construction that the intent and meaning of a statute are to be determined from the entire statute. A statute is passed as a whole and not in parts. Each section and provision should be construed in connection with every other part or section. [Citation.] In Scofield v. Board of Education, 411 Ill. 11, we said, at page 15: `It is a generally accepted principle of statutory construction, and has been so held by this court many times, that in construing a statute or determining its constitutionality, all its sections are to be construed together in the light of the general *978 purpose and plan, the evil intended to be remedied, and the object to be obtained, and if the language is susceptible of more than one construction, the statute should receive the construction that will effect its purpose rather than defeat it.'"
This rule has been specifically applied in construing the Election Code in Young v. Mikva (1977), 66 Ill.2d 579, 363 N.E.2d 851, and Carey v. Elrod (1971), 49 Ill.2d 464, 275 N.E.2d 367. Moreover, the consequences resulting from various constructions of an act must also be taken into consideration. (People ex rel. Holland v. Edelman (1975), 27 Ill. App.3d 793, 327 N.E.2d 338.) Where several constructions may be placed upon a statute, the court should select that which leads to a logical result and avoid one which the legislature could not have contemplated. Board of Education v. Community High School District No. 211 (1967), 89 Ill. App.2d 481, 232 N.E.2d 316; People ex rel. Cason v. Ring (1968), 41 Ill.2d 305, 242 N.E.2d 267.
An analysis of article 7 as a whole reveals a comprehensive, all inclusive approach to regulating the course and conduct of primary elections ranging from petitions for nomination, the qualifications of voters at a primary, procedures for the election itself and post-election procedures, including section 7-63 concerning primary contests which is at issue here. In fact, the article's scope of subject matter closely parallels the subject matter of the remaining articles of the Election Code which deal with general elections. The legislature's approach in this article clearly evidences an intent to regulate every aspect of the nomination or election of candidates at a primary including the contest of elections.
3 This conclusion is buttressed by reference to section 7-1. It provides that the nomination of certain specified candidates as well as the election of certain specified candidates, including ward committeeman, "shall be made in the manner provided in this article 7, and not otherwise." We believe that section 7-1's declaration, that elections held at a primary shall be made only in the manner set forth in article 7 was intended to limit the contest of said elections to the primary contest provision found in this article, section 7-63. We reach this determination on the basis that an election contest is merely one of several procedures in article 7 relating to post election procedures. Moreover, a contest is intrinsically related to the holding of the election.
To accept petitioner's theory in this regard we would be required to overlook the important words "and not otherwise." This would effectively emasculate the statute and would be contrary to "the fundamental rule that each word, clause or sentence must, if possible, be given some reasonable meaning. Hirschfield v. Barrett (1968), 40 Ill.2d 224, 230, 239 N.E.2d 831.
Our examination of the entire article 7 convinces us that the time of *979 filing of this contest is governed by section 63 of article 7. To begin with, section 1 of article 7 (Ill. Rev. Stat. 1979, ch. 46, par. 7-1) expresses specifically that it is applicable to "the election of precinct, township, ward and State central committeemen * * *." In addition, section 63 of article 7 (Ill. Rev. Stat. 1979, ch. 46, par. 7-63) provides specifically:
"Authority and jurisdiction are hereby vested in the circuit court or in the judges thereof, to hear and determine primary contests."
A few lines above this statement, the same section (par. 7-63) provides:
"Any candidate whose name appears upon the primary ballot of any political party may contest the election of the candidate or candidates nominated for the office for which he was a candidate by his political party, upon the face of the returns, by filing with the clerk of the circuit court a petition in writing, setting forth the grounds of contest, which petition shall be verified by the affidavit of the petitioner or other person, and which petition shall be filed within 10 days after the completion of the canvass of the returns by the canvassing board making the final canvass of returns. The contestant shall also file with that canvassing board (and if for the nomination for an office, certified tabulated statements of the returns of which are to be filed with the State Board of Elections, also with the county canvassing board), a notice of the pendency of the contest." (Emphasis added.)
Considering all of these portions of the statute which must necessarily be read and construed together, it seems inescapable that candidates for the office of ward committeeman are to be elected at the time of the primary or, as it is sometimes called, the primary election. In addition, if this type of election is to be contested, the proceedings in such contest are governed by the same article 7. In fact, the statutory heading above section 63 of article 7 is "Primary election contest." We find from this language a clear legislative intent to provide for every aspect of the election of ward committeeman including the filing and management of election contests.
As we have already explained, we believe that section 7-1's declaration that elections held at a primary election shall be made only in the manner set forth in article 7 evidences a clear intent to provide in article 7 for every aspect of an election including the contest of the election, and we believe that the legislature intended section 7-63 to provide for primary contests whether from a nominated office or an elected office. This intent is consistent with the purpose of the Act to promote the integrity of the political party system in Illinois. Moreover, we note that as the officers elected at a primary are political party functionaries it is not unreasonable for the legislature to regulate such elected officers under the *980 same scheme as political nominees. All primary candidates are vying for a position within a particular political party. Moreover, party officers elected at a primary have the same time considerations as do party nominees in that it is imperative that the question of whether a candidate has been properly elected to a political office be resolved so that he or she can begin to fulfill the party obligations inherent in the office. Based on all of the foregoing, it would appear that it is consistent with the goal of maintaining the integrity of political parties that election contests for elected party offices proceed under the same expedited election contest procedure as contests for political nominees.
4 Alternatively, approaching the problem from another point of view, words may be added, deleted or changed in a statute to effectuate the legislative intent. (People ex rel. Carson v. Ring.) This recognizes the rule that the intention of the legislature is to be gathered not only from the language used but also from the reasons for the enactment and the purposes to be attained. (People ex rel. Carson v. Ring; In re Estate of Curtis (1963), 28 Ill.2d 172, 190 N.E.2d 723; Mid-South Chemical Corp. v. Carpentier (1958), 14 Ill.2d 514, 153 N.E.2d 72.) Indeed, as the court noted in Smith v. County of Logan (1918), 284 Ill. 163, 165-66, 119 N.E.2d 932:
"In construing a statute the court will not be confined to its literal meaning. A thing within the intention is regarded within the statute although not within the letter. A thing within the letter is not within the statute if it is not within the intention. When the intention has been thus ascertained from the reading of the statute, words may be modified or altered so as to obviate all inconsistencies with such intention. [Citations.]"
Accordingly, we believe that this court has the authority to read section 7-63 in such a way as to add the words "or elected" after the word nominated to effectuate the intent of the legislature. As amended the section would then read as follows: Any candidate whose name appears upon the primary ballot of any politial party may contest the election of the candidate or candidates nominated or elected for the office for which he was a candidate by his political party. People v. Hudson (1970), 46 Ill.2d 177, 263 N.E.2d 473; People ex rel. Carson v. Ring.
Based on the foregoing analysis we must reject petitioner's contention that the legislature clearly established two statutory schemes for election contests, one pertaining to elections where a candidate is nominated for an office and the other where the candidate is elected to office. He hypothesizes that the legislature decided to distinguish between these two types of contests from a nomination and 30 days from an election in recognition of the fact that an expedited election contest procedure is needed for the contest of a nomination due to the fact that there are only a *981 few months to conduct an election contest after the primary before a general election occurs. Under this view the 10-day filing requirement in the expedited election contest insures a decision prior to the general election, whereas it is argued that no such expedited procedure is necessary where the candidate for an elected office will not face a general election.
5 We also reject petitioner's contention that the 10-day filing requirement could not be applicable where a candidate is elected at a primary because the parties to an election may file for a discovery recount pursuant to section 22-9.1 (Ill. Rev. Stat. 1979, ch. 46, par. 22-9.1), whereas a candidate who is nominated at a primary may not seek a discovery recount. In the instant case petitioner notes that both parties filed for discovery recounts and the recounts did not commence until after the running of the 10-day filing period provided in section 7-63. Consequently, it was impossible to incorporate the results of the discovery recount into the petition for election contest within the 10-day period. Petitioner specifically argues in his brief before this court that "it would be irrational to assume that the legislature would provide for a discovery recount for the election of Ward Committeeman without providing even a modest period of time in which to incorporate in the ensuing election contest the facts brought to light in the discovery recount." We believe that the parties could seek to amend a timely filed petition for election contest to incorporate the findings of the discovery recount in time to avoid an adverse ruling from a motion to dismiss based, for instance, on allegations of lack of specificity. Moreover, we note that there is no allegation in the record that either or both parties sought to get the discovery recount commenced within the 10-day period.
6 Election contests are statutory in nature and, therefore, jurisdiction and procedure are strictly governed by the specific statutory provisions. (Young v. Mikva (1977), 66 Ill.2d 579, 363 N.E.2d 851; Nesladek v. Kanka (1930), 341 Ill. 180, 173 N.E. 94; Waupoose v. Kusper (1972), 8 Ill. App.3d 668, 290 N.E.2d 903.) Under this general rule, failure to timely file an election contest is fatal and divests the court from proceeding with the contest. (Patterson v. Crowe (1944), 385 Ill.2d 514, 53 N.E.2d 415.) We need not consider the merits of this situation as argued in the briefs.
The order of the circuit court of Cook County denying respondent's motion to dismiss the petition is reversed and the cause is remanded with directions to dismiss the petition for election contest.
Order reversed and cause remanded with directions.
GOLDBERG and McGLOON, JJ., concur.
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66 F.2d 1004 (1933)
COMMISSIONER OF INTERNAL REVENUE
v.
BOCA CEIGA DEVELOPMENT CO.
No. 5082.
Circuit Court of Appeals, Third Circuit.
August 23, 1933.
Sewall Key and John G. Remey, Sp. Assts. to Atty. Gen. (C. M. Charest, Gen. Counsel, Bureau of Internal Revenue, and James K. Polk, Jr., Sp. Atty., Bureau of Internal Revenue, both of Washington, D. C., of counsel), for petitioner.
Palmer Watson, of Philadelphia, Pa., for respondent.
Before BUFFINGTON, DAVIS, and THOMPSON, Circuit Judges.
DAVIS, Circuit Judge.
This petition involves income taxes for the fiscal year ending February 28, 1926.
*1005 On October 30, 1925, the respondent, the Boca Ceiga Development Company, a Florida real estate corporation, sold a tract of land to one of its stockholders for a gross consideration of $504,000, and received from the purchaser 480 shares of its capital stock, valued at $48,000, as the initial payment. For income tax purposes, the Commissioner of Internal Revenue computed the realized profit upon the installment sale basis as follows:
"Sale Price:
Mortgage ......................................... $384,000.00
Mortgage assumed by vendee ....................... 42,000.00
Stock of taxpayer corporation at par
value also fair market value ................. 48,000.00
Notes receivable ($30,000.00, no market
value) __________
Total sales price exclusive of notes ............. 474,000.00
Cost ............................................. 199,448.29
__________
Profit ........................................... 274,551.71
Sales price ...................................... 474,000.00
Less:
Mortgage assumed by vendee .................... 42,000.00
___________
Amount to be paid by vendee ...................... $432,000.00
Percentage of profit, $274,551.71÷$432,000=.63553
Initial payment .................................. $ 48,000.00
Profit realized .................................. $ 30,505.44"
The question involved in this case is whether or not the respondent realized any taxable gain on the initial payment made to it with its own stock.
The Commissioner determined that the proportion of the initial payment, which represented profit, was taxable regardless of the fact that the respondent's stock was the medium by which the payment was made. The Board of Tax Appeals was of the opinion that the respondent realized no gain from the transaction during the taxable year since it had received therein shares of its stock only. The Commissioner brought this petition to review the Board's order of redetermination.
The Board's decision that a corporation realizes neither a gain nor loss from the purchase of its stock was in keeping with its position at the time when it determined this case (Houston Brothers Company, 21 B. T. A. 804; S. A. Woods Machine Company, 21 B. T. A. 818; Schiller Piano Company, 23 B. T. A. 376), although its earlier decisions were to the contrary. Behlow Estate Company, 12 B. T. A. 1365; New Jersey Porcelain Company, 15 B. T. A. 1059. Meanwhile, the courts have held that a corporation acquiring its own stock may recognize a gain or loss provided the purpose of the transaction was not merely a capital readjustment [Johnson v. Commissioner (C. C. A.) 56 F. (2d) 58, certiorari denied 286 U. S. 551, 52 S. Ct. 502, 76 L. Ed. 1287], but a sale of property. Walville Lumber Company v. Commissioner, 35 F.(2d) 445 (C. C. A. 1); Spear & Co. v. Heiner, 54 F.(2d) 134 (D. C. W. D. Pa.); Commissioner v. S. A. Woods Machine Company, 57 F.(2d) 635, 636 (C. C. A. 1). Since these decisions, the Board has adopted the rule laid down by the courts. Houghton and Dutton Company, 26 B. T. A. 52.
The question here is disposed of by the following quotation from the Woods Case, supra: "The transaction involved in this case was equivalent to the payment of the debt in cash and the investment of the proceeds by the corporation in its own stock. If that had been done clearly the cash received would have been taxable income. The transaction was not changed in its essential character by the fact that, as the debtor happened also to own the stock, the money payment and the purchase of stock were by-passed, and the stock was directly transferred in payment of the debt. The stock was the medium in which the debt was paid. The wide door to evasion of taxes opened by the decision of the Board is an additional reason, and a weighty one, against it."
The determination of the Commissioner is approved, and the order of the Board of Tax Appeals reversed.
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15 F.3d 1097
Leev.Neonatology Associates**
NO. 93-2233
United States Court of Appeals,Eleventh Circuit.
Jan 28, 1994
1
Appeal From: M.D.Fla.
2
AFFIRMED.
**
Local Rule 36 case
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578 F.3d 831 (2009)
David EASTLING; EFP, LLC, a Minnesota Limited Liability Company, Appellants,
v.
BP PRODUCTS NORTH AMERICA, INC., a Maryland Corporation, Appellee.
No. 08-3661.
United States Court of Appeals, Eighth Circuit.
Submitted: June 9, 2009.
Filed: August 27, 2009.
*833 Randy V. Thompson, argued, St. Paul, MN, for appellant.
Sarah L. Brew, argued, Mark L. Johnson, on the brief, Minneapolis, MN, for appellee.
Before MURPHY, ARNOLD and GRUENDER, Circuit Judges.
GRUENDER, Circuit Judge.
David Eastling and EFP, LLC (collectively, "Eastling"), entered into a real estate contract with BP Products North America ("BP") to purchase from BP the property on which Eastling had been operating a gas station. The real estate contract included a restrictive covenant preventing the sale of any non-BP petroleum products on the property. Eastling filed suit, seeking a declaratory judgment that the restrictive covenant was no longer valid and enforceable. Both parties filed motions for summary judgment. The district court[1] granted summary judgment to BP, and Eastling appeals. For the following reasons, we affirm.
I. BACKGROUND
In November 2003, Eastling purchased the land and a BP-branded gas station located at 600 Boone Avenue North in Golden Valley, Minnesota, from BP pursuant to a real estate contract. Before purchasing the property, Eastling had been operating the gas station as a retail contract operator, meaning Eastling leased the station from BP. BP had initially intended to develop the property as a company-operated BP Connect convenience store and gas station,[2] but it instead decided to sell the property to Eastling.
Under the real estate contract, BP agreed to sell the property to Eastling subject to certain "Restrictive Covenants," which were "annexed ... and made a part" of the real estate contract. The "Petroleum Restriction," one of the restrictive covenants found in the second attachment to the real estate contract, states,
No part of the Property shall be used by Grantee [Eastling] or any other Grantee Party for an automobile service station, petroleum station, gasoline station, convenience store, quick-lube facility, or automobile repair shop, or for the purpose of conducting or carrying on the business of selling, offering for sale, storage, handling, distributing, or dealing in petroleum, gasoline, diesel fuel, kerosene, benzol, naphtha, greases, lubricating oils, any fuel used for internal combustion engines, lubricants in any form, automobile parts or accessories, *834 tires, batteries, or other petroleum or petroleum-related products, except for the personal use or consumption of such products by Grantee or other occupants of the Property. For purposes of this restriction, the term "convenience store" shall mean any retail business with its primary emphasis on providing the public with a convenient location to quickly purchase a wide array of consumable products (predominantly food or food and gasoline) and services.
The above covenants and use restrictions bind and restrict the Property as covenants and restrictions running with the land and are deemed to benefit Grantor [BP] as an owner or lessee of lands in Hennepin County, Minnesota, or as the operator of retail operations in such County. These restrictive covenants will remain in full force and effect for a term of approximately ten (10) years commencing on the Closing Date and terminating on the tenth (10th) anniversary after the Completion Date,... whereupon these restrictive covenants will automatically lapse and terminate and be of no further force or effect.
To allow Eastling to continue to operate the gas station as a BP-branded station, the real estate contract further provided,
Purchaser expressly acknowledges and agrees that Seller has entered into this Contract only upon the express understanding that the Property shall (for 10 years, or shorter period if Amoco/BP and its successors and assigns cease to serve the area in which the Property is located), continue to be used following closing as an Amoco/BP (or its successors or assigns)-branded retail gasoline station supplied by Amoco/BP (or its successors or assigns)-branded jobber. Therefore, Seller hereby agrees that the petroleum use restriction set forth in Attachment # 2 shall not be enforced by Seller against Purchaser or subsequent owner's [sic] of the Property, and Seller agrees to waive the same, so long as the gasoline station located on the Property continues to be an Amoco/BP (or its successors or assigns)-branded station supplied by Amoco/BP (or its successors or assigns)-branded jobber.... If Amoco/BP (or its successors and assigns) cease serving the area within which the Property is located, then Amoco/BP (or its successors or assigns) shall execute a recordable release to remove the petroleum use restriction from the Property.
The real estate contract also required Eastling to convert the station to a BPConnect-style store.[3] Eastling claims that at the time of the sale, BP told him that it was planning to invest heavily in the Minneapolis-St. Paul market and that it planned to convert all of its Twin Cities stations to BP Connect stores. Eastling contends that he agreed to purchase the property and convert the station to a BP-Connect-style store based on BP's representation that it intended to develop BP Connect stores throughout the Twin Cities market.
Finally, the real estate contract required Eastling to enter into a "dealer supply agreement" with BP, which provided that BP would be the exclusive supplier of petroleum products to Eastling's station for ten years, beginning on December 16, 2004. The dealer supply agreement contained an early-termination option allowing Eastling to terminate it by giving BP ninety days' notice, paying all financial obligations then accrued, and paying certain liquidated damages.
After spending nearly three million dollars to purchase the property and rebuild *835 the station, Eastling opened the BP-Connect-style store in 2004. Soon after, he learned that BP had decided to "decapitalize" the Twin Cities market. Between 2005 and 2006, BP sold its interests in all properties it owned in Hennepin County and assigned all of the leases it had in the market to those purchasers. BP did, however, continue to supply petroleum products to its branded stations in the Twin Cities market.
Eastling filed suit, seeking a declaratory judgment that the Petroleum Restriction was no longer binding. Eastling argued that because BP no longer owned or leased lands or operated retail operations in Hennepin County, it no longer benefitted from the Petroleum Restriction "as an owner or lessee of lands in Hennepin County." Therefore, according to Eastling, the Petroleum Restriction no longer served its original purpose, and circumstances had changed so as to invalidate the Petroleum Restriction. Both parties filed motions for summary judgment. The district court granted BP's motion for summary judgment and dismissed Eastling's motion. The district court found that the language of the real estate contract and Petroleum Restriction was clear and unambiguous and that, "at the time the parties entered into the transaction, they intended that the property ... would carry a restrictive covenant that it could only be operated as a BP-branded station for ten years, so long as the property was operated as a gas station and BP supplied petroleum products in the area."
The district court rejected Eastling's argument that because of BP's decision to decapitalize the Twin Cities market, circumstances had changed so as to invalidate the Petroleum Restriction. In support, the court relied on Double Diamond Properties, LLC v. Amoco Oil Co., 487 F.Supp.2d 737 (E.D.Va.2007), aff'd, Double Diamond Props., LLC v. BP Prods. N. Am., Inc., 277 Fed.Appx. 312 (4th Cir. 2008). Double Diamond also involved a restrictive covenant on a gas station property that prohibited the sale of non-BP petroleum products on the property and BP's decision to decapitalize the Southeastern Virginia market. Id. at 740-41. The district court in Double Diamond concluded that the purpose of the restrictive covenant was to benefit BP as a refiner and supplier of its branded petroleum and that the restrictive covenant continued to benefit BP even after its decision to decapitalize the Southeastern Virginia market. Id. at 746. Eastling attempted to distinguish Double Diamond by noting that the restrictive covenant in that case explicitly stated that its purpose was to benefit BP "as an owner or lessee of lands" in the area "or as the operator or supplier of retail operations" in the area, whereas here the Petroleum Restriction stated only that it was to benefit BP "as an owner or lessee of lands in Hennepin County, Minnesota, or as the operator of retail operations" in Hennepin County. The district court rejected that argument, citing provisions in both the Petroleum Restriction and the real estate contract and concluding that the parties' agreement reflected a broader purpose of ensuring that so long as BP supplied petroleum products to the area and the property was operated as a gas station, the property would be a BP-branded station. The district court determined that even though BP did not own or lease lands or operate retail operations in Hennepin County, BP still benefitted from the property's status as a BP-branded station. Consequently, the district court granted BP's motion for summary judgment and denied Eastling's motion for summary judgment.
II. DISCUSSION
We review a district court's decision to grant summary judgment de novo, *836 and we may affirm on any grounds supported by the record. Am. Home Assur. Co. v. Pope, 487 F.3d 590, 598 (8th Cir. 2007). A court should grant a motion for summary judgment "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). We view the evidence in the light most favorable to the nonmoving party. Am. Home Assur. Co., 487 F.3d at 598.
Under Minnesota law, restrictive covenants are strictly construed, but they are enforced to the extent of the "true intent of the parties." See Naftalin v. John Wood Co., 263 Minn. 135, 116 N.W.2d 91, 100 (1962). Eastling argues that we should read the Petroleum Restriction in isolation and that the district court erred by reading it in conjunction with the real estate contract. According to Eastling, the only benefits the Petroleum Restriction itself conferred on BP were tied to BP's status as an owner or lessee of lands or the operator of retail operations in Hennepin County. Under this theory, if we look to the Petroleum Restriction in isolation, then once BP was no longer an owner or lessee of lands or the operator of retail operations in Hennepin County, it could no longer benefit from the Petroleum Restriction. However, "[i]t is an elementary principle of law that a contract must be construed as a whole," and "[t]he intention of the parties must be gathered from the entire instrument and not from isolated clauses." Telex Corp. v. Data Prods. Corp., 271 Minn. 288, 135 N.W.2d 681, 685 (1965). The "Restrictive Covenants," including the Petroleum Restriction, are "annexed" to the real estate contract as part of the second attachment to the contract. Moreover, the real estate contract specifically refers to and makes the restrictive covenants "part" of the real estate contract. See, e.g., Katzner v. Kelleher Constr., 545 N.W.2d 378, 379-80 (Minn.1996) (applying, as part of the contract, conditions that were incorporated by reference). Accordingly, we conclude that the Petroleum Restriction is a part of the real estate contract, which we must read as a whole. Thus, the district court did not err when it considered the real estate contract and the Petroleum Restriction together.
Eastling next argues that the Petroleum Restriction only identifies a benefit to BP as an owner or lessee of lands or operator of retail operations in Hennepin County. Because BP sold its property, gave up its leases, and no longer operated retail operations in Hennepin County, Eastling argues that BP severed the benefit identified in the Petroleum Restriction from its roles listed in the Petroleum Restriction. In other words, once BP was no longer an owner or lessee of lands or operator of retail operations in Hennepin County, it could no longer enforce the benefit identified in the Petroleum Restriction. We disagree. As the district court explained, the purpose of the Petroleum Restriction is "clear from its language: to ensure that so long as BP supplies petroleum products to this area, and so long as the property is operated as a gas station, the property will be a BP-branded station."
Eastling asserts that we should reach a contrary conclusion based on In re Turners Crossroad Development Co., 277 N.W.2d 364 (Minn.1979), but again we disagree. In Turners Crossroad, McCarthy's St. Louis Park Cafe, Inc. ("McCarthy's") conveyed a tract of land ("Tract I") to the Minneapolis Baseball and Athletic Association ("MBAA") with a restriction preventing the sale of food or liquor on the land except for the kinds typically sold in connection *837 with a baseball game. Id. at 366-67. McCarthy's owned another tract of land ("Tract II") next to Tract I, on which it operated a restaurant and liquor store. Id. at 367. McCarthy's subsequently conveyed all of its assets to McCarthy Enterprises, which then conveyed Tract II to Eddie Webster's, Inc. with a deed that reserved to McCarthy Enterprises the right to enforce the restriction. The MBAA later conveyed Tract I to Turners Crossroad Development Co. ("Turners"). Id. at 368. Turners planned to build restaurants and bars on Tract I. Id. McCarthy Enterprises attempted to block the proposed development by enforcing the restriction. Id. The Minnesota Supreme Court concluded that the purpose of the restriction was to protect McCarthy's restaurant and liquor store from competition. Therefore, the covenant ran with the land and was not a personal benefit to McCarthy Enterprises. Id. at 371. Because the restriction ran with the land and benefitted Tract II, McCarthy Enterprises' attempt to reserve the enforcement right to itself after conveying the property to Eddie Webster's was held to have extinguished the restriction. Id. at 372.
Eastling argues that Turners Crossroad compels us to conclude that BP could no longer enforce the Petroleum Restriction once it severed the benefit, but Turners Crossroad is distinguishable. There, the restriction clearly benefitted a neighboring property, since the constraints on the kinds of food and liquor that could be sold on Tract I protected the restaurant on the adjacent Tract II from competition. The restriction did not confer a general benefit on McCarthy's or McCarthy Enterprises as individual entities; rather, it only benefitted them in their capacities as owners of the tract on which the restaurant was located. See id. at 372. Here, there is no particular property, such as an adjoining piece of land, that was intended to benefit from the Petroleum Restriction. Unlike Turners Crossroad, in which McCarthy Enterprises could no longer benefit once it sold Tract II, BP benefits from the Petroleum Restriction by its continuing presence in the Twin Cities market through the sales of its petroleum products. Thus, Turners Crossroad does not compel us to find that the Petroleum Restriction was extinguished.[4]
*838 Eastling also argues that BP's decapitalization of the Twin Cities market amounts to a change in circumstances such that enforcement of the Petroleum Restriction is unreasonable and that the district court erred by applying the reasoning of Double Diamond in analyzing whether circumstances had changed. Minnesota courts have determined that conditions may change to defeat the purpose of a restriction on land use. See Burger v. City of St. Paul, 241 Minn. 285, 64 N.W.2d 73, 81 (1954) ("Conditions change from time to time and therefore no hard-and-fast rule can be laid down as to when change in condition will defeat the purpose of the restrictions. It is generally held that the changes must be of such impact as to practically destroy the essential objects and purposes of the restrictive use...."). We find that the decapitalization did not "practically destroy the essential objects and purposes of the" Petroleum Restriction. Reading the real estate contract as a whole, as we must, we agree with the district court that the purpose of the Petroleum Restriction was to ensure that Eastling sold only BP petroleum products at the 600 Boone Avenue North property for at least ten years, and that purpose still exists. As the district court noted, "BP still supplies the Twin Cities market with gasoline and benefits from the Boone Avenue station's status as a BP-branded station."
Eastling further claims that the restrictions imposed by the Petroleum Restriction do not run with the land and so do not bind Eastling's successors. However, as we have already stated, we read the Petroleum Restriction as part of the real estate contract. The Petroleum Restriction explicitly states that "[t]he above covenants and use restrictions bind and restrict the Property as covenants and restrictions running with the land." Accordingly, we reject the premise that the restrictions do not run with the land.[5]
III. CONCLUSION
Accordingly, we affirm the district court's grant of summary judgment.
NOTES
[1] The Honorable Donovan W. Frank, United States District Judge for the District of Minnesota.
[2] According to the deposition testimony of Patrick Saunders, a BP employee, at that time a "BP Connect" was a 4200-square-foot gas station and convenience store, owned and operated by BP, offering made-to-order sandwiches and limited seating.
[3] Because it was not owned by BP, Eastling's station would not technically qualify as a BP Connect store, but the real estate contract required Eastling to build the station in the same style as a BP Connect.
[4] Furthermore, we predict that the Minnesota Supreme Court would apply the principles set forth in the Restatement (Third) of Property: Servitudes, even though the court has not relied on that particular restatement before. See, e.g., Larson v. Wasemiller, 738 N.W.2d 300, 306 (Minn.2007) (noting that the Minnesota Supreme Court has "frequently relied on the Restatement of Torts to guide [its] development of tort law in areas that [it has] not previously had an opportunity to address"); Turners Crossroad, 277 N.W.2d at 369-72 (applying the reasoning of the then-current Restatement of Property); see also Magnuson v. Diekmann, 689 N.W.2d 272, 274-75 (Minn.Ct. App.2004) (relying on the Restatement (Third) of Property: Wills and Other Donative Transfers where Minnesota caselaw did not resolve the issue). The Restatement (Third) of Property: Servitudes recognizes the enforceability of a "benefit in gross," which is a benefit "not tied to ownership or occupancy of a particular unit or parcel of land." Restatement (Third) of Prop.: Servitudes § 1.5(2). A benefit is in gross if the parties intend for it to be in gross. See id. § 4.1(1). If the intention of the parties is not ascertainable, however, a benefit may still be in gross "if it serves a purpose that would be more useful to the original beneficiary than it would be to a successor to an interest in property held by the original beneficiary at the time the servitude was created." Id. § 4.5(1)(b). In our view, the Petroleum Restriction, together with the real estate contract, shows that the parties intended to create a benefit in gross. Assuming, however, that the intention of the parties was not ascertainable, the benefit would still be in gross because the Petroleum Restriction serves a purpose more useful to BP than it would be to a successor to an interest in property held by BP at the time the servitude was created. Thus, under the Restatement (Third) of Property: Servitudes, the Petroleum Restriction created an enforceable benefit in gross, which BP retained when it sold its property, gave up its leases, and no longer operated retail operations in Hennepin County.
[5] Eastling also argues that because the dealer supply agreement allows for the possibility of early termination, BP cannot claim that it benefits from continuing to supply petroleum products at the property, as Eastling can choose to terminate the dealer supply agreement at any time. However, even if Eastling chose to terminate the dealer supply agreement, the Petroleum Restriction would still prohibit Eastling from selling any other petroleum products on the property. Regardless, Eastling failed to make this argument in its opening brief, so it is waived. See Eckert v. Titan Tire Corp., 514 F.3d 801, 805 n. 2 (8th Cir.2008).
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United States Court of Appeals
For the Eighth Circuit
___________________________
No. 12-2125
___________________________
United States of America
lllllllllllllllllllll Plaintiff - Appellee
v.
Todd Hobbs
lllllllllllllllllllll Defendant - Appellant
____________
Appeal from United States District Court
for the District of Nebraska - Lincoln
____________
Submitted: December 14, 2012
Filed: April 1, 2013
____________
Before LOKEN, BRIGHT, and COLLOTON, Circuit Judges.
____________
LOKEN, Circuit Judge.
Todd Hobbs pleaded guilty to possession of child pornography in violation of
18 U.S.C. § 2252(a)(4)(B). At sentencing, the district court1 granted a downward
variance and sentenced Hobbs to sixty months in prison followed by five years of
1
The Honorable Richard G. Kopf, United States District Judge for the District
of Nebraska.
supervised release. Hobbs appeals the sentence, arguing the district court abused its
discretion in imposing two special conditions of supervised release requiring advance
approval by his Probation Officer before he may (i) reside with or contact children
under the age of 18, including his own, or (ii) possess “any material that is sexually
stimulating or sexually oriented.” We review a district court’s imposition of special
conditions of supervised release for abuse of discretion. But we carefully scrutinize
“restrictions on important constitutional rights” and apply de novo review if such
restrictions are “sweeping.” United States v. Schaefer, 675 F.3d 1122, 1125 (8th Cir.
2012). In this case, the restrictions at issue impact constitutional rights but are not
sweeping. Upon careful review of the sentencing record, we conclude the district
court did not abuse its substantial discretion and therefore affirm.
I. Background
In April 2011, a Lincoln, Nebraska, police investigator accessed visual
depictions of minors engaged in sexually explicit conduct being shared by an IP
address assigned to Todd Hobbs in Lincoln. A warrant search of Hobbs’s residence
and examination of his computers and storage media uncovered over 20,000 images
of child pornography, including multiple videos depicting adult penetration of
prepubescent females. Hobbs admitted possessing the child pornography and stated
he had been accessing child pornography for approximately seven years. He was
charged in June 2011 with receiving and distributing child pornography in violation
of 18 U.S.C. § 2252A(a)(2), and with the less serious offence of possessing child
pornography in violation of 18 U.S.C. § 2252(a)(4)(B).
After arraignment, Hobbs was granted pretrial release on personal recognizance
subject to conditions including that he abstain from alcohol consumption and attend
treatment and counseling sessions for his pornography addiction. On January 4, 2012,
Hobbs pleaded guilty to possession of child pornography, and the government agreed
to dismiss the receiving and distributing count at sentencing. On February 14, a
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pretrial services officer visited Hobbs’s home and smelled alcohol. Hobbs admitted
that his long-time girlfriend had brought home an 18-pack of beer, and that he drank
ten to twelve beers that evening and got drunk. Based on this violation, the court
revoked pretrial release and ordered Hobbs detained pending sentencing.
The Presentence Investigation Report (PSR) recommended an advisory
guidelines range of 108-135 months in prison, subject to the 120-month statutory
maximum. Three days before the April 26 sentencing, the Probation Officer filed
lengthy Sentencing Recommendations. She recommended a prison sentence at the
bottom of the advisory range, 108 months, explaining:
As noted in the presentence report, the defendant’s case is different from
the majority of child pornography cases prosecuted in the District of
Nebraska because he has prior convictions resulting in his placement in
a Criminal History Category II. . . . The defendant has been diagnosed
with alcohol dependence and his prior criminal history convictions
appear to be related to his alcohol abuse issue. Additionally, the
defendant’s pretrial release was revoked after he was caught consuming
alcohol while on bond for the instant offense. . . . Therefore, treatment
will be an essential part of Mr. Hobbs’ future. The defendant’s
possession of child pornography on his computer is very serious and
feeds a market that perpetuates the sexual abuse of children. The length
of time the defendant collected and possessed child pornography in this
case is a substantial factor as well.
The Probation Officer concluded by recommending that the court impose 21 special
conditions of supervised release, including the two here at issue, which provide in
material part:
11. The defendant shall have no contact, nor reside with children
under the age of 18, including [his] own children, unless approved in
advance by the U.S. Probation Officer in consultation with the treatment
providers. . . .
-3-
20. . . . The defendant shall not possess, view, or otherwise use
any material that is sexually stimulating or sexually oriented deemed to
be inappropriate by the U.S. Probation Officer in consultation with the
treatment provider.
At sentencing, the district court granted Hobbs’s motion for a downward
variance, in part to avoid unwarranted sentencing disparity with other District of
Nebraska child pornography offenders, and sentenced him to sixty months in prison,
followed by five years of supervised release subject to “the standard conditions
together with the special conditions outlined in the [Probation Officer’s] sentencing
recommendation.” Defense counsel timely objected to Special Condition #11: “I’d
like [the court] to say today that [Hobbs] has the ability to live with his own children.”
The court replied: “I think that that provision ought to remain. And I say that because
of the defendant’s alcoholism.” The colloquy concluded:
[DEFENSE COUNSEL]: Well, that has nothing to do, though,
Judge, with --
THE COURT: Yeah, it has everything to do with why that
provision is in there.
[DEFENSE COUNSEL]: But there’s been no showing
whatsoever that his own children have been at risk for any kind of sexual
perpetration by him. And, in fact, all the evidence is to the contrary.
THE COURT: I respectfully disagree. I think this is an
appropriate condition.
Defense counsel then objected to the portion of Special Condition #20 prohibiting
Hobbs from possessing “sexually stimulating” material that the probation office
deems to be inappropriate. The court also overruled this objection.
-4-
II. Special Condition #11
Before his pretrial detention, Hobbs lived with his partner of 17 years, their
sixteen-year-old daughter, their eleven-year-old son, and Hobbs’s seven-year-old
stepson. The two boys will still be minors when Hobbs finishes serving his prison
sentence. It is undisputed that Hobbs has a close and positive relationship with his
son, Schuyler, who has begun to exhibit behavioral issues at home and at school, and
has been a loving parent to his stepson. On appeal, Hobbs argues that, by requiring
prior approval by a probation officer before Hobbs can see and live with his own
children, Special Condition #11 exacts a greater deprivation of liberty than necessary
and interferes with his fundamental liberty interest in the relationships with his
children. Hobbs emphasizes that his conviction was for possession of child
pornography, not the more serious offense of distribution; that he has no history of
sexual abuse of minors; that a licensed clinical psychologist opined after a full
psychological assessment that the risk of Hobbs committing sexual violence or even
engaging in future “cyber pornography” is low; that his family has serious financial
issues and wants him to return home as soon as possible; and that he wants again to
be a positive influence before son Schuyler graduates from high school.
The relationship between parent and child is a liberty interest protected by the
Due Process Clause. See, e.g., Quilloin v. Walcott, 434 U.S. 246, 255 (1978). Thus,
in sex offender cases, we scrutinize more carefully conditions restricting the
defendant’s right to contact his own children than conditions restricting childless sex
offenders from contact with children. Compare United States v. Davis, 452 F.3d 991,
995 (8th Cir. 2006), with United States v. Muhlenbruch, 682 F.3d 1096, 1104 (8th Cir.
2012).
Despite the constitutional sensitivity of such restrictions, we have repeatedly
upheld conditions requiring defendants to receive permission from a probation officer
before contacting their own children. See United States v. Simons, 614 F.3d 475,
-5-
481-82 (8th Cir. 2010); United States v. Stults, 575 F.3d 834, 850-51 (8th Cir. 2009),
cert. denied, 130 S. Ct. 1309 (2010); United States v. Mark, 425 F.3d 505, 507-08
(8th Cir. 2005); United States v. Crume, 422 F.3d 728, 733-34 (8th Cir. 2005); United
States v. Vick, 421 F.3d 794, 795 (8th Cir. 2005).2 That a defendant does not have a
history of physical or sexual abuse of minors “is not necessarily determinative” of this
issue. United States v. Kerr, 472 F.3d 517, 523 (8th Cir. 2006). However, an
“individualized inquiry,” and a “particularized showing” of need for the condition, is
required in each case. United States v. Springston, 650 F.3d 1153, 1156 (8th Cir.
2011), vacated on other grounds, 132 S. Ct. 1905 (2012).
In our prior cases upholding this type of special condition, we agreed with the
district court that the restriction was reasonably necessary to protect the public, and
was not overly restrictive, because of the nature of the sex offense of conviction, or
because of the defendant’s history of sexual abuse of minors.3 If the proper focus is
solely these risk-of-future-sex-offense factors, we agree with Hobbs that the record
in this case does not reveal a “particularized need” for a restriction placing a probation
officer’s approval in the way of Hobbs reuniting with his family when his sentence
has been served. But the Probation Officer did not treat Hobbs as a typical sex
offender. Rather, she based her sentencing recommendations in part on an extensive
2
This special condition was also imposed in United States v. Deatherage, 682
F.3d 755, 762 (8th Cir. 2012), but was not challenged on appeal. In Schaefer, which
the government wrongly asserts is “strikingly similar” to this case, this aspect of the
special condition was not a factor because defendant’s children would be over the age
of 18 when he was released. 675 F.3d at 1125-26.
3
See Simons, 614 F.3d at 482 (2 prior crimes against minor victims); Stults, 575
F.3d at 839 (prior conviction for sexual assault of a child); Mark, 425 F.3d at 508
(prior “sexual exploration” of minor female family member); Crume, 422 F.3d at 734
(mother, herself a prior victim, fearful defendant would molest his daughter); Vick,
421 F.3d at 795 (condition “tailored to [defendant’s] extensive history with minors”).
See also United States v. Levering, 441 F.3d 566, 568 (8th Cir. 2006) (childless
defendant committed forcible sexual act on a minor).
-6-
history of criminal convictions resulting from Hobbs drinking to excess and being a
danger to the public when he does -- one assault, two disturbing the peace, and two
driving while intoxicated convictions -- plus his failure to abstain from alcohol while
on pretrial release. This history of alcohol abuse together with Hobbs’s longstanding
child pornography addiction led the Probation Officer to recommend not only a
guidelines range sentence, but also special conditions requiring drug and alcohol
treatment and testing4 and participation in a sex-offense-specific program, as well as
other Special Conditions including #11.
Based on this highly individualized inquiry, we conclude the district court did
not abuse its discretion in imposing recommended Special Condition #11. The
purpose of this restriction is to protect the public; “children, including those of Mr.
[Hobbs], are members of the public that the terms of supervised release seek to
protect.” Crume, 422 F.3d at 734. Hobbs has demonstrated repeatedly that he is
prone to alcohol abuse and is dangerous when he is drunk. That poses a risk to all
those who live with him. Hopefully, he will comply with conditions requiring him to
abstain from consuming alcohol and successfully participate in substance abuse and
sex-offender treatment. If he does, the probation officer “in consultation with the
treatment providers” will doubtless approve his living with his family. “If such
permission is arbitrarily or unfairly denied, [Hobbs will be] free to seek relief from the
district court under [18 U.S.C.] § 3583(e).” United States v. Mickelson, 433 F.3d
1050, 1057 (8th Cir. 2006).
We have one unanswered concern with Special Condition #11 -- its failure to
address whether the probation office must decide prior to his release from custody if
Hobbs may initially move in with his children. This seems to us a critical issue for the
4
Special Condition #3 requires Hobbs to “attend, pay for and successfully
complete any diagnostic evaluations, treatment or counseling programs, or approved
support groups (e.g., AA/NA) for alcohol and/or controlled substance abuse, as
directed by the probation officer.”
-7-
family, yet government counsel at oral argument could give no assurance that a timely
answer would be forthcoming. We considered remanding for explicit consideration
of this issue but instead conclude that it may reasonably be left to the discretion of the
probation office, subject to prompt review by the district court. In our view, on this
record, only an adverse development during incarceration would warrant prohibiting
Hobbs from again living with his family upon release, subject to revocation
proceedings should he then resume consuming alcohol or accessing sexually explicit
materials.
III. Special Condition #20
Relying primarily on Simons, 614 F.3d at 483-85, and United States v. Kelly,
625 F.3d 516, 519-22 (8th Cir. 2010), Hobbs argues that the portion of Special
Condition #20 prohibiting him from possessing, viewing, or using any “sexually
stimulating or sexually oriented” material “deemed inappropriate by the U.S.
Probation Officer in consultation with the treatment provider” is unconstitutionally
overbroad and vague. This contention is without merit.
Though we have acknowledged that terms like “pornography” lack precise legal
definitions, we have repeatedly upheld these same or very similar conditions when
they were “obviously relevant to the child pornography offense at issue or to the
defendant’s history and characteristics.” Deatherage, 682 F.3d at 764 (“sexually
oriented materials”); see United States v. Thompson, 653 F.3d 688, 693 (8th Cir.
2011) (“sexually explicit materials”); United States v. Wiedower, 634 F.3d 490, 492-
93, 96-97 (8th Cir. 2011) (“sexually explicit material”); Stults, 575 F.3d at 841
(“sexually oriented or sexually stimulating materials”); United States v. Boston, 494
F.3d 660, 667 (8th Cir. 2007) (“sexually stimulating or sexually oriented material”).
Here, the restriction is obviously relevant to Hobbs’s admitted child pornography
addiction. In addition, Special Condition #20 is limited to sexually stimulating or
sexually oriented material, and further limited to obtaining prior approval of the
-8-
probation officer “in consultation with the treatment provider.” By contrast, in
Simons and Kelly, it was an absolute ban on possessing material “that contains
nudity,” which would include biology textbooks and famous works of art, that caused
us to overturn the conditions as overbroad. 614 F.3d at 483-84; 625 F.3d at 521.
Here, the district court did not abuse its discretion in imposing Special Condition #20.
For the foregoing reasons, we affirm the judgment of the district court.
COLLOTON, Circuit Judge, concurring in the judgment.
I concur in affirming the judgment of the district court imposing special
conditions of supervised release. I do not join the court’s statements regarding what
a probation officer will approve in 2016 or how this court would rule on a decision by
the district court in 2016, on this record, to deny permission under Special Condition
#11 for Todd Hobbs to move in with his children upon release from custody. Any
decision by the probation office and the district court about whether to grant
permission will depend on specific facts and circumstances as they exist at the time
of a future request. Any decision by this court on appellate review should be rendered
with the benefit of a contemporaneous record and an explanation by the district court.
______________________________
-9-
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758 F.Supp. 646 (1990)
Edna WILLOUGHBY, Plaintiff,
v.
Felton J. WILLOUGHBY, Defendant.
Felton WILLOUGHBY, Plaintiff,
v.
Edna WILLOUGHBY, Defendant.
Civ. A. Nos. 88-4269-S, 88-4287-S.
United States District Court, D. Kansas.
January 26, 1990.
*647 Dan L. Wulz, Bryan, Lykins, Hejtmanek & Wulz, P.A., Topeka, Kan., for Edna Willoughby.
Robert D. Hecht, Scott, Quinlan & Hecht, Topeka, Kan., for Felton J. Willoughby.
Edward L. Bailey, Grant M. Glenn, Cosgrove, Webb & Oman, Topeka, Kan., for Equicore, Inc. and Equitable Life Assur. Soc.
MEMORANDUM AND ORDER
SAFFELS, Senior District Judge.
This matter is before the court on parties' cross-motions for summary judgment. This consolidated suit involves a dispute over proceeds of a life insurance policy belonging to decedent, Martin Willoughby. Because the court finds that oral argument would not be of material assistance in its determination of this matter, Felton Willoughby's request for oral argument is denied. D. Kan. 206(d).
The court finds the following facts to be uncontroverted. Edna J. Willoughby (hereafter, "Edna") and Martin P. Willoughby, deceased, (hereafter, "Martin") were married on August 2, 1970. Edna and Martin had two children: namely, Terry M. Willoughby ("Terry") and Sandy D. Willoughby. During the 17-year marriage, Martin acquired a life insurance policy through an employee benefits program offered by his employer, Kansas Power and Light Company ("KP & L"), namely Life Insurance Policy No. 566666, certificate number XXXXXXXXX, issued through Equicor, Inc. and/or Equitable Life Assurance Society. Upon acquiring the policy and at the time Edna's petition for divorce and restraining order were filed on June 17, 1988, Edna was named the beneficiary of the policy, if *648 living, and if not to their children in equal shares. Prior to January 1, 1988, Martin paid $8.00 per month through payroll deduction for the life insurance policy. Thereafter, KP & L paid for $40,000 worth of coverage as an employee benefit, and Martin paid 90 cents per month for the additional $5,000 worth of coverage as elective grandfathered insurance.
On June 17, 1988, Edna filed for divorce from Martin in the District Court of Shawnee County, Kansas (case no. 88-D-837). On that same date, a standard form restraining order utilized in Shawnee County, Kansas was entered in the divorce action. The restraining order contained language prohibiting the parties from withdrawing, selling, encumbering or disposing of the money, property or assets of the parties not needed for day-to-day living expenses. On June 22, 1988, Martin was served with the petition and restraining order. He was represented by counsel in the divorce action and had an opportunity to discuss the pleadings filed therein.
On July 6, 1988, Martin changed the named beneficiary on the life insurance policy from Edna to their son, Terry. On July 21, 1988, Martin added his father, Felton Willoughby ("Felton"), as a secondary beneficiary on the policy. On July 23, 1988, Terry, the primary beneficiary, was shot and killed, predeceasing Martin. On July 24, 1988, Martin died in or near Loveland, Colorado, the cause of death being ruled as suicide. On or about August 1, 1988, Felton made a claim to the life insurance proceeds.
On November 9, 1988, Edna filed this action in federal district court against Felton and the insurance company, premising jurisdiction on 29 U.S.C. § 1132(e). On December 1, 1988, Felton's state court action against the insurance company for the proceeds of Martin's policy was removed to this court. The court ordered the two cases consolidated on December 29, 1988. On January 20, 1989, the insurance company was dismissed as a defendant in this lawsuit; the proceeds of the policy were ordered deposited in an interest bearing account, pending further order of the court.
In this action, Edna Willoughby claims the proceeds of the policy because she was the named beneficiary of the life insurance policy when the restraining order was issued on June 17, 1988. The restraining order, she argues, prevented Martin from changing the beneficiary of the policy because the life insurance policy was marital property of a type which Martin was enjoined from disposing of or encumbering under the terms of the court order. Felton Willoughby contends that he is entitled to the policy proceeds because he was the surviving, named beneficiary when Martin died. Felton further argues that the restraining order did not restrain Martin from changing the beneficiary on his life insurance policy since Edna's right to receive proceeds was a "mere expectancy," not property subject to the restraining order.
As an initial matter, the court finds that because no material facts in this case are disputed, this case is ripe for summary judgment. The specific legal issue before the court, therefore, is whether the life insurance policy was property subject to the restraining order of the Shawnee County District Court. In Kansas, after a petition for divorce is filed, a district judge is permitted to make and enforce a number of interlocutory orders, including an order restraining the parties from disposing of property. K.S.A. 60-1607(a)(1). The restraining order entered on June 17, 1988 and in effect when Martin executed the change in beneficiary on the policy provided, in relevant part, as follows:
Until both parties shall have the opportunity to present their views and evidence, the money, property, and other assets of the parties not needed for day to day living expenses ... should be preserved by an order of the Court restraining and enjoining both parties from withdrawing, selling, encumbering or disposing of the same.
The Court should make such orders as are necessary to maintain and preserve the parties' present financial status in *649 order to protect both parties from the dissipation of their assets ...
Each of the parties are hereby restrained and enjoined from encumbering or selling any of the parties' property, withdrawing from savings accounts, cashing certificates, and from withdrawing funds from checking accounts, except for reasonable living expenses ...
Although the life insurance policy is not specifically mentioned in the restraining order, the court finds that the policy was "property" within the broad terms of the restraining order; thus, under the restraining order in effect at the time, Martin was restrained from altering the status of this property by changing the beneficiary, pending further disposition of the matter before the Shawnee County District Court. See Candler v. Donaldson, 272 F.2d 374, 377 (6th Cir.1959) (finding that a similar restraining order prevented an insured from changing the beneficiary of a life insurance policy).
This court finds this conclusion to be supported by several reasons. First, the intent of the broad terms of the restraining order is clear: the court intended to maintain the status quo regarding the parties' property pending further disposition of the case. See Kelly v. Kelly, 89 Kan. 889, 132 P. 981, 982 (1913) (stating that the sole purpose of this type of restraining order in a divorce is to preserve property intact, pending judgment). Further, Martin was served with this order and had an opportunity to consult with an attorney and to, if he chose, apply for a modification of the order.
Second, the court finds this conclusion to be amply supported by the plenary power of Kansas district courts in dealing with the parties' property in divorce cases. In Kansas, the power of the district court to make and enforce orders regarding the parties' property in a divorce action is extremely broad. K.S.A. 60-1607; K.S.A. 60-1610. Marital property is broadly defined by another Kansas statute, namely K.S.A. 23-201(b), to include all property owned by married persons, whether held individually or jointly. Thus, under Kansas statute, the district court had the power to consider the life insurance policy as part of the Willoughbys' property in distributing property in its final decree of divorce, K.S.A. 60-1610(b)(1), and the power to preserve this item of property pending that decree. See K.S.A. 60-1607(a)(1).
Third, the court finds that under Kansas law, Edna can be deemed to have obtained a vested, if undetermined, interest in all marital property, including the life insurance policy when she commenced her divorce action against Martin by filing her petition for divorce. The marital property statute, K.S.A. 23-201(b), provides that each spouse has a "common ownership in marital property which vests at the time of commencement of such [divorce] action, the extent of the vested interest to be determined and finalized by the court, pursuant to K.S.A. 60-1610 and amendments thereto." K.S.A. 23-201(b). Kansas cases have also recognized the statutory principle that upon filing for divorce, each spouse obtains a vested, if undetermined, interest in all property individually or jointly held, and courts are obligated to divide that property in a just and equitable manner, regardless of the title or origin of the property. See Neis v. Neis, 3 Kan.App.2d 589, 599 P.2d 305 (1979). See also Gronquist v. Gronquist, 7 Kan.App.2d 583, 644 P.2d 1365 (1982); Wachholz v. Wachholz, 4 Kan. App.2d 161, 603 P.2d 647 (1979). Further, Kansas courts have specifically found that a life insurance policy is property subject to division in a divorce. In Redmond v. Redmond, 229 Kan. 565, 629 P.2d 142, 142 (1981), the Kansas Supreme Court affirmed a district court's division of a life insurance policy in a divorce action as within the court's discretion. In Hollaway v. Selvidge, 219 Kan. 345, 548 P.2d 835, 840 (1976), although the court held that the wife in that case had contracted away her right to policy proceeds, the husband's insurance policy was treated as an item of marital property under the property settlement agreement in that divorce.[1]
*650 The court further finds that on the undisputed facts before it, the equities weigh strongly in favor of Edna's interest in the life insurance proceeds. As a general rule, the owner of an insurance policy has the right to change beneficiaries, Hollaway, 548 P.2d at 839, and the named beneficiary at the time of death obtains a vested right to proceeds. Travelers Ins. Co. v. Daniels, 667 F.2d 572, 573 (7th Cir. 1981). Courts, including Kansas courts, have recognized, however, that equities may limit the right of the policy owner to change beneficiaries and the right of the currently named beneficiary to collect proceeds. See Candler, 272 F.2d at 376-77; Travelers Ins. Co., 667 F.2d at 573. See also Standard Ins. Co. v. Schwalbe, 110 Wash.2d 520, 755 P.2d 802, 806 (1988) (voiding a change of beneficiary which violated a preliminary injunction issued in a divorce proceeding); Pierce v. Pierce, 12 Kan. App.2d 810, 758 P.2d 252 (1988), aff'd, 244 Kan. 246, 767 P.2d 292 (1989) (affirming a trial court's judgment that a divorce decree requiring a husband to maintain a life insurance policy with minor children as beneficiaries precluded the husband from changing beneficiaries; thus, the minor children, although not currently named as beneficiaries, were entitled to the proceeds).
Under the facts of the present case, the court finds that equity weighs in favor of Edna Willoughby's right to recover the proceeds of the insurance policy vis-a-vis the currently named beneficiary, Felton Willoughby, in view of the Edna and Martin's 17-year marriage, Martin's attempt to change beneficiaries in spite of the restraining order prohibiting him from disposing of property, the fact that the policy was purchased during the marriage and at least some of the premiums were paid from Martin's wages earned during the marriage, and the fact that Felton Willoughby is merely a donee beneficiary with no offsetting equities. See Candler, 272 F.2d at 377.
For all of the above reasons, therefore, the court finds that Edna Willoughby's motion for summary judgment should be granted, pursuant to Fed.R.Civ.P. 56. Accordingly, Felton Willoughby's motion for summary judgment will be denied.
IT IS BY THE COURT THEREFORE ORDERED that Edna Willoughby's motion for summary judgment is granted.
IT IS FURTHER ORDERED that Felton Willoughby's motion for summary judgment is denied.
NOTES
[1] The court finds the case law from other jurisdictions cited by Felton Willoughby in support of the proposition that life insurance policies are not property subject to a restraining order unpersuasive on the question of how Kansas law would regard a life insurance policy in the situation before the court, particularly in light of the broad view of marital property exhibited in the Kansas statutes and case law cited herein.
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939 F.2d 425
UNITED STATES of America, Plaintiff-Appellee,v.John C. BEST, Gregory J. Bewick and Paul F. Conarty,Defendants-Appellants.
Nos. 87-2456, 87-2457 and 87-2458.
United States Court of Appeals,Seventh Circuit.
Argued April 5, 1990.Reargued En Banc June 11, 1991.Decided Aug. 5, 1991.
Anton R. Valukas, U.S. Atty., Jeanne M. Witherspoon, Asst. U.S. Atty., Office of U.S. Atty., Crim. Div., David J. Stetler, Victoria J. Peters, Asst. U.S. Attys., Office of U.S. Atty., Crim. Receiving, Appellate Div., Chicago, Ill., for plaintiff-appellee.
James R. Ferguson, Sonnenschein, Nath & Rosenthal, James S. Montana, Jr., Susan G. Feibus, Sidney Z. Karasik, Lydon & Griffin, George P. Lynch, and Gregory C. Jones, Irving C. Faber, Grippo & Elden, M. Jacqueline Walther (argued), Kielian & Walther, Mary Ellen Dienes (argued), Chicago, Ill., for defendants-appellants.
James R. Ferguson, Sonnenschein, Nath & Rosenthal, Gregory C. Jones, Irving C. Faber, Grippo & Elden, Chicago, Ill., Dennis A. Rendleman, Ill. State Bar Ass'n, Staff Counsel, Springfield, Ill., for amicus curiae Susan Bogart.
Before BAUER, Chief Judge, CUMMINGS, WOOD, Jr., CUDAHY, POSNER, COFFEY, FLAUM, EASTERBROOK, RIPPLE, MANION and KANNE, Circuit Judges.
BAUER, Chief Judge.
1
In this en banc review, we must decide whether the defendants were deprived of a fair trial due to the presence of binders containing certain government exhibits in the jury room during deliberations. In our prior opinion, see United States v. Best, 913 F.2d 1179 (7th Cir.1990), vacated, 924 F.2d 646 (7th Cir.1991), a panel of this court held that the presence of the binders during jury deliberations was jury tampering that constituted reversible error. After rehearing the case en banc, we now hold that the presence of the binders in the jury room was not error, and, therefore, affirm the defendants' convictions.
I.
2
Having recited the complex facts of this case in the earlier opinion, we need only glean from that recitation here. See Best, 913 F.2d at 1181. John C. Best, Gregory J. Bewick, and Paul F. Conarty were indicted on thirty-five counts of mail fraud, misapplication of bank funds, bank fraud, and related crimes committed in the course of the failure of the American Heritage Savings and Loan Association ("American"), a federally insured institution of which Best, Bewick, and Conarty were officers. Best was its president and chaired its Board of Directors, Bewick its executive vice-president and managing officer, and Conarty its in-house counsel.
3
American had been experiencing financial difficulties since 1981, when the State of Illinois Commissioner of Savings and Loans and the Federal Home Loan Bank Board conducted a joint examination of its economic condition and projected a net loss in excess of $1.7 million and net worth deficiency of approximately $200,000 by the end of the fiscal year. Between late 1981 and mid-1983, Best and Bewick, joined later by Conarty, embarked on a course of desperate efforts to keep American afloat. It was those actions that eventually led to the insolvency of the association and gave rise to this prosecution.
4
By 1981, American and its subsidiaries, American Heritage Service Corporation ("Service"), Metrodyne, Incorporated ("Metrodyne"), and Landfinder's Realty Corporation ("Landfinder's"), had accumulated large holdings in real estate, primarily through foreclosure, known as "real estate owned" or "REO." Best wanted to get the REO off American's books because it was a non-earning asset and a drain on American's earning power. In addition to several other practices that violated the norms of the savings and loan industry, Best and Bewick would require borrowers to purchase REO from American and its subsidiaries as a condition of obtaining a loan. See Id., 913 F.2d at 1181. In so doing, Best and Bewick attempted to disguise the American's deteriorating financial status. They would apply as much of the loan as was necessary to cover the down payment for the purchase of the real estate. By this tactic, Best and Bewick, in effect, were selling American's real estate to the borrower--who typically was not creditworthy and known by Best and Bewick to be so--for no cash down. Moreover, they were selling this real estate at inflated prices, based on inflated appraisals, so that American could book a profit on the sales and thereby improve its balance sheet even though it was extremely unlikely that the borrower would be able to complete the payments for the property or that, when the borrower stopped making payments, the property could be sold for a price equal to the purchase price--or for that matter, equal to the loan. Id. While engaging in these reckless transactions, which predictably flopped, and while the bank was losing money hand over fist, Best and Bewick paid themselves large bonuses from the Landfinder's account. Id.
5
Conarty became involved when he joined American as its in-house counsel in early 1983. During that year, American made sizeable loans to a partnership, but two of the three partners were ineligible to borrow from the association because they had reached their loan limit. Conarty at least knew that one of the partners was in bankruptcy because he was one of that partner's creditors and had filed a claim in the bankruptcy proceeding. Id. The loan was made to enable the partnership to purchase and develop real estate owned by American, yet the proceeds of the loan were going to two of the partners to enable them to pay off pre-existing debts unrelated to the real estate project. This loan, therefore, constituted a misuse of bank funds of which Conarty was aware and in which he participated.
6
As American's financial condition deteriorated, the Federal Home Loan Bank Board ("FHLBB"), which promulgates and enforces the rules and regulations that govern federally insured savings and loan associations, more carefully scrutinized American's lending practices. Between 1981 and 1983, Best and Bewick were able to keep the examiners at bay, in part by concealing the ultimate recipients of loan proceeds. Best's and Bewick's maneuvers to continue to manipulate the net worth of American allowed it to continue to operate approximately one year beyond the point of insolvency. It was only after an extensive review of the loan files and the other records of the association that the examiners were able to determine the true recipients of the loan proceeds. The FHLBB took control of American in 1984--an event that would have occurred much sooner if the true financial condition of American had not been concealed by Best and Bewick.
7
A jury trial commenced on April 20, 1987, in the United States District Court before the Honorable Nicholas Bua. After a seven-week trial, the jury found Best and Bewick guilty of all counts save one. The jury found Conarty guilty of six counts, including mail fraud, misapplication of savings and loan funds, and participation by a savings and loan officer in an improper loan. Four months later, Judge Bua sentenced Best to one year and a day in prison, three years probation, and five hundred hours of community service; Bewick to six months work release, three years probation, and five hundred hours of community service; and Conarty to three years probation and four hundred hours of community service.
8
All three defendants appealed. A panel of this court reversed the defendants' convictions and remanded the cause to the district court. We vacated that opinion and granted the government's petition for rehearing en banc to reconsider whether the jury's use of the government's binders during deliberations constitutes reversible error.
II.
9
Near the beginning of the trial, the government furnished each juror with a loose-leaf binder containing the key government exhibits arranged by transaction. The district court understood that the binders would be used to help the jury follow the descriptions of the various exhibits. See Transcript of Trial Proceedings ("Trial Trans.") at 677. Yet, because the exhibits in the binders had not yet been placed in evidence, the judge told the jurors not to look in the binders until a particular exhibit was admitted into evidence, and then to look only at that exhibit in the binder. He also told them to leave the binders in the jury box during recesses. See Id. at 678, 730. The binders remained in the jury box with the jurors throughout the trial. None of the defendants objected to this use of the binders by the jury. See Id. at 678.
10
When the trial ended, the binders were left by the jurors in the jury box. The district judge instructed the parties to review the exhibits and to agree on which exhibits were to be sent to the jury for deliberations. The various defense counsel and the prosecutors spent the morning of June 9, 1987, reviewing the many exhibits that the parties intended to send into the jury room. There were ten boxes of exhibits--nine boxes of government exhibits and one box of defense exhibits--lined up on the front row spectator bench in the courtroom. Defense counsel claim that the prosecutor promised them that the binders were not going to be sent to the jury room. The prosecutor denies ever making such a promise. See Affidavit of Prosecutor at 7. After resolving some minor issues regarding one or two of the exhibits, the judge directed that the exhibits entering the jury room be placed in the custody of the United States Marshal. Defense counsel then left the courtroom and the judge turned to other business. The prosecutor and the case agent from the FBI began loading all the exhibits, including the binders, onto a cart that the marshal wheeled into the jury room.
11
After the jury had been deliberating for four days, one of the defense counsel learned that the binders had been sent into the jury room and moved for a mistrial. See Trial Trans. at 5986. Defense counsel argued that the submission of the binders to the jury during deliberations constituted reversible error. The binders were, counsel argued, merely roadmaps to conviction, highlighting the key exhibits of the government's case. Moreover, these binders were sent to the jury room with neither the knowledge nor consent of the defendants. The district court denied the motion. See Trial Trans. at 5990, 5999, 6029. However, because the government agreed to defense counsel's request to have the binders removed, the binders were removed from the jury room after the jurors were dismissed for the weekend. See Trial Trans. at 5997-98, 6007.1
12
On the following Monday, the jurors finished deliberating and returned the verdicts described above. There is no doubt that the jurors noticed the absence of the binders: on Monday morning, the foreperson asked about the missing binders and requested the return of various slips of paper upon which jurors made notes and which were placed inside the binders. The district court chose not to respond to the jurors' request, and approximately four hours later, the jury came in with its verdicts. Following the verdicts, the district court agreed to conduct an examination of each juror to determine whether he had used the binders to the exclusion of all the original exhibits admitted in evidence. Each juror stated that he used the binders only in conjunction with the original exhibits during the deliberations. Every juror remarked that they had examined the other exhibits in the jury room. See Trial Trans. at 6195-6215.
13
Regardless of the jurors' statements about considering all the evidence, the defendants filed a joint post-trial motion for a new trial based on the prejudicial impact of the binders on jury deliberations and the alleged misconduct by the government. Defense counsel argued that they had been misled by the prosecution regarding what was to be sent to the jury room and that the presence of the binders in the jury room had contaminated the jurors' deliberations. Prior to sentencing the defendants, the district court heard argument from the parties on the post-trial motion. At that time, both parties were prepared to give sworn testimony regarding the defendants' allegations. But they didn't get the chance: the district court declined to hold a hearing on the issue of government misconduct, finding that the issue was mooted by the fact that all the exhibits contained in the binders had been admitted properly in evidence during the trial, and thus, no harm was done by their presence in the jury room. See Trial Trans. at 6272. The district court specifically added that it was not finding that the government intentionally deposited the binders in the jury room to prejudice the defendants. See Trial Trans. at 6188-89. The district court accordingly denied the defendants' motion for a new trial and proceeded with sentencing.
III.
14
On appeal, the defendants renew their arguments that the prosecutor's misconduct in sending the binders into the jury room prejudiced the defendants and, thereby, deprived them of a fair trial. We need only reach the misconduct issue, however, if the defendants establish that there was some prejudice or substantial right affected by the presence of the binders in the jury room during deliberations, and that the district court abused its discretion by refusing to hold an evidentiary hearing on that alleged misconduct. See United States v. Wilson, 715 F.2d 1164, 1169 (7th Cir.), cert. denied, 464 U.S. 986, 104 S.Ct. 434, 78 L.Ed.2d 366 (1983). Thus, first--and, as we shall see, the only--issue we face is whether the district court acted reasonably in refusing to set aside the verdict because it found no possible prejudice. See United States v. Bruscino, 687 F.2d 938, 940 (7th Cir.1982) ("The proper standard of appellate review ... is whether the district court abused its discretion in denying defendant's motion for a new trial.") (quotations omitted). We note that, under the abuse of discretion standard, the proper inquiry "is not how the reviewing court would have ruled if it had been considering the case in the first place, but rather whether any reasonable person could agree with the district court." Graefenhain v. Pabst Brewing Co., 870 F.2d 1198, 1201 (7th Cir.1989) (quoting United States v. $103,387.27 in U.S. Currency, 863 F.2d 555, 561 (7th Cir.1988)).
15
In Bruscino, we faced a similar question. In that case, the two defendants, inmates at a federal penitentiary, were charged with the murder of another inmate. The defendants argued that their convictions were unlawful because the jury had been exposed to two documents not in evidence--specifically, a Bureau of Prisons report and a newspaper article. The report suggested that one of the defendants was involved with the "Mexican Mafia," and the article related that all of the individuals who had been indicted for the murder had pleaded guilty, except the two defendants. We held that the district court did not abuse its discretion in concluding that it was highly unlikely that the jury had been prejudiced by the documents in question. Therefore, we affirmed the convictions. Given the wealth of admitted evidence against the two defendants, we found the challenged documents "drably descriptive," telling the jury "nothing it did not already know," and thus insufficient to justify reversing the convictions. See Bruscino, 687 F.2d at 942.
16
The instant case presents an even stronger argument for affirming the convictions of Best, Bewick, and Conarty. In Bruscino, the challenged documents were not admitted in evidence; therefore, it was error for the jury to see such documents. See Id. at 940 ("A criminal defendant in our system has a right to be tried on the basis of the evidence admitted at his trial, and this right may be violated if the jury gets access to extra-record evidence...."). Thus, the question in Bruscino was whether the district court abused its discretion in concluding that that error had not prejudiced the jury. But in the present appeal, all parties agree that the jury properly could review the exhibits contained in the binders--after all, they openly had been examining those binders, document by document, in the course of the seven-week trial, and by the end of the trial, every document in the binder had been admitted in evidence. Thus, it simply could not have been error for the jury to see the exhibits contained in the binders.
17
The only contention of prejudice is that the use of the binders during deliberations made it easier for the jurors to follow the government's case, and that the jurors might have taken the absence of any binders provided by the defendants as an indication that the defense agreed that the government's binders contained all the relevant evidence. See Best, 913 F.2d at 1184. This argument ignores the fact that the binders contained only copies of documents admitted in evidence; the original exhibits, both the government and the defense documents, were carefully organized in boxes that were just as easily accessible to the jury. The binders were no more "roadmaps to conviction" than were the ten boxes of carefully ordered evidence.
18
Even if we accept the argument that the binders permitted greater access to the government exhibits, we nevertheless fail to see how easy access by itself amounts to error. If the defendants objected to the ease of access which the binders provided, the time to object was when the binders were first distributed to the jury in the opening days of the trial. Not only did they fail to object, but the record reveals that during the trial the defendants themselves frequently directed the jury's attention to the binders in order to focus the jurors on a particular document or transaction. As the district court appropriately ruled, once it was determined that the documents in the binders properly were admitted in evidence, and considering the fact that the binders had been on the jurors' laps for seven weeks, there can be no issue of prejudice:
19
The Court: Well, I think, here again, it would be a serious issue, obviously, and I would declare a mistrial at the snap of a finger in the event the jury did not have that jury book [i.e. binder] on their laps for almost two months, and, also, if, indeed, the exhibits appearing in the jury book were not exhibits actually received in evidence. I'd have no problem with it. I don't think it is a proper reaction for the court to declare a mistrial just because this evidence has been compiled in one jury book.
20
Trial Trans. at 6038-39.
21
The cases upon which the defendants and the panel's opinion rely easily are distinguishable. In each of these cases involving the jury's exposure to "unauthorized" materials during deliberations, the materials in question were not properly admitted in evidence. Indeed, the three main cases cited by the defendants, United States v. Brown, 451 F.2d 1231 (5th Cir.1971); Sanchez v. United States, 293 F.2d 260 (8th Cir.1961); and United States v. Ware, 247 F.2d 698 (7th Cir.1957), all involved situations in which federal agents in narcotics cases had handwritten on the envelopes that contained the narcotics the time, date, and place of the defendant's sale of the drugs, as well as the results of the laboratory analysis including the drugs' purity and amount. The courts in those case, observing that the notes were profoundly detailed, concluded that the labels on the envelopes amounted to a "neat condensation" of the government's case on each sale. Brown, 451 F.2d at 1234; Sanchez, 293 F.2d at 269; Ware, 247 F.2d at 700. The important distinction here is that, unlike the documents in the binders in the present case, the labels in Brown, Ware, and Sanchez had not been admitted properly in evidence.
22
Even in more recent cases in which we have held that unauthorized materials in the jury room did not require a mistrial, we still focused on whether the materials in issue had been admitted in evidence. See United States v. Herrero, 893 F.2d 1512, 1539-41 (7th Cir.), cert. denied, --- U.S. ----, 110 S.Ct. 2623, 110 L.Ed.2d 644 (1990) (presence of map in the jury room not in evidence did not require mistrial); United States v. Sababu, 891 F.2d 1308, 1332-34 (7th Cir.1989) (presence of transcript from telephone conversation previously excluded from evidence in the jury room did not violate defendant's constitutional rights); United States v. Key, 859 F.2d 1257, 1264 (7th Cir.1988) (debtor not entitled to new trial because there was no reasonable probability that evidence that debtor's husband had been convicted of tax evasion, which one juror learned from an outside source and communicated the information to another juror, had affected the jury's verdict); United States v. Weisman, 736 F.2d 421, 424 (7th Cir.), (one juror's bringing into the jury room a newspaper clipping that referred to the co-defendant's guilty plea was harmless and did not warrant new trial) cert. denied, 469 U.S. 983, 105 S.Ct. 390, 83 L.Ed.2d 324 (1984). If exposure to such improper evidence did not warrant a new trial in these cases, the jury's exposure in this case to copies of documents properly admitted in evidence in a binder that the jury had used for the length of the trial cannot warrant a new trial.
23
Moreover, the district court did not simply rely on the fact that the documents had been admitted in evidence. The court also verified, through individual voir dire of each juror, that the jurors considered all the evidence, not just the binders, in arriving at their verdicts. See Trial Trans. at 6275-76. Given this support, the district court's denial of the defendants' motion for mistrial was not an abuse of discretion. As we declared in Bruscino:
24
The trial judge will always be in a better position than the appellate judges to assess the probable reactions of jurors in a case over which he has presided.... As we cannot put ourselves in the district judge's shoes in these matters we ought to accept his judgment unless we have a very strong conviction of error.
25
687 F.2d at 941. Here, the district court found no error resulting from the presence of the binders in the jury room during the deliberations. The record competently supports such a finding.2
26
Because we determine that the district court did not abuse its discretion, we need not even address the defendants' charges of prosecutorial misconduct. Simply put, if there was no error in the jurors' use of the binders during deliberations, then how the jurors came to have the binders in the jury room is immaterial. The district court felt similarly, as it refused to hold an evidentiary hearing regarding possible government misconduct: "There is no need for any additional hearing. I think it is mooted out. The only concern this court had was the jury might have had with them during their deliberations exhibits which were not admitted in evidence." Trial Trans. at 6272.
27
Thus, although the record contains the conflicting affidavits of the prosecutor and the defense counsel, the district court declined to resolve these disputes. With no record to guide us, we refuse to "find facts" on appeal.3 See United States v. Rodriguez, 888 F.2d 519, 525 (7th Cir.1989). See also Mars Steel Corp. v. Continental Bank, 880 F.2d 928 (7th Cir.1989) (en banc ). Instead, we hold that the district court's refusal to entertain an evidentiary hearing concerning the defendants' charges of prosecutorial misconduct was not an abuse of discretion. See Wilson, 715 F.2d at 1169 (finding no abuse of discretion when the district court denied an evidentiary hearing on the defendants' claim that the government leaked information to the press, which resulted in prejudicial pretrial publicity, where there was no evidence that the pretrial publicity adversely affected the rights of the defendants.). As the panel rejected the defendants' other contentions, we do so as well, relying on the panel's brief discussion. See Best, 913 F.2d at 1180-82, 1185.
IV.
28
For the reasons discussed above, the judgments of conviction are
29
AFFIRMED.
30
POSNER, Circuit Judge, with whom CUMMINGS, CUDAHY, EASTERBROOK, and RIPPLE, Circuit Judges, join, dissenting.
31
As a result of the introduction by the prosecutor of unauthorized materials into the jury room, and the trial judge's failure to apply the correct legal standard in determining whether that introduction had prejudiced the jury's deliberations, the three defendants were improperly convicted, and are entitled, as the panel unanimously found, to a new trial. Although there was adequate evidence of the defendants' guilt, it was a close case, and defendant Conarty in particular might well have been acquitted but for the business with the binders.
32
At the beginning of this seven-week trial of a complicated financial fraud, the government, with the judge's permission, supplied each juror with a loose-leaf binder containing the key government exhibits, arranged by transaction, to assist the jury in following the evidence. Because the exhibits in the binders had not yet been placed in evidence, the judge told the jurors not to look in the binders until a particular exhibit was admitted into evidence, and then to look only at that exhibit. He also told them to leave the binders in the jury box during recesses. When the trial ended and the jury left the box, the binders were still there, lying on the floor beside each juror's seat; several spare binders were also lying on the floor. The original exhibits were in ten boxes, nine containing the government's exhibits and one the defendants'. (The defendants had not supplied the jurors with copies, bound or otherwise, of their exhibits, so the only defendants' exhibits that the jurors had seen or would ever see were the original exhibits.) At this time the defendants' lawyers, according to affidavits they submitted, had a brief discussion with the prosecutor about which exhibits would go to the jury room, and it was agreed that only the ten boxes of original exhibits would go, together with some charts summarizing parts of the evidence--not the government's binders.
33
The defendants' lawyers then left the courtroom, and the judge turned to his motion call. The prosecutor was still in the courtroom. In her presence an FBI agent who had assisted in the prosecution loaded both the ten boxes of original exhibits, which had been lying on the first-row spectators' bench, and the government's binders, onto a cart that the marshal then wheeled into the jury room. The prosecutor denies having told the defendants' lawyers that the binders would not be going to the jury room, but she did not make this denial in an affidavit under oath, as the defendants' lawyers had done with their version of the conversation. According to the FBI agent's "affidavit," which was also unsworn, the prosecutor actually helped him load the binders onto the cart. The district judge made no finding as to who was telling the truth, so for purposes of this appeal we must (even if we disregard the prosecution's unexplained failure to execute proper affidavits) assume that the binders were sent to the jury without the consent or acquiescence of the defendants' lawyers.
34
A chance remark by the marshal to one of the defense lawyers that the jury room was getting messy with all the exhibits and books lying around revealed, after the jury had been deliberating for four days, that the binders were in the jury room. The defense immediately protested to the judge, moved for a mistrial, and demanded that the binders be withdrawn from the jury room as soon as the jury broke for the weekend. The prosecutor made no objection to that demand. The judge waited until the jury had left and then had the binders withdrawn and sealed in a garbage bag together with yellow sheets of paper, which had been inserted in the binders, on which the jurors had made notes.
35
The jurors had been told nothing about the contretemps over the binders, but when they arrived Monday morning to resume their deliberations they immediately noticed that the binders were gone. The jury foreman went to the judge's chambers and told the judge's secretaries that the binders had disappeared and that he was afraid that someone had broken into the jury room and stolen them. He was given no explanation for the disappearance of the binders, or of the jurors' notes that disappeared with them. Those notes, by the way, were all the notes the jurors had made during their deliberations to date. For, concerned lest the cleaning staff or other building personnel read the notes, the jurors had adopted the practice of tucking all their notes into the government binders at the end of each day's deliberations.
36
The jury resumed its deliberations and four hours later brought in its verdict. The judge then summoned the jurors to his chambers one by one and in the presence of the lawyers asked the jurors whether they had used the binders in their deliberations to the exclusion of the original exhibits. Their answers (which were brief, and there were virtually no follow-up questions) indicated, first, that they had indeed used the binders in their deliberations--and not just as a place for storing notes. One juror said, "the book [i.e., the government binder] was always in front of me." But they had not used them to the exclusion of the original exhibits. One juror said, "we were in and out of all those boxes"; another, "one person would go through the file [in the boxes of original exhibits], and just grab whatever piece of evidence we were trying to look for. The other members of the jury would then look in the jury book if it was listed in the jury book." A third juror said, "after you withdrew the books [i.e., the government binders]"--for the judge had now told the jurors that the binders had been withdrawn at his direction rather than just having mysteriously disappeared--"we went back to the original exhibits." The judge then denied the defendants' motion for a mistrial.
37
Both the district court and this court make much of the fact that all the exhibits in the government's binders had been admitted into evidence. That cannot be the end of our inquiry. If the prosecutor had entered the jury room during the jurors' deliberations and told the jurors that if they examined the original exhibits in the following sequence it would help them to understand the defendants' guilt, no judge would think that the fact that all the exhibits were in evidence would save the conviction. Instead of visiting the jury room in person the prosecutor sent into it a roadmap to a guilty verdict, in the form of suggestively sequenced selections from nine boxes of government exhibits, for the jurors to use in their deliberations. The ordering of familiar materials is a form of creativity recognized in law: you can copyright a compilation of materials that are in the public domain. And you can convict a man by a tendentious compilation of exhibits already in evidence.
38
The district judge brushed aside this concern after satisfying himself that the jurors had looked at the original exhibits as well as the government binders. Our court now goes him one better by holding that the judge's initial permission to the government to give the exhibit binders to the jury was permission that the jury could use them in its deliberations. The judge obviously didn't think he had given the broader permission. If he had, he would not have summoned the jurors to his chambers and quizzed them on the use they had made of the binders and of the original exhibits. He did this because it was only through a slip-up that the binders had found their way into the jury room. Why else was the prosecutor so quick to stipulate with the defendants' lawyers for the withdrawal of the binders from the jury room in the midst of the jury's deliberations? That withdrawal made sense only as an effort to rectify an error. Otherwise it would have been a gratuitous interference with the orderly deliberations of the jury. For remember that along with the binders were removed--also without any explanation--all of the jurors' notes. Remember also that the jurors completed their deliberations under the impression that someone might have broken into the jury room and stolen the binders and notes. How could this deformation of the jury's deliberations have made any sense if the binders were properly in the jury room?
39
I said that you can convict a man with a tendentious compilation of evidence. I will illustrate with Conarty. Best and Bewick, Conarty's two codefendants, were, respectively, the top man and the second in command at a savings and loan association. They were charged with approving a number of improper loans, but Conarty, the association's in-house counsel, was charged in connection with only one of these transactions, the Kings Point loan. It was a loan to a partnership, but two of the three partners were ineligible to borrow from the bank. One of them, Henning, was in bankruptcy. This much Conarty undeniably knew because he was one of Henning's creditors and had filed a claim in the bankruptcy proceeding. Another partner, Andreuccetti, also was uncreditworthy, although there is no evidence that Conarty knew this. At the closing, some of the loan moneys were paid directly to Henning, who then cut a check to Conarty that paid off Henning's indebtedness to him in full. Pernice, the third borrowing partner, also used a portion of the loan moneys to pay a preexisting debt to Conarty. Conarty received a total of $13,000 at the closing. The loan was improper, and if Conarty knew this he was guilty of fraud. There was circumstantial evidence--not least the use of a part of the loan to pay off unrelated debts to him--that he did know. But it was a close case. One reason Judge Bua gave for not quizzing the jurors about the binders before the jury completed its deliberations was that the issue would be moot if the jury returned verdicts of not guilty. In his words, "there's a chance, and I see it quite possible, that Mr. Conarty's case could very well go not guilty."
40
The government binders made it easy for the jury to infer Conarty's guilty knowledge, because they grouped all the documents relevant to the Kings Point transaction under one tab, which the boxes of original exhibits did not do. There were the checks cut to Conarty right alongside the loan documents themselves. In fact the checks were located in the binder directly after Andreucetti's unimpressive financial statement, demonstrating his lack of creditworthiness, even though there was no evidence that Conarty (who was not a member of the savings and loan association's loan committee) had ever seen the statement, or for that matter the loan documents. It was a suggestive juxtaposition.
41
The utility of the binders as a guide to guilt was enhanced by the fact that there were so many of them--sixteen or seventeen: one for each juror, with several extras. There were of course no defense exhibits in them. If the jurors wanted to look at defense exhibits they had to go to the original exhibits, which contained one box of defense exhibits: one box, for twelve jurors.
42
There is nothing wrong with a party's placing its key exhibits in binders for the jurors to use during their deliberations, as well as during the trial itself. But of course the other party is entitled to notice that this is going to be done. If the defendants' lawyers had known that the jury would have the government's binders in the jury room, they might have supplied their own binders to the jury, with their own ordering of exhibits, and they might have objected to the selection and arrangement of the exhibits in the government's binders. They had no opportunity to do these things. The fact that the jury had the government's binders and no binders from the defendants was calculated to enhance the authority of the government's binders in the jurors' eyes and to validate the suggestive order in which the exhibits were arranged in those binders. Note that when questioned by the judge, the jurors referred to the government binders not as a government compilation but simply as "the jury book." So, as a matter of fact, did the judge.
43
The district court's lack of control over what went to the jury room, the prosecutor's and the FBI agent's failures (unexplained to this day) to attest their affidavits, the prosecutor's opposition to an evidentiary hearing to clear up the issue of responsibility for the binders' having found their way into the jury room, the disrespect shown the jurors by the spiriting away of the binders and especially of all their notes without any explanation--all these are deeply regrettable features of this case, and in fact embarrassments to federal justice. But we cannot reverse the convictions unless there was a "reasonable possibility" that the presence in the jury room of unauthorized materials affected the jury's verdict. United States v. Bruscino, 687 F.2d 938, 940 (7th Cir.1982) (en banc). That is a judgment to be made in the first instance by the trial judge, who having observed the jury during the trial is in a better position than we to gauge the probable impact of the unauthorized materials on the outcome. Our review of his judgment is therefore deferential, which explains the cases such as United States v. Weisman, 736 F.2d 421 (7th Cir.1984), cited in the majority opinion, in which we and other courts of appeals have affirmed refusals by district judges to grant a mistrial on the basis of the introduction of unauthorized materials into the jury room when the judge had framed the inquiry relevant to his exercise of discretionary judgment in a proper and responsible fashion. Id. at 426. In this case he did not. He asked the jurors whether they had consulted the original exhibits as well as the binders, and when they said they had he denied the motion for a mistrial. He asked the wrong question. It is the rare case of introducing unauthorized materials into the jury room in which the jury looks only at those materials. That cannot be the decisive consideration. Nor the fact that the exhibits in the binders were in evidence (and in fact when the judge denied the mistrial right after interviewing the jurors, there was an open question whether all the exhibits really had been admitted into evidence). The binders--Ariadne's thread through the maze constituted by the ten boxes of original exhibits--were not in evidence.
44
The rule that precludes inquiry into the reasoning process by which a jury reached its verdict does not preclude inquiry into the prejudicial impact of extraneous information on the jury's deliberations. Fed.R.Evid. 606(b). The judge should have inquired into the effect on the jury's deliberations of the order of exhibits in the government binders--for example, had the jurors assumed that Conarty had seen Andreucetti's financial statement and the other documents for the Kings Point loan? On the basis of such inquiry, plus an evaluation of the strength of the evidence against Conarty and the other defendants, the judge could have made an informed and responsible decision as to whether there was a reasonable possibility that the use of the binders in the jury's deliberations had changed the outcome of the case--and we would be bound by that decision. The judge's perfunctory and loaded inquiry (e.g., "Did you use the jury book to the exclusion of all the other exhibits and evidence you heard in the case?") suggests more than anything else a determination not to have to sit through another seven-week trial.
45
Ordinarily when a district judge has failed to exercise the discretion that is his the remedy is a remand to enable him to exercise it. That is not feasible here. The jurors are scattered to the winds and can no longer be questioned about the impact of the binders, and the judge has committed himself to the view that the binders did no harm. The bell cannot be unrung. The defendants are entitled to a new trial.
1
The panel seemed to attach significance to the district court's decision to remove the binders from the jury room once the defendants raised their objections. See Best, 913 F.2d at 1183. We find that significance unwarranted. The transcript of the district court proceedings plainly reveals that the court had the binders removed not becuase it found their presence in error, but because the parties stipulated to their removal:
Defense Counsel: Judge, ... we are going to also move that at the recess, whenever we break and the jury is excused for the weekend, that those jury books [i.e. the binders] be collected, taken out of the jury room, and that the jury not be permitted to look at those jury books for the remainder of their deliberation, because they have the exhibits and they can look at the exhibits....
The Court: Any objection to that?
Prosecutor: I have no objection to that.
The Court: Fine. Okay. * * * So stipulated. Okay, we'll sneak in there after they [i.e. the jurors] leave without letting them know. * * * Let the record show that pursuant to agreement of counsel, without waiving any defendant's rights to a claim of error because of the jury books going back with the evidence, the court has ordered the court room deputy to remove those twelve jury books from the jury room....
Trial Trans. at 5997-98, 6007.
Later, when ruling on the defendants' post-trial motions, the district court made clear that the removal of the binders did not constitute a finding of error, or, for that matter, any other finding. It was simply a stipulated compromise that was struck between the parties:
Defense Counsel: [I]t wasn't until Friday afternoon, late in the afternoon, that we discovered that those jury books went back there. And when we made our record, your Honor ruled that the jury books should come out. And what was the first thing--
The Court: I think that was a compromise position after we discussed it.... * * * But rather than a ruling, I think it was a compromise position. The government had no objection to removing them at that time. But at any rate ... the transcript will reflect that.
Trial Trans. at 6150.
2
The dissent maintains the position that the presence of the binders in the jury room constituted error--that they were "unauthorized materials." But the materials were authorized--were in fact in the possession of and perused by the jurors for nearly seven weeks. The agreement or acquiescence in their use by the defendants is simply not material to the issue of whether they were admissible pieces of evidence--and each piece of the material in the binders was in evidence
The dissent also suggests that the immediate agreement of the government to withdraw the binders is somehow an admission that they were wrongfully there. Not so. It is simply an acknowledgement that it didn't make the slightest difference. With or without the binders, the exhibits were in the jury room. So rather than fight over the program, take the binders out. (It is interesting that when these binders--these "road maps to guilt"--were in the jury room, they deliberated four days without result; four hours after their removal, the jurors found their own road map and returned a guilty verdict. Speculation on jury process is a futile pastime at best but since the subject was raised, why not?)
The dissent also complains that the post-trial questioning of the jurors was inadequate because the only thing the court asked was whether they had used the binders "to the exclusion of the original exhibits." This is not so. What the court asked was whether they had used the binders to the exclusion of the other exhibits--government and defendant. See Trial Trans. at 6196. The answer to this question was negative. That was the only issue raised by the defense. Any further inquiry would have been an inquiry as to how the jurors arrived at their verdict. That inquiry is clearly improper unless there is an allegation that something not admitted in evidence was in the jury room or some improper communication had occurred. See Fed.R.Evid. 606(b). See generally J. Haddad, J. Zagel, G. Starkman & W. Bauer, Cases and Comments on Criminal Procedure, 1461-62 (3d ed. 1987). Neither of these facts were alleged or were true. The court simply put to rest a stated fear of the defense counsel.
3
On this question, we note that the findings of the original panel in this case that suggested that Assistant United States Attorney Susan Bogart, the lead prosecutor in this case, had "quite possibly" engaged in misconduct have been vacated. Had the district court believed an inquiry into Ms. Bogart's conduct warranted, it could have conducted one; we should not perform that task in its stead
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THE STATE OF TEXAS
MANDATE
TO THE COUNTY COURT OF LAMAR COUNTY, GREETINGS:
Before the Court of Appeals for the Sixth Court of Appeals District of Texas, on the 18th
day of March, A.D. 2015, the cause upon appeal to revise or reverse your Judgment was
determined; and therein our said Court made its order in these words:
Randyael Dontrell Tyson, Appellant No. 06-14-00114-CR
v. Trial Court No. 61504
The State of Texas, Appellee
As stated in the Court’s opinion of this date, we find no error in the judgment of the court
below. We affirm the judgment of the trial court.
We note that the appellant, Randyael Dontrell Tyson, has adequately indicated his
inability to pay costs of appeal. Therefore, we waive payment of costs.
WHEREFORE, WE COMMAND YOU to observe the order of our said Court in this
behalf, and in all things to have it duly recognized, obeyed, and executed.
WITNESS, the Hon. Josh R. Morriss, III, Chief Justice of our said Court of Appeals, with
the seal thereof annexed, at the City of Texarkana, this the 20th day of May, A.D. 2015.
DEBRA K. AUTREY, Clerk
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705 F.2d 457
Quinnv.General Motors Corp.
81-1497
UNITED STATES COURT OF APPEALS Sixth Circuit
10/15/82
1
E.D.Mich.
AFFIRMED
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355 F.Supp. 314 (1972)
Modesto Montañez ALAMO, Plaintiff,
v.
Elliot RICHARDSON, Secretary of Health, Education and Welfare, Defendant.
Civ. No. 921-70.
United States District Court, D. Puerto Rico.
December 22, 1972.
*315 James A. Toro, San Juan, P. R., for plaintiff.
Julio Morales-Sanchez, U. S. Atty., for defendant.
TOLEDO, District Judge.
ORDER
This is an action brought by plaintiff pursuant to Section 205(g) of the Social Security Act (hereinafter called the Act), Title 42, United States Code, Section 405(g), seeking a judicial review of a final decision of the Secretary of Health, Education and Welfare (hereinafter named the Secretary), holding that he is not entitled to a period of disability and to disability insurance benefits, under Sections 216(i) and 223 of the Act, Title 42, United States Code, Sections 416(i) and 423.
Plaintiff, a 55 year old man with first grade education, alleged before the Secretary that he became unable to work in 1962, due to impaired discs and arthritis.[1]
The Secretary determined plaintiff met the special earnings requirements at the date he alleged his impairments originated,[2] but found he was not disabled within the meaning of the Act.
All of the administrative remedies were exhausted when the decision of the hearing examiner became the final decision of the Secretary, once the Appeals Council, on September 4, 1970, approved said decision.
The statutory scheme of judicial review being limited in nature, this Court is bound to ascertain only whether the record contains substantial evidence to support the Secretary's findings. Santiago v. Secretary of Health, Education and Welfare (D.C.P.R.1971), 336 F.Supp. 1071; Rosario v. Secretary of Health, Education and Welfare (D.C.P. R.1971), 324 F.Supp. 1321.
The plaintiff asserts he has been unable to work since 1962, with the exception of 2 or 3 days in 1965 (when he worked only four hours); that the record before the Court is less than impartial, occasioned principally by the absence of a counsel to represent him before the Secretary; and that the said absence of counsel representation has prevented him from meeting his evidentiary burden and properly presenting his case before the Secretary. Plaintiff also asserts that the hearing examiner committed abuse of discretion and, hence, reversible error, for he failed to act as an impartial arbitrator, seeing that all relevant facts were fully developed during the course of the hearing. Lastly, plaintiff contends that the hearing examiner's decision was not based on substantial evidence, for exclusion was made of some documentary evidence plaintiff intended to introduce at the hearing; for *316 the hearing examiner made misleading unqualified findings of facts regarding his education and ability to read, count, give change and solve simple arithmetic problems without any foundation on the record; for the hearing examiner has concluded he had no significant mental impairment on or before March 31, 1965, based on a document which merely specifies the date he began to receive treatment (see note 1); and for the hearing examiner found he was able to do his prior job on or before March 31, 1965, when the record show the contrary.
Plaintiff submits that the hearing examiner's failure to explore the facts adequately, as well as his making findings of fact which are clearly unsubstantiated by any evidence taking the record as a whole, constitutes reversible error, thereby entitling him to judgment in his favor. In the alternative, plaintiff requests the Court to remand the cause to the Secretary for a rehearing, where he would present evidence that will establish his physical and mental condition during the critical period in which he last met the earnings requirements (see note 2); at which rehearing, he will be represented by his appointed counsel, for this cause.
It is defendant's basic position that the only medical evidence relating to the period during which plaintiff was insured for disability purposes is a report from the Puerto Rico Industrial Commission dated April 17, 1963, and that the remaining medical evidence relates to examinations made after March 31, 1965, when plaintiff's insured status expired. Defendant adds that the pertinent medical evidence, when considered with the non-medical evidence, fails to satisfy the disability requirements of the law; that is, that said evidence fails to establish that plaintiff is unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment, which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months; and which can be demonstrated by evidence supported by objective data obtained by medically acceptable clinical and laboratory techniques. With respect to the medical evidence subsequent to the date plaintiff last met the insured status requirements, defendant contends that said evidence does not entitle plaintiff to disability benefits, for at most, it can reflect that plaintiff's impairment reached disabling severity after the expiration of his insured status, and that for said reason, is not relevant, even though the impairment itself may have existed before plaintiff's insured status. In relation to plaintiff's lack of legal representation at the hearing before the hearing examiner, it alleges that it is no ground for remand; that plaintiff was notified of his right to be represented by counsel, thus afforded due process by the defendant, but apparently, chose to proceed with the hearing without counsel; and that plaintiff has failed to show that he was prejudiced or that the proceedings were unfair. Finally, defendant asserts there was no abuse of discretion in the hearing examiner's development of the evidence.
Although we are aware that the burden is upon the plaintiff to prove he is entitled to the benefits of the Act, Reyes Robles v. Finch (1 Cir. 1969), 409 F.2d 84; De Jesús Faría v. Finch (D. C.P.R.1971), 336 F.Supp. 1069; Torres v. Secretary of Health, Education and Welfare (D.C.P.R.1971), 333 F.Supp. 676, and not upon the Secretary to make an initial showing of nondisability to perform a job, De Jesús Faría v. Finch, supra; de la Cruz v. Secretary of Health, Education and Welfare (D.C.P. R.1971), 331 F.Supp. 522, we are of the opinion that said rules, even though being very convenient for the expediency of process on the administrative level, should be applied with caution in cases like the one before us. Román v. Secretary of Health, Education and Welfare (D.C.P.R.1972), 355 F.Supp. 646 (Memorandum Opinion and Order of November 15, 1972). We have before us a plaintiff with only first grade education, *317 who can hardly understand the administrative process before the defendant, who was the subject of a hearing which, although held in the Spanish language, was in our opinion, too technical for him to fully understand, especially being him at the time of the hearing under treatment for a mental condition and not represented or assisted by counsel.
In Leon v. Secretary of Health, Education and Welfare (D.C.P.R.1971), 337 F.Supp. 905, we dealt with a situation similar to the present one. Likewise, in Román v. Secretary of Health, Education and Welfare, supra. In this respect, it suffices to say that when a claimant appears without counsel at the administrative hearing and the presence of a mental impairment is obvious, be it because it is observable by the hearing examiner or because medical evidence is presented in that respect, it is the duty of the hearing examiner to adequately explore all aspects of the claim before him. Otherwise, legitimate claims, such as mental impairments, could unjustly go unattended for failure to properly act upon them.
We are of the opinion that in this case the hearing examiner failed to adequately explore all aspects of the claim. It appears to us that although the physical impairments alleged by the plaintiff are his main complaint, the record shows that his mental condition may be a significant factor in determining the severity of his disability. Román v. Secretary of Health, Education and Welfare, supra.
The evidence in record before us, in relation to the mental condition of plaintiff, is insufficient for us to conclude that the record contains substantial evidence to support the findings of the Secretary (see Note 1). Likewise, it is our opinion that in view of the factors we previously mentioned, this plaintiff may have been prevented from adequately presenting his claim before the Secretary. Moreover, plaintiff has satisfied us that with representation of counsel at the rehearing, new medical evidence and a better case will be presented. Toledo v. Secretary of Health, Education and Welfare (1 Cir. 1971), 435 F.2d 1297. Furthermore, by failing to adequately inquire about plaintiff's mental condition, defendant has acted unfairly. Toledo v. Secretary of Health, Education and Welfare, supra; Torres v. Secretary of Health, Education and Welfare (D.C.P.R.1971), 337 F.Supp. 1329.
In view of the foregoing, we are of the opinion that a rehearing to further inquire into plaintiff's physical and mental impairments is proper and necessary, at which time the plaintiff is to be assisted by counsel.
Wherefore, this Court finds there is good cause to remand under Section 205(g) of the Act, Title 42, United States Code, Section 405(g), and the Court, accordingly, hereby
Orders, adjudges and decrees, that the present action be remanded to the Secretary of Health, Education and Welfare, with specific instructions that the complete psychiatric record of the plaintiff be made available and made part of the record; that a consultative psychiatric examination be made if necessary to clearly establish whether the mental impairment constitutes a disability as defined by the Act at the time plaintiff last met the insured status requirements; that any necessary and appropriate examinations with regard to his physical impairments be made; and that the defendant carry out any other further proceeding they may deem proper consistent with this memorandum opinion.
The Court also deems proper to recommend that plaintiff be assisted at the rehearing by his appointed counsel on this cause.
It is so ordered.
NOTES
[1] The record before the Court reveals plaintiff has been receiving psychiatric treatment at the Caguas Mental Health Clinic since September 9, 1969, but no mention is made as to the onset date of the mental impairment, the diagnosis and prognosis, etc.
[2] Plaintiff met the earnings requirement through the quarter ending March 31, 1965. Therefore, on the basis of his applications of November 28, 1967, plaintiff must establish that he was under a disability which commenced prior to March 31, 1965, when he last met the special insured status requirements.
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675 S.W.2d 29 (1984)
Wilbert DANIELS, Appellant,
v.
Charlie DANIELS, Respondent.
No. 43126.
Missouri Court of Appeals, Eastern District, Division Four.
June 26, 1984.
*31 Robert S. Moss, Richmond Heights, for appellant.
Charles R. Oldham, St. Louis, for respondent.
SATZ, Judge.
Wilbert Daniels, the husband, appeals from a decree of dissolution. Charlie Daniels, the wife, filed no brief. The husband's counsel on appeal was not his trial counsel. He must take the record as he finds it and so must we.
Previously, we raised the issue of our jurisdiction sua sponte and dismissed the husband's appeal on the ground it was not timely filed. We then granted the husband's motion for rehearing. After rehearing, we now find his appeal was timely filed and address the appeal on the merits. We affirm in part and reverse and remand in part, with directions.
PROCEDURAL MATTER
Fourteen days after the trial court entered what appeared to be an incomplete decree of dissolution,[1] the husband filed a Motion to Modify Judgment, or, in the alternative, a Motion for a New Trial. Twenty-nine days later, the court "denied" the motion, and, at the same time, it "amended" the original decree to include requests made by the husband in his motion.[2] The "denial" and "amendment" appear to be in conflict and irreconcilable. Thus, the effect the court intended this order to have is, at best, ambiguous.
Twenty eight days after this order, the husband filed his notice of appeal, stating, in his notice, that his appeal was taken from the original decree and the order "which together constitute the decree of dissolution." If the order denying the husband's motion to modify the original decree and, at the same time, amending the original decree was a new decree, the court had jurisdiction over this new decree for 30 days, Rule 75.01, and the husband's notice of appeal, filed 28 days later, although premature, was timely filed. Rules 81.05(b) and 73.01(b). If, on the other hand, this order disposing of the husband's Motion *32 to Modify was simply the disposition of a Motion for a New Trial or other authorized after trial motion under Rule 81.05, the decree became final for appeal "at the date of disposition" of the Motion, Rule 81.05(a), and the 10 day period for filing an appeal began on that date. Rule 81.04; See, Schreier v. Schreier, 625 S.W.2d 644 (Mo. App.1981). Then, the husband's notice of appeal would not be timely filed.
The trial court's order disposing of the husband's Motion to Modify is subject to various interpretations, and forceful argument can be made to support each interpretation. Suffice it to say that, after rehearing, we find the trial court considered its original decree incomplete because it had not properly disposed of certain certificates of deposit in issue. By this interpretation, we reconcile the apparent irreconcilable orders of denying modification of the decree and, at the same time, amending it. Simply stated, the denial of the motion was, in effect, a denial without prejudice, and the court simply proceeded to complete the original decree by inserting a new and more complete paragraph concerning certain certificates of deposit. The trial court still had jurisdiction to complete its decree and did so. The husband's notice of appeal filed 28 days later was, therefore, timely. Rules 81.05(b) and 73.01(b); Rule 81.05(a).
MERITS
At the outset, we note that the relevant evidence adduced at trial is, at best, sparse. Although both the husband and the wife were represented by counsel who filed the parties' financial statements, depositions and interrogatories with answers, neither counsel offered the financial statements into evidence, rarely referred to them and seldom used the depositions or the answers to interrogatories. Thus, the information contained in these documents is, for the most part, not properly before us. Hopkins v. Hopkins, 664 S.W.2d 273, 274 (Mo. App.1984). The lack of sufficient evidence requires us to reverse and remand this cause for additional evidence and for the proper disposition of certain life insurance policies and certificates of deposits. However, to the extent the present record allows, we narrow the issues left for remand.
The trial court granted the wife's motion pendente lite. The husband argues this order was void because the record does not show the wife filed a written motion with an accompanying affidavit as required by § 452.315 RSMo 1978. This issue is not before us.
This appeal is from the dissolution decree, not an order pendente lite. In a dissolution proceeding, an order pendente lite is a final and appealable order. E.g. Tzinberg v. Tzinberg, 631 S.W.2d 681, 682 (Mo.App.1982). The husband failed to appeal from the pendente lite order, and his complaint against that order is not cognizable in this appeal from a final dissolution decree. Richardson v. Richardson, 524 S.W.2d 149, 153 (Mo.App.1975); See Nilges v. Nilges, 610 S.W.2d 58, 62 (Mo.App.1980).
The husband next complains there was not sufficient evidence to award custody of the parties' daughter, Eldora Wendy, to the wife. We disagree.
Arguably, the evidence of the fitness of both husband and wife to care for the daughter was sparse. This, however, is understandable. The daughter was about 18 years old at the time of the hearing, ready to graduate high school and planning to attend college away from home. Neither the husband nor the wife was shown to be unfit. As a matter of fact, the husband had no objection to the daughter living with the wife, he just "would prefer her residing with [him]." The trial court has discretion to determine which spouse would be the better custodian. Riley v. Riley, 643 S.W.2d 298, 301 (Mo.App.1982). Under the present circumstances, an award of custody to the mother would not be an abuse of discretion. Id. at 301.
The husband next argues the award of $55.00 per week child support was improper. He contends there was insufficient evidence relevant to the factors determining proper child support, as enumerated by *33 § 452.340 RSMo 1978, particularly as to the needs of the child and the financial resources of the husband and wife. We disagree.
Admittedly, the husband's testimony about his earnings was conflicting. At first, he testified his take home pay was $1,200 per month. Later, he testified his annual income two years prior to the hearing was $28,000, and, for the year immediately prior to the hearing, his annual income was $3,000 less; i.e., $25,000. The wife's testimony about her income was similarly inconsistent. She first testified that she earns $1,370.20 net per month and testified later that she earns $1,600 twice a month. Although the testimony about the income of both parties is conflicting, the trial court can choose to believe or disbelieve any part of it, Seelig v. Seelig, 540 S.W.2d 142, 145 (Mo.App.1976); Rule 73.01, and rely on the testimony it found to be credible.
Choosing that part of this conflicting testimony most favorable to the husband, we do not consider the child support payments of $55 per week an abuse of discretion. The husband testified that he had been paying child support of $210 per month and that he was willing to continue these payments until his daughter was emancipated. The order pendente lite and dissolution decree for child support of $55 per week translates into approximately $238.15 per month. The difference of $28.15 per month, between what the husband was willing to pay and what he was ordered to pay, is not of great significance in light of the husband's admitted income.
Moreover, contrary to the husband's contention, there is evidence of the needs of the child. Admittedly, counsel for the wife did not offer into evidence the wife's financial statement which set out the child's needs in detail. However, the wife testified, without contradiction or objection, that her daughter's "expenses" amounted to $369 per month. In light of the foregoing evidence, the parties' income and the needs of the child, the husband has no valid complaints. See Metts v. Metts, 625 S.W.2d 896, 899 (Mo.App.1981); Green v. Green, 623 S.W.2d 265, 267 (Mo.App.1981); Suesserman v. Suesserman, 539 S.W.2d 741, 743 (Mo.App.1976); compare Gambino v. Gambino, 636 S.W.2d 81, 82-83 (Mo.App. 1982).
The husband also claims error in the division of marital property. Because the cash value of certain life insurance policies and the ownership of some certificates of deposit were not proven by sufficient evidence, we must remand for the proper disposition of this personal property. However, the disposition of this cause after remand must be done in the light of the following ownership and values of real and personal property properly determined by the trial court.
The husband argues there was insufficient evidence to determine whether real property at 1172 North Kingshighway awarded to him was separate or marital property. We disagree.
While the court must first find whether property is marital or non-marital before dividing it, Fields v. Fields, 584 S.W.2d 163, 166 (Mo.App.1979), the husband's testimony at trial belies his claim that the real property at 1172 North Kingshighway was separate property. The husband testified he wanted the court to order the real property, including the North Kingshighway property, sold and the proceeds divided between him and his wife. This is an admission of marital property not a claim of separate property. Moreover, the husband testified that, at the time of trial, the North Kingshighway property was held in joint names, although he had acquired it prior to the marriage. "[A] spouse may by agreement, either express or implied, or by gift, transmute an item of separate property into marital property." Daniels v. Daniels, 557 S.W.2d 702, 704 (Mo.App.1977). More specifically, property which was separate property but is held in joint names at the time of dissolution is marital property, unless it is shown that transfer to the parties jointly was not intended as a settlement upon or as a gift to *34 the other party. Smith v. Smith, 561 S.W.2d 714, 717 (Mo.App.1978); Conrad v. Bowers, 533 S.W.2d 614, 622 (Mo.App. 1975). Having testified the property was jointly owned and requesting the proceeds from the sale of the property be divided between the husband and wife, the husband cannot support his claim that the property should be set off to him as separate property.
The husband also argues the trial court erred in awarding the marital home, 6123 North Pointe, to the wife. In the original decree of dissolution, the court specifically stated it awarded the marital home and furnishings to the wife "because she has custody of the daughter and is, therefore, in greater need of the family homestead and its furnishings." The husband argues this award based on this ground was an abuse of discretion because the daughter was planning to leave for college, and, therefore, she would not be living in the house. This argument is misdirected and, thus, misses the mark.
A factor to be considered in dividing marital property is "the desirability of awarding the family home or the right to live therein for reasonable periods to the spouse having custody of any children." § 452.330 RSMo 1978. We doubt whether "custody" as used in this statute requires physical presence of the child in the home of the custodian at all times. In any event, the husband's argument ignores the sensible inference that the daughter will, in all likelihood, be coming home on school holidays and summer vacations and also ignores the possibility the daughter may fail to complete her studies and return to live at home.
The husband also argues the court lacked sufficient evidence to make a just division of marital property under the requirements of § 452.330 RSMo 1978. The following tabulation sets out the division of property and the value of that property established by the present record.
PROPERTY AWARDED TO HUSBAND
DESCRIPTION LOWEST VALUE HIGHEST VALUE
1172 North Kingshighway $6,700.00 $9,100.00
1976 Ford LTD 3,000.00 3,200.00
Husband's Railroad Retirement Not Proven Not Proven
Fund
One-Half of Income Tax Refund Not Proven Not Proven
for Year Preceding Trial
TOTAL $9,700.00 $12,300.00
PROPERTY AWARDED TO WIFE
LOWEST HIGHEST APPRAISER'S
DESCRIPTION VALUE VALUE VALUE
6123 North Pointe $22,500.00(W)* $38,000.00(H)* $22,500.00(A)*
Mortgage (17,000.00) (17,000.00) (17,000.00)
----------- ----------- -----------
Equity 5,500.00 21,000.00 5,500.00
1972 Monte Carlo 500.00 500.00 500.00
1974 Mustang (Title in 1,000.00 1,000.00 1,000.00
Husband; Daughter
Drives it)
*35
Furniture and Furnishings 2,500.00 3,300.00 3,300.00
All Policies on Wife's Not Proved Not Proved Not Proved
Life
One-Half Income Tax Not Proved Not Proved Not Proved
Refund for Year Preceding
Trial
TOTAL $ 9,500.00 $25,800.00 $10,300.00
* The 3 values of the North Pointe property are based upon the values given by the wife (W), the
wife's appraiser (A) and the husband (H). The values for the personalty listed under the appraised
value of the house are the highest value given by the parties.
As can be seen, the value of some of the property in issue has not been established. As also can be seen, the lowest established value of the property awarded to the husband is $9,700, and, when the value of the North Pointe property set by the wife's appraiser is used, the highest established value of the property awarded to the wife is $10,300. The difference between these two values ($10,300-$9,700) is $600. Section 452.330 RSMo 1978 requires only a just division of property, not an equal division. E.g., Metts v. Metts, 625 S.W.2d supra at 899. No marital misconduct was alleged or proved. Thus, the distribution made would not be unjust, if the only unknown value was the value, if any, of the husband's railroad retirement fund. At trial, the husband had ample opportunity to establish whether this fund was separate or marital property and, if marital, the value, if any, of the fund. Whether the fund was separate or marital property and whatever its value, the husband has no cause to complain about the award of the fund. The award was made to him and, thus, could only tilt an already just division of property toward him.
However, the cash value of the life policies awarded to the wife were not established. Without this value, we cannot determine whether the division of property was just or unjust, and, therefore, must remand this cause, at least, for the purpose of establishing the value of these policies.
Since we are remanding this cause, the trial court should also properly dispose of the following property or issues by specifically evaluating the property and entering the appropriate decree:
Railroad Retirement Fund
The court should determine whether this fund is separate or marital property, its value and its appropriate distribution.
One-Half of Income Tax Refund For Year Preceding Hearing
This court has invalidated a provision of a dissolution decree requiring each party to pay one half of their joint tax liability when the amount of that liability was not known at the time the decree was entered. Faulkner v. Faulkner, 559 S.W.2d 545, 546 (Mo.App.1977); see also Hull v. Hull, 591 S.W.2d 376, 383 (Mo.App.1979). We do not determine whether equal division of the receipt of an unknown tax refund would likewise be void. On remand, this refund, if any, will be ascertainable and the trial court can make the appropriate distribution.
Bank Accounts and Government Bonds
The failure to divide bank accounts valued at $150.00 and two United States Savings Bonds with face value of $75.00 would be de minimus and would not warrant invalidation of the present decree. However, *36 on remand, this property should be distributed.
Debts
The court ordered the wife to pay debts amounting to $2,600. Debts owed by the parties do not constitute property properly subject to division in a dissolution decree. N.J.W. v. W.E.W., 584 S.W.2d 148, 151 (Mo.App.1979). The better practice, however, is to provide for payment of the debts, as the court did, and thereby reduce subsequent disputes. Id. at 151.
Certificates Of Deposit
The original court decree ordered the certificates of deposit in issue to be disposed as follows:
"The two (2) Certificates of Deposit held by the Respondent ..., as well as the three (3) Certificates of Deposit now held by Petitioner are to be held in trust for the benefit of the parties minor child, Eldora Wendy, to be utilized for her college education, and any remainder to be delivered to Eldora Wendy when she reaches majority. An appropriate mechanism for the implementing of the trust agreement should be agreed to by both parties, such as the procedure provided by the" [This paragraph ends here. This sentence is incomplete in the decree].
The amended decree provided:
"... [The Amended Decree of Dissolution is] amended to read: `any and all Certificates of Deposit heretofore held by either of the parties prior to and on the date of the trial (April 8, 1980), shall be considered as held in trust for the sole interest and benefit of their minor child, Eldora Wendy, and upon her request, all the certificates shall be made available to Eldora Wendy to pay for the college and other educational costs of said minor child, Eldora Wendy.'"
The problem created by these orders is two-fold. First, the record is not clear whether some or all of these certificates are held by the husband and wife as trustees for their daughter or whether the husband, wife and daughter held these certificates as joint owners. If the husband and wife are trustees for the daughter, that part of the court's order effecting the trusteeship is void. Placing the certificates in trust divested the settlors, the husband and wife, of their interest in the funds so transferred. Barry v. Barry, 579 S.W.2d 136, 140 (Mo.App.1979). If the daughter is a joint owner of any of the certificates, she must be joined as a party, and the joint interests of the daughter, husband and wife properly evaluated and distributed. Ravenscroft v. Ravenscroft, 585 S.W.2d 270, 274 (Mo.App.1979).
We affirm that part of the court's decree awarding custody of the daughter to the wife and ordering the husband to pay $55 per week to the wife as child support. We reverse and remand this cause for the trial court to reopen the cause to receive such additional evidences and make such additional orders as are made necessary by and as are consistent with this opinion and decision.
SMITH, P.J., and PUDLOWSKI, J., concur.
NOTES
[1] The decree ordered:
"The two (2) Certificates of Deposit held by the Respondent ..., as well as the three (3) Certificates of Deposit now held by Petitioner are to be held in trust for the benefit of the parties minor child, Eldora Wendy, to be utilized for her college education, and any remainder to be delivered to Eldora Wendy when she reaches majority. An appropriate mechanism for the implementing of the trust agreement should be agreed to by both parties, such as the procedure provided by the" [This paragraph ends here. This sentence is incomplete in the decree].
[2] This order reads:
"Defendant's (sic) Motion to Modify Judgment, etc., is denied and overruled. By stipulation of both parties [the Decree of Dissolution is] amended to read: `any and all Certificates of Deposit heretofore held by either of the parties prior to and on the date of trial ..., shall be considered as held in trust for the sole interest and benefit of their minor child, Eldora Wendy, and upon her request, all the certificates shall be made available to Eldora Wendy to pay for the college and other educational costs of said minor child, Eldora Wendy.'"
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